Development in Comparative Perspective
- Afridi, Farzana, Bidisha Barooah and Rohini Somanathan, Improving learning outcomes through information provision: Evidence from Indian villages [Paper]
- Abstract: We study whether information provision improves students’ academic performance in a setting where parents have incomplete information about their child’s cognitive skills and where there are competing public and private providers of education. Contiguous village councils in the north Indian state of Rajasthan were randomly assigned to either a control or one of four treatment groups in which all schools and/or parents were progressively provided more information through report cards on the performance of students in curriculum based tests. We find significant improvement in test scores of private school students by 0.31 standard deviations when information on both intra and inter school quality is provided to households and schools but no impact when information on intra-school performance and to schools alone is provided. Close examination of the results suggest that these impacts were due to choice of better quality schools by private school students in the new academic year. Public school parents did respond by exercising school choice and lowering student absenteeism but saw no improvements in learning outcomes possibly because of constrained school choice set. Overall, our results suggest that markets can be leveraged to improve learning outcomes and accountability of service providers.
- Ahlerup, Pelle, Thushyanthan Baskaran and Arne Bigsten, Gold Mining and Education: A Long-run Resource Curse in Africa? [Paper]
- Abstract: We provide micro-level evidence on an important channel through which mineral resources may adversely affect development in the long-run: lower educational attainment. Combining Afrobarometer survey data with geocoded data on the discovery and shutdown dates of of gold mines, we show that respondents who had a gold mine within their district when they were in adolescence have significantly lower educational attainment. These results are robust to the omission of individual countries, different definitions of adulthood, the use of alternative data from the Development and Health Surveys (DHS), and buffer-based approaches to define neighbourhood. Regarding mechanisms, we conclude that the educational costs of mines are likely due to households making myopic educational decisions when employment in gold mining is an alternative. We explore and rule out competing mechanism such as endogenous migration, a lower provision of public goods by the government, and a higher propensity for violent conflicts in gold mining districts.
- Clarke, Damian and Hanna Muhlrad, The Impact of Abortion Legalization on Fertility and Female Empowerment: New Evidence from Mexico [Paper]
- Abstract:We examine the effect of a large-scale, free, elective abortion program implemented in Mexico City in 2007. This reform resulted in a sharp increase in the request and use of early term elective abortions: approximately 90,000 abortions were administered by public health providers in the four years following the reform, versus only 62 in the five years preceding the reform. We document, firstly, that this localised reform resulted in a legislative backlash in 18 other Mexican states which constitutionally altered penal codes to increase sanctions on abortions. We take advantage of this dual policy environment to estimate the effect of progressive and regressive abortion reform on fertility and women's empowerment. Using administrative birth data we find that progressive abortion laws reduce rates of child-bearing, particularly among young women. Additionally, the reform is found to increase women's role in household decision making—an empowerment result in line with economic theory and empirical results from a developed-country setting. We however find little evidence to suggest that the resulting regressive changes to penal codes have had an inverse result over the time-period studied. In turning to mechanisms, evidence from a panel of women suggests that results are directly driven by increased access to abortion, rather than changes in sexual behaviour, contraceptive use or contraceptive knowledge.
- Congdon Fors, Heather and Annika Lindskog, Within-Family Inequalities in Human Capital Accumulation in India: Birth Order and Gender Effects [Paper]
- Abstract: In this paper we investigate birth order and gender effects on children's development of education human capital in India. We have unusually rich data on education inputs and outcomes and investigate both indicators of the child's current stock of human capital and of investment into their continued human capital accumulation, distinguishing between time investments and pecuniary investment into school quality. We also examine the impact on child labor and height for age Z scores, which while not educational variables per se are relevant in understanding educational human capital accumulation. Our results show that in India, birth order effects are mostly negative, i.e. the results are more in line with the findings in developed countries. First-born children devote more of their time to schooling, they more often attend a private school, their families spend more on their education, and they perform better on reading, writing and math tests. Positive birth order effects are more likely for time investment, since these are influenced by the opportunity cost of child time. They are less likely for indicators of pecuniary investments into school quality or for indicators of children's accumulated human capital stock. We confirm the pattern of a more positive birth order gradient in poor than in rich households, and show that this is especially the case for time investments. We also show that birth order effects on time investments are more positive in large than in small families in India.
- Das, Mausumi, Cultural Transmission of Traits: Some Macroeconomic Implications
- Abstract: This paper explores the macroeconomic implications of cultural transmission of occupational traits. Certain occupations in the society are associated with strong collective spirit and are delivered best by agents who are motivated towards these. The degree of motivation of an agent in turn depends on intergenerational transmission of values and beliefs, working through a socialization process with the parental generation. Through socialization, a young agents picks up some traits which makes her predisposed towards a particular occupation. The acquired cultural trait interacts with market returns to determine the actual occupational choice. We show that the dynamics of cultural transmission and corresponding occupational choice may result in endogenous fluctuations in output, accompanied by oscillatory growth.
- Das, Sabyasachi, Abhiroop Mukhopadhyay and Rajas Saroy, Efficiency Consequences of Affirmative Action in Elections: Theory and Evidence from India [Paper]
- Abstract: We examine the efficiency consequences of affirmative action (AA) in politics, i.e., restricting candidate entry in elections to one group of population. AA can affect efficiency through both ability (selection effect) and effort (competition effect) of the leader. Our model shows that the competition effect of restricting candidate entry to one group on public spending would depend on the population share of the group. The outcome may improve with restriction when one group is relatively large, even when restriction worsens the average ability of candidates. We provide empirical evidence in favor of our model in the context of elections of village heads in Rajasthan, India. We exploit randomized reservation quota for a caste group (OBCs) to show that restriction indeed increased public spending in the relevant villages. We also provide empirical support for the mechanism explored in the model. Our results highlight that efficiency concerns regarding affirmative action policies may need reevaluation.
- Durevall, Dick and Gunnar Kohlin, Are Fairtrade Prices Fair? An Analysis of the Distribution of Returns in the Swedish Coffee Market [Paper]
- Abstract: Consumers pay a premium for Fair Trade coffee, often assuming that it mainly benefits poor coffee farmers. However, several studies report that most of the premium accrues to actors in the consumer countries, such as roasters and retailers. This paper analyses how the returns to Fair Trade are distributed among bean producer countries, roasters and retailers, and Fairtrade Sweden, using scanner data on 185 products from Sweden and information about costs of production. The distribution depends on how much more costly it is to produce Fair Trade coffee compared to conventional coffee, given costs of beans and licences. Assuming the difference is 5 SEK per kg (about USD 0.80), which is on the high side, roasters and retailers get 61%, while producer countries, i.e., coffee farmers, cooperatives, middlemen, exporters and Fairtrade International, get 31%. The rest accrues to Fairtrade Sweden. These estimates are uncertain, but there is there strong evidence that Fair Trade retail prices are higher than the level attributable to the costs of Fair Trade beans and licences.
- Gangadharan, Lata, Tarun Jain, Pushkar Maitra and Joseph Vecci, The Fairer Sex? Women Leaders, Strategic Deception and Affirmative Action [Paper]
- Abstract: Do women as leaders behave differently from men? Using field experiments conducted in rural India, we find that women participants assigned as leaders are more deceptive compared to men. The rate of deception is greater in treatments where the gender of the leader is revealed to the group and in villages with a past female village head as a result of an affirmative action policy designed to increase female political leadership. Greater deception can be explained by female leaders correctly anticipating different economic and social costs for their actions as compared to male leaders. Our findings suggest significant behavioral challenges to the effectiveness of women as leaders.
- Ghosh, Parikshit and Rohini Somanathan, Driving While Green: Vehicular Regulation and Air Quality in Indian Cities
- Abstract: We study air quality monitoring data to evaluate the environmental impact of policies aimed at regulating an important source of air pollution in Indian cities – vehicular traffic. The interventions studied include the odd-even rationing rule introduced in Delhi in two trial phases in 2016, and the mandatory switch from petrol to LPG for auto-rickshaws in Kolkata in 2009. Using a difference-in-difference approach, exploiting geographical and temporal variations in regulatory regimes, we find that the odd-even rule in Delhi caused a significant reduction in carbon monoxide and nitrogen oxide concentrations, and may have also impacted the presence of fine particulate matter. The fuel regulation in Kolkata is also found to have a significant beneficial effect on the city’s air quality. Opinion surveys of various stakeholders, including drivers of private and public vehicles as well as users of public transport, suggest there is considerable heterogeneity of interests, and hence distributive conflicts are a potential reason why environmental regulation is often delayed or derailed.
- Greenstone, Michael, Santosh Harish, Rohini Pande and Anant Sudarshan, Clearing the air on Delhi’s odd-even program
- Abstract: In January and April 2016, the government of Delhi piloted an “odd-even” traffic rule which mandated that only cars with odd (even) numbered license plates could ply on odd (even) dates. We use high frequency measures from air quality monitoring stations to estimate the program impact. Relative to surrounding satellite cities, fine particle concentrations in Delhi’s air were lower by 14-16% during the January pilot. In contrast, the program did not affect Delhi’s air quality during the warmer month of April. Taken together, this suggests that the main value of an ``odd-even” program is as an emergency measure during winter months when car emissions play a more prominent role in affecting air quality.
- Isaksson, Ann-Sofie and Andreas Kotsadam, Chinese Aid and Local Corruption [Paper]
- Abstract: Considering the mounting criticisms concerning Chinese aid practices, the present paper investigates whether Chinese aid projects fuel local-level corruption in Africa. To this end, we geographically match a new geo-referenced dataset on the subnational allocation of Chinese development finance projects to Africa over the 2000-2012 period with 98,449 respondents from four Afrobarometer survey waves across 29 African countries. By comparing the corruption experiences of individuals who live near a site where a Chinese project is being implemented at the time of the interview to those of individuals living close to a site where a Chinese project will be initiated but where implementation had not yet started at the time of the interview, we control for unobservable time-invariant characteristics that may influence the selection of project sites. The empirical results consistently indicate more widespread local corruption around active Chinese project sites. The effect, which lingers after the project implementation period, is seemingly not driven by an increase in economic activity, but rather seems to signify that the Chinese presence impacts norms. Moreover, China stands out from the World Bank and other bilateral donors in this respect. In particular, whereas the results indicate that Chinese aid projects fuel local corruption but have no observable impact on local economic activity, they suggest that World Bank aid projects stimulate local economic activity without fuelling local corruption.
- Kumar, Surender and Prerna Prabhakar, Industrial Energy Prices and Export Competitiveness: Evidence from India [Paper]
- Abstract: Using a panel for the period 1998-2009, we estimate the response of Indian exports for 11 energy intensive sectors to sectoral level energy price asymmetry. We apply dynamic gravity model of trade proposed by Olivero and Yotov (2012). We observe absence of the contemporaneous effect of energy price differential on Indian exports, but presence of persistence effects. It is found that a 10 percent increase in relative energy prices negatively affects Indian sectoral exports by about 1 percent ranging from 0.9 percent for chemicals to 1.4 percent for non-ferrous metals, revealing a larger impact for energy intensive sectors. These small effects imply that the concerns of carbon leakage are largely overplayed.
- Tengstam, Sven, On aid orphans and aid darlings [Extended Abstract]
- Abstract: The Paris agenda assumes that the effectiveness of aid use can be enhanced by improved allocation of resources across countries. To what extent has this issue been addressed, and how much more needs to be done? What does it look like when including donors such as international NGOs, and “new donors” such as China, India, Brazil and South Africa? We analyze this by investigating what an ‘optimal’ aid allocation would look like if the aim is to achieve as large a reduction of poverty as possible. We also investigate how much more poverty reduction could be achieved if aid was actually allocated according to our allocation rule. Finally, we study each donor group at a time, and put a value of Aid Effectiveness (average poverty reduction per aid dollar) for each donor group.