Does Access to Formal Finance Matter for Welfare and Inequality? Micro Level Evidence from Nigeria

Using a treatment effects model, decomposition techniques and representative household data from Nigeria, we study the welfare and inequality implications of access to formal finance. While improving household welfare, formal access to finance increases inter-household inequalities, despite ameliorating the inequality enhancing effect of urban residence and enhancing the inequality ameliorating effect of greater educational attainment. The positive effect of access to formal finance on inequality is smaller than the effect of unobserved household characteristics, indicating that welfare and equality enhancing strategies should follow a holistic approach as opposed to one focusing on one isolated policy variable at a time.     

Does Observance of Religious Holidays Affect Agricultural Productivity and Household Welfare? Evidence from Rural Ethiopia

This study examines whether traditional customs affect household's welfare by taking the case of the work prohibition related with religion in rural Ethiopia. Although the anecdotal evidence suggests that work prohibition by the Ethiopian Orthodox Church, to observe the religious holidays, is one of the reasons for the high poverty incidence in Ethiopia, the estimation results do not show that there is a significant effect of the number of religious holidays observed on agricultural productivity and household welfare. Observance of religious holidays affects crop choice and income source.     

Does Education Improve Health? Evidence from Indonesia

I examine the effects of education on health in Indonesia using an exogenous variation in education induced by an extension of Indonesia’s school term length in 1978–1979, a natural experiment that fits a regression discontinuity design. I find the longer school year increases educational attainment and wages, but I do not find evidence that education improves health. I explore some mechanisms through which education may affect health, but education does not seem to promote healthy lifestyles, increase the use of modern healthcare services, or improve access to health insurance; if anything, education improves only cognitive capacity.     

Is Corruption Really Bad for Inequality? Evidence from Latin America

This article presents new evidence on the relationship between corruption and income inequality. Using a panel data methodology, we find that lower corruption is associated with higher income inequality in Latin America. This result is in contrast to other empirical studies but it makes sense in Latin America for a number of reasons. The finding of an inverse relationship between inequality and corruption suggests that institutional reform policies by themselves may be misguided.     

Does Changing Economic Well-Being Shape Resentment About Inequality in China?

The political consequences of income inequality in China have attracted increasing attention among researchers, and conventional wisdom states that economic development can mitigate negative views on inequality. I investigate the effects of subjective and objective changes in economic well-being on public opinion concerning income inequality based on a 2004 Chinese national survey. On the one hand, I find weak evidence of a negative correlation between perceived better economic well-being and negative opinion about inequality in China. On the other hand, I identify consistent evidence of a negative correlation between objective intergenerational upward mobility and negative views about inequality. It is worth noting that while the effect of intergenerational upward mobility is large, it is unable to completely reverse negative views about inequality among Chinese citizens. Hence, I suggest that economic development plays only a limited role in mitigating anger about inequality in China.     

How Does Contract Design Affect the Uptake of Microcredit among the Ultra-poor? Experimental Evidence from the River Islands of Northern Bangladesh

This study examines the demand of microcredit among ultra-poor households in northern Bangladesh. We implemented a field experiment to identify what type of credit is best suited to their demand. We found that the uptake rate by the ultra-poor is the lowest for regular small cash credit, followed by in-kind credit. We also found that the ultra-poor are significantly more likely to join a microcredit programme than the moderately poor if a grace period with longer maturity is attached to a large amount of credit, irrespective of whether the credit is provided in cash or in kind.     

Does Livestock Ownership Affect Animal Source Foods Consumption and Child Nutritional Status? Evidence from Rural Uganda

Abstract

In many developing countries consumption of animal source foods (ASF) among the poor is still at a level where increasing its share in total caloric intake may have many positive nutritional benefits. This paper explores whether ownership of different livestock species increases consumption of ASF and helps improving child nutritional status, finding some evidence that both food consumption patterns and nutritional outcomes may be affected by livestock ownership in rural Uganda. Our results are suggestive that promoting (small) livestock ownership has the potential for affecting human nutrition in rural Uganda, but further research is needed to more precisely estimate the direction and size of these effects.     

How does ethnic diversity shape the design of intergovernmental fiscal relations? Evidence from China

This study examines how ethnic diversity shapes the design of intergovernmental fiscal relations in regimes such as China, where local accountability and resident mobility are largely absent. We argue that in these regimes, ethnic diversity largely captures potential social conflicts and instability, consequently requiring a higher level of fiscal centralization and regional equalization from upper-level governments to preserve social stability. Using provincial and sub-provincial level panel data from China for 1995–2019, we find strong supporting evidence that an increase in a province's ethnic diversity significantly increases fiscal centralization and the provincial government's fiscal equalization efforts. We also show that these effects tend to be stronger in provinces whose leaders have closer ties with the central authority and where local capture is less serious. Our study contributes to a better understanding of ethnic diversity's consequences on the policy choices governments make.     

Does the Heterogeneity of Project Implementers Affect the Programme Participation of Beneficiaries?: Evidence from Rural Cambodia

This study employs the dataset collected for the assessment of a post-harvest technology project in rural Cambodia and focuses on the heterogeneous preferences of project implementers, frequently overlooked in the literature on programme evaluation studies. We focus on the ‘implementer effect’ on the programme participation of the treated farmers. We demonstrate that the heterogeneous programme participation of ordinary farmers could be induced due to heterogeneity in the characteristics of the project staff. In particular, we indicate that the baseline altruism of the project staff, measured by the dictator game, consistently increases the participation rate and the number of participations in the training sessions of beneficiaries. This type of heterogeneity in project staffs’ preferences across treatment sites could be a source of treatment heterogeneity for programmes conducted at a certain cluster level. While few studies have focused on the heterogeneity of programme implementers, our empirical results indicate that the preference of implementers could be a source of treatment heterogeneity and imply the importance of implementation of an actual project.     

Does Land Fragmentation Increase the Cost of Cultivation? Evidence from India

To appreciate overall impacts of fragmentation, underlying channels, and potential heterogeneity by holding size, we distinguish average fragment size and mean inter-fragment distance as two aspects of this phenomenon. Estimating a cost function with associated input demand equations on a large nationally representative Indian survey, robust to endogeneity, suggests that fragmentation’s main impact is to reduce mean plot size below the threshold for mechanisation. Higher inter-fragment distances increase costs for larger holdings, but by a much smaller magnitude. Implications as to when programmes to consolidate holdings may make sense and ways to ensure their sustainability are discussed.     

Does transformational leadership stimulate user orientation? Evidence from a field experiment

While doing good for specific citizens and users is often considered a powerful motivator among public service employees, little research has rigorously evaluated how public managers can promote individualized prosocial motivation. We follow recent studies on the behavioural implications of ‘user orientation’ to explore how public managers can use a specific leadership strategy—transformational leadership—to reinforce employees' individualized prosocial motivation. Combining a field experiment with 80 childcare centre managers and survey reports from their 590 preschool teachers, we assess the effect of a transformational leadership training programme on user orientation. The results show a positive effect on user orientation three months after the training programme but no persistent effect 15 months after the intervention. This implies that, at least in the short term, public managers can use transformational leadership behaviours to stimulate user orientation.     

Does democratic local governance facilitate local economic development? Evidence from Bangladesh

ABSTRACT

This paper tests whether the improvement of democratic local governance (DLG) positively impacts local economic development (LED). Based on a nationally representative citizen perception survey of 3,024 households across 56 Union Parishads (UPs) in Bangladesh, the results suggest that, although the UP governance program (UPGP) has improved the administrative governance of UPs, functional governance involving citizens remains weak. Thus, due to partial improvement of DLG, UPGP does not appear to have a significant impact on the overall local economic development and service delivery of UPs. A significant gap can be seen to exist between the claims of UPs and the perceptions of citizens around UPs’ governance performance, which may result from the poor awareness building structures of the UPGP. However, our results suggest that providing training to UP officials can partially offset the shortfalls of DLG in its pursuit of LED.     

Does Oil Hinder Social Spending? Evidence from Dictatorships, 1972–2008

This paper examines the effects of natural resource abundance on social spending in dictatorships. Natural resources, particularly oil, provide authoritarian leaders with economic rents without widescale labor force participation. I argue that dependence on natural resource production thus reduces dictators’ incentive to invest in human capital, which is reflected in lower levels of social spending. Using a panel dataset of authoritarian regimes between 1972 and 2008, I find that oil abundance leads to significantly lower levels of social spending by authoritarian governments. The negative effects are especially prominent concerning expenditures for public education and health: when an authoritarian country earns ten more dollars per capita from oil production, per capita spending on education and health decreases by approximately 1%. Extended analysis shows that the negative impact of oil on social spending is peculiar to authoritarian regimes; no impact of oil wealth on social expenditures is found among democracies.     

Does Health Insurance Reduce Child Labour and Education Gaps? Evidence from Rwanda

A common practice of poor households to informally deal with risk is to allocate children’s time away from school towards income-generating activities or household production. Focussing on Rwanda, this study investigates whether the provision of formal health insurance helps to prevent this undesired risk coping strategy. We find that children of households enrolled in health insurance work significantly less compared to those of not enrolled families, and also have better educational achievements. The results suggest that policy interventions which reduce household risk exposure may have additional benefits in terms of lower child labour supply and higher schooling levels.     

How Responsive are Chinese Exports to Exchange Rate Changes? Evidence from Firm-level Data

This article examines the impact of exchange rate changes on Chinese firms’ decisions on export market entry and export share. Using a large dataset for Chinese firms in 2000–2006, we find that changes in exchange rate levels play a significant role on both export extensive and intensive margins of Chinese firms. Compared to studies using macro data, our firm-level analysis allows us to control for firm and industry heterogeneity. Firm size and location matter. We do not find a difference between foreign and domestic firms in responding to exchange rate changes. Industry heterogeneity is also found to be important.     

Does Participation Lead to Ongoing Infrastructure Maintenance? Evidence from Caribbean Landslide Mitigation Projects

Donor-funded infrastructure projects may focus on construction and neglect longer-term sustainability. Engaging local communities has been proposed as way of inducing ongoing maintenance by facilitating coordination and a sense of ownership, but there is little evidence on its effectiveness in practice. We analyse data from inspections of 103 landslide hazard mitigation drains in Saint Lucia several years after construction. We conclude that community participation at the beginning of the project, by accessing local knowledge, is associated with improved construction quality, but appears to have no impact on subsequent maintenance, suggesting that contractual provision for maintenance may be required.     

Does the ICDS Improve Children’s Diets? Some Evidence from Rural Bihar

Although there are several studies documenting the impact of the Integrated Child Development Scheme (ICDS) – the largest preschool intervention – in India, few have documented to what extent it improves the quantity and quality of food consumed by young children. This paper attempts to provide causal estimates of the impact of the ICDS on calories, protein, iron, and Vitamin A intakes of children. Using matching techniques to define an appropriate counterfactual, and a primary survey in four villages in rural Bihar, our results suggest that: (a) for older children three to six years who benefit from cooked meals, the ICDS did result in higher intakes of calories, protein, and iron, and no substantive evidence that as a consequence there was substitution away from food at home. However, there was no impact on vitamin A intake; (b) for younger children whose mothers are given take-home rations, there is no evidence the ICDS improved intakes of calories or any other nutrients. Thus, even though the monetary value of the transfer was the same across both age groups, there is evidence to suggest the mode of transfer does seem to matter to ICDS effectiveness, consistent with other literature.     

Does Decentralization Reform Always Increase Economic Growth?: A Cross Country Comparison of the Performance

This study aims to test the impact of decentralization on the economic growth of a country. Based on the longitudinal data set of 63 countries with a time series spanning 1960 to 2007, the test result reveals that there is a negative relationship both between fiscal decentralization and GDP growth and between political decentralization and GDP growth. In order to examine the different impacts of decentralization, the same analysis was applied to subsets of countries categorized into three groups according to the economic stage of the country. This further analysis found that there is a negative relationship between political decentralization and growth in developing countries, between fiscal decentralization and growth in semi-developed countries, but no relationship in developed countries. These results show that decentralization is not always instrumental in economic growth, which means that the time variable, or more precisely the stage of economic development of a country, is an important factor when introducing decentralization reforms.     

How Accurate is Food-for-Work Self-Targeting in the Presence of Imperfect Factor Markets? Evidence from Ethiopia

Effective targeting of transfers is a key issue in public policy to combat poverty. Much faith is presently placed in self-targeting mechanisms such as public employment schemes supported by food-for-work transfers. Where targeting errors have been observed, these are usually attributed to mismanagement of key operational details, such as the project's wage rate. Using a unique data set from rural Ethiopia, we demonstrate that targeting errors may also have structural causes in some low-income countries. We hypothesise that imperfect factor markets generate a predictable dispersion across households in reservation wage rates that breaks down the unconditionally positive relation between income and shadow wages on which the theory of self-targeting public employment programmes rests. Our results confirm that the inaccuracy of FFW targeting stems from the fact that, in rural Ethiopia, higher income households are endowed with more labour per unit of land or animal. Due to poor factor markets in land and livestock these labour-abundant households have lower marginal labour productivity on farm, thereby depressing the reservation wage rates they find acceptable for FFW participation.     

Are Place-Based Policies Always a Blessing? Evidence from China’s National Poor County Programme

In this paper, we evaluate the effects of a large-scale and continuing place-based policy in China. In 1994, the Chinese central government designated 592 counties as National Poor Counties (NPC), which have been receiving preferential treatment in several aspects. Our identification strategy exploits a discontinuous criterion for determining a county’s eligibility of the programme. We find that the NPC programme failed to foster local economic growth. Further investigation suggests that local capture is partly responsible for this failure. Our findings yield important policy implications that, in countries with limited local accountability, place-based policies characterised by decentralised implementation are not always a blessing.