Journal of Development Economics最新文献

We use new administrative data from Ecuador to study the welfare effects of the misallocation of procurement contracts caused by political connections. We show that firms that form links with the bureaucracy through their shareholders experience an increased probability of being awarded a government contract. We develop a novel sufficient statistic – the average gap in revenue productivity and capital share of revenue – to measure the efficiency effects, in terms of input utilization, of political connections. Our framework allows for heterogeneity in quality, productivity, and non-constant marginal costs. We estimate political connections create welfare losses ranging from 2 to 6% of the procurement budget.

Continued emphasis in development economics on measurement and survey design provides opportunities to expand the research frontier. Yet methods work, particularly survey experiments and mode effect studies, remains scantly published in economics. This special issue contributes to the evolution of development economics by presenting evidence on three broad sets of methodological problems that researchers face: managing measurement error, expanding the scope of measurement, and understanding measurement error mechanisms.

The location of oil reserves plays an essential role in policymakers’ incentives to coordinate supply-side climate policy. In this paper I use data on the location of all historic onshore petroleum discoveries to establish a new stylized fact: Economically developed areas are many times more likely to contain an oil or gas discovery, compared to undeveloped areas. I show that this result is not driven reverse causality or confounding geology. By implication, there exist large additional undiscovered oil and gas deposits in currently undeveloped areas, mainly located outside of Europe and North America. I quantify these deposits to be about 40% of total discovered onshore oil reserves.

While cash transfers consistently show large effects on immediate outcomes like consumption, limited access to markets may mute their impact on productive investment. In an experiment in Malawi, we cross-cut cash transfers with an “input fair”, designed to reduce transport costs to access agricultural inputs. Cash alone increases investment by 27%, while the joint provision of cash and the input fair increases investment by about 40%; thus, the incremental effect of the input fair is equivalent to about a 50% increase compared to the effect of cash alone. Input fairs alone were ineffective.

Making use of a unique administrative data set consisting of the universe of administrative filings in Rwanda, this paper investigates the impact of tax audits on businesses’ reporting behaviour. The evidence suggests that tax audits have a positive impact on corporate income and corporate tax liabilities reported for three years after the start of the audit process. The results also suggest that the type of audit matters. While ‘comprehensive’ tax audits have a significant positive effect on compliance, ‘narrow-scope’ tax audits exhibit both a positive and a negative effect during a three-year period after the audit, with the net impact being negative. The implication of this, from a tax compliance perspective, is that ‘narrow-scope’ audits are ineffective and that doing more of those and less of comprehensive ones might have a negative impact on tax compliance. Effective tax compliance strategy therefore requires the careful evaluation of all types of audits.

In addition to generating a negative environmental externality, a household’s water consumption entails another “market failure”: household members free-ride off each other and overconsume. The problem stems from consumption being billed at the household level and the difficulty of monitoring one another’s consumption. We document the importance of this phenomenon in urban Zambia by combining utility billing records and randomized person-specific price variation. We derive and empirically confirm the following prediction: Individuals with weaker incentives to conserve under the household’s financial arrangements reduce water use more when their person-specific price increases. Another prediction is that this overconsumption problem is more acute when the financial benefit of a lower utility bill is shared unevenly among household members. We show that households indeed seem more responsive to a change in the household-level price of water when their financial arrangements are more equal. Our results offer a novel explanation for the low price sensitivity of residential water (and electricity) consumption.

Product quality is widely regarded as an important determinant for economic development. This paper investigates whether horizontal foreign direct investment (FDI) improves or deteriorates the quality of domestic firms’ exports. We use China’s FDI regulation changes in 2002 as an instrument variable (IV) for FDI penetration in China to identify the causal impact and introduce a theoretical model to rationalize our empirical work. We find that FDI inflows exert a significantly negative effect on Chinese firms’ export quality. The mechanism of the negative effect is that FDI intensifies the domestic market competition, which induces within-firm adjustment of product mix and lowers domestic firms’ incentive to invest in the quality of new products. In particular, while domestic firms drop some existing products and introduce new products, they invest less in the quality of new products and maintain the quality of continuing products.

In socially conservative Muslim societies, the absence of a sex-appropriate school in one’s community has historically been a major constraint to girls’ schooling. We use the expansion of access to girls’ or mixed schools in Jordan to investigate the effects of access to school on women’s education and fertility. We find that having access to a sex-appropriate school in a woman’s sub-district of birth led to 3.0–3.4 additional years of schooling and 1.0–1.4 fewer births. Using access to girl-appropriate schools as an instrument for female educational attainment, we find that an additional year of schooling reduces total fertility by 0.3–0.4 births. The impact of schooling on fertility is mostly for births occurring at older ages (30+) and higher parities (6+). We also find evidence of effects on intergenerational transmission of education but we find no evidence that school access has translated into higher participation in the labor market.

As the climate changes, efficient climate policy requires a better understanding of how individuals adapt. Despite extensive research on various climate adaptation frictions, including financial and technological constraints, models of adaptive decision-making assume that agents have perfect information and accurate beliefs about climate. Combining rural household data in Bangladesh with a meteorological measure of dryness, this paper studies the role of individual drought beliefs and their accuracy in irrigation decisions as a key adaptive margin. In a theoretical model, I introduce a behavioral friction to document how heterogeneous beliefs differentially influence responsiveness to the same meteorological signal in dryness. The empirical analysis reveals an asymmetric response to dry shocks in irrigation conditional on the accuracy of prior beliefs. A counterfactual analysis shows lower technology adoption levels and higher monetary losses when beliefs are inaccurate.

This paper empirically studies the impact of massive and sudden school closures following the 2011 nationwide student strike in Chile on teenage pregnancy. We observe an average increase of 2.7% in teenage pregnancies in response to temporary high school shutdowns, equal to 1.9 additional pregnancies per lost school day. The effect diminishes after three quarters since the strike’s onset. The effects are predominantly driven by first-time mothers aligned with high-school absenteeism periods and are unrelated to the typical seasonality of teenage fertility or pregnancies in other age groups. Additionally, we document that the strike had a larger disruptive role by affecting students’ educational trajectories, evidenced by a persistent increase in dropout rates and a reduction in college admission test take-up for both female and male students.