Mental health in the aftermath of conflict

The authors survey the recent literature on the mental health effects of conflict. They highlight the methodological challenges faced in this literature, which include the lack of validated mental health scales in a survey context, the difficulties in measuring individual exposure to conflict, and the issues related to making causal inferences from observed correlations. They illustrate how some of these issues can be overcome in a study of mental health in post-conflict Bosnia and Herzegovina. Mental health is measured using a clinically validated scale; conflict exposure is proxied by administrative data on war casualties instead of being self-reported. The analysis suggests that there are no significant differences in overall mental health across areas which are affected by ethnic conflict to a greater or lesser degree.Health Monitoring&Evaluation,Disease Control&Prevention,Population Policies,Gender and Health,Health Systems Development&Reform

How does geographic distance affect credit market access in Niger ?

Distances involved in accessing basic services can constitute a major barrier to development. This paper analyzes the relationship between the distance separating households from microfinance institutions'offices in Niger, and the low levels of development and performance of the microfinance sector in the country. To cope with the effects of geographical distance, microfinance institutions adapt their policies through more restrictive loan conditions, higher interest rates, and more intensive screening. The authors to discuss the tension between access and sustainability in the context of financial services for the poor.

Financial dollarization and central bank credibility

Why do firms and banks hold foreign currency denominated liabilities? The authors argue that foreign currency debt, by altering the effect of a devaluation on output, has a disciplining effect when the Central Bank's objectives differ from the social optimum. However, under imperfect information, bad priors about the Central Bank induce excess dollarization of liabilities, which in turn limits the ability of the Central Bank to conduct an optimal monetary policy. In addition the economy may become stuck in a"dollarization trap"in which dollarized liabilities limit the ability of agents to learn the true type of the monetary authority. The model has clear-cut policy implications regarding the taxation of foreign currency liabilities as a way to encourage perfect information and avoid dollarization traps. Moreover, it reinforces the existing argument for Central Bank independence. Finally, the authors believe this model to be consistent with a growing empirical literature on the determinants of foreign currency liabilities and their relationships to Central Bank credibility.Financial Intermediation,Environmental Economics&Policies,Payment Systems&Infrastructure,Economic Theory&Research,Fiscal&Monetary Policy,Economic Theory&Research,Economic Stabilization,Environmental Economics&Policies,Macroeconomic Management,Financial Intermediation

Embedding based on function approximation for large scale image search

The objective of this paper is to design an embedding method that maps local features describing an image (e.g. SIFT) to a higher dimensional representation useful for the image retrieval problem. First, motivated by the relationship between the linear approximation of a nonlinear function in high dimensional space and the stateof-the-art feature representation used in image retrieval, i.e., VLAD, we propose a new approach for the approximation. The embedded vectors resulted by the function approximation process are then aggregated to form a single representation for image retrieval. Second, in order to make the proposed embedding method applicable to large scale problem, we further derive its fast version in which the embedded vectors can be efficiently computed, i.e., in the closed-form. We compare the proposed embedding methods with the state of the art in the context of image search under various settings: when the images are represented by medium length vectors, short vectors, or binary vectors. The experimental results show that the proposed embedding methods outperform existing the state of the art on the standard public image retrieval benchmarks.Comment: Accepted to TPAMI 2017. The implementation and precomputed features of the proposed F-FAemb are released at the following link: http://tinyurl.com/F-FAem

Poverty, social divisions, and conflict in Nepal

The authors conduct an econometric analysis of the economic and social factors which contributed to the spread of violent conflict in Nepal. They find that conflict intensity is significantly higher in places with greater poverty and lower levels of economic development. Violence is higher in locations that favor insurgents, such as mountains and forests. The authors find weaker evidence that caste divisions in society are correlated with the intensity of civil conflict, while linguistic diversity has little impact.Population Policies,Social Conflict and Violence,Services&Transfers to Poor,Post Conflict Reintegration,Peace&Peacekeeping

Superstition, family planning, and human development

Are wanted and unwanted children treated equally by their parents? To address this question, the authors rely on the observation that, according to Vietnamese astrology, dates of birth are believed to be determinants of success, luck, character, and good match between individuals. They then examine fertility decisions made in Vietnam between 1976 and 1996. The authors find that birth cohorts in auspicious years are significantly larger than in other years. Children born in auspicious years moreover do better both in health and education. While parental characteristics seem to affect fertility choices and human development simultaneously, their analysis suggests that family planning is one key mechanism leading to the observed differences in outcomes: in a society in which superstition is widespread, children born in auspicious years are more likely to have been planned by their parents, thus benefiting from more favorable financial, psychological, or emotional conditions for better human development.Health Monitoring&Evaluation,Youth and Governance,Adolescent Health,Population Policies,Gender and Social Development

Trade, inequality, and the political economy of institutions

The authors analyze the relationship between international trade and the quality of economic institutions such as contract enforcement, rule of law, or property rights. The literature on institutions has argued, both empirically and theoretically, that larger firms care less about good institutions and that higher inequality leads to worse institutions. Recent literature on international trade enables the authors to analyze economies with heterogeneous firms, and argue that trade opening leads to a reallocation of production in which large firms grow larger, while small firms become smaller or disappear. Combining these two strands of literature, the authors build a model that has two key features. First, preferences over institutional quality differ across firms and depend on firm size. Second, institutional quality is endogenously determined in a political economy framework. They show that trade opening can worsen institutions when it increases the political power of a small elite of large exporters that prefer to maintain bad institutions. The detrimental effect of trade on institutions is most likely to occur when a small country captures a sufficiently large share of world exports in sectors characterized by economic profits.Economic Theory&Research,Free Trade,Trade Law,Trade Policy,Trade and Services

The Economics of Consanguinity

The institution of consanguineous marriage - a marriage contracted between close biological relatives - has been a basic building block of many societies in different parts of the world. This paper argues that the practice of consanguinity is closely related to the practice of dowry, and that both arise in response to an agency problem between the families of a bride and a groom. When marriage contracts are incomplete, dowries transfer control rights to the party with the highest incentives to invest in a marriage. When these transactions are costly however, consanguinity can be a more appropriate response since it directly reduces the agency cost. Our model predicts that dowry transfers are less likely to be observed in consanguineous unions, and that close-kin marriages are more prevalent at both extremes of the wealth distribution. An empirical analysis using data from Bangladesh delivers results consistent with the predictions of the model, lending strong support to our theory

Trade and financial development

The differences in financial development between advanced and developing countries are pronounced. It has been observed, both theoretically and empirically, that these differences in countries'financial systems are a source of comparative advantage and trade. This paper points out that to the extent a country's financial development is endogenous, it will in turn be influenced by trade. The paper builds a model in which a country's financial development is an equilibrium outcome of the economy's productive structure: in countries with large financially intensive sectors financial systems are more developed. When a wealthy and a poor country open to trade, the financially dependent sectors grow in the wealthy country, and so does the financial system. By contrast, as the financially intensive sectors shrink in the poor country, demand for external finance decreases and the domestic financial system deteriorates. This paper describes the authors'test model using data on financial development for a sample of 77 countries. The authors find that the main predictions of the model are borne out in the data: trade openness is associatedwith faster financial development in wealthier countries, and with slower financial development in poorer ones.Payment Systems&Infrastructure,Economic Theory&Research,Environmental Economics&Policies,Fiscal&Monetary Policy,Labor Policies,Economic Theory&Research,Environmental Economics&Policies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Macroeconomic Management,Inequality

Comparative advantage, demand for external finance, and financial development

The differences in the levels of financial development between industrial and developing countries are large and persistent. Theoretical and empirical literature has argued that these differences are the source of comparative advantage and could therefore shape trade patterns. This paper points out the reverse link: financial development is influenced by comparative advantage. The authors illustrate this idea using a model in which a country's financial development is an equilibrium outcome of the economy's productive structure: financial systems are more developed in countries with large financially intensive sectors. After trade opening demand for external finance, and therefore financial development, are higher in a country that specializes in financially intensive goods. By contrast, financial development is lower in countries that primarily export goods which do not rely on external finance. The authors demonstrate this effect empirically using data on financial development and export patterns in a panel of 96 countries over the period 1970-99. Using trade data, they construct a summary measure of a country's external finance need of exports and relate it to the level of financial development. In order to overcome the simultaneity problem, they adopt a strategy in the spirit of Frankel and Romer (1999). The authorsexploit sector-level bilateral trade data to construct, for each country and time period, a predicted value of external finance need of exports based on the estimated effect of geography variables on trade volumes across sectors. Their results indicate that financial development is an equilibrium outcome that depends strongly on a country's trade pattern.Economic Theory&Research,Free Trade,Trade Policy,Investment and Investment Climate,Trade Law