Do community-driven development projects enhance social capital ? evidence from the Philippines

This paper explores the social capital impacts of a large-scale, community-driven development project in the Philippines in which communities competed for block grants for infrastructure investment. The analysis uses a unique data set of about 2,100 households collected before the project started (2003) and after one cycle of sub-project implementation (2006) in 66 treatment and 69 matched control communities. Participation in village assemblies, the frequency with which local officials meet with residents and trust towards strangers increased as a result of the project. However, there is a decline in group membership and participation in informal collective action activities. This may have been because households were time-constrained, so that in order to participate in project activities, they needed to temporarily reduce their participation in informal activities. An alternative explanation is that the project improved the efficiency of formal forms of social capital and thus households needed to rely less on informal forms. Finally, the results indicate that, in the short run, the project might have reduced the number of other investments.Housing&Human Habitats,Access to Finance,Social Accountability,Social Capital,Banks&Banking Reform

A road to trust

The authors explore the relationship between transaction costs and generalized trust. Using panel data from 2,100 households in 135 rural communities of the Philippines, the paper shows that where transaction costs are reduced (proxied by road construction), there is an increase in generalized trust. Consistent with the argument that generalized trust is built through repeated interactions, the authors find that the individuals most likely to engage in exchange exhibit an increase in trust after road construction. These results suggest that, rather than being an input to economic growth, trust might be a product of reduced transaction costs (which also favors growth).Post Conflict Reconstruction,Transport Economics Policy&Planning,Rural Roads&Transport,Social Capital,Corporate Law

The power of information : the impact of mobile phones on farmers'welfare in the Philippines

The authors explore the impact of access to information on poor farmers’ consumption. The analysis combines spatially coded data on mobile phone coverage with household panel data on farmers from some of the poorest areas of the Philippines. Both the ordinary least squares and instrumental variable estimates indicate that purchasing a mobile phone has a large, positive impact on the household-level growth rate of per capita consumption. Estimates range from 11 to 17 percent, depending on the sample and the specification chosen. The authors perform a range of reliability tests, the results of which all suggest that the instruments are valid. They also present evidence consistent with the argument that easier access to information allows farmers to strike better price deals within their existing trading relationships and to make better choices in terms of where they choose to sell their goods.E-Business,Access to Finance,Rural Poverty Reduction,Debt Markets,Poverty Lines

Conflict, Ideology and Foreign Aid

In this paper, we present a rent-seeking model of conflict, which highlights the role of ideology in determining whether the government or the rebels take the initiative. We use the model to interpret the impact of a large-scale Community-Driven Development project on civil conflict in the Philippines. The country is characterized by the presence of two rebel groups, the New People's Army (NPA) and the Moro Islamic Liberation Front (MILF), with two distinct ideologies. We use a unique geo-referenced panel dataset on the occurrence of conflicts in 2003 and 2006 gathered from local newspapers that we match with nationally representative household survey and budget data on all municipalities in the country. Consistent with our model's predictions, using a variety of estimation strategies, we find robust evidence that the project leads to a decline in MILF-related events and to an increase in NPA-related events.Civil Conflict;foreign aid;Rent Seeking;Community-Driven Development;philippines

Conflict, Ideology and Foreign Aid

In this paper, we present a rent-seeking model of conflict, which highlights the role of ideology in determining whether the government or the rebels take the initiative. We use the model to interpret the impact of a large-scale Community-Driven Development project on civil conflict in the Philippines. The country is characterized by the presence of two rebel groups, the New People's Army (NPA) and the Moro Islamic Liberation Front (MILF), with two distinct ideologies. We use a unique geo-referenced panel dataset on the occurrence of conflicts in 2003 and 2006 gathered from local newspapers that we match with nationally representative household survey and budget data on all municipalities in the country. Consistent with our model's predictions, using a variety of estimation strategies, we find robust evidence that the project leads to a decline in MILF-related events and to an increase in NPA-related events.Civil Conflict, foreign aid, Rent Seeking, Community-Driven Development, philippines

Conflict, Ideology and Foreign Aid

In this paper, we present a rent-seeking model of conflict, which highlights the role of ideology in determining whether the government or the rebels take the initiative. We use the model to interpret the impact of a large-scale Community-Driven Development project on civil conflict in the Philippines. The country is characterized by the presence of two rebel groups, the New People's Army (NPA) and the Moro Islamic Liberation Front (MILF), with two distinct ideologies. We use a unique geo-referenced panel dataset on the occurrence of conflicts in 2003 and 2006 gathered from local newspapers that we match with nationally representative household survey and budget data on all municipalities in the country. Consistent with our model's predictions, using a variety of estimation strategies, we find robust evidence that the project leads to a decline in MILF-related events and to an increase in NPA-related events

Economic shocks and labor market flexibility

We test how labor markets adjust to large, but temporary, economic shocks in a context in which such shocks are common. Using an individual-level panel, from 1,140 Philippine municipalities over 26 quarters, we find that workers in areas affected by strong typhoons experience reductions in hours worked and hourly wages, without evidence of layoffs. The results are strongest for formal, wagepaying jobs. We argue that those results are best explained by implicit contracts where workers and firms share risks. We provide extensive qualitative data suggesting that employment contracts in the Philippines allow for such flexibility

Empirical essays on political economy

This thesis is about how elected politicians stay in power and about some of its economic and social consequences, fundamental political economy questions. It takes advantage of the decentralized political structure in the Philippines to test models of voter and politician behavior. In doing so, it contributes to the literature on clientelism and retrospective voting. In Chapter One, I assess the impacts of targeted government transfers on a local incumbent's electoral performance. I use the randomized roll-out of a CCT program in the Philippines where a number of municipalities are tightly controlled by political dynasties. In a competitive political environment, incumbent vote share is 26 percentage-points higher in municipalities where the program was implemented in all villages than in municipalities where the program was implemented in half of them.The program had no impact in municipalities with low levels of political competition. In Chapter Two, I test for the presence of political business cycles in Philippine municipalities over the period 2003-2009, a context where according to the literature such cycles are likely to be observed. I find robust evidence for the presence of political business. This effect is only present when I use quarterly data and vanishes when I aggregate the data at the yearly-level. The difference is not merely driven by a decline in statistical power due to aggregation: point estimates for the overall effects are 7 times larger when I use quarterly data than when I use yearly data. This discrepancy can be explained by a drop in employment post-election that dilutes the yearly effects. In Chapter Three, we estimate the impacts of being connected to local politicians, either currently in office or in opposition, on occupational choice. We use a large administrative dataset collected between 2008 and 2010 on all individuals in 700 Philippine municipalities along with information on all candidates in the 2007 and 2010 municipal elections. We rely on local naming conventions to assess blood and marriage links between households. Using individuals connected to successful candidates in the 2010 elections that did not run in 2007 as a control group, we find that connections to current office-holders increase the likelihood of being employed in better paying occupations. Individuals connected to candidates that were close to being elected in 2007 are less likely to be employed in better paying occupations.</p