Do Migrants Improve Governance at Home? Evidence from a Voting Experiment

Can international migration promote better institutions at home by raising the demand for political accountability? In order to examine this question, we designed a behavioral measure of the population's desire for better governance. A postcard was distributed to households with the pledge that, if enough postcards were mailed back, results from a survey module on perceived corruption would be made public in the national media. Using data from a tailored household survey, we examine the determinants of our behavioral measure of demand for political accountability (i.e. of undertaking the costly action of mailing the postcard), and isolate the positive effect of international emigration using locality level variation. The estimated effects are robust to the use of instrumental variables, including both past migration and macro shocks in the migrant destination countries. We find that the estimated effects can be mainly attributed to those who emigrated to countries with better governance, especially return migrants.international migration, governance, political accountability, institutions, effects of emigration in origin countries, household survey, Cape Verde, sub-Saharan Africa.

Do Migrants Improve Governance at Home? Evidence from a Voting Experiment

This paper tests the hypothesis that international migration experiences may promote better institutions at home by raising the demand for political accountability. In order to examine this question, we use a simple postcard voting experiment designed to capture the population’s desire for better governance. Using data from a tailored household survey, we examine the determinants of voting behavior in our experiment, and isolate the positive effect of international emigration on the demand for political accountability. We find that this effect can be mainly attributed to the presence of return migrants, particularly to those who emigrated to countries with better governance.international migration, household survey, governance, political accountability, institutions, effects of emigration in origin countries, Cape Verde, Sub-Saharan Africa

Legal Corruption

We challenge the conventional definition of corruption as the abuse of public office for private gain, making a distinction between legal and illegal forms of corruption, and paying more attention to corporate patterns of corruption (which also affect public corruption). We undertake to identify general determinants of the pattern of legal and illegal corruption worldwide, and present a model where both corruption (modeled explicitly in the context of allocations) and the political equilibrium are endogenous. Three types of equilibrium outcomes are identified as a function of basic parameters, namely initial conditions (assets/productivity), equality, and fundamental political accountability. These equilibria are: i) an illegal corruption equilibrium, where the political elite does not face binding incentives; ii) a legal corruption equilibrium, where the political elite is obliged to incur on a cost to deceive the population; and iii) a no-corruption equilibrium, where the population cannot be deceived. An integral empirical test of the model is performed, using a broad range of variables and sources. Its core variables, namely regarding legal corruption (and other manifestations of corporate corruption) come from an original survey developed with the World Economic Forum (in the Executive Opinion Survey 2004 of the Global Competitiveness Report). The empirical results generally validate the model and explanations. Some salient implications emerge.

Votes and Violence: Evidence from a Field Experiment in Nigeria

Following the wave of democratization during the 1990s, elections are now common in low-income societies. However, these elections are frequently flawed. We investigate the Nigerian general election of 2007, which is to date the largest election held in Africa and one seriously marred by violence. We designed and conducted a nationwide field experiment based on randomized anti-violence grassroots campaigning. We find direct effects on violence outcomes from exploring both subject-surveying and independent data sources. Crucially, we establish that voter intimidation is effective in reducing voter turnout, and that the violence was systematically dissociated from incumbents. We suggest that incumbents have a comparative advantage in alternative strategies, vote buying and ballot fraud. Voter intimidation may be a strategy of the weak analogous to terrorism.Violence, Conflict, Electoral Politics, Political Economy, Randomized Experiment, Field Experiment, Nigeria, West Africa

Testing the 'Brain Gain' Hypothesis: Micro Evidence from Cape Verde

Does emigration really drain human capital accumulation in origin countries? This paper explores a unique household survey purposely designed and conducted to answer this research question. We analyze the case of Cape Verde, a country with allegedly the highest 'brain drain' in Africa, despite a marked record of income and human capital growth in recent decades. Our micro data enables us to propose the first explicit test of 'brain gain' arguments according to which the prospects of own future migration can positively impact educational attainment. According to our results, a 10pp increase in the probability of own future migration may improve the average probability of completing intermediate secondary schooling by 8pp for individuals who do not migrate before age 16. Strikingly, this same 10pp increase may raise the probability of completing intermediate secondary schooling by 11pp for an individual whose parents were both non migrants when the educational decision was made. Our findings are robust to the choice of instruments and econometric model. Overall, we find that there may be substantial human capital gains from lowering migration barriers.household survey, Cape Verde, brain drain, brain gain, international migration, human capital, effects of emigration in origin countries, sub-Saharan Africa

Testing the 'Brain Gain' Hypothesis: MIcro Evidence from Cape Verde

Does emigration really drain human capital accumulation in origin countries? This paper explores a unique household survey purposely designed and conducted to answer this research question. We analyze the case of Cape Verde, a country with allegedly the highest ‘brain drain’ in Africa, despite a marked record of income and human capital growth in recent decades. Our micro data enables us to propose the first explicit test of ‘brain gain’ arguments according to which the prospects of own future migration can positively impact educational attainment. According to our results, a 10pp increase in the probability of own future migration improves the average probability of completing intermediate secondary schooling by 8pp. Our findings are robust to the choice of instruments and econometric model. Overall, we find that there may be substantial human capital gains from lowering migration barriers.

Evidence from a field experiment

What is the economic impact of newly introducing mobile money in rural areas underserved by financial services? This study is the first to use a randomized controlled trial to answer this research question. Following a sample of rural communities in Southern Mozambique, our experimental results show that the availability of mobile money translated into clear adoption of these services, measured through administrative data on mobile money transactions. We find that mobile money improved consumption smoothing by treated households, i.e., they became less vulnerable to adverse weather and self-reported shocks. However, we also observe that mobile money led to reduced investment, especially in agriculture. We document increases in the number of migrants in a household and in the migrant remittances received by rural households particularly in presence of adverse shocks, while there are no clear effects on savings. We interpret these results as evidence that, by drastically reducing the transaction costs associated with migrant remittances and improving migration-based insurance possibilities, mobile money acted as a facilitator of migration from rural to urban areas.publishersversionpublishe

evidence from an experiment in rural Africa

Who uses mobile money, and what do people do with it? This paper describes mobile money adoption patterns following the experimental introduction of mobile money for the first time in rural areas of Southern Mozambique. We use administrative and household survey data to characterize adopters as well as their mobile money usage patterns over three years. Adopters of mobile money (and early adopters in particular) are more educated than nonadopters, and they are also more likely to already hold a bank account. Positive self-selection of adopters should be considered when introducing mobile money as a tool for rapid financial inclusion.authorsversionpublishe

experimental evidence from African smallholder farmers

Investment in improved agricultural inputs is infrequent for smallholder farmers in Africa. One barrier may be limited access to formal savings. This is the first study to use a randomized controlled trial to evaluate the impact of using mobile money as a tool to promote agricultural investment. For this purpose, we designed and conducted a field experiment with a sample of smallholder farmers in rural Mozambique. This sample included a set of primary farmers and their closest farming friends. We work with two cross-randomized interventions. The first treatment gave access to a remunerated mobile savings account. The second treatment targeted closest farming friends and gave them access to the exact same interventions as their primary farmer counterparts. We find that the remunerated mobile savings account raised mobile savings, but only while interest was being paid. It also increased agricultural investment in fertilizer, although there was no change in investment in other complementary inputs that were not directly targeted by the intervention, unlike fertilizer. These results suggest that fertilizer salience in the remunerated savings treatment may have been important to focus farmers’ (limited) attention on saving some of their harvest proceeds, rather than farmers being financially constrained by a lack of alternative ways to save. Our results also suggest that the network intervention where farming friends had access to non-remunerated mobile money accounts decreased incentives to save and invest in agricultural inputs, likely due to network free-riding because of lower transfer costs within the network. Overall this research shows that tailored mobile money products can be used effectively to improve modern agricultural technology adoption in countries with very low agricultural productivity like Mozambique.authorsversionpublishe

Introducing Mobile Money in Rural Mozambique: Evidence from a Field Experiment*

The limitations of access to finance in Africa, together with the recent boom in cell phone use in that continent, created high expectations regarding the introduction of mobile money in many African countries. The success story of M-PESA in Kenya raised the bar further. We designed and conducted a field experiment to assess the impact of randomized mobile money dissemination in rural Mozambique. For this purpose we benefit from the fact that mobile money was only recently launched in the country, allowing for the identification of a pure control group. This paper reports on the first results of this ongoing project after the first wave of dissemination efforts in rural locations, which included the recruitment and training of mobile money agents, community meetings and theaters, as well as individual rural campaigning. Administrative and behavioral data both show clear adherence to the services in the treatment group. Financial literacy and trust outcomes are also positively affected by the treatment. We present behavioral evidence that the marginal willingness to remit was increased by the availability of mobile money. Finally, we observe a tendency for mobile money to substitute traditional alternatives for both savings and remittances.International Growth Centre (IGC), INOVA, Nova Forum, NOVAFRIC