The Triple Crisis: What Development Prospects for Africa?

Africa, Triple Crisis, Development, WIDER 25 Anniversary

Toward a Territorial Approach to Rural Development

This paper explores a territorial approach to rural development in Latin America. It first reviews evidence that progress in rural social development has not been accompanied by reductions in income poverty and inequality. It then assesses qualitative changes that have occurred in rural incomes and the emergence of new opportunities for rural poverty reduction and draws implications for the potential of a territorial approach to rural development. Recent experiences with territorial approaches are briefly reviewed and lessons extracted for the implementation of such an approach. It concludes with a series of recommendations for implementation of a territorial approach to rural development.rural development, rural poverty, territorial approach, inequality, Latin America, Community/Rural/Urban Development, O10, O13, O15, O18,

Flourish or Fail?: The Risky Reward of Elite High School Admission in Mexico City

Admission to an elite school imposes substantial risks on many students while offering modest academic benefits relative to admission in their most preferred nonelite school. Using variation in school assignment generated by the allocation mechanism, we find that admission to a system of elite public high schools in Mexico City increases the probability of high school dropout by 9.4 percentage points. Students with weaker middle school grades and whose commutes are lengthened by elite admission experience a larger rise in dropout probability. On the other hand, elite admission raises end-of-high-school math test scores for the marginal admittee, even when accounting for potential bias due to admission-induced dropout

Cash transfer programs with income multipliers

Cash transfer programs induce multiplier effects when recipients put the money they receive to work to generate additional income. The ultimate income effects are multiples of the amounts transferred. This paper analyzes the PROCAMPO program in Mexico, which was introduced to compensate farmers for the anticipated negative effect of the North American Free Trade Agreement (NAFTA) on the price of basic crops. The transfer rules and the timing of the panel data collected allow unique control of biases in this impact analysis. We find that the multiplier among ejido sector recipients is in the range of 1.5 to 2.6. Multipliers are higher for medium and large farm households, low numbers of adults in the household, nonindigenous backgrounds, and households located in the Center and Gulf regions. High multipliers reflect marginal income opportunities that were unrealized due to liquidity constraints that the transfers eased. Opportunities came from the asset endowments that these households have, particularly irrigated land, and these opportunities were enhanced by access to technical assistance.Subsidies Mexico ,income ,

The supply and demand side impacts of credit market information

We utilize a unique pair of experiments to study the precise ways in which reductions in asymmetric information alter the outcome in a credit market. We formulate a general model in which the information set held by lenders, and what borrowers believe their lenders to know, enter separately. This model illustrates that non-experimental identification of the supply- and demand-side information in a market will be confounded. We then present a unique natural experiment, wherein a Guatemalan credit bureau was implemented without the knowledge of borrowers, and subsequently borrowers were given a randomized course describing the existence and workings of the bureau. Using this pairing of randomized and natural experiment, we find that the most powerful effect of new information in the hands of lenders is seen on the extensive margin, in their ability to select better clients. Changes in contracts for ongoing borrowers are muted. When borrower in group loans learn that their lender possesses this new information set, on the other hand, we see strong responses on both the intensive margin (changes in moral hazard) and the extensive margin (groups changing their composition to improve performance). We find some evidence that disadvantaged and female borrowers are disproportionately impacted. Our results indicate that credit bureaus allow for large efficiency gains, that these gains are augmented when borrowers understand the rules of the game, and that economic mobility both upwards and downwards is likely to be increased.

Is a Friend in Need a Friend Indeed? Inclusion and Exclusion in Mutual Insurance Networks in Southern Ghana

Mutual insurance has been shown, theoretically and empirically, to be incomplete and limited by asymmetric information and lack of enforcement mechanisms. While some research has shown that networks based on kinship, neighborhood and ethnicity may provide a locus of insurance and thus a way of overcoming these problems, these studies are not fine enough to predict the inclusion and exclusion of individuals. Using data from rural Ghana, we examine the role of social relations in obtaining assistance in the face of shocks. We examine this at both the intra-household and community levels. At the household level, asking for and receiving assistance from the spouse is related to gender, the quality of the marital relationship, and the wealth of household members. At the community level, asking for and receiving help are correlated with membership in a major lineage, participation in secular organizations, the individual's fostering history, and anticipated land inheritance. We also show that these factors differ depending on whether the shortfall was for a household or personal item (as perceived by the respondent). This work helps us to identify individuals who are more likely to fall outside of mutual insurance networks and require interventions to help them cope with risk.Risk, social setworks, sutual insurance, intrahousehold allocation.

Cash transfer programs with income multipliers

Cash transfer programs induce multiplier effects when recipients put the money they receive to work to generate additional income. The ultimate income effects are multiples of the amounts transferred. This paper analyzes the PROCAMPO program in Mexico, which was introduced to compensate farmers for the anticipated negative effect of the North American Free Trade Agreement (NAFTA) on the price of basic crops. The transfer rules and the timing of the panel data collected allow unique control of biases in this impact analysis. We find that the multiplier among ejido sector recipients is in the range of 1.5 to 2.6. Multipliers are higher for medium and large farm households, low numbers of adults in the household, nonindigenous backgrounds, and households located in the Center and Gulf regions. High multipliers reflect marginal income opportunities that were unrealized due to liquidity constraints that the transfers eased. Opportunities came from the asset endowments that these households have, particularly irrigated land, and these opportunities were enhanced by access to technical assistance.Subsidies Mexico ,income ,

MEASURING THE INCOME GENERATING POTENTIAL OF LAND IN RURAL MEXICO

This paper measures the potential of land to generate income and establishes the contexts under which access to land can reduce poverty. Using Mexican household data, we apply nonparametric regression methods to estimate and graphically explore the relationship between land and welfare. Results suggest that the marginal value of land depends on both the complementary and contextual assets of the poor.Land Economics/Use,

FAMILY AND COMMUNITY NETWORKS IN MEXICO-U.S. MIGRATION

A household's decision to send migrants is based on information the household has on the expected returns and the costs of migration. Information on migration flows from both family migrant networks and community migrant networks. Direct assistance - in the form of money, housing, transportation, and food - is often provided to migrants by these networks, thus reducing the costs of migration. Using data from a national survey of rural Mexican households, we show the importance of networks in both the decision to migrate and the level of migration. We find that community and family networks are substitutes in the production of information and assistance suggesting that, once migration is well established in a community, family networks become less important. In addition, the development of strong community networks erases the role of household characteristics in migration, allowing those initially least favored to also participate in migration. Results suggest that policies designed to reduce Mexico-U.S. migration should focus on regions where migrant networks are yet weakly developed since, once strong community networks become established, reducing migration would require much higher levels of public investment.Migration, networks, Mexico, Consumer/Household Economics, Labor and Human Capital,

Transforming developing country agriculture: Removing adoption constraints and promoting inclusive value chain development

For most poor countries of today, investing in agriculture and the associated sectoral linkages is the most promising strategy for sustained growth and poverty reduction. Yet, in these countries, investment in agriculture has generally been lagging relative to international norms and recommendations. We start from the premise that this has been due to lack of success in modernizing the operations of smallholder farmers (SHF) that typically constitute the core of the farm population. These farmers are linked to consumers through value chains that range from the most elementary (local spot markets) to the most advanced (contract farming and out-grower schemes). Current wisdom with cases of successful modernization of smallholder farming is that it requires asset building, productivity growth in staple foods (Green Revolution), agricultural transformation (diversification of farming systems toward high value crops), and rural transformation (value addition through rural non-farm activities linked to agriculture). … /… Key words: Constraints removal approach: constraints to modernization originating in credit, insurance, information, and access to deep markets. Inclusive value chain development approach: incentives to modernize originating in access to assets, contracts, producer organizations discipline, and value chain coordination