Urban Growth Externalities and Neighborhood Incentives: Another Cause of Urban Sprawl?

This paper suggests a cause of low density in urban development or urban sprawl that has not been given much attention in the literature. There have been a number of arguments put forward for market failures that may account for urban sprawl, including incomplete pricing of infrastructure, environmental externalities, and unpriced congestion. The problem analyzed here is that urban growth creates benefits for an entire urban area, but the costs of growth are borne by individual neighborhoods. An externality problem arises because existing residents perceive the costs associated with the new residents locating in their neighborhoods, but not the full benefits of new entrants which accrue to the city as a whole. The result is that existing residents have an incentive to block new residents to their neighborhoods, resulting in cities that are less dense than is optimal, or too sprawling. The paper models several different types of urban growth, and examines the optimal and local choice outcomes under each type. In the first model, population growth is endogenous and the physical limits of the city are fixed. The second model examines the case in which population growth in the region is given, but the city boundary is allowed to vary. We show that in both cases the city will tend to be larger and less dense than is optimal. In each, we examine the sensitivity of the model to the number of neighborhoods and to the size of infrastructure and transportation costs. Finally, we examine optimal subsidies and see how they compare to current policies such as impact fees on new development.Externalities, Urban Growth, Optimality, Policies, Taxation

Health and the Revolution in Household Behavior 1880-1940: Fertility, Education and Married Female Labor Supply (previously entitled: Schooling, Fertility, and Married Female Labor Supply: What Role for Health?)

Between the latter nineteenth century and the 1930s there was a dramatic revolution in American families. Family size continued its long-term decline, the schooling of older children expanded dramatically and the proportion of married females' adulthood devoted to market-oriented activities increased. Over this same period there were significant reductions in mortality, especially among the young, and impressive reductions in morbidity. This paper considers all these trends jointly, modeling the changes in fertility, child schooling and lifetime married female labor supply as a consequence of exogenous changes in health. These interactions are then quantified using calibration techniques. The simulations suggest that reductions in child mortality alone cannot explain the transformation of the American family. Indeed, in our preferred calibration, reductions in child mortality lead to a modest decline in human capital and increase in fertility, with little effect on married female labor force involvement. In sharp contrast, reductions in morbidity are found to lower fertility and increase education. The time savings from lower fertility more than offset the increased time mothers invest in their childrens' quality, freeing some time for market work. However, lower fertility alone cannot account for the increase in market work of married women. In our framework, the majority of the increase is a consequence of a narrowing of the gender wage gap. More generally, viewing the implications of health improvements deepens our understanding of the American family transformation, complementing explanations based on skill biased technical change and improvements in household durable goods.Schooling, Fertility, Health, Human Capital Accumulation, Labor Supply.

Sub-Saharan growth surprises: Geography, institutions and history in an all African data panel

We use two types of cross-country growth regression models to revisit explanations of slow growth in Africa looking at growth rate variation among African countries only. Both sets of models produce results that are surprising given conclusions based on global sample: within Africa, we .nd greater coastal population negatively and greater ethnic heterogeneity positively associated with growth, while distance from the equator is at .rst negatively and only later positively associated with growth. Our results suggest also that institutional and policy variables are endogenous to geographic and historical factors including the colonizing power and the religious and ethnic make-up of the country

Avoiding the fragility trap in Africa

Not only do Africa's fragile states grow more slowly than non-fragile states, but they seem to be caught in a"fragility trap". For instance, the probability that a fragile state in 2001 was still fragile in 2009 was 0.95. This paper presents an economic model where three features -- political instability and violence, insecure property rights and unenforceable contracts, and corruption -- conspire to create a slow-growth-poor-governance equilibrium trap into which these fragile states can fall. The analysis shows that, by addressing the three problems, fragile countries can emerge from the fragility trap and enjoy a level of sustained economic growth. But addressing these issues requires resources, which are scarce because external aid is often tailored to the country's performance and cut back when there is instability, insecurity, and corruption. The implication is that, even if aid is seemingly unproductive in these weak-governance environments, it could be hugely beneficial if it is invested in such a way that it helps these countries tackle the root causes of instability, insecurity, and corruption. Empirical estimations corroborate the postulated relationships of the model, supporting the notion that it is possible for African fragile countries to avoid the fragility trap.Economic Theory&Research,Debt Markets,Emerging Markets,Inequality,Achieving Shared Growth

Cooperation under the threat of expulsion in a public goods experiment

In a public goods experiment with the opportunity to vote to expel members of a group, we found that contributions rose to nearly 100% of endowments with significantly higher efficiency compared with a noexpulsion baseline. Expulsions were strictly of the lowest contributors, and there was an exceptionally strong fall-off in contributions in the last period, when the expulsion threat was unavailable. Our findings support the intuition that the threat of expulsion or ostracism is one device that helps groups to provide public goods

Financial Development and Geographic Isolation: Global Evidence

Using cross-country differences in the degree of isolation before the advent of technologies in sea and air transportation, we assess the relationship between geographic isolation and financial development across the globe. We find that pre-historic geographical isolation has been beneficial to development because it has contributed to contemporary cross-country differences in financial development. The relationship is robust to alternative samples, different estimation techniques, outliers and varying conditioning information sets

The White Man’s Burden: On the Effect of African Resistance to European Domination

Are there contemporary development effects of African resistance to European domination? This question is the primary issue addressed by this inquiry. We establish that African resistance has had adverse effects on post-colonial African development and discuss possible channels of such causality. This relationship is robust to alternative model and to controlling for the outliers

The White Man’s Burden: On the Effect of African Resistance to European Domination

Are there contemporary development effects of African resistance to European domination? This question is the primary issue addressed by this inquiry. We establish that African resistance has had adverse effects on post-colonial African development and discuss possible channels of such causality. This relationship is robust to alternative model and to controlling for the outliers