The cost of imperfect agency in health care: Evidence from rural Cameroun

Health is a pressing problem facing Africans today, yet health care systems in Africa are inadequate and under-funded. We show that pervasive imperfect agency means that they are also inefficient. Imperfect agency (due to unobservable medical effort) is a recognized market failure in health care, but its impact is difficult to measure. We take an indirect approach to estimation and infer the cost of unobservable effort from the behavior of utility-maximizing patients, specifically their willingness to incur measurable costs to avoid practitioners who shirk. We use a unique data set from rural Cameroun where patients choose between the government health system, church-operated (mission) health facilities and, importantly, traditional healers. Traditional healers provide health services on an outcome–contingent basis where patients pay only if they are cured. Both government and mission facilities, in contrast, are paid on a fee-for-service basis. Patients' choices of practitioners, combined with quantitative information about patients' illnesses, permit a structural estimation of the value of unobservable medical effort. The results allow investigation into the nature of agency, its costs, and the manner in which contracts reduce and patient behavior mitigates those costs. We estimate that in the absence of imperfect agency, utility from health care would increase by at least 160%. Even in the face of imperfect agency, the sophistication of patients in choosing between existing contracts for different illnesses increases utility by up to 20%.     

Empowering parents to improve education: Evidence from rural Mexico

We examine a very inexpensive program in Mexico that involves parents directly in the management of schools located in disadvantaged rural communities. The program, known as AGE, finances parent associations and motivates parental participation by involving them in the management of primary school grants. We find that AGE reduced grade failure by 7.4% and grade repetition by 5.5% in grades 1 through 3. However, while AGE was effective in poor communities, it had no effect in extremely poor communities.     

Economic reform,growth and the poor: Evidence from rural Ethiopia

A new decomposition of poverty changes is developed to analyse the determinants of poverty changes during a period of economic reform (1989–1995) in villages in Ethiopia. Poverty fell substantially, but with diverse experiences across villages. Shocks mattered, but the main factors driving consumption changes were relative prices changes, resulting in changes in the returns to land, labour, human capital and location. The experience of the poor is mixed: one group of the poor in 1989, with relatively good land and location, outperformed all other households, while another group with much poorer endowments and location experienced virtually unchanged and persistent poverty.     

Child gender and parental borrowing: Evidence from India

Discrimination against girls is well-documented, especially in Asia. We show that women try to level the playing field for their daughters by taking on debt. But wealth asymmetry between mothers and fathers perpetuates gender inequality across generations.     

Reversal of gender gaps in child development: Evidence from young children in India

This paper provides unique evidence of a reversal of gender gaps in cognitive development in early childhood. We find steep caste and gender gradients and few substantive changes once children enter school. The gender gap, however, reverses its sign for the upper caste, with girls performing better than boys at age 5 but thereafter following the general pattern in India of boys performing better.     

Poverty,undernutrition and vulnerability in rural India: role of rural public works and food for work programmes

This paper analyses the effects of access to Rural Public Works (RPW) or Food for Work programme (FFW) on consumption poverty, vulnerability and undernutrition in India using the large household data sets constructed by the National Sample Survey for 1993 and 2004. The treatment-effects model is used to take account of sample selection bias in evaluating the effects of RPW in 1993 or FFW in 2004 on poverty. We have found significant and negative effects of participation in RPW and the Food for Work Programme on poverty, undernutrition (e.g. protein) and vulnerability in 1993 and 2004.     

Efficiency and equity impacts of rural land rental restrictions: Evidence from India

Recognition of the potentially deleterious implications of inequality in opportunity originating in a skewed asset distribution has spawned considerable interest in land reforms. However, little attention has been devoted to the fact that, in the longer-term, the measures used to implement land reforms, especially rental restrictions, could negatively affect productivity. Use of state level data on rental restrictions, together with a nationally representative survey from India suggests that, contrary to original intentions, rental restrictions negatively affect productivity and equity by reducing scope for efficiency-enhancing rental transactions that benefit poor producers. Simulations suggest that, by doubling the number of producers with access to land through rental, from about 15 million currently, liberalization of rental markets could have far-reaching impacts.     

Does increased access increase equality? Gender and child health investments in India

Increases in access to social services are often thought to decrease inequality in the level of these services between advantaged and disadvantaged groups. This is an issue in the developing world, where policy-makers often argue that increasing the level of health care, for example, will decrease gender inequality. However, increases in access to services often have empirically ambiguous effects on inequality, increasing it in some cases and decreasing it in others. This paper argues that this is not surprising, and simple economic theory suggests that we should expect a non-monotonic relationship between access and inequality. At low levels of access to investments, there is no investment for either the advantaged or disadvantaged group, producing equality. Increases in access increase investment for the advantaged group first, generating inequality. Further increases in access increase investment in the disadvantaged group, decreasing inequality. I test the predictions of this theory using data on the availability of health camps (or distance to health centers) and gender differences in vaccinations in India. I find strong support for a non-monotonic relationship between access and gender equality.     

Using the Hawthorne effect to examine the gap between a doctor's best possible practice and actual performance

Many doctors in developing countries provide considerably lower quality care to their patients than they have been trained to provide. The gap between best possible practice and actual performance (often referred to as the know-do gap) is difficult to measure among doctors who differ in levels of training and experience and who face very different types of patients. We exploit the Hawthorne effect-in which doctors change their behavior when a researcher comes to observe their practices-to measure the gap between best and actual performance. We analyze this gap for a sample of doctors and also examine the impact of the organization for which doctors work on their performance. We find that some organizations succeed in motivating doctors to work at levels of performance that are close to their best possible practice. This paper adds to recent evidence that motivation can be as important to health care quality as training and knowledge.     

Electricity provision and industrial development: Evidence from India

I investigate the effect of electricity provision on industrialization using a panel of Indian states for 1965-1984. To address the endogeneity of investment in electrification, I use the introduction of a new agricultural technology intensive in irrigation (the Green Revolution) as a natural experiment. As electric pumpsets are used to provide farmers with cheap irrigation water, I use the uneven availability of groundwater at the start of the Green Revolution to predict divergence in the expansion of the electricity network and, ultimately, to quantify the effect of electrification on industrial outcomes. I present a series of tests to show that the electrification channel remains the most important one among alternative explanations that could link groundwater availability to industrialization directly or indirectly. Results show that an increase in one standard deviation in the measure of electrification is associated with an increase of around 14% in manufacturing output for a state at the mean of the distribution.     

How does the impact of an HIV/AIDS information campaign vary with educational attainment? Evidence from rural Uganda

The responsiveness to information is thought to be one channel through which education affects health outcomes. This paper tests this hypothesis by examining the effectiveness of an information campaign that aims at preventing the HIV/AIDS epidemic in Uganda. It uses individual level data from a cohort study following and testing the general population of a cluster of villages in rural Uganda over 12 years and shows that, after more than a decade of prevention campaigns about the dangers of the epidemic, there has been a substantial evolution in the HIV/education gradient. Early in the epidemic, in 1990, there was no robust relation between HIV/AIDS and education. In 2000, among young females, education is associated with a lower risk of being HIV positive. Results on HIV incidence in a duration framework confirm that finding by establishing that, for young women, education reduces the probability of seroconversion. These findings reveal that educated women have been more responsive to the HIV/AIDS information campaigns. The analysis of sexual behavior reinforces that conclusion: condom use is associated positively with schooling levels.     

Social capital, innovation and growth: Evidence from Europe

This paper investigates the interplay between social capital, innovation and per capita income growth in the European Union. We model and identify innovation as an important mechanism that transforms social capital into higher income levels. In an empirical investigation of 102 European regions in the period 1990-2002, we show that higher innovation performance is conducive to per capita income growth and that social capital affects this growth indirectly by fostering innovation. Our estimates suggest that there is no direct role for social capital to foster per capita income growth in our sample of European Union countries.     

Fungibility and the impact of development assistance: Evidence from Vietnam's health sector

The apparent fungibility of aid is a challenge to the evaluation of donor-funded development projects, requiring a comparison of the observed outcomes with the outcomes that would have occurred if the project had not gone ahead. Where projects are targeted on specific geographic areas, counterfactual outcomes in each can differ from observed outcomes because the amount of government spending (gross of aid) differs, the productivity of government spending differs, or both. This paper estimates the benefits of two concurrent World Bank health projects in Vietnam targeted on specific provinces. Estimates are derived from a model linking outcomes (under-five mortality) to government spending before and after the project and in project and nonproject provinces, and are presented for different assumptions regarding fungibility of funds (zero and full fungibility) and the impacts of the project on the productivity of government spending (the project modifies productivity in both sectors equally and in neither sector). The estimated mortality reductions are highly insensitive to the assumed degree of fungibility, but highly sensitive to the assumed productivity effects (the estimates range from 1 to 25%). The wide range reflects the uncertainty due to the lack of a genuine control group of provinces.     

The social economic impact of AIDS: Accounting for intergenerational transmission,productivity and fertility

In this paper we develop a model that aims to investigate the economic and demographic impacts of three effects of the HIV-AIDS epidemic in developing countries. The direct effect of the HIV epidemic is that it increases mortality and morbidity. The two indirect effects, resulting from the first, are the reduction in productivity of adults and the transmission of the disease to their offsprings. We allow these different effects to act either separately or together, and we investigate the marginal efficiency of health expenditures on the survival probability of individuals and demographics. The direct effect of the HIV virus is that it leads adults to increase their own health expenditure and to decrease that of their children. On the contrary, the transmission effect of the HIV virus leads parents to spend more on their children than on their own. We show that the reduction in productivity of young adults decreases health expenditures for themselves and their children. Furthermore, we find that the productivity effect dominates by large the two others. Moreover, when adults decide to have fewer children because of HIV, we show that the ratio of low to high skilled workers increases. This demographic impact impoverishes the economy in the short and medium run.     

Wars and Child Health: Evidence from the Eritrean-Ethiopian Conflict

Conflict between and within countries can have lasting health and economic consequences, but identifying such effects can be empirically challenging. This paper uses household survey data from Eritrea to estimate the effect of exposure to the 1998-2000 Eritrea-Ethiopia war on children's health. The identification strategy exploits exogenous variation in the conflict's geographic extent and timing and the exposure of different birth cohorts to the fighting. The unique survey data include details on each household's migration history, which allows us to measure a child's geographic location during the war and without which war exposure would be incorrectly classified. War-exposed children have lower height-for-age Z-scores, with similar effects for children born before or during the war. Both boys and girls who are born during the war experience negative impacts due to conflict. Effects are robust to including region-specific time trends, alternative conflict exposure measures, and mother fixed effects.     

Child labor and the minimum wage: Evidence from India

This study examines how changes in the minimum wage affect child labor in India. The analysis uses repeated cross sections of India's NSSO employment data from 1983 to 2008 merged with data on state-level minimum wage rates. Theoretically, the impact of the minimum wage on child work could go either way, so empirical evidence from a country with high rates of child labor and a myriad of minimum wage laws across states and industries helps to lessen the ambiguity. Results indicate that regardless of gender, in urban areas, a higher minimum wage reduces child labor in household work. In rural areas a similar result applies for girls while household labor does rise for boys. The minimum wage has virtually no impact on child work outside of the home across urban and rural areas.     

Does services liberalization affect manufacturing firms’ export performance? Evidence from India

This paper investigates the relationship between the reform of energy, telecommunications and transport services in India in the mid-1990s and manufacturing firms’ export performance. The empirical analysis relies on exogenous indicators of regulation of Indian services sectors and detailed firm-level data from India in the 1994–2004 period. I find that the reform of upstream services sector has increased the probability of exporting and export sales shares of firms producing in downstream manufacturing industries. The results suggest that the effect of services liberalization on manufacturing firms’ export performance is stronger for initially more productive firms. These empirical findings are robust to alternative econometric specifications that control for other reforms, industry, firm characteristics and that deal with potential reverse causality concerns.     

Crime,incentives and political effort: Evidence from India

Political representatives with criminal backgrounds are considered a great problem in many countries. In India, public disclosure of the large share of politicians currently facing criminal charges has sparked a heated public debate and emerging literature assessing the causes and effects. We develop two hypotheses based on our theoretical considerations. Based on the coding of published affidavits and a comprehensive set of three proxies to measure effort in the 14th Lok Sabha over the 2004–2009 legislative period, we put these hypotheses to an empirical test. Members of the parliament (MPs) facing criminal accusations exhibit on average about 5% lower attendance rates and lower utilization rates in a local area development fund, but only insignificantly lower parliamentary activity. In line with our hypotheses, these differences decline in the development level of the constituency - a proxy for higher rent-seeking possibilities and monitoring intensity. We argue and demonstrate why these negative relations should constitute an upper bound estimate of the causal effect, and show that even under conservative assumptions the effect is unlikely to be caused by unaccounted selection-bias.     

Globalisation and Gender Inequality: Evidence from Labour Market in India

This paper examines quantitative and qualitative dimensions of employment issues in India from gender lens. Inequality in quantitative aspects have been analysed gender gap in work participation, composition and structure of employment. The study finds that female work participation in India has declined sharply despite faster economic growth and improvement in female literacy outcomes. The magnitude of decline is sharper in case of illiterate, women from less privileged class and rural backgrounds. Similarly, even after two decades of economic reform, female workers are highly concentrated in low productive, less remunerative and unpaid family labour category of self employment activities. Considering the qualitative dimension of jobs, the paper finds that the condition of female workers are more vulnerable as they are highly concentrated in informal sector and informal jobs with no employment security, no social security, and are being paid relatively lower wages compared to male workers in most of the sub-sector. The paper argues for an urgent policy intervention to ensure access to decent jobs and to provide protection to these vulnerably placed women workers.

     

Endogenous lifetime and economic growth

Endogenous mortality is introduced in a two-period overlapping generations model: probability of surviving from the first period to the next depends upon health capital that is augmented through public investment. High mortality societies do not grow fast since shorter lifespans discourage savings; development traps are possible. Productivity differences across nations result in persistent differences in capital-output ratios and relatively larger gaps in income and mortality. High mortality also reduces returns on education, where risks are undiversifiable. When human capital drives economic growth, countries differing in health capital do not converge to similar living standards, ‘threshold effects’ may also result.