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41. Labour market effects of digital matching platforms: Experimental evidence from sub-Saharan Africa

Author:
Sam Jones and Kunal Sen
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Can digital labour market platforms reduce search frictions in either formal or informal labour markets? We study this question using a randomized experiment embedded in a tracer study of the work transitions of graduates from technical and vocational colleges in Mozambique. We implement an encouragement design, inviting graduates by SMS to join one of two local digital platforms: Biscate, a site to find freelancers for informal manual tasks; and Emprego, a conventional formal jobs website. In contrast to positive estimates of the contribution of both platforms to job outcomes from naïve (per-treatment) estimates, both intent-to-treat and complier average treatment effects are consistently zero in the full sample, while the impact on life satisfaction is negative. However, use of the informal jobs platform leads to better work outcomes for women, especially those with manual qualifications, for whom earnings rise by over 50 per cent.
Topic:
Education, Labor Issues, Digital Economy, and Unemployment
Political Geography:
Africa and Mozambique

42. What drove the profitability of colonial firms? Labour coercion and trade preferences on the Sena Sugar Estates (1920–74)

Author:
Sam Jones and Peter Gibbon
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The magnitude of returns to colonial-era investments in Africa has been addressed in an extensive literature, as have the nature and legacies of extractive colonial institutions. However, the link between these institutions and the profitability of firms remains unclear. We reconstruct the annual financial records of Sena Sugar Estates in Portuguese East Africa (today’s Mozambique) over the period 1920–74 to probe the contributions of forced labour and preferential trade arrangements to the performance of the firm. We show that Sena Sugar Estates achieved stable and solid returns to capital, comparable in size to a range of domestic UK firms. Counterfactual simulations suggest that the firm’s profitability was highly dependent on sustained access to cheap labour, but generally was not so dependent on trade preferences. At the same time, a production function analysis suggests that higher reliance on rents from forced labour was associated with lower total factor productivity at the Estates. This helps explain why extractive institutions did not translate into ‘super-profits’.
Topic:
History, Colonialism, Trade, Sugar, and Forced Labor
Political Geography:
Africa and Mozambique

43. COVID-19 and the state: Nicaragua case study

Author:
Mateo C. Jarquín
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Unlike Latin American peers, and contrary to World Health Organization recommendations, Nicaragua eschewed lockdowns and other common strategies to mitigate the spread of COVID-19. Analysts have since demonstrated how Nicaraguan authorities dramatically under-reported the number of deaths and infections that resulted (though a dearth of data complicates cross-country comparisons). Questions remain about the government’s decision to pursue a hands-off strategy in the first place. This paper argues that rather than optimizing for fewer cases and deaths, the authoritarian government of President Daniel Ortega instead attuned its pandemic response to other, political and economic, variables. In the context of a pre-existing sociopolitical crisis that threatened the regime’s legitimacy and territorial control, policy-makers were primarily interested in safeguarding macroeconomic indicators and fomenting a sense of normalcy among the populace. For related reasons, they restricted public health information and criminalized citizen-led public health efforts. In the Nicaraguan case, government and leadership mattered more than state capacity in determining the public health response.
Topic:
Authoritarianism, Leadership, State, COVID-19, and Daniel Ortega
Political Geography:
Central Asia and Nicaragua

44. Anticompetitive practices on public procurement: Evidence from Brazilian electronic biddings

Author:
Antonio Sampaio, Paulo Figueiredo, and Klarizze Puzon
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using big data from the Brazilian public procurement system, this research aims to investigate what factors are associated with the occurrence of anticompetitive practices in electronic bidding. Our analysis considers all services contracted between 2014 and 2017. The study uses the logit regression model with a dependent binary variable to model the probability of bidding fraud as a function of a vector of explanatory variables composed of the characteristics of the bidding process and of the supplier, in terms of firm size, thus quantifying the relationship between the explanatory variables and the probability of fraud occurrence. We find that firm size and the Apparent Overbilling Index which we propose are associated with the occurrence of fraud and anticompetitive practices in electronic auctions. This study contributes to the accumulation of empirical and theoretical knowledge, expanding safer bases for governments and society in the fight against corruption.
Topic:
Fraud, Economic Competition, and Public Procurement
Political Geography:
Brazil and South America

45. Poverty, inequality, and growth: trends, policies, and controversies

Author:
Ines A. Ferreira, Vincenzo Salvucci, and Finn Tarp
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Reducing poverty and inequality and promoting inclusive growth are fundamental to achieving the United Nations Sustainable Development Goals. Much has changed in the global economy in recent decades and perspectives on progress made vary widely. This is even more so in light of the ongoing COVID-19 pandemic. However, getting to grips in a meaningful manner with existing trends is critical to evidence-based policy-making. This contribution aims to provide an original review and evaluation of the main stylized facts concerning poverty, inequality, and growth. It will uncover existing trends, put controversies into perspective, and help to provide a platform for informed policy debate.
Topic:
Poverty, Inequality, Sustainable Development Goals, and Economic Growth
Political Geography:
Global Focus

46. Residual capacity and the political economy of pandemic response in Ghana

Author:
Kofi Takyi Asante
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
On the whole, poor countries in Africa and elsewhere seem to have weathered the coronavirus (SARS-CoV-2, or COVID-19) pandemic better than wealthier countries with superior healthcare systems. Using the Ghanaian case, this paper draws on newspaper articles, policy statements, and other secondary sources to explain how the country’s competitive clientelist political settlement mediated the public health outcomes of the pandemic. It argues that while it lacks overall state capacity, Ghana was able to surmount the limitations of its weak and underresourced public health system by leveraging ‘residual capacity’ from previous public health programmes and a strong proactive response from the continental and subregional organizations. The government’s strong early response enabled it to gain control of the situation in the crucial first few months of the outbreak. However, with an upcoming election later in the year and unwilling to bear the political costs of sustaining its initial efforts, the government subsequently wavered in its response. The country’s infection and death rates spiked and dipped in response to these waves of enforcement. The paper concludes with a brief discussion of the limits of ‘residual capacity’ in public service delivery.
Topic:
State, Public Health, Settlements, COVID-19, and Clientelism
Political Geography:
Africa and Ghana

47. Pandemic precarity and the complicated case of Maharashtra: Interrogating state capacity and its fault lines

Author:
Manish K. Jha
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The state of Maharashtra and the city of Mumbai have been referred to as the epidemic epicentre of India since the time of the plague of 1896 and influenza epidemic of 1918. During the COVID-19 pandemic too, the state experienced the highest cases with maximum fatalities. Against the structural backdrop of India’s underfinanced public health infrastructure, this paper engages with the subnational state’s capacity, legitimacy, and authority in managing the pandemic. The paper highlights the socio-economic and spatial-demographic context to explain the reasons behind the severity of the pandemic in Maharashtra. Through an analysis of regulatory information at different levels during crucial phases of the pandemic, and statistics about tests, caseloads, medical resources (such as hospital beds, essential drugs, and oxygen), migrants’ welfare, excess deaths, vaccines, etc., the paper explores how knowledge about the unfolding crisis and the capacity to respond kept changing as the pandemic progressed. The emphasis is on demonstrating how the state improved its response, from a situation of confusion to an augmentation of infrastructure and a coordinated response. Despite fiscal constraints and centre-state tensions, the reliance on rational bureaucracy, scientific knowledge, and the decentralization of the response helped to develop several models and good practices that were widely acknowledged. The paper emphasizes that the case of Maharashtra underscores the importance of decentralized planning and recognizes the value of collaborative federalism.
Topic:
Vaccine, Pandemic, COVID-19, Migrants, and Excess Deaths
Political Geography:
South Asia and India

48. Female labour supply and informal employment in Ecuador

Author:
H. Xavier Jara and Pia Rattenhuber
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Low- and middle-income countries face a trade-off between raising tax revenue to strengthen social protection and creating incentives for the population to enter formal employment. However, empirical evidence on labour supply elasticities in the presence of informal employment remains scarce. This paper analyses female labour supply behaviour and the choice between formal and informal employment in Ecuador, a middle-income country characterized by persistent levels of informal employment particularly among women. We use two methods to estimate and compare formal employment elasticities: (i) a discrete choice model of labour supply with informality and (ii) grouped-data estimation techniques. For identification, we exploit variation in tax–benefit policies covering the period 2011–19, using microsimulation techniques applied to household survey data. Our results show that, on average, formal employment elasticities for single women are low regardless of the approach chosen. However, for women in couples, formal employment elasticities are larger under the discrete choice approach whereas they are low and non-significant under the grouped-data estimations.
Topic:
Labor Issues, Women, Employment, and Tax Systems
Political Geography:
Central America and Ecuador

49. Wartime governance and state-building trajectories in post-conflict societies

Author:
Patricia Justino
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
To date, there is limited understanding about the consequences of wartime dynamics for post-war state-building processes. This paper explores one such dynamics—the forms of governance exercised by armed groups during wartime—and proposes a theoretical framework outlining how forms of wartime governance affect trajectories of state-building in the aftermath of civil wars. Six possible trajectories are mapped out: stable democracy, weak democracy, stable autocracy, fragmented rule, contested autocracy, and durable disorder. Each trajectory is shaped by the interaction between two dimensions of wartime governance: how armed groups build institutional capacity in wartime and the characteristics of wartime civilian rule by armed groups. The core argument is that civil wars generate within themselves bureaucratic and institutional capacity—through how armed groups govern territories and civilians within them—that under certain circumstances may be harnessed in the post-war period to build states capable of governing. The characteristics and durability of those forms of wartime governance shape the type of statebuilding and political regime trajectories that emerge in the post-war period.
Topic:
Political Violence, Development, War, Conflict, Peace, and State Building
Political Geography:
Global Focus

50. Health and ethnic inequalities in Mozambique with special reference to leprosy

Author:
Isabel Maria Casimiro and Júlio Machele
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The subject of this paper is health and ethnic inequalities in Mozambique, with special reference to leprosy. It is argued that the health policies and strategies adopted in the colonial and post-colonial periods led to an unequal distribution not only of certain diseases but also of health infrastructures. The colonial regime, by neglecting and creating ineffective leprosaria in central and northern Mozambique, ‘ethnicized’ Lazarus disease, a fact corroborated by its current unequal distribution. In turn, post-colonial health policies and health coverage failed to take this inequality into account. The current National Leprosy Control Program aims to end leprosy and thus eliminate its identification with the ethnolinguistic groups in northern and central Mozambique. This qualitative study, which draws on reports from the Ministry of Health and NGOs, statistics, and observations, falls within the scope of the social sciences, with an emphasis on the comparative historical-sociological method.
Topic:
Health, Inequality, Ethnicity, and Leprosy
Political Geography:
Africa and Mozambique

51. Aid’s impact on democracy

Author:
Miguel Niño-Zarazúa, Ana Horigoshi, and Rachel M. Gisselquist
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper investigates the impact of foreign aid on democratic outcomes using a panel of countries for the period between 1995 and 2018. In so doing, it speaks to a major critique of foreign aid, which is that it negatively impacts democratic governance. The analysis distinguishes between developmental aid and democracy aid, and examines democracy aid to specific sectors, in order to explore variation across different aid types. It draws on the Organisation for Economic Co-operation and Development’s (OECD) Creditor Reporting System (CRS) data on foreign aid and indices of democracy from the Varieties of Democracy project, employing a combination of a maximum likelihood estimation and structural equation modelling (ML-SEM) model and fixed effects models. Overall, using a more extensive set of data and methods than previous analyses, we offer comprehensive evidence pointing to aid having a positive if modest impact on democratic outcomes. Our analysis suggests this effect is more significant for democracy aid than developmental aid, but there is no evidence of negative impact for either. These results are robust to multiple specifications.
Topic:
Development, Foreign Aid, and Democracy
Political Geography:
Global Focus

52. Global oil theft: impact and policy responses

Author:
Etienne Romsom
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper, the first of two on global oil theft and fraud, discusses the prevalence, methods, and consequences of global oil theft, valued at US$133 billion per year and equivalent to 5–7 per cent of the global market for crude oil and petroleum fuels. However, the impact of oil theft is significantly larger than the value of theft itself. Government tax yields have been assessed for 30 developing countries associated with oil theft and found to be significantly lower than in the International Monetary Fund’s benchmark study. Oil theft, smuggling, and illicit trade in petroleum products are often seen as lesser forms of crime than human trafficking, the drugs trade, smuggling of weapons, kidnapping, and terrorism. However, oil theft as an act of opportunity tends to evolve into organized crime and, if left unchecked, oil theft may interlink with other organized crime activities and groups. Actions against oil theft should target the transnational crime syndicates that continue to find ways to replicate their thefts by adapting their theft strategies and business models. However, there is a lack of basic data, including how much oil is stolen, how the stolen oil is transported, and how illicit oil transactions are conducted. The mixing of legal commercial operations with illegal oil theft activities and fraud obscures many oil theft crimes.
Topic:
Corruption, Oil, International Crime, and Tax Evasion
Political Geography:
Global Focus

53. The legacies of armed conflict: insights from stayees and returning forced migrants

Author:
Isabel Ruiz and Carlos Vargas-Silva
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
How does conflict, displacement, and return shape trust, reconciliation, and community engagement? And what is the relative impact of exposure to violence on these indicators? In this paper we explore these questions by focusing on the legacies of armed conflict and the differences between those who stayed in their communities of origin during the conflict (stayees) and those who were displaced internally and internationally and who returned home over time (returnees). The results, which rely on analysis of data we collected in Burundi, suggest that internal returnees have significantly lower levels of trust, reconciliation, and community engagement than stayees, whereas the differences between international returnees and stayees are mostly statistically insignificant. Greater exposure to violence has a more positive effect on trust for returnees compared to stayees. On the other hand greater exposure to violence has a more negative effect on reconciliation and community engagement for returnees compared to stayees.
Topic:
Displacement, Conflict, Reconciliation, Trust, and Migrants
Political Geography:
Global Focus

54. Does the adoption of peer-to-government mobile payments improve tax revenue mobilization in developing countries?

Author:
Abdoul-Akim Wandaogo, Fayçal Sawadogo, and Jesse Lastunen
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Developing countries need to raise sufficient tax revenue to finance development. Revenue mobilization is often hampered by limited tax compliance, weak institutions, and technical problems with tax collection. One solution to these challenges is person-to-government (P2G) mobile phone payments, adopted in a number of developing countries since the early 2000s. This study assesses the causal effect of P2G adoption on tax revenue using propensity score matching. According to the matching estimates, countries that adopt P2G services experience a 1.2–1.3 percentage point boost in direct tax revenue as a share of GDP. P2G adoption increases revenue from both corporate and personal income taxes, with larger effects on the latter. The results remain robust to matching quality tests and alternative estimation methods, including function control, two-stage least squares, and system generalized method of moments. The average treatment effects are largest among lower-middle-income countries and countries characterized by limited tax compliance and corruption control, and by low levels of urbanization and domestic credit to the private sector. The findings suggest that developing countries, particularly those with poor institutions and low levels of financial inclusion, should promote the adoption and use of mobile money services for tax transactions.
Topic:
Development, Government, Finance, Economy, and Tax Systems
Political Geography:
Global Focus

55. Revisiting the links between economic inequality and political violence: The role of social mobilization

Author:
Patricia Justino
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The main aim of this paper is to explore theoretically important mechanisms through which economic inequalities may affect the emergence of political violence given the forms of social mobilization they (may) generate. The paper identifies and explores two mechanisms under which social mobilization in unequal societies may result in either non-violent or violent collective action and, ultimately, in violent conflict. The first condition is the level of social cooperation between different social groups that are formed during the process of social mobilization. The second is the efficacy of collective action to drive change, which is in turn shaped by the ability of individuals within groups to coordinate their actions. Forms of social mobilization become violent when antagonism is the dominant form of social interaction between different social groups in unequal societies, and when each of these social groups exhibits high levels of internal coordination.
Topic:
Political Violence, Economics, Social Movement, Inequality, Mobilization, and Collective Action
Political Geography:
Global Focus

56. Women’s inheritance rights and time use: Evidence from the Hindu Succession Act in India

Author:
Tana Gupta
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of the Hindu Succession Act on married women’s time use in India. The Hindu Succession Act was amended between 1976 and 2005 by giving equal inheritance rights to women for inheriting property. To estimate the effect of the equal inheritance reform, I devise a difference-in-difference strategy by exploiting the features of the reform. Using the nationally representative Time Use Survey 2019, I find that women exposed to the reform are investing 46 minutes per day more in employment. Moreover, women exposed to the reform are spending 44 minutes per day less time on home production, with no change in their leisure time. By looking at the individual components of home production, I find that the reduction in home production is driven on account of a decline in time spent on domestic chores, with no change in childcare work. In addition, I find that women exposed to reform devote slightly more time to learning. This implies that the reform has led women to substitute their time from home production to market work. These findings are consistent with an increase in women’s autonomy effect. I also find evidence of intra-household substitution of home production work for exposed women through sharing the burden of home production by other household members, especially the male members. This suggests that inheritance reform could be a form of reversal of the devaluing of women’s domestic and reproductive labour.
Topic:
Women, Inequality, Legislation, and Inheritance
Political Geography:
South Asia and India

57. Profit-shifting behaviour of emerging multinationals from India

Author:
Khanindra Ch. Das
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the profit-shifting behaviour of emerging multinational firms from India. It is found that the before-tax profitability of subsidiaries differs according to whether they were established directly or via an Offshore Financial Centre (OFC). The impact of the corporate tax rate on profitability is examined using a fixed-effects model for the period 2010–19. In the case of subsidiaries established via OFCs, a negative relationship between corporate tax rate and profitability is found, indicating profit-shifting behaviour. However, a disaggregated investigation by characteristics of parent firms reveals that the negative relationship holds primarily for via-OFC subsidiaries that belong to multinational firms with limited transactions of intangible assets, lower export intensity, and limited dependence on external commercial borrowing. The evidence of profit shifting is not all pervasive. However, in the presence of these transaction channels, multinational firms establish better control over intra-firm resources, which enables the transfer of resources within the multinational firm when the network of subsidiaries is connected through the OFC. The results are robust to the inclusion of economic and institutional factors pertaining to the host country.
Topic:
Finance, Multinational Corporations, Profit, Corporate Tax, and Tax Havens
Political Geography:
South Asia and India

58. Does aid to the productive sectors cause manufacturing sector growth in Africa?

Author:
Alain Ndikumana
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In recent decades, Africa has received a large share of official development assistance compared to other regions of the world. Using AidData for 2000–13, this paper examines the effects of aid to productive sectors on manufacturing growth in Africa. Econometric results show that increased assistance to these sectors is associated with an increase in growth of the manufacturing sector, with complementary effects from allocations to economic services and infrastructures. However, dynamic panel regression results show a positive long-term link between increased official development assistance to productive sectors and growth of the manufacturing sector. These findings make an important contribution to the economic literature where there is controversy over aid effectiveness at the macro level. The findings also have policy implications for allocation of aid between sectors by making rational trade-offs related to their amount and quality, with emphasis on productive sectors where investment has a major impact on growth of the manufacturing industry.
Topic:
Humanitarian Aid, Economic Growth, Manufacturing, and Development Assistance
Political Geography:
Africa

59. Impact of teacher content knowledge on student achievement in a low-income country

Author:
Anna Holvio
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper estimates the causal impact of teacher content knowledge on student achievement in Mozambique, a low-income country where a large share of fourth-graders fail to meet the minimum requirements of literacy and numeracy. I use nationally representative data from the Service Delivery Indicator survey, and exploit within-student across-subject variation in a sample of students taught by the same teacher in maths and Portuguese, thus circumventing bias caused by unobserved student and teacher heterogeneity. I find that, on average, teacher content knowledge does not have an impact on student achievement. However, the impact varies significantly by student’s first language, urban or rural location of the school, and the match of students and teachers in their knowledge.
Topic:
Education, Literacy, and Teachers
Political Geography:
Africa and Mozambique

60. Measuring illicit financial flows: A gravity model approach to estimate international trade misinvoicing

Author:
Lourenço S. Paz
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Illicit financial flows have recently attracted the attention of academia, practitioners, and multilateral organizations who consider them harmful to economic development. Some observers suggest that many of these flows occur via the misinvoicing of international trade transactions. This study develops a novel methodology based on the gravity model of international trade to estimate illicit financial flows using publicly available product-level international trade data. It contributes to the literature by estimating product-level transportation and insurance costs and providing, for the first time, an estimation for all countries of an upper bound of the values of export and of import over- and under-misinvoicing separately, without resorting to assumptions about trade statistics reliability. Application of the methodology is illustrated using six-digit product-level UN Comtrade data for 2013–16. The results indicate that misinvoicing is not confined to a few products or countries but is a widespread phenomenon that deserves future research.
Topic:
International Trade and Finance, Transportation, Illicit Financial Flows, and Misinvoicing
Political Geography:
Global Focus