International Development

The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence

The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence
Journal of Development Studies 50 (4), April 2014: 583-604.

David Roodman and Jonathan Morduch
04/01/2014

We replicate and reanalyse the most influential study of microcredit impacts (Pitt and Khandker, 1998). That study was celebrated for showing that microcredit reduces poverty, a much hoped-for possibility (though one not confirmed by recent randomized controlled trials). We show that the original results on poverty reduction disappear after dropping outliers, or when using a robust linear estimator. Using a new program for estimation of mixed process maximum likelihood models, we show how assumptions critical for the original analysis, such as error normality, are contradicted by the data. We conclude that questions about impact cannot be answered in these data.

Is Micro Too Small? Microcredit vs. SME Finance

Is Micro Too Small? Microcredit vs. SME Finance
World Development 43: 288-297. 2013.

Bauchet, Jonathan and Jonathan Morduch
12/15/2013

Microcredit and SME finance are often pitched as alternative strategies to create employment opportunities in low-income communities. So far, though, little is known about how employment patterns compare. We integrate evidence from three surveys to show that, compared to Bangladeshi microcredit customers, typical SME employees in Bangladesh have more education and professional skills, and live in households that are notably less poor. SME jobs also require long work weeks, clashing with family responsibilities. The evidence from Bangladesh rejects the idea that SME finance more efficiently creates jobs for the population currently served by microcredit.

Hospitalization for ambulatory-care sensitive conditions (ACSC) in Île-de-France: A view from across the Atlantic

Hospitalization for ambulatory-care sensitive conditions (ACSC) in Île-de-France: A view from across the Atlantic
Revue française des affaires sociales; 3(3): 108-125.

Rodwin, VG., Gusmano, MK., and Weisz, D.
12/03/2013

This article presents an indicator used in the United States and other OECD nations (hospitalizations for ambulatory-care sensitive conditions – ACSC) to assess access to primary care services and their capacity to handle a set of medical conditions before they require acute hospital treatment. Based on a study of Ile de France, which relies on residence-based hospital discharge data on patient diagnoses and treatments, the indicator identifies areas where hospitalizations for ACSC appear particularly high. Such hospital stays are considered potentially avoidable. Based on data from the Programme de m.dicalisation des syst.mes d’information (PMSI), disparities are measured. We rely on logistic regression analysis to identify a range of individual factors and neighborhood-level factors that explain these disparities. Access to primary care appears to be worse among residents in areas with average household income in the lowest quartile and among those hospitalized in public hospitals. This raises an important question for the future of health policy. Should areas with higher hospital discharge rates of ACSC be understood as having populations with poor health-seeking behaviors or health care systems not well enough organized to target higher-risk populations?

Parallel paths to enforcement: Private compliance, public regulation, and labor standards in the Brazilian sugar sector

Parallel paths to enforcement: Private compliance, public regulation, and labor standards in the Brazilian sugar sector
Politics & Society

Coslovsky, Salo and Richard Locke
09/16/2013

In recent years, global corporations and national governments have been enacting a growing number of codes of conduct and public regulations to combat dangerous and degrading work conditions in global supply chains. At the receiving end of this activity, local producers must contend with multiple regulatory regimes, but it is unclear how these regimes interact and what results, if any, they produce. This paper examines this dynamic in the sugar sector in Brazil. It finds that although private and public agents rarely communicate, let alone coordinate with one another they nevertheless reinforce each other’s actions. Public regulators use their legal powers to outlaw extreme forms of outsourcing. Private auditors use the trust they command as company insiders to instigate a process of workplace transformation that facilitates compliance. Together, their parallel actions block the low road and guide targeted firms to a higher road in which improved labor standards are not only possible but even desirable.

Economic development without pre-requisites: How Bolivian firms met food safety standards and dominated the global brazil-nut market

Economic development without pre-requisites: How Bolivian firms met food safety standards and dominated the global brazil-nut market
World Development

Coslovsky, Salo
09/16/2013

Brazilian firms used to dominate the brazil nut (BN) market to such an extent that the product still carries the country’s name. Presently, 77% of all BNs are processed and exported by Bolivia, a country with far fewer resources than its neighbor. This paper analyzes the impact of EU regulations on the global BN market. It finds that Bolivian producers prevailed because they joined forces to revamp their manufacturing practices and meet EU sanitary standards despite continued mutual mistrust. In contrast, Brazilian producers have been unable to work cooperatively and lost access to the European market entirely.

Moroccan Migrants as Unlikely Captains of Industry: Remittances, Financial Intermediation, and La Banque Centrale Populaire

Moroccan Migrants as Unlikely Captains of Industry: Remittances, Financial Intermediation, and La Banque Centrale Populaire
In S. Eckstein, ed. Immigrant Impact in their Homelands. Durham: Duke University Press.

Iskander, N.
09/06/2013

The impact that remittances – the monies that migrants send home – have on the development on migrant-sending economies is a matter of considerable debate. This essay presents the case of Morocco and its state-controlled bank, La Banque Centrale Populaire (BCP), to argue that the major determinant of remittance impact on development is the quality and breadth of financial intermediation to which migrants have access. By providing a set of financial tools that allowed migrants to deposit, save, and invest with the institution, the BCP, since 1969, simultaneously made remittances funds available the migrants for their personal expenditures and to the Moroccan government for large-scale industrial investment. However, to create financial services for migrants with an appeal broad enough to bring significant amounts of remittance liquidity into the banking sector, BCP had to engage migrants in an open and collaborative process of product design. Ultimately, this paper argues, migrants’ involvement in the design of financial products enabled them to use the banking system to redirect remittances resources to rural and semi-rural areas most migrants were from, and to amend the industrial development priorities of the Moroccan government.

Overweight, obesity, and inactivity and urban design in rapidly growing Chinese cities

Overweight, obesity, and inactivity and urban design in rapidly growing Chinese cities
Health & Place, 21, 29-38. http://dx.doi.org/10.1016/j.healthplace.2012.12.009

Day, K, M Alfonzo, Y F Chen, Z Guo, and K K Lee
05/01/2013

China faces rising rates of overweight, obesity, and physical inactivity among its citizens. Risk is highest in China’s rapidly growing cities and urban populations. Current urban development practices and policies in China heighten this risk. These include policies that support decentralization in land use planning; practices of neighborhood gating; and policies and practices tied to motor vehicle travel, transit planning, and bicycle and pedestrian infrastructure. In this paper, we review cultural, political, and economic issues that influence overweight, obesity, and inactivity in China. We examine key urban planning features and policies that shape urban environments that may compromise physical activity as part of everyday life, including walking and bicycling. We review the empirical research to identify planning and design strategies that support physical activity in other high-density cities in developing and developed countries. Finally, we identify successful strategies to increase physical activity in another growing, high-density city – New York City – to suggest strategies that may have relevance for rapidly urbanizing Chinese cities.

A Trapped-Factors Model of Innovation

A Trapped-Factors Model of Innovation
Forthcoming, American Economic Review, May 2013.

Paul Romer, Nicholas Bloom, Stephen J. Terry, and John Van Reenen
05/01/2013

When will reducing trade barriers against a low wage country cause innovation to increase in high wage regions like the US or EU? We develop a model where factors of production have costs of adjustment and so are partially “trapped” in producing old goods. Trade liberalization with a low wage country reduces the profitability of old goods and so the opportunity cost of innovating falls. Interestingly, the “China shock” is more likely to induce innovation than liberalization with high wage countries. These implications are consistent with a range of recent empirical evidence on the impact of China and offers a new mechanism for positive welfare effects of trade liberalization over and above the standard benefits of specialization and market expansion. Calibrations of our model to the recent experience of the US with China suggests that there will be faster long-run growth through innovation in the US and that, in the short run, this is magnified by the trapped factor effect.

Migration and development, global South / Mexico-Morocco

Migration and development, global South / Mexico-Morocco
I. Ness, ed. The Encyclopedia of Global Human Migration. Wiley Blackwell

Iskander, N.
02/04/2013

In recent years, the relationship between migration and development has received renewed attention, and analysts, policy-makers, and development experts have returned to the question of how to use emigration to foster economic growth in countries and communities of origin. The main thrust of this inquiry has focused on how to use remittances – the monies that migrants send back home – to support economic activity (de la Garza & Orozco 2002; Orozco 2002; Munzele Maimbo & Ratha 2005; Ratha 2005). However, among countries with high emigration rates, a handful of governments have expanded their emphasis past remittances to create policies that link emigration and development in a more comprehensive way (Castles & Delgado Wise 2008). Morocco and Mexico feature prominently among them. Both countries have policies to link emigration with local and national economic transformation that reach beyond a narrow focus on remittances, and that, more importantly, are creative, participatory, and dynamic (Iskander 2010). At their outset, however, the policies were as single-minded in their focus on remittances as any of the more mercenary examples of today.

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