cash transfer programs with income multipliers procampo in mexico abstract cash transfer programs create multiplier effects when recipients put the money they receive to work to generate further incomes when this is the case the ultimate income effects are multiples of the amounts transferred we analyze the procampo program in mexico that was introduced to compensate farmers for the anticipated negative effect of nafta on the prices 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 1 5 2 6 multipliers are higher for households with medium and large farms low numbers of adults in the household nonindigenous backgrounds and located in the center and gulf regions high multipliers reflect income opportunities that had remained unrealized due to liquidity constraints that are relaxed by the transfers opportunities come from the asset endowments that these households received through the land reform particularly irrigated land and they are enhanced by access to technical assistance

uncertain altruism and the provision of long term care this paper studies the role of private and public long term care ltc insurance programs in a world in which family assistance is uncertain benefits are paid in case of disability but cannot be conditioned directly due to moral hazard problems on family aid under a topping up scheme when the probability of altruism is high there is no need for insurance at lower probabilities insurance is required thought not full insurance this can be provided either privately or publicly if insurance premiums are fair and publicly otherwise moreover the amount of ltc insurance varies negatively with the probability of altruism with an opting out scheme there will be three possible equilibria depending on the children s degree of altruism being low moderate or very high these imply full ltc insurance with no aid from children less than full insurance just enough to induce aid and full insurance with aid fair private insurance markets can support the first equilibrium but not the other two equilibria only a public opting out scheme can attain them by creating incentives for self targeting and ensuring that only dependent parents who are not helped by their children seek help from the government

aid policy and growth in post conflict societies countries emerging from civil war attract both aid and policy advice this paper provides the first systematic empirical analysis of aid and policy reform in the post conflict growth process it is based on a comprehensive data set of large civil wars and covers 27 countries that were in their first decade of post conflict economic recovery during the 1990s the authors first investigate whether the absorptive capacity for aid is systematically different in post conflict countries they find that during the first three post conflict years absorptive capacity is no greater than normal but that in the rest of the first decade it is approximately double its normal level so ideally aid should phase in during the decade historically aid has not on average been higher in post conflict societies and it has tended to taper out over the course of the decade the authors then investigate whether the contribution of policy to growth is systematically different in post conflict countries and in particular whether particular components of policy are differentially important for this they use the world bank policy rating database the authors find that growth is more sensitive to policy in post conflict societies comparing the efficacy of different policies they find that social policies are differentially important relative to macroeconomic policies however historically this does not appear to have been how policy reform has been prioritized in post conflict societies

instruments randomization and learning about development there is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development there is skepticism about the ability of econometric analysis to resolve these issues or of development agencies to learn from their own experience in response there is increasing use in development economics of randomized controlled trials rcts to accumulate credible knowledge of what works without overreliance on questionable theory or statistical methods when rcts are not possible the proponents of these methods advocate quasirandomization through instrumental variable iv techniques or natural experiments i argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding two key issues are the misunderstanding of exogeneity and the handling of heterogeneity i illustrate from the literature on aid and growth actual randomization faces similar problems as does quasi randomization notwithstanding rhetoric to the contrary i argue that experiments have no special ability to produce more credible knowledge than other methods and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority i illustrate using prominent experiments in development and elsewhere as with iv methods rct based evaluation of projects without guidance from an understanding of underlying mechanisms is unlikely to lead to scientific progress in the understanding of economic development i welcome recent trends in development experimentation away from the evaluation of projects and toward the evaluation of theoretical mechanisms jel c21 f35 o19

poverty traps and index based risk transfer products summary a growing literature suggests that in low income countries households with few assets can be trapped in chronic poverty this article reviews relevant threads of the poverty traps literature to motivate a description of the opportunities presented by innovative index based risk transfer products these products can be used to address some insurance and credit market failures that contribute to the persistence of poverty among households in low income countries applications are considered at the micro meso and macro levels 2008 elsevier ltd all rights reserved

assessing the employment impacts of environmental and natural resource policy this paper provides an introductory guide for environmental andresource economists to methods of assessing the impact of environmentaland natural resource policy on employment it examines five basicapproaches to evaluating the effect of a policy action on employment 1 supply and demand analysis of the affected sector 2 partialequilibrium analysis of multiple markets 3 fixed price generalequilibrium simulations input output i o and social accounting matrix sam multiplier models 4 non linear general equilibriumsimulations computable general equilibrium cge models and 5 econometric estimation of the adjustment process particularly timeseries analysis the basic modeling structure and data requirementsfor each of these approaches are described simple examples of theirapplication to evaluation of environmental and natural resourcepolicy are developed and the relative merits and applicability of each are discussed

uncertain altruism and investment in children the authors discuss the concept of parental uncertainty about their childrens altruism and the consequences for investment in childrens human capital in this paper we show that if parents are uncertain about their childrens altruism but are at least sure that they will receive some support from their children then the unique optimal investment is the efficient one uncertainty over the exact level of the retirement gift does not alter the conclusion of the perfect certainty case even when parents are risk averse alternatively parents may not know enough about their childrens altruism to feel completely confident that some gift will be forthcoming regardless of the size of their investment under this assumption we show that the optimal investment must be less than the efficient amount excerpt

countercyclical safety nets for the poor and vulnerable abstract relatively little is known about how government safety net programs insure against low consumption and stabilize asset bases compared to what is known about their role in transferring income the insurance function requires a flexible budget that can be scaled up rapidly to meet unanticipated circumstances safety nets serving an insurance function also differ from other transfer programs in their targeting they need to determine transitory need rather than more chronic correlates of poverty moreover insurance safety nets need a more flexible implementation strategy than do more permanent programs this paper reviews these issues from the perspective of low income countries

majority voting with single crossing preferences we clarify and extend a number of sufficient conditions for the existence of a majority voting equilibrium on one dimensional choice domains these conditions variously stated in the previous literature all impose order restrictions on voter preferences for instance monotone marginal rates of substitution which we show to imply or be equivalent to a general ordinal version of the single crossing condition this simple property is economically intuitive and easily checked in applications this ease of application is demonstrated through an examination of voting models of redistributive income taxation and trade union bargaining behaviour

an environmentally extended social accounting matrix although the social accounting matrix sam approach has been widely used in nationalaccounting and development economics it still neglectsimportant information among which are theinteractions between an economy and the environment this paper environmentally extends sam to capture therelationships among economic activities pollutionabatement activities and pollution emissions anumerical example of the environmentally extendedsocial accounting matrix esam using chinese 1990data is presented the multiplier and structural pathanalyses are applied to the esam for assessingenvironmental impacts of pollution related economicpolicies the analysis results show that an esam canbe a useful tool for environmental policy analysis

cash transfers and high food prices explaining outcomes on ethiopia s productive safety net programme an ongoing and highly politicised debate concerns the relative efficacy of cash transfers versus food aid this paper aims to shed light on this debate drawing on new empirical evidence from ethiopia s productive safety net programme psnp our data derive from a two wave panel survey conducted in 2006 and 2008 ethiopia has experienced unprecedented rates of inflation since 2007 which have reduced the real purchasing power of psnp cash payments our regression findings confirm that food transfers or cash plus food packages are superior to cash transfers alone they enable higher levels of income growth livestock accumulation and self reported food security these results raise questions of fundamental importance to global humanitarian response and social protection policy we draw out some implications for the design of social transfer programmes and describe some steps that could be taken to enable predictable transfers to meet predictable needs

political sustainability and the design of social insurance this paper examines how the issue of political support affects the design of social insurance it distinguishes between redistributive character and size of social protection three main results emerge first it may be appropriate to adopt a system which is less redistributive than otherwise optimal in order to ensure political support for an adequate level of coverage in the second voting stage second supplementary private insurance may increase the welfare of the poor even if it is effectively bought only by the rich third the case for prohibiting supplementary private insurance may become stronger when the efficiency of private insurance markets increases

the impact of ethiopia s productive safety net programme and its linkages abstract this paper assesses the impact of ethiopia s productive safety nets programme psnp the largest social protection programme in sub saharan africa outside of south africa using propensity score matching techniques we find that the programme has little impact on participants on average due in part to transfer levels that fell far below programme targets participants with access to both the psnp and packages of agricultural support are more likely to be food secure to borrow for productive purposes use improved agricultural technologies and operate non farm own business activities however beneficiaries did not experience faster asset growth

the impact of doe building technology energy efficiency programs on u s employment income and investment abstract the u s department of energy s office of energy efficiency and renewable energy eere analyzes the macroeconomic impacts of its programs that are designed to increase the energy efficiency of the u s residential and commercial building stock the analysis is conducted using the impact of sector energy technologies imset model a special purpose 188 sector input output model of the u s economy designed specifically to evaluate the impacts of energy efficiency investments and saving for the analysis described in the paper imset was amended to provide estimates of sector by sector capital requirements and investment in the scenario of the fiscal year fy 2005 building technologies bt program the technologies and building practices being developed and promoted by the bt program have the potential to save about 2 9 10 15 btu in buildings by the year 2030 about 27 of the expected growth in building energy consumption by the year 2030 the analysis reported in the paper finds that by the year 2030 these savings have the potential to increase employment by up to 446 000 jobs increase wage income by 7 8 billion reduce needs for capital stock in the energy sector and closely related supporting industries by about 207 billion and the corresponding annual level of investment by 13 billion and create net capital savings that are available to grow the nation s future economy

where has all the education gone cross national data show no association between increases in human capital attributable to the rising educational attainment of the labor force and the rate of growth of output per worker this implies that the association of educational capital growth with conventional measures of total factor production is large strongly statistically significant and negative these are on average results derived from imposing a constant coefficient however the development impact of education varied widely across countries and has fallen short of expectations for three possible reasons first the institutional governance environment could have been sufficiently perverse that the accumulation of educational capital lowered economic growth second marginal returns to education could have fallen rapidly as the supply of educated labor expanded while demand remained stagnant third educational quality could have been so low that years of schooling created no human capital the extent and mix of these three phenomena vary from country to country in explaining the actual economic impact of education or the lack thereof

demand and supply side determinants of conditional cash transfer program effectiveness summary the programa nacional de becas estudiantiles is a conditional cash transfer program designed to promote human capital accumulation and reduce poverty among argentine youth this study follows a 1999 cohort of students for five years and uses matching methods with a comparison group of students excluded due to quotas to estimate average and marginal program impacts multilevel methods are used to explore the role of program management and execution in explaining variation between schools in student outcomes the results suggest that the becas program improved students attendance and performance in part through program conditions requiring good attendance and academic progress for continued scholarship receipt

social protection 2 0 exploring issues evidence and debates in a globalizing world abstract this paper reviews the growing literature on social protection while not new the concept evolved remarkably in recent years it is approached from a multitude of perspectives and intersects with broader bodies of literature particularly around public policy pro poor growth rights humanitarian strategies and aid effectiveness as well as feeding into specific programmatic issues e g conditionality targeting and transfer selection this blend of challenges and approaches has often made debates elusive and polarized the paper examines the evolution and definitions of social protection and unbundles critical policy institutional and implementation quandaries taken together these considerations shape a set of context specific models of social protection the paper s five core conclusions may help chart future directions for social protection research and practice

we are all poor here economic difference social divisiveness and targeting cash transfers in sub saharan africa abstract while the central thrust of michael lipton s work has been the crucial role of productivity gains in small farm agriculture for rural poverty reduction in many sub saharan african countries this desirable outcome has stubbornly refused to materialise and growing numbers of rural poor people are found persistently to fail to secure even minimal acceptable levels of food consumption a social protection policy response is to target social cash transfers to the chronic extreme poor this article focuses on the level of cash transfers relative to income differences between households in the bottom half of the income distribution and the social tensions that arise from beneficiary selection and exclusion it is found that cash transfers to target groups such as the poorest 10 per cent or the ultra poor labour constrained must be set low even below the welfare levels they seek to achieve if they are to avoid socially invidious reshuffling of the income distribution the article identifies crit

cash versus direct food relief abstract the usual method of providing relief to a famine region is to import food and distribute it to the needy direct food relief if there are markets for food in the region however a relief agency could just as easily distribute money to the needy and let them purchase food in the market cash relief this alternative has been much discussed in the famine literature recently the purpose of this paper is to clarify the conditions under which cash relief will be more or less effective than direct food relief by analyzing the relative effectiveness of the two policies in a formal model

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

social security and family support this paper shows how the role of the market the state and the family in providing financial support at old age has evolved over time with changes in factors such as the reliability and the effectiveness of family support the rate of interest the cost of public funds and earning inequality we model a society in which agents with different productivity are asked to vote over the existence of a beveridgian pension system we show that when children assistance is certain and large agents may rely exclusively on family to finance old age consumption and prefer to vote for a zero tax rate only if income inequalities are very large a majority will be in favor of a pension system however when the size and the likelihood of family generosity decreases a pension system is more likely to emerge in that case agents supplement children assistance with pension benefits a pension system is also more likely to emerge when the cost of public fund is small and the return from private savings is high

fit for purpose rethinking food security responses in protracted humanitarian crises the recent rise in the price of food worldwide defied easy categorization however the impact of the price hikes on developing country consumption served to refocus attention on food security much attention was paid to short term buffering of nutrition in tandem with new investments in agriculture a dual approach that served to reinforce a longstanding bifurcation in analysis and programming between emergency and development categories suggesting that emergency responses deal with immediate needs while development means addressing underlying causes with a longer term lens the notion of the relief to development continuum has long been dismissed as conceptual framework but has never really been replaced as a programmatic framework this paper suggests a multi dimensional way of conceiving of these categories and a more systematic way of thinking about response ethiopia is noted as an example where elements of this new approach are taking shape but even ethiopia has not adopted all of these components in an integrated way and the programming there has not been comprehensively evaluated

the old age security hypothesis revisited abstract children s altruism toward parents is allowed in a two overlapping generations model with endogenous fertility parents raise children because when retired they expect gifts from their children who are essentially a capital good individuals behavior between generations is examined by analyzing a nash equilibrium which is then compared with a social planner s optimal allocation the pay as you go public pension program is viewed as the optimal gifts from the optimal allocation when the latter is implemented the effect on fertility of the introduction of a capital market is also analyzed the validity of the old age security hypothesis is shown to depend on the parameters of utility and cost functions

child growth shocks and food aid in rural ethiopia this brief summarizes the results of a gender impact evaluation study entitled child growth shocks and food aid in rural ethiopia conducted between 1995 and 1996 in ethiopia the study observed the impact of food aid on child growth and shocks in communities on the child level food aid has a positive significant impact on the growth in height of children the total amount of food aid appears on average to be sufficient to offset the negative effects of plot damage on child growth given the fact there remains a massive amount of child stunting there must be large amounts of mis targeting of aid girls seem to be more resilient to shocks than boys

the economic impacts of river rehabilitation a regional input output analysis abstract we developed a model to predict the impacts of river rehabilitation activities on the local economy the model is based on the input output analysis technique and was applied to the planned rehabilitation project for the river thur in northern switzerland along the 4 km stretch between the communities of burglen and weinfelden we estimated changes in local employment and local economic output resulting from government spending on rehabilitation associated changes in adjacent land use and increased recreational activity accounting for land use changes required a modification of the conventional input output analysis technique which should be of general interest we accounted for uncertainty in the data and in some of the model assumptions by using a probabilistic formulation and propagating uncertainty through the model equations as time consuming local surveys were beyond the scope of this study we used the location quotient non survey technique to construct the local technical coefficients from national data and local employment data this implies that the model can be applied quite easily to a different study area in switzerland as long as local employment data are available for each chf 1 million expenditure per year on rehabilitation activities in our study region we estimate an extra 8 fulltime employment equivalents standard deviation 0 4 fte and an increased output of chf 1 4 million chf 0 05 million the low uncertainty of these estimates can be partly attributed to the structure of input output analysis and partly to the fact that we estimated changes in the economic output rather than output itself in addition to the above impacts we estimate that increased recreational use of the area will increase output by as much as chf 0 17 million chf 0 12 million and employment by as much as 1 7 fulltime employment equivalents 1 3 fte depending on the specific rehabilitation option selected

the pay as you go pension system as fertility insurance and an enforcement device a paygo system may serve as insurance against not having children and as an enforcement device for ungrateful children who are unwilling to pay their parents a pension in fact the latter was bismarck s historic motive for introducing this system it is true that the paygo system reduces the investment in human capital but if it is run on a sufficiently small scale it may nevertheless bring about a welfare improvement if on the other hand the scale of the system is so large that parents bequeath some of their pensions to their children it is overdrawn and creates unnecessarily strong disincentives for human capital investment

are there lessons for africa from china s success against poverty at the outset of china s reform period the country had a far higher poverty rate than for africa as a whole within five years that was no longer true this paper tries to explain how china escaped from a situation in which extreme poverty persisted due to failed and unpopular policies while acknowledging that africa faces constraints that china did not and that context matters two lessons stand out the first is the importance of productivity growth in smallholder agriculture which will require both market based incentives and public support the second is the role played by strong leadership and a capable public administration at all levels of government

agrifood industry transformation and small farmers in developing countries summary this article introduces this special issue on the rapid transformation of the agrifood industry in developing countries and its effects on small farmers we review the literature from the late 1980s to the present and find evidence first of food processing then retail transformation and mixed evidence of impacts on small farmers both inclusion particularly with resource providing contracts and exclusion sometimes from scale constraint sometimes from inadequate non land assets the special issue papers contribute to the debate by confirming the mix of cases of inclusion and exclusion the cases are main in horticulture and dairy key hopes for smallholder development

intertemporal transfer institutions abstract we consider a single commodity overlapping generations model where at a cost institutions can be created or transformed to carry out intergenerational transfers we analyze the game with both strategic and cooperative methods characterizing the unique stationary equilibrium as well as the set of transfer institutions that belong to the core which we show to coincide with the consistent core we conclude that as long as the creation of an institution is costly it is possible to sustain positive transfers though those will be below the optimal level moreover the lower the costs the more efficient the transfer will be journal of economic literature classification numbers c71 c72 d23 e21 h55

reflections on food crises past abstract world food crises are relatively rare events occurring roughly three times a century but they also tend to be regular events every three decades or so suggesting there is an underlying cyclical cause if so far sighted donor and government investments in raising agricultural productivity and policies on behalf of stable food production and prices might go a long way to preventing food crises in the future preventing food crises rather than trying to cope after the fact with their impact on the poor is the only way to avoid substantial perhaps permanent damage to the welfare of poor households lessons from the world food crises in 1972 73 and in 2007 08 especially lessons from how the world rice market functioned point the way toward improved food policy management at national and international levels in the future

a positive theory of social security in many countries social security accounts for a large fraction of the government budget why is this so given that at any point in time the number of recipients of social security benefits is smaller than the number of contributors in the overlapping generations model studied in this paper all individuals currently alive vote on social security in every period in equilibrium the size of social security is larger the greater is the proportion of elderly people in the population and the greater is the inequality of pre tax income within each generation both predictions of the theory are supported by the empirical evidence in cross country data

assessing non marginal variations with consequential lca application to european energy sector many policies are being designed to mitigate impacts of human activities on the environment an environmental evaluation of these policies should include assessments of their impacts according to all known environmental impacts moreover because policies may indirectly affect regions or economic sectors not initially targeted by these policies indirect environmental consequences should be included in environmental balances life cycle analysis lca is a holistic method made to assess environmental impacts caused by products or services according to various environmental damage categories however the ability of lca to model environmental consequences due to a change is restricted to marginal changes occurring in small life cycles new methodological developments are needed to study major changes and their environmental consequences as they may happen when a policy is applied at large scale for that purpose the economic general equilibrium model gtap has been used to predict global economic perturbation that would be caused by two different european energy policies bioenergy policy and business as usual policy lca was then used to assess environmental impacts due to european energy generation and perturbation of world economy despite the bioenergy policy involves more energy from renewable technologies which are expected to be less polluting results show that due to rebound effects bioenergy policy results in more environmental impacts combining both gtap and lca improves environmental assessment made with gtap because it allows computing environmental impacts according to products life cycles instead of using economic sector emission factors and because emissions and extractions from environment are related to impacts on environment regarding lca method this new approach allows studying significant changes affecting large systems with a global modeling of economy in a time dependent environment however more work is needed to evaluate this new approach especially uncertainty should be studied