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This paper provides an introduction to a special issue on what sustains informality. The papers in the special issue contribute significantly to critical issues related to the nature of informal employment and its determinants, how informal firms can grow their business and productivity, and the effects of labor market regulations and social insurance policies on informality. [ABSTRACT FROM AUTHOR]

One of the most complex policy issues that developing countries will face as a result of the employment crisis caused by the Covid crisis is the question of how they can better protect the unemployed. However, the analysis of unemployment insurance (UI) in developing economies with large informal sectors is in its infancy, with few papers providing solid empirical evidence. This paper therefore makes several contributions: first, it applies Chetty's 2008 landmark work on UI to a transition economy (Chile) and shows that the moral hazard effects expected by policy makers, who designed the system are minimal, while liquidity effects were entirely neglected. Second, it demonstrates that it is not enough merely to quantify effects such as moral hazard, but to understand their causes as unemployment generated by moral hazard or liquidity constraints has different welfare implications and should therefore result in different policies. By means of an RDD, this paper analyses the Chilean UI system using a large sample of administrative data, which allows for an extremely precise analysis of how the system works, thus providing invaluable empirical lessons for other countries. [ABSTRACT FROM AUTHOR]

When seeking to increase their tax revenues, policy makers face a likely tradeoff between decreasing personal income tax rates (making formalizing more attractive and potentially contributing to revenue) and alternatively raising tax rates (potentially slowing down the formalization of the economy if people prefer informal employment). Evidence on formal versus informal earnings and job characteristics in different sectors is limited in African countries, and in particular very little is known about the impact of tax changes on the extent of informality. This paper therefore estimates the personal income tax responsiveness of the extensive margin of formality, i.e. the propensity to be a formal as opposed to an informal worker, for Ghana, Rwanda, Tanzania, and Uganda, using repeated cross-sections of household data and applying grouping estimator techniques. Perhaps because of labour demand constraints and other frictions, the paper finds non-significant relations between the formal employment share and the formal-informal earnings differences. [ABSTRACT FROM AUTHOR]

The increasing numbers of rural youth in developing countries and their perceived disenchantment with the society and economy have raised policy concerns across the developed and developing world. Youth (ages 15 to 24) make up one in five people in developing countries, and one in eight in the developed world. Of the 1.2 billion youth in the world, nearly 1 billion reside in developing countries, and their numbers are growing far more rapidly than in higher-income countries. Despite the increasing number of institutional publications on youth issues, rigorous research to put these numbers into perspective and to shed light into their challenges and opportunities in economic, political and civic participation to guide their inclusion in rural transformation is remarkably limited. This special section brings together five papers that make use of the most up to date and comprehensive data sets and analyses on rural youth to address these research gaps. They provide an overall understanding of the contexts (economic sectors, spatial distributions, welfare outcomes, gendered differences, and civic participation) in which rural youth live and work, and expand the nascent literature that can support the design and targeting of policies to ensure rural youth inclusion in rural transformation. [ABSTRACT FROM AUTHOR]

Private tutoring participation is increasing in several developing countries, and this expansion has attracted the interest of scholars spanning disciplines of economics, sociology and history. This paper presents a theoretical model of private tutoring demand. The model incorporates the household and school characteristics in a developing country context and demonstrates the source of gender gaps in access to private tutoring. Using a recent database from India and employing a hurdle model approach, the paper also provides estimates of the drivers of private tutoring participation and spending for pre-secondary students. Our results indicate evidence of gender gaps in private tutoring access, and that the socio-economic profile of a student is positively correlated with tutoring demand. Further, school quality indicators are negatively correlated with tutoring participation, suggesting that students at 'better' schools rely less on tutoring. Overall, the findings suggest that tutoring demand is influenced by a mix of demand-side (household, community drivers) and supply-side (school quality and learning environment) factors. The results bring into focus the equity implications of tutoring growth and the need to improve school quality in order to reduce the dependence on private tutoring. [ABSTRACT FROM AUTHOR]

Information asymmetries and limited skills are two main factors affecting job seekers' chances to access quality jobs in developing countries. This paper evaluates the effectiveness of a program combining job intermediation and wage subsidy in Bolivia, a country with one of the highest levels of informality in Latin-America. Using administrative and survey data, we find that the program substantially increases employment and formality. These effects are heterogeneous across different subsamples of interest. Our results suggest that Active Labor Market Policies might be an effective solution for improving access to quality jobs in the context of high informality. [ABSTRACT FROM AUTHOR]

Although low tax morale hits developing countries hardest, little is known about its determinants in those countries. This paper examines the impact of trust in public institutions and the neighbourhood on individual tax morale in four African countries. First, the paper provides theoretical foundations of such a relationship. Further, the paper uses the World Value Survey to estimate the effects of trust in public institutions and the neighbourhood on individual tax morale. The identification strategy employs the instrumental variables method and relies on historical data on the slave trade and the literature on the cultural heritage of trust. The paper finds that trust in public institutions and the neighbourhood are associated with tax morale in Algeria, Ghana, Morocco, and Nigeria. The findings are robust to an alternative identification strategy, additional controls, and a falsification test. [ABSTRACT FROM AUTHOR]

Achieving sustainable agricultural development is a vital concern as soil degradation poses a growing threat to the livelihoods of smallholder farmers in the developing world. Previous literature has highlighted the potential for rural population growth to exacerbate this concern by leading to smaller farm sizes and crop production on marginal land. This paper uses a theoretical model to demonstrate a countervailing effect consistent with the work of Esther Boserup: Smaller farm sizes can encourage greater intensification and investment in the soil. Using panel data from the Tanzania National Panel Survey, I test the model and find some evidence consistent with this effect. Smaller farms are associated with greater organic, but not inorganic, fertilizer application, and higher levels of some soil quality proxies. These results suggest that if key resource and information constraints are overcome, population growth need not be an obstacle, and can be a boon, to sustainable agricultural development. [ABSTRACT FROM AUTHOR]

Several episodes of market-oriented reforms in developing countries have been accompanied by a significant rise in work outside of the formal economy. This paper investigates whether the impact of trade on formal employment is mediated by the strength of labour regulations. We rely on data from the Brazilian Census that provides information on workers' demographics and employment, including job formality status. Our estimation strategy exploits quasi-exogenous changes in industry-level real exchange rates to explore the likelihood of informality across employers exposed to varying degrees of de facto labour regulations. We further utilize two key features of Brazilian labour institutions – budgetary decisions about the availability of resources occur at the federal level, while decisions about where to inspect occur at the local level – to instrument for labour enforcement. Our results suggest that strict labour regulations may lead to a precarization of employment, rather than offering protection for workers. [ABSTRACT FROM AUTHOR]

This paper examines the recent resurgence of interest in public-private partnerships (PPPs) to provide infrastructure in developing countries. First, the paper demonstrates that there has been a revival of support for private sector participation in infrastructure. Second, the paper argues that this revival differs from earlier attempts to increase the involvement of the private sector in public service provision in a number of respects. In particular, the current support for PPPs is related to an increased availability of global financial capital. Third, the paper considers the implications of this distinct feature of the revival for development. [ABSTRACT FROM AUTHOR]

Minimum wage (MW) policies are widespread in the developing world and yet their effects are still unclear. In this paper we explore the effect of national MW policies in Latin America's six largest economies by exploiting the heterogeneity in the bite of the national minimum wage across local labor markets and over time. We find evidence that the MW has a compression effect on the wage distribution of formal workers. The effect was particularly large during the 2000s, a decade of sustained growth and strong labor markets. In contrast, the effect seems to vanish in the 2010s, a decade of much weaker labor markets. We also find suggestive evidence of a lighthouse effect: the MW seems to have an equalizing effect also on the wage distribution of informal workers. [ABSTRACT FROM AUTHOR]

International trade in the 21st century operates through global value chains (GVCs). There is a growing literature on how the emergence of GVCs has changed the playing field for catch-up industrialization of developing countries. Inter-industry linkages have historically been a central aspect of catch-up industrialization. How such linkages on the country level are affected by the reality that trade is conducted via GVCs is an important research question. This paper synthesizes the theoretical elaborations on inter-industry linkages from the classic development economics literature with secondary empirical data from the East Asian industrialization experience to illustrate the importance of inter-industry linkages for the industrialization process. Using primary data from the South African automotive industry, the paper shows how the dynamics of the automotive GVC have affected domestic inter-industry linkage building in the country. The backward linkages to the domestic component manufacturing industry and to the domestic materials industries from South Africa's successful integration into the automotive GVC have been disappointing. Both local policy decisions as well as GVC-specific dynamics of follow sourcing and the proliferation of manufacturing technologies and material standards have undermined more substantial backward linkages from exports of automobiles. [ABSTRACT FROM AUTHOR]

Agglomeration effects on the workers' and firms' productivity in developed countries are widely confirmed by previous studies, while empirical evidence for developing countries is still limited. This paper sheds light on another urban productivity factor that is particularly important for developing countries: self-employment and wage jobs. The transition from the economy dominated by the former to the one by the latter is a key to economic development. This study examines how urban agglomerations are linked to the mix of self-employment and wage jobs by focusing on one of the least urbanized low-income countries: Ethiopia. Applying an instrumental variable approach to worker-level cross-sectional data, the analysis finds a negative link between town population size and the share of self-employment workers: a log increase in town population size lowers the probability of engaging in self-employment by 7.9 percentage points. Particularly female, young, and less-educated workers are more likely to work with wage jobs in larger towns. The findings suggest a crucial link between urban agglomerations and employment modes in the developing world. [ABSTRACT FROM AUTHOR]

Joint liability group lending has come under scrutiny for failure to promote profitable risk-taking among smallholder borrowers in developing countries. One possible explanation for the absence of profitable risk-taking is the collateral-like effect of social capital, which borrowers fear losing if they default. In this paper, we use data from a framed field experiment and a survey administered in Tanzania to empirically investigate the relationship between social capital and risk-taking. We find that borrowers with more close relationships (family and friends) in their borrowing group increase risk-taking yet borrowers with more relationships that induce negative moral emotions (shame and guilt) reduce risk-taking. [ABSTRACT FROM AUTHOR]

This paper analyses the Indonesian Family Life Survey to show that job strenuousness is negatively related to obesity, which is largely consistent with the literature. However, this paper does not interpret the relationship as causal. Instead, efforts are made to demonstrate that the relationship is attributable to sample selection: workers with low socioeconomic status are lightweight and selected for strenuous jobs. This paper warns against reflexive applications of the conclusions derived from the developed world to the developing world. Our results imply that sedentariness at work probably plays a small role in the prevalence of obesity in the region. [ABSTRACT FROM PUBLISHER]

The global economy is experiencing digital transformation with impacts felt in developing countries. Digital firms and capabilities, however, remain concentrated in advanced economies. These processes indicate an emerging source of global economic inequality and a widening of the technological gap. Recently, there has been a growth in interventionist digital policy in developing and emerging economies but research has so far made a limited analysis of how this might fulfil economic objectives and support technological catch-up. In this paper, we examine this growth of national digital policies and highlight how industrial policy objectives are important drivers of digital strategies. Examining a number of cases based on an extensive analysis of national digital policies, with a focus on China, we illustrate that these policies often aim at facilitating global integration and linkages. However, our analysis shows that, under certain conditions, more interventionist approaches can be vital in countering structural challenges. Challenges include the power of digital platforms, limitations of domestic digital firms, and limited ability to leverage digitalisation for broad-based national development. [ABSTRACT FROM AUTHOR]

The current era of globalisation has been accompanied by China's rise as a major economic actor. Chinese firms are expanding their presence globally and are seeking to 'catch-up' with firms in developed countries across different sectors. This paper uses China's agricultural machinery sector as a vehicle to examine the challenges faced by firms from developing countries in their effort to catch-up with 'core firms'. Chinese firms operating in the sector struggle to compete with a small number of dominant core firms based in developed countries. These core firms are sectoral leaders with a global presence. They are continuously strengthening their competitive advantage using diverse strategies, including: investing in R&D, focused acquisitions and developing relationships with actors internal and external to agriculture. The challenge of catching-up for Chinese firms in the sector has further increased as developed countries seek to protect firms in strategic sectors like agriculture. By examining the changing nature of the agricultural machinery sector, and the role of core firms, the paper highlights the substantial barriers facing Chinese firms in their efforts to catch-up. This paper has important implications, as it shows that even if firms from developing countries enjoy state-support, they will increasingly struggle to catch-up. [ABSTRACT FROM AUTHOR]

Does local internet diffusion spur manufacturing performance in developing countries? To answer this question, we conduct instrumental variable estimations, using repeated cross-section data on 44,073 manufacturing firms from 109 developing and transition economies, and find large positive spillover effects of local email incidence on manufacturing firms sales and sales per worker. This evidence is driven by the local dissemination of email technology within industries rather than across industries. However, further analysis stresses that inter-industry spillovers are actually U-shaped, that is, negative at low email incidence rates but turning positive once incidence reaches approximately 50% of the local universe of firms. This suggests that local internet spillovers across industries are subject to network effects. Last, these threshold effects seem related to the presence of outward-oriented firms, which are known to exhibit higher digital absorptive capacity. Overall, this paper shows that local industrialisation paces may strongly diverge between poorly and highly digitalised environments. [ABSTRACT FROM AUTHOR]

Calls to deepen levels of social accountability within social protection interventions need to be informed by the now extensive experience of promoting social accountability in developing countries. Drawing on a systematic review of over 90 social accountability interventions, including some involving social protection, this paper shows that politics and context are critical to shaping their success. We argue that the politics of social protection and of social accountability resonate strongly with the broader project of transforming state-society relations in developing countries. This requires a reconceptualisation of social accountability and social protection in terms of the broader development of ‘social contracts’, and that the current emphasis on promoting bottom-up forms of accountability needs to be balanced by efforts to strengthen and legitimise public authority in developing countries. [ABSTRACT FROM PUBLISHER]

In the empirical literature on child labour and income transfer programmes, evidence has been lacking on whether (and how) the size of transfer influences the impact on child labour. This paper finds significant size effects in the impact of scholarship-based transfers on child labour in Nepal. High-value scholarships decrease 8-16 year-old girls' total work hours by one-third, largely reducing their hours in paid and unpaid economic activities with little impact on domestic chores. Low-value scholarships have no impact at all. The findings elucidate the scope for calibrating transfer size to achieve greater child labour impacts in developing countries. [ABSTRACT FROM AUTHOR]

This paper examines the impact of the introduction of the value-added tax on inequality and government revenues using newly released macro data. We present both conventional country fixed effect regressions and instrumental variable analyses, where VAT adoption is instrumented using the previous values of neighbouring countries' VAT systems as an instrument. The results reveal - in contrast to earlier work - that the revenue consequences of the VAT have not been positive. The results indicate that income-based inequality has increased due to the VAT adoption, whereas consumption inequality has remained unaffected. [ABSTRACT FROM AUTHOR]

The economic debate on the existence and definition of the middle class has become particularly lively in many developing countries. Building on a recently developed framework called the Vulnerability Approach to Middle Class (VAMC) to define the middle class, this paper tries to estimate the size of the Nigerian middle class in a rigorous quantitative manner and to gauge its evolution over time. Using the VAMC method, the middle class group can be defined residually from the vulnerability analysis as those for which the probability of falling into poverty is below a certain threshold. The results show the size of the Nigerian middle class from is around 20 percent of the total population in 2012/13. However, the rate has been slower than expected given the high growth rates experienced in the country over the same period. The results also paint a heterogeneous picture of the middle class in Nigeria with large spatial differences. The southern regions have a higher share and experienced more growth of the middle class compared with the northern regions. [ABSTRACT FROM AUTHOR]

This paper analyses the informal channels of the job search process through migrant networks in the urban labour markets in developing countries. Using a novel approach and nationwide sample survey, we measure various aspects of migrant networks such as size, diversity, efficiency and experience content and estimate their effect on probability of employment. Our findings suggest that migrant stock (having experience content) has an inverted-U relationship with the probability of finding a job for a migrant. The share of employed workers in a migrant network (efficiency) and different origin identity (diversity) positively affect the employment outcome through weak ties. Further, the migrant network effect is more active in larger cities as compared to smaller urban areas. The implications of this study indicate towards the importance of non-market informal channels in job searches and the need for integrating labour markets to harness the benefits of larger positive network externalities. [ABSTRACT FROM AUTHOR]

The regional concentration of poverty and the resulting disparities in living conditions create conditions where educational inequalities are intensified. These adverse conditions could lead teachers to refuse to work in disadvantaged locations that are characterised by high incidences of poverty and low-performing students. In this paper, we estimate how poverty in the districts where the schools are situated influences the probability that teachers accept a job offer in Costa Rica. Working with data on contract offers acceptance or rejection is a methodological novelty that makes it possible to dissociate students' poverty from the poverty of the schools' location. The estimation of a three‐level hierarchical model allows us to deal with aggregation bias and unobserved heterogeneity. The results show evidence that district poverty is a key determinant of teachers' rejection of offers. Although the study uses data from Costa Rica, the results indicate more generally, how educational inequity can perpetuate poverty. [ABSTRACT FROM AUTHOR]

This paper uses a Preston Curve approach to test for changes over time in agriculture, nutrition and food policy, comparing national averages in Africa and elsewhere at each level of national income per capita from the 1990s to the 2010s. Our statistical tests and data visualisations reveal that, at each level of income, African countries have faster rural population growth, a larger share of workers in agriculture and lower agricultural labour productivity than countries elsewhere, with no significant shift in these patterns from the 1990s to the 2010s. In contrast, there have been structural shifts towards less child stunting everywhere, and towards more adult obesity in high-income countries. The overall pattern of African governments' food policies and government expenditures have not shifted, however, as they continue price interventions and low investment levels characteristic of low-income countries around the world. [ABSTRACT FROM AUTHOR]

This paper focuses on participation in decision-making processes and how rural youth could benefit from its use in development projects and initiatives. General literature and relevant international experiences related to participation mechanisms aimed at youth show that participation boosts interventions linked to improvements of young people's livelihoods and developmental opportunities. However, participation mechanisms are less explored (and used) in rural settings: we know little of the effectivity of rural participation, even less so for youth, in developing countries. Based on the review of 54 documented cases about participation of rural youth in developing countries, we conclude that participation mechanisms towards rural youth can produce substantial results to enhance the development and social inclusion opportunities through three channels. First, collecting rural youth´s opinions around issues relevant to them through platforms that are sensible to the challenges they face to participate. Second, capitalising rural youth and their organisations, improving their financial assets but also working in character skills and intergenerational partnerships that let them break the status quo. Third, articulating youth with new institutions, organisations, and territories through new links supported by diversification of the urban-rural continuum and new information technologies. [ABSTRACT FROM AUTHOR]

Proxy Means Testing (PMT) is a popular method to target the poor in developing countries. PMT usually relies on survey-based consumption data and assumes random measurement errors – an assumption that has been challenged by recent literature. Using a survey experiment conducted in Tanzania, this paper brings causal evidence on the impact of non-random errors on PMT performances. Results show that non-random errors bias the coefficients from PMT models, resulting in a 5 to 27 per cent reduction in PMT predictive performances. Moreover, non-random errors induce a 10 to 34 per cent increase in the incidence of targeting errors when poverty is defined in absolute terms. More reassuringly, impacts on the ranking of households are smaller and essentially non-significant. Taken together, these results indicate that PMT performances are quite vulnerable to non-random errors when the objective is to target absolutely poor households, but remain largely unaffected when the objective is to target a fixed share of the population. [ABSTRACT FROM AUTHOR]

The integration of Global South actors into the global agricultural economy has attracted research on labour effects. This is because Global South actors are often integrated at the level of production of raw materials with little power and less capture of gain. To better understand the conceptual perspectives and methodologies underpinning existing empirical studies and provide evidence for the labour-related practice, this paper conducts a systematic review of the methodologies and perspectives applied in the Global Agricultural Production Networks literature. Based on an analysis of 87 articles published in English-speaking journals, we show that the assessment of labour regulatory frameworks' impact on labour issues is more focused on private than public or social forms of governance and on vertical than horizontal frameworks. Wageworkers working on smallholder farms and agro-industries and women have received little consideration, in particular, if compared with wageworkers on plantations, as has the topic of occupational health and safety as a specific key labour issue. Overall, the existing body of empirical research can be characterised as being largely qualitative in nature, underexploiting the potential quantitative or mixed methods research designs. Our review generates methodological ideas and conceptual perspectives for future studies to consider. [ABSTRACT FROM AUTHOR]

This paper contributes to the literature on the nature of informal employment in developing economies. Drawing on the model with essential heterogeneity, it offers a list of scenarios describing the behavioural patterns which informal workers follow. The list nests not only classical patterns of a rationed formal sector versus an integrated labour market, but also different patterns of rationing. Using non-parametric techniques and data from a few African economies with different levels of development, the paper proposes empirical case studies fitting various informality schemes. Developing economies show disparate patterns of allocation of workers and various patterns of rationing. [ABSTRACT FROM AUTHOR]

Across the Global South, the realities of urban informality are changing, with implications for how we understand this phenomenon across economic, spatial, and political domains. Recent accounts have attempted to recognise the diversity of informality across contexts and dimensions, as well as its everyday lived realities. Reviewing key debates in the sector, and drawing upon the new empirical studies in the papers presented here, we argue for a shift away from seeing urban informality narrowly as a setting, sector, or outcome. We suggest that reconsidering informality as a site of critical analysis offers a new perspective that draws on and extends political economy approaches, and helps us to understand processes of stratification and disadvantage. We seek to highlight the significance of the informal-formal continuum at the same time as challenging this dichotomy, and to explore emerging theoretical and empirical developments, including changing attitudes to informality; the increasing salience of agency; and informality as strategy both for elite and subaltern groups. [ABSTRACT FROM AUTHOR]

This paper studies the relationship between the use of formal and informal health care in a developing country setting by examining the introduction of a social health insurance scheme in Ghana. We estimate the effects of gaining coverage on changes in care seeking behaviour and show how these effects differ by age and wealth status. District-level differences in the implementation of the insurance scheme provide exogenous variation in access to insurance and allow us to address issues with selection into coverage. Results indicate that insurance access strongly increased use of formal care and reduced out-of-pocket expenditures on health services. [ABSTRACT FROM AUTHOR]

This paper examines why job creation in the manufacturing sector has differed widely across developing countries, using a modified Lewis model that captures the scale, composition and labour intensity effects of industrialisation on job creation. We show that while the scale effect has been mostly positive, labour intensity and composition effects have been mostly negative. Trade integration has a positive impact on manufacturing employment via the scale and composition effects, but a negative impact via the labour intensity effect. Human capital has a positive effect via the labour intensity effect. Labour regulations have no impact through any of the effects. [ABSTRACT FROM AUTHOR]

Several developing countries are currently experiencing a significant fertility decline, however, academic economists have paid little attention to this transition. This paper seeks to explain the fertility transition by infant mortality, urbanisation, income, culture and educational attainment of females and males using annual data for 92 developing countries over the period 1960-2014. External instruments are used to deal with endogeneity. The results suggest that increasing per capita income, improved female education and increasing secularisation have been important determinants for declining fertility in the developing world. [ABSTRACT FROM AUTHOR]

Recent years have seen a growing interest in the long-term implications, resonance, and reverberation of international development interventions. Going beyond projects' official blueprints and stated objectives, scholars and development practitioners alike increasingly approach such interventions as living, complex, and non-linear processes that can have far-reaching and unexpected consequences. In this article, I offer a conceptual guide—reinforced by methodological suggestions—for studying the representational and material 'afterlives' of development interventions in the global South, which overflow projects' official timelines and life cycles. Inspired by phenomenological ideas and by the 'material turn' in anthropology, as well as by work on temporality and spatiality, I recognize target populations as repositories of non-hegemonic knowledge, skill, and agency, who creatively re-appropriate development's remains and legacies. While such local perspectives may have been kept under relative control throughout the project itself, they come to the fore upon the project's termination, as formal scripts loosen their grip. The result is a cumulative, site-specific, and grassroots-based ethnographical approach aimed at studying post-intervention sites in their totality, with emphasis on the intertwinement of the palimpsest-like multilayers of interventions. [ABSTRACT FROM AUTHOR]

This paper addresses vulnerability of revenue to external shocks using export composition to capture economic structure and differentiating countries according to income levels, resource endowments and political regimes. This gives a richer characterisation than previous studies. Lower income countries are vulnerable to shocks, especially in terms of trade (associated with the greatest revenue loss): democratic regimes seem to be less vulnerable to revenue losses due to shocks than non-democracies whereas revenue in resource rich countries is more vulnerable to shocks (except natural disasters) than non-resource rich countries. We find a negative relationship between manufacturing exports and revenue in lower income countries. [ABSTRACT FROM AUTHOR]

Although no longer an editor, John was instrumental in bringing JDS to the IDS in Sussex, of which he had become Director, in 1988. In fact, one of his earliest papers in JDS (1983, 20:1, 87-107), the precursor to what became John's book I Dilemmas of Development i (1987), was a critical article based on being asked to review Bauer (1981) I Equality, the Third World and Economic Delusion i . The Journal recognises the contribution of John Toye on the first anniversary of his death on 12 November 2021. [Extracted from the article]

The Economic Vulnerability Index (EVI) is a well-recognised measure of the structural vulnerability of developing countries and is regularly used and published by the United Nations for cross-country comparison purposes, primarily to review the list of Least Developed Countries (LDCs). However, due to the revisions in methodology occurring over time, the official EVI cannot be used to assess the changes in vulnerability. In this paper, we use two retrospective series of the EVI, based on constant definitions. The real change in vulnerability is thus isolated from the impact of revisions in the design of the index, allowing comparison of the evolution of LDCs and non-LDCs. The implications of the revisions in the EVI design are then discussed. [ABSTRACT FROM AUTHOR]

Using household and labour force surveys from Cambodia and Sri Lanka, we find large positive wage premiums and a closing of the male-female wage gap during the Multi-Fibre Arrangement (MFA) period, but smaller premiums and a widening wage gap after the end of the MFA. Our results suggest that apparel exports continued to benefit women in developing countries post-MFA but women – both in and out of the apparel industry – are susceptible to changes in global apparel prices. [ABSTRACT FROM AUTHOR]

As the multilateral debt relief initiatives draw to a close, this article reviews the impacts of debt relief to low-income countries (LICs) building on both the theoretical and empirical literature of past decades. We show that, while the pioneering studies of the early 2000s are inconclusive, the most recent analyses overcome certain methodological impediments to highlight significant multilateral debt relief initiative effects. These analyses hence suggest that these large-scale programmes may well have met expectations, at least in part. [ABSTRACT FROM AUTHOR]

Youth bulges in developing countries may carry both a potential for growth via demographic dividends, and ticking political time bombs, depending on the success of authorities in providing youth with adequate opportunities as they transit into the labour markets of the twenty-first century. In this article I examine the theoretical and empirical research on school-to-work transitions (SWT) in developing countries. After a discussion of the attempts at operationalising the concept of school-to-work transitions from a statistical point of view, I review the theoretical settings suitable for analysing the SWT. Despite an extensive search and matching literature, few models seem adapted to developing countries' labour markets, and even fewer are empirically tested. I then examine the determinants of transition lengths at the individual and macro level. Findings indicate that education is not always associated with shorter durations to first employment, and that the reasons may be higher expectations, reservation wages, or queuing. Women generally experience longer transitions in the labour market, and evidence from labour market interventions is mixed. Many factors likely to influence the school-to-work transition have not been studied from the point of view of school-to-work transitions, however, and potential directions for future research are presented. [ABSTRACT FROM AUTHOR]

This survey reviews the current state of the economic literature, assessing the impact of transport investments and policies on growth, inclusion, and sustainability in a developing country context. It also discusses the specific implementation challenges of transport interventions in developing countries. [ABSTRACT FROM AUTHOR]

Using non-parametric methods and India Human Development Survey 2004–2005, this study analyses the effect of urban proximity in terms of distance and connectivity on spatial pattern of land-use and development in the context of rural India. We find that, in urban surroundings, rural areas have diversified economic activities, intensive agriculture with higher spending on various inputs, higher economic wellbeing in terms of wages, income and consumption expenditure. We also document that transport and tele-connectivity are important for improved rural-urban linkages and changing rural landscape. These findings suggest that urban settlements are keys to development and inclusive growth in rural areas. [ABSTRACT FROM PUBLISHER]

There is extensive evidence linking air pollution exposure to physical health. Less is known about the mental health impacts of poor air quality, especially in developing countries. We use data from India and estimate the causal impact of air pollution exposure on feeling sad, experiencing cognitive difficulties, and feeling unable to control and cope with important things in life. We instrument for air pollution exposure using the annual number of nighttime thermal inversions and show that air pollution exposure in the previous calendar year significantly worsens mental health in the current year. We examine potential mechanisms and find that air pollution exposure negatively impacts self-reported physical health, worsens respiratory conditions, and increases the likelihood of experiencing sleeping difficulties. Accounting for mental health impacts of pollution exposure is critical to accurately estimating the true health costs of air pollution and designing optimal environmental policy. [ABSTRACT FROM AUTHOR]

The rapid growth of China's export sophistication and the driving factors are a matter of discussion in the literature. This study constructs a new measurement for net sophistication by utilizing the world input-output database and excluding the technologies embodied in foreign inputs. We find that although China's net sophistication has been increasing, it is much lower than that of developed countries. Based on new measurements, we explore the impact of FDI on domestic firms' net sophistication in China using data from 2000 to 2010. The results suggest that FDI has competition effects on domestic firms. Net sophistication may increase in the short term as domestic firms adjust their production by reducing the use of foreign technology to reduce costs. However, this increase in net sophistication is not sustainable without technological upgrades. Under long-term competition from foreign firms, domestic firms' net sophistication decreases. Our findings provide clear policy implications for labor-rich developing countries that seek to upgrade exports by attracting FDI. [ABSTRACT FROM AUTHOR]

Adolescents' time allocation is an important determinant of non-cognitive skills formation, but evidence from developing countries is limited. This study builds upon two previous studies using data from four developing countries. I estimate how adolescents' time allocation determines their self-esteem and self-efficacy – two measures of non-cognitive skills – and I show how these estimates are sensitive to trade-offs across different types of activities. In every country, an additional hour of domestic work that reduces time for school or study reduces children's self-efficacy, significant for all countries except Peru. Work is most harmful for girls in India and Vietnam, but not for boys in Ethiopia. However, domestic or economic work that shifts time away from leisure is no more or less determinative of adolescents' self-efficacy or self-esteem in all countries analyzed. Attending school and studying outside school improve both self-efficacy and self-esteem for adolescents in Peru, but are statistically insignificant in the other three countries. Overall, these findings are mainly relevant for self-efficacy compared to self-esteem. The harmful effects of adolescents' work are contextual, depending on the activity substituted, and the country studied. [ABSTRACT FROM AUTHOR]

Developing countries face uncertain trajectories for growth in the twenty-first century, with many finding themselves a 'middle-income trap'. Extant theories in the politics of development that focus on domestic institutional strength and weakness represent necessary but not fully sufficient explanations for the trajectories of middle-income countries. In order to explain uncertain and uneven development outcomes in an era of heightened globalisation, this article seeks to explore the impact of international institutions, specifically the post-Cold War structures of trade and investment and global value chains, on the possibilities for growth for middle-income countries. The particular character of rules and norms defining trade and investment and the power dynamics behind their design suggest that international institutions as well as domestic factors explain disappointing and increasingly unequal development outcomes among middle-income countries. [ABSTRACT FROM AUTHOR]

The transfer of climate finance to developing countries is a key feature in global climate change agreements. This article examines how conflicting preferences between climate finance donors and domestic actors affect the diffusion of emerging international norms on climate finance coordination at national and subnational levels in Zambia. Informed by literature on norm localization we trace the diverging preferences and interactions among donors and domestic actors over a 12-year period as they shape climate finance coordination in Zambia with support from the global Climate Investment Funds. We find that this has been a highly conflictual and dynamic process with contestation centered on norm application rather than norm validity. While the World Bank have had a strong initial influence on the enactment of coordination norms, domestic actors have over time undermined and reconfigured coordination arrangements to align better with their own preferences. Our findings show (i) how emerging international norms on climate finance coordination may be localized and reshaped as they are enacted in developing countries; (ii) that preferences may differ significantly between and among donors and domestic actors in this regard, and (iii) that past relationships from development cooperation may be carried forward but also challenged in this process. [ABSTRACT FROM AUTHOR]

Our analysis of a rich representative household survey for Malawi, where patrilineal and matrilineal institutions coexist, suggests that: in matrilineal societies the likelihood of high-value crop cultivation by a household increases with the extent of land owned by males, while the income generated from high-value crop production decreases with the amount of land owned by females; and the cultivation of high-value crops increases household welfare. The policy implication is that facilitating female ownership of assets through informal and formal institutions does not, on its own, increase welfare when appropriate complementary resources and institutions are absent. [ABSTRACT FROM PUBLISHER]

Mobile money is an important instrument to improve the degree of financial inclusion, especially in developing countries. However, having a mobile money account does not imply that this account is actually used. In our sample, 86% of microentrepreneurs own a mobile money account, but only 49% actively use it – the resulting gap indicates unmet opportunities. We estimate that mobile money reaches up to 40% of those without prior access to (semi-)formal financial services, still leaving a substantial group behind in which women and the most disadvantaged are overrepresented. A choice experiment shows that high fees hinder mobile money usage for a substantial number of microentrepreneurs. Moreover, insufficient physical infrastructure, i.e. a small number and unfavourable spatial distribution of mobile money agents, also limits access, while a lack of financial education seems to contribute to comparatively low price sensitivity. Based on these results, we suggest policy measures that reduce the remaining barriers limiting the contribution of mobile money to financial inclusion. [ABSTRACT FROM AUTHOR]

Underpinning China's technological advancement are the twin-engines of exports and innovation. To better understand China's meteoric economic transformation, we explore the extent to which new products are triggered by exports (direct effects) and by exposure to other exporters (indirect effects). Our methodology (generalised propensity score model) tackles two sources of selectivity bias – at the level of the firm and neighbourhood. Given that production is highly specialised and localised, it would be unusual if firms failed to learn from exposure to local exporters.Our findings reveal an overwhelmingly positive direct effect of exports on new product introductions. Also, a more modest spillover effect. Interestingly, firms with a reduced need to innovate (processing exporters) can also appropriate export spillovers. Our findings have implications for other developing countries seeking to maximise exporting in economic clusters, promoting innovation and ultimately growth. [ABSTRACT FROM AUTHOR]