Category Archives: development economics

Pesticides, IQ, social climbing – A pesticide poverty trap

Two different studies by Berkelay and Columbia university confirm that children of women who assumed food with pesticides during their pregnancy, after 7 year from birth, perform worse in IQ tests than peer whose mothers ate free-pesticide food in the same period. The researchers controlled for eduction and environmental elements which could bias the results, too. Unfortunately, the paper is not downloadable freely (it would be interesting to analyse for some selection bias issues). As a development economist, I am concerned with poverty issues. That is, it is likely that poorer families are more exposed to pesticides than wealthier ones, pushing poorer children into a pesticide poverty trap which does not allow (at best, obstacles) them to social climbing. Especially, I am thinking to developing countries or BRICS, where need for growth could lead government to subside cropping technologies which spur agricultural productivity at the expense of health conditions.

China’s growth – the trade-off investments vs consumption and Japanese lessons

Martin Wolf on the Financial Times  provides an analysis about how China’s growth could slow down and, eventually, end in a bump because of the investments-led growth strategy. There are signals that the investments are lowering their returns and the consumption is growing too slowly in order to fill up the gap. Among the other arguments given by the author, there are the ‘middle-income trap’ and the size of China. I need some expert macro-economist telling me whether the parallelism with Japan is too rash. It is worth for a deep reading!

When will China overtake USA, truly?

Yao Yang on Project Syndicate about the issues emerging when comparing China’s and US’ economies in terms of purchasing power parity (PPP). Complex concepts, tough explained so neatly. Enjoy it!

To Practice 7 – I’m not the World Bank

Before starting my Nicaraguan experience, dreams of glory flooded my ego. Reviewing all my studies on data collection, I knew it would have been a priority to collect data from households survey as fast as possible. Because interviewing the first household of the community today and the last one in 6-months time means introducing a significant source of bias in the research, especially in rural economies subject to seasonality. However, I’m realising that I was naive. Because we’re just two interviewers, because I didn’t consider my stomach could have left me in my room for one entire week, because I go to and from the community using my stick, not my jeep. In other words, because I’m not the World Bank, nor Indiana Jones. To sum up, my goal is to have enough large control group to match with the treatment of the households who participate to a micro credit scheme – the ‘Small Business Program. I have two possibilities: surrendering to the extended collection time bias or opting for a second best solution. I’m trying to move toward the second option. In parallel with the community survey, I’m working with students of a technical high school to assess the program Education That Pays For Itself, run by the English NGO, Teach A Man To Fish. Among the NGO’s outcomes of interests, there is the socioeconomic condition of the students’ families. Hence, I’ training the students to interview their families (belonging to other communities though), in order to increase quickly the treatment group. Therefore, I can focus my interviews in the community on treatment group mainly, shortening the data collection timing, and getting information on students’ families. The assumption is that from the students’ families, coming from rural background in Nicaragua, a PSM approach will allow me to select part of my control group. I fancy to better solutions…

P.S. Edgar, I know you’re thinking about the horse!

To practice 6 – Ex Post Considerations on Vulnerability Measurement

After carrying out and attending several interviews, questions are arising in me about the vulnerability section. Vulnerability - considered in my study “the magnitude of the threat of future poverty” (Calvo and Dercon 2005, p.5) – is a complex concept, indeed enriching a poverty profile.


A man who was shot in an armed robbery 3 months ago, told me his level of worry for being assaulted in the future is very low, a woman who hasn’t been assaulted in the last 5 years, stated is extremely worried of being assaulted in the future.

Now, let’s put apart probabilistic calculations and think in a mere qualitative way, how do we compare their different levels of perceived vulnerability to assaults? Measuring the poverty ex-ante, a real challenge. Literature on this issue is warmly welcomed, I need a reliable vulnerability index…

To Practice (5) – Health Conditions and Opportunity Cost of Time

IS MORTALITY IN DEVELOPING COUNTRIES PROCYCLICAL? HEALTH PRODUCTION AND THE VALUE OF TIME IN COLOMBIA’S COFFEE-GROWING REGIONS (Miller and Urdinola, 2007) is a paper testing the hypothesis of countercyclical infant mortality in poor coffee crops area in rural Colombia, i.e. the mortality rate being decreasing during economic growth. That is to say, during economic upturns (high coffee price), coffee growers would have a higher propensity to focus on their children’s health conditions due to higher disposable income. Meanwhile, during economic downturns (low coffee price), poor coffee growers would give priority to other expenditures than the ones put towards their children’s health status – due to consumption smoothing mechanisms. However, the authors find evidence of procyclical infant mortality rate. Namely, the mortality rate increases during positive economic shocks (high coffee price), when the coffee growers are supposed to have more resources they can assign to health care. In developed countries, too, evidences suggest that mortality rate is procyclical. This could be explained by three main factors, holding during economic upturns:

  1. Increasing consumption of harmful normal goods like tobacco and  alcohol (Miller and Urdinola, 2007)
  2. Increasing pollutant emissions and higher traffic fatality rates (ibid.)
  3. Increasing opportunity cost of time (ibid.)

The Colombian context – where the rates of tobacco and alcohol addition are supposed to be close to zero among infants and the geographic and environmental features make pollution and traffic an minor problem –   suggests reasons 1. and 2. cannot hold. On the other hand, factor 3., the increased opportunity cost of time, looks plausible.

Jinotega department in Nicaragua is a coffee-growing region. Yesterday I was interviewing a household’s head and, at the question whether he was worried by bad health conditions of him or a family member, he complined about the waste of time for going to the health center. Did he read Miller and Urdinola, too?

Don’t hesitate to tell me I make things too simple!

To Practice (4) – God’s Willingness and the Ethic of Risk

Interview 2, 3 & 4 completed. I shortened the time, from 3 to 2 hours to complete the questionnaire! Like the first time, I brought back home both material and spiritual enrichment.  Again, the vulnerability section is giving unexpected reactions. At the question whether the hh’s head was afraid of different shocks affecting familiar economic activity, the perceived fear decreased in the time-horizon, counter-intuitively. ‘What God keeps today, he will give it back tomorrow’ is the respondent’s explanation.  In some ways, this attitude could bring individuals to invest in riskier activities, faithful in divine justice at sometime; on the other hand, individuals could have an incentive to inactivity, being everything decided – reminiscences of Bachelor’s courses on Webber and The Protestant Ethic of Capitalism come to me.‎ I’ll seek to let the data tell me this story.

In the picture below, Questionnaire  with ocote (my second still life!), a pine resin used to light up the house – not reached by electric light.

To practice (3) – Questionnaire with Ayote (still life)

Interviewing the first household was an enriching experience, from a human and professional point of view. The most interesting responses were given in the vulnerability section: talking about the climates change, the household’s head lamented the Summers are becoming more and more dry, making harvesting very difficult and unforecastable because of “changes in the solar system”. However, sometimes images can say more than any word. Below, the questionnaire with the ayote, a sort of courgette, but bigger and sweeter, which the family gave me as a present.

My weekly top-5 (1)

  1. The Aid Contest of the Celebrity Exes (by Laura Freschi on Aid Watch)
  2. Why America steals doctors from poorer countries (by Jonathan Wolff on the Guardian)
  3. People are not property: Please stop saying that countries “steal” doctors from Africa (by Michael Clemens on Chriss Blattman’s Blog)
  4. Innovation for Growth in Africa – MIT Sloan School Africa Business Conference (Speech by Dr. Ngozi Okonjo-Iweala, Managing Director, World Bank)
  5. New development economics blog (by Edgar Salgado’s Blog)

Innovation and Growth in Africa

During the MIT-Sloan School Africa Business Conference, held the past 1st of April, Mr. Okonjio-Iweala (Managing Director, World Bank) gave a  speech on innovation, in his opinion the main ingredient to spur growth in Africa in the decades to come. Putting voluntarily apart the issue of endogeneity between growth and innovation, the speaker pointed 4 strategic sectors could make the African economy take off once and for all:

  1. Agriculture
  2. Pharmaceutical sector
  3. ICT sector
  4. Arts

‘With these four sectors I have tried to show you what opportunities exist in Africa for growth through product, process, organizational or marketing innovations. And I am sure you would agree with me that there are enormous. But Africa would only be able to benefit fully from these opportunities if the governments create the right incentive framework for innovation.  Africans need the freedom and space to think and innovate. For this to happen the following things must be in place; macro-economic stability, affordable and easy access to capital, openness to trade, the appropriate competition policy laws, a solid intellectual property rights and patent laws regime and an overall good governance regime’ (Okonjio-Iweala).

In other words, institutions and governments have to support the process. Easterly points out aid ineffectiveness and debt insolvency can be explained, ceteris paribus, by instable political elites who discount heavily the future, i.e. the high probability of being suddenly divested of power make them to think about their interests hic et nunc (here and now). Could we transpose the same argumentation for innovation? Which effect will have the Meddle East’s revolutions on the discount rates of the elites to come?

It is for posterity and smart analysts to judge.