M. Shahe Emran

On Selective Indirect Tax Reform in Developing Countries

A solventless curable silicone release composition contains (A) a branched organopolysiloxane having a vinyl group attached to a silicon atom at an end of its molecular chain, (B) an organohydrogenpolysiloxane having at least three SiH groups in a molecule, and (C) a platinum group metal catalyst. The composition is easily applicable to a thin gage and cures into a releasable silicone coating ensuring light release at high speeds. A release sheet having the cured coating formed thereon has improved release characteristics.

Access to Markets and Rural Poverty: Evidence from Household Consumption in China

This paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural China. The econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets. We use straight-line distances to coastline and navigable river, along with the topography of the intervening counties, as sources of exogeneous variations. We also use identification through heteroskedasticity, which does not rely on standard exclusion restrictions. The results from alternative identification schemes show that better access to both domestic and international markets has positive effects on per capita consumption, the domestic market effect is significantly larger in magnitude, and there is complementarity between the access to domestic and international markets.

The Extent of the Market and Stages of Agricultural Specialization (La Taille Du Marché Et Les Étapes Dans La Spécialisation Agricole)

This paper provides empirical evidence of an U‐shaped causal relationship between the extent of the market (size of the relevant urban market) and the pattern of crop specialization in a village economy. We use the recent two‐stage estimator developed by Lewbel (2012) and exploit heteroscedasticity for identification. The results suggest that the portfolio of crops in a village economy becomes more diversified initially as the extent of the market increases. However, after the market size reaches a threshold, the production structure starts to specialize again. This evidence on the stages of agricultural diversification is consistent with the stages of diversification identified in the recent literature for the economy as a whole and also for the manufacturing sector. Ce texte fournit des resultats empiriques sur la relation causale en U entre la taille du marche (taille du marche urbain pertinent) et le pattern de specialisation des cultures dans une economie village. On utilise un estimateur en deux etapes developpe par Lewbel (2012) et on exploite l’heteroskedasticite pour l’identification. Les resultats suggerent que le portefeuille de cultures dans une economie village devient plus diversifie initialement a proportion que la taille du marche s’accroit. Cependant, apres que le marche depasse un certain seuil, la structure de production tend a se specialiser a nouveau. Ce resultat sur les stages de diversification agricole sont consistants avec les stages de diversification identifies dans la litterature recente pour l’economie dans son ensemble et aussi pour le secteur manufacturier.

Assessing the Frontiers of Ultra-Poverty Reduction: Evidence from CFPR/TUP, An Innovative Program in Bangladesh

This paper uses household panel data to provide robust evidence on the effects of BRACs Targeting the Ultra-poor Program in Bangladesh. Our identification strategy exploits type-1 errors in assignment, comparing households correctly included with those incorrectly excluded, according to program criteria. Evidence from difference-in-difference matching and sensitivity analysis shows that participation had significant positive effects on income, food consumption and security, household durables, and livestock, but no robust impact on health, ownership of homestead land, housing quality and other productive assets. Using quantile difference-in-difference, we find that the income gains from program participation is smaller for the lowest two deciles.

Intergenerational Occupational Mobility in Rural Economy: Evidence from Nepal and Vietnam

This paper presents evidence on intergenerational occupational mobility from agriculture to the nonfarm sector using survey data from Nepal and Vietnam. In the absence of credible instruments, the degree of selection on observables is used as a guide to the degree of selection on unobservables, à la Altonji et al. (2005) to address the unobserved genetic correlations. The results show that intergenerational occupational mobility is lower among women in both countries, and is lower in Nepal compared with Vietnam. In the case of Nepal, strong evidence favors a causal role played by the mothers nonfarm participation in the daughters occupation choice, possibly because of cultural inheritance in a traditional society.

Financial Liberalization, Financial Restraint, and Entrepreneurial Development

This paper argues that there is a fundamental conflict between financial liberalization and private sector led development strategy in developing countries. Using a simple model of occupational choice with moral hazard, it shows that under financial liberalization banks may (i) fail to finance new entrepreneurs because of poaching externality, and (ii) systematically favor pro jects with front-loaded returns at the expense of pro jects with strong learning effects. We identify two types of policies that are helpful in escaping from a no entrepreneurial experimentation equilibrium: intersectoral and intertemporal policies. Among intersectoral policies, a deposit rate ceiling, or a tax on the deposits coupled with a contingent subsidy to the new industrial financing (but not interest rate subsidy) may be helpful for entrepreneurial discovery. The intersectoral policies are, however, not effective in weeding out short-termism in pro ject choice. Among intertemporal policies, a dual track policy where competition is preserved in the lending to competing activities (agriculture) but limited duration monopoly is awarded to industrial lending is shown to be effective for both the discovery of new industrial entrepreneurs and tackling shorttermism in project choices.

Estimating an Import Demand Function in Developing Countries: A Structural Econometric Approach with Applications to India and Sri Lanka

Owing to the unavailability of time-series data on the domestic market-clearing price of imports, the estimation of notional price and income elasticities of aggregate import demand remains a daunting task for a large number of developing countries. This paper develops a structural econometric model of a two-goods representative agent economy that incorporates a binding foreign exchange constraint at the administered prices of imports. A theoretically consistent parameterization of the “virtual relative price” of imports circumvents the data problem, and thus enables the estimation of income and price responses by cointegration approach. The price and income elasticity estimates for India and Sri Lanka, in contrast to the extant literature, have correct signs, high statistical significance, and plausible magnitudes.

Access to Markets and Household Consumption: Evidence from Rural China

This paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural China. The econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets. Motivated by the transport engineering literature, we exploit topography of the other counties along the linear distances to the markets as the source of exogeneous variations. We also use identification through heteroskedasticity which does not rely on any exclusion restrictions. The results from alternative identification schemes show that (i) better access to both domestic and international markets has positive effects on per capita consumption, (ii) the domestic market effect is significantly larger in magnitude and (iii) there is complementarity between the access to domestic and international markets.

Assessing the Frontiers of Ultrapoverty Reduction: Evidence from Challenging the Frontiers of Poverty Reduction/Targeting the Ultra-poor, an Innovative Program in Bangladesh

This article uses household panel data to provide robust evidence on the effects of BRAC’s (Building Resources across Countries) Targeting the Ultra-poor (TUP) program in Bangladesh. We use alternative treatment-comparison pairs; in addition to BRAC’s own classification, we exploit type 1 errors in assignment in BRAC’s selection process to create a second treatment-comparison pair. This allows us to estimate the program effects on the target group, not contaminated by mistargeting. To address selection on unobservables, we implement heteroskedasticity-based identification and two recent estimators based on matching and propensity score reweighting. The results show that participation had significant positive effects on food security, clothing, shoes, livestock, and cash savings, but there is weak or no evidence of an impact on the number of household durables and assets and indicators of health and women’s empowerment. The effects on the poorest of the poor (the target group) may be different from the effects on an average participant in the TUP program. When one takes into account the differences in initial conditions, the effects of the TUP program on the poorest of the poor are much larger (as measured by the program effect normalized by the initial mean value of an outcome), which suggests that the TUP program would have had a larger impact with better targeting.

Lazy Banks? Government Borrowing and Private Credit in Developing Countries

When government borrows one dollar from domestic banking sector, how much does it reduce private credit in developing countries? There is surprisingly no reliable estimate in the literature on this. We provide robust estimates of the causal effect of government borrowing on private credit using panel data on 60 developing countries and instruments based on the structure of the political system. The point estimates indicate that a