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Category: Economics

Published August 16, 2012

How and When Is Poverty Transmitted from One Generation to the Next?

That’s the theme of a special issue of the Development Policy Review, published last month. The special issue contains papers on:

  1. Widowhood and asset inheritance in Sub-Saharan Africa, by Amber Peterman,
  2. How inheritance is a gendered and intergenerational dimension of poverty, by Elizabeth Cooper and Kate Bird,
  3. Inheritance practices and gender differences affect poverty and well-being in Ethiopia, by Neha Kumar and Agnes Quisumbing,
  4. Women, marriage, and asset inheritance in Uganda, by Cheryl Doss et al.,
  5. Intergenerational poverty traps in India, by my Sanford School colleague Anirudh Krishna, and
  6. Women and inheritance in Sub-Saharan Africa, by Elizabeth Cooper.

This is a very important topic considering that up until recently, we did not have good datasets tracking people over time. We had even fewer datasets tracking people and their children over time.

Published August 14, 2012

Drought and Food Prices: Yours Truly in the Media

Droughts, and the famines they cause, are rarely down to one factor.

“Food crises rarely, if ever, occur because of an overall lack of food to go around,” said Professor Marc F. Bellemare, an agricultural economist at Duke University in North Carolina.

“Rather, they occur because of structural and political problems. Sure, food is scarce in the Sahel, which makes it very expensive.

“But in most places, when food is scarce, food prices increase, which should in principle provide an incentive for traders to import food and distribute it to the areas that need it most.

“In the Sahel, a drought sparked the current food crisis, but poor infrastructure and conflict combined to create the perfect storm of constraints to food imports and food distribution.”

From an article in the UK version of Metro which was published last week.

And then there’s this, from AllAfrica.com:

There is potential to make and save a lot of money predicting the international market, but governments who have yet to, for example, integrate their own farmers into their country’s domestic agricultural market will find these tools offer little in the grand scheme of their concerns.

In many countries, farmers sell only to their neighbours or farm for their own subsistence, effectively barring them from domestic markets.

Marc Bellemare, a public policy assistant professor at Duke University, said tools like the Food Security Media Analysis are a “laudable effort … but what developing countries need is better infrastructure and governance.”

Countries that still lack access to even basics like decent roads will struggle to take advantage of new technology, in other words.

 

Published August 8, 2012

Roads to Development?

We return to two questions concerning the 19th century U.S. transportation revolution. First, to what extent were transportation improvements responsible for the large changes in the regional distribution of population in the United States and, within regions, for the changes in industry structure? Second, how important were transportation improvements for welfare gains? We find that transport improvements were the key factor driving where people lived and what industry they worked in. We also find that transport improvements were important for welfare gains: Gains over 1840-1860 would have been only half as large if there had been no transportation improvements.

From a new International Economic Review article by Berthold Herrendorf, James A. Schmitz, Jr., and Arilton Teixeira.

The emphasis is mine and, quite frankly, I’m surprised that the effect of transportation improvements on welfare is not larger. Better transportation  decreases transaction costs, which means that for many goods and services, buyers pay a lower effective price (i.e., market price plus transaction costs) and sellers receive a higher effective price (i.e., market price minus transaction costs).

Continue readingRoads to Development?