WORKING PAPER 43 - September 14, 2021
KEYWORDS: cookstoves, wood fuels, black carbon, aerosols, climate-forcing emissions, abatement costs, energy access
Nearly three billion people continue to use wood fuels for their daily cooking. The global policy discourse increasingly emphasizes clean fuels, notably gas and electricity. Yet, electricity and gas are expensive, and their supply chains are typically interrupted in rural areas. They will hence not reach the global poor soon, especially in Africa. As an alternative, this paper shows that fuel-efficient biomass stoves can contribute climate mitigation potentials in Sub-Saharan Africa that exceed the total CO2-equivalent emissions of a medium-sized European country. Abatement costs of this policy are low at $2 to 10 per ton. Furthermore, we demonstrate that cooking-related emissions will likely double by 2050. We conclude by arguing that a rapid dissemination policy should be based on two crucial steps: First, fuel-efficient stoves should be field-tested region by region and adapted to satisfy local cooking needs. Second, cookstoves that have proven to be adopted by users should be heavily subsidized at scale.
WORKING PAPER 42 - September 3, 2021
KEYWORDS: solar home system, subsidy, technology, developing countries, kerosene
Technology can help to reduce inefficiencies and inequalities in developing countries. Although whether this happens in practice often depends on the social and geographic context. Deployment of solar home systems (SHS) across Nepal provides one such example. We examine a policy to promote SHS through a subsidy for adoption and its downstream benefits - children’s education, time allocated to agricultural and household work (both unpaid), and working for a wage. We overcome the challenges of the non-random assignment of subsidies by using geographic regression discontinuity design using (cost) distance as the assignment variable. This is based on the assumption that households cannot perfectly control the assignment variable because migrating to a different region, simply to acquire an additional solar subsidy of maximum NRs4000, is challenging and unlikely in the case of Nepal. Our results show that subsidy-eligible households are about 43% more likely to adopt SHS. We find a positive effect of the SHS adoption on the grade for age and educational z-score of children’s educations with the effect being higher on girls than boys. We also find that females are 14.2% more likely to participate and spend more time (about 19 extra days in a year) in agricultural practices by reducing their engagement in family work. However, there is no effect on the participation rates across the labour market. Results also show that males increase their contribution to household work.
WORKING PAPER 41 - July 12, 2021
KEYWORDS: choice overload, willingness to pay, improved cookstoves, vickrey auction
Economists generally believe that more choice is beneficial, yet bigger choice sets can impose opportunity, error and cognitive costs that lower demand. We study this relationship in the context of rural energy use in low-income settings. We invited approximately 1,100 randomly selected Senegalese households to participate in second-price auctions for improved cookstoves, and exogenously varied the number and types of devices being auctioned to identify the causal impact of expanded choice on willingness to pay (WTP). Expanded choice lowered WTP for a more advanced but relatively unfamiliar cookstove by 25 percent, but had no effect on WTP for a simpler, locally-produced device. Households’ ability to compare alternatives side-by-side during multi device auctions and identify the one best suited to their needs appears to drivethese results. Our findings have implications for the design of policies that aim to introduce welfare-improving technologies in remote, rural areas.
WORKING PAPER 40 - June 30, 2021
KEYWORDS: COVID-19, community perception, Local Governance, community policing, India
This paper has conducted a literature review of the international scenario of the local governance and covid19 (including best practices) followed by an empirical examination of risk perception and state of local governance in the two most populous states in India (UP and Bihar) with a joint population of over 300 million. Plenty of work during COVID 19 suggests multiple problems, solutions and best local practices. However, very little is known about linkages between pandemic, its community perception and local response mechanism in high population countries having scarce resources. The result of logistic regression (N=2041) shows non-migrants and females perceive no risk of COVID despite having heard of Corona, showing a perception and behavioural issue that requires special local governing attention in such societies. Further, analysis reveals infection rate is high in the districts where complete elected council is not present and are only governed by chiefs of the villages. In such a deficient state of local governance, the COVID problem could be handled by community policing instead of totally relying on strict lockdown.
WORKING PAPER 39 - April 30, 2021
KEYWORDS: Aid for Health, bilateral aid, China, emerging donors, health aid, development assistance for health, foreign aid for health
China’s annual global health aid has increased substantially since the 2000s. Unlike many donors, China has no oﬃcial aid reporting obligations, nor does it voluntarily disclose detailed aid information. Because of this, several third parties have attempted to estimate China’s health aid footprint. Unfortunately, current estimates use varied deﬁnitions of health aid, geographic regions, and time spans. These distinct and diﬀering methodological approaches make it diﬃcult to compare Chinese aid to aid from other donors. Our study builds on previous tracking eﬀorts and takes them further by creating a standardized estimate using commonly accepted deﬁnitions of aid and frameworks for categorizing health projects.
These ﬁndings enable a better understanding of Chinese health aid in the absence of transparent aid reporting. We believe such an understanding could lead to better coordination, collaboration, and resource allocation for both donors and recipient countries.
WORKING PAPER 38 - March 31, 2021
KEYWORDS: Consumer demand system, QUAIDS, carbon pricing, Sub-Saharan Africa, household welfare, distribution, sustainable development
Policy makers frequently voice concerns that carbon pricing could impair economic
development in the short-run, especially in low-income countries such as Uganda. We estimate
a quadratic almost ideal demand system (QUAIDS) for energy and food items to assess how
consumers’ welfare, energy and food demand, as well as nutritional intake, can be expected to
react to a carbon price of US$40/ton. The results suggest overall progressive welfare effects in
the range of 0.1 – 4.9% across the population. We further observe declines in the demand for
electricity, kerosene and transport in the range of 4 – 20%, with concomitant shifts within food
consumption baskets, due to complementarities with cooking fuels, and income effects.
Heterogeneous demand responses across expenditure terciles and rural-urban areas reveal
significant disparities in food and calorie consumption as well as protein and micronutrient
intake due to carbon pricing. The bottom third of households exhibit nutritional declines of up
to 16%, while middle-class urban households witness increases by around 9%. Complementary
social protection policies in conjunction with carbon pricing could ease potentially adverse
effects on economic development outcomes in Uganda.
WORKING PAPER 37 - March 26, 2021
KEYWORDS: ultimate investors, bilateral foreign direct investment (FDI), phantom FDI, multinational enterprises, ultimate investing country (UIC), foreign affiliate statistics, international development, international finance, United States Agency for International Development (USAID), United Nations Conference on Trade and Development (UNCTAD), International Monetary Fund (IMF), Bureau of Economic Analysis (BEA)
Official foreign direct investment (FDI) statistics track FDI via direct investing nation rather than ultimate investing country (UIC). If a FDI project is sourced through an overseas subsidiary, normal FDI metrics will register that investment as being from the third country, not the home country of the multinational. There is a growing awareness that the large amount of FDI channeled through special purpose vehicles and offshore financial centers therefore makes official statistics unreliable: investment from certain nations may be significantly under or over counted. According to official statistics, the United States ranks 11th in terms of total amount of foreign direct investment (FDI) in Vietnam. As Vietnam joins the ranks of lower middle-income countries, and becomes more integrated into global value chains, a more representative methodology for calculating FDI would help Vietnam thoughtfully engage with foreign investors and support Vietnam's development objectives. This report, commissioned by the United States Agency for International Development (USAID) in Hanoi includes: 1) A literature review of FDI databases and FDI tracking methods, 2) a comparative analysis of the existing methods for tracking FDI via UIC, 3) a discussion on the feasibility of implementing those methods for Vietnam, 4) a novel method for estimating Vietnam’s inward FDI via UIC, 6) recommendations to USAID for further research and analysis.
WORKING PAPER 36 - March 19, 2021
KEYWORDS: electricity, manufacturing, employment, renewable energy
Almost half of firms in South Asia identify electricity as a major constraint to operations. We investigate whether electrification in Nepal – via microhydro mini-grids – helped grow the manufacturing sector. Electrification led to a substantial and statistically significant increase in formal manufacturing establishments; yet the overall presence remains limited due to low baseline numbers. Labor shifts from self-employment and agriculture to employment for salary and wages. Increases in informal, nonagricultural household enterprises also contribute to labor changes. In more remote locations – farther from the historical electrical grid – the impacts of microhydro on manufacturing establishments are significantly muted.
WORKING PAPER 35 - March 8, 2021
KEYWORDS: Social Capital, Digital Capital, Digital Politics, Digital Democracy
This conceptual work dissertates the contesting theoretical underpinnings of political participation on social media platforms, challenges, and poses possible future research questions in digital politics. The study first briefly discusses the popular theoretical frameworks applied to digital politics research; and then builds upon the popular framework of social capital that can yield a generally applicable digital capital framework. The essay concludes with challenges and future research questions demanding scholars' attention in their broader internet politics discipline.
WORKING PAPER 34 - March 2, 2021
KEYWORDS: China, development, upper middle-income stage, transition to high income, anti-poverty strategies, poverty reduction, inequality, demography, human development, urbanization, rural migration
This paper summarizes what developing countries that are on the cusp of high income can learn from the approaches to poverty reduction adopted by the United States, Japan and the Republic of Korea. China is almost as well-off today as the United States was in 1960, Japan in 1980, and South Korea in 2000, when they reached high-income. China’s poverty reduction strategy is quite different from the approaches adopted by these countries. Relatedly, China’s performance in reducing poverty rates—using developmentally appropriate standards such as the official definition of poverty adopted by the US in the 1960s—is considerably less impressive than widely believed.