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1. Legacy of apartheid: Misallocation of labour and firm productivity

Author:
Talent Nesongano, Carol Newman, John Rand, and Marvin Suesse
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper investigates the extent to which the historical legacy of apartheid laws explains contemporary misallocation and firm productivity in South Africa. During the apartheid era (1948–1994), job reservations, closed-shop agreements, and minimum-wage policies were implemented to restrict occupational mobility for Black workers and to insulate White employees from competition. Using digitized historical data from government gazettes combined with contemporary employer-employee panel data, we identify sectors and districts where these restrictions applied and find persistent impacts on labour allocation today. Results show that historically restricted sector-district pairs exhibit between 4 and 14% more labour misallocation compared to unaffected counterparts. In contrast, we find no significant differences in average firm productivity in treated cells, suggesting that apartheid’s legacy on production persists primarily through allocative inefficiencies rather than observable differences in average firm efficiency. These findings underscore the persistent influence of discriminatory institutions on market efficiency and highlight the importance of policies aimed at correcting historical distortions in labour allocation.
Topic:
Apartheid, Labor Issues, Discrimination, Productivity, Racism, Firms, and Persistence
Political Geography:
Africa and South Africa

2. Beyond the state, but reinforcing it? Informal tax institutions and state legitimacy in the Democratic Republic of Congo

Author:
Vanessa van den Boogaard, Yannick Lokaya Bokasola, Gayatri Sahgal, and Caleb Jérémie Dohou
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores the role of informal taxation in the Democratic Republic of Congo and aims to shed light on informal fiscal realities and the implications of informal tax institutions for governance and state legitimacy. Relying on mixed-methods data from household surveys, interviews, and focus group discussions across Kinshasa and North Kivu, it focuses on three areas of inquiry: the nature of informal taxation; citizens’ perceptions of formal and informal taxing authorities; and the impact of informal taxation on perceptions of the state’s legitimacy. The paper finds that, while informal taxes place a significant burden on citizens, they may support local governance by supplementing public services and reinforcing perceptions of state legitimacy, particularly in the case of customary contributions. Overall, these findings highlight the complex interplay between informal and formal institutions, challenging assumptions that informal taxation solely undermines state authority. Its insights hold critical implications for scholars of informal governance and policy makers aiming to navigate hybrid governance structures in fragile states.
Topic:
Governance, Tax Systems, Legitimacy, and Statebuilding
Political Geography:
Africa and Democratic Republic of Congo

3. Climate shocks, labour market dynamics, and inequality in South Africa: Evidence from administrative tax data

Author:
Safa Awaworyi Churchill, Yohannes Kefale Mogess, and Yuvana Jaichand
Publication Date:
04-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of temperature shocks on individual earnings and income inequality in South Africa. We leverage high-resolution satellite temperature data, merged with administrative tax records from the South African National Treasury and UNU-WIDER. Data from 2009 to 2022 shows that temperature shocks significantly reduce income, with a one-standard-deviation increase in average temperature associated with a 1 per cent decline in earnings and a 1.3 per cent decline in total income. However, we observe no statistically significant effects on income inequality. Temperature projections from the most recent climate models of the Coupled Model Intercomparison Project (CMIP6) are used to simulate the impact of global warming on income in the short, medium, and long term. By 2100, income is projected to decline by 5 per cent without mitigation and adaptation strategies, relative to a ‘best case’ scenario characterized by widespread adoption of renewable energy and climate change mitigation.
Topic:
Climate Change, Inequality, Labor Market, Income, Temperature, and Rainfall
Political Geography:
Africa and South Africa

4. Social protection in South Africa

Author:
Haroon Bhorat and Morné Oosthuizen
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
South Africa has a relatively well-developed social protection system for a middle-income country. Despite its roots in the country’s racially discriminatory past, the system has been repurposed post-apartheid to address deep poverty and severe inequality. This paper explores key characteristics of the current social protection system, highlighting its large scale and reach. Given high unemployment, the scope of social insurance is relatively limited and the social protection system is largely geared toward s social assistance. Social assistance is well-targeted and has been found to have significant beneficial impacts on poverty and inequality, but also various other socioeconomic outcomes. A key gap in the formal social assistance system is the working-age population: able-bodied working-age adults are covered only by the COVID-19 social relief of distress grant, the introduction of which has reignited calls for the implementation of basic income support despite South Africa’s significantly constrained fiscal environment.
Topic:
Poverty, Fiscal Policy, Cash Transfers, Social Assistance, and Social Protection
Political Geography:
Africa and South Africa

5. Gender and intergenerational mobility: Unequal economic outcomes between siblings

Author:
Martín Leites and Joan Vilá
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the role of sibling sex composition as a potential explanation of the transmission of parental advantages to the next generation. The presence of a brother affects the family environment and parents’ decisions, influencing the siblings’ labour market outcomes in the long term. The results show a negative effect of approximately 2% on the permanent income of women for the presence of a younger brother. This effect does not modify the intergenerational persistence of income. Regarding mechanisms, we find evidence that the effect is amplified when households face tighter budget constraints. Moreover, it is more pronounced in households with traditional gender norms, shaping permanent income, educational choices, and motherhood decisions. These findings underscore the importance of sociocultural mechanisms in accounting for the persistence of inequality.
Topic:
Occupation, Gender Norms, Social Mobility, Gender Wage Gap, Sibling Sex Composition, and Labor Market
Political Geography:
Global Focus

6. Social protection in Egypt

Author:
Ragui Assaad and Irene Selwaness
Publication Date:
03-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper examines the structure of the social protection system in Egypt including its contributory and non-contributory components. It begins by examining the historical evolution of the system, its scale and reach, and its sources of financing. The book then assesses the de jure and de facto coverage of the system and the adequacy of payments for different kinds of workers and socio-economic groups. We end by examining the effectiveness of existing institutions in delivering social protection in light of the limited implementation capacity of the state, the incentive of firms to operate in the formal economy, and the potential tensions between individual participation in contributory social insurance and access to noncontributory social assistance.
Topic:
Institutions, Incentives, Social Protection, and Contributory Schemes
Political Geography:
Middle East and Egypt

7. Mapping mobility and opportunity: How place, gender, and ethnicity shape economic outcomes in Ecuador

Author:
Paolo Brunori, Diego del Pozo, H. Xavier Jara, and Lorena Moreno
Publication Date:
03-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Integrating administrative data from the civil registry, social security, and national censuses, we provide novel evidence on intergenerational income mobility and equality of opportunity among 514,890 formal workers in Ecuador. Our results show substantial intergenerational mobility (rank–rank slope 0.22, elasticity 0.17). Formal employment substantially equalizes mobility: gender differences are minimal, and ethnic disparities are compressed, although ethnic minorities face barriers at the bottom. Model-based recursive partitioning (MOB) endogenously identifies 63 spatially homogeneous areas based on intergenerational income elasticity (IGE) and highlights a large degree of variation, with elasticities ranging from 0.09 to 0.23. We complement our analysis with a Roemerian equality of opportunity framework using transformation trees, which shows that equality of opportunity is relatively limited: the worst-off earn 74% of average income, and circumstances predict 33% of total inequality. Our findings suggest that stable formal employment serves as an important equalizing mechanism for intergenerational mobility among formal sector workers, though the persistent ethnic disparities and spatial heterogeneity we observe point to remaining challenges in achieving equality of opportunity across all groups and regions in Ecuador.
Topic:
Labor Issues, Machine Learning, Social Mobility, and Equal Opportunity
Political Geography:
South America and Ecuador

8. Social protection in South Korea: Transition from the developmental to the universal welfare state

Author:
Huck-ju Kwon and Eunju Kim
Publication Date:
01-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
South Korea’s social protection system has undergone a profound transformation from a developmental welfare state, in which social protection policies were subordinated to the economic development goal, to a universal welfare state. This study traces this trajectory by examining six key programmes—Industrial Accident Compensation Insurance, National Health Insurance, National Pension, Employment Insurance, the National Basic Livelihood Security Scheme, and the Basic Pension—focusing on their functions, policy design, coverage expansion, and responses to new social risks. Findings show that initial programmes targeted formal-sector workers to support industrialization, but were gradually expanded to encompass broader populations. They were sequentially extended from large enterprises to small firms and then to the general population, with contribution rates increased incrementally to ensure administrative feasibility and fiscal sustainability. Democratization and electoral competition opened policy windows for universalization, while economic crises accelerated programme inclusivity. The analysis reveals that social protection facilitated structural economic transformation while progressively recognizing social rights. However, persistent labour market dualism, population aging, and high elderly poverty underscore the need for recalibrating Korea’s welfare system toward greater inclusivity and sustainability.
Topic:
Development, Welfare, and Social Protection
Political Geography:
Asia and South Korea

9. Intergenerational mobility through the lens of the elderly: New estimates from India and a comparison with existing measures

Author:
Rajdeep Chaudhuri, Abhiroop Mukhopadhyay, and Kunal Sen
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The literature on intergenerational mobility for many countries in the world focus on household surveys that capture the education of parents and their children. While they pay particular attention to issues regarding co-residency of fathers and son, they are somewhat weaker in information on women: daughters who live with their in-laws as well as resident women outside the reproductive age group (15--49), for whom information on parents is typically missing. In this paper we examine how estimates from a nationally representative survey of the elderly in India (LASI)---that over-samples adults who are 45 years and above and contains information about their parents---compare with existing studies that provide analogous estimates. We find that while estimates using father-son pairs are similar to extant literature on India, we can provide robust estimates for pairs that involve women, as parents and daughters, due to a relatively larger sample size, especially for the period before 1970s. Thus, we contend that LASI can be especially useful for studying temporal changes in human capital investment in daughters relative to sons.
Topic:
Development, Human Capital, Survey, and Social Mobility
Political Geography:
South Asia and India

10. Does implementing the Extractive Industries Transparency Initiative (EITI) increase resource revenue in developing countries?

Author:
Neerbewendé Abdoul Rachid Pafadnam
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The need for developing countries to increase their domestic revenue has always been relevant, especially after the COVID-19 pandemic, which weakened their public finances. This paper analyses the dynamic treatment effects of the Extractive Industries Transparency Initiative (EITI) implementation on resource revenue mobilization. We use a sample of 83 developing countries from 1995 to 2019, and our empirical strategy relies on the recent dynamic heterogeneity-robust difference-in-differences estimator. Our results show that implementing the EITI increases resource revenue in member countries through improved governance from greater transparency, increased foreign direct investment, and extractive resource exports. These findings are robust to several robustness checks. This study highlights the significant contribution of the EITI implementation in domestic revenue mobilization and the necessity to improve transparency in natural resources management, especially as international demand for critical mineral resources is expected to grow strongly.
Topic:
Development, Political Economy, Natural Resources, Tax Systems, COVID-19, Extractive Industries, and Revenue
Political Geography:
Global Focus

11. Jihadist taxation and order-making in Mali and Niger

Author:
Yvan Guichaoua and Ferdaous Bouhlel
Publication Date:
02-2026
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores the forms of taxation practised by Al Qaeda and the Islamic State branches operating in Mali and Niger. It builds on insights from the rebel governance literature and an original conceptualisation of jihadist taxation and its effects. Unlike classic perspectives in the rebel governance literature, we argue for an ‘all at once’ approach to jihadist governance and warfare, where taxation is the beginning and the end of acts of warfare due to the fundamental political nature of Islamic taxation. Empirically, we stress the adaptiveness of jihadist groups to local circumstances, alternatively for doctrinal or pragmatic reasons.
Topic:
Governance, Al Qaeda, Islamic State, Conflict, Tax Systems, and Jihadism
Political Geography:
Africa, Mali, Sahel, and Niger

12. Rule of law in Mozambique

Author:
Margherita Bove and Patricia Justino
Publication Date:
02-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the state and evolution of the rule of law in Mozambique, focusing on key dimensions such as voice and political participation, judicial independence and accessibility, corruption, access to basic services, personal security, and property rights. Drawing on Afrobarometer surveys, voting data, and conflict records, the paper offer insights into the perceptions and experiences of Mozambican citizens. The findings indicate a deterioration in institutional trust over the past two decades, alongside declining voter turnout in general elections and increasing election-related and political violence. Despite reforms aimed at improving judicial autonomy and accessibility, the legal system remains affected by inefficiencies and regional disparities. Citizens are often subject to bribery when accessing essential public services, and perception of corruption in key institutions remains high. Concerns about fairness and integrity in the land registration process can also weaken confidence in land security and property rights protection. The paper highlights the continued challenges Mozambique faces in consolidating the rule of law, exacerbated by legacies of conflict, political instability, and uneven socioeconomic development.
Topic:
Elections, Rule of Law, Institutions, Survey, and Trust
Political Geography:
Africa and Mozambique

13. Inequality and agricultural structural change: Evidence from macro and microdata, 1950–present

Author:
Matthew Fisher-Post
Publication Date:
02-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Since 1950, agricultural productivity has been increasing even as labourers leave agriculture. However, while average productivity of the sector has been converging, within-sector inequality has been increasing. Agricultural income inequality is still less than overall income inequality, but it measures significantly higher when we use higher-quality and more comprehensive survey data. This means not only to observe the entirety of household farm income, but also to measure the magnitude of capital income and corporate profits in the sector. Given the likely increase in agricultural inequality during the process of structural change, I show also the extent to which social protection programmes are both insufficient and poorly targeted for rural populations.
Topic:
Agriculture, Development, Food Security, and Inequality
Political Geography:
Global Focus

14. How reliable are national accounts estimates of agricultural output?

Author:
Sam Jones and Marcelo Mucocana
Publication Date:
02-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Measurement errors in macroeconomic aggregates such as GDP have been widely lamented, particularly in low-income contexts. This study investigates the reliability of one component of national accounts, agricultural sector output. Focusing first on the case of Mozambique, we use a series of 12 harmonized national agricultural micro-surveys to construct estimates of gross annual output in the sector. Compared to corresponding national accounts values for the period 2002–20, the micro-survey estimates are about 50% lower. A decomposition exercise indicates this gap is primarily driven by differences in base year levels, offset by higher rates of inflation observed in survey-based producer prices. Triangulating these estimates using household budget surveys, market price, and FAO production data, we find consistent support for the agricultural micro-survey estimates, suggesting real rates of total GDP growth may have been overestimated by 1 percentage point over the period. A cross-country comparison of national accounts and FAO production data indicates positive differences between estimates of agricultural output from the two sources are not unique to Mozambique, but with larger discrepancies among lower-income countries. Systematic investment in reliable and timely agricultural statistics is essential to track progress in the sector.
Topic:
Agriculture, GDP, Macroeconomics, and Survey
Political Geography:
Africa and Mozambique

15. Social protection for Mozambique’s elderly: History, structure, and potential effectiveness

Author:
Sara Almeida, Hanna Berkel, Sam Jones, Patricia Justino, and Telça Massingue
Publication Date:
03-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study assesses the effectiveness of Mozambique's flagship social pension programme, the elderly component of the Programa de Subsídio Social Básico (PSSB). Focusing on three key criteria— programme targeting, reliability, and materiality—we combine administrative data on the universe of beneficiaries with the complete records of the 2017 Population and Housing Census. Merging these datasets at the localidade level, we provide a highly granular view of programme coverage rates and payment delivery regularity. We estimate that in the best case with zero targeting errors, the PSSB-Elderly programme reaches two-thirds of its target group. However, significant regional disparities persist, including undercoverage in poorer regions. Additionally, we document substantial delays in payments since 2023, as well as various inaccuracies in the beneficiary registry. These findings underscore the importance of simple and robust designs for social protection in resource-constrained contexts. They also suggest that expanding programme coverage towards a quasi-universal subsidy in high-poverty locations merits serious consideration.
Topic:
Poverty, Public Policy, Pension, and Payment Systems
Political Geography:
Africa and Mozambique

16. Environmental Kuznets curve and green regulation

Author:
Luca Bettarelli, Davide Furceri, Prakash Loungani, Jonathan D. Ostry, and Loredana Pisano
Publication Date:
04-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper, we first test the validity of the Environmental Kuznets Curve (EKC) hypothesis, using a large sample of approximately 190 advanced and developing countries, over a period of 34 years (1989– 2022). We find that (CO2) emissions respond positively to increasing income per capita, up to a turning point of approximately US$25,000. In a departure from the previous literature, we allow the relationship between economic development and emissions to depend on the stringency of environmental regulation. Our results indicate that environmental policies—and particularly market-based instruments, such as carbon taxes and emissions trading systems—make the EKC lower and flatter. These results are robust to several sensitivity checks, and to the use of regional (rather than global) data. Overall, our results have important policy implications, as they identify economic development as a pathway to environmental improvements. Moreover, we show that environmental policies are an essential means to achieving decoupling of emissions and economic output over the longer term.
Topic:
Climate Change, Carbon Tax, Decoupling, and Environmental Kuznets Curve (EKC)
Political Geography:
Global Focus

17. Fiscal policy and commodity price shocks in South Africa

Author:
Tumisang Loate and Vincent Dadam
Publication Date:
04-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper investigates the effect of commodity price shocks in a commodity-exporting small open economy, and the role of fiscal policy in transmitting these shocks to the rest of the economy. Using South African data, we first estimate an empirical model using a Bayesian vector autoregression model. We then develop a New Keynesian small open economy with labour market hysteresis and commodity price shocks. We find that a commodity price shock typically has an expansionary effect as real GDP and employment increase, which translates into higher tax revenue. The results from our dynamic stochastic general equilibrium model match the data. In addition, despite not modelling the tradable and non-tradable sectors explicitly, we find that there is an opportunity cost associated with taxing the commodity sector more than home production. This results in a higher trade deficit and government spending. Consequently, we also explore the role of countercyclical fiscal policy during a commodity boom.
Topic:
Economy, Fiscal Policy, Hysteresis, and Commodity Price Shock
Political Geography:
Africa and South Africa

18. Economic development and inequality of opportunity: Kuznets meets the Great Gatsby?

Author:
Francisco H. G. Ferreira, Domenico Moramarco, and Vito Peragine
Publication Date:
04-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
According to the Kuznets hypothesis, inequality first tends to increase and then decrease as a country develops. Whether borne out empirically, this inverted-U Kuznets curve, as a stylized ‘fact’, has shaped the discourse on economic development and income inequality for decades. In this paper we investigate whether a similar relationship holds between national income per capita and inequality of opportunity: the inequality associated with inherited individual circumstances such as gender, ethnicity, and family background. As, empirically, inequality of opportunity is positively correlated with income inequality (a relationship known as the ‘Great Gatsby’ curve), the relationship between inequality of opportunity and ‘development’ is expected to display the same inverted-U shape. We suggest that the existence of a Kuznets inequality of opportunity curve can be the result of a ‘triangular’ relationship between development, income inequality, and inequality of opportunity. We propose a simple theoretical model that links the three concepts and describes two possible mechanisms. A numerical simulation based on the model illustrates the process. We then draw on the newly published Global Estimates of Opportunity and Mobility database to shed new light on this ‘triangular’ relationship, primarily in a cross-sectional context.
Topic:
Development, Inequality, and Opportunity
Political Geography:
Global Focus

19. Surviving the storm: How climate-related disasters reshape tax morale in sub-Saharan Africa

Author:
Enrico Nichelatti and Abrams Tagem
Publication Date:
04-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Climate-related disasters have increased over recent decades, with severe human and economic consequences. While research has examined their macroeconomic effects and impact on households’ income and consumption patterns, little attention has been given to their impact on tax morale—taxpayers’ intrinsic motivation to comply with tax obligations. This study fills this gap by estimating the impact of climaterelated disasters on tax morale in 26 sub-Saharan African countries using Afrobarometer survey data from 2011 to 2021. The analysis considers six climate-related shocks: droughts, earthquakes, extreme temperatures, floods, storms, and wildfires. We hypothesize that the impact of climate-related disasters on tax morale depends on the specific disasters considered, and that these heterogeneous effects work through two key mechanisms: economic inequality and trust in public institutions. First, they can exacerbate inequality by reducing government revenue, increasing economic hardship for vulnerable groups (through loss of livelihoods), and eliciting unequal policy responses from government. Climate-related disasters can also reduce inequality when associated with increased economic hardship for richer households (by destroying their productive assets. Second, tax morale declines when citizens perceive government responses as inadequate or unfair; conversely, it increases if citizens perceive the government to be responding adequately. Logistic regression results confirm this heterogeneity. Droughts, extreme temperatures, floods, and storms reduce tax morale, while earthquakes and wildfires increase it. Incorporating regional heterogeneity shows that the negative effects of disasters on tax morale are more profound in rural areas. Mediation analysis confirms inequality and institutional trust as key transmission channels. These findings underscore the need for inclusive tax policies and effective post-disaster governance to sustain revenue mobilization in sub-Saharan Africa.
Topic:
Climate Change, Natural Disasters, Tax Systems, and Economic Inequality
Political Geography:
Africa and Sub-Saharan Africa

20. Carbon taxation and firm behaviour in emerging economies: Evidence from South Africa

Author:
Johannes Gallé, Rodrigo Oliveira, Daniel Overbeck, Nadine Riedel, and Edson Severnini
Publication Date:
05-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper provides the first comprehensive analysis of how firms in emerging economies respond to carbon taxation, leveraging detailed administrative data from South Africa—a potential trailblazer for other developing countries with limited state capacity amid the growing global push for carbon pricing. We examine the dynamic impacts of the carbon tax on firm-level outcomes—such as profits, sales, capital, and labour inputs—across manufacturing and mining firms, which are key sectors in the context of the carbon tax. Contrary to concerns that carbon taxes may hinder economic growth or reduce employment, our findings show no evidence of negative average impacts on firm performance or jobs. However, this overall result masks significant heterogeneity in the tax’s effects across sectors, driven by the sector-specific design elements of the South African carbon tax. Firms expecting higher effective tax rates may have intensified their use of emission-intensive machinery and depreciated capital in anticipation of the tax. This behaviour appears to stem from firms resolving regulatory uncertainty or seeking to recover costs from stranded assets.
Topic:
Employment, Economic Growth, Carbon Tax, and Emerging Economies
Political Geography:
Africa and South Africa

21. Rethinking development finance in Tajikistan: Towards more sustainable and inclusive fiscal pathways

Author:
Jovid Ikromi
Publication Date:
05-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper rethinks development finance in Tajikistan through the lens of fiscal sociology, arguing that sustained reliance on foreign aid and external borrowing may weaken state-society trust and erode institutional legitimacy. Anchored in the political economy of development finance, the paper explores how alternative financing strategies, such as tax reform, diaspora bonds, thematic bonds, and blended finance, interact with domestic institutions, investor confidence, and citizen perceptions of fiscal fairness. While external flows have financed essential infrastructure and social programmes, they have also limited incentives for domestic resource mobilization and weakened public accountability. Issues of debt sustainability increasingly constrain long-term planning, while climate finance is emerging as both a challenge and an opportunity for diversifying development funding. Drawing on policy analysis and secondary data, the paper shows that financial instruments succeed not only through technical design but through their ability to reinforce the fiscal social contract. Tajikistan’s case illustrates that without improvements in governance, transparency, and citizen engagement, even well-structured innovations in development finance may fail to gain traction. The findings offer practical insights for low-income countries seeking to reduce aid dependency while building more credible and inclusive systems of public finance.
Topic:
Development, Foreign Aid, Finance, Climate Finance, and Sustainability
Political Geography:
Central Asia and Tajikistan

22. Twenty-five years of inflation-targeting in South Africa: Going from 6% to 3%?

Author:
Philippe Burger
Publication Date:
06-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper proposes that the South African Reserve Bank should pursue a 3% inflation target, instead of the current 4.5% midpoint of a 3%-to-6% target range. Doing so may also result in lower inflation volatility, thereby reducing nominal exchange rate risk for investment and trade, and may thus support economic growth. Using a two-regime Markov-switching model, the analysis shows that since the global financial crisis, periods of higher inflation volatility are much shorter. Thus, inflation is relatively better anchored since the global financial crisis. But there are still shocks that coincide with periods of exchange rate volatility. Lastly, the analysis shows that the budget deficit/gross domestic product ratio, constraints on electricity supply, and administered prices contribute significantly to inflation, while the effect of real gross domestic product growth (as a demand variable) is limited. The analysis also argues that the sacrifice ratio, measuring the sacrifice of growth and employment that is required to reduce inflation, is of limited use once the potential role that other variables can play in the reduction of inflation and inflationary expectations is considered. The government has an especially significant role to play in supporting the South African Reserve Bank in lowering the inflation rate to an average of 3% by lowering the level and volatility of administered price inflation, reducing the budget deficit, and improving electricity supply.
Topic:
Budget, Investment, Inflation, Trade, and Deficit
Political Geography:
Africa and South Africa

23. The illusion of criminal ‘order’: Institutional trust and municipal finances in Mexico

Author:
Ana I. López García, Seung-hun Lee, and Juan P. Figueroa Mansur
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Do criminal groups which help maintain order strengthen the fiscal contract or weaken it? This paper examines how the presence of organized-crime groups shapes Mexican municipalities’ ability to collect revenue, deliver public goods, and earn citizens’ trust. Survey data show that residents living in neighbourhoods home to organized crime report lower levels of trust in local government, regardless of whether those groups provide ‘order’ or engage in extortion and violence. Municipality-level data further reveal that both local revenue collection and public spending decline over time in areas with such a presence, independent of whether they are dominated by a single group (whereby crime syndicates’ provision of order is more likely) or see multiple organizations vie for supremacy (leading to extortion and violence being more commonplace). Evidence from Mexico suggests that criminal governance fractures the social contract locally: it erodes institutional trust, weakens municipalities’ fiscal capacity, and harms publicgood provision.
Topic:
Institutions, Organized Crime, Municipalities, Trust, Local Government, and Fiscal Capacity
Political Geography:
Latin America, North America, and Mexico

24. Digitalization and the politics of tax in low-income states

Author:
Alex Yeandle
Publication Date:
11-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The digitalization of low-income economies has made it easier for governments to collect tax, yet many still fail to raise adequate revenues. Why would policy makers in urgent need of resources not fully leverage these new tools? I argue that governments remain constrained by public opinion: digital taxes are perceived as unfair, unaccountable, and lacking tangible benefit among the large groups of voters they affect. As a result, public support for digital taxes depends heavily on how they are designed. I test this argument with a conjoint experiment in Malawi focused on mobile transaction levies, a common form of digital tax introduced across Africa that has provoked strong backlash. Specific design choices, like earmarking revenues for local services or exempting small-scale users, can significantly affect support. This underscores broader political constraints on building fiscal capacity, even as technical limits on the state recede.
Topic:
Government, Public Opinion, Tax Systems, Digitalization, and Fiscal Capacity
Political Geography:
Global Focus

25. Social protection for Mozambique’s elderly: History, structure, and potential effectiveness

Author:
Sara Almeida, Hanna Berkel, Sam Jones, Patricia Justino, and Telça Massingue
Publication Date:
03-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study assesses the effectiveness of Mozambique's flagship social pension programme, the elderly component of the Programa de Subsídio Social Básico (PSSB). Focusing on three key criteria— programme targeting, reliability, and materiality—we combine administrative data on the universe of beneficiaries with the complete records of the 2017 Population and Housing Census. Merging these datasets at the localidade level, we provide a highly granular view of programme coverage rates and payment delivery regularity. We estimate that in the best case with zero targeting errors, the PSSB-Elderly programme reaches two-thirds of its target group. However, significant regional disparities persist, including undercoverage in poorer regions. Additionally, we document substantial delays in payments since 2023, as well as various inaccuracies in the beneficiary registry. These findings underscore the importance of simple and robust designs for social protection in resource-constrained contexts. They also suggest that expanding programme coverage towards a quasi-universal subsidy in high-poverty locations merits serious consideration.
Topic:
Poverty, Pension, Coverage Gaps, Payment Delays, and Program Targetng
Political Geography:
Africa and Mozambique

26. Is inequality always unfair? Experimental evidence on preferences for redistribution in Mozambique and Viet Nam

Author:
Ines A. Ferreira, Rachel M. Gisselquist, and Finn Tarp
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Knowledge of the factors driving people’s views on redistribution in the Global South remains limited. While these societies occupy top positions in inequality rankings, redistribution levels tend to be lower. We combine survey and experimental data from Mozambique and Viet Nam to test whether redistributive preferences vary depending on the source of inequality, focusing on two channels, fairness views and communication. First, we confirm the finding that inequality resulting from differences in merit is more accepted than inequality due to luck or factors outside of individual control. We also observe heterogeneity in fairness views. Second, we extend the analysis to consider whether allowing for communication between a receiver, who can suggest a distribution, and a dictator, who makes the final decision, affects redistribution preferences. We find that the relevance of the source of inequality remains. However, whether the expectation of the receiver is met by the dictator varies across samples and depends on the source of inequality. Overall, our results provide important insights into the universality of fairness views and point to the need for more analysis across contexts with different institutional and economic backgrounds.
Topic:
Inequality, Global Focus, Redistribution, and Fairness
Political Geography:
Africa, Asia, Mozambique, and Viet Nam

27. Emerging public debt challenges in sub-Saharan Africa

Author:
Maureen Were
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Sub-Saharan Africa (SSA)’s public debt burden remains a challenge to development. Key drivers of public debt include large-scale financing of infrastructure development, adverse impact of multiple shocks including COVID-19 pandemic, maturity mismatches, and high vulnerability to exchange rate and interest rate volatility. The tight financial conditions following interest rate hikes in advanced economies have exacerbated the debt burden and heightened debt sustainability risks. Half of the SSA low-income countries are either in debt distress or at high risk of it. Countries in debt distress include middle-income economies. Given the high cost of debt servicing and lack of fiscal space, achievement of sustainable development goals is in jeopardy. A long-term sustainable solution requires a multi-pronged approach. The G20 Common Framework for debt treatment remains limited in scope, coverage, and impact. More needs to be done including consideration for debt relief. Other strategies include access to long-term concessional finance, domestic resource mobilization, and improved efficiency in public spending and fiscal management.
Topic:
Development, Infrastructure, Sustainability, Public Debt, and Public Spending
Political Geography:
Africa and Sub-Saharan Africa

28. Institutions and governance in Mozambique :A bird’s eye view based on existing databases

Author:
Ines A. Ferreira
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using publicly available databases and drawing on a wide range of indicators, this paper reviews the institutional performance of Mozambique across seven broad categories: rule of law and judicial independence; voice and freedom of expression/association; political participation; accountability and transparency; political instability and violence, and external relations; state legitimacy and political leadership; and governance and state capacity. Overall, the selected indicators point to similar trends within each dimension and suggest limited progress during the last decades. Still, it is fundamental that these insights and the scores presented by the indicators are put into context, and that we understand the historical path of Mozambique, the internal and external factors at play, and the fact that it takes time for progress achieved to be reflected in this type of data.
Topic:
Governance, Leadership, Freedom of Expression, Rule of Law, Accountability, Institutions, Judiciary, Instability, and Political Participation
Political Geography:
Africa and Mozambique

29. Cultivating change: the long-term impact of forced labour in Mozambique

Author:
Margherita Bove, Rute Martins Caeiro, Rachel Coelho, Sam Jones, and Patricia Justino
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Following the abolition of slavery, various forms of compulsory labour were adopted by colonial powers to develop their economies. This paper analyses the contemporary consequences of compulsory cotton production—a forced labour system that operated in colonial Mozambique from 1926 to 1961. During this period, the Portuguese colonial government granted geographic concessions to private companies, within which smallholder farmers were forced to cultivate cotton for payment in cash. Women bore the brunt of this regime, but in doing so often took on responsibilities traditionally reserved for men and engaged in active resistance strategies. Employing a spatial regression discontinuity, we explore the enduring impact of this exposure to forced cotton cultivation on present-day human and social capital, focusing specifically on rural southern Mozambique. Our estimation strategy relies on the arbitrarily defined historical borders of the concessions, which reflected the tendency of concessionaires to absorb as much territory as possible, often ignoring agronomic conditions. Drawing on bespoke individual-level survey data collected along the concession border, we find lower educational outcomes among women in former concession areas. However, this is counterbalanced by positive effects on social capital, in the form of higher levels of civil participation, more progressive attitudes towards gender norms, and an increased presence of women in leadership positions. These results suggest that exogenous ruptures that push women outside traditional boundaries can help to reinforce their role in society.
Topic:
History, Women, Colonialism, Human Capital, Social Capital, Forced Labor, and Cotton
Political Geography:
Africa and Mozambique

30. Bolivia: desk study on aid and democracy

Author:
Swetha Ramachandran
Publication Date:
02-2024
Content Type:
Special Report
Institution:
United Nations University
Abstract:
This study is part of a series of ten country-focused desk studies on aid and democracy prepared under the project The state and statebuilding in the Global South. They are prepared under the guidance of Rachel M. Gisselquist as background to a broader research effort on aid, governance, and democracy promotion. The studies follow a common template and each draws on the research literature and selected cross-national sources to discuss regime type and timeline, findings from the literature on democracy/democratization, findings from the literature on aid and democracy/democratization, aid flows and sources, and specific aid examples. This study addresses the case of Bolivia, with focus on the post-Cold War period.
Topic:
Foreign Aid, Governance, Democracy, and Post-Cold War
Political Geography:
South America and Bolivia

31. How to create decent work for women: Policy lessons for low- and middle-income countries

Author:
Ashwini Deshpande, Janneke Pieters, Kunal Sen, and Maria C. Lo Bue
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Despite advancements for gender equality in some spheres, labour market outcomes for women continue to be worse than for men. Gender gaps in pay, labour force participation rates, and measures of job quality are stubbornly persistent and continue to hamper women’s economic empowerment globally. Economic development and social change should improve women’s labour market outcomes, but even with large-scale public policy actions, gender-based inequalities are difficult to address.
Topic:
Women, Inequality, Income Inequality, Economic Development, Labor Market, and Gender
Political Geography:
Global Focus

32. Keys for sustaining Tanzania’s economic development

Author:
Oliver Morrissey and Maureen Were
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Sustainable economic development hinges on the ability of firms and households to maintain growth and wellbeing. How have Tanzania’s firms and households performed in recent decades, and what policies can improve their resilience against future shocks?
Topic:
Economy, Economic Development, Sustainability, and Resilience
Political Geography:
Africa and Tanzania

33. What traders know: the (mis)perceptions of formal and informal cross-border traders

Author:
Paolo Falco and Eleanor Wiseman
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
ross-border traders face a choice between official and unofficial border crossings. The latter allow them to evade taxes, but expose them to other risks, such as bribes, fines, and arrest. We investigate the perceptions of cross-border traders about the risks of trading officially vs unofficially at the border between Kenya and Uganda. We find that traders overestimate the risks of trading officially relative to the same risks when trading unofficially. In reality, the measured risks of trading through the official border are lower.
Topic:
Borders, Risk, Trade, and Informal Economy
Political Geography:
Uganda, Kenya, and Africa

34. Watts happening to work? The labour market effects of South Africa’s electricity crisis

Author:
Haroon Bhorat and Timothy Köhler
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Frequent electricity outages threaten to impede the benefits of expanded access achieved by many developing countries in recent decades. A large literature documents these negative effects, however almost none consider labour market effects. This paper merges labour force survey microdata with high-frequency electricity supply and demand data to provide the first estimates of the relationships between outages and labour market outcomes in South Africa, a country characterized by frequent, severe outages referred to as load shedding. Exploiting temporal variation in outage incidence and intensity, we find that load shedding is associated with significantly lower employment rates, working hours, and earnings on average. Employment appears more sensitive relative to intensive margin outcomes, threatening job creation and preservation efforts. These negative relationships, however, are not evident for low levels of load shedding, but their strength markedly increases with load shedding intensity. We document further heterogeneity by firm size and industry, highlighting the vulnerability of jobs in manufacturing. Overall, our findings suggest that the South African labour market is largely insensitive to relatively low levels of load shedding; however, high levels appear especially costly.
Topic:
Employment, Economy, Electricity, and Labor Market
Political Geography:
Africa and South Africa

35. Labour market inequality in two Asian giants Indonesia and India compared

Author:
Kunal Sen
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We examine the nature of labour market inequality in Indonesia and India, using a common conceptual approach drawing from the job ladder framework. In the framework, we differentiate between self-employment and wage-informal and between formal, upper tier informal, and lower tier informal jobs. We find that both countries have a large proportion of workers in lower tier jobs, though the importance of wage-employment is larger in Indonesia. There are more workers in formal wage-employment in Indonesia than India. There are also sharp disparities in the earnings of workers in different tiers of the labour market in Indonesia and India, and there is limited evidence of convergence of the earnings of the lower tier informal workers to that of formal workers, at least for Indonesia. We also find that gender and educational level are important correlates of work status in both countries. Females and less educated workers occupy the lower tiers of the labour markets in the two countries.
Topic:
Employment, Inequality, Economy, Labor Market, and Informal Economy
Political Geography:
South Asia, Indonesia, India, and Asia

36. Faraway, so close: the impact of the Russia–Ukraine war on political violence in Asian countries

Author:
Michele Di Maio, Valerio Leone Sciabolazza, Patricia Justino, and Cecilia Nardi
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We show that the Russia–Ukraine-war-induced changes in the international price of wheat affected political violence in Asia. Using data from 13 countries and more than four million cell-level observations, we show that a higher wheat price increases political violence in areas that are more suitable to produce that crop. We interpret this evidence as consistent with a rapacity effect being at play: the higher value of agricultural output increases the incentive to violently appropriate it. Our result is robust to a number of falsification and robustness tests. The effect is heterogeneous across countries and cell types: in line with our interpretation of the empirical findings, the effect is larger in countries that are net exporters of wheat and in cells that are rural. We also show that a higher price of wheat increases political violence more in countries that are low-income, fragile, and characterized by the presence of anti-government or terrorist groups, indicating that a higher value of crop production is more likely to fuel violence in areas that are poor or not politically stable.
Topic:
Political Violence, Instability, Russia-Ukraine War, and Wheat
Political Geography:
Asia

37. Market power and merger control in South Africa

Author:
C. Friedrich Kreuser, Michael Kilumelume, and Rulof Burger
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We estimate structural, materials, and labour markups for the South African economy at the three-digit industry level for 2012–19. The fall in structural labour and materials markups found for the numerical majority of industries are generally isolated to smaller industries, with industries accounting for a higher proportion of sales generally experiencing smaller downward shifts. We show that materials-based markups are increasing over this period. Upward markup pressure in structural and labour markups are primarily driven by compositional shifts of surviving firms, while materials markup growth is driven by the average firm in a given sector. We show that merger intensity is positively related to structural markup growth, with a 1% increase in the proportion of cumulative mergers over 2013–18 being related to around a 0.27% increase in structural markup growth over the period from 2012 to 2019. We find that large vertical mergers are positively related to structural and materials markup growth while being negatively related to labour markup growth. Large horizontal mergers generally increase labour and structural markups.
Topic:
Markets, Economy, Industry, and Mergers and Acquisitions
Political Geography:
Africa and South Africa

38. Climate shocks and economic resilience: Evidence from Zambia's formal sector

Author:
Kwabena Adu-Ababio, Evaristo Mwale, and Rodrigo Oliveira
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Low-income countries face the combined challenges of climate shocks and limited domestic revenue mobilization, yet these issues are rarely studied together. This paper provides new evidence on the impact of climate shocks on firm performance and tax revenue in a low-income country context, using firm-level data from Zambia. We find that extreme weather events, such as excessive rainfall and high temperatures, significantly reduce firms’ sales, input purchases, and tax collection, particularly in sectors such as manufacturing, retail, accommodation, and construction. Firms respond by reducing employment and wages, reflecting a decline in productivity. Our findings highlight the need to consider the combined effects of climate shocks on both formal sector productivity and government revenue in developing countries, where taxation on services and goods (e.g. VAT) represents a larger share of government budgets.
Topic:
Climate Change, Revenue, Firms, and Value-Added Tax (VAT)
Political Geography:
Africa and Zambia

39. Gendered effects of climate and conflict shocks on food security in Sudan and the mitigating role of social protection

Author:
Aysegül Kayaoglu, Ghassan Baliki, and Tilman Brück
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Climate change and violent conflict are defining challenges of our time. However, it is not yet understood how they interact in shaping human welfare and food security, how their interaction shapes gendered outcomes, or how social protection systems can mitigate their impact. To address these knowledge gaps, we first examine how household food insecurity relates to conflict and climate shocks and whether these associations are gender-sensitive. Second, we test what mechanisms can reduce the negative impacts of these shocks. Our empirical analysis relies on novel survey data of 7,908 rural households collected across 14 states in Sudan in 2022. Sudan currently faces floods, droughts, and violent conflict affecting agricultural production and food supply. We find that climate shocks do not significantly affect food consumption scores (FCS), while exposure to violent conflict leads to a substantial decrease in FCS. Both productive and nonproductive assets increase FCS for all households, especially female-headed households. Longer distances to agricultural input and output markets correlate with lower FCS, particularly for maleheaded households. Women’s social group membership positively impacts on FCS for femaleheaded households. However, women do not receive additional benefits from other social networks during climate and conflict exposure, while male-headed households benefit from all types of social networks. Income diversification is identified as a key strategy for improving FCS, particularly for female-headed households during conflict. Informal cash transfers significantly improve FCS, especially for female-headed households. In contrast, formal cash transfers negatively correlate with FCS, although they positively impact on male-headed households during violent conflict. Overall, we recommend targeted social protection programmes that address gender disparities and enhance resilience among vulnerable populations.
Topic:
Climate Change, Food Security, Conflict, Gender, and Social Protection
Political Geography:
Africa and Sudan

40. Economic impacts of electricity supply shortages in South Africa

Author:
Hiroaki Suenaga
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study examines the sectoral impacts of electricity supply shortages in South Africa, using the cost share information available from the 2015 social accounting matrix. A simulation conducted under each of two technological assumptions, Cobb-Douglas and Leontief, reveals that a productivity decline in the electricity, gas, steam, and hot water supply (EGSH) sector increases the price of the EGSH sector substantially, while it affects the other sectors marginally due to the small cost shares of the EGSH factor in these sectors. The total cost of supplying the baseline final demand increases by ZAR19 billion or 0.46% of the baseline gross value added (GVA) when EGSH productivity declines by 10%. This cost impact expands to ZAR150 billion or 3.57% of GVA when EGSH productivity is halved. Large shares of these cost increments are incurred by the EGSH and manufacturing sectors, owning to the direct physical impact of productivity decline for the former and a large share of its sectoral GVA in the aggregate economy for the latter. The simulation also indicates that the equilibrium wage should increase by a greater extent for workers with a lower education than for those with a higher education if the baseline final demands are to be met at the higher EGSH output price after the sector’s productivity decline
Topic:
Economy, Manufacturing, Electricity, Supply, and Productivity
Political Geography:
Africa and South Africa

41. The gendered effects of climate shocks on labour and welfare in Zambia

Author:
Alessandra Hidalgo-Arestegui, Patricia Justino, Gabriel Monteiro, Rodrigo Oliveira, and Bruce Sianyeuka
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper exploits several waves of two major nationwide representative surveys to document the impacts of climate shocks on individuals and households in Zambia. We merge these datasets with historical precipitation and temperature data at the district level. First, we show the gendered effects of the shocks, which have a higher negative impact on women. Women have a lower probability of being in the labourforce and fewer hours of work when experiencing shocks. Second, we show that households affected by climate shocks have 16% lower consumption, which is mainly explained by female-headed households. We show that social protection policies mitigate income reduction but not consumption, which may suggest that climate shocks affect households directly by reducing their income, but also indirectly by raising food prices.
Topic:
Climate Change, Labor Issues, Consumption, Gender, and Climate Shocks
Political Geography:
Africa and Zambia

42. Raindrop in the drought? Vulnerability to climate shocks and the role of social protection in Zambia

Author:
Katrin Gasior, Pia Rattenhuber, Adnan Shahir, and Anna Zasova
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Zambia’s reliance on rain-fed agriculture makes its economy and population highly vulnerable to frequent droughts and irregular rainfall. This paper assesses the role of social protection, specifically the Social Cash Transfer (SCT) program, in mitigating drought-induced poverty and consumption declines. Using the MicroZAMOD microsimulation model and districtlevel rainfall data, we find that rainfall shocks significantly increase poverty and reduce household consumption, disproportionately affecting the poorest households. While the current SCT program provides some relief, reforms to eligibility criteria, particularly removing the household composition requirement, could improve targeting, expand coverage, and strengthen resilience against climate-related economic shocks.
Topic:
Agriculture, Climate Change, Tax Systems, Vulnerability, and Social Protection
Political Geography:
Africa and Zambia

43. Tax financing options for new social protection instruments: The equity implications of taxing more to expand the South African social security system

Author:
Maya Goldman and Ntuthuko Hlela
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper, we use a static fiscal incidence analysis model to evaluate the poverty and inequality impacts of using fiscal policy to finance expanded social spending in South Africa. We assess three methods to enhance the social protection system’s equity objectives: increasing the size and/or coverage of the existing Social Relief of Distress grant and introducing a universal or working-age basic income grant. The implications of financing these reforms are examined using four tax instruments: increasing the value-added tax rate, increasing personal income tax rates, reducing the personal income tax primary annual rebate, and introducing a surcharge on incomes. While we discuss behavioural effects, they are not included in the model. Our analysis indicates that an expansion of the social security system financed through increased taxation could substantially reduce poverty and inequality to varying degrees depending on the taxes and transfers used.
Topic:
Poverty, Inequality, Tax Systems, Fiscal Policy, Social Spending, and Cash Transfers
Political Geography:
Africa and South Africa

44. The sustainability of South African fiscal policy

Author:
Philippe Burger
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The public-debt-to-GDP ratio in South Africa increased from 26 per cent in the 2008/09 fiscal year to 73.9 per cent in 2023/24, raising fears that fiscal policy is not sustainable. This raises the question: did the government take steps to arrest the increase in the debt-to-GDP ratio and regain fiscal sustainability, and if so, why did they fail? Establishing fiscal sustainability can be done directly or indirectly. Doing it directly entails the government increasing the primary balance in reaction to higher debt levels. Hence, this paper presents a fiscal reaction function. The analysis shows that during the period in which the public-debt-to-GDP ratio rose, the primary balance did indeed react to an increased debt burden, but its level remained too low to arrest the increase in the public-debt-to-GDP ratio. The analysis also assesses whether fiscal fatigue set in, wherein the responsiveness of the primary balance to the debt burden is positive but eventually weakens. Some evidence for the presence of fiscal fatigue is present. One indirect approach to establishing fiscal sustainability is through the impact of expenditure and revenue on economic growth. Leaving revenue for further study later, this paper presents an adapted growth equation to investigate the impact on growth of general government investment and consumption expenditure, and of public (and private) corporation investment. While the effect of private sector investment is positive, neither general government nor public corporation investment has a statistically significant impact on growth. Furthermore, government consumption has a negative impact on growth.
Topic:
Investment, Fiscal Policy, Deficit, Sustainability, and Public Debt
Political Geography:
Africa and South Africa

45. Spatial consumption inequality in Mozambique

Author:
Carlos Gradín
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper, I show that the trend in spatial inequality in Mozambique almost entirely explains the outstanding surge in inequality in the country over the past decade, as well as its decline immediately after the pandemic, in contrast to its secondary role in the earliest years. For this analysis, I use an innovative regression-based decomposition framework based on the Recentred Influence Function to estimate each area’s contribution to inequality and a Blinder– Oaxaca approach to disentangle the nature of their contribution to spatial and non-spatial inequality trends. This rise in inequality was mainly due to a generalized drop in consumption experienced by households in the afflicted rural areas in the north and centre of the country, affected by natural disasters and growing conflict. This was aggravated by disproportionally larger economic growth in two urban areas: the Maputo area, which encompassed the capital, during the expansive phase, and the urban area of coal-rich Tete province during the recession that followed. In more recent years, the crisis disproportionally affected the capital and other urban areas, producing a strong mitigating effect on inequality that might be only temporary. The findings of this research have the potential to significantly inform policy decisions to address inequality in Mozambique, thereby contributing to the country’s economic development substantially.
Topic:
Inequality, Urban, Rural, and Economic Development
Political Geography:
Africa, Mozambique, and Sub-Saharan Africa

46. Spillover effects of the recent US monetary policy shocks on the South African economy: The role of monetary and fiscal policy coordination

Author:
Guangling Liu and Marrium Mustapher
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study examines how different policy mix regimes affect the impact of recent US contractionary monetary policy on South Africa’s inflation and business cycles. The study uses a small open economy New Keynesian Dynamic Stochastic General Equilibrium model with an integrated fiscal block to analyse these effects. Regime M (active monetary policy) is more effective at containing the spillover effects but leads to higher public debt, requiring larger future fiscal surpluses. The commitment to price stability under Regime M increases real interest rates, raising domestic debt service costs and the debt-to-GDP ratio. Regime F (active fiscal policy), in contrast, stabilizes debt more quickly but at the cost of higher inflation, as it does not use future surpluses to manage public debt. These spillover effects are more amplified under both Regime M and Regime F in the case of a complete exchange rate pass-through and a higher degree of trade openness, with Regime F exhibiting a stronger amplification effect.
Topic:
Foreign Policy, Economics, Monetary Policy, Inflation, and Fiscal Policy
Political Geography:
Africa, South Africa, North America, and United States of America

47. Dancing on the grid: electricity crises, manufacturing energy vulnerability, and jobs in South Africa

Author:
Gideon Ndubuisi, Elvis Korku Avenyo, and Rex Asiama
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
South Africa’s current electricity crises have worsened, placing the country on an uncertain and turbulent economic trajectory. To identify the manufacturing sub-sectors that are most vulnerable to this crises, we use the input–output matrices for the period between 1993 and 2021 to develop a sub-sector energy vulnerability index. Second, we employ the self-constructed energy vulnerability index in a flexible empirical framework to examine the effect of the electricity crises on manufacturing sector jobs in the country. We find that energy vulnerability has a high degree of heterogeneity across manufacturing sub-sectors, highlighting cross-sector differences in the level of exposure and susceptibility to the energy-related crises. Results from the empirical analysis, on the other hand, suggest that electricity crises are associated with significant job destruction, with this adverse effect severe for manufacturing sectors with higher energy vulnerability intensity. The severity of this adverse effect holds irrespective of the nature of jobs, whether formal or informal.
Topic:
Crisis Management, Manufacturing, Electricity, Vulnerability, and Jobs
Political Geography:
Africa and South Africa

48. The experimented society: interventions, social science, and the failure of post-conflict reconstruction in Afghanistan

Author:
Jennifer Brick Murtazashvili
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper critically examines the shortcomings of post-conflict reconstruction efforts in Afghanistan from 2001 to 2021, arguing that an overemphasis on measurable results and causal inference led to overly narrow, community-driven development interventions that failed to appreciate the complex political realities of the country. While these interventions espoused community control, they were in fact the result of a top-down approach reminiscent of earlier state-building efforts, neglected the importance of customary authority structures, and treated Afghanistan as a blank slate for experimentation. Such community-based programmes also lead to a myopic focus on quantifiable metrics at the expense of political considerations, reflecting a broader methodological bias in development studies exemplified by the popularity of randomized controlled trials. Drawing on extensive field observations, the paper contends that such programmes worked against the grain of Afghan society and paradoxically undermined the legitimacy and effectiveness of local governance institutions. The paper concludes by advocating a more holistic, adaptive, and politically informed approach to grassroots development in conflictaffected regions—one that empowers authentic local ownership, aligns with endogenous social and political structures, and grapples with the messy realities of fostering legitimate governance in fragile contexts. The hard-earned lessons from Afghanistan’s recent past should prompt a fundamental rethinking of what constitutes effective development assistance in post-conflict environments.
Topic:
Development, Governance, Reconstruction, and Post-Conflict
Political Geography:
Afghanistan and South Asia

49. Statebuilding in fragile countries: What can we learn from past stateness?

Author:
Andrea Vaccaro and Rachel M. Gisselquist
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Supporting state capacity is a priority for the international community, yet the record of internationally supported statebuilding to date has been mixed at best. A key question for continuing research concerns the factors influencing more versus less successful interventions. We show that the quality of past ‘stateness’ is crucial in understanding contemporary state fragility and statebuilding. Extending beyond previous work, we introduce the concept of past stateness, consider theoretically its relationship to contemporary fragility, and explore this relationship empirically, drawing on cross-national data and newly developed indicators. In line with our expectations, descriptive and inferential analysis shows that lack of experience of two core features of stateness—monopoly of violence and existence of a professional bureaucracy—in the past century predicts chronic fragility today. This association is mainly driven by monopoly of violence rather than existence of a professional bureaucracy. Our analysis sheds new light on the underlying heterogeneity among states today labelled as ‘fragile’. From a policy perspective, a key implication is that, in designing interventions, the most relevant experiences are likely to be from other countries with similar stateness legacies, rather than from ‘fragile states’ more generally. Our analysis does not imply that statebuilding is impossible in contexts with weak stateness legacies, but it does underscore the challenges of this and the importance of setting expectations appropriately.
Topic:
Bureaucracy, State Fragility, Statebuilding, and Monopoly of Violence
Political Geography:
Global Focus

50. Economic geography determinants of spatial wage disparities in South Africa: Evidence from a firm‐level panel

Author:
Sanduku Mulumba, Lawrence Edwards, and David Fadiran
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper, we use the new economic geography (NEG) framework to estimate the extent to which spatial wage disparities in the South African manufacturing sector are an outcome of economic forces such as market access. To test the relationship, we use the anonymized tax data on employers and employees made available by the South African Revenue Service and National Treasury in collaboration with UNU-WIDER. We first document the key stylized facts that characterize the spatial distribution of wages across regions in South Africa using exploratory spatial data analysis (ESDA) techniques. We then test for the existence of a wage structure across South African local and metropolitan municipalities, controlling for individual and firm characteristics using a two-stage estimation method. Consistent with the NEG predictions, we find that wages are higher in municipalities that are closer to large markets, as measured by the Harris market potential index. However, much of the wage effect is driven by the income and employment density of the municipality’s own market, and not that of surrounding areas. These results point to a combination of large spatial rigidities leading to highly localized effects of market potential, together with wage and productivity effects arising from urban agglomeration economies.
Topic:
Economics, Manufacturing, Wages, and Market Access
Political Geography:
Africa and South Africa

51. Inequality and institutional outcomes in Viet Nam: A combined principal components and clustering analysis

Author:
Thu K. Hoang, Klarizze Anne M. Puzon, Hoai Thi Thu Dang, and Rachel M. Gisselquist
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Better understanding of inequality, including its relationship to governance and other key outcomes, is relevant both to academic researchers and to policy-makers. Nevertheless, efforts to establish causal relationships empirically remain hampered by the quality and availability of data, especially for Global South countries at the sub-national level. This paper draws on newly available data on income inequality in Viet Nam at the provincial level to show how unsupervised learning techniques might be used as tools in consideration of the relationship between inequality and governance. While previous empirical work in this area has largely used standard techniques such as regression analysis aimed at establishing causal relationships, this is often hampered by the quality and availability of data. Adopting a different approach, this paper applies K-means clustering and principal components analysis (PCA) to show how unsupervised learning techniques can provide relevant insight into structures and patterns in data. Using PCA, it identifies two groupings of provinces based on similarities in institutional quality measures. K-means analysis points to similar relative inequality levels but substantially different absolute inequality and income levels, suggesting two broad ‘types’ of provinces. The results are suggestive of the positive impact of initial inequality on institutions and that better quality of institutions might reduce inequality for some groups. In general, increased incomes might imply improved inequality and institutional quality outcomes in some cases. A final section considers key limits to such analysis, alongside extensions and further applications.
Topic:
Governance, Inequality, and Institutions
Political Geography:
Vietnam, Southeast Asia, and Viet Nam

52. From the Bottom 40 to Inequality Lines: Sharing Prosperity Globally and Domestically

Author:
Borja Lopez-Noval, Miguel Niño-Zarazúa, Laurence S. J. Roope, and Finn Tarp
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
A major of focus of global development policy, enshrined in the Sustainable Development Goal target 10.1, is the aim to progressively achieve and sustain income growth of the bottom 40 per cent (B40) of the population at a rate higher than the national average. We propose an alternative approach to assessing shared prosperity, using ‘inequality lines’. Analogous to poverty lines, but focused on inequality, inequality lines are benchmark incomes. Income increases below the inequality line decrease inequality; income increases above the line increase inequality. In contrast to both the B40 approach, and all widely used poverty lines, inequality lines have the advantage that they arise naturally; their location in the income distribution is directly implied by standard inequality indexes, which are underpinned by established normative principles such as the Pigou-Dalton transfer principle. Should official development assistance be used to grow or subsidise those on incomes that are low by global standards, even if this increases domestic inequality? Should instead international resources be used to reduce domestic inequality wherever it is severe, even if this means exacerbating global inequality? Using inequality lines, we investigate the extent to which there may be trade-offs between sharing prosperity domestically versus sharing prosperity globally. Using data from the World Income Inequality Database, we present the most comprehensive empirical study to date of where in the income distribution inequality lines lie in practice, and how they evolved during 1950-2020. With estimates for 208 countries in 2020, we provide the first estimates of these global inequality lines, how the global inequality line percentile has changed over time, and how it compares to domestic inequality lines. For each country, our results illuminate when income growth, subsidies or developmental interventions are likely to be equalising, with respect to both domestic and global income distributions, and where there are trade-offs between the two. We also shed light on where there are important, purely domestic, tradeoffs, between reducing domestic inequality and reducing poverty.
Topic:
Development, Poverty, Inequality, and Sustainable Development
Political Geography:
Global Focus

53. Will economic growth be sufficient to end global poverty? New projections of the UN Sustainable Development Goals

Author:
Arief Anshory Yusuf, Zuzy Anna, Ahmad Komarulzaman, and Andy Sumner
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper, we present new projections for a range of global poverty-related Sustainable Development Goals (SDGs), specifically, extreme monetary poverty, undernutrition, stunting, child mortality, maternal mortality, and access to clean water and basic sanitation. Our projections, based on economic growth forecasts, take into account recent global shocks such as the COVID-19 pandemic and the inflation shock. Our findings indicate that economic growth alone will not be sufficient to end global poverty, and the global poverty-related SDGs will not be met by a considerable distance. The implication of this, we argue, is that a stronger focus is needed on inclusive growth (SDG-8), and specifically redistribution with growth at global and national levels. This would mean more emphasis on policies to build productive capacities, and the introduction or expansion of income transfers as well as ensuring public investments are sufficient to meet the SDGs. To this end new international financing needs to be made available through debt relief or other forms of finance to expand developing countries’ fiscal space.
Topic:
Poverty, Sustainable Development Goals, Economic Growth, and Inclusion
Political Geography:
Global Focus

54. Barriers or catalysts? Traditional institutions and social mobility in rural India

Author:
Vegard Iversen, Anustup Kundu, Rahul Lahoti, and Kunal Sen
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We examine how village-level social group dominance affects the educational and occupational mobility of minority and other social groups in rural India across multiple generations. We distinguish between upper caste and own-group dominance and examine the mechanisms underpinning inequality in mobility outcomes. We find inequality in upward educational mobility to have significantly narrowed over time, with Scheduled Castes doing better in upper caste- and own-dominated villages, while Scheduled Tribes and Muslims do worse in own-dominated villages. In contrast, for occupational mobility we find no evidence of minority groups catching up with upper castes; Scheduled Castes and Scheduled Tribes are particularly disadvantaged, but Scheduled Castes, again, do comparatively better in their own-dominated villages. Exploring the mechanisms that explain the relationships between land dominance regimes and mobility, we find that a combination of agroecological and natural resource base and social cohesion of villages underpins the differences observed more than public goods provision. Our findings suggest a new pattern of inequality where historically disadvantaged groups appear less able to convert educational gains into labour market and occupational progress.
Topic:
Education, Inequality, Rural, Social Mobility, and Traditional Institutions
Political Geography:
South Asia and India

55. Wage inequality, firm characteristics, and firm wage premia in South Africa

Author:
Shakeba Foster
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper investigates the role of firm characteristics in driving wage inequality and firm wage premia in the South African labour market. The Abowd, Kramarz, and Margolis (AKM) and Kline, Saggio, and Sølvsten (KSS) regression-based decomposition methods are applied to matched employer–employee administrative tax data for the period 2011–19. Additionally, the Theil index is used as a comparative tool for estimating wage inequality, given that the variance of logarithms applied in the regression-based decomposition methods has been established as an imprecise measure of inequality. The results show significantly high dispersion in wages, as estimated by both the AKM and the KSS methods as well as the Theil index, reaffirming the extent of high inequality in the country. Worker and firm characteristics account for 35 per cent and 18 per cent of wage dispersion, respectively, with a positive worker–firm covariance accounting for 11 per cent. Firm size, industry, profits, geographical location, and whether firms are locally or foreign-owned are found to be important in driving firm wage premia.
Topic:
Labor Issues, Inequality, Economy, and Wages
Political Geography:
Africa and South Africa

56. Will the poverty-related SDGs be met? Global projections for 2030

Author:
Arief Anshory Yusuf, Zuzy Anna, Ahmad Komarulzaman, and Andy Sumner
Publication Date:
10-2023
Content Type:
Research Paper
Institution:
United Nations University
Abstract:
The 1980s are sometimes referred to as the ‘lost decade’ for development. Many countries in the Global South experienced weak or no improvement in poverty indicators. Our projections are equally dire for the current decade and prospects for the SDGs unless action is taken.
Topic:
Poverty, Sustainable Development Goals, and Economic Development
Political Geography:
Global Focus

57. The rise of social protection in the Global South – the role of foreign aid

Author:
Miguel Niño-Zarazúa, Ana Horigoshi, and Alma Santillán Hernández
Publication Date:
10-2023
Content Type:
Research Paper
Institution:
United Nations University
Abstract:
Despite the rapid expansion of social protection across the Global South in recent decades, the ILO (2021: 19) estimates that more than half of the global population still have no access to any form of protection against poverty vulnerability and social exclusion.
Topic:
Poverty, Foreign Aid, and Protection
Political Geography:
Global Focus and Global South

58. Construction productivity and global inequality

Author:
Saumik Paul and Kunal Sen
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Two well established stylized facts of economic development are a strong correlation between investment and income, and large differences in investment rates across countries. Construction is the largest component of investment. This paper examines the implications of heterogeneity in construction productivity on cross-country income disparity. We estimate the 10:1 spread in construction productivity among 145 countries in 2005 as a factor of 61.7-fold. Based on a general equilibrium model with input–output linkages, we find that the 10:1 spread in income per capita declines by 45 per cent when the construction productivity gap is eliminated. Sectoral characterization of the aggregate effect of a change in construction productivity shows heterogeneous sectoral contributions to income convergence. Electrical equipment, metals, and transport equipment play stronger roles in transforming the effect of a change in construction productivity to the aggregate level in China compared with other countries.
Topic:
Inequality, Investment, Productivity, Construction, and Income
Political Geography:
China and Global Focus

59. The political economy of Bitcoin as legal tender in El Salvador: Temporary bandages to permanent wounds?

Author:
Tobias Boos and Juan Grigera
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper provides a contextual analysis of the adoption of Bitcoin as legal tender in El Salvador. First, we outline the historical context and the political situation of the period 2019–24 that serve as context for the passage and implementation of the Bitcoin law (Decree No. 57). We identify the institutional and political context and the main areas of contention. Next, we delve into the macroeconomic context of El Salvador, outlining the fundamental features of its economy and highlighting how they relate to currency issues. Our analysis reveals that the adoption of Bitcoin cannot be understood without factoring in the mounting strains surrounding dollarization, remittances, and foreign debt. We conclude by putting forth a set of hypotheses regarding the potential dynamics and future of Bitcoin as legal tender in El Salvador that point beyond Bukele’s tactics.
Topic:
Debt, Political Economy, Economy, Bitcoin, Digital Currency, Remittances, Dollarization, and Nayib Bukele
Political Geography:
Central America and El Salvador

60. A reform option for pension fund contribution as tax expenditure in South Africa

Author:
Ada Jansen, Winele Ngobeni, and Wynnona Steyn
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
South Africa has a progressive broad-based personal income tax system with relatively few tax expenditures. The two most important are the medical contribution plus additional tax credits for medical expenses, and the deductions allowed for retirement contributions. A pertinent question for tax reform in South Africa is whether redistributive gains can be achieved by restructuring expenditures in the personal income tax system. This paper considers the redistributive implications of converting the tax deduction for retirement contributions to a tax credit. This would build on the gains achieved by introducing a medical tax credit system in 2012. We analyse the tax revenue gains/losses of income groups and in total in terms of distributional effects and progressivity outcomes using a static microsimulation model based on data for the 2019/20 tax year. We find a high concentration of taxpayers in terms of taxable income and retirement contributions. The concentration of contributions is highly skewed towards lower- and middle-income earners, whose annual contribution amounts are low compared with higher-income earners. We recommend a conversion rate that considers the current distribution of taxpayers contributing to retirement funds. Converting the pension contribution deduction to a tax credit would raise additional revenue and make the tax system more progressive, benefiting low-income earners with marginal tax rates of less than the proposed conversion rate. The revenue gained would provide increased fiscal space to fund social expenditure or reduce government debt. Further distributional and behavioural analyses are needed on low-income earners and those earning below/above the minimum tax threshold, to refine understanding of the impact on low-and middle-income earners’ contributions to retirement funds.
Topic:
Economics, Reform, Tax Systems, and Pension
Political Geography:
Africa and South Africa

61. Degrees of disadvantage

Author:
Chinmayi Srikanth
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study is positioned in two strands of literature—intersectionality and social mobility. It is the first to measure (dis)advantage at the individual level as an outcome of the intersectionality of identities and parental circumstances. By linking circumstances at the parental level with (dis)advantage at the individual level, this study uses fuzzy-set Qualitative Comparative Analysis (fsQCA) in an unprecedented application, i.e. to study social mobility or generational persistence. By accounting for intersectional ascribed identities, this study is also the first to analyse social mobility for the intersectionality of caste, religion, and gender identities. Using data from the India Human Development Survey 2011–12, the study finds that, in a given generation, Hindu women can observe high outcomes only if they are born into advantageous parental circumstances. This is further tempered by their position in the social hierarchy. For men, advantageous circumstances are not a necessary precondition for upward mobility. By building epistemological arguments, this paper also makes a contribution by being the first to contend that fsQCA is the ideal method to study overdeterministic social science phenomena.
Topic:
Development, Women, Inequality, Identity, and Social Mobility
Political Geography:
South Asia and India

62. Differential bunching impacts across the income distribution: Evidence from Zambian tax administrative data

Author:
Samuel Bryson, Kwabena Adu-Ababio, Evaristo Mwale, and John Rand
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We investigate the behavioural responses of individual taxpayers to changes in marginal personal income tax rates applying empirical bunching methodology to tax administrative data from Zambia over the period from 2014 to 2021. We find evidence for excess bunching at the first kink in the tax schedule for all years but less evidence of bunching at the second and third thresholds. While bunching is considerable and behavioural responses are observed to changes in the location of the kinks over time, bunching at reference points (‘round-number bunching’) also appears large. Implied elasticities of taxable income are however not remarkable, and comparing actual and estimated counterfactual wage distributions reveal that missed tax revenue arising from the excess bunching is limited. This is consistent with the observed bunching reacting sharply and immediately to changes in the location of the kink points over time, suggesting that observed behavioural change is driven by reporting behaviour rather than real economic responses.
Topic:
Economics, Tax Systems, Income, and Income Distribution
Political Geography:
Africa and Zambia

63. Trust a few: natural disasters and the formation of trust in Africa

Author:
Robert Mackay, Astghik Mavisakalyan, and Yashar Tarverdi
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Individuals are at their most mental plasticity in their impressionable years (ages 18–25 years) forming long-term attitudes and behaviours essential to functioning in a society, such as trust. In this paper we ask how exposure to natural disasters within the impressionable years may affect the formation of trust by matching data from over 1,000 disaster occurrences with data from 88,670 individuals across 36 African nations. Exploiting the frequency of disaster exposure across the impressionable years, we show that disaster exposure has a negative and significant association with generalized trust. Additionally, we show that disasters experienced during the impressionable years have an impact on other dimensions of interpersonal and institutional trust. Our findings are robust to a battery of tests and add to the evidence base on the lasting impacts of natural disasters on individuals and societies.
Topic:
Natural Disasters, Crisis Management, Institutions, and Trust
Political Geography:
Africa

64. Mobile Internet and income improvement: Evidence from Viet Nam

Author:
Trang Thi Pham
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
New developments of existing technologies over time have led to emergent patterns of technology adoption and, accordingly, changing impacts on economy and society. Focusing on the arrival of mobile internet in the early 2010s in developing countries, this paper identifies significant positive effects on provinces’ average household income in Viet Nam. The effect sizes are larger for lower-income quintiles and for rural areas, suggesting the more inclusive changing impact of the innovation over the last decade. Preliminary evidence of impact mechanisms via skilled employment rates and (formal) wages is also presented. The evidence from Viet Nam, a lower-middle-income country, can bring further understanding in terms of the extent of development impacts of second-generation mobile for development (M4D 2.0) in particular and information and communication technologies for development (ICT4D) in general.
Topic:
Science and Technology, Internet, Rural, Economic Development, Social Mobility, and Income
Political Geography:
Southeast Asia and Viet Nam

65. Global income polarization: Relative and absolute perspectives

Author:
Vanesa Jorda, Miguel Niño-Zarazúa, Laurence Roope, and Finn Tarp
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper presents the first global and regional estimates of polarization and bipolarization spanning the period 1960–2020. The study relies on group data to implement a flexible parametric model to obtain the global income distribution and polarization estimates. The study introduces a battery of sensitivity tests to assess the reliability of polarization estimates under various assumptions, with particular emphasis on the impact of survey under-coverage of top incomes on global polarization levels and trends. Overall, we find that relative bipolarization has consistently decreased since 1980, while in absolute terms it has increased since 1960. The more general measure of relative polarization has also exhibited a steady decline since 1980; however, the trend in its absolute counterpart depends on the size of a sensitivity parameter, which reflects whether individuals cluster with peers of similar income or are segregated from different income groups. Consequently, absolute polarization declined over time for lower values of this parameter but increased for higher values.
Topic:
Economic Inequality, Polarization, and Income Distribution
Political Geography:
Global Focus

66. The dynamics of formal employment during and after the COVID-19 pandemic in Uganda

Author:
Kyle McNabb, Tina Kaidu Barugahara, and Susan Namirembe Kavuma
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper studies the impact of the COVID-19 pandemic on formal sector employment in Uganda. Utilizing employee-level administrative tax data from the Uganda Revenue Authority, we describe the dynamics of employment as the pandemic evolved, seeking to better understand the various coping strategies undertaken by firms in the face of reduced sales and business activity. We find that over one in ten formally employed workers fully lost their incomes in the immediate aftermath of the onset of the pandemic and associated lockdown restrictions. Of those that remained employed, some 14% saw their salaries fall in the short term (to June 2020), and by March 2021 (a full year after the onset of the pandemic) over 9% of the formal workforce were still earning less than pre-pandemic. We subsequently match these pay-as-you-earn records with firms’ income tax returns to better understand how characteristics such as firm size, sector, and profitability affected the likelihood that different coping strategies were undertaken. We find that firms which were larger and more profitable pre-pandemic were more likely to retain their workforce and less likely to cut salaries throughout the course of the pandemic.
Topic:
Employment, Economy, COVID-19, and Income
Political Geography:
Uganda and Africa

67. Macro-financial implications of public debt in South Africa: The role of financial regimes

Author:
Theshne Kisten
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the role of financial frictions in the public debt–growth nexus, documenting that a public debt shock has different macro-financial implications dependent on the state of financial markets in South Africa. A non-linear vector autoregression model is estimated which allows the transmission mechanism to be characterized by two distinct financial regimes: stressful versus normal. The empirical results suggest that a public debt shock has a broadly insignificant impact on economic growth over the full sample, reflecting the ineffectiveness of government borrowing in stimulating the economy, and could suggest that the high and growing debt service costs faced by the government reduces funds available for investment purposes. Debt shocks are found to be deflationary in both regimes, lending support to the precautionary savings effect and the existence of a well-developed financial market, while interest rates decline with the immediate impact being moderately larger in the stress regime, providing evidence of the accommodative stance between fiscal policy and monetary policy. In response to a public debt shock, financial conditions show an immediate and transitory improvement in the high-stress regime; however, in the low-stress regime there is an immediate yet negligible improvement in financial conditions. Lastly, the responses evolve over time, with fiscal policy being less effective in stimulating the economy in the post-crisis period, but it has been effective in reducing financial stress in the high-stress regime.
Topic:
Economics, Finance, Economic Growth, and Public Debt
Political Geography:
Africa and South Africa

68. Nation building in post-conflict settings: Evidence from South Africa

Author:
Thomas Gautier, Daniela Horta-Saenz, and Gianluca Russo
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
How do states rebuild nations after a major conflict? Truth and Reconciliation Commissions (TRCs) have emerged as one of the most common interventions to achieve this objective. Despite their popularity, little is known about their efficacy to foster reconciliation and nation building. We fill this gap by studying the seminal TRC established in South Africa after the end of the Apartheid. To measure exposure to TRC across South African municipalities, we leverage quasi-random variation in media coverage of the TRC message. South African municipalities with higher historical exposure to TRC on media have lower levels of violence today. This effect is driven by improved nation building and higher trust towards post-Apartheid institutions. Exploiting daily variation in TRC hearings and mediatic exposure in the short run, we bolster our interpretation that our long-run results are forged in the years of TRC activity. The same evidence suggests that our results are driven by the coverage of TRC on media as opposed to generic media exposure.
Topic:
Reconciliation, Post-Conflict, Trust, Nation Building, and Truth and Reconciliation
Political Geography:
Africa and South Africa

69. Structural transformation and sources of growth in Turkey

Author:
Ahmet Ihsan Kaya and Cumhur Çiçekçi
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper provides a comprehensive analysis of the supply and demand side of structural transformation in Turkey. Using the GGDC/UNU-WIDER Economic Transformation Database, we find that labour productivity improvements explain more than half of economic growth in the period 1980–2021. This is mainly thanks to within-sector productivity improvements, while the contribution of structural change declines over time. Time-series regression analysis shows that structural change is driven by per capita income growth and financial openness but is halted by trade integration. Furthermore, decomposition analysis from input– output tables demonstrates that domestic final demand has been the main source of output growth since 1980 and the contribution of export expansion has increased over time, but import dependency has persisted. The intermediate goods industry stands out as the locomotive sector in the economy throughout the entire period according to forward and backward linkage analysis.
Topic:
Labor Issues, Economic Growth, Productivity, Income, Supply and Demand, and Structural Transformation
Political Geography:
Turkey and Middle East

70. Structural change and the National Initiative for Human Development in Morocco

Author:
Al-mouksit Akim and Wissal Sahel
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper aims to revisit the pace and patterns of structural change in Morocco with a renewed perspective focusing on subnational trends to document the macro patterns. In that perspective, we first build a within-country sectoral longitudinal dataset covering employment and value added (VA) that expands the international databases mostly used in the literature. Based on this novel dataset, our results shed light on the different contributions of subnational units (regions) to labour productivity growth and, subsequently, structural change. Taking advantage of this novel dataset, we use an instrumental variable (IV) strategy to estimate the impact of the National Initiative for Human Development (NIHD) programme on labour productivity growth and both of its components: the between (structural change) and the within components. We find that the NIHD programme positively affects productivity growth overall, mainly through structural change. The results are driven by urban areas and the participation of local actors such as associations or cooperatives in the management of NIHD projects.
Topic:
Labor Issues, Economy, Human Development, Productivity, and Structural Transformation
Political Geography:
North Africa and Morocco

71. Forced migration, aid effectiveness, and the humanitarian–development nexus: The case of Germany’s P4P programme

Author:
Stefan Leiderer and Helge Roxin
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Bridging the gap between humanitarian assistance and development cooperation has been a contentious issue in academia and development practice for decades. Drawing on an evaluation of Germany’s ‘Partnership for Prospects’ initiative, this paper argues that, whilst the supplement of ‘peacebuilding’ to the nexus (humanitarian–development–peacebuilding [HDP] nexus) brought an important context factor into the discussion in an environment of conflict, it is only of marginal help in a context of forced migration to neighbouring countries of a given conflict. For the context of host countries of refugees in a protracted crisis, it is more relevant that host countries show ownership and reliability in their policies to create long-term perspectives for refugees. These policies in turn need to be embedded in reliable rules (polity) and negotiation processes (politics) in host countries. Consequently, the paper suggests that a ‘HD–Triple-P’ nexus would take the necessary political dimension into account more adequately. However, it might also mark the boundary as to what development politics can achieve.
Topic:
Foreign Policy, Development, Humanitarian Aid, International Cooperation, Refugees, Conflict, and Forced Migration
Political Geography:
Europe and Germany

72. Structural transformation and international trade: Evidence from the China shock

Author:
Clément Nedoncelle and Julien Wolfersberger
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
How does international trade affect structural transformation in developing countries? We use data on sectoral allocation of labour and value-added in 46 developing economies over the period 1995–2017 and exploit for identification plausibly exogenous variation in manufacturing imports from China. We find that the so-called ‘China shock’ largely slows down the transformation of low- and middle-income economies out of agriculture. In our main specification industrialization decreases by 0.49 per cent on average for each additional per cent of manufacturing imports from China. It highlights a competition effect where exposure to Chinese imports is largely detrimental to structural transformation. These results hold across geographical regions, with a difference in Sub-Saharan Africa, where international trade causes an increase in the size of the services sector.
Topic:
Development, Economies, Trade, Industrialization, and Structural Transformation
Political Geography:
Global Focus

73. Digital de-industrialization, global value chains, and structural transformation: Empirical evidence from low- and middle-income countries

Author:
Karishma Banga, Pankhury Harbansh, and Surendar Singh
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Digitalization and shifting patterns of globalization are fast changing the rules of the game for countries embarking on a path of industrialization. In this study, we empirically examine the impact of digitalization and global value chains on structural transformation using a crosscountry panel of 51 economies in the GGDC/UNU-WIDER Economic Transformation Database for the period 1990–2018. The analysis is based on a novel cross-country panel combining information from the Economic Transformation Database with the UNCTAD EORA data set, World Development Indicators, and Penn World Tables. Structural transformation is examined through changes across three variables: changes in manufacturing labour productivity, manufacturing employment share, and country-level structural change. To address issues related to endogeneity and country fixed effects, we use methodologies of fixed effects with instrumental variables and the two-step system GMM estimator. Results indicate that digitalization has a positive impact on structural change and manufacturing labour productivity but a negative impact on manufacturing employment share, indicating a reallocation of labour from the agricultural sector into services. Overall global value chain participation, and particularly forward participation, has a positive impact on structural change and manufacturing labour productivity.
Topic:
Science and Technology, Industrialization, Global Value Chains, and Structural Transformation
Political Geography:
Global Focus

74. Gendered implications of the waves of COVID19 and economic upgrading trajectories in digital value chains: Insights from Kenyan agricultural platforms

Author:
Aarti Krishnan, Monica Nganga, and Tim Foster
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Women play a critical yet under-researched role in global digital agri-food value chains, especially in smallholder production, which affects how they are able to economically upgrade (improve crop yields and product quality, and increase product diversification). Research suggests that women’s participation in agricultural platform-driven value chains facilitates the overcoming of barriers such as access to productive resources and engenders upgrading. However, studies have shown mixed evidence of the benefits of ag-platforms, and there are very limited data on female farmers’ contribution. Their economic upgrading possibilities are further compounded by the onset of shocks such as COVID-19. Predominantly only anecdotal evidence exists of how such shocks impact women in agriculture generally, let alone those using digital platforms. This paper seeks to answer the question: To what extent has the intensity of COVID-19 affected economic upgrading possibilities for women in platform-driven ag-value chains? The paper attempts to unpack economic upgrading through the different regimes of COVID-19, illustrating the dynamic effects experienced by women living through the shock. The paper uses a mixed methods approach, combining daily transaction data for over 3,000 farmers from 2019 to 2021 with 40 interviews of various value chain actors. The results show that women have been able to upgrade through the shock in terms of crop productivity and product quality more successfully than men, although there are differences across the different regimes of COVID-19; however, women have downgraded in terms of product diversification. The results are robust using pooled OLS, fixed effects, random effects, and seemingly unrelated regressions. The paper highlights a critical need to unpack shocks as a succession of regimes, rather than treating them as homogeneous entities, in order to provide a more holistic understanding of how women cope.
Topic:
Agriculture, COVID-19, Value Chains, and Gender
Political Geography:
Kenya and Africa

75. Language and student learning: Evidence from an ethnographic study in Mozambique

Author:
Feliciano Chimbutane and Ritva Reinikka
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This ethnographic study explores the implementation of bilingual education in Mozambique: how it is understood, adapted, and resisted by school directors, teachers, and local officials. Bilingual education uses local languages in early grades before a gradual shift into Portuguese, which most Mozambican children do not speak when entering school. Our study confirms that students participate actively and understand content better in bilingual classes. Regardless of education policy, school directors decide whether or not to form bilingual classes. They report pressure from parents for Portuguese-only instruction because of misunderstanding about the nature of bilingual education, poor resourcing, and fears about students failing tests. Some teachers demonstrate an impressive ability to provide bilingual education despite a lack of training and materials. Others resist and do little to hide their negative attitude. District officers are not able to supply schools with basic materials for local-language teaching. We conclude that bilingual education has lost momentum in Mozambique.
Topic:
Education, Ethnography, Language, and Policy Implementation
Political Geography:
Africa and Mozambique

76. Welfare losses, preferences for redistribution, and political participation: Evidence from the United Kingdom’s age of austerity

Author:
Patricia Justino, Bruno Martorano, and Laura Metzger
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper studies the effect of austerity on forms of political participation—including voting, appealing for reform, and peaceful protesting—and the role of preferences for redistribution in shaping the relationship between individual exposure to austerity and political participation. The paper focuses on the case of the United Kingdom (UK) where, between 2011 and 2019, wide-ranging austerity policies were introduced to deal with high public debt in the aftermath of the 2007–08 financial crisis. Cuts to government spending on public investment, services, and social protection, especially during the initial fiscal consolidation phase of 2011–15, led to significant welfare losses for the population. We provide evidence from observational microeconomic data and a large-scale online experiment in the UK showing that individual exposure to welfare losses from austerity increases political participation and strengthens preferences for government redistribution. The experimental data suggests that changes in individual preferences for redistribution significantly shape the effect of austerity on political participation.
Topic:
Austerity, Welfare, Redistribution, and Political Participation
Political Geography:
United Kingdom and Europe

77. Sanction-busting through tax havens

Author:
Kerim Can Kavakli, Giovanna Marcolongo, and Diego Zambiasi
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Financial sanctions, which aim to economically hurt a target by restricting its access to financial assets and markets, require the ability to identify who owns an asset. Although experts have long claimed that offshore financial centres that offer secrecy (‘tax havens’) undermine sanctions by hiding ownership information, so far data limitations have prevented a rigorous test of this claim. We overcome this constraint using data from the Bank of International Settlements and the Offshore Leaks Database and conduct the first systematic analysis of the role that tax havens play in financial sanction evasion. Our main finding is that sanction targets reduce their funds in sanctioning countries while increasing their funds in tax havens. This displacement effect is stronger when the sanction coalition includes the United States or comprises more FATF or OECD members. Lastly, whether a tax haven is in the sanctioning coalition does not seem to make a difference. These findings confirm that target countries evade sanctions by moving large portions of their funds from sanctioning countries to tax havens. More broadly, our paper highlights a novel and geostrategically important role of tax havens in global finance.
Topic:
Sanctions, Financial Markets, Leaks, and Tax Havens
Political Geography:
Global Focus

78. Employment transitions with high unemployment and a small informal sector: Examining worker flows during normal and recessionary periods in South Africa

Author:
Shakeba Foster
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines employment transitions in the South African labour market. Using the Post-Apartheid Labour Market Series, it analyses flows between the formal sector, informal sector, and unemployment, paying specific attention to how these flows differ during recessions. It explicitly considers heterogeneity within the informal sector by separately accounting for wage employment and self-employment as well as upper-tier and lower-tier informal sector segments. Transition probabilities are estimated using dynamic discrete choice models, and the extent to which transitions affect changes in real wages is estimated using a linear model. The results provide evidence of heterogeneity within the informal sector and segmentation between wage employment and self-employment. They also show a lag in the employment impacts following a recession. Finally, the paper provides suggestive evidence that the upper-tier segment of the informal sector acts as a buffer during recessionary periods by absorbing labour that would otherwise be unemployed or relegated to precarious lower-tier informal employment.
Topic:
Employment, Labor Market, Informal Economy, and Recession
Political Geography:
Africa and South Africa

79. More information, better knowledge? The effects of information campaigns on aid beneficiaries’ knowledge of aid projects

Author:
Alexander De Juan, Paul Hofman, and Carlo Koos
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Aid beneficiaries know very little about development interventions in their own communities. This lack of transparency and information is likely to reduce beneficiaries’ ability and willingness to become active in local development. It may also dampen intended aid effects on beneficiaries’ political and social attitudes. Can targeted information campaigns strengthen beneficiaries’ understanding of aid projects? We test the effects of two types of interventions: the provision of information only and the combination of information and feedback opportunities. We embed these interventions in a panel survey in rural Mali. Our information treatment is highly customized to specific local aid projects in respondents’ locations and corresponds to beneficiaries’ ex-ante information demands. Nonetheless, two months after the campaign, we find only small treatment effects on respondents’ project-specific knowledge (type, location) and no effects on their procedural knowledge (selection mechanisms). Only people with favourable ex-ante views of the state’s rule adherence and self-identified non-beneficiaries tend to update their views on procedural knowledge. Finally, we find that the combined information and feedback treatment has an effect on respondents’ subjective knowledge, which we interpret as promising mechanisms for engaging and identifying with aid projects.
Topic:
Fragile States, Development Aid, and Information
Political Geography:
Global Focus

80. Armed group opportunism in the face of recent crises: COVID-19 and climate change

Author:
Siobhan O'Neil
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Terrorist and other types of armed groups often exploit natural and human-made disasters and emergencies to advance their causes. This paper studies how some armed groups have responded to two recent global emergencies—climate change and the COVID-19 pandemic. It examines the messaging and actions of the Boko Haram in Nigeria and Fuerzas Armadas Revolucionarias de Colombia (FARC) dissident groups in Colombia in response to COVID and climatic shifts. The paper uses assessment methodology to look into unique survey evidence from each country in order to determine the public impact of armed group decision-making and responses to these emergencies. It also considers the potential policy implications of the findings presented herein.
Topic:
Climate Change, Non State Actors, Armed Forces, COVID-19, and Decision-Making
Political Geography:
Global Focus

81. European aid to the MENA region after the Arab uprisings: A window of opportunity missed

Author:
Thilo Bodenstein and Mark Furness
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
European official development assistance to Middle Eastern and North African (MENA) countries increased sharply after 2011, ostensibly in support of the social, economic, and above all political changes demanded by the Arab uprisings. The subsequent turn to development policies driven by security and anti-migration agendas, especially following the Syria refugee crisis in the autumn of 2015, raises the question whether initial expressions of support for democratic transformation expressed by European donors were ever backed by concrete measures. This paper discusses this question with an exploratory review of the policy and practice dimensions of four European MENA aid programmes between 2011 and 2016. The policy dimension is explored via an analysis of available documents from the EU, France, Germany, and the UK. The practice dimension is discussed with reference to OECD-DAC aid data on bilateral aid to MENA countries, focusing on aid in the social infrastructure and services sector, and in particular on the government and civil society sub-category. Our analysis reveals that, while all donors promised to support democracy in MENA countries, none had a clear strategy for doing so via their development cooperation. At the practice level, while programmes and projects were aimed at supporting change in specific contexts, increases in aid were mostly unrelated to political change. This indicates a preference for avoiding risks, which served to underpin the region’s political and socio-economic status quo. Accordingly, European donors missed an opportunity to test whether their aid could make a difference in supporting democratic transformation in the MENA. The social, economic, and political tensions behind the Arab uprisings remain unresolved more than a decade on, meaning that there is likely a need to learn lessons from the period following 2011.
Topic:
Development, Democracy, Arab Spring, and Development Assistance
Political Geography:
Europe, Middle East, and North Africa

82. India’s economic development since independence: An interpretative survey

Author:
Kunal Sen
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
When India became a republic in 1950, the economy was primarily agrarian, with threefifths of output originating from agriculture. In the sixty years since independence, there has been a significant transformation of economic activity away from agriculture, with less than one-fifth of output now originating from agriculture and the rest from manufacturing and services. Since the 1980s, along with structural change, there has been strong economic growth, till 2010, followed by a period of declining growth. In this paper, we describe India’s economic foundation, paying particular interest to the processes of economic growth and structural change. We begin with a brief discussion of the patterns of growth and structural change since independence. We then discuss the economic policies that have underpinned India’s economic development. Next, we discuss the evolution of the three main economic sectors—agriculture, industry, and services. We then provide a summary of India’s regional performance. We end with a discussion of India’s economic performance in the post-2014 period.
Topic:
Agriculture, Development, Economic Growth, Economic Policy, and Industry
Political Geography:
South Asia and India

83. India’s development cooperation in Africa: The case of ‘Solar Mamas’ who bring light

Author:
Veda Vaidyanathan
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines multiple facets of New Delhi’s development cooperation with countries in Africa and argues that grassroots organizations in India that find innovative, low-cost technological solutions to developmental challenges can help governments and multilateral agencies craft inclusive, sustainable policies. The aim of this paper is threefold. First, to understand the major actors, instruments, themes, and mechanisms that make up India’s Development cooperation towards countries in Africa and how these usher in a new dimension of ‘South–South cooperation’. Second, the paper will explore the role of grassroots organizations that have found localized solutions in India that then export their learnings to other geographies and how they craft a unique role for themselves in India’s broader development cooperation framework. To explore this idea further, the paper will utilize the case study of a community-based grassroots organization, Barefoot College, Tilonia, founded by Sanjit Bunker Roy in 1972, and its solar programme. The college trains women from unelectrified, remote communities to become solar engineers who then return to their rural villages with the ability to harness solar power, earning them the title of ‘Solar Mamas’. Third, this paper argues that the uneven, fragmented Indian experience of designing development assistance programmes provides an important non-western perspective that can help decision makers craft policies for an era beyond aid.
Topic:
Development, International Cooperation, Science and Technology, Innovation, and Sustainability
Political Geography:
Africa and India

84. Fiscal dependence on extractive revenues: Measurement and concepts

Author:
Kyle McNabb
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The aims of this paper are twofold. It firstly identifies and discusses the extent to which public revenues from natural resources are adequately captured in existing cross-country revenue databases, before exploring the extent to which such data can be used to estimate countries’ fiscal dependence on extractives. I first discuss key conceptual, definitional and measurement issues, before comparing the coverage of key existing databases, notably the UNU-WIDER Government Revenue Dataset (GRD). I then propose a new measure of fiscal dependence on extractive revenues (FDE). Whilst a number of existing studies have attempted to better quantify countries’ resource dependence, to the best of my knowledge none has yet proposed an indicator that ties the idea of dependence to any outcomes. The FDE simply calculates the extent to which extractive-producing countries can fund day-to-day government spending with non-extractive revenues. I find that the FDE is strongly correlated with existing measures of extractive dependence but can ultimately tell us more about countries’ fiscal positions and resulting vulnerability to shocks to revenue or government spending.
Topic:
Natural Resources, Tax Systems, Extractive Industries, and Economic Dependence
Political Geography:
Africa, South Asia, and India

85. The violent legacy of fascism: Neofascist political violence in Italy, 1969–88

Author:
Stefano Costalli, Daniele Guariso, Patricia Justino, and Andrea Ruggeri
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We still have limited knowledge about the long-term effects of fascism on European democracies. European countries experienced cycles of violence between the 1960s and 1980s. Can such violence be explained by legacies of mobilization during fascism? We study whether and how the Italian fascist experience of the 1920s affected political violence during the 1970s and 1980s. We created an original dataset of conflictual events at a subnational level in Italy. Using zero-inflated negative binomial regressions, we find that local membership of the fascist party in 1922—before the institutionalization of the fascist regime—predicts neofascist political violence at the provincial level more than 40 years later. New windows of opportunity facilitate the resurfacing of local fascist legacies: in the months when a new Minister of Interior is appointed, we observe higher levels of neofascist violence in provinces where the early presence of the fascist party was stronger.
Topic:
Terrorism, History, Fascism, Conflict, and Violence
Political Geography:
Europe and Italy

86. Assessment of institutional set-up of results measurement and reporting systems for non-sovereign operations in development finance institutions

Author:
Patrick Mabuza, Francis H. Kemeze, Oluwatoba J. Omotilewa, Mamadou Bah, and Btissam Benkerroum
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Development finance institutions (DFIs) foster sustainable development through financing, advisory services, and technical assistance. They complement public investments in developing and underserved markets to unlock development opportunities and deliver development results. Whereas DFIs’ missions are known among practitioners, their development achievements are often less understood. Consequently, DFIs have developed different results measurement and reporting systems to document the impacts of their interventions. This includes recent efforts to harmonize development impact indicators for results measurement and reporting. However, less is known about methodologies used in development outcomes assessments, or institutional set-ups for measuring and reporting these outcomes. This hampers knowledge on what works or does not work from a development finance perspective, preventing feedback mechanisms for DFIs to learn from prior interventions, mitigate risks, and ultimately improve subsequent interventions. Using a newly developed integration index score of hard versus soft integration of results measurement and reporting systems, and primary and secondary data from eleven such systems within DFIs, this study examines the set-up and effectiveness of different results reporting systems and mechanisms currently in place in DFIs. Findings reveal that although all interviewed DFIs measure anticipated (ex-ante) and ex-post development outcomes, only 27 per cent operate a fully integrated results measurement and reporting system that permits a 360- degree feedback loop for development effectiveness.
Topic:
Development, Finance, and Assessment
Political Geography:
Global Focus

87. Absolute or relative: perceptions of inequality among young adults in Mozambique

Author:
Giulia Barletta, Ines A. Ferreira, and Vincenzo Salvucci
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Different concepts of inequality lead to different positions in discussions about whether economic growth leads to increasing inequality. This study investigates how over 1,100 young adults in Mozambique perceive inequality and whether their perceptions are based on relative or absolute terms. It follows the line of work which examines attitudes (perceptions and preferences) towards different distributional axioms, and focuses on scale and translation invariance. Most of our respondents believe that inequality in their neighbourhood is too high and that circumstances beyond their control explain why some people are poor. We conclude that, while some respondents think in absolute terms, many do not agree with either the scale-invariance or the translation-invariance axioms, and there is great variation depending on the scenario presented to the respondents. We find some correlation between their way of thinking and gender, but no clear link with level of education and type of employment.
Topic:
Education, Inequality, Economic Growth, Youth, and Gender
Political Geography:
Africa and Mozambique

88. Building resilience knowledge for sustainable development: Insights from development studies

Author:
Albert Sanghoon Park
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores how the concept of resilience has been used in development studies. Set amidst the rise of resilience in sustainable development, it offers insights for scholars and policy-makers, alike. Sampling 419 resilience-oriented journal articles from 2017–22, it uses Kuhnian paradigms to analyse development knowledge production. This produces three key findings. First is the absence of a coherent resilience paradigm (with shared definitions, problems, and methods) in development studies. Second is its use, instead, by pre-existing paradigms as a theoretical add-on to better address complexity and/or as a new buzzword to repackage prior arguments. Third are latent possibilities for resilience as both a rallying call and siren song in sustainable development. Here, resilience discourses open vital space for development cooperation and climate action. However, its outcomes will depend on whether we can first understand precisely what we talk about when we talk about resilience.
Topic:
Development, Politics, Sustainability, Resilience, and Knowledge Production
Political Geography:
Global Focus

89. Migration out of poverty: The case of post-war migration in Mozambique

Author:
Maimuna Ibraimo and Eva-Maria Egger
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Internal migration plays an important role in the economic development of individuals, their families, and their country. This study describes Mozambique’s most common migration patterns from 1992 until 2017 using data from three population censuses. We focus on the most important moves between regions, provinces, and rural and urban areas. Further, we document the characteristics of migrants to assess selection patterns. In the final step, we estimate the relationship between migration and multidimensional poverty by applying inverse probability weighted regression adjustment (IPWRA). We find that migration in Mozambique was very high, especially between rural areas, after the war ended as people returned from displacement. Still, it is very low in the most recent period. Recently, migration has been the main contributor to the urbanization of the greater Maputo area (capital city). Migrants appear to be positively selected on education, and are, on average, less likely to be poor.
Topic:
Migration, Poverty, Displacement, Rural, Economic Development, and Post-Conflict
Political Geography:
Africa and Mozambique

90. Armed groups’ modes of local engagement and post-conflict (in)stability: Insights from the Ethiopian and Somali civil wars

Author:
Marine Gassier
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
What distinguishes post-war governments that succeed in establishing a stable political order and prevent recurring conflict from those that do not? This comparative study considers the specific threats that typically lead to the collapse of the post-conflict political order to offer new hypotheses on the conditions that affect post-war governments’ ability to sustainably restore stability. The threats considered include (i) fragmentation of the main actors in the conflict, (ii) inadequate demobilization, and (iii) enduring dependence of the post-war government on local brokers. Post-war regimes are more vulnerable to such risks after wars in which the dominant armed groups have established themselves by co-opting local power structures and drawing on existing socio-political networks, as this process redistributes power from the central to the local level. Empirically, this paper uses a novel dataset documenting the practices through which rebel groups may alter local power structures to highlight the connection between this wartime process of transformation and patterns of conflict recurrence. In addition, it contrasts the transition of the Tigray People’s Liberation Front from rebellion to government in Ethiopia in the 1990s with the trajectory of the armed movements in Somalia that also overthrew the incumbent military regime but then failed to establish a viable state.
Topic:
Conflict Prevention, Armed Forces, Conflict, Post-Conflict, and Instability
Political Geography:
Africa, Ethiopia, and Somalia

91. ‘Ten pound touts’: post-conflict trust and the legacy of counterinsurgency in Northern Ireland

Author:
Kristin M. Bakke and Kit Rickard
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores the legacies of wartime rebel governance and counterinsurgency tactics. Insurgents rely on civilian support for resources, information, and cover. To defeat insurgents, the state attempts to extract information from communities where support for insurgents is highest. We argue that strong norms against civilian collaboration emerge in these areas, which may have long legacies for local community trust. To explore these legacies, we conduct a case study of post-conflict Northern Ireland. While both Republican and Loyalist paramilitary groups established wartime institutions, the counterinsurgency targeted Republican groups in urban areas with the use of informants. Drawing on secondary literature and a survey, we show that strong norms against informers—‘touts’—persist long after the end of the conflict in Republican strongholds. These areas show lower levels of local community trust than their Loyalist counterparts. The Northern Irish case demonstrates the detrimental effects of dynamics likely to shape other post-conflict states.
Topic:
Counterinsurgency, Governance, Civilians, Survey, and Trust
Political Geography:
Europe and Northern Ireland

92. Trade sanctions and informal employment

Author:
Ali Moghaddasi Kelishomi and Robert Nisticò
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines how trade sanctions affect the allocation of workers across formal and informal employment. We analyse the case of the unexpected and unprecedented trade sanctions imposed on Iran in 2012. We use a difference-in-differences approach and compare the probability of working in the informal sector before and after 2012 for individuals employed in industries with pre-existing different levels of exposure to international trade. Combining employment data from the Iranian Labour Force Survey and trade data from Iran’s Customs Administration database for the years 2008–14, we find that workers employed in industries initially facing higher exposure to trade are significantly more likely to experience informal employment in the years after 2012 than workers employed in industries with lower trade exposure. This result suggests that, in the short run, the informal sector may absorb a significant fraction of workers displaced by the trade shock caused by the sanctions. We estimate that the increase in informal employment is highest for poorly educated workers, highlighting the unequal labour market consequences of trade sanctions. We exclude that industries differentially exposed to international trade were already following a different trend in the share of informal employment in the years prior to 2012, thus providing empirical support for the validity of our identification strategy. Moreover, we show that our main result holds when accounting for potential sorting issues by an instrumental variable approach. Our findings shed light on a potentially important dimension of labour reallocation whereby trade sanctions can affect the economy of the target country. They also provide important implications for policies designed to address informal employment and to assist trade-displaced workers.
Topic:
Labor Issues, Sanctions, Employment, Trade, and Informal Economy
Political Geography:
Iran and Middle East

93. The effectiveness of social protection in five African countries through normal times and times of crisis

Author:
Katrin Gasior, Iva V. Tasseva, and Gemma Wright
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We study the effectiveness of social protection benefits in reducing income and consumption poverty in five sub-Saharan African countries—Ghana, Mozambique, Tanzania, Uganda, and Zambia—in normal times and times of widespread economic crisis. Using tax–benefit microsimulation models with representative household survey data, first we estimate the coverage of benefits and their poverty-reducing effects in each country. Second, we study the ability of benefit automatic stabilizers to reduce losses in incomes and consumption in times of crisis, by simulating hypothetical reductions to earnings and employment. Although the coverage of benefits is fairly high in Ghana and Zambia, the poverty-reducing impact of benefits in all five countries is low in normal times. The effectiveness of benefits to stabilize income and consumption in times of crisis is also limited because many benefits are linked to proxies of income, not income itself, or have tight eligibility criteria. Social assistance programmes are typically unresponsive to losses in household earnings and employment and provide limited support for unemployed people.
Topic:
Poverty, Crisis Management, Economic Crisis, and Income
Political Geography:
Uganda, Africa, Mozambique, Tanzania, Zambia, and Ghana

94. The state and the ‘legalization’ of illicit financial flows: Trading gold in Bolivia

Author:
Fritz Brugger, Joschka Proksik, and Felitas Fischer
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Most research on illicit financial flows (IFFs) has focused on illicit outflows from developing countries and the role of non-state actors in generating IFFs. Less attention has been paid to processes and interfaces through which IFFs enter formal value chains—in effect being ‘legalized’ before leaving the country—or the crucial role of state institutions as gatekeepers. We develop a novel explanatory approach to account for the enabling role of state institutions in the ‘legalization’ of IFFs. Building on political settlement theory, we explain the performance of institutions in the regulation of IFFs as a function of political settlements. Taking the case of the Bolivian gold-trading sector, we examine how the process of ‘legalizing’ illicit value flows works in practice and analyse the motives and underlying conditions that lead state institutions to permit the formal export of gold shipments that have been illicitly sourced or transferred. Evidence from Bolivia indicates that the ‘legalization’ of illicit flows cannot be sufficiently explained by reference to corruption, illicit rent-seeking, or a general lack of administrative capacity. Rather, the process accommodates the interests of the cooperatives dominating the gold-mining sector, which are critical to maintaining the political settlement on which the incumbent government’s power is based. By maintaining a status quo of non-enforcement, legal ambiguity, and pervasive informality, gold-mining cooperatives are permitted to reap higher benefits from resource extraction at the expense of domestic revenue mobilization.
Topic:
Institutions, Mining, Trade, Value Chains, Illicit Financial Flows, and Gold
Political Geography:
Global Focus

95. Savings transition in Asia: Unity in diversity

Author:
Prema-chandra Athukorala and Wanissa Suanin
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the national savings behaviour in the process of economic growth through a comparative analysis of countries in developing Asia from a historical perspective. Developing Asia provides an ideal laboratory for the study with considerable differences in the savings behaviour among countries and over time within individual countries, notwithstanding the ‘model saver’ image based on the average savings rate. The empirical analysis distinguishes between private and government savings rates, with specific emphasis on the former. The results of the empirical analysis are consistent with the view of ‘virtuous circle’ between growth and savings, with growth initiating the savings transition. No evidence to suggest that a prior phase of promoting savings through specific policy initiatives is needed to initiate the process of growth and structural transformation. The private savings rate is associated positively with per capita gross domestic product, export orientation, and foreign resource inflows and negatively with the young dependency ratio of the population and domestic credit availability.
Topic:
Economic Growth, Exports, Savings, and Structural Transformation
Political Geography:
Asia

96. The impact of COVID-19 on urban informal workers in Maputo

Author:
Nilifer Anaç, Eva-Maria Egger, Sam Jones, Ricardo Santos, and Alex Warren-Rodriguez
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Informal self-employed traders in developing countries are vulnerable to shocks as they often lack access to social insurance or formal finance. This study investigates the impact of the COVID-19 pandemic on these urban traders in the capital of Mozambique, Maputo. Drawing on longitudinal phone survey data over six months, we find they experienced significant negative shocks to earnings, leading to a reduction in savings as well as worsening food security and assets. Individuals simultaneously affected by a municipal policy to remove informal traders from a central market were hit particularly hard as they lost their clients and market stalls. We simulate that a cash transfer equivalent to the government’s proposed COVID-19 response would have significantly buffered these shocks. The findings point to the need for a more shock-responsive social protection system, easy access to liquidity and provision of market infrastructure for informal traders.
Topic:
Urban, Trade, COVID-19, and Informal Economy
Political Geography:
Africa and Mozambique

97. Trust as state capacity: The political economy of compliance

Author:
Timothy Besley and Sacha Dray
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores the link between trust in government, policy-making, and compliance. It focuses on a specific channel whereby citizens who are convinced that a policy is worthwhile are more motivated to comply with it. This in turn reduces the government’s cost of implementing a policy and may also increase the set of feasible policies. Thus, state capacity is greater when citizens trust their government. The paper discusses alternative approaches to modelling the origins of trust, especially the link to the design of political institutions. We then provide empirical evidence consistent with the model’s findings that compliance is increasing in trust using the Integrated Values Survey and voluntary compliance during COVID-19 in the UK. We also show that countries with high levels of citizen trust in government were more likely to implement policies requiring voluntary compliance during the COVID-19 pandemic. The paper suggests that trust in government can play a role in building and expanding state capacities.
Topic:
Government, Political Economy, Capacity, Compliance, and Trust
Political Geography:
Global Focus

98. The determinants of domestic saving in Kenya

Author:
Rodgers Musamali, Cecilia Mutia, and Rose Ngugi
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The savings–growth nexus is widely acknowledged, both in policy and in the literature. But Kenya’s numerous policy initiatives to encourage savings mobilization are yet to yield the expected outcomes. This paper identifies the key drivers of domestic saving in Kenya, exploiting fintech as an alternative channel for savings mobilization, and drawing lessons from the Kenyan experience so far. Using data from various sources, and employing an autoregressive distributive lag estimation model, we find that in the long run, private saving is positively and significantly influenced by the per capita income growth rate, inflation, and age dependency ratio, and negatively influenced by the public saving rate and terms of trade. National saving is positively and significantly influenced by the per capita income growth rate, inflation, and private sector credit growth rates in the long run. Wealth and deposit rates negatively influence national saving. Based on these findings, we recommend the following interventions to grow savings in Kenya: creating decent employment opportunities to enhance income growth; providing sustained financial development with a focus on savings mobilization; creating an enabling environment for the private sector; taking advantage of Kenya’s young population; exploiting mobile money platforms to boost savings. Moreover, households show targeted saving behaviour where they accumulate financial savings and then transform them into savings in kind. Therefore, accounting for savings should go beyond the traditional focus on bank deposits and incorporate savings held in other forms. Households also use non-formal platforms for saving, and we suggest that existing barriers to formal saving platforms be removed to direct more saving into formal channels.
Topic:
Economic Growth, Saving, Income, and Fintech
Political Geography:
Kenya and Africa

99. Tax provisioning by extractive industry multinational subsidiaries

Author:
Khanindra Ch. Das
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Extractive industries are spread across mining of metal and minerals, oil and gas, among others. Multinationals in these sectors are confronted with different challenges ranging from corruption, political risk, economic uncertainty, sunk costs, and the long-gestation periods to execute projects. As a result, tax payment behaviour of subsidiaries in the extractive sector could be dependent not only on these factors, but also on the life cycle of the subsidiary, profitability, and holding structure. Furthermore, emerging economy multinationals in the extractive industries could be state-owned and may invest in foreign subsidiaries for strategic reasons. We examine tax provision in host countries by India’s multinational subsidiaries in the extractive industry. Panel data analysis is carried out for the period 2010–20. It is found that tax provision remains lower in the initial years of subsidiary life and increases with the sustenance of subsidiary in the host country for a longer period. In addition, subsidiaries of public sector enterprises are found to have higher tax provisions than their private counterparts. When it comes to the determinants, economic policy uncertainty, corruption, and political stability are found to significantly affect tax provision.
Topic:
Corruption, Political stability, Multinational Corporations, Tax Systems, Economic Policy, Public Sector, Extractive Industries, and Uncertainty
Political Geography:
South Asia and India

100. Marriage market responses in the wake of a natural disaster in India

Author:
Shreyasee Das and Shatanjaya Dasgupta
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of the 2001 Gujarat earthquake on age at marriage and other assortative matching outcomes. Using the 2004–05 wave of the India Human Development Survey and employing a difference-in-differences strategy, we document that the earthquake reduced the age at marriage for both men and women and decreased the likelihood of women marrying into wealthier households. Additionally, we find no changes in matching by educational status or in the likelihood of intra-caste and out-of-village marriages. The results are driven by districts that were severely affected by the earthquake in terms of deaths and destruction. Our conjecture is that the negative economic shock pushed parents to marry off their daughters early to save on dowry expenditures. We confirm this underlying mechanism by using a proxy for dowry payments. Our results highlight how the institution of marriage can induce long-lasting demographic changes after a natural disaster.
Topic:
Natural Disasters, Marriage, Earthquake, and Dowry
Political Geography:
South Asia and India