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8201. 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

8202. 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

8203. 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

8204. 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

8205. 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

8206. 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

8207. 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

8208. 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

8209. 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

8210. 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