Politics, finance and growth

c. Steve Evans

c. Steve Evans

Dr Svetlana Andrianova, University of Leicester

Start: Sep 2012 |  End: Mar 2016

Project webpage
Research Councils UK project page

DEGRP report: Finance for Development
Working paper: Finance and Poverty: evidence from India
Working paper: Financial liberalization and income inequality: channels and cross-country evidence
Working paper: Ethnic Fractionalization, Governance and Loan Defaults in Africa
Working paper: Loan Defaults in Africa
Journal article: Finance is good for the poor but it depends where you live
Journal article: Monetization, Financial Development, and Growth: Time Series Evidence from 22 Countries in Sub-Saharan Africa
Journal article: Revisiting the institutions–growth nexus in developing countries: The new evidence
Journal article: Financial Literacy And Financial Behaviour: Experimental Evidence From Rural Rwanda
Journal article: Why Do African Banks Lend So Little?
Journal article: Credit Booms, Financial Fragility and Banking Crises
Journal article: Capital Account Liberalization and Income Inequality
Journal article: The changing face of financial development
Vox EU article: A new international database on financial fragility

Although the recent financial crisis led to suggestions that there can be too much finance, many Low Income Countries (LICs)  remain financially under-developed.  In Sub-Saharan Africa, banks continue to lend little domestically, and even where financial development has taken place, its effects on the poor are generally unknown. By analysing the linkages between politics, finance and growth in Sub-Saharan Africa, this project aims to explain how finance can help promote pro-poor economic growth in LICs.

The project seeks to analyse the causes of financial under-development. It will use appropriate methods and data focusing on:

  • determinants of high loan default in Sub-Saharan Africa;
  • the role of incumbent financiers in deterring new firms’ entry;
  • the role of natural resources on financial development.

It also aims to re-examine key aspects of the finance-growth relationship by analysing the consequences of banks’ opportunistic behaviour on financial instability, and the effect of different types of financial reforms on bank soundness. A new measure of banking fragility constructed under the project will help determine if increased fragility explains the recent weakening of the finance-growth relationship.

 

The diffusion of innovation in Low Income Countries

Dr Xiaolan Fu, University of Oxford

Start Date:  Sep 2012 |   End Date: Feb 2016

Project webpage
Research Councils UK project page

Film: Innovation in LICs
Report: Innovation in low income countries: A survey report
Journal article: Information Sources, ICTs and Price Information in Rural Agricultural Markets
Journal article: Drivers of Export Upgrading
Journal article: Transaction Costs, Information Technologies, and the Choice of Marketplace among Farmers in Northern Ghana
Journal article: Complementarity between in-house R&D and technology purchasing: evidence from Chinese manufacturing firms
Working paper: Innovation Under the Radar in Low Income Countries: Evidence from Ghana
Working paper: The diffusion of innovation in the private sectors in Low-income Countries (LICs): A systematic literature review
Working paper: Multi-dimensional Complementarities and the Growth Impact of Direct Investment from China on Host Countries
Working paper: Complementarity between internal knowledge creation and external knowledge sourcing in developing countries
Presentation: The Diffusion of Innovation in Low Income Countries
Working Paper: The Impact of China-Africa Trade on the Productivity of African Firms: Evidence from Ghana
Working Paper: The Innovation Effects of ICT adoption in Ghana
Working Paper: Innovation, informality, and firms' growth in low-income countries
Working Paper: Productivity convergence and exporting
Journal Article: Chinese MNEs and managerial knowledge transfer in Africa: the case of the construction sector in Ghana

Technological innovation is a key element of industrialisation and catch-up in developing countries. Since innovation is costly, risky and path-dependent, ground-breaking innovation is highly concentrated in a few rich countries and amongst a small number of firms. Foreign sources of technology account for a large part of productivity growth in most countries. If foreign technologies are easy to diffuse and adopt, a technologically backward country can catch up rapidly through the acquisition and more rapid deployment of the most advanced technologies (Eaton and Kortum, 1995; Bell and Pavitt, 1993).

Therefore, the development process in low income countries can be supported by tapping existing knowledge and know-how. The transfer, adoption and adaptation of knowledge to low income countries hence constitutes an important issue for economic growth and global development.

Technology diffusion and adoption relies on substantial and well-directed technological efforts (Lall, 1992) as well as sufficient human and financial resources and absorptive capacity (Cohen and Levinthal, 1989). It requires appropriate institutions and policies to incentivise and facilitate the process in addition to strong local capabilities to identify the right technology and appropriate transfer mechanism, and to absorb and make adaptations according to local economic, social, technical and environmental conditions (Fu, et al., 2011). 

This research project will explore determinants and transmission channels for effective innovation creation, diffusion and adoption in LICs under institutional, resource and affordability constraints. In particular, it looks at:

• The barriers to innovation creation and diffusion in LICs under institutional, resource and affordability constraints and the space for innovation policy;
• The determinants of knowledge diffusion in LICs from leading innovators to latecomers, in particular the role of university-industry linkage and inter-firm networks;
• The effect of external knowledge diffusion to LICs, in particular the productivity impact of South-South trade and FDI with a special focus on Chinese trade and FDI in Africa;
• Develops an SME open innovation network model to increase frugal innovation for the poorer societies in LICs.

Agricultural innovations: which farmer(s) should we target?

Farmer in Congo c. Russell Watkins/DFID

Farmer in Congo c. Russell Watkins/DFID

Professor Erwin Bulte, Wageningen University

Start Date: 24 July 2012 |   End Date: 01 April 2016

Research Councils UK project page

Video: Intro to N2Africa in DRC
Video: Interview with a field liaison officer in DRC
Research report: Social relationships, local institutions, and the diffusion of improved variety seed and field management techniques in rural communities: six case studies in South Kivu, DRC
Research report: Farm Households in Eastern Congo Baseline Survey Report
Research summary: Yield Gaps and Food Security

This project will investigate if the selection of farmers chosen to promote new agricultural technologies has an effect and impact on technology diffusion and development.  

In the case study country of Democratic Republic of Congo, local field officers will research current selection methods, identify limitations in reaching vulnerable sub groups and promote the use of improved crop varieties. The results of the study will be used to design an improved selection method which will then be implemented in 30 randomly selected villages.  Detailed data will be collected before and after intervention at both village and household level and additional analyses will provide detailed insights into technology diffusion through social networks.

This research will find out if improved methods lead to enhanced diffusion of knowledge on new varieties of crops. It will also allow agricultural development programs to increase their reach amongst rural African smallholders and find out how to better target vulnerable subgroups in rural societies.

Training, productivity, and upgrading in the Bangladesh apparel sector

Training of female workers in Dhaka, Bangladesh c. Sarah-Jane Saltmarsh/ILO

Training of female workers in Dhaka, Bangladesh c. Sarah-Jane Saltmarsh/ILO

Professor Christopher Woodruff, University of Warwick

Start Date: Feb 2012 |   End Date: Feb 2015

Research Councils UK project page

Video: DEGRP interview
Event: Bangladesh Policy dialogue, 2014
Policy essays: Enhancing productivity in Bangladesh's garment sector
IGC/DEGRP Policy brief: Managerial capital and productivity

The project examines the effect of female managers on firm-level productivity in the ready-made garment (RMG) sector in Bangladesh. Around 85 per cent of machine operators in the sector are female, but managers are overwhelmingly male. The study evaluates, through a Randomized Control Trial, a Female Supervisor Training Program supported by the German overseas aid agency (GIZ) and developed with industry stakeholders. Mid-level management training is widely seen as needed in the Bangladeshi RMG sector, and thus the training program is targeted to sector-specific needs.

The research project provides supervisor training to 384 female and 96 male machine operators from 96 factories, with the aim of understanding the effect of both gender and training on a variety of outcomes. The first two outcomes are rates of trainee promotion and migration to other factories. Conditional on promotion, the project examines the management style of line supervisors, supervisee job satisfaction, and productivity -  including output, absenteeism and product quality. There is a potentially large demand for training in the sector, but also concerns among factory owners that trainees will leave the factory after completing training. The issue of migration has profound effects on demand for training and for those who fund the training.

Structural change and productivity growth in Africa

Owner of Feed Processing Plant, East Africa Photo by US Agency for International Development (USAID)

Owner of Feed Processing Plant, East Africa

Photo by US Agency for International Development (USAID)

Professor Margaret McMillan, International Food Policy Research Institute

Start: Apr 2012|   End: Sep 2014

Research Councils UK project page

Video: Margaret McMillan on Structural Transformation
World Development Journal: Globalization, structural change and productivity growth
Op-ed: The Myth of de-industralisation and Africa's quiet agricultural revolution
NBER Working paper: What is driving the African growth miracle?
Working paper: Life during structural transformation
Working paper: Transfers and Transformations: Remittances, Foreign Aid and Growth

This research seeks to understand the causes and consequences of structural transformation in Africa. While it is well understood that structural change and economic growth go hand in hand, there is little consensus among researchers - and in the case of Africa little actual research - on the determinants of structural transformation.

A major contribution of this project is the construction of a harmonised long-term sectoral dataset for several countries in Sub-Saharan Africa. This dataset will consist of time series information on value added in international prices and employment for ten broad economic sectors for the period from 1960 to 2010.

With this new dataset, the researchers will identify countries in which structural change has been growth enhancing as well as countries in which structural change has reduced economic growth. Comparisons with other developing regions of the world will be made through similar datasets already available for Asia and Latin-America. Using the results of this analysis, the researchers will identify specific policies and events that have influenced the process of structural change.

The researchers will also examine the links between urbanization, food prices and structural change by using a combination of qualitative and quantitative methods including in-depth case studies.

Space, markets and employment in agricultural development from Southern Africa

Professor Andries du Toit, University of the Western Cape

Start Date: 01 March 2012 | End Date: 31 August 2014

Project webpage
Research Councils UK project page

Video: Making Markets: Land Reform, Agriculture and New Local Economies in Zimbabwe
Research update: Malawi
Research update: Zimbabwe
Blog: It’s not only about farming
Guardian article: Stop selling off African land - invest in farmers instead
Blog: Beef value chains in Masvingo Province, Zimbabwe
Blog: Retail revolutions: the rise and rise of butcheries and informal food selling in Zimbabwe
Blog: Rural cattle marketing in Zimbabwe
Blog: Access to $1000 credit: would this help unleash agricultural commercialisation in Zimbabwe?
Blog: Agricultural development and the local: the case of South Africa
Blog: Zimbabwe’s new agricultural entrepreneurs I: pig production
Blog: Zimbabwe’s new agricultural entrepreneurs II: Poultry
Blog: Zimbabwe’s new agricultural entrepreneurs III: irrigators
Blog: Building impact over time: experiences from Zimbabwe
Opinion: Abattoirs and the Zimbabwe meat trade
Workshop: Changing Countrysides in Southern Africa: Land and Agricultural Commercialisation and Rural Employment
Presentation: Space, Markets and Employment in Agricultural Development: Findings
Policy Brief: Space, markets and employment in agricultural development: Malawi
Policy Brief: Space, markets and employment in agricultural development: South Africa
Research report: Malawi country report
Impact case study: Changing views on Zimbabwe's land reform
Research report: Space, markets and employment in agricultural development: Zimbabwe
Policy Brief: Space, markets and employment in agricultural development: Zimbabwe
Blog: Land and commercial agriculture in Zimbabwe: new findings
Blog: Sharing results, generating impact: experience from Zimbabwe
Policy brief: Can agriculture contribute to inclusive rural economies? 
Research report: Space, markets and employment in agricultural development: South Africa
Research booklet: Land reform, commercial agriculture and local economic growth in Zimbabwe (or in Shona)
Blog: Can agriculture in Africa sustain a nourishing rural non-farm economy?
Blog: It’s not only about farming
 

Agricultural development can only lead to inclusive, sustainable growth if, in addition to productivity gains on the land, it supports non-farm employment. Recent debates indicate that conditions to support non-farm rural employment depend not only on growth in local aggregate demand, but also on the spatial and institutional configuration of the links between farm and non-farm employment, and between near and distant markets. 

This project explores the spatial and institutional articulation of markets, human settlements and farm and non-farm livelihoods in marginalised and impoverished regions of Malawi, South Africa and Zimbabwe. A qualitative picture of the flow and distribution of money, resources, risk and opportunities in socio-economic networks, value chains and markets in rural districts will be combined with a quantitative analysis of the livelihood outcomes for actors and role players in the network.

The research will be undertaken by a consortium of researchers led by the Institute for Poverty, Land and Agrarian Studies at the University of the Western Cape in South Africa. 

Rural property rights, returns to scale and contracts

Rural farmer in Qing Yunnan, China c. Hong Meen Chee

Dr Elaine Liu, University of Houston

Start Date: 25 April 2012 |   End Date: 24 October 2014

Research Councils UK project page

Conference: Rural Issues and Development Economics, China

This research entails two projects that examines the impact of rural land rights on the decisions and outcomes of farmers in China.

Previously farmers only had use rights and could not legally engage in any market land transaction such as selling or renting.

In the first project the research team will study whether giving farmers leasing rights will improve their outcome. In the second project, the researchers will study the types and terms of contracts that farmers sign when allowing other farmers or agricultural firms to use their land, and will analyse the impact of these contract choices on agricultural investment and productivity.

This research agenda builds on economic theories that suggest that some types of contracts may lead to lower investment and lower levels of productivity. It will provide valuable insight into how land market interactions among farmers and between farmers and agricultural firms affect rural economic growth.

Malaria, productivity and access to treatment

Clinic in Nigeria Photo by Curt Carnemark, World Bank

Clinic in Nigeria

Photo by Curt Carnemark, World Bank

Experimental evidence from Nigeria

Dr Andrew Dillon, International Food Policy Research Institute

Start Date: Aug 2012   |   End Date: Aug 2014

Research Councils UK project page

Blog: How malaria testing can get more people back into work

The consequences of ill health for productivity and economic development are presumed to be severe yet the rigorous evidence base for such a linkage is small.

For this research project a mobile health clinic was established on a plantation and used an exogenously determined order to test and treat workers. Despite the positive effect of treatment, we found that there are low rates of workers seeking curative and preventative treatments. To understand the reason for this, this study will offer access to malaria treatment and insurance at varied prices to estimate its effect on take-up and frequency of health care.

In another study phase, the effect of treatment on both worker productivity and physical activity will be measured. We will then be able to estimate the effects of malaria on physical activity in general, which will allow us to extend our findings in this context to other physical occupations in endemic areas.

Innovation systems, agricultural growth and rural livelihoods in East Africa

Farmer in Kenya c. Neil Palmer/CIAT

Farmer in Kenya c. Neil Palmer/CIAT

Dr Peter Dorward, University of Reading

Start Date: 19 June 2012   |   End Date: 31 October 2014

Project webpage
Research Councils UK project page

Smallholder farming is widely seen as a potential engine for economic growth and for poverty alleviation in rural areas of sub-Saharan Africa. Yet the arrangements put in place to encourage the uptake of new technology, and to improve the management of resources by smallholders, have not always been particularly effective.

Using Kenya, Sudan and Uganda as case studies, this project will explore how different institutional arrangements affects the innovation activity of male and female farmers and the impact this has on growth in the local economy.

The research team will build up a detailed picture of organisations and institutions that support and provide services to smallholder farmers. They will then carry out a detailed investigation of recent innovation activity in four sites in each country analysing the factors that have constrained and those that have supported innovation.

Evidence-based conclusions on the potential and limitations for enhancing support for smallholder farmers’ innovation through new institutional arrangements and different ways of implementing support programmes at local level will be developed.

Innovations to promote growth among small-scale irrigators in Africa

Farm irrigation in Mto Wa Mbu, Tanzania c. Lecucurbitacee

Farm irrigation in Mto Wa Mbu, Tanzania c. Lecucurbitacee

Elizabeth Harrison, University of Sussex

Start Date: 17 November 2012   |   End Date: 03 August 2015

Project website
Research Councils UK project page

Research briefing: Innovations  to promote growth among small scale irrigators
Working paper: The Politics of Small-Scale Irrigation in Tanzania
Innovation to promote growth among small scale irrigators: policy briefing 1, policy briefing 2
Research in ContextTanzania: Irrigation, formal institutions and water governance
Thesis: The potential for irrigated rice production to enhance small-holder livelihoods in Tanzania
Blog: Farmers versus big business: the politics of irrigation in Tanzania
Journal Article: Anthropology and impact evaluation: a critical commentary
Journal article: The livelihood approach to innovation of small-scale irrigation in Noakhall Char area in Bangladesh
Research briefing: Small-scale irrigation in Malawi - challenges and opportunities
Policy briefing: Innovation in small-scale irrigation: formality, scale and sustainability
Journal article: Differentiated legitimacy, differentiated resilience: beyond the natural in ‘natural disasters'

This project examines the rules and norms governing access to and control over water by smallholder farmers, considering how these are influenced by externally-induced innovations and the effects of climate change.

The research aims to determine if general principles of water allocation and equity can be identified, and what the scope is for transferring them across contexts. It involves comparative research in Bangladesh, Tanzania and Malawi.

Key questions include:

  • What are the ‘local rules’ for governing access to water and what shapes these?
  • What is the relationship between ‘local’ rules and ‘outside’ influences such as government, business and NGO initiatives?
  • How are the politics of water control changing?

Information, market creation and agricultural growth

Farmers in Ramagoundanpatti, India c. Surajram Kumaravel

Farmers in Ramagoundanpatti, India c. Surajram Kumaravel

Dr Arjunan Subramanian, University of Glasgow

Start Date: 01 November 2012   |   End Date: 31 October 2016

Project webpage
Research Councils UK project page

Video: How ICT can play a role in improving rural welfare in India
Journal Article: Using geospatial technology to strengthen data systems in developing countries.

The role of information and communication technology (ICT) in economic development has become a much contested topic over the last decade.

Although anecdotes exist about the impact of information provided through ICT, we know little about the effects of providing real-time information to farmers on productivity, farm incomes, changes in agricultural practices, and reduction in transaction costs. Some fear that with ICT, technological disparity will arise, and existing socio-economic inequality and poverty will be further exacerbated.  

This project will investigate the impact of ICT on rural welfare in the Indian state of Karnataka by giving selected farmers from some villages new information on key agricultural related services. Data from surveys and randomised experiments will be used to study the impact of information dissemination on agricultural practices, household incomes, social network, risk coping mechanism and caste disparity.

Industrial productivity, health sector performance and policy synergies for inclusive growth

In Tanzania and Kenya

Photo by Anouk Delafortrie, The European Commission's Humanitarian Aid and Civil Protection Department (ECHO)

Photo by Anouk Delafortrie, The European Commission's Humanitarian Aid and Civil Protection Department (ECHO)

This project studies the supply chains of essential medicines, medical equipment and supplies from local industries, and imports into the health systems in Tanzania and Kenya. Shortages and the high cost of health-related commodities are persistent causes of exclusionary and poor quality health care in low-income Africa.  

The research hypothesis is that better integration between industrial and health policies could contribute to higher employment, industrial upgrading, and improved health system performance and accessibility. If this is correct, improved industrial production - higher productivity, more appropriate and cheaper products, and innovative production methods - could improve health service performance while raising economic output: in other words, contribute to inclusive growth.

The project will interview heath facilities, shops and wholesalers in all sectors, in urban and rural contexts, about their procurement practices and problems. Mapping of supply chains will be followed by data collection at firm level. Private sector businesses and policy makers, and health sector managers and policy makers, will debate the scope for more integrated policy making.

Improving microfinance regulation to support growth and innovation in micro-enterprise

c. Ken Teegardin

c. Ken Teegardin

Professor Alison Brown, Cardiff University

Start Date: Nov 2012   |   End Date: Mar 2016

Research Council UK project page

Video: Alison Brown on Microfinance in Tanzania
Video: Shaping Economic Tranformation in Tanzania
Session flyer: inclusive growth and access to microfinance
Event: Microfinance and innovation in Africa's cities

This research focuses on strengthening consumer protection in microfinance (MF) to support growth and innovation in key urban sectors such as street vending, artisanal mining, tourism services, construction, and food processing. It will take the format of comparative studies in Rwanda, Tanzania, Kenya, Ethiopia and India.

The hypothesis is that poor regulation of MFIs (Microfinance Institutions) and lack of safety nets limit accessibility and take-up of MF services, creating excessive debt for poor borrowers and inhibiting micro-enterprise innovation and growth.

The objectives are to analyse comparatively:

  • national and local policies on MF consumer protection
  • barriers, benefits and risks to micro-enterprises of accessing MF
  • consumer protection in different MF packages, eg collateral requirements, interest rates, customer support
  • the impact of micro-finance on urban economic growth.

Methods include desk studies and key informant interviews with: government; advisory and regulatory agencies; and formal, semi-formal and informal MFIs; and semi-structured interviews with micro-enterprises in the identified economic growth sectors.

Agricultural supply chains, growth and poverty in Sub-Saharan Africa

Farmer in Kenya C. Marisol Grandon/DFID

Farmer in Kenya C. Marisol Grandon/DFID

Dr Nicolas Depetris Chauvin, African Centre for Economic Transformation

Start date: 25 April 2012   |   End date: 24 April 2015

Research Councils UK project page

Event: Quest for economic transformation in Africa
Video: Francis Mulangu presenting on Structural Transformation
Video: Julius Gatune Kariuki on economic transformation in Tanzania
Working Paper: To Be or not to Be a Member of a Grass-Root Institution – A Case Study Using a Network Analysis in Rural Areas in Ghana
Working Paper: Agricultural Supply Chains and Farmers Constraints: Welfare Impacts in ECOWAS Countries
Paper: The Role of Agricultural Supply Chains and Household Constraints in ECOWAS countries

In Africa, the agriculture sector has failed to become an engine of growth and economic transformation for most countries in the continent. Part of the problem lies in the market structures and in the poor institutions, policies, and infrastructure serving the agriculture sector.

This research will investigate if and how agricultural market structures and farm constraints affect the development of dynamic food and cash crop sectors and whether these sectors can contribute to economic transformation and poverty reduction in Africa.

Assessing the contribution of the dairy sector to economic growth and food security in Malawi

c. Swathi Sridharan

c. Swathi Sridharan

Dr Cesar Luis Jorge Revoredo-Giha, Scotland's Rural College

Start date: 01 June 2012   |   End date: 31 May 2015

    Project website
    Research Councils UK project page

    Working Paper: Demand for Dairy Products in Malawi
    Working Paper: How Responsive to Prices is the Supply of Milk in Malawi?
    Event Presentation: Malawi: building a sustainable dairy farming sector and link to posters
    Poster: Demand for Dairy Products in Malawi
    Blog: You won't help farmers in Africa by just throwing money at them
    Seminar: Overview - SRUC Research Messages and Training for Malawi and presentation from the event.
    Working Paper: Market structure and coherence of international cooperation: the case of the dairy sector in Malawi
    Event Presentation: Market structure and coherence of international cooperation: the case of the dairy sector in Malawi
    Journal Article: The demand for dairy products in Malawi

    Fractured supply chains have been identified as a barrier to growth for the agricultural sector, in particular in Africa. Dairy is a key investment sector in Malawi, however domestic production response is unimpressive: a large part of the population are unable to access nutritious and safe dairy products, despite donors such as USA, Japan and Belgium focusing development aid on his sector.

    The project aims to boost the potential contribution of the dairy sector to aid economic growth and food security. Research will consist of assessing operations, identifying problems and proposing solutions, and integrating the different results into a model that will replicate the impact of different policy alternatives. The project is multidisciplinary and builds on the existing academic link between Scotland's Rural College and Bunda College of Agriculture in Malawi.

    A behavioural economic analysis of agricultural investment decisions in Uganda

    c. Trust for Africa's Orphans (TAO)

    c. Trust for Africa's Orphans (TAO)

    Dr Arjan Verschoor, University of East Anglia

    Start date: 20 February 2012   |   End date: 19 February 2015

    Project webpage
    Research Councils UK project page

    Presentation: Status Quo Bias in Investment and Insurance Behaviour
    Paper: Nature's Frames, Reference Lotteries and Truly Risky Choice: Evidence from a Ugandan Field Lab (2013)
    Journal article: Investment Behaviour, Risk Sharing and Social Distance
    Journal article: Conflicting risk attitudes
    Policy brief: Risk-taking, risk-sharing and underinvestment in agriculture in eastern Uganda – Policy lessons
    Stakeholder engagement report: Co-producing policy recommendations: Lessons from DEGRP project "A behavioural economic analysis of agricultural investment decisions in Uganda"
    Graphic: Stakeholder engagement process (or here)
    Journal article: Lab and life: Does risky choice behaviour observed in experiments reflect that in the real world?

    Farmers in developing countries operate in extraordinarily difficult environments. Policies that aim to increase agricultural productivity, for example agricultural lending, research and extension, rural infrastructure and crop insurance, need to take into account how farmers make agricultural investment decisions.  However, crucial elements of their decision-making habits that relate to risky choices are not well understood.

    This research project took place in east Uganda, and aimed to advance the understanding of how farmers who face numerous threats to their livelihoods take risky investment decisions. Participants responded to real monetary incentives to identify the significant features of their decision-making habits. Firstly potential biases in risky choice behaviour were studied by using lotteries to measure whether certain risks tend to be exaggerated (or alternatively, downplayed) in participants’ minds. Secondly the influence of social interaction on risky choice behaviour was studied.

    Financial regulation in low-income countries

    Balancing inclusive growth with financial stability

    MF4WAForum

    MF4WAForum

     
    Professor Stephany Griffith-Jones, Overseas Development Institute

    Start date: Mar 2012   |   End date: Sep 2015

    Project webpage
    Research Council UK project page

    Event: Accra Workshop 2013
    Report: A financial sector to support development in low-income countries
    Working Paper: Institutional Challenges for Effective Banking Regulation and Supervision in Sub-Saharan Africa
    Policy essay: Challenges in implementing financial regulation in sub-Saharan Africa 
    Survey: Capital account management in low-income countries
    Policy essay: Sustaining growth and structural transformation in Africa: how can a stableand efficient financial sector help?
    Working paper: Finance and Growth in Sub-Saharan Africa: policy and research challenges
    Report: Financial Regulation in Ghana: Balancing Inclusive Growth with Financial Stability

    In the wake of the global financial crisis, many developed and developing country governments are prioritising stability at the individual financial institutions and systemic level by strengthening financial regulation.

    Even though the latter is important to make financial systems more robust, its contribution to inclusive growth might be insufficient, especially in poor countries. This research project aims to explore how the financial system should be regulated and structured to achieve the twin goals of inclusive growth and financial stability, with a focus on African low-income countries.

    The research will be structured in two phases:

    •  First, a survey of the theoretical and empirical literature on the relationships between domestic financial structures and financial regulation, domestic and external financial regulations, and their implications for inclusive growth and stability will be carried out. In the second phase, econometric analysis on trade-offs between growth and stability when tightening financial regulation will be conducted.
    • This will be complemented by in-depth country case studies by senior African researchers and focused policy analysis. Close interaction between researchers and senior policy-makers will be a feature of the project.

    Improving productivity in developing countries

    Professor Orazio Attanasio, Institute for Fiscal Studies

    Start date: Mar 2012   |   End date: Aug 2015

    Research Councils UK project page

    Working Paper: Livestock Asset Transfers With and Without Training: Evidence from Rwanda 
    NBER Working Paper: Holy Cows or Cash Cows
    Presentation: Sanitation (and research) dynamics A research agenda on sanitation and primary data collection
    Working Paper: Subjective Expectations and Income Processes in Rural India
    Working Paper: Sanitation dynamics: toilet acquisition and its economic and social implications
    Event: EDePO Conference 2015
    Video: EDePO Conference 2015 and presentation by Orazio Attanasio

    There is much evidence to show that productivity in developing countries can be extremely low, particularly for agricultural activities. Often, policy makers, practitioners and researchers have identified simple innovations and investment opportunities that would greatly improve productivity and offer a substantial rate of return but yet do not get adopted.

    The aim of this research is to identify imperfections and frictions that prevent the adoption of profitable technology and innovations or, more generally, that may impede investment opportunities with a potentially high rate of return. To achieve this, the research will use data that have been collected to evaluate a number of interventions in developing countries in order to estimate models of individual behaviour and investment choices. There will be four different projects, covering parts of Africa, India, and Pakistan.

    The use of different methods, ranging from impact evaluation to the estimation of economic (structural) models of behaviour will allow one to understand the mechanisms at play, and also for the extrapolation of what is learnt in a given context to a variety of different situations. This research is crucial for the design of policies aimed at improving productivity.