Working Paper

Markets in low-income countries often display long tails of inefficient firms and signicant misallocation. This paper studies Rwandan coffee mills, an industry initially characterized by widespread inefficiencies that has recently seen a process of consolidation in which exporters have acquired…

Since 1993, Nepal implemented one of the most ambitious and comprehensive program of decentralization of forest management in the world, widely considered as a success story in terms of participatory management of natural resources. Using quasi-experimental methods, we first quantify…

Authoritarian regimes often direct the course of electoral politics in ways that allow them to concentrate and consolidate power. This observation applies well to Pakistan and its three military regimes: Ayub, Zia, and Musharraf. The political reforms enacted by General…

We develop an approach to understand the role of autocratic land reforms to prevent democratic change. The autocrat confiscates and redistributes land in an attempt to secure his power, exploiting the endogenous social identities and loyalty in the population. The…

Political selection can be crucial to the quality of governance. Yet our general knowledge of the individual characteristics that determine who becomes a politician remains scant – primarily due to data limitations. Dal Bo and Finan (2018) emphasize how the…

Islamic countries have increasingly been exposed to western culture, through the liberalization of their media markets and rise of transnational media networks. What is the consequence of this exposure on cultural and religious behavior, given potential clashes between western norms…

This report summarizes an ongoing study of the effect of teacher rotation on student outcomes in Uganda. In the status quo, teachers are transferred (“rotated”) across schools at the discretion of district authorities. In randomized treatment schools, we incentivize teachers…

We document the following dissimilarity between patterns of selection into entrepreneurship and into exporting among Chinese entrepreneurs. Birth counties with higher population density (PD) exhibited higher levels and growth of entrepreneurship, but a lower fraction of active entrepreneurs were engaged…

Developing economies are characterized by limited compliance with government regulation, such as taxation. Resources for enforcement are scarce, but the increasing availability of digitized data and data processing technologies have the potential to improve the targeting of enforcement. Levering an…

We study judicial in-group bias in Indian criminal courts, collecting data on over 5 million criminal case records from 2010–2018. We exploit quasi-random assignment of cases to judges to examine whether defendant outcomes are affected by assignment to a judge…

Artificial Intelligence (AI) and machine learning (ML) – adaptive computer programs that can perform functions typically associated with the human mind – offer new opportunities for improving the productivity of large-scale organizations. Recent advances in data collection, systems of aggregation,…

In a field experiment spanning the entirety of two Indian states, we randomized bureaucrats’ access to a mobile phone based e-management platform for India’s flagship workfare program. We randomized which levels of the administrative hierarchy received access to the app,…

In this paper, we estimate the impact of dynastic families on local development in Pakistan’s largest province, Punjab. Toward this purpose,we compile an original database on political genealogies, which includes information aboutthe personal and family characteristics of both elected representatives…

Past research has provided evidence of clientelistic politics in delivery of program benefits by local governments (gram panchayats (GPs)), and manipulation of GP pro- gram budgets by legislators and elected officials at upper tiers in West Bengal, India. Using household…

Why do more small firms in developing countries not use the market for professional business services like accounting, marketing, and human resource specialists? Two key reasons may be that firms lack information about the availability of these services, and that…

Information barriers can prohibit trade. This paper empirically documents the existence of business-to-business information sharing between small firm traders in Lagos, Nigeria. Sharing information about availability of new products and styles is more common than sharing information about actual suppliers…

Abstract: Historical narratives suggest that general differences exist in the power structure of society between Imperial China and Premodern Europe: the Ruler enjoyed a weaker absolute power in Europe, while in China the People were more on par with the…

Abstract: Bihar is widely regarded as one of India’s poorest and most divided states. It has also been the site of many social movements that have left indelible marks on the state’s politics and identity. Little is currently known about…

Abstract: What are the determinants of news media consumption? In this paper, we investigate whether it is determined by political motives. We build a new panel dataset on Indian publications at the city level between 2002 and 2017. We exploit…

Abstract: This document is the second of two progress reports that provide an overview of the progress made on the DFID RA4 project “Social structures, political accountability, and effective public goods provision.” Our study is interested in better understanding how…

Abstract: This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay-for-performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a pay-for-percentile or fixed-wage contract. Once recruits were placed,…

Abstract: International donors and governments require contracting mechanisms that provide accountability in order to mitigate leakage and corruption in public infrastructure projects, especially when construction is outsourced to private sector contractors. This is an important goal because low-income countries spend…

Abstract: Gangs govern millions worldwide. Why rule, and how do they respond to states? Many argue that criminal rule provides protection when states do not, and that increasing state services could crowd gangs out. We began by interviewing leaders from…

Abstract: We investigate the historical origins of female genital cutting (FGC), a harmful practice widespread across Africa. We test the hypothesis -substantiated by historical sources – that FGC was connected to the Red Sea slave trade route, where women were…

Abstract: We study the role of traditional institutions of tribes and clans – large groups of people sharing an identity based on common lineage – in determining long-run differences in economic trajectories at sub-national level. Using a combination of rich…

In early September, 2020, ten days before the deadline for revisions to this volume, Colombians participated in the biggest anti-police protests in decades. Like the protests that swept the United States just months earlier, they were sparked by the heinous…

Abstract: Property taxes are in theory easy to enforce in their simplest form due to their tangible tax base, and are considered an equitable means to raise revenue in low-income countries. In spite of these features, African countries, where cities…

The practice of child marriage is ubiquitous in developing countries, where one in three girls is married before the age of 18. Although most developing countries have a legal minimum age of marriage, in practice marriage age is determined by…

Reducing crime and improving personal and communal security are crucial policy goals. The task of achieving these goals naturally falls first and foremost on a country’s police force.There is a widespread consensus that police forces are most effective in preventing…

Experimental evidence from Ghana’s civil service Abstract: Organizational culture is an important driver of organizational performance, but evidence on how to improve performance-oriented organizational cultures is scarce – especially in the public sector. We partnered with Ghana’s Civil Service to…

Abstract: In this study, we exploit a natural experiment to investigate the size and nature of the gender asset gap in Pakistan. In 2010, there was a massive flood, which affected nearly a fifth of the country, and caused a…

In this paper, we study a large scale effort to improve the information environment in a key area of legal rights: women’s rights in marriage. The degree of freedom that women enjoy over key life choices such as whether, when…

Mozambique Institutional Diagnostic Chapter 13: Synthesis and policy recommendations We now proceed to bringing together the different elements of previous chapters with the aim of presenting the essence of this country study of Mozambique. In the next section, we take…

Mozambique Institutional Diagnostic Chapter 12: Natural resources, institutions, and economic transformation in Mozambique Abstract: In the light of Mozambique’s natural resources boom—especially its large-scale investments in mining, oil, and gas—this paper analyses the prospects for the extractive industries to contribute…

Mozambique Institutional Diagnostic Chapter 11: Donor relations and sovereignty Abstract: As a sovereign country, Mozambique initially relied on international solidarity and managed its donor relations well. Donor dependency entailed some loss of agency for the government as it allowed donors…

Mozambique Institutional Diagnostic Chapter 10: Rule of law and judicial independence Abstract: The rule of law and judicial independence are a project yet to be achieved in Mozambique. The different attempts made so far to reform the legal system, mainly…

Mozambique Institutional Diagnostic Chapter 8: Decentralization reforms in Mozambique The role of institutions in the definition of results Abstract: With the introduction of the economic reforms in the late 1980s, the opening up of the political arena and the end…

Mozambique Institutional Diagnostic Chapter 7: Health, development, and institutional factors The Mozambique case Abstract: The central aim of this text is to show the impact institutions have on the performance of the health sector in Mozambique. The text shows that…

Mozambique Institutional Diagnostic Chapter 6: The education sector in Mozambique From access to epistemic quality in primary education Abstract: From the early days of national independence in 1975, the central aim of the educational policy in Mozambique has been to…

Mozambique Institutional Diagnostic Chapter 3: Institutional Performance International datasets, quantitative survey and key informants Having taken stock of the development performance of Mozambique in a historical and socioeconomic perspective in Chapter 2, we introduce in Section 2 of this chapter…

Mozambique Institutional Diagnostic Chapter 2. Historical, political and economic background Few countries have experienced as many extreme political and economic changes as Mozambique both before and after independence in 1975. ‘The combined legacies of colonialism, idealism, socialism, war fueled by…

Mozambique Institutional Diagnostic Chapter 1: Introduction and overview Authors: Ines A. Ferreira and Finn Tarp

Mozambique Institutional Diagnostic Foreword and Acknowledgements Authors: António S. Cruz, Ines A. Ferreira, Johnny Flentø and, Finn Tarp

Abstract: Most enlightenment philosophers argued that the separation between Church and State would prevent capture of resources by one state religion. We formalize and test a theory that addresses a different danger. We demonstrate that a reduction in the separation…

An Institutional Diagnostic of Bangladesh: Introduction Chapter overview: Why an institutional diagnostic? Methodological approach to the Bangladesh institutional diagnostic and the organisation of this volume A brief overview of Bangladesh’s political history The difficult installation of democracy The era of…

Bangladesh Institutional Diagnostic Chapter 11: The Synthesis Chapter overview: Introduction Identifying institutional constraints in Bangladesh’s development A sketch of Bangladesh’s political history Successes and challenges of Bangladesh’s economic development Bangladesh’s institutional performance in global rankings Bangladesh’s institutional performance based on…

Bangladesh Institutional Diagnostic Chapter 9: Institutional challenges in land administration and management in Bangladesh Chapter Overview List of tables and figures Glossary Introduction Consequences of land scarcity and inefficient land management Overview of the land laws and policies in Bangladesh…

The vital importance of institutions for economic development is widely acknowledged in both the theoretical and empirical literature. Yet the precise nature of the relationship between the two is unclear: do ‘good’ institutions produce development, or does development lead to…

Bangladesh Institutional Diagnostic Chapter 4: The country institutional survey – experts’ opinions on institutions in Bangladesh Chapter Overview List of tables and figures Introduction The CIS in Bangladesh The survey: design of the questionnaire Execution of the survey Critical institutional…

Bangladesh Institutional Diagnostic Chapter 8: Institutional challenges in public spending: the case of primary education Chapter overview: List of figures Introduction The importance of education (primary education) for development in Bangladesh The primary education sector in Bangladesh: basic performance Challenges…

Bangladesh Institutional Diagnostic Chapter 10: Political economy analysis of the role of the judiciary in land dispossession litigation in Bangladesh Chapter Overview Table of contents List of tables and figures List of abbreviations Glossary Introduction The effectiveness of the judiciary…

Bangladesh Institutional Diagnostic Chapter 7: Institutional dimensions of tax reforms in Bangladesh Chapter Overview List of tables and figures Development context The public resource mobilisation challenge Main objectives, methodology, and approach of the chapter Tax mobilisation issues in developing countries:…

Bangladesh Institutional Diagnostic Chapter 6: Political economy of private bank governance in Bangladesh Chapter Overview List of tables, figures, and boxes Introduction Review of literature on the banking sector of Bangladesh Banking sector in Bangladesh: Performance and challenges Structure of…

Bangladesh Institutional Diagnostic Chapter 5: Informal institutions, the RMG sector, and the present challenge of export diversification in Bangladesh Chapter Overview List of tables, figures, and boxes Introduction Review of the literature on export diversification Overview of the RMG and…

Bangladesh Institutional Diagnostic Chapter 3: A cross-country comparative analysis of institutional indicators: Where does Bangladesh stand? Chapter Overview List of tables and figures Introduction Constructing synthetic institutional indices Bangladesh’s position in the global ranking of synthetic institutional indices How does…

Bangladesh Institutional Diagnostic Chapter 2: Bangladesh’s Development: Achievements and Challenges Chapter Overview: List of tables and figures Introduction Sources of growth and possible limitations of the present development regime  Aggregate growth Structural transformation Remittances and foreign direct investment Infrastructure Bangladesh…

Empirical Evidence from the Community Health Worker Program in Sierra Leone Authors:  Erika Deserranno, Northwestern University, and Philipp Kastrau and Gianmarco León-Ciliotta, Universitat Pompeu Fabra Introduction:  Poor performance of frontline service providers (e.g., teachers, health workers, tax collectors) has generated…

In this research, we ask whether kinship networks help promote entrepreneurship or impede its development in the Kyrgyz Republic. We conducted a survey of firm managers/entrepreneurs about the nature of their business networks, what kinds of business and non-business resources…

Value-added tax systems across the world are afflicted with size-dependent regulations.The benefit of such regulations to the tax authority is unclear. In this paper, we use an administrative dataset from the state of Delhi in India to first show that…

This paper investigates how women’s promotions in the workplace affect bargaining in the household. I exploit the design of a promotion programme for women in 27 Bangladeshi garment factories, by comparing women who were quasi-randomly selected for the programme to…

This paper presents the introduction from the Handbook of Economic Development and Institutions published by Princeton University Press in January 2020. The book can be purchased online from Princeton University Press. Authors: Jean-Marie Baland, Francois Bourguignon, Jean-Philippe Platteau, and Thierry…

Abstract: Are ordinary citizens or political party leaders better positioned to select candidates?  While the American primary system lets citizens choose, most democracies rely instead on party officials to appoint or nominate candidates.  The consequences of these distinct design choices…

Authors: François Bourguignon, Paris School of Economics, and Samuel Wangwe, Economic and Social Research Foundation

Abstract: We report the results of a field experiment designed to promote women to supervisory positions in Bangladesh’s garment factories, with which participating factories have little prior experience. We show that formal diagnostic tests lead factories to choose candidates that…

Abstract: Does informing plaintiffs about expected case outcomes lead them to hire better quality lawyers? We conduct a randomized field experiment with the Mexico City Labor Court to provide statistical predictions and meetings with court conciliators to potential plaintiffs. Almost…

Abstract: This paper reviews the literature on aspirations in economics, with a particular focus on socially determined aspirations. The core theory builds on two fundamental principles: (a) aspirations can serve to inspire, but still higher aspirations can lead to frustration…

Abstract: This paper studies the land property rights of married women using a diagnostic survey on women’s land property rights and Village Councils in rural Tanzania (VI-LART). Women own little property independently of their husbands. This puts them at particular…

This paper elucidates the willingness of an autocrat to push through institutional reforms in a context where traditional authorities represented by religious clerics are averse to them and where the military, who have their own preferences about reforms, control the…

Abstract: Research on innovation in government often focuses on ideas introduced by senior leaders or managers, but ideas from public servants themselves are an important and underexplored channel for improving performance in government bureaucracies. We provide new evidence on the…

Abstract: This paper investigates how social norms related to land conversion may evolve to accommodate greater scarcity, by taking advantage of data collected in the Equateur Province in the Democratic Republic of Congo as well as historical events that introduced…

This publication is part of the Benin Institutional Diagnostic. Based on the descriptive analysis of the economic, social, and political context in the first part of this volume, and the various thematic studies in the second part, this final chapter…

This publication is part of the Benin Institutional Diagnostic. Summary of contents: 1 Introduction 2 Historical economic relations between Benin and Nigeria 3 Causes of informal trade: Nigeria’s pervasive distortions incentivise smuggling 4 Magnitude of entrepôt trade between Benin and…

This publication is part of the Benin Institutional Diagnostic. This chapter deals with the issue of land tenure, which has been identified by the research coordinators as one of the major institutional problems in Benin. It deals more specifically with…

This publication is part of the Benin Institutional Diagnostic. Abstract: Using a database providing information on tax revenue over the period 1980–2015, covering 42 sub-Saharan African (SSA) countries, we analyse the efforts by Benin to raise tax revenue, in regard…

This publication is part of the Benin Institutional Diagnostic. Contents: 1 Introduction 2 Analytical framework 2.1 Organisation of the cotton sector 2.2 External factors 2.3 Domestic factors 3 Historical background of cotton in Benin: 1641-1960 3.1 Pre-colonial period to 1949:…

This publication is part of the Benin Institutional Diagnostic. This chapter uses a novel database on contractual arrangements between politicians, political brokers, and businessmen in Benin to investigate the way the nature of these arrangements depends on the level of…

This publication is part of the Benin Institutional Diagnostic. This chapter aims to identify the institutional areas that most constrain Benin’s economic development, relying on expert opinion as it appears in databases that provide international comparisons of institutional and related…

This publication is part of the Benin Institutional Diagnostic. This chapter is the second part of the overview of institutional and other constraints on the development of Benin. While the first chapter focused on the geographical, historical, social, and political…

This publication is part of the Benin Institutional Diagnostic. This chapter, Chapter 1, constitutes the first part of a two-step overview of institutional and other constraints on the development of Benin. It looks at the context in which Benin’s development…

François Bourguignon provides a brief introduction to the five thematic studies undertaken for the Benin Institutional Diagnostic.

This introductory chapter the the Benin Institutional Diagnostic provides a contextual overview to the publication under five main topics: ‘Institutions matter’ How institutions matter in development policy today Searching for evidence on the quality of institutions and development Institutional diagnostic…

Abstract: The negative welfare consequences of child marriage are well established, but the phenomenon is still ubiquitous in developing countries, where one in three girls is married before the age of 18. Although most countries have a legal minimum age of marriage…

This EDI Working Paper arises from the research undertaken for a case study on “Discretion versus rule-based budgeting and assignment in Indian governments“. The study shows how political support of household heads respond to receipt of different private and public good…

This EDI Working Paper derives from research undertaken in the Case Study on ‘Community networks and industrial entrepreneurship in India and China’ by Dilip Mookherjee et al. The authors argue that community networks played an important role in the emergence of…

This paper identifies and quantifies the role played by birth-county-based community networks in the growth of private enterprise in China. We develop a network-based model that generates predictions for the dynamics of firm entry, concentration, and firm size across birth counties with varying…

Tanzania Institutional Diagnostic Chapter 8: Synthesis This chapter provides a synthesis of information and arguments developed in the first seven chapters of the Tanzania Institutional Diagnostic. Chapter outline Part 1.  The basic institutional constraints on Tanzanian development The main challenges…

Tanzania Institutional Diagnostic Chapter 7: Power Sector Chapter outline Introduction The Tanzanian power sector: structure and performance Institutional structure Power sector performance The Tanzanian power sector’s institutional development Early institutional infrastructure in the power sector – the colonial period From…

Tanzania Institutional Diagnostic Chapter 6: Land Rights Chapter outline Overview A brief historical perspective on land tenure issues Legal land tenure in Tanzania according to the 1999 Land Act Rights of occupancy Land transformation by the state and the issue…

Tanzania Institutional Diagnostic Chapter 5: Decentralization and development Chapter outline Introduction The theory of central–local government relationships The evolution of local government in Tanzania Local and central governance in Tanzania today: a complex and confusing legal framework Fiscal decentralisation: the…

Tanzania Institutional Diagnostic Chapter 4: Civil Service Chapter outline Introduction The role and political context of the civil service in economic development The transitional phase, 1961–66 The socialist phase, 1967–85 The liberalisation phase, 1986 to date Constraints to effective civil…

Tanzania Institutional Diagnostic Chapter 3: Politics and business Chapter outline Introduction Theoretical framework and methodology The early independence period: 1961–66 The situation at independence Origins of the position of Asians Development initiatives in early post-independence period Continued concern over social…

Tanzania Institutional Diagnostic Chapter 2: Tanzanian institutional strengths and weaknesses Chapter outline Introduction The Country Institutional Survey (CIS): experts’ opinions on Tanzanian institutions The survey: design of the questionnaire Execution of the survey Most critical institutions for the development of Tanzania…

Tanzania Institutional Diagnostic Chapter 1: Reflections on the political and economic development of Tanzania Chapter outline A short account of the political history of Tanzania The colonial era The German colonisation The British mandate on Tanganyika Independence Forging a nation: the…

François Bourguignon and Sam Wangwe provide an introduction to the analysis produced for the Tanzania Institutional Diagnostic. The authors outline three approaches have been developed to identify the institutional factors hindering development or ways of remedying specific factors: historical case studies;…

Where does the evidence stand on institutions, development and growth? This paper explores the empirical evidence on institutions and growth. The empirical evidence on institutions ranges from historical studies to econometric analyses, with different studies making very different theoretical commitments…

This paper provides an overview of the literature on political clientelism  and its relation to economic development. It starts by describing the range of mechanisms used by political operatives to monitor how specific voters vote in order to target clientelistic…

This paper reviews and discusses the literature on formal institutions and development. We first discuss the mapping from institutions to economic development, with the main emphasis on the effect on economic growth. We thereafter discuss two main literatures on endogenous…

Market exchange involves many cognitive and non-cognitive processes, e.g., search, inference, prediction, negotiation. Much attention has been devoted to these issues both in theory and in experimental economics. I focus on the enforcement of market transactions against opportunistic behavior. I…

This paper presents a survey of the literature on culture in economics, emphasizing the effects of culture as well as the origins of cultural development. Research finds culture to have a large set of effects on economic behaviors, outcomes and …

This paper reviews the economic literature on how family systems respond to changes in resource endowments, outside economic opportunities, the development of markets, and surrounding institutions. On topics where economic contributions are scarce, we also provide insights from other disciplines,…

Institutions are commonly defined as the rules of the game that societies play which in shared understanding act as constraints on and guidelines for economic performance. This paper provides an overview of case studies from the two largest developing countries,…

A next step forward in examining economic growth and institutions is examining the frequency, timing and magnitude of “growth episodes”—discrete accelerations and de-celerations in medium to long run growth.  This will be challenging as to the extent that very long-run…

The paper surveys the very heterogeneous economic literature on the scope and limits of efforts to match institutional constraints and needs, on the one hand, and infrastructure policy and project designs, on the other, to increase the odds of improving…

This paper reviews and synthesizes current knowledge on the role of institutions on firm financing and growth in developing countries. First, the paper presents stylized facts on the different institutional constraints under which firms in developing countries operate. Next, the…

This paper takes stock of and provides a critical review of several literatures, notably the theoretical and empirical work on finance and growth and studies on the determinants of financial development. These two literatures are linked as the sustainable expansion…

This paper provides a selective review of evidence from labor markets in low-income countries. The aim is to synthesize this literature to consolidate what is known about the key drivers of worker outcomes (including those of micro-entrepreneurs), firm behavior, and the interaction between…

A large share of children in low income countries learn little and complete their primary education lacking even basic reading, writing and arithmetic skills. We review the experimental literature on teacher effort, knowledge, and skills – areas we argue are…

The paper discusses Marx’s view on the relationship between technological change and institutional change as presented in the famous preface to A Contribution to the Critique of Political Economy.  What Marx meant by a contradiction between the base and the…

The paper focuses on the role played by Trade Related Institutions (TRIs) in shaping trade flows and their development impact in low income countries and how these TRIs are shaped by international trade. Three types of TRIs are examined: i)…

This paper surveys the literature on the two-way relationship between development aid and the quality of institutions in developing countries. Aid may improve institutions, e.g. when conditionality succeeds, but it can also have unintended effects that are typically negative, e.g….

In this review, we examine the links between economic development and social conflict. By economic development, we refer broadly to aggregate changes in per-capita income and wealth, or in the distribution of that wealth. By social conflict, we refer to…

Gender relations are a key institution governing important aspects of production and reproduction of societies. They are guided by formal institutions as well as informal norms and values. As this survey shows, there is great regional heterogeneity in gender inequality…

Environmental problems may be classified by the scale of the relevant externalities. Some externalities are primarily local, for example, those concerning the management of resources like forests, pastures and inland fisheries, or local air and water pollution. Others are mainly regional…

I ask what clues do historical and contemporary data provide for theory building and empirical work to enhance our understanding of the relationship between institutions and inequality. The survey begins with a brief overview of the role of institutions in…

Group inequality is a prominent feature of many modern democracies. The purpose of this paper is to take stock of what we know about the ways in which major democracies have viewed social groups and addressed inequalities between them. Countries…

This survey examines the relationship between community networks and migration. Adding networks to the Roy model, the workhorse model of migration in economics, is shown to reconcile key stylized facts on migration with the theory. This addition is supported by…

This paper reviews the channels through which the media can be a tool of institutional development, building the argument in two parts. First I focus on the media as a tool for accountability: by providing information on candidates ex ante,…

We present accepted basic arguments on the role of institutions in development and then discuss the corresponding empirical evidence in support (or not) of those arguments. Methodologically, our emphasis is on experimental evidence wherever available, and thematically we focus on…