Lin Ma, Gil Shapira, Damien de Walque, Quy-Toan Do, Jed Friedman, Andrei Levchenko, 19 July 2021

There has been ongoing debate over what type of lockdowns are warranted to counter Covid-19 and whether the benefits justify the accompanying economic contractions. This column uses a macro-susceptible-infected-recovered model to show that the impact of economic contractions on child mortality in poorer countries combined with their younger demographic composition, as well as the greater community-related transmission and lower healthcare capacity in these countries, mean that under certain circumstances, lockdowns could actually increase overall (COVID-19 plus non-COVID-19) mortality for the lowest-income countries.

Simeon Djankov, Eva (Yiwen) Zhang, 09 July 2021

The economic shock triggered by Covid-19 shut down thousands of businesses and cost millions of workers their jobs. The goal of government response to this shock was simple: keep the lights on for as long as possible. This column describes how while some advanced economies have moved ahead with changes in their bankruptcy law to make it easier for distressed companies to keep running, developing countries have not reformed their procedures. A possible solution is to devise policies that reduce the share of the informal economy and put more pressure on reforming formal institutions.

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This workshop aims to bring together leading US- and Europe-based researchers with a specific focus on developing countries, working in the fields of:

  • Political Economy
  • Economics of Conflict
  • Firms and Organizations in Developing Countries

Speakers and Programme:

  • 2:00 to 2:45 pm: Michele Di Maio (La Sapienza University Rome)
  • 2:45 to 3:30 pm: Pamela Medina Quispe (University of Toronto)
  • 3:30 to 3:40 pm: Break
  • 3:40 to 4:25 pm.: Lavinia Piemontese (ENS de Lyon)
  • 4:25 to 5:10 pm: Vasily Korovkin (CERGE-EI)
  • 5:10 to 5:20 pm: Break
  • 5:20 to 6:05 pm: Jonas Hjort (Columbia University and CEPR
  • 6:05 to 6:50 pm: Tarek Ghani (Olin Business School)

To attend the online event, please register your interest via the zoom registration page.

Organizers:

  • Mathieu Couttenier (ENS de Lyon and CEPR)
  • Lavinia Piemontese (ENS de Lyon)

Alex Armand, Ivan Kim Taveras, 11 April 2021

When discussing the socioeconomic effects of climate change, little attention has been given to the role of the ocean. This column presents new evidence of the effect of ocean acidification on early-childhood mortality in low- and middle-income countries. Small increases in exposure to water acidity while in utero have significant effects on neonatal mortality. A closer look at possible mechanisms highlight the role of the ocean for nutrition and how overfishing represents an additional threat.

Charles Gottlieb, Jan Grobovšek, Markus Poschke, Fernando Saltiel, 18 March 2021

The ability to work from home, which has proved crucial to the resilience of labour markets during the Covid-19 pandemic, may have shifted employment patterns permanently. Data on this shift have thus far come largely from advanced economies. This column proposes a measure of the ability to work from home in low- and middle-income countries. It indicates that fewer than 10% of urban jobs in developing countries can be done remotely, and in particular workers in low-wage occupations and the self-employed have fewer opportunities to work from home.

Rafael Dix-Carneiro, Pinelopi Goldberg, Costas Meghir, Gabriel Ulyssea, 05 March 2021

Shifts into and out of the informal sector are important margins of labour market adjustment to economic shocks, particularly in developing countries. This column develops a structural equilibrium model of trade and informality to study the effects of trade openness on unemployment, welfare, productivity, and wage inequality. Higher trade openness leads to strong positive effects on aggregate welfare and productivity, decreases in overall wage inequality, and moderate increases in unemployment. Modelling the informal and non-tradable sectors is crucial to reaching a comprehensive understanding of the effects of trade in developing countries.

Avinash Persaud, 23 February 2021

The switch to renewable energies is necessary for humanity’s future, but it is currently too slow. For developing countries, the critical obstacle is the pricing, ownership, land-use and approval processes renewable projects have to go through. This column argues that to bring dividends for sunnier, developing countries, provide more projects for green investors, and for some redemption for the rest of humanity, countries should (1) streamline the approval process, (2) broaden the ownership of assets through mandated initial public offerings and small-investor allocations while supporting big foreign investors in the short-run, and (3) offer an attractive feed-in tariff that predictably ratchets down in favour of consumers once investors reach their return threshold.

Pierre Dubois, Yassine Lefouili, Stephane Straub, 30 January 2021

Patients in the developing world often face prices for essential medicines far in excess of international reference levels, even if those drugs have lost patent protection. This column presents evidence from seven low- and middle-income countries with diverse drug procurement systems to assess the effect of centralised procurement on drug prices. The results of the study highlight that centralised procurement of drugs by the public sector leads to lower prices, but that the induced price reduction is smaller when the supply side is more concentrated.

Roberto Bonfatti, Steven Poelhekke, 03 December 2020

Africa’s interior-to-coast roads are well placed to export natural resources, but not to support regional trade. Are they the optimal response to geography and comparative advantage, or the result of suboptimal political distortions? This column investigates the political determinants of road paving in West Africa in 1965–2014. Autocracies focused more than democracies on connecting metal and mineral deposits to ports, resulting in more interior-to-coast networks. This deposit-to-port bias was only present for deposits located on the elite’s ethnic homeland, suggesting that Africa’s interior-to-coast roads were the result of ethnic favouritism by autocracies.

Federico Di Pace, Luciana Juvenal, Ivan Petrella, 28 November 2020

The abrupt movements in commodity prices at the onset of the Covid-19 crisis have reignited policymakers’ concerns over movements in the terms of trade. The shock has certainly confirmed that terms of trade are very volatile and extremely sensitive to changes in global economic activity. This column argues that these terms of trade shocks are likely to have a persistent impact on the business cycle of developing economies, which are particularly vulnerable to fluctuations in the price of their exports.  

Ravi Kanbur, 21 September 2020

From the public discourse, it seems clear that we are living in an age of rising inequality. However, common measures of income and consumption inequality disguise a more nuanced pattern of inequality change across the world. This column argues that inequality within countries has not been rising everywhere and that inequality between countries has decreased. At the same time, technological progress is increasingly displacing basic labour in favour of skilled labour and capital, across borders, and widening the wage gap. The overall effect is unclear. National policies to mitigate inequality are needed but, in the absence of international cooperation, are constrained by cross-border spillovers.

Emmanuelle Auriol, Julie Lassébie, Amma Panin, Eva Raiber, Paul Seabright, 19 September 2020

The Pentecostal church is one of the fastest-growing segments of Christianity, including in sub-Saharan Africa. The church makes a strong and explicit link between ‘giving to God’ and future wellbeing; donations can be seen as a form of insurance for the future. This column tests how formal market-based insurance affects the demand for informal church-based insurance in Accra, Ghana. People enrolled in a formal insurance policy give less money to their church and to other charitable organisations.

Thorsten Beck, Mohammad Hoseini, 28 August 2020

The high degree of informality in developing countries means most low-income workers have not been able to work from home during the Covid crisis or benefit from employment protection. Despite limited fiscal space and limited access to international financial markets, many developing country governments have implemented support programmes for households and firms. This column assesses the impact of an emergency household loan programme in Iran on consumption. It finds that the loans are positively related with higher consumption of non-durable and semi-durable goods, with no significant effect on the consumption of durables or asset purchases, suggesting that the emergency loans were predominantly used for their intended purpose.

Gaston Gelos, Umang Rawat, Hanqing Ye, 20 August 2020

Emerging markets and developing countries are particularly vulnerable to economic shocks such as that posed by COVID-19, not least because of their often weaker monetary policy frameworks. This column discusses the extent to which these economies have been able to react to the crisis with a loosening of monetary policy. While the initial inflation level is an important determinant of a country’s ability to cut rates, additional institutional factors can also affect their ability to conduct countercyclical monetary policy during the crisis.   

Walker Hanlon, Casper Worm Hansen, Jake Kantor, 15 July 2020

Temperature can affect human health and mortality. Historical evidence on the changing relationship between temperature and mortality may be useful in today’s world as we consider adaptive strategies to face global warming. This column uses detailed weekly mortality data from London for 1866–1965 to examine how the temperature-mortality relationship changed as the city developed. In 1866–1914, high-temperature events increase mortality for several weeks, but much of the effect of high temperatures on mortality has disappeared after WWI. The change is linked to the significant reduction in infant digestive disease around 1900.

Caitlin Brown, Martin Ravallion, Dominique van de Walle, 27 June 2020

Recommendations to limit the spread of COVID-19 call for social distancing, washing, and access to information and treatment. However, people need to be in household environments that allow them to follow those recommendations. This column examines the relationship between poverty and the adequacy of the home environment. There is a strong wealth effect both within and between countries, where the poor are less likely to have the kind of dwellings and infrastructure to follow WHO recommendations. Complementary policies to address such inadequate home environments are needed.

Titan Alon, Minki Kim, David Lagakos , Mitchell VanVuren, 26 June 2020

The COVID-19 pandemic has led to dramatic policy responses in most advanced economies, and in particular sustained lockdowns matched with sizable transfers to workers. This column discuss the extent to which developing countries should try to replicate these policies. Due to differences in labour market informality, fiscal capacity, healthcare infrastructure, and demographics, blanket lockdowns appear less effective in developing countries. Age-targeted policies – where the young are allowed to work while the old are shielded from the virus – can potentially save both more lives and livelihoods.

Simeon Djankov, Ugo Panizza, 22 June 2020

At the beginning of the COVID-19 pandemic, it was hoped that warm weather and younger populations would shield many developing countries from the virus. This hope has not been in realised. Infected cases in Africa, South Asia and Latin America are still growing, with Latin America having surpassed the number of cases in Europe and growing rapidly. This column introduces a new eBook that describes the early work focusing on developing and emerging markets. It concludes that the international community should step up, by providing aid, technical assistance and debt relief so that countries will not need to decide between saving lives and servicing their debts.

Ken Mayhew, Samuel Wills, 18 June 2020

Inequality within most developed countries is higher today than it was 30 years ago. Growth in emerging economies has reduced inequality between nations, but the benefits have been unevenly spread within those economies. This column analyses what has happened, why we should care, and what can be done about inequality. Governments have not focused enough on pre-market policies that prevent inequality arising in the first place. Post-market interventions should be seen as too little, too late. Instead, we need a call-to-arms for governments to re-focus on the deep underlying drivers of inequality.

Ramanand Jeeneea, Kaviraj Sharma Sukon, 09 May 2020

The government of Mauritius responded early to the COVID-19 pandemic with stringent lockdown measures and saw a drastic reduction in new cases. This column examines the Mauritian response and estimates that the measures led to an 80% reduction in the coronavirus transmission rate. A well-implemented and early ‘hard lockdown’ can be effective in managing the spread of COVID-19.

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