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Essays on development economics.

Rud, Juan Pablo (2008) Essays on development economics. PhD thesis, London School of Economics and Political Science (United Kingdom).

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Abstract

This thesis presents three papers that contribute to the measurement and understanding of the process of economic development. In particular, I deal with issues of significant importance in the current literature in development economics: the provision and regulatory institutions of infrastructure, firms and industries' behaviour and performance, and the process of human capital accumulation and its link to gender issues. In Chapter 2 I investigate the effect of electricity provision on industrialization using a panel of Indian states from 1965-1984. To address the endogeneity of investment in electrification, I use the introduction of a new agricultural technology intensive in irrigation (the Green Revolution) as a natural experiment. As electric pumpsets are used to provide farmers with cheap irrigation water, I use the uneven availability of groundwater to predict divergence in the expansion of the electricity network and, ultimately, to quantify the effect of electrification on industrial outcomes. I present a series of tests to rule out alternative explanations that could link groundwater availability to industrialization directly or through other means than electrification. Overall, the uneven expansion of the electricity network explains between 10 and 15 percentage points of the difference in manufacturing output across states in India. In Chapter 3 I explore how firms in India cope with the erratic and expensive provision of electricity. In a model that combines upstream regulation with downstream heterogeneous firms in a monopolistic competition firework, I investigate the role of the electricity regulator's preferences and the economic environment (i.e. regulation and openness) in determining the decision to adopt a captive generator of electricity and industries' aggregate productivity. I show that a firm's productivity, the electricity regulator's disregard for the well-being of industrial producers consuming electricity and greater industry protection from competition are associated with greater adoption of captive power. The mechanisms I propose are present for a representative repeated cross-section sample of Indian firms in the 1990s, with heterogeneous effects along dimensions such as location. In Chapter 4 I investigate the effect of the Green Revolution on rural literacy and rural women's employment and literacy levels, using a panel of 254 districts for census years, before and after the introduction of the high yield variety (HYV) seeds. Even though the new technology has been shown to increase returns to education, aggregate effects on literacy are ambiguous a priori, if claims are correct that the process excluded most poor farmers and that mechanization replaced women labour and their effects are strong. I find robust evidence that the increase in adoption of the new seeds is associated with increases of around 2 percentage points in literacy levels. The effects are only present for treated cohorts. Additionally, I find no evidence of a Green Revolution related increase in the gender gap: even though results indicate that the percentages of working and literate women in rural India fall over time, a greater intensity in HYV is shown to mitigate this trend.

Item Type: Thesis (PhD)
Uncontrolled Keywords: Economics, General
Sets: Collections > ProQuest Etheses
URI: http://etheses.lse.ac.uk/id/eprint/2184

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