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Essays in development economics

Deserranno, Erika (2015) Essays in development economics. PhD thesis, London School of Economics and Political Science.

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This thesis contains three chapters that fall under the broad banner of development economics, with a particular focus on the study of mechanisms and strategies that improve public goods delivery. The first chapter studies the role of financial incentives as signals of job attributes when these are unknown to potential applicants. I create experimental variation in expected earnings and use it to estimate the effect of financial incentives on candidates’ perception of a newly created health worker position in Uganda and, through this, on the size and composition of the applicant pool. I find that more lucrative positions are perceived as entailing a lower positive externality for the community, and discourage agents with strong prosocial preferences from applying. While higher financial incentives attract more applicants and increase the probability of filling a vacancy, they hamper retention and performance. This is because the signal they convey reduces the ability to recruit the most socially motivated agents, who are found to stay longer on the job and to perform better. The second chapter analyzes the role of social connections on the targeting choices of delivery agents. During the expansion of an agriculture extension program in Uganda, we randomly selected one delivery agent out of two eligible candidates per community. We find that social connections matter: relative to farmers connected only to the non-selected candidate, those connected only to the selected delivery agent benefit more from the program. They are indeed more likely to receive advice, training and more likely to adopt improved seeds, a new beneficial technology. We show that these results are consistent with delivery agents (a) putting positive weight on the utility of farmers connected to them (altruism) and (b) putting a negative weight on the utility of farmers connected to the rival candidate (spite). This sheds light on the importance of both positive and negative social preferences in shaping program delivery. The third chapter studies the effect of movement restrictions on education. The evidence is based on the construction of the West Bank Separation Barrier in 2003. The exposure of an individual to the Barrier is determined both by her locality of residence and by whether she was in school or about to start school when the Barrier was built. Using a difference-indifferences approach, I find that movement restrictions increase the probability of dropping out from elementary and preparatory school by 3.7 and 6 percentage points respectively, i.e. a 50% increase relative to localities with no movement restrictions, while the proportion of children who have never attended school increased by 3.6 percentage points. Among all households, the poorest ones are the most affected, indicating that movement restrictions not only deteriorate the average education level but also increase income inequality.

Item Type: Thesis (PhD)
Additional Information: © 2015 Erika Deserranno
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Departments > Economics
Supervisor: Burgess, Robin and Bandiera, Oriana

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