Rachid Laajaj

TECHNOLOGY ADOPTION IN AGRICULTURE

 

Endogenous time horizon and behavioral poverty trap: Theory and evidence from Mozambique Journal of Development Economics 2017

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This paper provides a model where a long-term planning horizon improves economic decisions but also increases the salience of anticipated future utility. Hence, a gloomy future induces the agent to shorten her time horizon in order to reduce distress caused by the anticipation of poverty, at the cost of worsening her realized future consumption, resulting in a behavioral poverty trap where poverty and shortsightedness reinforce each other. The paper also provides primary empirical evidence of the endogenous determination of time horizon and of the existence of a behavioral poverty trap. Using a randomized controlled trial in Mozambique that provided agro-input subsidies and a Matched Savings program, I show that improvement in economic prospects resulted in a significant increase in the planning horizon of the poor beneficiaries. Moreover, the increase in horizon significantly predicts asset accumulation of beneficiaries during the two years following the intervention.

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Subsidies and the African Green Revolution: Direct Effects and Social Network Spillovers of Randomized Input Subsidies in Mozambique (with Michael Carter and Dean Yang)

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The Green Revolution bolstered agricultural yields and rural well-being in Asia and Latin America, but bypassed sub-Saharan Africa. We study the first randomized controlled trial of a government-implemented input subsidy program (ISP) in Africa. A temporary subsidy for Mozambican maize farmers stimulates Green Revolution technology adoption, and effects persist in later unsubsidized years. Social networks of subsidized farmers benefit from spillovers, experiencing increases in technology adoption, yields, and expected returns to the technologies. Spillovers account for the vast majority of subsidy-induced gains. ISPs alleviate informational market failures, stimulating learning about new technologies by subsidy recipients and their social networks.

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Directed vs. Enabling Interventions: A Study of Subsidies and Savings in Rural Mozambique (with Michael Carter and Dean Yang)

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Abstract Two broad types of development interventions are common. Directed interventions seek to facilitate a defined action, such as fertilizing crops. Enabling interventions expand beneficiaries’ abilities to mobilize scarce resources with some degree of flexibility; financial services interventions are key examples. Depending on the underlying market failures, one or the other type of intervention may be optimal, and there may be complementarities from combining both. In a randomized controlled trial in rural Mozambique, we compare the impacts of directed (fertilizer subsidy) and enabling (savings) interventions, separately and in combination. While the directed fertilizer subsidy intervention has positive and sustained impacts (on fertilizer use), our results provide greater support for enabling interventions. The enabling (savings) intervention has positive impacts on savings. Tellingly, households assigned only to the savings program do not choose to invest in fertilizer. Households receiving both interventions initially raise their fertilizer use, but when exposed to the savings program they reduce their fertilizer use and divert resources to savings. Our results underscore the value of interventions (like financial services) that allow beneficiaries freedom of action, and raise cautions about interventions focusing on narrow, targeted activities.

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Customer Training Externalities and Technology Adoption: A Field Experiment on Formal Savings in Mozambique (with Dean Yang)

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When customers have poor information about new technologies, training or education about the technology can increase adoption. We argue that private providers of the technology may have insufficient incentives to provide such training, due to positive information externalities: training by one firm also increases demand for the technology from other sellers, so that the training-provider captures only part of the gains. Free-riding (under-provision of training) and low adoption can result from this externality. We study these issues in the context of banks training customers on formal savings technologies in rural Mozambique. We partnered with a local bank and randomly assigned training on the use and benefits of formal savings accounts. The training treatment leads to higher technology adoption (savings accumulation) at the partner bank, but also has large positive externalities, in the form of higher savings accumulation at other banks. The externality is large in magnitude: other banks, in aggregate, see higher savings balance increases than the bank providing training. As predicted by a simple model, the externality impacts rise in magnitude with geographic proximity to other banks. Customer training externalities provide a rationale for public subsidy or cross-provider collaboration in information provision to promote new technologies.

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Yield gap or field gap? Reconciling yield gains in agronomic trials and African smallholder conditions (with Karen Macours, Cargele Masso, Moses Thuita and Bernard Vanlauwe) Scientific Reports 10, 14286 (2020)

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Increased adoption of improved agricultural technologies is considered key for addressing global poverty and hunger, and agronomic trials suggest intensification in developing countries could result in large yield gains. Yet the promise of new technologies does not always carry over from trials to real-life conditions, and diffusion of many technologies remains limited. We offer a new explanation for this puzzle, and show how plot and farmer selection, together with behavioural responses in agronomic trials, can explain why yield gain estimates from trials may not be experienced as such by average smallholders under real-life conditions. We provide quantitative evidence by exploiting variation in farmer selection and detailed data collection from research trials in Western Kenya on which large yield increments were observed from improved input packages.  After adjusting for selection, behavioural responses, and other corrections, estimates of yield gains fall to zero for one input package but remain high for the other. Also, estimates of yield levels are 45% to 59% lower and close to farmers’ own yields. These results suggest that testing new agricultural technologies in real-world conditions and without researcher interference early in the agricultural research and development process is key to guide both diffusion efforts and future research directions.

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CORRUPTION

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Oil, governance and the (mis)allocation of talent in developing countries (with Christian Ebeke and Luc Désiré Omgba, Journal of Development Economics 2015) press

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This paper sheds light on the relationship between oil rent and the allocation of talent, toward rent-seeking versus more productive activities, conditional on the quality of institutions. Using a sample of 69 developing countries, we demonstrate that oil resources orient university students toward specializations that provide better future access to rents when institutions are weak. The results are robust to various specifications, datasets on governance quality and estimation methods. Oil affects the demand for each profession through a technological effect, indicating complementarity between oil and engineering, manufacturing and construction; however, it also increases the ‘size of the cake’. Therefore, when institutions are weak, oil increases the incentive to opt for professions with better access to rents (law, business, and the social sciences), rather than careers in engineering, creating a deviation from the optimal allocation between the two types of specialization.

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The Costs of Bureaucracy and Corruption at Customs: Evidence from the Computerization of Imports in Colombia (with Marcela Eslava and Tidiane Kinda) Journal of Public Economics (2023), 225, p.104969.

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Customs face a difficult tradeoff between, on one side, collecting tariff revenues and preventing smuggling, and on the other side, avoiding creating additional barriers to trade. Customs also tend to concentrate discretionary power in the hands of officials whose decisions can bear high costs for the firms, creating room for rent extraction. In this context, information technologies can limit direct interactions, reduce transaction costs and allow local businesses to better take advantage of the benefits of international trade. We assess the effects of the computerization of import transactions on plants' growth in Colombia. The reform occurred sequentially in the different customs between 2000 and 2005, allowing us to use a triple-difference strategy, comparing the change in outcome variables of firms that were importing before the beginning of the reform, to the one of firms that were not importing (and are thus less affected by changes at customs). We find that the computerization of imports led to an increase of 6 log points in the firms' value added along with consequent increases in employment, productivity and tax collection at customs. However, it generated winners (importing firms) and losers (non-importing firms). Our investigation of the channels reveals a reduction in corruption judiciary cases at treated customs, as well as a reduction of time to clear customs and its unpredictability. Our results provide new evidence that the systematization of customs can be highly beneficial for the economy and supports growing evidence of the high potential impact of proper use of information technologies to improve efficiency and tackle corruption in public administration.

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Natural resources, rent-seeking and career choice, evidence from the redistribution of royalties across Colombia (with Cristhian Acosta)

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In this paper we show quasi-experimental evidence on how the rent from natural resources affects the allocation of a country’s most valuable resource: human capital. In 2011, Colombia announced a reform that completely shifted the distribution of royalties from hydrocarbons among municipalities from one that mostly fell into the hands of the producers to one that is much more widespread across all municipalities in the country. We investigate the effect of this sudden change in royalties on university students’ career choices. Following previous literature, we classify careers into engineering and management (business, accounting, law and economics). Management careers are more likely to lead to government positions and to benefit from both formal and informal windfalls from the natural resources. We use both differences-in-differences and an instrumental variable approach that makes use of the exogenous variation in royalties generated by the reform. We show that an exogenous increase in royalties leads to an increase in students opting for management compared to engineering and that this effect is significantly stronger in municipalities with more corruption allegations in the years before the reform, raising concerns that the choice is partly driven by rent-seeking opportunities. Our findings provide new micro-evidence of one of the most detrimental consequences of corruption: it diverts the best talents away from productive activities towards activities with better rent-seeking opportunities, an effect that increases with the size of the cake offered by natural resources.

 

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HUMAN CAPITAL

 

Equality of Opportunity and Human Capital Accumulation: Motivational Effect of a Nationwide Scholarship in Colombia (with Andres Moya and Fabio Sanchez) press: Foco Economico & Silla Vacia 

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We study the ex ante motivational effect of a nationwide merit and need-based scholarship in Colombia, which granted full scholarships to low-income students at high-quality universities. Specifically, we analyze how the opportunity to receive the scholarship, influenced the performance of low-income students in the national high-school exit and 9th grade exams, and their university enrollment rates. Following a differences-in-discontinuity design, we find that the opportunity to receive the scholarship significantly increased test scores at the national high school exit exam at the top of the distribution. At the 90th percentile of the distribution, eligibility for the scholarship reduced the socioeconomic achievement gap by 16 percent. We also document an increase in the post-secondary enrollment of low-income students at the top of their score distribution, even for the non-recipients of the scholarship. Finally, we estimate a positive effect on the test scores of younger 9th grade students, affecting a broader range of the distribution. Our results highlight how opportunities for social mobility encourage human capital accumulation by low-income students, thus contributing to breaking the persistence of poverty and inequality.

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Measuring Skills in Developing Countries 2021 (with Karen Macours) Journal of Human resources, 56(4), pp.1254-1295.  Online Appendix, VoxDev, Replication file 

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Measures of cognitive, non-cognitive, and technical skills are increasingly used to analyse the determinants of skill formation or the role of skills in economic decisions in developing and developed countries. Yet in most cases, these measures have only been validated in high-income countries. This paper tests the reliability and validity of some of the most commonly used skills measures in a rural developing context. A survey experiment with a series of skills measurements was administered to more than 900 farmers in western Kenya, and the same questions were asked again after three weeks to test the reliability of the measures. To test predictive power, the study also collected information on agricultural practices and production during the four following seasons. The results show the cognitive skills measures are reliable and internally consistent, while technical skills are difficult to capture and very noisy. The evidence further suggests that measurement error in non-cognitive skills is non-classical, as correlations between questions are driven in part by the answering patterns of the respondents and the phrasing of the questions. Addressing both random and systematic measurement error using common psychometric practices and repeated measures leads to improvements and clearer predictions but does not address all concerns. We replicate the main parts of the analysis for farmers in Colombia and obtain similar results. The paper provides a cautionary tale for naïve interpretations of skill measures. It also points to the importance of addressing measurement challenges to establish the relationship of different skills with economic outcomes. Based on these findings, the paper derives guidelines for skill measurement and interpretation in similar contexts

 

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Challenges to Capture the Big Five Personality Traits in non-WEIRD populations (with Karen Macours, Daniel Alejandro Pinzon Hernandez, Omar Arias, Marta Rubio-Codina and Renos Vakis) Science Advances, 10 jul 2019; eeaw5226

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Can personality traits be measured and interpreted reliably across the world? Their broad acceptance and increasingly common use across social sciences suggests that researchers believe they can. Yet few attempts have been made to validate Big Five measures outside of White Educated Industrialized Rich and Democratic populations (WEIRD). Adopting a comprehensive psychometric approach to analyze 29 face-to-face surveys from 94,751 respondents in 23 low and middle-income countries, we show that commonly used personality questions generally fail to measure the intended personality traits and do not pass common validity tests. We contrast these measures with those obtained from 198,356 self-selected respondents of internet surveys from the same countries, which show much higher validity. We then discuss how specific challenges regarding the response patterns, enumerator interactions, low education levels and limited understanding of abstract questions can jeopardize personality measures when they are collected on large samples in survey conditions. Our results highlight the risk of misinterpreting big five data from low and middle-income countries and provide a warning against naive interpretations of personality traits without evidence of its validity in the data.

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