Mortality risks and child labor

In this paper, we investigate the role of young adult mortality on child labor and educational decisions. We show that, in the absence of appropriate insurance mechanisms, the level of child labor is inefficient. It may be too high if parents are not very altruistic and anticipate positive transfers from their children in the future, but it can also be too low, in particular when parents expect to make positive transfers to their children in the future. Imperfect capital markets unambiguously increase the equilibrium level of child labor. We also show that a cash transfer conditional on child’s schooling can always restore efficiency regarding child labor.

On the Distributive Impact of Privatizing the Commons: The Case of Renewable Resources

The privatization of a natural resource is often proposed as a solution to the degradation of natural resources under open access, known as the Tragedy of the Commons. However, this efficiency improvement may come at a distributional cost (Weitzman, 1974) as traditional users of the resource lose income and employment unless they are given a large enough share of the property rights. The present paper demonstrates that, in the case of renewable resources, traditional users may gain from privatization even if they are denied ownership of the resource. Indeed, a private owner maximizes profits by preserving the resource, which results in long-term increases in employment. Hence, the short term losses to traditional users from lower labor demand and loss of rent, must be weighted against the long term gains from employment creation. We also derive the conditions under which privatization is Pareto-improving, benefiting both the new and traditional owners of the natural resource.Renewable resources, Common access, Privatization, Employment Creation

Awareness and AIDS: A Political Economy Model

We present a simple political economy model that explains two major puzzles of government policies to combat HIV/AIDS epidemic: the lack of policy response in many countries where the epidemic is massive and the reversal of the downward trend in HIV prevalence in the countries that have adopted early agressive prevention campaigns. The model builds on the assumption that the unaware citizens impose a negative externality on the aware by increasing the risk of contagion. Prevention campaigns raise awareness of the current generation, which then partially transmit this awareness to the next generation, thus creating political support for the next-period awareness campaigns. The economy has two steady-state equilibria: the "good" one (with high awareness and low prevalence) and the "bad" one (low awareness, high prevalence). The "good" equilibrium is fragile, i.e. a sufficiently large exogenous drop in HIV prevalence undermines the next-generation political support for campaigns and makes the economy drift away towards the "bad" equilibrium.HIV/AIDS, voting, overlapping generations, awareness

Commons as Insurance and the Welfare Impact of Privatization

It is shown here that despite the efficiency gains from privatization, when markets are incomplete, all individuals may be made worse off by privatization, even when the resource is equitably privatized. Such market incompleteness is common in the developing world and can explain the often encountered resistance to efficiency enhancing privatizing reforms, especially in the case of village level landholdings and forests. The advantage of commonly held property arises because of its superior insurance properties (which tend to provide income maintenance in low states). Sufficient conditions are established under which any feasible insurance scheme under private property cannot ex ante Pareto dominate allocations under the commons.common property, privatisation, insurance

The Economics of Roscas and Intra-Household Resource Allocation

This paper investigates individual motives to participate in rotating savings and credit associations (roscas).Detailed evidence from roscas in a Kenyan slum (Nairobi) suggests that most roscas are predominantly composed of women, particularly those living in a couple and earning an independent income. To explain this phenomenon, we propose an argument based on conflictual interactions within the household.Participation in a rosca is a strategy a wife employs to protect her savings against claims by her husband for immediate consumption.The empirical implications of the model are then tested using the data collected in Kenya.Rosca;Gender;Household

Socially Disadvantaged Groups and Microfinance in India

In this paper we provide an empirical analysis of the performance of microfinance groups, known as Self-Help groups, based on an original census we carried out in a poor area of Northern India. We examine whether traditionally disadvantaged villagers, such as members of lower castes or landless farmers, are less likely to have access to groups. We also analyze their performance in terms of access to bank loans, which is an important benefit of the groups. We nd evidence of the attrition process being selective against lower castes: they have a lower probability of becoming a permanent member of a group. The net effects in terms of their expected access to a bank loan remain however relatively limited. By contrast, even though landless farmers are more likely to fail or leave the groups, they tend to benet disproportionately. In expected terms, they receive more than two times the amounts of bank loans given to farmers owning more than one acre. Overall, the program therefore has positive and important distributional implications.

Titan's Obliquity as evidence for a subsurface ocean?

On the basis of gravity and radar observations with the Cassini spacecraft, the moment of inertia of Titan and the orientation of Titan's rotation axis have been estimated in recent studies. According to the observed orientation, Titan is close to the Cassini state. However, the observed obliquity is inconsistent with the estimate of the moment of inertia for an entirely solid Titan occupying the Cassini state. We propose a new Cassini state model for Titan in which we assume the presence of a liquid water ocean beneath an ice shell and consider the gravitational and pressure torques arising between the different layers of the satellite. With the new model, we find a closer agreement between the moment of inertia and the rotation state than for the solid case, strengthening the possibility that Titan has a subsurface ocean.Comment: 11 pages, 4 figure

The prime spectra of relative stable module categories

For a finite group G and an arbitrary commutative ring R, Broué has placed a Frobenius exact structure on the category of finitely generated RG-modules by taking the exact sequences to be those that split upon restriction to the trivial subgroup. The corresponding stable category is then tensor triangulated. In this paper we examine the case R = S/tn, where S is a discrete valuation ring having uniformising parameter t. We prove that the prime ideal spectrum (in the sense of Balmer) of this ‘relative’ version of the stable module category of RG is a disjoint union of n copies of that for kG, where k is the residue field of S

Governance and Development

In this paper we discuss whether or not `governance' is an important source of variation in development experiences. We draw four main conclusions. First, governance is best thought of a sub-set of `institutions' and as such emphasis on governance is consistent with much recent academic work. Nevertheless, governance is a quite vague rubric which it is difficult to unbundle. Second, the governance of a society is the outcome of a political process and as such is closely related to the literature on the political economy of development. Third, improving governance necessitates understanding the nature of the entire political equilibrium. Finally, an important research frontier is understanding the forces that create or impeded endogenous changes in governance.