Democracies, politics and arms supply: A bilateral trade equation

Throughout the XXth century arms have not only been tradable goods, but also foreign policy instruments. This paper focuses on countries supplying major conventional weapons (MCW), and investigates whether changes in political conditions impact the quantity of MCW supplied to third countries. In particular, I concentrate on democratic exporters and estimate a gravity-type panel TOBIT for the years 1975-2004. Results suggest that the exporter's chief executive being right-wing has a positive and significant impact on MCW exports. This may reect a general right-wing tendency to support national industry and deregulate heavy industry exports. I also find that higher political competition is associated with higher MCW exports, and that executives serving the last year of their current term tend to increase MCW exports if they cannot be re-elected, and to decrease MCW exports if they run for re-election.arms trade ; politics ; gravity-type equation

The network structure of mutual support links: Evidence from rural Tanzania

This paper takes a network perspective t oinvestigate how rural households in developing countries form the links through which they provide and get economic support. I test the hypothesis that indirect contacts (e.g. friends of friends) matter for link formation. An estimation procedure of a network formation model à la Jackson and Wolinsky (1996) is proposed and applied to data on a single village in Tanzania. Results show that when agents evaluate the net advantage of forming a link they also consider the wealth and the position of indirect contacts. The network externalities from indirect contacts are negative, which suggests a mechanism of competition over scarce resources. This paper proposes the first structural estimation of an endogenous network formation model, and also contributes to the development literature by overcoming the dyadic regression approach and providing evidence that village-level network structure has an explanatory value disregarded by all previous studies.mutual support ; network formation ; structural estimation ; indirect contacts

Testing Unilateral and Bilateral Link Formation

The literature has shown that network architecture depends crucially on whether links are formed unilaterally or bilaterally, that is, on whether the consent of both nodes is required for a link to be formed. We propose a text whether network data is best seen as an actual link or willingness to link and, in the latter case, whether this link is generated by an unilateral or bilateral link formation process. We illustrate this testing using survey answers to a risk-sharing question in Tanzania. We find that the bilateral link formation model fits the data better than the unilateral model, but the date are best interpreted as willingness to link rather than an actual link. We then expand the model to include self-censoring and find that models with self-censoring fit the data best.network architecture; pairwise stability; risk sharing

Educational attainment and selection into the labour market: The determinants of employment and earnings in Indonesia

This paper uses household survey (Sakernas) data from 2004 to estimate the determinants of earnings in Indonesia, a country where non-salaried work is widespread and where earnings data are available for salaried employees only. We deal with the selection bias by estimating a full-information maximum likelihood system of equations, where earnings are observed for salaried employees, and selection into the labour market is modelled in a multinomial setting. We also deal with reverse causality between educational attainment and earnings by instrumenting years of schooling in both the multinomial selection and the earnings equations. Our identification strategy, following Duflo (2001), uses information on exposure to a large-scale school construction programme implemented in the 1970s. Duflo recognizes that schooling may affect an individual's probability of working as a salaried employee, which creates a simultaneity bias, but does not directly deal with this issue. We find that the parameters of the earnings equation estimated under multinomial selection differ from standard OLS estimates, which ignore the selection bias, and from a binomial selection procedure "à la Heckman" (1979). In particular, the estimated parameters that vary the most are those related to the variables with the strongest impact on individual selection into the different labour-market statuses. We also find that workers with higher educational attainment are most likely to find a job as salaried employees, and that non-salaried work is as an alternative to inactivity.Indonesia ; employment ; earnings ; multinomial selection

Democracies, politics and arms supply: A bilateral trade equation

Throughout the XXth century arms have not only been tradable goods, but also foreign policy instruments. This paper focuses on countries supplying major conventional weapons (MCW), and investigates whether changes in political conditions impact the quantity of MCW supplied to third countries. In particular, I concentrate on democratic exporters and estimate a gravity-type panel TOBIT for the years 1975-2004. Results suggest that the exporter's chief executive being right-wing has a positive and significant impact on MCW exports. This may reect a general right-wing tendency to support national industry and deregulate heavy industry exports. I also find that higher political competition is associated with higher MCW exports, and that executives serving the last year of their current term tend to increase MCW exports if they cannot be re-elected, and to decrease MCW exports if they run for re-election.La politique peut influencer les ventes d'armes de plusieurs façons et l'histoire indique qu'elle le fait réellement : tout au long du XXème siècle les armes ont non seulement été des marchandises commercialisables mais également des instruments de politique extérieure. Ce document se concentre sur des pays fournissant des armes conventionnelles majeures (ACM) et étudie si l'orientation politique du gouvernement en place a une importance sur la politique d'exportation d'armes. En particulier, je me concentre sur les pays démocratiques exportateurs pour vérifier comment l'orientation politique, de droite ou de gauche, a un impact sur la quantité d'armes fournis aux pays tiers. A cette fin, une équation de commerce bilatéral est estimée pour les années 1975-2004, en appliquant un modèle TOBIT en panel. Les résultats suggèrent que l'éxecutif d'un pays exportateur de droite a un impact positif et significatif sur les exportations d'ACM. Ceci peut refléter une tendance générale de droite d'abaisser les barrières douanières, avec des conséquences sur la derégulation des exportations de l'industrie lourde ou un appui économique vers le secteur de l'armement comme composante de l'industrie nationale

Testing unilateral and bilateral link formation

We propose a test of whether self-reported network data is best seen as an actual link or willingness to link and, in the latter case, whether this link is generated by an unilateral or bilateral link formation process. We illustrate this test using survey answers to a risk-sharing question in an African village. We find that bilateral link formation fits the data better than unilateral link formation, but the data are best interpreted as willingness to link rather than an actual link. We then expand the model to include self-censoring and find it to fit the data significantly better than willingness to link. This suggests that, in our data, the data generating process behind self-reported links is a hybrid between an actual link and willingness to link.network architecture ; pairwise stability ; risk sharing

Fiscal Decentralization and Urbanization in Indonesia

Indonesia went through a process of fiscal decentralization in 2001 involving the devolution of several policymaking and service delivery functions to the subnational tiers of government (provinces and districts). This process is likely to have affected rIndonesia, minimum wage, federalism, urbanization

Do Interventions Change the Network? A Panel Peer-Effect Model Accounting for Endogenous Network Changes

A large literature has studied how peers affect behavior by exploiting the preexisting social network structure only. What if networks rewire in response to changes in the economic environment, such as a randomized intervention? We exploit a unique panel dataset that contains detailed information on the network of informal financial transactions before and after a field experiment that randomized access to savings accounts in Nepal. First, we show that the intervention affects the structure of the network of informal financial transactions among households. Second, we estimate a panel model of peer effects in expenditure where the network may change endogenously, and we exploit the design of the randomized intervention to instrument for the observed network change. Our results suggest that disregarding the network change would underestimate both total peer effects and the overall impact of the intervention

The network structure of mutual support links: Evidence from rural Tanzania

This paper takes a network perspective t oinvestigate how rural households in developing countries form the links through which they provide and get economic support. I test the hypothesis that indirect contacts (e.g. friends of friends) matter for link formation. An estimation procedure of a network formation model à la Jackson and Wolinsky (1996) is proposed and applied to data on a single village in Tanzania. Results show that when agents evaluate the net advantage of forming a link they also consider the wealth and the position of indirect contacts. The network externalities from indirect contacts are negative, which suggests a mechanism of competition over scarce resources. This paper proposes the first structural estimation of an endogenous network formation model, and also contributes to the development literature by overcoming the dyadic regression approach and providing evidence that village-level network structure has an explanatory value disregarded by all previous studies.Dans les pays en voie de développement, lorsque les institutions financières et économiques formelles manquent de pouvoir, les ménages sont forcés de se fonder sur le partage de risque ainsi que d'autres arrangements informels basés sur des rapports interpersonnels préexistants. Ce document prend une perspective de réseau pour étudier comment les ménages ruraux forment les liens par lesquels ils fournissent et/ou obtiennent un appui économique et si la structure de raccordement de la communauté affecte la formation de ces liens. J'évalue l'hypothèse que les contacts indirects importent, c'est-à-dire, les agents prennent en considération non seulement les caractéristiques de leurs partenaires potentiels mais également leur position en ce qui concerne tout autres agents. Un modèle de formation de réseau avec les agents entièrement hétérogènes est d'abord présenté d'après Jackson et Wolinsky (1996) et une procédure d'évaluation est alors proposée et appliquée aux données sur un village en Tanzanie rurale. Les résultats démontrent que, quand les agents évaluent l'avantage net de former un lien ils considèrent également la position relative et la richesse des agents associés indirects. Mon papier contribue à la théorie des réseaux sociaux et à la littérature sur les arrangements de partage de risque parce qu'il propose un procédé innovateur pour estimer les modèles endogènes de formation de réseau et fournit l'évidence que la structure du réseau a une valeur explicative négligée par toutes les études précédentes, qui sont concentrées sur des relations directes seulement

Fiscal decentralization and urbanization in Indonesia

Indonesia went through a process of fiscal decentralization in 2001 involving the devolution of several policymaking and service delivery functions to the subnational tiers of government (provinces and districts). This process is likely to have affected regional patterns of urbanization, because the new prerogatives granted to the local governments have altered the distribution of urban amenities and labour market outcomes among and within the local jurisdictions. This paper uses a dataset of local governments for 1996 and 2004-05 to estimate the effect of the decentralization of minimum-wage setting in 2001 on urban population growth. Our findings suggest that, controlling for demand- and supply-side determinants of urban population growth, if the minimum wage had risen by an additional 81.5 thousand rupiah (25 per cent of its initial mean value), the urban population would have risen by an additional 0.4 per cent from its initial level