Economists and political scientists have argued that differences in the risk of civil conflict across countries and over time may partly reflect differences in the opportunity cost of participating in civil conflicts. One way to test for the opportunity-cost channel is to examine civil conflict risk following transitory income shocks. In this paper I propose two instrumentalvariables approaches...

Using data from a randomized control trial in Sri Lanka, this paper explores whether cash and in-kind grants helped microenterprises approach the productivity level of SMEs. The paper first estimates production functions and subsequently treatment effects on TFP levels. Most significantly, more able and more risk-averse owners benefit from the larger in-kind grant. Also, the larger in-kind gran...

Over the last couple of decades, it has become a commonplace to claim that “institutions matter” for economic development. Yet, institutions are not exogenous but the result of human action. It is argued here that the values and norms held by substantial parts of society’s members are an important determinant of its institutions. It is further argued that values and norms have both a direct and...

The Urban Informal Sector (UIS) is a major and expanding part of developing economies both in terms of employment and output. However, they cause substantial environmental damages and worsen living conditions, prompting authorities to impose rigid environmental regulations. Yet, these steps have been mostly arbitrary and based on adhoc popular sentiment or political exigencies and not on rigoro...

The Economic Freedom of the World (EFW) index is extensively used in academic research to show how economic freedom relates to a wide array of economic and social outcomes. Given this, it is important that researchers understand the goal of the index and how to properly utilize this index in their research. There seem to be several common misconceptions about the EFW index resulting from a simp...

Economic and rent-seeking outcomes are determined jointly in a dynamic general equilibrium model of corruption, public spending and growth. In an economy with government intervention and capital accumulation, state-appointed bureaucrats are responsible for providing public goods, which contribute to productive efficiency. Corruption arises because of an opportunity for bureaucrats to appropriat...

Ž . The paper uses new cross-country data on income and asset land distribution to show Ž . that i there is a strong negative relationship between initial inequality in the asset Ž . distribution and long-term growth; ii inequality reduces income growth for the poor, but Ž . not for the rich; and iii available longitudinal data provide little support for the Kuznets hypothesis. Policies that in...

8 One of the famous questions in social science is whether money makes people happy. We offer new 9 evidence by using longitudinal data on a random sample of Britons who receive medium-sized lottery wins 10 of between £1000 and £120,000 (that is, up to approximately US$ 200,000). When compared to two control 11 groups – one with no wins and the other with small wins – these individuals go on ev...

Information on the number of interviewer contacts allows insights into how people’s responses to questions on happiness are connected to the difficulty of reaching potential participants. Using the paradata of the German Socio-Economic Panel Study (SOEP), this paper continues such research by revealing a strong link between respondent motivation and reported happiness. Analyses of responses by ...

In the last decade, there are strong indications of an expansion in shadow economic activities in the Netherlands Antilles, which is caused by the high tax burden and high unemployment. This paper attempts to measure the size of the shadow economy of the Netherlands Antilles using two distinct estimation methods: the direct and indirect approach. Both methods produced similar results, showing t...