This week we featured research on malaria, economic growth, electricity theft and more!
Another packed week at VoxDev, in which we hosted two online events:
- On Tuesday, Tristan Reed, Rodimiro Rodrigo, Gustavo de Souza, and Markus Poschke covered the present and future of industrialisation, focusing on trade, automation, and firms.
- On Thursday, Aniket Panjwani took us through how development economists can get set up to use agents for research, focusing on the cheapest options currently available, and general lessons for working with agents.
And we released two podcasts:
- On Ideas in Development, Raghuram Rajan joined us to discuss why he feels the standard doom narrative around AI and service-led growth is too simple, why India's model may be more resilient than critics assume, and what policymakers need to do to make sure it stays that way.
- On VoxDevTalks, Matt Lowe discusses why decades of research on the benefits of intergroup contact may have been significantly overstated.
Children who survive malaria infections suffer lasting cognitive impairments, reduced classroom attention, and higher school absenteeism. These effects weaken educational outcomes and ultimately lower labour productivity in adulthood. Policymakers must ask: how much richer would malaria-endemic countries be if the disease were eliminated? Taking child mortality and morbidity into account, Minki Kim finds that the economic gains are five times larger than prior estimates.
Husnain Ahmad, Ayesha Ali, Robyn Meeks, Zhenxuan Wang, and Javed Younas present evidence from the study of a large-scale intervention in Karachi that aimed to reduce electricity theft by making it physically more difficult. They find that upgrading Karachi’s electricity network from bare low-voltage wires to aerial bundled cables significantly reduced theft and feeder losses, leading to improved revenue recovery and fewer power outages. However, while the intervention strengthened the utility’s finances and service reliability, it increased billing complaints and may have disproportionately affected poorer households who were newly formalised and consumed relatively little electricity.
Rajveer Jat and Bharat Ramaswami compare agricultural productivity to the informal and formal non-farm sectors in India. They find substantial productivity gaps with the formal sector but small and negligible gaps with the informal non-farm sector. About two-thirds of non-farm workers are in sectors not more productive than the agricultural sector. This suggests that the primary dualism in development is between the formal non-farm sector and the informal sector including agriculture.
In low-income countries, unemployment often rises with education – a phenomenon known as ‘educated unemployment’. In urban West Africa, Esther Mirjam Girsberger and Romuald Méango find that educated unemployment stems from educated workers rationally waiting for scarce, high-paying public and formal private jobs in labour markets characterised by severe hiring frictions. Policies that reduce private-sector hiring costs, rather than expanding public employment or subsidising self-employment, are most effective at lowering unemployment and raising welfare.
In recent decades, Malaysia achieved rapid inclusive growth, yet focus group discussions with Malaysian citizens across the country have reported stagnating living standards and rising dissatisfaction. This disconnect reflects pressures not captured by aggregate data, including rising costs, work pressure, debt, stress, and weakening social cohesion, which shapes how people experience and evaluate economic progress. M Niaz Asadullah, Monica Biradavolu, Vijayendra Rao, and Kenneth Simler discuss.
Adrienne Lucas, Patrick McEwan, and David Torres Irribarra study the long-run and intergenerational effects of Chile’s Beca Indígena programme, a large-scale conditional cash transfer for indigenous students. They find that sustained, well-implemented CCTs can increase human capital – both for recipients and for their children – and the earnings of the recipients, leading to reductions in ethnic inequality.
In Nigeria, nearly one in three formal firms report that they were not registered originally but then formalised later on. These ‘switchers’ account for over a quarter of employment among micro, small and medium-sized formal firms. Idossou Marius Adom finds that taxes and enforcement – rather than registration costs alone – are the most effective levers for reducing informality without harming aggregate output.
Elsewhere in development:
- Six Questions with Monica Lambon-Quayefio
- A Directory of Living Literature Reviews by Nisha Austin and Matt Clancy
- An Evidence Map on Graduation Programmes from BRAC.
- Lant Pritchett on why economic growth, and only economic growth, is enough.