This week we featured research on agricultural advice, forecasting, formalisation and more!
In this week’s episode of Economics Unpacked, Gabriel Ulyssea explains why informality is so widespread, how it affects economic growth, inequality and public services, and why simply cracking down on informal businesses often makes matters worse. Drawing on his research, he explores why the informal economy is often a symptom of deeper institutional problems and what governments can do to encourage more workers and firms to join the formal sector.
Why are businesses in developing economies so much smaller than their counterparts elsewhere, and why do so many of them stay that way? In this week’s episode of VoxDevTalks, Marcela Eslava discusses what is known – and what remains a black box – about this puzzle, from regulatory hurdles and credit access to the surprising role that better data has played in reshaping the debate.
In the mid-2000s, the Indian Ministry of Agriculture introduced Kisan Call Centres (KCC) to address the country’s agricultural information gap, offering free agricultural advice to farmers via landline or mobile phones, but only in the official language of the state where the caller’s phone number is registered. Apoorv Gupta, Jacopo Ponticelli, and Andrea Tesei show that these language barriers reduce access to agricultural information among farmers, hindering technology adoption and lowering agricultural productivity.
The Social Science Prediction Platform (SSPP), launched in 2020, allows authors to collect predictions about the main findings of ongoing or not-yet-public research projects. In recent research, Stefano DellaVigna and Eva Vivalt use the SSPP to study how well people forecast social science findings at scale. Evidence from 100 SSPP projects shows that research forecasts are too optimistic on average, but still predictive enough to improve study design when they are combined, shrunk, and weighted carefully.
Brazil’s Microempreendedor Individual (MEI) programme changed the terms of formality for very small entrepreneurs. Alison Farias and Roberto Hsu Rocha find that by making formalisation cheaper and easier, it helped millions of microentrepreneurs register – but delivered little in higher earnings, functioning instead as a subsidised expansion of social security access at a net fiscal cost.
Sub-Saharan Africa is home to a growing share of the world's young people. Yet we know remarkably little about these students. To address this gap, Natalie Bau, Corinne Low, Simona Simona, and Bryce Steinberg launched a research project at the University of Zambia, with the aim of better understanding the financial lives of its students. They find that college students can be as food insecure as the ultra-poor, and that modest financial support may yield large returns for wellbeing.
When tax enforcement depends on geography, firms may choose to locate where taxes are easier to evade rather than where they are most productive. A Chinese reform that standardised VAT enforcement across rugged and flatter counties reduced this misallocation, raising aggregate productivity by an estimated 5%. Yu Liu and Xiaoxue Zhao discuss.
In early 2015, the Chinese public was shaken by the online release of Under the Dome, an environmental documentary exposing the severe air pollution problem in the country. While previous research has documented the impact of the film on environmental awareness, Wei Zou and Pinghan Liang take this a step further by demonstrating that this sudden surge in information had tangible, long-term effects on China’s primary land market, affecting the fiscal revenue of local governments.
Elsewhere in development:
- James Robinson in conversation with Abdoulaye Ndiaye at the Africa's Values Debate in Senegal.
- Oliver Kim writes about Robert McNamara for In Development.