Social scientists studying entrepreneurship have emphasized three distinct sets of variables: the institutional environment, sociological variables, and personal and psychological characteristics. We are conducting surveys in five large developing and transition economies to better understand entrepreneurship. In this short paper, using over 2,000 interviews from a pilot study in Russia, we find evidence that the three sets of variables matter: perceptions of the local institutional environment, social network effects, and individual characteristics are all important in determining entrepreneurial behavior.
This paper examines ethnic diversity and local public goods in rural western Kenya. The identification strategy relies on the stable historically determined patterns of ethnic land settlement. Ethnic diversity is associated with lower primary school funding and worse school facilities, and there is suggestive evidence that it leads to poor water well maintenance. The theoretical model illustrates how inability to impose social sanctions in diverse communities leads to collective action failures, and we find that school committees in diverse areas do impose fewer sanctions on defaulting parents. We relate these results to the literature on social capital and economic development and discuss implications for decentralization in less developed countries.
A new stylized fact in development economics is the importance of social capital in promoting economic growth. This paper examines the effect of social capital on industrialization in Indonesia. We analyze a rich set of social capital and social interaction measures, including voluntary associational activity and levels of trust and informal cooperation. The main finding is that initial social capital does not predict subsequent industrial development across 274 Indonesian districts. Though these findings are for only a single nation and may not apply everywhere, they call into question recent claims regarding social capital and economic development.
Miguel, Edward. 2005. "Health, Education, and Economic Development." In Health and Economic Growth: Findings and Policy Implications, edited by Guillem LÃ³pez-Casasnovas, Berta Rivera and Luis Currais, 140-168. Cambridge: MIT Press.
The volume Health and Economic Growth: Findings and Policy Implications is evidence of the growing awareness within economics of the important connections between health and poverty in less developed countries. The aim of this chapter is to review recent evidence on one potential channel through which health may affect income: education.
This study uses rainfall variation to estimate the impact of income shocks on murder in rural Tanzania. Extreme rainfall (drought or flood) leads to a large increase in the murder of "witches"–typically elderly women killed by relatives–but not other murders. The findings provide novel evidence on the role of income shocks in causing violent crime, and religious violence in particular.
Kremer, Michael, Edward Miguel, and Rebecca Thorton. "Incentives to Learn: Merit Scholarships That Pay Kids to Do Well," Education Next 4 (2)
Proposals for education reform generally focus on teachers and curricula. But the most important factor in education may be the student himself or herself. A growing number of states, including Georgia, Michigan, New York, and Massachusetts, have established programs that provide financial rewards in the form of merit scholarships for college for students who perform well academically. However, such programs are controversial with some educators, and the structure of many existing programs in the United States makes it difficult to evaluate rigorously the impact of such incentive programs because it is hard to identify for comparison a credible group of students who were not eligible for the program.
Examining the experiences of programs outside the United States may well be informative in helping to understand the impact of incentives for students. We collected evidence from a program in Kenya, in which girls in public schools who performed well were offered merit scholarships that covered the cost of the fees charged by public schools at the time. Their families were offered grants to help cover the cost of school supplies. The program was implemented by a nonprofit organization, which phased it into a number of schools in random order, allowing us to compare schools that were eligible for the program with other schools where the program had not yet been introduced. The results of our evaluation, conducted in 2001 and 2002, indicate that the program significantly improved the test scores of girls. Moreover, the program had salutary spillover effects: test scores of students who were not eligible for-or had no hope of earning-the award also improved, as did school attendance for both students and teachers.