Lahore School of Economics

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Lahore School Third International Conference on Applied Development Economics

(8-10 September 2021) 

The Lahore School of Economics in partnership with International Growth Centre hosted its Third International Conference on Applied Development Economics, on 8-10th September 2021. Similar to the first two editions of the conference in 2018 and 2019 which were a great success, the three-day event this year, was once again devoted to bringing together policy makers, renowned researchers, academics and practitioners from within Pakistan and abroad to discuss relevant themes for developing countries such as, firm & entrepreneurship, labor, gender, poverty and social protection, health, education, and governance and institutional capacity. The thought-provoking research presented at the conference was hoped to disseminate and invite interesting feedback, stimulate further research in this domain and be instrumental in improving research capabilities of young researchers within the country.

The conference started off with welcome remarks by Dr. Shahid Amjad Chaudhry (Rector, Lahore School of Economics). He extended a warm welcome to a distinguished and impressive galaxy of academics, researchers, and other honorable guests. He highlighted that that this international conference will shed light on the state of economic stability in developing countries especially under the circumstances of COVID, poverty, underdevelopment, and civil war which is ending in Afghanistan. He also mentioned that Pakistan’s economy is fundamentally strong due to its agricultural sector however, it still has to work hard for macroeconomic growth as for 2021 the macroeconomic growth rate was 3.8%. Currently, the EHSAS project in Pakistan provides 2000 Rs or roughly $15 monthly to about 6million families, which is around 15% of its population. The health sector in Pakistan, largely private and public sector provides its services to around 35% of the population which is going to jump to 65% in a time span of two months. These two projects will help to ease the poverty condition in Pakistan.

The plenary address was delivered by Christopher Woodruff (University of Oxford) who discussed the impact of loans and grants on different microenterprises. He evaluated whether the donor should give grants or make loans given the aim is to generate growth. The idea he reflected is that with loans, the enterprise keeps only the returns in excess of principal and interest payments. However, it may restrict the class of investment and increase the risk which might keep the enterprises from borrowing. On the contrary, if the donor makes grants, the enterprises realize the entire gain of any investment which, therefore, allows them to invest in assets with longer returns. This can also lead to no investment at all. However, either way, everyone accepts the grants. He also highlighted why do grants and loans result in different outcomes for microenterprises. He elaborated a downside of grants that their effects are not always so large, and there is no evidence that they lead to truly dynamic, transformative growth in enterprises. He also mentioned multiple studies where the researcher found very high returns of grants but found no employment generation. Additionally, he talked about a few studies where even an insignificant impact of grants was found. He concluded with the final thought that, for research fostering innovation, grants demonstrate high returns but for MFI experiments they show a lack of dynamism. The reason is that the MFI models are pointing to tweaks that make loans compatible with higher return investments.

The first session of the conference focused on firms and entrepreneurship. The moderator for the session was Hamna Ahmed (Lahore School of Economics). The session was initiated by Muhammad Meki (University of Oxford) with his paper (written jointly with Francesco Cordaro, Marcel Fafchamps, Colin Mayer, Simon Quinn and Kate Roll) comparing a traditional debt contract to three alternatives: a novel equity-like financing contract; a hybrid debt-equity contract; and an index insurance financing contract. The study ran the first field experiment of a performance-contingent microfinance contract and found strong mutual benefits from the contractual innovations: distributors earn substantially higher profits and the host firm experiences a substantial increase in income. The second paper was presented by Muhammad Haseeb (University of Geneva) on Environmental regulation and firm size (coauthored with Namrata Kala and James Fenske).The study estimates the impact of a large change in environmental policy in India in 2016, which reduced the burden of environmental regulation for certain sectors. Study results reveal that reducing the regulatory burden changed the self-reported characteristics of new entrants. New applicants in industries in which regulatory restrictions were loosened were smaller, employing fewer workers, having less total capital investment, and using less land.

The second session of the conference was on Labour. The session was moderated by Muhammad Meki (University of Oxford). Lukas Hensel (University of Oxford) presented the first paper of the session (jointly written with Tsegay Gebrekidan Tekleselassie and Marc Witte). The study conducted a field experiment with 625 small and medium-sized enterprises in Addis Ababa, Ethiopia, in which they subsidized firms’ formal employee search. The research finds that firms were imperfectly informed about labor market conditions and that exposure to a different segment of the labor market can change firms’ hiring strategies. The second paper of the session, authored by Momoe Makino (Institute of Developing Economies), explored whether providing parents with information on income earning opportunities for young women is effective in changing parental attitudes toward female labor force participation. The results of the study suggest that provision of information about working conditions and environments is effective in influencing positive changes in parental attitudes toward women working in garment factories.

Papers presented in the third session continued to discuss various labour related issues and was moderated by Kate Vyborny (Duke University). The first paper in the session was by Raja Abdar Rahman (Lahore School of Economics), Muhammad Ahmed Nazif (Lahore School of Economics) and Farah Said (University of Göttingen). Their study aimed to estimate i) Is there a gender difference in willingness to compete? and ii) Does competition reduce likelihood of moral hazard? The results suggest women to be less willing to compete than men when competing with others and competition can help reduce the likelihood of shirking. The second paper of the session written by Nivedhitha Subramanian (Bates College) puts forth experimental evidence on workplace attributes and women’s labor supply decisions. The study finds that information about coworker or supervisor gender does not significantly impact women’s job application decisions directly at the vacancy level, but shifts the occupations that women prefer and apply to, and shifts beliefs about the likelihood of having a male supervisor by occupation.

The last session of day focused on gender which was moderated by Farah Said (University of Göttingen). The first paper of the session was by Sabrin Beg (University of Delaware), Erica Field (Duke University), Jeremy Lebow (Duke University) Kate Vyborny (Duke University). The research examines the effects of a new system of land records in Punjab, Pakistan on de facto land rights of females. While de jure all females receive a share of parental land, female disinheritance is the de facto norm. The study finds that the reform caused large increases in inheritances for females. The second paper of the session which concluded the first day of the conference was by Nina Buchmann (Stanford University). The study uses a combination of survey and lab-in-the-field experiments to assess whether men use punishment in response to disobedience, an often-cited justification for violence, to deter disobedience, or independent to disobedience. The results of the study suggest that men might use punishment in order to deter or mitigate the reputation costs associated with disobedience and that differences in reputation concerns could explain the income gradient in violence.

The chairperson for the second plenary session was Naved Hamid and the plenary address was delivered by Victoria Baranov (Associate Professor, University of Melbourne), who discussed maternal depression, parental investment, and child development. She insisted that development economists should care about mental health because depression and anxiety account for 8% of years lived with a disability which leads to the psychological poverty trap. She also added that poverty or negative economic shocks cause mental illness which can hence affect economic decision-making in ways that reinforce poverty. In her talk, she highlighted this issue by explaining two studies where different randomized control trials were used, first of them is the long-term impact of treating mental depression. The second is about the role of biomarkers in maternal depression intervention. Key findings from the study employing the first intervention are that the intervention improved the mother's financial autonomy and parental investment. It also added that the treated women sought more social support, had better relationships. Furthermore, no effects were found on fertility, mother's physical health, and husband's income. A key finding from the study using second intervention is that a low-cost, scalable, peer-delivered psychological intervention can slightly reduce depressive symptoms in mothers.

The first session of day 2 focused on poverty and social protection. The moderator for the session was Muhammad Haseeb (University of Geneva). The session was initiated by Zehra Gardezi (Pakistan Institute of Development Economics) with her paper that examines the impact of one of the largest unconditional cash transfer programs in South Asia - the Benazir Income Support Program (BISP) - introduced in Pakistan in 2008. Specifically, it observes the effect of receiving supplemental income during the prenatal period on the anthropometric trajectory of the child. The findings of the study suggest that there are considerable gains associated with even low-value cash transfers if families have access to the cash during the prenatal period. The second paper was presented by Mahreen Mahmud (University of Exeter) on Adapting to an aggregate shock (coauthored with Emma Riley). The study estimates the impact of the Covid-19 crisis on households in rural Uganda after one year. Study results reveal that after a large initial decline in incomes, these have recovered in March'21 to pre-pandemic levels which were made possible due to a large increase in crop income. However, not all households have recovered fully: those with a business pre-pandemic continue to experience a one-third significant decline in their income.

The second session of day 2 was on Health and the session was also moderated by Muhammad Haseeb (University of Geneva). Stefania Lovo (University of Reading) presented the first paper of the session (jointly written with Samantha B Rawlings). The study of the effect of e-waste dumping sites on early child health. The authors focus on two major dumping sites in West Africa, Ghana and Nigeria. The research finds the e-waste sites increase neonatal and infant mortality by 4.5 and 6.5 percentage points, respectively, for children living in the proximity of the site. The second paper of the session, authored by Maha Khan (University of York), explored the intergenerational impact of women’s exposure to the legislative amendments in inheritance law on their children’s health. The study finds a significant improvement in the health of children whose mothers were exposed to the amendment, but that even after the reform, substantial gender bias persists.

Papers presented in the third session focused on education and were moderated by Mahreen Mahmud (University of Exeter). The first paper in the session was by Christina Brown (University of Chicago) and Tahir Andrabi (Pomona College). Their study paper uses teachers’ contract choices and a randomized controlled trial of performance pay with 7,000 teachers in 243 private schools in Pakistan to study whether performance pay affects the composition of teachers. Consistent with adverse selection models, the study finds that performance pay induces positive sorting: both among teachers with the higher latent ability and among those with a more elastic effort response to incentives. The second paper of the session written by Wayne Sandholtz (Nova School of Business and Economics) looks at primary student responses to a Free Secondary Education (FSE) program in Tanzania in 2016, using the universe of two high-stakes national standardized tests taken in mainland Tanzania between 2013 and 2018. Results of the study show that access to secondary school affects the investments of students in primary school, indicating the presence of dynamic complementarities in the education production function.

The last session of the day continued discussion on education-related issues which was also moderated by Mahreen Mahmud (University of Exeter). The first paper of the session was by Zahra Mansoor (Blavatnik School of Government). The research presents experimental evidence on the impact of employer recognition on the performance of headteachers in a public in-service teacher training program The study finds that employer recognition can improve teacher training performance if it makes potential career benefits salient but the positive effects can also backfire depending on how these incentives are framed. The second paper of the session which concluded the second day of the conference was by Maryiam Haroon (Lahore School of Economics), Farah Said (University of Göttingen), and Mahniya Zafar (Lahore School of Economics). The study conducts a randomized control trial to investigate the effect of a soft-skills intervention that highlights the role of effort and perseverance in achieving goals, the mindset, and academic performance of college students. The research finds that a brief discussion stressing sustained effort and a constructive interpretation of failures improves the likelihood of students showing greater willingness to set strategic, measurable, attainable, results-oriented, and time-bound (SMART) goals immediately after the intervention.The chairperson for the Third plenary session was Theresa Chaudhry and the plenary address was delivered by Danila Serra (Texas A&M University) who discussed the impact of role models on attitudes and behaviors in developing countries. She started off her discussion by explaining why aspirations, hope and perceived social norms matter. The idea she reflected is that social environment is important as we look at those around us to form beliefs about what is achievable. She then defined role models as individuals who influence others’ achievements, motivation, and goals by acting as behavioral models, representations of the possible, and/or inspirations. Moreover, she explained that a person should think about role models as someone who shows them that something they thought was out of reach is achievable, shows them how to do or accomplish something and inspires them to follow their steps, possibly affecting aspirations and goal formation. She also presented literature on the impact of role models on preferences, attitudes and behaviors in developing countries. In the second part of her talk, she discussed her ongoing study on a role model intervention in Somalia (joint work with Elijah Kipchuma, Cath Porter and Munshi Sulaiman). She highlighted that the study explores two research questions I) Can exposing children to young people of the same backgrounds who are pursuing higher education positively impact their education aspirations? and II) Can exposure to young women pursuing higher education affect children’s gender attitudes toward equality in education and labor market? They find visits by female role models had a strong and large impact on boys and girls’ attitudes toward gender equality 6 months later. On the contrary, when they collect data two years later (graduating class only), find statistically insignificant results. However, they do see an impact of female role models on boys’ aspirations to go to college for the graduating cohort. She concluded with the final thought that, there is high potential for role model interventions in developing countries as they are low cost, tend to be effective, and could be added on to higher-touch programs.

The ninth session of the conference focused on the role of governance and institutional capacity in economic development. The moderator of session was Farah Said. The session was initiated by Hamna Ahmed (Lahore School of Economics) with her paper (written jointly with Dareen Latif (Lahore School of Economics), and Kate Vyborny (Duke University)) investigating how political influences affect the response of police to citizen complaints in Lahore, Pakistan. The paper tests how political alignment with the party in power affects the recording of and response to citizen complaints. To identify effects, this study exploits variation in political alignment over an election cycle when the party in power at the national level changed. The key findings of this study shows that political alignment robustly decreases the seriousness with which police respond to citizen complaints. Alignment with the governing party reduces the number of complaints logged, reduces the number of crimes officially pursued, and shifts the composition of complaints from criminal reports to non-criminal loss reports. The second paper was presented by Aditi Bhowmick (Development Data Lab & Princeton University) on Measuring Gender and Religious Bias in the Indian Judiciary (coauthored with Elliott Ash (ETH Zurich), Sam Asher (John Hopkins SAIS), Daniel Chen (World Bank), Tanaya Devi (Harvard University), Christoph Goessmann (ETH Zurich), Paul Novosad (Dartmouth College), and Bilal Siddiqi (UC Berkeley)). Collecting data on over 5 million criminal case records from 2010–2018, the paper studied judicial in-group bias in Indian criminal courts. The study exploits quasi-random assignment of cases to judges to examine whether defendant outcomes are affected by assignment to a judge with a similar identity. The paper contributes to literature by finding limited in-group bias in some (but not all) settings where identity is particularly salient, but even here the confidence intervals reject effect sizes smaller than those in much of the prior literature.

The tenth session of the conference was again on the role of governance and institutional capacity in economic development and the moderator for the paper was Waqar Wadho. Dr. Saher Asad (Assistant Professor Lahore University of Management Sciences) presented the first paper of the session (jointly written with Dr. Ayesha Ali (Lahore University of Management Sciences)). This paper studies the impact of increasing competition in the news media industry since the year 2002, when private channels were first allowed to enter the market on quality of news talk shows in Pakistan. For this purpose, a random sample of 1761 prime time talk show videos aired on private news channels between 2017- 2018 was taken. For exogenous variation in competition, the paper uses the date of entry of new news channels as thresholds for Regression Discontinuity in Time. The results from the data collected show that an increase in competition leads to an improvement in quality of channels with high rating but reduces the quality further of the channels with low rating. This suggests that intensification of competition in the news sector can have heterogeneous impacts depending on rating of the incumbents. The second paper of the session, coauthored by Natalya Rahman (Stanford University) and Sarah Thompson (Stanford University), hypothesize and test how election-day logistics may curb women’s willingness to participate in formal political processes. The preliminary findings of this paper provide suggestive behavioral evidence for the importance of election-day logistics; female turnout rates are higher in areas when women can feasibly combine their voting trips with their male family members’ trips. The study implies that strategies to increase women’s political participation in developing democracies should take seriously how to ensure women’s safety outside of the home. The last paper in this session was co-authored by Katrina Kosec (International Food Policy Research Institute) and Cecilia Hyunjung Mo (UC Berkeley). The paper explores weather perceived economic standing relative to others affect citizens’ support and confidence in government leaders and institutions. By employing a regression discontinuity approach using BISP’s administrative data and an original survey experiment, the study finds that perceptions of relative deprivation color citizen reactions to social protection. When relative deprivation is not salient, receiving cash transfers has little effect on individuals’ reported level of support for government and its leaders. However, when relative deprivation is salient, those receiving cash transfers experience increases in support for government, while those denied transfers simultaneously become more politically disgruntled. This has important implications for our understanding of the political ramifications of rising perceived inequality.

The conference ended with concluding remarks by Dr. Azam Chaudhry (Dean of the Economics Faculty, Lahore School of Economics) in which he thanked all the presenters, attendees and the members of the organizing team. He highlighted that this international conference shed light on the state of economic stability in developing countries especially under the circumstances of COVID, poverty, underdevelopment, and civil war which is ending in Afghanistan. Moreover, he emphasized that the role of intellectuals is needed more than ever before, we require evidence-based policy tailored to local conditions which can provide the analytical lens to our economic issues.

Also in Pakistan Observer

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posted by S A J Shirazi @ 9/11/2021 01:33:00 PM,

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