The objective of this introduction is to put the May 2009 conference "on Agriculture for Development" in perspective of current and expected changes in the broad process of using agriculture for development in Sub-Saharan Africa. This is to help the conference achieve its two main purposes: assess the frontiers of research in economics applied to agricultural development and smallholder competitiveness; and establish research priorities for future efforts in that direction. It uses the WDR 2008 as a starting point for this task.

This dissertation examines the impacts and functioning of a community led public works intervention in Yemen, the Labor Intensive Public Works Program (LIWP). LIWP was designed using the "twin-track" approach of combining short-term relief with long-term investments. The program transfers funds to poor rural households by creating temporary employment opportunities in projects that benefit the local community. Income from program wages provides short term protection against negative consumption shocks, while the public works projects themselves provide medium to long term benefits for the community. The first chapter describes an unexpected effect of the intervention on decreasing local prices and explains how this effect can occur as a result of the existing informal institution of store credit in rural communities. The second chapter examines heterogeneity in program impacts related to the type of project chosen by the community and the correlates of this choice. The third chapter provides a detailed evaluation of the impact of the LIWP intervention on households in communities where projects took place.

In Chapter 1, I show the surprising empirical finding that in villages with random assignment to participate in LIWP, the price of staple goods in local stores rose less over time, and connect this to the institution of store credit in isolated villages. I find that there is an increase in prices in communities with 5 or more stores, and a significant relative decline of about 10% in villages with 4 or fewer stores. I develop a simple model of credit as insurance based on qualitative interviews in the field which shows that villagers are willing to pay a premium to local store owners over a more distant and anonymous market because their local store owner can be relied on to let them buy on credit in the future. In this way, the cost of zero-interest credit is internalized in prices charged, however this informal contract is only sustainable if there are sufficient dynamic incentives, which will be more likely in less competitive markets, consistent with the empirical findings.

In Chapter 2, which is based on joint work with Alain de Janvry and Elisabeth Sadoulet, we examine the choice of project by communities in the LIWP intervention. While LIWP was designed with the short-term purpose of providing cash for work to underemployed villagers, the community as a whole decided on the type public infrastructure to be constructed using the labor paid for by LIWP. We characterize the various projects in terms of skill intensity based on administrative data about relative pay receipts to unskilled and skilled workers and show that the skill-intensity of project choice is correlated with demographic features of the village which imply greater political power for older men. This result indicates that the choice of projects by the community is influenced by the relative distribution of benefits. To identify the channel at play, we show that in the immediate aftermath of the 2011 economic and political crisis in Yemen, there was a higher preference for skill-intensive projects. This is consistent with a model in which older, skilled men who prior to the crisis would not have self-selected as participants in the LIWP program due to the relatively low wages paid compared to alternative employment options, became potential participants due to the crisis. As a consequence, they pushed for skilled labor-intensive projects in which they could capture a larger share of the benefits.

In Chapter 3, which is based on joint work with Alain de Janvry, Elisabeth Sadoulet, and Daniel Egel, we use a randomized control trial to measure improvements in household welfare brought about by the program intervention. We find positive program impacts on household income and durable good ownership, reflecting the short term benefits of wages from work in the LIWP project. We also find surprisingly large program effects on decreasing the average outstanding debt. By analyzing the calorie content of staple grains consumed per person, we find a program impact equivalent to 11-13% higher calorie consumption in treated compared to untreated communities. We also summarize community perceptions of the project benefits and find that completed water related projects reduced water scarcity and fetching time.

Food prices have more than doubled between mid-2006 and mid-2008, creating major istress among the poor across the world, but also gainers among farm producers. While transmission was largely averted in India, increasingly open food markets indicate the need to anticipate the welfare implications of a repetition of such events in the future. This paper simulates the welfare effects of the rise in the international price of cereals and edible oils on a comprehensive typology of Indian households. Results show that large farmers (with farm size of one hectare and more) would have gained as a group, and that the average gain is large for those who gain, but that 59% of them in fact lose. The main category of poor households negatively affected by the rise in prices is rural (representing 77% of all losing poor households), both farmers and non-farmers. This is contrary to conventional wisdom that looks at the urban poor as the main category to be sheltered from rising prices through safety net measures, and expects most farmers to gain. These rural households account for 79% of the aggregate welfare loss among the poor. This makes a forceful case for the need to look beyond the urban poor when food prices rise.

This dissertation combines two empirical analyses related to the importance of security in Mexico. The first paper considers the impact of a major collapse in security by studying firms in large cities during outbreaks of violence. The second paper turns to rural areas and small-scale farmers, examining the effects of a land titling program that was designed to improve tenure security and increase agricultural productivity.

Chapter 1 shows that indeed high levels of violent crime have substantial negative effects on firm outcomes. I study the economic consequences of recent high levels of violence associated with the Mexican drug war, relying on microdata from national business victimization surveys conducted in 2012 and 2014, and monthly panel data from 8,000 manufacturing and construction establishments in more than 70 cities between 2007 and 2013. Beginning primarily in 2008, violence spread across Mexico from city to city, creating spatial and temporal variation in cities' exposures to crime. I exploit this staggered incidence to identify the firm-level impacts of drug-related violence, first within a fixed effects design, and second within a novel difference-in-differences design employing structural breaks in homicide rates and synthetic controls at the firm-level. In all sectors, I find significant declines in activity when violence increases; in the industrial sector, I find that revenue, employment and hours worked fall by 2.5-4% in the 24 months following a large structural break. But I find no significant increase in wages, no significant impacts on private security investments, and I find that the business impacts of violence persist even after controlling for economic crimes like theft. Effects are heterogeneous by firm size and sector, and consistent with greater impacts among smaller firms and non-traded goods.

Chapter 2, which is based on joint work with Alain de Janvry and Elisabeth Sadoulet, shows that improving property rights through land certification leads to a particular pattern of migration and changes to the structure of local economies. We use the rollout of a large-scale land certification program in Mexico from 1993 to 2006 to study how rural reforms establishing secure property rights determine patterns of migration, urbanization, and structural transformation. Certification leads higher-skilled agricultural labor to migrate, leaving behind economies less concentrated in agriculture, yet with no significant deterioration in wages. States' manufacturing capitals see corresponding gains in urban population and agricultural employment. Average wages increase significantly in manufacturing capitals, suggesting growth and demand effects that outweigh employment competition usually associated with immigration. Sectoral wages only rise significantly in services, indicating that imperfect substitutability of labor is empirically important to understanding structural transformation and internal migration. These results also imply that natives in non-tradeable sectors are the most likely beneficiaries of increased local demand under immigration.

Using grants programs to induce poor parents to send their children to school has received considerable attention as an instrument to break the inheritance of poverty. Yet, the cost of these programs tends to be quite high so that increasing their efficiency is an important issue that needs to be researched. We use the educational component of Progresa in Mexico to explore alternative targeting and calibrating schemes to achieve this purpose. We show that targeting on risk of nonenrollment instead of targeting on poverty, as currently done, would be implementable and create huge efficiency gains. To start with, this would concentrate grants on secondary school since attendance to primary school is virtually universal, saving 55% of the educational budget. Targeting the population most likely to drop out of school upon completing primary and allowing for variable transfers across beneficiaries would result in a 72% efficiency gain for that cohort over targeting on poverty and making uniform transfers by gender, reducing leakage cost from 85% to 53% of the budget. Even restricting transfers to be uniform across beneficiaries but set at the optimal level would achieve a 65% efficiency gain. However, to make the scheme easy to implement, only observable, transparent, and non-manipulable indicators of risk should be used and discrete levels of transfers offered. This would still result in a 53% efficiency gain over the current scheme.

Temptation for tenants to under-report output levels under share contracts is undoubtedly high. There is evidence that theft of product occurs and that this affects the design of share contracts. In this case, the optimal output share is chosen to not only induce effort but also to reduce theft of product, while meeting the landlord’s limited liability obligation. The tenant’s share thus rises with his desire and ability to steal. The optimal contract allows both residual inefficiency in the provision of effort and residual cheating. This contract is also modified by process utility in cheating, ability of the landlord to supervise, risk of revenge with abusive surveillance, and switch to products less prone to theft.

The relationship between democracy and inequality and the role of democratic participation in fostering redistribution has been a critical question of interest to economists over time. My dissertation focuses on a key aspect of democratic participation - the ability of citizens to form political parties and contest elections - and empirically identifies the relationship between the distribution of political power, and the distribution of public resources. To this effect, I study the economic impacts emanating from the political mobilization of historically underprivileged and socio-economically disadvantaged citizen groups in India - the low caste and indigenous communities - which has occurred over the past three decades. While comprising over half the nation's population, citizens from these groups have faced institutionalized discrimination through the hierarchical caste system, severely restricting their access to education, public institutions and basic services. This process of political mobilization by low caste citizens resulted in the formation of powerful caste-based political parties which contested elections in an attempt to capture political power through the democratic process, and subsequently, use their nascent state power to redirect public resources to their communities. The core chapters of this dissertation empirically document the economic and social impacts emanating from this change in the distribution of political power through democratic processes, resulting in the political empowerment of marginalized citizen groups.

The first chapter of my dissertation identifies the economic impacts of this process of political mobilization. Using the outcome of close elections between parties exclusively representing low caste interests and other mainstream parties as the source of exogenous variation, the paper shows that the marginal legislator from low caste parties increases the share of state expenditures allocated towards targeted and untargeted welfare schemes benefitting low caste citizens by 2 and 1 percent. In a departure from existing studies in the literature which have exploited the system of mandated representation of low caste politicians in India, my paper shows that the mandated representation of low caste politicians has no impact on welfare transfers for low caste citizens when unaccompanied by a strong ex-ante party commitment in favour of low caste welfare. This paper also highlights the trade-offs emanating from the redistributive spending choices of fiscally constrained legislators by identifying the negative impact of the marginal legislator from low caste parties on public investments in road construction and electricity generation. Using tests of heterogeneity, the paper argues that the redistributive spending preferences of legislators from low caste parties is one of the mechanisms explaining the negative causal impact between the electoral success of these parties and regional inflows of private investment.

Low caste citizens in India have often been victims of targeted violence by social elites in an attempt to preserve the existing social hierarchy and consolidate economic rents. This forms the motivation for the second chapter of my dissertation, identifying the causal impact of low caste parties on the incidence of targeted crimes against low caste citizens. The empirical results from this paper show that the marginal legislator from low caste parties reduces the incidence of violent crimes against low caste citizens by 4-14 percent and contribute significantly to the protection of civil rights. The paper also identifies the mechanisms explaining the reduced form impact - first, through higher rates of arrest, prosecution and diligence with which law enforcement agencies pursue such cases of targeted violence; second, through changes in the attitudes of low-caste citizens towards state institutions which affect the enforcement of criminal law.

Finally, the third chapter of my dissertation focuses on a major question of interest in the field of development economics and economic growth - the role of agricultural growth in the process of structural transformation. Using data from a panel of 273 Indian districts over a twenty-five year period and rainfall shocks as an instrument for agricultural growth, I present causal evidence that rainfall-induced agricultural growth has a significant impact on the structural transformation process by increasing the share of rural workers employed in the manufacturing sector. My results show that the non-farm employment gains from higher agricultural growth is concentrated amongst unskilled workers with relatively low levels of education, signalling the poverty alleviating aspect of agricultural growth. By studying the differential impact of agricultural productivity across regions with initially low levels of agricultural productivity and urbanization, I also document the potential of agricultural growth to facilitate convergence across regions in terms of rural employment diversification.