Essays in development economics
This dissertation consists of four studies covering both micro and macro perspectives of development economics using theory and empirics. This thesis predominantly focuses on problems of economic development and considers policy directions to mitigate such problems. Chapter 2 develops a model of rural-urban seasonal migration with special reference to lean period shocks. Agricultural lean periods occur in rural areas due to natural disasters or agricultural downturns. This study shows that as the probability of a lean period increases, overall seasonal migration decreases but the proportion of agricultural workers undertaking seasonal migration increases. Chapter 3 investigates the relationship between access to micro-credit and temporary seasonal migration. Using primary data from Bangladesh, this study quantifies the factors that influence such migration decisions. Seasonal migration is a natural choice in a lean period, however due to strict loan repayment rules, those who have prior access to micro-credit have no such option. The study finds that that there is no significant difference in income in a lean period between those who have access to micro-credit and those who do not. Chapter 4 focuses on the determinants of government expenditure in developing countries. This study finds evidence that political and institutional variables, as well as governance variables, have considerable association with government expenditure. Among other results, corruption is found to be influential whereas, by contrast, size of the economy and linguistic fractionalization are found to have sizable negative impact on government expenditure. The study finds evidence that public expenditure significantly shrinks under military dictatorship. Chapter 5 studies the spending and absorption of aid in Poverty Reduction and Growth Facility (PRGF), an IMF supported aid program. The study further verifies whether the use of aid is programmed to be smoothed over time, and analyses how considerations about macroeconomic stability ...