Abu Shonchoy

Job Market Paper

Seasonal Migration and Effectiveness of Micro-credit in Lean Period : Evidence from Bangladesh

Abstract

This paper investigates the relationship between access to micro-credit and temporary seasonal migration, an issue which is largely ignored in the standard rural-urban migration literature. Seasonal migration due to natural disasters or agricultural downturns is a common phenomenon in developing countries. Using primary data from a cross-sectional household survey from the northern part of Bangladesh, this study quantifies the factors that influence such migration decisions. Seasonal migration is a natural choice for individual suffering periodic hardship. However, due to strong loan repayment rules, those who have prior access to micro-credit have no such option. I find that there is no significant difference in income in lean period between those who have access to micro-credit and those who do not. Households that take the decision to migrate while having access to micro-credit earn significantly more than households who only have micro-credit in the lean period. In addition, this paper finds that network effects play a significant role influencing the migration decision, with the presence of kinsmen at the place of destination having considerable impact. The results have numerous potential policy implications, including the design of typical micro-credit schemes.

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Second Paper

The Determinants of Government Consumption Expenditures : A Panel Data Study

Abstract

This paper focuses on the recent pattern of government expenditure in developing countries and estimates the determinants which have influenced government expenditure. Using a panel dataset for 111 developing countries from 1984 to 2004, this study finds evidence that political and institutional variables, as well as governance variables, significantly influence government expenditure. Among other results, the paper finds new evidence of Wagner's law which states that peoples' demand for service and willingness to pay is income-elastic, hence the expansion of public economy is influenced by the greater economic affluence of a nation (Cameron 1978). Corruption is found to be influential in explaining the public expenditure of developing countries. By contrast, size of the economy and linguistic fractionalization are found to have significant negative association with government expenditure. In addition, the study finds evidence that public expenditure significantly shrinks under military dictatorship compared with other form of governance.

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Third Paper

The Dynamics of Spending and Absorption of Aid: Panel Data Analysis.

Abstract

In September 1999, the International Monetary Fund (IMF) established the Poverty Reduction and Growth Facility (PRGF) to make the reduction of poverty and the enhancement of economic growth the fundamental objectives of lending operations in its poorest member countries. This paper studies the spending and absorption of aid in PRGF-supported programs, verifies whether the use of aid is programmed to be smoothed over time, and analyzes how considerations about macroeconomic stability influence the programmed use of aid. The paper shows that PRGF-supported programs permit countries to utilize all increases in aid within a few years, showing smoothed use of aid inflows over time. Our results reveal that spending is higher than absorption in both the long-run and short-run use of aid, which is a robust finding of the study. Furthermore, the paper demonstrates that the long-run spending exceeds the injected increase of aid inflows in the economy. In addition, the paper finds that the presence of a PRGF-supported program does not influence the actual absorption or spending of aid.

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