Three essays in development economics

Abstract

This thesis contains three empirical studies on different facets of development economics. Two of the chapters specifically focus on Benin, a country that has not often been studied in the development literature. The first of these studies is an investigation into the sustainability of Beninese Rotating Savings and Credit Associations. Work such as Besley et al. (1993) or Anderson et al. (2009) has questioned how such groups can overcome the incentives for individuals to default, theorising that the institutional design of the groups can play an important role. Using household survey data collected in 2004 and 2006, chapter 2 presents a first test into many of the theories outlined in the theoretical literature. The second study examines primary school attendance rates in Benin. Despite almost unparalleled increases in attendance rates since 1990, the country has remained virtually ignored in the literature. The study, found in chapter 3, attempts to improve on existing related studies by employing a multilevel model in order to account for higher level variance in the data. The results help to shed light on the stark regional disparities in attendance that continue to exist across Benin’s 77 communes. Finally, chapter 4 uses the recently released ICTD-UNU WIDER Government Revenue Dataset in order to revisit some recent results on the relationship between tax structures and economic growth. Recent work in this field has offered little or no evidence for developing countries, yet it is in such countries where the greatest changes in tax structure have not only been seen over the past 30 years but will likely be seen in coming years. The study examines the impact of revenue neutral changes in tax structure on per capita GDP growth rates. Results suggest that previous findings are not applicable to countries at all levels of development and as such urge caution with regard to some recent policy advice that is based on previous findings.