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Drawing on evidence from Africa - especially Ethiopia and Uganda - the authors of this volume draw conclusions about economic policy in the aftermath of civil war. A sample of conclusions follows. Civil wars differ from international wars. They are informal, often have no clear beginning and end, weaken rather than strengthen the authority of the state, and leave two unreconciled armies to be demobilized within one territory. Civil wars erode the institutions of civil society, leading to a decline in the stock of social capital, which takes some time to restore. Private investment and government revenue are slow to recover, and military expenditures are not easily reduced. As a result, there is little or no peace dividend in the short run. The period of transition to peace is a particularly suitable time for radical policy reform, despite the high degree of polarization typical in countries engaged in civil war. And speedy reform, far from increasing uncertainty, is likely to reduce it. After a civil war, private agents are fearful both of each other and of the government. This, perhaps even more than physical damage to infrastructure, hinders private-sector-led recovery, as irreversible investment is delayed despite being financeable. The transition to peace is primarily the transition from fear and the defensive responses that became ingrained in wartime. The peace dividend comes as a gradual recovery of confidence induces repatriation of financial and human capital. Such confidence can be boosted by the early sequencing of investment-sensitive policy reforms and by preserving low inflation through direct consumer price index targeting. Lack of confidence can be compensated for by temporary undervaluation of the exchange rate, or however, may prove more difficult to make credibly time-bound. Finally, aid can permit accelerated rehabilitation of the infrastructure (especially transport networks) needed to return to a market economy. Contrary to the studies hypothesis, the authors found that demobilization - at least in Uganda - did not lead to a significant upsurge in insecurity. In the short term, demobilization significantly reduced crime, unless the demobilized lacked access to land. If the demobilized returned to their home areas and were given some assistance, with identifiab le exceptions they were able to find income-earning opportunities.

Tanto las habilidades cognitivas como las no cognitivas son importantes para comprender las oportunidades del niño y resultados en la edad adulta. Sin embargo, no está claro cómo se producen las habilidades no cognitivas y cuál es el papel de las inversiones de los hogares en este proceso. Motivados por las sugerencias de la literatura médica y por el modelo de formación de habilidades propuesto por Cunha y Heckman (2007, 2008), en este trabajo usamos datos longitudinales de niños que crecen en contexto de países en desarrollo para estudiar el papel de la historia nutricional temprana en la configuración de estos habilidades. Para hacer esto, vinculamos la altura para la edad a la edad de 7 a 8 años con un conjunto de características psicosociales. competencias medidas a la edad de 11 a 12 años que se sabe están correlacionadas con las ganancias durante la edad adulta: autoeficacia, autoestima y aspiraciones educativas. La estimación El procedimiento es OLS con efectos fijos de la comunidad, controlando una amplia gama de factores que pueden considerarse determinantes de las inversiones de los padres, incluido un conjunto ampliado de controles de riqueza del hogar. Encontramos que la altura para la edad predice los tres observados medidas psicosociales. Las estimaciones auxiliares sugieren que el efecto nutricional encontrado es es poco probable que esté mediado por el efecto que la desnutrición puede tener sobre las habilidades cognitivas.

In this paper we review the evidence on the impact of large shocks, such as drought, on child and adult health, with particular emphasis on Zimbabwe and Ethiopia. Our focus is on the impact of shocks on long-term outcomes, and we ask whether there are intrahousehold differences in these effects. The evidence suggests substantial fluctuations in body weight and growth retardation in response to shocks. While there appears to be no differential impact between boys and girls, adult women are often worse affected by these shocks. For children, there is no full recovery from these losses, affecting adult health and education outcomes, as well as lifetime earnings. For adults, there is no evidence of persistent effects from transitory shocks in our data. – health ; risk ; shocks ; consumption smoothing ; catching up

In this paper, we focus on the effectiveness of video-based interventions in inducing behavioural changes in poor countries. We first review relevant literature from different disciplines. This suggests both that information targeted to an individual's specific needs is more effective than broader messages and that videos featuring role models similar to viewers reinforce persuasiveness as the latter relate to the character. We then discuss some of the challenges in designing non-laboratory randomized controlled trials to evaluate video-based interventions. We draw on our design of a recently completed study in remote rural Ethiopia, which showed that simple documentaries of relatively successful individuals from the same region affected both viewers' investment in their children's education and other future-oriented behaviors (Bernard, Tanguy, S. Dercon, K. Orkin, and A. S. Taffesse. 2014. "The Future in Mind: Aspirations and Forward- Looking Behaviour in Rural Ethiopia." Paper presented at Centre for the Study of African Economies conference on economic development in Africa, Oxford, UK, March 25). We discuss the importance and challenges of placebo treatments to evaluate the effects of exposure to video and gatherings, explore the potential for controlling variation in the exposure of an individual's network of friends to the same treatment, and discuss external validity. Our experiment only partially addresses the issues we highlight, so we suggest directions for future research.

We model the emergence of formal insurance institutions as equilibria under limited contract enforceability where groups are required to be coalition-proof but also can use fines for enforcement. The model can generate coexistence of formal and informal groups without requiring heterogeneity in insurance demand, because coalition-proof equilibria can fail to exist. It also predicts where formal insurance is likely to flourish: insurance groups that hold savings become more prevalent the more enforcement power communities have, and the more enforcement power, the better insurance. We use data on Ethiopian funeral insurance groups and their members to motivate and test our model. Those which hold savings and collect regular premia provide better insurance than informal ones, and both sets of groups employ a variety of punishment mechanisms to induce their members to share risk. Despite the observed positive correlation between formality and the quality of insurance, informal and formal groups co-exist. Consistent with predictions generated by the model, we find that standard measures of social cohesion are linked to the use of punishment mechanisms, the quality of insurance and the prevalence of formal insurance institutions.

Both cognitive and non-cognitive skills matter to understand a child's opportunities and outcomes in adulthood. However, it is unclear how non-cognitive skills are acquired and what the role played by household investments is in this process. Motivated by suggestions from the medical literature and by the recent literature on human skill formation, this paper uses longitudinal data from children growing up in developing countries to study the role of early nutritional history in shaping this type of skills. We link height-for-age at the age of 7 to 8 to a set of psychosocial competencies measured at the age of 11 to 12 that are known to be correlated with earnings during adulthood: self-efficacy, self-esteem and aspirations. We find that height-for-age predicts the three observed psychosocial measures. Auxiliary estimations suggest that the relationship found is unlikely to be mediated by the effect that undernutrition can have on academic performance.

Poverty is still a predominantly rural phenomenon. However, the context of rural poverty has been changing across the world, with high growth in some economies and stagnation in others. Furthermore, increased openness in many economies has affected the specific role of agricultural growth for rural poverty reduction. This paper revisits an ‘old’ question: how does growth and poverty reduction come about if most of the poor live in rural areas and are dependent on agriculture? What is the role of agricultural and rural development in this respect? Focusing on Sub-Saharan Africa, and using economic theory and the available evidence, the author comes to the conclusion that changing contexts has meant that agricultural growth is only crucial as an engine for growth in particular settings, more specifically in landlocked, resource-poor countries, which are often also characterized by relatively low potential for agriculture. However, extensive market failures in key factor markets and likely spatial effects give a remaining crucial role for rural development policies, including focusing on agriculture, to assist the inclusion of the rural poor in growth and development. How to overcome these market failures remains a key issue for further research.

This article uses a 13-year panel of individuals in Tanzania to assess how adult mortality shocks affect both the short- and long-run consumption growth of surviving household members. Using unique data that tracks individuals from 1991 to 2004, we examine consumption growth, controlling for a set of initial community, household, and individual characteristics; the effect is identified using the sample of households in 2004 that grew out of baseline households. We find robust evidence that an affected household will see consumption drop 7% within the first 5 years after the adult death. With high growth in the sample over this time period, this creates a 19 percentage point growth gap with the average household. There is some evidence of persistent effects of these shocks for up to 13 years, but these effects are imprecisely estimated and not significantly different from zero. The impact of female adult death is found to be particularly severe.