M.Comm. / The objective of this thesis is to examine the importance of external finance of economic development and growth in South Africa. The investigation takes cognisance of the unique characteristics of the South African economy, especially the years of isolation from the world economy, unequal distribution of income and the need for sustainable economic growth to create employment and thus a stable social and economic environment conducive to foreign investment. The inflow of foreign capital in the economic development process is an imperative for filling either the investment-savings gap or the import-export gap. In a closed economic system the demand for investment funds will be met by the supply of domestic savings. Economic growth will be limited to the availability of investment funds, or domestic savings. In an open economic system, the demand for investment funds can be supplemented by the inflow of foreign capital, and growth will thus not be impaired by a scarcity of investment resources. Foreign capital inflows formed an integral part of the economic development process in the South African economy since the discovery of gold and diamonds in the latter half of the nineteenth century. Until 1976, in 24 out of 31 years, the South African economy recorded a net inflow of foreign capital. South Africa could, until 1976, the year in which political and social unrest broke out, finance a shortfall on the current account of the balance of payments with the inflow of foreign capital. Since then South Africa became a net exporter of capital. The South African economy found itself isolated from the world economy since the middle eighties due to the Apartheid policy. The inflow of foreign capital was greatly inhibited by sanctions and disinvestment. The South African economy had to rely on domestic savings to finance investment needs. This shortage of investment funds was an inhibiting factor on economic growth and development. This dissertation distinguishes between the different developing funding sources and as such outlines the benefits of using both multilateral as well as bilateral developing funding institutions to enhance and foster economic growth and development, especially in developing countries. It also gives a historical overview of South Africa's relationships with and use of these institutions. The reintegration of Eastern Europe into the world economy meant even bigger pressure on existing development funds. Since the early nineties funds available to the Third World for economic development have been steadily declining. New sources of funds for economic development had to be found. The emphasis has been moving away from pure development assistance and grants to direct foreign investment as a means of financing development in the developing world.

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Low agricultural productivity is a persistent challenge in developing economies. In the first chapter of the dissertation, I study the concurrent but independently implemented expansion of rural roads and extension in Ethiopia to examine how access to markets and technologies affect agricultural productivity. Using geospatial data combined with large surveys and exploiting the staggered roll-out of the two programs, I show that there are strong complementarities between roads and extension. While ineffective in isolation, access to both a road and extension increases productivity. I find that roads and extension improve productivity by facilitating the take up of agricultural advice and modern inputs. Furthermore, households adjust crop choices and shift across occupations in response to their changing comparative advantages in access to markets and technologies. In the second chapter of the dissertation, co-authored with Samuel Bazzi and Martin Fiszbein, we study the long-run implications of the American frontier experience for culture and politics. We track the frontier throughout the 1790–1890 period and construct a novel, county-level measure of total frontier experience (TFE). Historically, frontier locations had distinctive demographics and greater individualism. Long after the closing of the frontier, counties with greater TFE exhibit more pervasive individualism and opposition to redistribution. We provide suggestive evidence on the roots of frontier culture: selective migration, an adaptive advantage of self-reliance, and perceived opportunities for upward mobility through effort. Overall, our findings shed new light on the frontiers persistent legacy of rugged individualism. In the third chapter of the dissertation, I use plant level census data to examine the effects of two policies designed to support prioritized sub-sectors and regions on the productivity of the Ethiopian manufacturing sector. The first policy, implemented during 1996-2002, was an activist industrial policy favoring import substitution while the second policy, active during 2003-2012, emphasized export promotion. I find that there is severe misallocation in Ethiopian manufacturing sector, but it has subsided over the studied period. The results suggest that the priority sector support policies have exacerbated the misallocation, and the within-sector variations of the policies largely account for the dispersion in revenue productivity.

This dissertation contains three chapters in the field of development economics and applied microeconomics. The first chapter studies the effect of higher education on an individual’s life outcomes and how the effect evolves over her life cycle. The second chapter examines how a woman-centered, preference-based counseling procedure shapes women’s contraceptive preferences and behavior. The third chapter investigates the impact of construction activities of transportation infrastructure on local economic outcomes. Chapter 1 examines the effect of higher education on an individual’s life outcomes, and how the effect evolves over her life cycle. I use as a natural experiment the most ambitious educational reform in Chinese history, the reinstatement of the National College Entrance Examination (the Gaokao) following the end of the Cultural Revolution. Using Census data in 1990 and 2000, I find discontinuous changes in the likelihood of completing high school and attending college around a cutoff birth date, which are shown to be induced by the policy shock. Through a combination of regression discontinuity and difference-in-difference methods, this chapter finds that cohorts that were more likely to complete high school and obtain a college education as a result of the reform were more likely to have a high-socioeconomic (SES) occupation in their early 30s, and the effect becomes smaller in their 40s. More educated cohorts, and in particular women, tend to marry later. Individuals with higher education were less likely to be ever married in their 40s. Finally, individuals with higher education tend to delay childbearing and migrate more in both their 30s and 40s, plausibly due to greater returns to migration for the more educated. Chapter 2 (with Mahesh Karra) examines how a woman-centered, preference-based approach to family planning counseling shapes women's contraceptive preferences and behavior. By implementing a randomized controlled trial in urban Malawi, we explore how a woman's decision-making may be shaped by: 1) the number and types of contraceptive methods presented to her based on her stated preferences for contraception (targeted counseling); and 2) the presence of her husband / male partner at the time of counseling. Women were subsequently offered free transport and access to family planning methods and services at a clinic for one month. We find that women who received targeted counseling were 15.6 percent less likely to be using their stated ideal contraceptive method at follow-up and were 17.5 percent more likely to exhibit discordance between their stated and ideal method at follow-up. On the other hand, women who were encouraged to invite their husbands to the counseling session were 13.5 percent less likely to change their stated ideal method from counseling to follow-up but 16.6 percent more likely to be using their stated ideal method at follow-up. While both approaches aim to achieve the goal of ``helping women make informed choices on family planning'', neither seems to yield strictly preferred outcomes for women. Chapter 3 investigates how the construction of the three earliest high-speed railway (HSR) lines in mid-Southern China affects economic activity. By formulating a set of counterfactual railway lines following the HSR planbook (MLTRP) issued by the central government, and by utilizing nighttime light data (NTL) from 1992 to 2013, I implement an event-study analysis to quantify how HSR construction transforms the local economic activity as proxied by the NTL. Furthermore, I employ county-level data on economic indicators to pin down the channels at work underlying the effects. I find that: 1) the grid-level NTL significantly increased compared to the counterfactual regions one year after the HSR construction, but there is no significant impact following the operation of the HSR lines; 2) the positive construction impacts can be explained by the provisions of associated local amenities, temporary clearing of households, as well as structural transformation from agricultural towards non-agricultural sectors.

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Cluster Organizations, as a means of promoting competition and innovation in industrial clusters, have become increasingly popular over the world. Cluster organizations aim to increase growth and competitiveness of clusters within a region, and have become a central part of economic policy-making across the world. Recently, the concept has been used to a larger extent as a tool for economic development and poverty alleviation. This thesis seeks to examine the cluster organizations that are part of the Sida funded program Innovation Systems and Cluster development in Tanzania (ISCP-Tz), by evaluating performance, goals and development of the program based on cluster facilitators perceptions, and assess linkages and actor collaborations between clustered actors. The data in this thesis is collected through a telephone-administered questionnaire, as well as interviews and visits to cluster sites. The results show a positive impact on cluster firms performance as assessed by cluster facilitators, but show that actor collaborations in many cases are inadequate and need to be improved.

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This dissertation presents an extension of the warlord competition models found in Skaperdas (2002) and Konrad and Skaperdas (2012). I consider two non-parasitic warlords located on a line. Each warlord allocates resources for the extraction of natural resources, the production of goods and services, and conflict with the opposing warlord. Within the symmetric rates of seizure model, I use three different forms of the contest success function, a primary tool in the conflict theory literature, in my analysis. I show that the warlord closer to the point of conflict will invest less into the hiring of warriors and more into the production of goods and services, yet wins a larger proportion of total goods and services produced within the economy. Under certain conditions, the placement of the point of conflict at the midpoint between the two warlords maximizes the total resources toward war and minimizes total production. Under the asymmetric rates of seizure model, I find that the warlord closer to the point of conflict invests more in warfare and less in production; that is, results that counter what is found in the symmetric model. / Economics

Thesis advisor: Geoffrey Sanzenbacher / Despite growing importance in the global economy, many of the countriees with large natural resource economies are among the poorest. In this paper, I first construct a theoretical model that provides a framework for the harm of natural resources on corruption levels and governance. Then, I construct what I call the Resource Volatility Index. This measures both a country's level of dependence on a category of resources and the price volatility of these resources themselves. Finally, I use Correlated Random Effects models to show that both average and year-varying levels of this index can explain the level of corruption and the quality of governance in a given country. The nagative impacts I find on both variables confirms previous economic theory on governments funded by natural resources. / Thesis (BA) — Boston College, 2024. / Submitted to: Boston College. Morrissey School of Arts and Sciences. / Discipline: Economics. / Discipline: Scholar of the College.