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At a glance, this study is a critique of local development policies with specific reference to the Buffalo City and Nelson Mandela Metropolitan Municipalities in the Eastern Cape. The researcher enters the debate by posing a primary research question: Do the Public-Private Partnerships (PPP) and Broad-Based Black Economic Empowerment (BBBEE) ventures that constitute anti-poverty strategies succeed in addressing the issues of poverty, and achieving more equitable development at the municipal level in the Eastern Cape? This research proposes a problem statement: The local development policies of PPP and BBBEE that are being applied through Local Economic Development strategies are not in the interests of the majority of people living in the Eastern Cape. At a methodological level this research employs both quantitative and qualitative approaches to answer the central question and to verify the problem statement of this study. This triangulation approach is employed to utilize the strengths of both quantitative and qualitative methods. More specifically, the researcher uses a number of different research instruments to collect the data including four hundred questionnaires, four focus groups and elite interviews in both municipalities. The findings of this study indicate that local development policies in both municipalities do not improve the lives of the people. This line of thinking is indicated by both the empirical study conducted by the researcher and is supported by a number of scholarly materials. This study contributes to the body of knowledge in Political Economy and Development Studies including other disciplines in Social and Economic Sciences. The central argument of this thesis is that both BBBEE and PPPs are inspired by neo-liberalism (BBBEE is not neo-liberal per se though it may be heavily influenced by it) and neo-liberalism in practice is contradictory in nature as it involves the allocation of state resources to politically influential individuals, rather than promoting economic development for the majority. The evidence of this research further shows that the local business and political elites through the BBBEE, PPPs and outsourcing of services are using their strong networks (associated political, social and capital resources) in their efforts for personal accumulation. The researcher in this study examines the local development policies from a particular standpoint which is a political economy approach. The business and political elites according to political economic perspective use state resources to enrich themselves.

This thesis is about how elected politicians stay in power and about some of its economic and social consequences, fundamental political economy questions. It takes advantage of the decentralized political structure in the Philippines to test models of voter and politician behavior. In doing so, it contributes to the literature on clientelism and retrospective voting. In Chapter One, I assess the impacts of targeted government transfers on a local incumbent's electoral performance. I use the randomized roll-out of a CCT program in the Philippines where a number of municipalities are tightly controlled by political dynasties. In a competitive political environment, incumbent vote share is 26 percentage-points higher in municipalities where the program was implemented in all villages than in municipalities where the program was implemented in half of them. The program had no impact in municipalities with low levels of political competition. In Chapter Two, I test for the presence of political business cycles in Philippine municipalities over the period 2003-2009, a context where according to the literature such cycles are likely to be observed. I find robust evidence for the presence of political business. This effect is only present when I use quarterly data and vanishes when I aggregate the data at the yearly-level. The difference is not merely driven by a decline in statistical power due to aggregation: point estimates for the overall effects are 7 times larger when I use quarterly data than when I use yearly data. This discrepancy can be explained by a drop in employment post-election that dilutes the yearly effects. In Chapter Three, we estimate the impacts of being connected to local politicians, either currently in office or in opposition, on occupational choice. We use a large administrative dataset collected between 2008 and 2010 on all individuals in 700 Philippine municipalities along with information on all candidates in the 2007 and 2010 municipal elections. We rely on local naming conventions to assess blood and marriage links between households. Using individuals connected to successful candidates in the 2010 elections that did not run in 2007 as a control group, we find that connections to current office-holders increase the likelihood of being employed in better paying occupations. Individuals connected to candidates that were close to being elected in 2007 are less likely to be employed in better paying occupations.

In many developing countries, the electricity system is too weak to meet growing demand and the availability and reliability of generating capacity is inadequate. Protracted mismanagement, political interference, subsidised pricing, and corruption all undermine the ability of developing electricity supply industries to finance and deliver service or attract new private investment. Power sector reform is an acute need in developing countries where implementation of a top-down liberalisation approach has been pursued without adequately considering the social, political and economic conditions. The conventional response to low levels of electricity sector investment has been from the top-down: aim to create competitive electricity markets by encouraging new entry into the generation sector and by breaking up vertically integrated power companies. Using a case study from Gujarat, India, this thesis argues for an alternative approach—utilise distributed generation (DG) and captive power capacity (self-generation) of industry to reshape the generation and distribution sectors from the bottom-up. The thesis examines the economic viability of distributed generation in a rural setting and captive power for industrial use in Gujarat, India, taking into account the economic, technical and political factors that shape investment decisions. In India, 40 percent of the population still does not have an electricity connection, but an array of new energy technologies for small-scale electricity generation near the site of use may provide a new development path. The bottom-up model enables rapid addition of generation capacity to a system struggling to meet demand while increasing competition in the power market. The thesis concludes that more power from independent and industrial sources will best harness the financial and engineer resources of the Indian electricity supply industry (ESI) and ultimately benefit the economy. The solution proposed is not suggested as an optimal policy programme, but instead is advanced as the best of the feasible options available within current political and economic constraints.

This thesis has two main objectives. First, it outlines a taxonomy of reflexive development practice, which aims at transcending the divide between modernism and postmodernism in the methodology of development economics. Second, the thesis examines the taxonomy in two countries at opposite ends of the development spectrum, Vanuatu and Singapore, attempting to show that the taxonomy provides insights for policymaking. The taxonomy is the principal contribution. It suggests an examination of external values and norms; an assessment of the importance of local context; a recognition that policies can worsen the problems that they try to solve; and the idea that theory and policy should be revised as circumstances change. The taxonomy is developed as a way of addressing the difficulties encountered by the modernist Washington Consensus on the one hand and postmodernism on the other. Some postmodernists have criticised modernists for trying to make universal statements based on findings specific to a particular time and context. A further criticism is that the modernist-type theorising exemplified by the Washington Consensus assumes too much certainty, putting excessive faith in the ‘expert’ outsider. Postmodernists, on the other hand, have often been criticised for being relativist or even being against theory itself. In extreme versions of postmodernism, the entire rejection of epistemological foundations allows no analysis or significant discussion. The taxonomy aims to steer away from the pitfalls of either tradition, emphasising in particular the unity of theory and practice and the need for analysis and policy advice to take account of both the objectivism of the outsider and the subjectivism of the insider. The thesis is divided into two parts. The first part discusses how the open systems approach of critical realism, John Maynard Keynes and the neo-Austrians aims to overcome the difficulties of modernism and postmodernism. It then examines some of the principal uses of the term reflexivity in the past century or so, suggesting that some of these uses are compatible with each other and with the idea of open systems. This section draws on the work of several economic methodologists and sociologists, including Karl Marx, Karl Mannheim, Pierre Bourdieu, Anthony Giddens and thinkers within the sociology of scientific knowledge. Next is a critical discussion of the Washington Consensus and its amended version, followed by the development of the taxonomy. Part two begins with a brief discussion of the nature of comparison within developing economies, before looking at the taxonomy in the context of Vanuatu and Singapore. Following the case-studies is an attempt to draw lessons from the experience of the two countries. Finally, the discussion is summarised and some conclusions established.

In this thesis I explore three topics in labour economics, using micro data from South Africa and Tanzania. South Africa suffers from extremely high income inequality, in part as a result of comprehensive Apartheid-era racial discrimination. The first topic explores possible explanations for the extremely large earnings differences across different types of employment for black South Africans, using the KwaZulu-Natal Income Dynamics Study data. I analyse the relative importance of individual ability and institutions, including public sector wage setting and trade unions, in determining earnings. My results suggest that human capital explains much of the earnings differentials within the private sector, including union premiums, but cannot explain the large premiums for public sector workers. Self-employment is very common in urban Tanzania but, unlike South Africa, survey data show that there are large overlaps in the distribution of earnings in private wage employment and self-employment. This suggests that self-employment represents a viable alternative to wage employment in small, low productivity firms for the majority of urban Tanzanians. In chapter three I build an equilibrium search model of the urban Tanzanian labour market to explain the choice of wage and self-employment and the variation in earnings across and within these sectors. In the final topic I explore the effect of education on earnings in Tanzania. Estimating the returns to education has stimulated much recent work in applied econometrics as researchers advance their understanding of the effect of individual heterogeneity on the possibility of estimating the returns to education. In my attempt to purge estimates of the return to education of the influence of individual heterogeneity, I use an education reform in Tanzania as a natural experiment that provides exogenous variation in education. When using Ordinary Least Squares (OLS) I find high and strongly convex, increasing returns to education. My best attempt at separating out the effect of individual heterogeneity suggests that returns are still high but that they may actually be concave.

Apart from the introduction (Chapter 1) and conclusion (Chapter 7), this thesis comprises five chapters organized into two parts: Part I studies promotion incentives in the public sector, and focuses on the case of teachers in rural China. All teachers in China compete with their colleagues for rank promotions. I aim to answer two questions: first, whether the promotion system for teachers in China elicits effort from teachers, and second, how the design features of the promotion system affect effort incentives. Part I includes four chapters. Chapter 2 introduces the topic and provides a background on promotions for teachers in China. It also discusses related work in this area, and introduces the data that will be used in Part I. Chapter 3 presents and tests a theoretical model of promotions as an incentive device. The model treats all teachers as identical in terms of their ability, and as such, focuses on average levels of teacher effort. It predicts that effort is exerted in response to potential promotions. In addition, the model also predicts that average effort incentives are higher in promotion contests in which the wage gap is higher, the promotion rate is closer to one half, the number of teachers competing for a promotion is higher (for promotion rates between 1/3 and 2/3), and the average age of teachers in the contest is lower, or the proportion of female teachers is lower. The model is used to derive an estimating equation by which to test predictions on average levels of teacher effort. An equation is estimated for the probability of promotion as a function of teacher effort, which is proxied by the teachers' annual performance evaluation scores. There is simultaneity present as effort increases the probability of promotion, but it is also the promise of promotion that motivates effort. As a result, effort is instrumented using wage changes, which are both informative (higher wage gaps are associated with higher effort) and valid (wages only affect promotions through effort). The second stage of the regression demonstrates that effort is indeed exerted by teachers in order to win promotions. The first stage confirms the predictions of the model with regards to wage gaps, the promotion rate, and the size and composition of the pool of competitors. Chapter 4 extends the model of Chapter 3 in two ways: teachers are now treated as heterogeneous in ability, and a multi-period model of teacher effort over time is also added. This chapter focuses on individual levels of teacher effort, and on how the parameters of the promotion system interact with teacher characteristics to affect teacher effort. The predictions include that teachers in the extremes of the skill distribution will have lower incentives, and as the contest size increases these teachers will have effort incentives that are lower still, that teachers who are five or more years from promotion eligibility will have zero effort, as will teachers in the highest rank, that teacher effort will increase in the five years leading up to promotion eligibility, and that teacher effort will decrease after a teacher is eligible for promotion but has been passed over several times. An effort equation is estimated that captures all of these components, and the predictions are largely affirmed by the data. Tests are conducted in order to alleviate concerns about selection, as well as measurement error in the performance evaluation scores. Chapter 5 concludes Part I. Part II of this thesis looks at teacher labour markets, social distance, and learning outcomes in Punjab, Pakistan. Chapter 6 explores the link between the distribution of teachers in the labour market, caste differences between teachers and students, and child learning outcomes. Using rich longitudinal data from Pakistan that allows me to convincingly identify the causal effects of caste on learning outcomes, I show how the distribution of teachers across public schools induces particular matches of high and low caste teachers and students, and that these matches are highly predictive of test score outcomes. Specifically, low caste male children perform significantly better when taught by high caste teachers than when they are taught by low caste teachers. Several possible channels are explored, including discrimination in the classroom, role model effects, teacher quality, patronage, peer effects, and returns to education. Although the channel cannot be proven, the data points to high caste teachers being able to raise the already high returns to education for low caste children because they are able to assist these children in getting educational benefits and employment later on using their patronage networks. Low caste children therefore work harder to impress high caste teachers, and this results in higher learning outcomes.

This thesis is a collection of three essays with contributions to the intergenerational and intra-generational mobility literature. The essay on full risk insurance and measurement error examines the likelihood that measurement error may reconcile observed departures from perfect rank immobility in insurable consumption with the mobility predictions of full risk insurance, by generating spurious rank-breaking transitions. The essay shows that under certain assumptions full risk insurance predicts perfect rank immobility and that there exists ranges of error covariance matrices for which the mobility predictions of full risk insurance plus measurement error can not be rejected in the Peruvian data. A novel approach to test these mobility predictions is presented. The essay on discrete time-states Markov chain models applied to welfare dynamics shows that models with higher order may fit data better than the popular first-order, stationary model, and that the order of the chain, in turn, affects the estimation of equilibrium distributions. A best-practice methodology to conduct homogeneity tests between two samples with different optimal order is proposed, and an index by Shorrocks, based on the trace of the transition matrix, is extended to discrete Markov chain models with higher order. The essay on cohort heterogeneity in intergenerational mobility of education shows how cohort heterogeneity affects the analysis of cross-group homogeneity and long-term prospects of a welfare variable, based on transition matrix analysis. The essay compares the transition matrices of Peruvian groups divided by gender and ethnicity and finds genuine reductions in heterogeneity of the mobility regimes between male and female and between indigenous and non-indigenous groups among the youngest cohorts. The essay proposes a methodology to conduct first-order stochastic dominance analysis with equilibrium distributions and shows that among the youngest cohorts past stochastic dominance of male over females and non-indigenous over indigenous disappear in the long term.

This dissertation contributes to the long-standing debate between those who argue that the enclosure of the commons was as a precondition to foster economic growth and those who defend common property regimes can be efficient and sustainable. Exploiting historical evidence from 19^th century and early 20^th century Spain, this research shows that the persistence of the commons in some Spanish regions was not detrimental to economic development, at least relative to the institutional arrangements they were replaced with. On the contrary, during the early stages of modern economic growth, the communal regime not only did not limit agricultural productivity growth, but indeed constituted a crucial part of the functioning of the rural economics in a number of ways. On the one hand, these collective resources complemented rural incomes and, subsequently, sustained households' consumption capacity. The reduction in life expectancy and heights in the provinces where privatisation was more intense, as well as the negative effect on literacy levels, strongly supports that the privatisation of the commons deteriorated the living standards of a relatively large part of the population. On the other hand, the communal regime also significantly contributed to financing the municipal budget. Deprived from this important source of revenue, local councils became unable to adequately fund local public goods and ended up increasing local taxes. Lastly, the social networks developed around the use and management of these collective resources facilitated the diffusion of information and the building of mutual knowledge and trust, thus constituting a vital ingredient of the social glue that hold these rural communities together. All things considered, the persistence of the commons in some regions provided peasants with cooperation mechanisms different from the market and made the transition to modern economic growth more socially sustainable.