Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics University of California, Berkeley
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Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Pro
fess
or T
ed M
igue
lD
epar
tmen
t of E
cono
mic
sU
nive
rsity
of C
alifo
rnia
, Ber
kele
y
Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Lect
ure
17 �
Mar
ch 1
3, 2
007
Eco
nom
ics
172:
Lec
ture
17
3
�Th
e m
idte
rm e
xam
is th
is T
hurs
day
Mar
ch 1
5th
in c
lass
Eco
nom
ics
172:
Lec
ture
17
4
�Th
e m
idte
rm e
xam
is th
is T
hurs
day
Mar
ch 1
5th
in c
lass
�R
eade
r #2
avai
labl
e in
Cop
y C
entra
l lat
er th
is w
eek
Eco
nom
ics
172:
Lec
ture
17
5
The
regr
essi
on d
isco
ntin
uity
(RD
) app
roac
h
�C
lear
ly c
ompa
ring
scho
lars
hip
win
ners
to s
chol
arsh
ip
lose
rs is
not
a v
ery
appe
alin
g st
rate
gy: t
he w
inne
rs a
re
muc
h be
tter s
tude
nts,
so
lose
rs a
re n
ot a
goo
d �c
ompa
rison
gro
up�
Eco
nom
ics
172:
Lec
ture
17
6
2001
exa
m
scor
e
Edu
catio
nal
atta
inm
ent
2005
-200
6 (y
rs)
GS
P w
inne
rsG
SP
lose
rs
Sco
re*
Eco
nom
ics
172:
Lec
ture
17
7
The
regr
essi
on d
isco
ntin
uity
(RD
) app
roac
h
�C
lear
ly c
ompa
ring
scho
lars
hip
win
ners
to s
chol
arsh
ip
lose
rs is
not
a v
ery
appe
alin
g st
rate
gy: t
he w
inne
rs a
re
muc
h be
tter s
tude
nts,
so
lose
rs a
re n
ot a
goo
d �c
ompa
rison
gro
up�
�O
ne w
ay to
get
aro
und
this
is to
focu
s on
stu
dent
s �v
ery
clos
e to
�the
win
ning
thre
shol
d te
st s
core
leve
l
Eco
nom
ics
172:
Lec
ture
17
8
2001
exa
m
scor
e
Edu
catio
nal
atta
inm
ent
2005
-200
6 (y
rs)
GS
P w
inne
rsG
SP
lose
rs
Sco
re*
Eco
nom
ics
172:
Lec
ture
17
9
The
regr
essi
on d
isco
ntin
uity
(RD
) app
roac
h
�C
lear
ly c
ompa
ring
scho
lars
hip
win
ners
to s
chol
arsh
ip
lose
rs is
not
a v
ery
appe
alin
g st
rate
gy: t
he w
inne
rs a
re
muc
h be
tter s
tude
nts,
so
lose
rs a
re n
ot a
goo
d �c
ompa
rison
gro
up�
�O
ne w
ay to
get
aro
und
this
is to
focu
s on
stu
dent
s �v
ery
clos
e to
�the
win
ning
thre
shol
d te
st s
core
leve
l
�In
the
limit,
com
parin
g th
e st
uden
t who
just
bar
ely
won
(r
ecei
ving
Sco
re*)
to th
e st
uden
t who
just
bar
ely
lost
(S
core
* �
ε) s
houl
d yi
eld
a co
mpa
rison
gro
up o
f los
ers
alm
ost i
dent
ical
to w
inne
rs a
long
uno
bser
vabl
es, t
oo
Eco
nom
ics
172:
Lec
ture
17
10
2001
exa
m
scor
e
Edu
catio
nal
atta
inm
ent
2005
-200
6 (y
rs)
GS
P w
inne
rs (T
i=1)
GS
P lo
sers
(Ti=
0)
Sco
re*
RD
est
imat
e of
the
impa
ct o
f win
ning
Eco
nom
ics
172:
Lec
ture
17
11
Trea
tmen
t effe
cts
and
omitt
ed v
aria
ble
bias
(1)
Yi=
a +
bT i
+ cX
i+
e i
(2)
E(Y
i| T
i=1)
�E
(Yi|
Ti=
0)
= [a
+ b
+ c
E(X
i| T
i=1)
+ E
(ei|
Ti=
1)]
�[a
+ 0
+ c
E(X
i| T
i=0)
+ E
(ei|
Ti=
0)]
= b
+ c
[E(X
i| T
i=1)
�E
(Xi|
Ti=
0)]
True
effe
ct�O
mitt
ed v
aria
ble/
sele
ctio
n bi
as� t
erm
Eco
nom
ics
172:
Lec
ture
17
12
Trea
tmen
t effe
cts
and
omitt
ed v
aria
ble
bias
(2)
E(Y
i| T
i=1)
�E
(Yi|
Ti=
0)=
b+
c [E
(Xi|
Ti=
1) �
E(X
i| T
i=0)
]
Ass
ume
that
any
rele
vant
om
itted
var
iabl
es v
ary
�sm
ooth
ly�,
so v
ery
little
, with
resp
ect t
o th
e te
st s
core
, an
d do
not
�jum
p� a
cros
s th
e w
inni
ng th
resh
old:
Eco
nom
ics
172:
Lec
ture
17
13
Trea
tmen
t effe
cts
and
omitt
ed v
aria
ble
bias
(2)
E(Y
i| T
i=1)
�E
(Yi|
Ti=
0)=
b+
c [E
(Xi|
Ti=
1) �
E(X
i| T
i=0)
]
Ass
ume
that
any
rele
vant
om
itted
var
iabl
es v
ary
�sm
ooth
ly�,
so v
ery
little
, with
resp
ect t
o th
e te
st s
core
, an
d do
not
�jum
p� a
cros
s th
e w
inni
ng th
resh
old:
= b
+ c
[ (x*
+ δ
) �x*
]=
b+
c*δ
≈b
Eco
nom
ics
172:
Lec
ture
17
14
Usi
ng th
e R
D a
ppro
ach
�M
ore
gene
rally
RD
met
hods
can
be
used
whe
neve
r pr
ogra
m /
treat
men
t ass
ignm
ent h
as a
�sha
rp
disc
ontin
uity
�, in
oth
er w
ords
, a v
ery
rapi
d ch
ange
in
the
likel
ihoo
d of
ass
ignm
ent w
ith re
spec
t to
an
unde
rlyin
g �s
moo
th�v
aria
ble
(her
e, th
e te
st s
core
)
Eco
nom
ics
172:
Lec
ture
17
15
Usi
ng th
e R
D a
ppro
ach
�M
ore
gene
rally
RD
met
hods
can
be
used
whe
neve
r pr
ogra
m /
treat
men
t ass
ignm
ent h
as a
�sha
rp
disc
ontin
uity
�, in
oth
er w
ords
, a v
ery
rapi
d ch
ange
in
the
likel
ihoo
d of
ass
ignm
ent w
ith re
spec
t to
an
unde
rlyin
g �s
moo
th�v
aria
ble
(her
e, th
e te
st s
core
)
�Fo
r exa
mpl
e, p
eopl
e m
ay o
nly
get a
loan
if th
eir c
redi
t sc
ore
is s
uffic
ient
ly h
igh.
If y
ou c
ompa
re p
eopl
e w
ith,
say,
a c
redi
t sco
re o
f 750
ver
sus
with
749
they
are
ve
ry s
imila
r, bu
t onl
y th
e fo
rmer
gro
up g
ets
a lo
an
Eco
nom
ics
172:
Lec
ture
17
16
Usi
ng th
e R
D a
ppro
ach
�M
ore
gene
rally
RD
met
hods
can
be
used
whe
neve
r pr
ogra
m /
treat
men
t ass
ignm
ent h
as a
�sha
rp
disc
ontin
uity
�, in
oth
er w
ords
, a v
ery
rapi
d ch
ange
in
the
likel
ihoo
d of
ass
ignm
ent w
ith re
spec
t to
an
unde
rlyin
g �s
moo
th�v
aria
ble
(her
e, th
e te
st s
core
)
�Fo
r exa
mpl
e, p
eopl
e m
ay o
nly
get a
loan
if th
eir c
redi
t sc
ore
is s
uffic
ient
ly h
igh.
If y
ou c
ompa
re p
eopl
e w
ith,
say,
a c
redi
t sco
re o
f 750
ver
sus
with
749
they
are
ve
ry s
imila
r, bu
t onl
y th
e fo
rmer
gro
up g
ets
a lo
an
�R
D L
imita
tion:
�loc
al�t
reat
men
t effe
ct a
t the
thre
shol
d
Eco
nom
ics
172:
Lec
ture
17
17
Em
piric
al m
etho
ds s
o fa
r in
the
cour
se
�A
fund
amen
tal e
cono
met
ric c
once
rn in
em
piric
al
econ
omic
rese
arch
: non
-ran
dom
sel
ectio
n in
to
�trea
tmen
t�/ o
mitt
ed v
aria
ble
bias
(OV
B)
�P
oten
tial s
olut
ions
:
Eco
nom
ics
172:
Lec
ture
17
18
Em
piric
al m
etho
ds s
o fa
r in
the
cour
se
�A
fund
amen
tal e
cono
met
ric c
once
rn in
em
piric
al
econ
omic
rese
arch
: non
-ran
dom
sel
ectio
n in
to
�trea
tmen
t�/ o
mitt
ed v
aria
ble
bias
(OV
B)
�P
oten
tial s
olut
ions
:(1
) Con
trol f
or a
ll re
leva
nt fa
ctor
s (c
halle
ngin
g!)
(2) R
ando
miz
ed e
valu
atio
n
Eco
nom
ics
172:
Lec
ture
17
19
Em
piric
al m
etho
ds s
o fa
r in
the
cour
se
�A
fund
amen
tal e
cono
met
ric c
once
rn in
em
piric
al
econ
omic
rese
arch
: non
-ran
dom
sel
ectio
n in
to
�trea
tmen
t�/ o
mitt
ed v
aria
ble
bias
(OV
B)
�P
oten
tial s
olut
ions
:(1
) Con
trol f
or a
ll re
leva
nt fa
ctor
s (c
halle
ngin
g!)
(2) R
ando
miz
ed e
valu
atio
n(3
) Diff
eren
ce in
diff
eren
ces
(DD
)(4
) Reg
ress
ion
disc
ontin
uity
(RD
)
Eco
nom
ics
172:
Lec
ture
17
20
Em
piric
al m
etho
ds s
o fa
r in
the
cour
se
�A
fund
amen
tal e
cono
met
ric c
once
rn in
em
piric
al
econ
omic
rese
arch
: non
-ran
dom
sel
ectio
n in
to
�trea
tmen
t�/ o
mitt
ed v
aria
ble
bias
(OV
B)
�P
oten
tial s
olut
ions
:(1
) Con
trol f
or a
ll re
leva
nt fa
ctor
s (c
halle
ngin
g!)
(2) R
ando
miz
ed e
valu
atio
n(3
) Diff
eren
ce in
diff
eren
ces
(DD
)(4
) Reg
ress
ion
disc
ontin
uity
(RD
)
�E
ach
of th
ese
met
hods
has
thei
r ow
n st
reng
ths
and
limita
tions
, alth
ough
if a
rand
omiz
ed e
xper
imen
t is
poss
ible
, it i
s us
ually
thou
ght o
f as
the
gold
sta
ndar
d
Eco
nom
ics
172:
Lec
ture
17
21
Theo
retic
al m
odel
s so
far i
n th
e co
urse
�Th
e S
olow
Gro
wth
Mod
el
�S
exua
l beh
avio
r and
HIV
risk
Eco
nom
ics
172:
Lec
ture
17
22
Theo
retic
al m
odel
s so
far i
n th
e co
urse
�Th
e S
olow
Gro
wth
Mod
el
�S
exua
l beh
avio
r and
HIV
risk
�W
ithin
hou
seho
ld a
lloca
tion
unde
r ext
rem
e sc
arci
ty
�E
duca
tiona
l inv
estm
ent,
time
horiz
ons,
and
gen
der
Eco
nom
ics
172:
Lec
ture
17
23
Mai
n su
bsta
ntiv
e to
pics
so
far i
n th
e co
urse
�P
atte
rns
of A
frica
n ec
onom
ic d
evel
opm
ent
�Th
eorie
s of
eco
nom
ic g
row
th
�G
eogr
aphy
, hea
lth, a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
17
24
Mai
n su
bsta
ntiv
e to
pics
so
far i
n th
e co
urse
�P
atte
rns
of A
frica
n ec
onom
ic d
evel
opm
ent
�Th
eorie
s of
eco
nom
ic g
row
th
�G
eogr
aphy
, hea
lth, a
nd d
evel
opm
ent
�Th
e ec
onom
ics
of H
IV/A
IDS
�E
cono
mic
sho
cks
and
rura
l hou
seho
lds
�H
uman
cap
ital
Eco
nom
ics
172:
Lec
ture
17
25
Nex
t top
ic: e
nviro
nmen
tal a
nd d
evel
opm
ent
�W
hat w
ill h
appe
n to
Afri
ca a
s a
resu
lt of
clim
ate
chan
ge?
Wha
t if g
loba
l tem
pera
ture
s ke
ep ri
sing
?
�O
ne im
porta
nt is
sue
is w
ater
sca
rcity
, if t
empe
ratu
res
rise
and
drou
ghts
bec
ome
mor
e co
mm
on
Eco
nom
ics
172:
Lec
ture
17
26
Nex
t top
ic: e
nviro
nmen
tal a
nd d
evel
opm
ent
�W
hat w
ill h
appe
n to
Afri
ca a
s a
resu
lt of
clim
ate
chan
ge?
Wha
t if g
loba
l tem
pera
ture
s ke
ep ri
sing
?
�O
ne im
porta
nt is
sue
is w
ater
sca
rcity
, if t
empe
ratu
res
rise
and
drou
ghts
bec
ome
mor
e co
mm
on
�Th
e ca
se o
f Cha
d: L
ake
Cha
d, o
nce
the
wor
ld�s
6th
larg
est l
ake,
but
it is
dry
ing
up. I
t is
curr
ently
onl
y 10
-20
% o
f its
form
er s
ize.
For
mer
fish
ing
tow
ns a
re d
eser
t
�D
eser
tific
atio
n, p
lus
dam
min
g of
rive
rs fo
r hyd
ro-
elec
tric
pow
er, a
re b
oth
to b
lam
e
Eco
nom
ics
172:
Lec
ture
17
27
Eco
nom
ics
172:
Lec
ture
17
28
�Fo
r nex
t tim
e: s
tudy
for t
he m
idte
rm e
xam
!
Eco
nom
ics
172:
Lec
ture
17
29
Whi
tebo
ard
#1
Eco
nom
ics
172:
Lec
ture
17
30
Whi
tebo
ard
#2
Eco
nom
ics
172:
Lec
ture
17
31
Whi
tebo
ard
#3
Eco
nom
ics
172:
Lec
ture
17
32
Whi
tebo
ard
#4
Eco
nom
ics
172:
Lec
ture
17
33
Whi
tebo
ard
#5
Eco
nom
ics
172:
Lec
ture
17
34
Map
of A
frica
Eco
nom
ics
172:
Lec
ture
17
35
Map
of A
frica
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