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Malawi

A cheap intervention that helped partially formalize firms and increased profits – just don’t ask about taxes

David McKenzie's picture
Governments have at least four reasons to try and bring firms into the formal system:
  1. To broaden and increase the tax base
  2. To enable firms to access the formal economy and help spur firm growth through the potential benefits of being formal (such as access to financial services and government contracts)
  3. To increase the sense of rule of law by having the default be that everyone is obeying the law
  4. To have firms provide information about themselves to the state, which can help the government better understand the structure of the economy and to better target business programs.

The most common way of trying to achieve these aims has been through regulatory reforms that make it easier for firms to formalize. This has taken the form of “one-stop-shops” which have been implemented in at least 115 countries and which enable firms to register both as a business and as a tax entity all at once. However, a number of randomized experiments that have followed such reforms have seen very few informal firms formalize. This raises the question of whether regulatory simplification alone is not enough, and whether trying to achieve all of the above four goals with one instrument causes none of them to be attained.

Separating business and tax registration, and an experiment in Malawi
In a new working paper (replication data) (joint with Francisco Campos), we conducted an experiment with informal firms in Malawi that aimed to test whether governments can bring firms into at least part of the formal system and thereby achieve at least some of the above goals, and whether firms need additional help to realize the benefits of becoming formal.

Too poor to save?

Markus Goldstein's picture
Across developing countries, only 63 percent of adults have a bank account, according to our friends over at the Findex.  And we’ve seen a couple of papers with targeted populations that suggest savings vehicles could be good for some development outcomes.   So is it time for a big push on banking the unbanked?  
 

Teacher Coaching: What We Know

David Evans's picture
“Teacher coaching has emerged as a promising alternative to traditional models of professional development.” In Kraft, Blazar, and Hogan’s newly updated review “The Effect of Teacher Coaching on Instruction and Achievement: A Meta-Analysis of the Causal Evidence,” they highlight that reviews of the literature on teacher professional development (i.e., training teachers who are already on the job) highlight a few promising characteristics of effect

Can providing information to parents improve student outcomes? 4 recent papers show it can (Chile, Malawi, and US x2)

David Evans's picture
My oldest child started middle school this year, and I suddenly started receiving emails every other week with updates on his grades. I’d never received anything like this before and was overwhelmed (and a little annoyed) by the amount of information. Someone told me that I could go to some website to opt out, but that seemed like too much work. So I continue getting the emails. And sure enough, now I follow up: “Hey, are you going to speak to your teacher about making up that assignment?

People think it’s easy to contract HIV. That’s a good thing, right? Maybe not. Guest post by Jason Kerwin

Development Impact Guest Blogger's picture

This is the fourteenth in our series of posts by students on the job market this year.

People are afraid of HIV. Moreover, people around the world are convinced that the virus is easier to get than it actually is. The median person thinks that if you have unprotected sex with an HIV-positive person a single time, you will get HIV for sure. The truth is that it’s not nearly that easy to get HIV – the medical literature estimates that the transmission rate is actually about 0.1% per sex act, or 10% per year.

Ending Stigma: Lessons from the AIDS Epidemic -- Guest post by Laura Derksen

Development Impact Guest Blogger's picture

This is number 9 in our series of posts by students on the job market this year.

As HIV continues to spread in sub-Saharan Africa, so does stigma. Many go to great lengths to hide their HIV status, get tested at clinics far from home to avoid being seen, and put off medical care until it's much too late. This has devastating effects. While life-saving medication is now provided for free in most parts of Southern Africa, there are still over one million AIDS deaths every year. Reluctance to seek treatment also has a negative externality. Antiretroviral drugs slow the spread of HIV dramatically, but a “treatment for prevention” strategy won’t work if people don’t seek treatment.

What causes stigma? What can we do about it?

From the Annals of Puzzles: Why Indian Children Are More Stunted than African Children

Berk Ozler's picture
I recently finished teaching smart and hard working honours students. In Growth and Development, we covered equity and talked about inequalities of opportunity (and outcomes) across countries, across regions within countries, between different ethnic groups, genders, etc. In Population and Labour Economics, we covered intra-household bargaining models and how spending on children may vary depending on the relative bargaining power of the parents.

Notes from the field: Setting up a firm survey in Malawi

Markus Goldstein's picture

I am currently in Malawi rolling out a firm survey with my colleagues Francisco Campos and Manuela Bucciarelli.    As we’ve gone through the enumerator selection and training this week and a pre-test of the survey, a number of observations have come up – some related to firm surveys in particular, some more general.   In no particular order:

Better Nutrition Through Information

Markus Goldstein's picture

In honor of Labor Day here in the US, I want to talk about a recent nutrition paper by Emla Fitzsimons, Bansi Malde, Alice Mesnard and Marcos Vera-Hernandez.   This paper, “Household Responses to Information on Child Nutrition,” is one with a twist – they look not only at nutrition outcomes, but they also try and figure out where these might be coming from – and hence also look at labor supply.  

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