The economic impact of schistosomiasis and the underlying tradeoffs between water resources development and public health concerns have yet to be quantified. Schistosomiasis exerts large health, social and financial burdens on infected individuals and households. While irrigation schemes are one of the most important policy responses designed to reduce poverty, particularly in sub-Saharan Africa, they facilitate the propagation of schistosomiasis and other diseases. We estimate the economic impact of schistosomiasis in Burkina Faso via its effect on agricultural production. We create an original dataset that combines detailed household and agricultural surveys with high-resolution geo-statistical disease maps. We develop new methods that use the densities of the intermediate host snails of schistosomiasis as instrumental variables together with panel, spatial and machine learning techniques. We estimate that the elimination of schistosomiasis in Burkina Faso would increase average crop yields by around 7%, rising to 32% for high infection clusters. Keeping schistosomiasis unchecked, in turn, would correspond to a loss of gross domestic product of approximately 0.8%. We identify the disease burden as a shock to the agricultural productivity of farmers. The poorest households engaged in subsistence agriculture bear a far heavier disease burden than their wealthier counterparts, experiencing an average yield loss due to schistosomiasis of between 32 and 45%. We show that the returns to water resources development are substantially reduced once its health effects are taken into account: villages in proximity of large-scale dams suffer an average yield loss of around 20%, and this burden decreases as distance between dams and villages increases. This study provides a rigorous estimation of how schistosomiasis affects agricultural production and how it is both a driver and a consequence of poverty. It further quantifies the tradeoff between the economics of water infrastructures and their impact on public health. Although we focus on Burkina Faso, our approach can be applied to any country in which schistosomiasis is endemic.

This paper shows that early colonial interactions between Europeans and indigenous populations, specifically the deaths of the latter, have long-term effects on economic development. We propose an alternative view on the historical origins of comparative development, arguing for links between pre-colonial conditions, colonial-era practices, and growth centuries later. We explore the decades of first contact between Europeans and the indigenous population for both violence against that population and the type of political-economic “regime” established. These violence and regime consequences affected the strength or weakness of property-protecting institutions, with the latter in turn influencing per capita income today.

We develop an exchange rate target zone model with finite exit time and non-Gaussian tails. We show how the tails are a consequence of time-varying investor risk aversion, which generates mean-preserving spreads in the fundamental distribution. We solve explicitly for stationary and non-stationary exchange rate paths, and show how both depend continuously on the distance to the exit time and the target zone bands. This enables us to show how central bank intervention is endogenous to both the distance of the fundamental to the band and the underlying risk. We discuss how the feasibility of the target zone is shaped by the set horizon and the degree of underlying risk, and we determine a minimum time at which the required parity can be reached. We prove that increases in risk after a certain threshold can yield endogenous regime shifts where the "honeymoon effects" vanish and the target zone cannot be feasibly maintained. None of these results can be obtained by means of the standard Gaussian or affine models. Numerical simulations allow us to recover all the exchange rate densities established in the target zone literature.

We extend the celebrated Rothschild and Stiglitz (1970) definition of Mean-Preserving Spreads to a dynamic framework. We adapt the original integral conditions to transition probability densities, and give sufficient conditions for their satisfaction. We then focus on a class of nonlinear scalar diffusion processes, the super-diffusive ballistic process, and prove that it satisfies the integral conditions. We further prove that this class is unique among Brownian bridges. This class of processes can be generated by a random superposition of linear Markov processes with constant drifts. This exceptionally simple representation enables us to systematically revisit, by means of the properties of dynamic mean-preserving spreads, workhorse economic models originally based on White Gaussian Noise. A selection of four examples is presented and explicitly solved.

A portion of the economics literature has long debated about the relative importance of historical, institutional, geographical, and health determinants of economic growth. In 2001, Gallup and Sachs quantified the association between malaria and the level and growth of per capita income over the period 1965–1995 in a cross-country regression framework. We took a contemporary look at Gallup and Sachs’ seminal work in the context of significant progress in malaria control achieved globally since 2000. Focusing on the period 2000–2017, we used the latest data available on malaria case incidence and other determinants of economic growth, as well as macro-econometric methods that are now the professional norm. In our preferred specification using a fixed-effects model, a 10% decrease in malaria incidence was associated with an increase in income per capita of nearly 0.3% on average and a 0.11 percentage point faster per capita growth per annum. Greater average income gains were expected among higher burden countries and those with lower income. Growth of industries with the same level of labor intensity was found to be significantly slower in countries with higher malaria incidence. To analyze the causal impact of malaria on economic outcomes, we used malaria treatment failure and pyrethroid-only insecticide resistance as exogeneous instruments in two-stage least squares estimations. Despite several methodological challenges, as expected in these types of analyses, our findings confirm the intrinsic link between malaria and economic growth and underscore the importance of malaria control in the agenda for sustainable development.

Using a unique dataset collected in 59 rural Gambian villages, we study how ethnic heterogeneity is related to the structure of four economic exchange networks: land, labour, inputs and credit. We find that different measures of village‐level ethnic fragmentation are mostly uncorrelated with network structure. At a more disaggregated level, household heads belonging to ethnic minorities are not less central than those from the predominant ethnicity in any of the networks and, at the dyadic level, the fact that two households share ethnicity is not an economically significant predictor of link formation. Our results indicate that, in the particular setting of our study, the structure of the exchange networks is better defined by other variables than ethnicity and that ethnic heterogeneity is unlikely to be a driver for sub‐optimal economic exchanges.

We study the mortality cost of political patronage in the context of China’s Great Leap Famine (GLF; 1958-1962). As a direct consequence of a series of radical and misguided policies implemented during a political and economic campaign initiated by China’s top leader Mao, the GLF caused millions of deaths in rural China, with famine mortality varying substantially across provinces. We show that provincial party leaders who were socially connected to Mao 1) pursued Mao’s policies with more zealousness, which led to significantly more famine deaths in their jurisdictions; 2) were more likely to get promoted right before the GLF; 3) had more interactions with Mao during the GLF. Our results point to political patronage as an important contributing factor of the Great Leap Famine.

Stiglitz and Weiss (1981) credit rationing is embedded within rank dependent expected utility theory. Our results show that sufficient pessimism or sufficient risk-aversion by borrowers may eliminate adverse selection. Moreover, lender optimism may eliminate credit rationing even when adverse selection exists.