WIDER Seminar Series - Faraz Usmani and Larissa Nawo

At the 14 March 2018 session of the WIDER Seminar Series, PhD Candidates Faraz Usmani and Larissa Nawo will present their recent findings.

Faraz Usmani: Abstract – Fracking, farmers, and rural electrification in India

Access to reliable electricity is believed to be a catalyst for growth and development, yet recent evidence on the impacts of electrification is mixed. We exploit a natural experiment in India to investigate whether large-scale rural electrification is necessary (rather than sufficient) for household welfare and regional economic growth. Smallholders in north-west India grow the vast majority of the world's guar, a crop that yields a potent thickening agent used in hydraulic-fracturing (‘fracking’) fluid. In response to the United States' fracking boom, Indian guar prices increased by nearly 1,000% over 2006–10. Using multiple identification strategies, we first evaluate the impacts of this exogenous income shock on a host of rural-development outcomes. Leveraging population-based discontinuities in the contemporaneous roll-out of India's massive rural electrification scheme, we then investigate the extent to which these impacts are confined to areas electrified before the boom.

Larissa Nawo: Abstract – Why are African ruling elites so enamoured with sovereign wealth funds? | Slides

In this paper, we argue that in paternalist regimes and weak democratic states, where ruling elites strengthen power through economic fortune, sovereign wealth funds (SWFs) look like the new fashion tool to cement hold on power. In fact, SWFs concentrate substantial resources which can be used for several political agendas besides the macroeconomic goals declared. Using a logit regression panel data model, we provide the first cross-national political-economy of the creation and proliferation of SWFs. Results suggest that in Africa ‘autonomy-maximization’ theory has been crucial in shaping the decisions of most ruling elites to set up SWFs. In the end, SWFs are institutions for advancing this undeclared goal. This is because they enhance domestic stability and can bring prosperity at least in short-run, as in Libya before the Arab Spring, Angola or Nigeria. Without centralized power, there is disorder, which is a nuisance to investments and economic growth.

WIDER Seminar Series

The WIDER Seminar Series showcases recent and ongoing work on key topics in development economics. The weekly sessions held in Helsinki are open to local and visiting researchers, policy makers, and others interested in development topics. Click here to learn more.