Rural Perspectives in a Global Economy
My dissertation is grounded in policy issues that affect rural economic growth in emerging markets. In a global economic framework, where growth and redistribution are par for the course, policies promoting rural development deserve particular attention. In the first two chapters, I explore how property rights establishment affects trade, deforestation and agricultural productivity in the Brazilian Amazon. My third chapter presents substantial evidence that crises propagate differently across
... ifferently across rural versus urban areas in Latin America. ii a 30% in credit financing and a 5 % increase in the number of credit contracts for investment purposes. However, we find no evidence indicating that the small farms engage in deforestation; they decrease their temporary crop cultivation, but do not increase their permanent crop cultivation. Increasing the area registered by mediumsized farms that obtain their land cheaply leads to an increase in the area deforested, as well as an increase in the rate of deforestation, by 0.3% and 4.4%, respectively, in response to a 1 p.p increase in their area registered. Finally, removing the threat of expropriation, along with increased access to credit, results in a reduction of total area cultivated due to a decreased cultivation of temporary crop cultivation. However, the largest properties increase their overall cultivation, particularly of cash crops and cocoa, though we cannot attribute this to the credit channel. My final chapter, "Asymmetric Effects of Crises in Urban vs. Rural Areas in Latin America: A Study Using Nightlights," more broadly assesses the impact of shocks in rural Latin America and the Caribbean. Using nightlights observed from space as a proxy for real GDP and population density maps, I construct a very precise measure of economic activity at five-square-kilometer grid level, a level of disaggregation never used before. To estimate the effect, I run separate regressions based on population density and cluster the errors at the country-level, using the pairs cluster bootstrap-t procedure to deal with the problem of too few clusters in my sample. Rural/semirural areas see their real income growth fall following systemic banking crises and currency crises, with the effect ranging between 0.5% to 1% based on the subsample and type of crisis. Notably, I fail to reject the null for their urban counterparts. These findings indicate that capital markets are not integrated by population at this disaggregate level and that the assumption of perfect risk-sharing is strongly violated. JEL Classifications: R11, F18, O13, O18 iii Acknowledgements I am grateful to my dissertation advisers, James Harrigan, John McLaren, and Kerem Cosar, for their guidance, and to Molly Lipscomb for advice and the use of the registration data from Terra Legal. I also thank Ariell Reshef and Alan Taylor for their encouragement and suggestions, and Danila Pankov for his support. This dissertation would not be possible without Shoshana Griffith's assistance in facilitating my visit to Brazil and Tatiana Benevides' graciousness and assistance during my visit. I am also grateful to Luis from the regional Manaus office of Terra Legal for arranging meetings with new land owners, Mathew Miller for his translation services and Francisco Oliveira from the Ministry of the Environment for invaluable information. I thank the Bankard Fund for Political Economy, Quantitative Collaborative UVA, the Steers Family Endowed Fund and the Thomas Jefferson Memorial Foundation for financial support and facilitating my visit to Brazil. iv Bibliography 130 2 The data at the municipal-HS6-level is restricted as of mid-2014. 3 However, it was not strictly phased in that agents could still register their property at any time if they were willing to travel to the field office. 4 The size threshold varied by municipality, based on population and proximity to cities. 5 However, it is not clear how the government determined which the market price or the discounted price that the land owners must pay, nor do I have information on how much they paid. worldbank.org/CountryProfile/en/Country/BRA/Year/2010/TradeFlow/Export/Partner/all/Product/44-49 Wood). 15 Quantity is not consistently reported, however and is zero for many observations that otherwise have Value and Net weight, so I do not consider quantity in my regressions.