Three Essays on Evidence-Based Approach to Development

This dissertation is a collection of three empirical research papers in micro and macro development. The first chapter studies the persistent impact of early-life weather conditions on adult socioeconomic outcomes, testing the epidemiological hypothesis that in utero and extrauterine environment has important implications for development of infants into adulthood. I find that a 50 percent higher birth year rainfall relative to the district norm leads Nepalese individuals (females) to 0.05 (0.09) more years of schooling and 1.7 percentage points higher likelihood of being literate. This has important policy implications regarding targeted agricultural insurance and safety net programs. The second chapter empirically analyzes the heterogeneous effects of decentralization on participation and quality of education in Nepalese public primary schools. The main empirical findings suggest that, on average, years taken to complete primary school declined by 1.3 years more for children in treated districts relative to those in untreated districts. There is also some evidence that decentralization boosted primary school enrolment for males. Finally, the third chapter focuses on the issue of whether and to what extent International Monetary Fund’s (IMF) concessional programs and World Bank’s International Development Association (IDA)-supported investment loans accelerate income convergence among eligible low and middle-income countries. On average, real GDP per capita in LMICs that are extended participants in IMF/IDA-supported programs grew 3.2 percentage points faster. More importantly, the rate of income convergence – measured as the marginal decrease in average growth rate for every ten percent rise in initial real GDP per capita – within the MICs, in particular, is 0.14 percentages points larger for extended participants in IMF-supported programs. Diminishing differences in fundamental factors of growth through preconditions of aid could help close the widening development gap within LMICs.