Research

Conflicts

D’Aoust O., Sterck, O., Verwimp, P. (2016). “Who Benefited from Burundi’s Demobilization Program?”.  World Bank Economic Review, forthcoming.

This paper assesses the impact of the demobilization, reinsertion and reintegration program in post-war Burundi. Two major rebel groups benefited from cash and in-kind transfers, the CNDD-FDD from 2004, and the FNL from 2010. We combine panel data of households collected in 2006 and 2010 with official records from the National Commission for Demobilization, Reinsertion and Reintegration. We find that the cash payments received by FNL demobilized households had a positive impact on consumption, non-food spending and investments. The program also generated positive spillovers in the villages where FNL combatants returned. Ex-combatants indeed spent a large part of their allowance on consumption goods and clothing, thereby generating a short-run economic boom in villages. However, the long-run evolution of consumption indicators is negative for CNDD-FDD households, as well as for villages where CNDD-FDD combatants returned, suggesting that the direct impact and the spillovers of the program vanished in the long run.

Colombo, A., D’Aoust, O., & Sterck, O. (2016) From Rebellion to Electoral Violence. Evidence from Burundi. Economic Development and Cultural Change, forthcoming.

What causes electoral violence in post-conflict countries? The theoretical literature emphasizes the potential role of (1) ethnic grievances, (2) political competition or (3) specialists in violence. Our study is the first to test these three hypotheses simultaneously. Using a unique dataset on electoral violence in Burundi, we compare the incidence of electoral violence in neighboring municipalities, as these are more likely to have similar unobservable characteristics. Interestingly, electoral violence did not result from ethnic grievances, the usual suspect. Rather, we find that electoral violence was higher in municipalities characterized by fierce political competition and acute polarization between ex-rebel groups.

Baele, S. J., Sterck, O. C., & Meur, E. (2014). “Theorizing and Measuring Emotions in Conflict The Case of the 2011 Palestinian Statehood Bid”. Journal of Conflict Resolution, forthcoming.

While recent research has demonstrated the key role played by emotion in conflicts, the interplay between the individual and collective dimensions of this variable has not yet been fully conceptualized and satisfyingly measured. Focusing on the 2011 Palestinian statehood bid at the United Nations and the United Nations Educational, Scientific and Cultural Organization, this article highlights the circular character of group-based emotional dynamics and stresses the importance of “emotional worldviews” and “emotional configurations.” We subsequently provide an innovative, robust, and repeatable quantitative method for the direct measuring of these two components. This threefold contribution—theoretical, methodological, empirical—completes recent models (chiefly the appraisal-based framework) and unfolds new research avenues for the study of the role of individual and collective emotions in conflicts.

Baele S., Sterck, O., (2015). “Diagnosing the Securitisation of Immigration at the EU Level: A New Method for Stronger Empirical Claims”. Political Studies, 63(5), 1120-1139.

Has immigration been securitised at the EU level? The question has been hotly discussed, but no consensus has been reached. This article claims that two shortcomings – one methodological, one theoretical – in the empirical conduct of securitisation theory (ST) have provoked this lack of consensus. Taking this situation as an opportunity, a quantitative method is introduced that addresses these two shortcomings, thereby helping to reach a stronger claim on the securitisation of immigration at the EU level. By measuring the intensity of the security framing in EU legislation on immigration, the method helps avoid simplistic binary statements of (non-)securitisation and encourages the scholar to acknowledge the complex, multifaceted reality of vast political fields. The results contribute to accrediting the thesis according to which immigration has been securitised at the EU level, but nuances it by demonstrating a significant variation between the various subfields of the policy (e.g. asylum, legal immigration).

Sterck, O. (2015).  “Fighting for Votes: Theory and Evidence from Burundi”.  CSAE Working Paper WPS/2015-19.

Electoral violence is widespread in developing countries. However, its causes are poorly understood. I present a theoretical model of electoral competition in which electoral violence is more likely to emerge if (1) the electoral bases of leading parties are of similar size, implying that political competition is tight, and (2) polarization between violent supporters of leading parties is high. The relative importance of these two conditions varies with the type of electoral violence (e.g. clashes, intimidation or murders). The predictions of the model are tested and validated using a unique dataset on electoral violence during the 2010 elections in Burundi.

Law and economics

D’Aoust O., Sterck, O. (2016). Who Benefits from Customary Justice? Rent seeking, Bribery and Criminality in sub-Saharan Africa. Journal of African Economies, 25(3), 439-467.

In many Sub-Saharan countries, customary and statutory judicial systems co-exist. Customary justice is exercised by clan leaders or local courts, and based on restorative principles. By contrast, statutory justice is mostly retributive and administered by magistrates’ courts. As the jurisdiction of the customary and the statutory systems often overlap, victims can choose which judicial system to refer to, which may lead to contradictions between rules and inconsistencies in judgments. In this essay, we construct a model representing a dual judicial system. We show that the overlap of competence encourages rent-seeking and bribery, and yields to high rates of petty crimes and civil disputes. We recommend the subsidization of the statutory judicial system, as it efficiently improves deterrence and incapacitation in the dual judicial system while minimizing corruption of customary judges. We illustrate our theoretical predictions by discussing the functioning of the Ugandan dual judicial system.

The economics of HIV/AIDS

Sterck, O. (2017).  What Goes Wrong with the Allocation of Domestic and International Resources for HIV? Health Economics, forthcoming.

This paper examines how domestic and international financing for HIV is, and ought to be, distributed. We build a theoretical framework that decomposes domestic and international financing for HIV into non-linear functions of national income, HIV prevalence and government effectiveness. We test this model, paying particular attention to non-linearities and to problems of bad controls, multicollinearity and reverse causality. Finally, we use the fitted values of quartile regressions to study how much countries could reasonably pay domestically, and how much they should receive from donors. Worryingly, countries with higher financial means receive on average more aid per PLHIV than very poor ones, and countries with higher HIV prevalence receive on average less aid per PLHIV. The normative analysis concludes that US$3.08 billion of fiscal space could be created in LIC and MIC. We identify the countries which could be allocated more aid.

Manning, R., Sterck, O. (2017).  Rethinking international and domestic financing for HIV in low and middle income countries. Development Policy Review, forthcoming.

The scaling up of treatment for HIV across the world has been one of the most significant recent achievements in international health. But the commitment on antiretroviral treatment also creates a financial liability which is large and insufficiently recognized. In this paper, we explore how this financial liability could be met by domestic and international sources. We argue that (1) governments and donors should recognize the magnitude of the problem and develop tools to manage the liability; (2) allocation of aid should be more rational, transparent and sustainable; (3) more fiscal space should be created domestically; (4) borrowing offers some limited potential for prevention interventions characterized by high returns on investment and (5) efficiency gains, while not in themselves likely to bridge the resourcing gap, should be energetically pursued.

Sterck, O., Roser, M., Ncube, M., Thewissen, S. (2016).  Allocation of development assistance for health: is the predominance of national income justified? Health Policy and Planning, forthcoming.

Gross national income (GNI) per capita is widely regarded as a key determinant of health outcomes. Major donors heavily rely on GNI per capita to allocate development assistance for health (DAH). This paper questions this paradigm by analyzing the determinants of health outcomes using cross-sectional data from 99 countries in 2012. We use disability-adjusted life years (Group I) per capita as our main indicator for health outcomes. We consider four primary variables: GNI per capita, institutional capacity, individual poverty and the epidemiological surroundings. Our empirical strategy has two innovations. First, we construct a health poverty line of 10·89 international-$ per day, which measures the minimum level of income an individual needs to have access to basic healthcare. Second, we take the contagious nature of communicable diseases into account, by estimating the extent to which the population health in neighboring countries (the epidemiological surroundings) affects health outcomes. We apply a spatial two-stage least-squares model to mitigate the risks of reverse causality. Our model captures 92% of the variation in health outcomes. We emphasize four findings. First, GNI per capita is not a significant predictor of health outcomes once other factors are controlled for. Second, the poverty gap below the 10·89 health poverty line is a good measure of universal access to healthcare, as it explains 19% of deviation in health outcomes. Third, the epidemiological surroundings in which countries are embedded capture as much as 47% of deviation in health outcomes. Finally, institutional capacity explains 10% of deviation in health outcomes.  Our empirical findings suggest that allocation frameworks for DAH should not only take into account national income, which remains an important indicator of countries’ financial capacity, but also individual poverty, governance and epidemiological surroundings to increase impact on health outcomes.

Remme, M., Siapka, M., Sterck, O., Ncube, M., Watts, C., Vassal, A. (2016). Financing the HIV response in sub-Saharan Africa from domestic sources: moving beyond a normative approach. Social Science & Medicine, forthcoming.

Despite optimism about the end of AIDS, the HIV response requires sustained financing into the future. Given flat-lining international aid, countries’ willingness and ability to shoulder this responsibility will be central to access to HIV care. This paper examines the potential to expand public HIV financing, and the extent to which governments have been utilising these options.

We develop and compare a normative and empirical approach. First, with data from the 14 most HIV-affected countries in sub-Saharan Africa, we estimate the potential increase in public HIV financing from economic growth, increased general revenue generation, greater health and HIV prioritisation, as well as from more unconventional and innovative sources, including borrowing, health-earmarked resources, efficiency gains, and complementary non-HIV investments. We then adopt a novel empirical approach to explore which options are most likely to translate into tangible public financing, based on cross-sectional econometric analyses of 92 low and middle-income country governments’ most recent HIV expenditure between 2008 and 2012.

If all fiscal sources were simultaneously leveraged in the next five years, public HIV spending in these 14 countries could increase from US$3.04 to US$10.84 billion per year. This could cover resource requirements in South Africa, Botswana, Namibia, Kenya, Nigeria, Ethiopia, and Swaziland, but not even half the requirements in the remaining countries. Our empirical results suggest that, in reality, even less fiscal space could be created (a reduction by over half) and only from more conventional sources. International financing may also crowd in public financing.

Most HIV-affected lower-income countries in sub-Saharan Africa will not be able to generate sufficient public resources for HIV in the medium-term, even if they take very bold measures. Considerable international financing will be required for years to come. HIV funders will need to engage with broader health and development financing to improve government revenue-raising and efficiencies.

Sterck, O. (2016). “Natural Resources and the Spread of HIV/AIDS: Curse or Blessing?” Social Science & Medicine, 150(2): 271-278.

This paper answers two questions: “What impact have natural resources had on the spread of the HIV epidemic so far?” and “What role can natural resource rents play in order to finance the long-run response to HIV/AIDS?” Using a panel dataset, de Soysa and Gizelis (2013) provided evidence in Social Science & Medicine that oil-rich countries are more deeply affected by the HIV and TB epidemics. They concluded that government of resource-rich countries failed to implement effective public policies for dealing with the epidemics. In this paper, I show that their results are (1) not robust, (2) based on an inappropriate choice of dependent variable and (3) spurious because series are non-stationary. After correcting for these issues, I find no specific relationship between resource rents and the spread of HIV and TB. The paper concludes by discussing the potential of natural resources rents for financing the long-term liability brought about by the HIV/AIDS epidemic in sub-Saharan Africa.

Collier, P., Manning, R., & Sterck O. (2015). “From Death Sentence to Debt Sentence” Finance & Development (IMF), 52(4), 28-31.

Now that AIDS is a controllable disease, countries and donors must focus on financing treatment and investing in prevention.

Collier, P., Sterck, O., & Manning, R. (2015) The Moral and Fiscal Implications of Anti-Retroviral Therapies for HIV in Africa (CSAE working paper No. WPS/2015-05).

Thanks to anti-retroviral therapies, people living with HIV in developing countries can now have a near-normal life at a cost of a few hundred dollars per year. We postulate that given this newly low cost of maintaining lives, there is a moral duty to rescue those who are infected. The core of the paper quantifies a reasonable lower bound for the fiscal consequences of this duty, which we show creates a financial quasi-liability which for some African countries is comparable to their debt-to-GDP ratios. Expenditures on prevention can pre-empt some of these liabilities. We construct a model to show that in some countries expenditure on prevention would be cost-effective, reducing liabilities by more than its cost. In principle, prevention should be pursued at least up to the point at which expenditure on it reduces the quasi-liability sufficiently to minimize the overall cost of accepting the duty to rescue. However, we show that even with optimal prevention the quasi-liability is likely to remain too high to be affordable for a significant number of African countries. Extending the model to two players, we show that if the international community accepts part of the quasi-liability, (as it does), it should finance an equal share of prevention and treatment efforts. Any imbalance in this distribuiton would introduce moral hazard and lead to a sub-optimal level of prevention.

Sterck, O. (2014). “HIV/AIDS and Fatalism: Should Prevention Campaigns Disclose the Transmission Rate of HIV?” Journal of African Economies, 23 (1): 53-104.

Among non-specialists, estimates of the HIV transmission rate are generally upwardly biased. This overestimation may be perceived as beneficial because it increases the incentives to have protected sexual relationships. However, a fatalistic reaction may counterbalance this positive effect. Combined with the overestimation of the transmission rate, an occasional unprotected sexual encounter may induce the feeling that ‘the die is cast’, and hence lead to a permanent neglect of condom use. This paper proposes a theoretical model to predict this fatalistic reaction in both regular and casual relationships. Simulations of the model show that the expected transmission rate that would maximise condom use in high-risk populations lies between 0.55 and 8%.

Sterck, O. (2013), “Why are Testing Rates so Low in Sub-Saharan Africa? Misconceptions and Strategic Behaviors”. Forum for Health Economics and Policy. 16(1), 1-39.

Voluntary Testing and Counseling is a popular method for fighting the epidemic of HIV/AIDS. The purpose of VTC is to reduce the incidence of the virus in a twofold manner. First, testing provides access to health care and antiretroviral therapies which diminish the transmission rate of the virus. Second, counseling encourages safer behavior for individuals who test HIV-negative and want to avoid HIV/AIDS, and altruistic individuals who test HIV-positive and want to protect their partners. Surprisingly, empirical evidence from DHS surveys in Sub-Saharan Africa shows that testing services are underused. Moreover, it is rare that both partners in a couple test for HIV. This paper proposes a theoretical model showing how misperceptions about the HIV/AIDS virus may explain these puzzles. More specifically, it shows that individuals at risk of infection may act strategically to avoid the cost of testing if they overestimate the risk of HIV transmission or believe that health care is not needed when HIV is asymptomatic. The correction of false beliefs and the promotion of self-testing are expected to increase testing rates.

Econometrics

Sterck, O. (2016). Beyond the Stars: A New Method for Assessing the Economic Importance of Variables in Regressions. CSAE working paper.

Economists lack a systematic method to assess the economic importance of effects in regressions. In this article, I use experimental evidence to show that for a large majority of economists, the economic importance of an explanatory variable refers to its contribution to deviations in the level of the dependent variable. Existing statistics, such as standardized beta coefficients and the partial or semi-partial r² and r, are imperfect measures of the economic importance of explanatory variables: these statistics do not match with economists’ common understanding of economic importance and are difficult to interpret. I therefore develop a new method, which consists in rescaling standardized beta coefficients such as to obtain the percentage contribution of each explanatory variable to deviations in the dependent variable. As an illustration, the method is applied to the study of the causes of long-run economic development.