Research

Peer-reviewed publications


Abstract: This paper questions whether firms’ internet connectivity and adoption helped them cope with the COVID-19 pandemic. Using data on 31,387 firms from 39 developing and developed economies, our results stress that businesses using website before the crisis showed higher absorption capacities than other firms during the crisis. The positive role of website use was mainly through the adoption of coping strategies, in particular home-delivery services, online sales or remote work. In contrast, the positive effect played by the prior use of internet is not explained by better access to external public (government support) or private (bank loan) financial resources. If prior internet use had a role on the resilience of firms, this is not the case for internet access. A negative effect of firm survival and labour adjustments is indeed found, but further analysis shows that this finding is explained by the mediating effect of 4G coverage on COVID policies’ stringency, suggesting that these policies were more effective in places with better internet coverage. 
Abstract: This paper investigates the impact of internet use as a means of accessing news on African citizens’ demand for and perception of the supply of democracy. This question is addressed using cross-sectional data from the last three rounds of the Afrobarometer survey for a sample of 25 African countries between 2011 and 2018. Using an instrumental variable approach to control for the possible endogeneity bias between internet use and citizens’ perceptions, we found that using the internet to get news has a negative and significant effect on the demand for and on the perceived supply of democracy. The negative effect is channeled through two main factors. The first factor is the confidence in governments and governmental institutions, which is undermined by the use of the internet. In particular, we find that this internet-induced lower confidence translates into a higher probability of engaging in street protests instead of increased political participation. The second driving factor is the (mis-)information channel. On the one hand, we show that internet users’ perception of the supply of democracy negatively diverges from experts’ ratings. On the other hand, we document further that internet use increases the likelihood of incoherence in the respondent’s stance about her demand for democracy. Finally, we show that the negative effect we found is mitigated when the internet is complemented by traditional media sources, especially the radio, to get informed. The findings of this study suggest that internet use is not neutral and tends to undermine citizens’ preferences for democracy and alter perceptions about the functioning of political institutions.
Abstract: In this paper, we highlight a new dimension of the submarine cable infrastructure network, termed ‘digital connectedness’, reflecting a country's digital proximity to main world markets, and assess its impact on export upgrading. Adopting an instrumental variables approach conducted in a sample of 60 developing countries―including 23 sub-Saharan African countries―over the period 1995‒2017, we find that digital connectedness positively and significantly contributes to the export basket complexity, but also points out spatial heterogeneity within our sample. In fact, estimations stress that, compared to the Rest of the World, a 10pp increase in the share of world GDP directly cabled to SSA countries leads to a supplementary increase ranging from 4.6 index points to 5.3 index points in the export complexity index. Moreover, whereas the positive effect of digital connectedness falloffs with distance from global markets everywhere else, in sub-Saharan Africa, an increased benefit is recorded. Last but not least, consistent with the literature improved digital connectedness also materializes into greater exports of differentiated goods and greater participation in the global value chain. Overall, our analysis gives credit to the belief that improved access to information and knowledge, through greater digital connectedness, spurs structural change and export basket upgrading in SSA at a higher pace than in any other developing areas. 
Abstract: Does local internet diffusion spur manufacturing performance in developing countries? To answer this question, we conduct instrumental variable estimations, using repeated cross-section data on 44,073 manufacturing firms from 109 developing and transition economies, and find large positive spillover effects of local email incidence on manufacturing firms’ sales and sales per worker. This evidence is driven by the local dissemination of email technology within industries rather than across industries. However, further analysis stresses that inter-industry spillovers are actually U-shaped, that is, negative at low email incidence rates but turning positive once incidence reaches approximately 50% of the local universe of firms. This suggests that local internet spillovers across industries are subject to network effects. Last, these threshold effects seem related to the presence of outward-oriented firms, which are known to exhibit higher digital absorptive capacity. Overall, this paper shows that local industrialisation paces may strongly diverge between poorly and highly digitalised environments. 
Abstract: A widely held belief is that exposure to international trade helps reducing corruption. In this article we show through theory and evidence that the relationship between trade and corruption is more nuanced. We show that firm level corruption actually increases when exports experience booms or busts. The reason is that export booms result in stronger incentives to favor production rather than corruption in low export settings, and vice versa in high export settings. Consequently, export busts when exports are very low, and export booms when exports are high, lead both to higher corruption. We corroborate these findings with an extensive database of some 45,000 firms from 72 developing and transition economies, surveyed over 2006-2017. We also confirm the corruption-deterrent effect of institutional quality. 

Among the 5 most cited articles published in IEPOL since 2020 (as of 07/12/2023).


Abstract: In recent decades, international connectivity has improved significantly with the worldwide deployment of some 400 fiber submarine cables (SMCs), transmitting more than 99% of international telecommunications. If sub-Saharan African (SSA) has long remained excluded from this interconnection process, the maritime infrastructure network has recently densified and spurred an African connectivity catch-up. This paper estimates the impact of SMC deployment on the digital divide in a sample of 45 SSA countries covering the period of 1990–2014. Difference in differences (DID) estimations are conducted and highlight the particular contribution of SEACOM and EASSy cables, laid in 2009–2010, to Internet penetration in Eastern and Southern Africa. According to DID estimates, the rollout of these SMCs has yielded a 3–5 percentage point increase in Internet penetration rates in this region compared to the rest of SSA. This is a remarkable advancement, since this variation corresponds approximately to the average level of Internet penetration in the subcontinent prior to their arrival.
Abstract: Regional integration (RI) follow-up based on the mere compliance and result-based indicators is limited. While compliance indicators are confined to the regulatory dimension of integration policies, indicators based on policy outcomes are influenced by domestic and external factors: population growth, international movements of foreign exchange rates, international raw commodity price volatility, and so on. This paper proposes to complement indicators for RI monitoring by an index measuring the commitment of member states of a regional economic community with respect to the recommendations of community acts that frame the RI process. By shifting the focus on public officials’ decision-making process, this approach makes it possible to remove the influence of factors independent of their commitment over policy outcomes. Such an index is therefore intended to promote more vigorous integration policies from member states. This paper explains the principles underlying the commitment for regional integration index, proposes an application to the trade integration process in the West African Economic and Monetary Union (WAEMU), and confronts the index to some trade integration outcomes. 

Awarded the Elinor Oström Prize of the best full-length article published in 2019 in the JoIE  


Abstract: This paper addresses the effects of the revolving door phenomenon on the inequality of influence among firms. It shows that firms are not equal in their capacities to benefit from state connections. We first develop a theoretical model introducing the notion of ‘bureaucratic capital’ and showing how the revolving door generates inequality in bureaucratic capital and in profits leading to inequality of influence. Then, this prediction is tested on a new database tracking the revolving door process involving the 20 biggest US commercial banks. We show that regulators who have created a large stock of ‘bureaucratic capital’ are more likely to be hired by the top five banks after leaving public office. We then develop indices of the inequality of influence between banks. We show that banks in the top revenue quintile concentrate around 80% of the stock of revolvers. Goldman Sachs appears as the prime beneficiary of this process, by concentrating almost 30% of the revolving door phenomenon.
Abstract: Customs administrations in developing countries increasingly use risk-based techniques relying on data mining and statistical scoring. By demonstrating the value of using data analysis techniques to orient frontline controls so as to facilitate legal trade and combat fraud more effectively, these projects have helped promote a cultural change in these organizations. However, these risk management techniques may prove to be ineffective in assessing fraud risks based only on frauds detected by customs inspectors. In a context of moral hazard and low-performing customs administration, one way to address this weakness is to expand the approach by relying on other sources of information such as discrepancies in bilateral trade statistics. Several studies use these statistical discrepancies (mirror data) to identify fraudulent declarations and estimate their effects. By comparing Gabon's import customs data with discrepancies in its bilateral trade data, this paper stresses the usefulness of simultaneously analyzing customs fraud records and mirror trade statistics data. Such an analysis helps quantifying undetected fraud and therefore constitutes a valuable tool to target ex post audits. Then, based on the combination of these databases, the paper defines indicators to monitor the performance of customs controls. 
Abstract: Monitoring of structural change in Least Developed Countries (LDCs) requires examination of the changes in their structural economic vulnerability. This cannot be done by comparing the level of the Economic Vulnerability Index (EVI) that is calculated for each triennial review of the list of LDCs, because of the change in the design of the index. In this paper, the change in the structural vulnerability of LDCs is assessed according to two retrospective series of EVI, based on constant definitions, those respectively used at the 2006 and 2012 reviews. The real change in structural economic vulnerability is thus isolated from the impact of the changes in the design of the index (components, weighting, methods of calculation, and data updating). According to both retrospective series, structural vulnerability is not only markedly higher in LDCs than in other developing countries, but it shows a later and smaller decline over the period 1990-2011. The declining trend of EVI is due mainly to the trend of the shock sub-index which is more marked in non-LDCs than in LDCs according to both designs. On the other hand, the exposure trend, which declines at a similar rate in LDCs and non LDCs, seems to result from two factors which do not reflect a real structural change in LDCs: a higher population growth and a less rapid increase of the share of population located in low elevation areas. Moreover the change in 2012 of the weighting of the exposure index, together with the addition of the low elevation coastal zone (LECZ) component (at the expense of population size), introduced a bias into the distribution of vulnerability values within the LDC group. It works against dry land countries, which are often threatened by climate change. It also leads to underestimate the increase in the gap between the structural vulnerability of LDCs and non-LDCs. 

Abstract: For at least 40 years, the analysis of the causes and consequences of macroeconomic instability has greatly deepened our understanding of the handicaps faced by developing countries. This concern on economic instability is evidenced by a broad spectrum of indicators, based on the deviation of observed values of a given economic aggregate from its reference or trend value. In general, the choice of this or that indicator is not discussed advocating that the resulting instability indicators are closely correlated. Focusing on measurements of instability in export revenue data for 134 countries from 1970 to 2005, this paper finds that this assertion may be true for variance-based indicators, measuring the average magnitude of deviations from the trend. However, great discrepancies may arise between different measures of the asymmetry or of the occurrence of extreme deviations around the trend when different trend computation methods are used. Our purpose is, therefore, to invite further discussions regarding the use of these indicators, and to highlight the different dimensions of instability, which have been so far unheeded by the economic literature. 

Books & Chapters in Book


Abstract: This book focuses on the impact of information technology on the lives and livelihoods of rural households in sub-Saharan Africa, where simple mobile phones have leapfrogged traditional communication and financial technologies, and thus, arguably, offer some of the greatest potential for development. Drawing on primary and secondary research from a variety of disciplines, the authors first examine the evolution of mobile phone coverage and adoption in sub-Saharan Africa over the past two decades, before exploring the main channels through which mobile phones can affect development. They then review initiatives on “digitizing development” before evaluating empirical evidence on their impact, arguing that digital has yet to live up to the hype.  The book ends with a set of questions that stakeholders should ask (and answer) when using digital technology for promoting development.
  • Brezis, E. S., & Cariolle, J. (2017). Financial Sector Regulation and the Revolving Door in US Commercial Banks. In State, Institutions and Democracy (pp. 53-76). Springer, Cham. 

Abstract: This chapter develops an index of the distortions due to the revolving door – The Revolving Door Index. This index focuses on the process by which these distortions arise, by measuring the concentration of revolving-door movements among private firms. We motivate this index through a literature review and a small theoretical model, and illustrate it by an empirical application using data on the five biggest US commercial banks. Our data show that there is a concentration of revolving-door movements which mainly benefits to Goldman Sachs. This index may have policy implications for improving financial sector regulation.  

  • Cariolle, J. "Corruption in turbulent times: A response to export booms and busts", in Commodity market instability and asymmetries in developing countries: Development impacts and policies, Sarris, A. (Ed), Ferdi, 92p, 2016.

Selected Working Papers


Imbruno, M., Cariolle, J., & de Melo, J. Digital connectivity and firm participation in foreign markets: An exporter-based bilateral analysis, CEPR Discussion Paper,  May 2022. R&R at Journal of Development Economics.
Abstract: This paper studies how bilateral digital connectivity resulting from telecommunications submarine cable (SMC) deployment affects firm participation in export markets. Based on a heterogeneous firm model and using an unbalanced panel of bilateral trade data across 48 countries during the period 1997-2014, we find that an SMC connection between two countries is associated with an increase in the number of bilateral exporters in developed countries, but also with a reduction in the number of bilateral exporters in developing countries. This negative association between bilateral connectivity and firm participation in export markets appears to be stronger in the poorest developing areas: Middle East and North Africa, South Asia and Sub-Saharan Africa. The growth in world connectivity spurred by SMCs deployment has therefore had a heterogeneous effect on firm decision to export, pushing more firms from high-income countries to enter export markets, and some incumbent exporters from lower-income countries to exit them. 
Cariolle, J. & Carroll II, A.D. From phone access to food markets: Is mobile connectivity transforming West-African livelihoods?  Ferdi Document de travail P341.Abstract: This paper investigates the impact of mobile connectivity on food market prices and household demand for food products in the West African Economic and Monetary Union (WAEMU) region. Leveraging data from harmonized World Bank LSMS household surveys across eight WAEMU countries, this study includes 59,319 households and 146 food products across 4,983 enumeration areas, with data gathered in 2018-2019. By using exposure to lightning strikes as an instrumental variable for cell tower coverage, we find that mobile connectivity reduces food price dispersion by spurring food prices catch-up in rural areas. Greater market demand for food products and lower reliance on self-consumption of food produced by rural households appear to be the drivers of this observed convergence in food price. Additionally, enhanced financial inclusion through mobile money and diversification of income sources through off-farm and non-agricultural activities are identified as key enablers of these observed changes. Overall, these results suggest that the digitalization of rural areas stimulates the transition from a subsistence to a market economy, thereby accelerating rural transformations, albeit with the added risk of leaving unconnected households behind.

Cariolle, J., Houngbonon, G.V., Silue, T., and Strusani, D. (2024) Submarine Cables, Internet Access Price and the Role of Competition and Regulation. Policy Research Working Paper,  Washington, DC: World Bank Group. doi: 10.1596/1813-9450-10840 .Submarine cables (SMCs) enable international connectivity and are essential for highspeed Internet access. In this paper, we test their potential to improve the affordability of Internet access by supporting a price drop through cost savings or increased competition intensity. Our empirical framework relies on a dataset that combines the capacity of SMCs with price data on fixed and mobile Internet across 150 countries over a decade. Using a two-way fixed effects estimator, we found that the expansion of SMCs is associated with a statistically significant drop in the price of Internet access, up to 14-21 percent, depending on the technology, for every doubling of the capacity of SMCs, and with large regional disparities. We found that these effects stem from cost savings in the short run and tend to decline over time, concomitant with a rise in domestic telecom market concentration. We also found that these effects can be enhanced by telecom regulations, especially de-jure independence of the regulator, and the regulation of network interconnection and access, shared telecom infrastructure, and competition from international players across the broadband value chain. Our main findings are robust to alternative estimation strategies, including an instrumental variable and a staggered difference in differences.

Work-in-progress


Ameye, H., Cariolle, J. & Carroll II, A.D. Digitalization and nutrition security in the WAEMU.

Cariolle, J., Dsouza, A., & Carroll II, A.D. Mobile connectivity, on-farm and off-farm revenues in rural West Africa.