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on Africa |
| By: | Stephen Bond (Institute for Fiscal Studies and Nuffield College, Oxford); Måns Söderbom (Centre for the Study of African Economies, Department of Economcis, University of Oxford, and Institute for Fiscal Studies) |
| Abstract: | Cobb Douglas production function parameters are not identified from cross-section variation when inputs are perfectly flexible and chosen optimally, and input prices are common to all firms. We consider the role of adjustment costs for inputs in identifying these parameters in this context. The presence of adjustment costs for all inputs allows production function parameters to be identified, even in the absence of variation in input prices. This source of identification appears to be quite fragile when adjustment costs are deterministic, but more useful in the case of stochastic adjustment costs. We illustrate these issues using simulated production data. |
| Date: | 2005–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:nuf:econwp:0504&r=afr |
| By: | Chih Ming Tan |
| Abstract: | Do institutions “rule” when explaining cross-country divergence? This paper finds that to a large extent they do. However, the role of ethno-linguistic fractionalization cannot be ignored. Sufficiently high-quality institutions are necessary if the negative impact on development from high levels of ethno-linguistic fractionalization is to be mitigated. Interestingly, I find no role for geographic factors; neither those associated with climate nor geographic isolation, in explaining divergence. There is also no evidence to suggest a role for religious fractionalization. Finally, my findings affirm earlier work in the literature that sets apart Sub-Saharan Africa’s development process from the rest of the world. |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0512&r=afr |