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on Central and Western Asia |
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Issue of 2010‒09‒18
eleven papers chosen by Bibhu Prasad Nayak Institute for Social and Economic Change |
| By: | Peter E Robertson (UWA Business School, The University of Western Australia); Jessica Y Xu (Australian Government, The Treasury) |
| Abstract: | China’s growth has been rapid but the value of China's international trade has grown even faster. This trade-biased growth is bringing both challenges and opportunities for Asian economies that are highly integrated with Chinese trade networks. Moreover in ASEAN countries such as Indonesia and Malaysia, China’s success has been seen as a threat to its existing trade and manufacturing base. We use an historical simulation analysis to examine the impacts of China’s growth on Asian economies. We find that a decade of China’s growth has raised GDP per capita in the developed Asian economies by around 16%. The effect on the ASEAN-4 economies is not as strong but still large, the GDP of the ASEAN-4 economies increased by approximately 7%. The main source of these gains is found to be lower durable goods import costs which induce accumulation of machinery and equipment capital. |
| Keywords: | Economic Growth, China, Trade Costs |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:10-15&r=cwa |
| By: | Bhattacharyay, Biswa N. (Asian Development Bank Institute) |
| Abstract: | Infrastructure plays a key role in promoting and sustaining rapid economic growth. Properly designed infrastructure can also make growth more inclusive by sharing its benefits with poorer groups and communities, especially by connecting remote areas and small and landlocked countries to major business centers. Even if the Asia-Pacific region has witnessed progress in infrastructure development, the growth of infrastructure lags behind its economic growth, and also behind international standards of infrastructure quantity and quality. Inadequate infrastructure can hamper the potential economic growth of Asian countries, weaken their international competitiveness, and adversely affect their poverty reduction efforts. The circumstances and effects of the recent economic and financial crisis provide a number of reasons to further develop national and regional infrastructure in Asia. Among these reasons is that regional infrastructure enhances competitiveness and productivity, which could help in economic recovery and in sustaining growth in the medium to long-term. Regional infrastructure also helps increase standard of living and reduce poverty by connecting isolated places and people with major economic centers and markets, narrowing the development gap among Asian economies. This paper estimates the need for infrastructure investment, including energy, transport, telecommunications, water, and sanitation during 2010-2020, in order to meet growing demands for services and facilitate further rapid growth in the region. By using "top-down" and "bottom-up" approaches, this paper provides a comprehensive estimate of Asia's need for infrastructure services. The estimates show that developing countries in Asia require financing of US$776 billion per year for national (US$747 billion) and regional (US$29 billion) infrastructure during 2010-2020 to meet growing demand. |
| Keywords: | asia-pacific infrastructure; regional infrastructure; infrastructure development |
| JEL: | L90 O10 O20 R11 R40 |
| Date: | 2010–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0248&r=cwa |
| By: | Negin, Vahideh; Abd Rashid, Zakariah; Nikopour, Hesam |
| Abstract: | Most of the studies which have investigated the link between corruption and poverty may draw conclusions on causality in the form of models that only show correlation. This study is set out to investigate the Granger causal relationship between corruption and poverty. It uses dynamic panel system GMM estimators, focuses on capability poverty using human poverty index (HPI) and is based on a sample of 97 developing countries during 1997-2006. The empirical findings reveal that corruption and poverty go together, with bidirectional causality. |
| Keywords: | Corruption; Poverty; Panel Data Analysis |
| JEL: | C23 I3 K42 |
| Date: | 2010–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24871&r=cwa |
| By: | Christophe J. Godlewski (LaRGE Research Center, Université de Strasbourg); Zuzana Fungacova (BOFIT, Bank of Finland); Laurent Weill (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | This paper investigates stock market reaction to debt arrangements in Russia. The analysis of the valuation of debt arrangements by stock markets provides information about the use of debt by Russian companies. We apply the event study methodology to check whether debt announcements lead to abnormal returns using a sample of Russian listed companies that issued syndicated loans or bonds between June 2004 and December 2008. We find a negative reaction of stock markets to debt arrangements that can be explained by moral hazard behavior of shareholders at the expense of debtholders. Further, we observe no significant difference between announcements of syndicated loans and bonds. Thus, our findings support the view that Russian companies could have incentives to limit their reliance on external debt. |
| Keywords: | Corporate bonds, event study, Russia, stock returns, syndicated loans. |
| JEL: | G14 G20 P30 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2010-10&r=cwa |
| By: | Randall K. Q. Akee |
| Abstract: | Existing research examining the self-selection of immigrants suffers from a lack of information on the immigrants’ labor force activities in the home country, quotas limiting who is allowed to enter the destination country, and non-economic factors such as internal civil strife in the home country. Using a novel data set from the Federated States of Micronesia (FSM), a migration flow to the U.S. has been analyzed that suffers from none of these problems. Second, nearest neighbor matching for immigrants has been conducted prior to their leaving the home country using home country wages as the outcome variable to determine the nature of selection on unobservable characteristics. [Discussion Paper No. 3268] |
| Keywords: | immigrants, home country, Federated States of Micronesia (FSM), U.S., high-skilled workers, endogeneity, wages |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2829&r=cwa |
| By: | Elisa Cavatorta (Department of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | This paper explores the interactions between the risk of food insecurity and the decision to health insure in the Palestinian Territories. The risk of adverse health conditions is insurable; the risk of food insecurity is a background risk and no market insurance exists. The vulnerability to food insecurity influences the individual utility from health insuring. We present a competing risk model to reveal this interdependence. We specify the empirical model as a bivariate probit model and evaluate the impact of food insecurity on the household decision to health insure. We find evidence of significant complementarity between the risk of food insecurity and the propensity to health insure. The predicted conditional probabilities reveal that the propensity to health insure is higher in presence of food insecurity among Palestinian households. This study shows that, in presence of a background risk, there are complementarities among risks that policy should be mindful of. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:1013&r=cwa |
| By: | Sunil Kanwar |
| Abstract: | In this paper, the influence of stronger intellectual property protection on technology transfer into developing countries via licensing is analyzed. Using panel data for the post-TRIPs period 1995-2005, it is found that stronger protection is associated with increased royalty and license fee payments by developing countries, implying greater technology transfer into these countries. [Working Paper No. 188]. |
| Keywords: | intellectual property, protection, research, per capita income, population, profitability, economy, economic freedom, financial, developing countries, royalty, license, technology transfer, fee payment, TRIPs, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2830&r=cwa |
| By: | Sophie Bernard (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | In a stylized model of international trade, a monopolist in the North exports second-hand products to a representative firm in the South to be reused as intermediate goods, with potential trade gains. The degree of reusability of waste products is a crucial choice variable in the North. This is because with a lack of international vigilance, non-reusable waste can be mixed illegally with the reusable waste. I explore the driving forces for the movement of illegal waste, paying particular attention to the role of local waste regulations, such as the EU's Waste Electrical and Electronic Equipment directive. Under mild conditions, it is shown that increased regulation stringency in the North leads its firm to reduce the degree of reusability of its products. As a result, the flow of non-reusable waste to the South increases, providing another channel for the Pollution Haven Hypothesis. |
| Keywords: | second-hand products, illegal waste, environmental regulation, trade |
| JEL: | F18 L10 O20 Q53 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1006e&r=cwa |
| By: | Zsolt Darvas (Bruegel, Hungarian Academy of Sciences, Corvinus University of Budapest); Jakob von Weizsäcker (Thüringer Wirtschaftsministerium, Bruegel) |
| Abstract: | The case for taxing financial transactions merely to raise more revenues from the financial sector is not particularly strong. Better alternatives to tax the financial sector are likely to be available. However, a tax on financial transactions could be justified in order to limit socially undesirable transactions when more direct means of doing so are unavailable for political or practical reasons. Some financial transactions are indeed likely to do more harm than good, especially when they contribute to the systemic risk of the financial system. However, such a financial transaction tax should be very small, much smaller than the negative externalities in question, because it is a blunt instrument that also drives out socially useful transactions. There is a case for taxing over-the-counter derivative transactions at a somewhat higher rate than exchange-based derivative transactions. More targeted remedies to drive out socially undesirable transactions should be sought in parallel, which would allow, after their implementation, to reduce or even phase out financial transaction taxes. |
| Keywords: | transaction tax, Tobin tax, financial transactions, global financial crisis, financial regulation |
| JEL: | H20 D62 G10 F30 |
| Date: | 2010–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:mkg:wpaper:1001&r=cwa |
| By: | Gennadi Kazakevitch |
| Abstract: | The article reflects upon the legacy of Yegor Gaidar (19 March 1956 – 16 December 2009), Russian economist – academic and political leader, the key figure of the initial stage of postcommunist transformation in Russia in early 1990s. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2010-30&r=cwa |
| By: | Barrientos, Armando; Nino-Zarazua, Miguel |
| Abstract: | In this new version of the database we have included pilot social assistance programmes. A number of pilot cash transfer programmes have been introduced in Latin America, Asia and Africa in the last year or so, and a few more are in the design stage. Their scale and rationale suggest there is a good chance they will be scaled up in the near future. In theory, pilot social protection programmes should imply experimentation in the face of uncertainty regarding the way forward, but several of the pilots covered in the database, and many of those in the pipeline, represent instead a specific route to the extension of social protection, and as such they merit discussion. The main purpose of this brief note is to provide such discussion, and illuminate on this specific mode of development of social protection in developing countries. In Sub-Saharan Africa, there are pilot cash transfers schemes in place in Kenya, Malawi, Ghana and Zambia; and in the implementation stage in Nigeria, Liberia, Uganda, and Tanzania. In Latin America, pilot programmes have been rolled out in Paraguay, Honduras, Nicaragua, Panama, Argentina, and the Dominican Republic. In South Asia, ’s Challenging the Frontiers of Poverty Reduction - Targeting the Ultra Poor programme is in fact a pilot programme, as as is Pakistan’s Child Support programme. Why the high number of pilots? In the context of technocratic models of policy making, pilot programmes would make a great deal of sense if policy makers are uncertain of the feasibility and likely impact effectiveness of interventions. Before introducing innovative, complex, and costly interventions, sensible policy makers would recommend testing the interventions in a small scale experiment. Knowledge from the delivery and impact of the interventions could then inform the desirability and design of a scaled up programme. There is a sense in which the social protection pilot programmes referred to above, and described in the database, do not fit fully into this description. We have accumulated a large body of evidence and knowledge about the design, delivery, and impact of cash transfer schemes in Latin America to be reasonably confident that, adequately designed, they can achieve their short term objectives. Why is further testing necessary? The strongest available evidence on cash transfer programmes comes from middle income countries in Latin America, Mexico’s Progresa/Oportunidades, and to a lesser extent Brazil’s Bolsa Escola/Familia. Naturally, questions remain over whether similar programmes can work in other environments. Would cash transfer schemes work in Africa? Would they work in low income countries in Latin America? Low income countries have higher incidence of poverty; lower capacity in terms of designing, delivering, and evaluating transfers schemes; and less developed administrative and financial systems. It makes sense to check whether cash transfers are appropriate and effective in these, more adverse, environments. Even then, fewer pilots would still deliver answers to our questions. We know from the Zambia Kalomo Social Transfer Pilot Scheme that cash transfers are feasible and effective in low income countries, providing that technical support is available and community selection of beneficiaries is feasible. The spread of pilot social assistance schemes is also explained by domestic policy processes and funding modalities. In countries where policy makers, and perhaps civil society, are reluctant to innovate, pilots provide an opportunity to enable learning from new approaches to poverty and vulnerability. It also provides a well defined time frame in which donors could use existing funding modalities to support the extension of social protection. DFID, for example, is committed to shifting focus from emergency aid to regular forms of support in Africa. In Latin America, IADB support for social protection initiatives normally extends for periods of up to five years. Given the time frame of available international aid , the expectations are that pilot schemes could be instrumental in building learning and support for social protection among domestic policy makers, that they would have strong ‘demonstration effects’. Risks and opportunities There are significant risks with this strategy, and even more significant opportunities. The risks are to do with pilots failing to generate the expected ‘demonstration effects’, and with changes in international economic conditions that shift attention to other problems. The opportunities could potentially be very significant, successful pilot transfer schemes could mark the beginnings of a process leading to the implementation of effective anti-poverty programmes at a scale capable of making a large dent on global poverty. Paying attention to the design of pilots and to associated policy processes could help minimise these risks and maximise opportunities. Designing pilot social assistance programmes as if they are a first phase of a fully scaled up programme is essential. This involves avoiding short cuts in the pilot stage, and making the necessary investment in information systems, delivery institutions, and beneficiary selection. These set up costs can be substantial. Process considerations are important in ensuring the pilots are part of national social protection strategies, and involve a wide range of stakeholders. It is vitally important that pilots achieve a good balance of design and process considerations. As much else in development policy, pilot social transfers are as much about politics as they are about the economic and technical issues of poverty reduction. |
| Keywords: | Social Protection; developing countries; Conditional Cash Transfers; Social Pensions; Workfare Programmes; database |
| JEL: | H55 I3 I38 H5 H53 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20001&r=cwa |