|
on Central and Western Asia |
|
Issue of 2010‒10‒23
eighteen papers chosen by Bibhu Prasad Nayak Institute for Social and Economic Change |
| By: | George Syrichas (Central Bank of Cyprus) |
| Abstract: | Mediterranean countries following a fixed exchange rate regime have been confronted with some challenges that test the efficacy of the regimes in place. These challenges mostly arise from the combination of inflationary pressures and the need for further capital account liberalisation amid conditions of ample liquidity in the banking system and rapid money and credit growth. In light of these developments, some of these exchange rate targeting Mediterranean countries are assessing the framework in place or even contemplating change to a more flexible arrangement, which would allow them greater freedom to pursue domestic objectives. Theoretical and empirical considerations do not point to the superiority of a particular exchange rate regime, but provide broad guidance on the factors and conditions that are predisposed to a fixed exchange rate regime and its sustainability in a liberalised environment. The case of Cyprus confirms the view that, under certain conditions, it is possible to maintain a credible fixed exchange rate regime while advancing capital account liberalisation and still achieve the primary objective of monetary policy. Adherence to a simple monetary rule, such as an exchange rate target, can confer credibility on a central bank and deliver price stability. Another important lesson drawn from the Cyprus case is that this strategy requires an independent central bank and needs to be supplemented by additional measures. Monetary aggregates, in particular credit, should be closely monitored and controlled, if necessary. The current account also warrants close monitoring, both as an indicator of inflationary pressures and as a warning signal helping to avoid unsustainable external imbalances. Finally, capital account liberalisation requires that the authorities have in advance a well-prepared and comprehensive plan, including, first and foremost, reforms in the conduct of monetary policy and banking supervision. |
| Keywords: | Exchange rate policy, exchange rate pegs, monetary policy, Mediterranean countries, Cyprus. |
| JEL: | E31 E4 E52 F31 F33 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:cyb:wpaper:2010-8&r=cwa |
| By: | Adrian Pagan (University of Technology, Sydney) |
| Abstract: | There is much scepticism about the ability to predict recessions. Harding and Pagan (2010b)have argued that this is because the definition of a recession involves the signs of future growth rates of economic activity and there is little predictability of these from the past. Turkey represents an interesting case study since growth in Turkish GDP features quite high serial correlation, suggesting that growth itself is predictable. Thus I want to examine whether it is possible to predict recessions in Turkey. As there seems only a small published literature on this it will be necessary to indicate what definition of recession is to be used and what information might be available to make a prediction of such an event. We found that using information from past macroeconomic variables would result in only limited success in predicting Turkish recessions. |
| Keywords: | Conditional CAPM |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1027&r=cwa |
| By: | Gloria O. Pasadilla |
| Abstract: | This paper surveys studies of the importance of Central Asian small- and medium-sized enterprises (SME) in the economy and their experience during the Russian financial crisis. It also uses survey data from the World Bank and the European Bank for Reconstruction and Development’s Business Environment and Enterprise Performance Surveys to infer noteworthy characteristics, features, and dependencies on financing of Central Asian SMEs and, consequently, derive the potential impact of the crisis on the sector. The paper also assesses government support for SMEs and the necessary market reforms that will give a boost to the sector’s development in the region. [ADBI Working Paper 187] |
| Keywords: | Central Asian, medium-sized enterprises (SME), Russian, Environment, Enterprise Performance Surveys |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3023&r=cwa |
| By: | Ahmad Khasawneh (Hashemite University, Jordan); M. Kabir Hassan |
| Abstract: | Although there is literature about off-balance sheet (OBS) activities in the banking system, this is the first paper that investigates the off-balance sheet activities in the Middle East and North Africa (MENA) banking industry. It aims to test the tax regulatory hypothesis and the market discipline hypothesis in determining OBS activities of MENA commercial banks using a panel dataset for the period 1996–2007. We employ Mansfield’s (1961) logistic diffusion model and we consider OBS activities as real financial innovation following a time trend diffusion curve. The model is modified to include regulatory and non-regulatory bank-specific factors in addition to macroeconomic factors. We also added a country dummy vector to incorporate the country’s institutional and financial environment and time dummy vector to control for the political and economic events over time. The results reveal that OBS activities do not follow Mansfield’s financial diffusion model, and that adoption is decreasing over time. Regulatory tax hypothesis is rejected for the case of MENA banks since most of them face high regulatory pressure which negatively affects the OBS adoption. The results also suggest that OBS activities follow the business cycle notion and that the usage decision depends on economic conditions. Moreover, there exists an informational economy of scope between loans and OBS activities. Banks will participate more in OBS activities to reduce their risk resulting from loans. Also, OBS activities are profit driven. Political and economic events negatively affect MENA banks’ OBS activities. The implications of these results suggest that regulations, institutional and technological deficiency in MENA countries prevent the banking system from adopting different financial innovations. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:552&r=cwa |
| By: | Matthias Lücke |
| Abstract: | Do the sovereign wealth funds of Kazakhstan and Azerbaijan promote the sustainable use of government oil revenues? We review the operational rules and performance of the two funds and compare them to Norway’s Government Pension Fund Global. The key challenges are to stabilize government expenditures despite volatile resource prices, build up a capital stock to draw on after the resource is depleted, and to save and spend resource revenues transparently. We conclude that the institutional framework of a resource fund may indeed enhance transparency and public scrutiny, limit discretionary control, and sustain public support for long-term savings of resource revenues |
| Keywords: | resource-based development, sovereign wealth fund |
| JEL: | O13 Q32 L71 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1652&r=cwa |
| By: | Ke-young Chu |
| Abstract: | Economic growth and poverty reduction require for a country to establish efficient rules for economic and political transactions. Poor countries suffer from inadequate, inefficient transaction rules. Formal rules (e.g.,laws,policies) must be nested in hospitable behavioural norms and values. Cultural collectivism in many of these countries and consequent group-oriented values, factionalism, and discretionary rule implementation have adverse implications for their efforts to establish well-defined property rights and other rules. Overtime, these countries must establish rules for government-enforced, widespread impersonal transactions. [DiscussionPaperNo.2001/98] |
| Keywords: | growth,poverty,rules,institutions,humanbehaviour |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3018&r=cwa |
| By: | Samuel Kobina Annim |
| Abstract: | This study argues that patterns, trends and drivers of the efficiency of microfinance institutions (MFIs) depend on the scope of financial sustainability measures and on MFIs’ inclination to either of the dual objectives of financial systems and outreach. A balanced panel data of 164 MFIs for the period 2004-08 is extracted from the MIX website for the study’s use. Both parametric and non-parametric efficiency estimation techniques are used. Contrary to a trade-off between financial efficiency and outreach, the latter tends to have a positive link with social efficiency. Negative effects of bureaucracies in property registration and lack of credit information on social efficiency are also observed. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12710&r=cwa |
| By: | Deepak Nayyar |
| Abstract: | This paper attempts to analyse the economic implications of the rise of China, India, Brazil and South Africa, for developing countries situated in the wider context of the world economy. It examines the possible impact of their rapid growth on industrialized countries and developing countries, which could be complementary or competitive and, on balance, positive or negative. In doing so, it considers the main channels of transmission, to focus on international trade, investment, finance and migration. The essential question is whether, in times to come, these four countries could be the new engines of growth for the world economy. [Discussion Paper No. 2008/05] |
| Keywords: | China, India, Brazil, South Africa, growth, development, history, trade, investment, finance, migration |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3039&r=cwa |
| By: | Eddy Yusof, Ezry Fahmy; Kan, Zusuff |
| Abstract: | Question arises whether the products and services offered by the Islamic financial institutions (IFIs) genuinely meeting the requirement of Shari’ah. At present, not only Shari’ah advisors have been appointed to scrutinize and endorse the new products and services. In fact, majority of the IFIs have established units or departments to ensure the documentations, legal and Shari’ah framework, the process and procedure, and implementation are in line with the precept of Shari’ah. IFIs not only must avoid riba, but as well as other important elements such as gharar, deception, inequality, duress in developing and executing the end products of IFIs in order to ensure justice and social welfare prevail. This could only be achieved if the products and services approved uphold the importance of Maqasid Shari’ah. This paper will evaluate the key value chain in product approval process, role of Shari’ah advisor in approving products and services in IFIs as well as to raise possible issues and challenges related to the value chain. This paper will also look into the importance of Maqasid Shari’ah in product approval process as it is a vital element to be considered so as to avoid legal conflicts, litigation risk, instability (reputational risk) to the IFIs, tarnish the image of so called Shari’ah compliance products, uphold justice (contracting parties) and more importantly the pure teaching of Islam. |
| Keywords: | Islamic financial institutions; Shari’ah committee; Maqasid Shari’ah. |
| JEL: | D70 Z12 D20 G30 D49 G21 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25683&r=cwa |
| By: | Hlavac, Marek |
| Abstract: | In “Oil Wealth and Regime Survival in the Developing World, 1960-1999“ Benjamin Smith examines the effects of oil wealth, as well as of sudden changes in oil prices, on regime failure, political protest and civil war. He finds that oil wealth is robustly associated with more durable regimes, and significantly related to lower levels of anti-state protest and civil war. In this comment, I discuss Smith's empirical approach - especially his treatment of possible reverse causality between conflict and economic performance, his use of the Polity democracy index, and his choice of the resource dependence variable - and provide suggestions for improvement. |
| Keywords: | oil wealth; regime survival; political economy; democracy; natural resource curse |
| JEL: | D74 O13 Q33 |
| Date: | 2010–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25797&r=cwa |
| By: | Nicola Jones; Carol Watson; Caroline Harper |
| Abstract: | Childhood, adolescence and early adulthood remain for many girls and young women a period of deprivation, danger and vulnerability, resulting in a signifcant lack of agency and critical development defcits. In many cases, overlapping and intersecting experiences of deprivation, foregone human development opportunities and abuse or exploitation serve to perpetuate and intensify poverty for girls and women over the life-course. Girls’ vulnerabilities in relation to poverty dynamics are diferent to those of boys and to those of adult women. This is in part because of their relative powerlessness and the particularities of their life stage. What happens at this critical time in their lives can reinforce their poverty status and that of their of spring, or infuence their movement into or out of poverty. |
| Keywords: | Childhood, adolescence, adulthood, intersecting experiences, dynamics, poverty |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3020&r=cwa |
| By: | Prabir De |
| Abstract: | This study is a comprehensive, empirical analysis of the linkages between governance, institutions, and regional infrastructure. The empirical results indicate that governance and institutions are crucial for regional infrastructure development: every one point improvement in governance results in a 1 to 1.5 point rise in regional infrastructure. Countries (and regions) with higher income, stronger institutions, better governance, and more open economies are likely to have higher levels of regional infrastructure. The findings of this paper suggest that our efforts to promote regional infrastructure must not be limited to traditional policy measures aimed at attracting investment in infrastructure, but must also address policy reform across a number of areas. Thus, institutions and governance must play an important complementary role in strengthening Asia’s regional infrastructure. [ADBI Working Paper 183] |
| Keywords: | comprehensive, governance, institutions, development, traditional, policy measures |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3029&r=cwa |
| By: | Ram Upendra Das |
| Abstract: | Regional economic integration agreements are considered to be important policy mechanisms to address regional developmental asymmetries. The Asian reality is characterized by developmental asymmetries across countries on the one hand and a lack of comprehensive pan-Asian formal regional economic integration agreements on the other. The need for such regional agreements is of paramount importance given the phenomenal economic performance of Asia. [ADBI Working Paper 172] |
| Keywords: | Regional, economic integration, policy, Asia |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3037&r=cwa |
| By: | Lisa Leinert (CER-ETH - Center of Economic Research at ETH Zurich, Switzerland) |
| Abstract: | The Hotelling rule argues that the price for a nonrenewable resource adjusts to the shadow value of the resource, reflecting the remaining availability of the resource. We empirically test the Hotelling rule on the effect of unanticipated oil field discoveries. We do not find evidence for a significant adjustment of the price of crude oil to news about greater resource availability and therefore conclude that the price for crude oil does not follow the theoretically optimal price path. |
| Keywords: | Nonrenewable Resource, Oil Price, Exhaustible Resources, Information Acquisition |
| JEL: | Q31 Q41 G14 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:10-140&r=cwa |
| By: | Mayssun El-Attar (Institute for Fiscal Studies and McGill University) |
| Abstract: | <p>The goal of this paper is to measure Palestinians' attitudes towards a peace process and their determinants. One novelty is to define these attitudes as multidimensional and to measure them carefully using a flexible item response model. Results show that education, on which previous evidence appears contradictory, has a positive effect on attitudes towards concessions but a negative effect on attitudes towards reconciliation. This could occur if more educated people, who currently have very low returns to education, have more to gain from peace but are less willing to reconcile because of resentment acquired due to their experience.</p> |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:27/10&r=cwa |
| By: | Channing, Arndt; Jones, Sam; Tarp, Finn |
| Abstract: | The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro and meso-levels, recent literature doubts the ability of foreign aid to foster economic growth and development. This paper assesses the aid-growth literature and, taking inspiration from the program evaluation literature, we re-examine key hypotheses. In our findings, aid has a positive and statistically significant causal effect on growth over the long run, with confidence intervals conforming to levels suggested by growth theory. Aid remains a key tool for enhancing the development prospects of poor countries. |
| Keywords: | Foreign aid, growth, aid effectiveness, causal effects |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-96&r=cwa |
| By: | Iwasaki, Ichiro |
| Abstract: | With a unique dataset of joint-stock companies, this paper aims to thoroughly describe the corporate audit structure in transition Russia and empirically analyze its determinants. When compared to the international standard, Russian firms have a weak audit structure in terms of the independence and expertise of the board of auditors and the accounting auditor. We found that board composition, affiliation with a business group, and presence of foreign investors are the most important factors determining the audit structure of Russian firms. The scope of the impact of these three factors, however, differed considerably with each other. We also found that government ownership, company size, fund procurement activities, and overseas advancement also have statistically significant impacts on the corporate audit structure in Russia. |
| Keywords: | audit structure, board composition, business integration, foreign investment, economic transition, Russia |
| JEL: | G34 K22 L22 M42 P31 P34 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:27&r=cwa |
| By: | Cagatay Bircan; Tilman Brück; Marc Vothknecht |
| Abstract: | This paper analyses the distributive impacts of violent conflicts, which is in contrast to previous literature that has focused on the other direction. We use cross-country panel data for the time period 1960-2005 to estimate war-related changes in income inequality. Our results indicate rising levels of inequality during war and especially in the early period of postwar reconstruction. However, we find that this rise in income inequality is not permanent. While inequality peaks around five years after the end of a conflict, it declines again to prewar levels within the end of the first post-war period. Lagged effects of conflict and only subsequent adjustments of redistributive policies in the period of post-war reconstruction seem to be valid explanations for these patterns of inequality. A series of alternative specifications confirms the main findings of the analysis. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12910&r=cwa |