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on Central and Western Asia |
| By: | Davide Luca; Andrés Rodríguez-Pose |
| Abstract: | One of the most important decisions that governments face is how to allocate the public resources necessary for development, given each countrys budget constraints. According to the literature on the links between wealth and institutional performance, highly kleptocratic countries are expected to show higher levels of politicisation of the public purse. The article tests the extent to which socioeconomic criteria (equity and efficiency) or electoral concerns determined the geographical distribution of public investment in the 81 provinces of Turkey between 2004 and 2012. Our results show that, although electoral concerns mattered for the allocation, socioeconomic measures remained the most relevant predictors of investment. Moreover, in contrast to official regional development policy principles, the Turkish state tended to favour areas with a higher level of development over those with greater ‘socioeconomic need’. Our results therefore challenge much of the distributive politics literature, which has overly emphasised the role of pork-barrel in public policy-making. At the same time, they underline the need of paying more attention to the political economy of regional development strategies. |
| Keywords: | Regional development policies, distributive politics, public investments, political geography, Turkey. |
| JEL: | H76 O12 O53 R12 R58 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:gov:wpaper:1402&r=cwa |
| By: | Dorothea Schäfer; Susan Steiner |
| Abstract: | This paper studies the association between a country's level of financial development and firms' employment growth. We employ an incomplete contract model for evaluating this association. The model proposes that a high level of financial development affects the employment of firms with low managerial capital negatively, while firms with high managerial capital benefit from a more developed financial system. We test this proposition with data from the Business Environment and Enterprise Performance Survey covering transition countries in Eastern Europe and Central Asia. We use firm size as a proxy for managerial capital. Our findings confirm a non-linear effect of financial development on firm employment. Specifically, the smallest firms' edge in employment growth over large firms is dampened when the level of financial development is higher, especially in countries at medium levels of financial development. |
| Keywords: | Financial development, employment, financial constraints, transition |
| JEL: | G20 G28 G30 J30 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1390&r=cwa |
| By: | Pao-Yu Oei; Markus Siehlow |
| Abstract: | Political instability of several countries in the Middle East is overshadowing one of the biggest challenges of the upcoming century: Water - a natural resource that is easily taken for granted, but whose scarcity might lead to serious conflicts. This paper investigates an optimal Water Allocation of the Tigris and Euphrates Rivershed by introducing the WATER-Model. A series of scenarios are analyzed to examine the effects of different levels of cooperation for an optimal water allocation. Special emphasize is put on the effects of filling new Turkish reservoirs which can cause additional welfare losses if these actions are not done on a basin-wide coordinated basis. Modeling results show that Turkey is most efficient in its water usage. However, using the water for irrigation purposes in Turkey, instead of the Iraqi or Syrian domestic and industrial sector, decreases the overall welfare. Especially the Euphrates basin might thus encounter losses of up to 33% due to such strategic behaviour. The predicted water demand growth in the region is going to increase this water scarcity further. Minimum flow treaties between riparian countries, however, can help to increase the overall welfare and should therefore be fostered. |
| Keywords: | Integrated Water Resources Management, Euphrates Tigris rivershed, non linear modeling, transboundary water resources allocation |
| JEL: | C61 Q25 O53 D74 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1381&r=cwa |