nep-dev New Economics Papers
on Development
Issue of 2005‒04‒24
25 papers chosen by
Jeong-Joon Lee
Towson University

  1. Measuring Transactions Costs from Observed Behavior: Market Choices in Peru By Renos Vakis; Elisabeth Sadoulet; Alain de Janvry
  2. A Tale of Two Communities: Explaining Deforestation in Mexico By Jennifer Alix-Garcia; Alain de Janvry; Elisabeth Sadoulet
  3. The Impact of Farmer-Field-Schools on Knowledge and Productivity: A Study of Potato Farmers in the Peruvian Andes By Erin Godtland; Elisabeth Sadoulet; Alain de Janvry; Rinku Murgai; Oscar Ortiz
  4. China's Income Distribution over Time: Reasons for Rising Inequality By Ximing Wu; Jeffrey Perloff
  5. Is a Friend in Need a Friend Indeed? Inclusion and Exclusion in Mutual Insurance Networks in Southern Ghana By Markus Goldstein; Alain de Janvry; Elisabeth Sadoulet
  6. Testing for Separability in Household Models with Heterogeneous Behavior: A Mixture Model Approach By Renos Vakis; Elisabeth Sadoulet; Alain de Janvry; Carlo Cafiero
  7. Peer Effects in Employment: Results from Mexico's Poor Rural Communities By Caridad Araujo; Alain de Janvry; Elisabeth Sadoulet
  8. Insecurity of Property Rights and Matching in the Tenancy Market By Karen Macours; Alain de Janvry; Elisabeth Sadoulet
  9. Strategic Tariff Protection, Market Conduct, and Government Commitment Levels in Developing Economies By Delia Ionaºcu; Kresimir Zigic
  10. Use of Ecolabels in Promoting Exports from Developing Countries to Developed Countries: Lessons from the Indian LeatherFootwear Industry By Parashar Kulkarni
  11. Exportation of Timber in Ghana: The Menace of Illegal Logging Operations By Paul Sarfo-Mensah
  12. Should Latin America Fear China? By Eduardo A. Lora
  13. US Politics and World Bank IDA-Lending By Thomas Barnebeck Andersen; Henrik Hansen; Thomas Markussen
  14. The Economics of Child Trafficking (Part II) By Sylvain E. Dessy; Flaubert Mbiekop; Stéphane Pallage
  15. Urban Structure and Growth By Esteban Rossi-Hansberg; Mark L.J. Wright
  16. Tax Structure in Developing Countries: Many Puzzles and a Possible Explanation By Roger Gordon; Wei Li
  17. Poverty Nutrition Trap in Rural India By Raghbendra Jha; Raghav Gaiha; Anurag Sharma
  19. Roads and Poverty in Rural Laos By Peter Warr
  20. Tax system and tax reforms in India By Bernardi, Luigi; Fraschini, Angela
  21. Spatial Price Differences in China: Estimates and Implications By Loren BRANDT; Carsten A HOLZ
  22. New Capital Estimates for China By Carsten A. Holz
  23. China's Reform Period Economic Growth: Why Angus Maddison Got It Wrong and What That Means By Carsten A. Holz
  24. Poverty and Inequality in Rural Assam An Indicative Study of Seven Villages in Udalguri Subdivision, Assam (India) By SK Mishra; Prasen Daimari
  25. Enterprise, Growth and Inequality in the Rural Economy of Assam : A Study of Seven Villages in Udalguri Subdivision By Prasen Daimari; SK Mishra

  1. By: Renos Vakis (World Bank); Elisabeth Sadoulet (University of California, Berkeley); Alain de Janvry (University of California, Berkeley)
    Abstract: Farmers incur proportional and fixed transactions costs in selling their crops on markets. Using data for Peruvian potato farmers, we propose a method to measure these transactions costs. When opportunities exist to sell a crop on alternative markets, the observed choice of market can be used to infer a monetary measure of transactions costs in market participation. The market choice model is first estimated at the reduced form level with a conditional logit, as a function of variables that explain transactions costs. We then use these market choice equations to control for selection in predicting the idiosyncratic prices that would be received on all markets and the idiosyncratic proportional transactions costs that would be incurred to reach all markets. The net between the two gives us a measure of effective farm-level prices. This allows us to estimate a semi-structural conditional logit of the market choice model. In this model, the choice of market is a function of predicted effective farm-level prices, and of market information that accounts for fixed transactions costs. We can use the estimated coefficients to derive the price equivalence of the fixed cost due to information. We find that the information on market price that farmers receive from their neighbors reduces fixed transactions costs by the equivalent of doubling the price received, and is equal to four times the average transportation cost.
    Keywords: transactions costs, market choice, information,
    Date: 2003–10–01
  2. By: Jennifer Alix-Garcia (University of California, Berkeley); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley)
    Abstract: Explaining land use change in Mexico requires understanding the behavior of the local institutions involved. We develop two theories to explain deforestation in communities with and without forestry projects, where the former involves a process of side payments to non-members of the community and the latter of partial cooperation among community members. Data collected in 2002 combined with satellite imagery are used to test these theories. For the forestry villages, we establish a positive relationship between the distribution of profits as dividends instead of public goods and forest loss. For communities not engaged in forestry projects, deforestation is largely related to the ability of the community to induce the formation of a coalition of members that cooperates in not encroaching. This happens more easily in smaller communities with experienced leaders. A disturbing result of the analysis is that deforestation is higher when a community engages in forestry projects, even after properly accounting for self-selection into this activity. This suggests that forestry projects as they now exist in Mexico are not sustainable and contribute to the deforestation problem.
    Keywords: deforestation, common property, partial cooperation,
    Date: 2003–11–07
  3. By: Erin Godtland (U.S. General Accounting Office); Elisabeth Sadoulet (University of California, Berkeley); Alain de Janvry (University of California, Berkeley); Rinku Murgai (Development Economics Research Group, The World Bank); Oscar Ortiz (International Potato Center, Consultative Group on Agricultural Research)
    Abstract: Using survey-data from Peru, this paper evaluates the impact of a pilot farmer-field-school (FFS) program on farmers' knowledge of integrated pest management(IPM) practices related to potato cultivation. We use both regression analysis controlling for participation and a propensity score matching approach to create a comparison group similar to the FFS participants in observable characteristics. Results are robust across the two approaches as well as with different matching methods. We find that farmers who participate in the program have significantly more knowledge about IPM practices than those in the non-participant comparison group. We also find that improved knowledge about IPM practices has a significant impact on productivity in potato production.
    Keywords: agricultural innovations, agricultural productivity, integrated pest management, potato cultivation,
    Date: 2003–11–01
  4. By: Ximing Wu (University of Guelph); Jeffrey Perloff (University of California, Berkeley, and Giannini Foundation)
    Abstract: We use a new method to estimate China's income distributions using publicly available interval summary statistics from China's largest national household survey. We examine rural, urban, and overall income distributions for each year from 1985-2001. By estimating the entire distributions, we can show how the distributions change directly as well as examine trends in traditional welfare indices such as the Gini. We find that inequality has increased substantially in both rural and urban areas. Using an inter-temporal decomposition of aggregate inequality, we determine that increases in inequality within the rural and urban sectors and the growing gap in rural and urban incomes have been equally responsible for the growth in overall inequality over the last two decades. However, the rural-urban income gap has played an increasingly important role in recent years. In contrast, only the growth of inequality within rural and urban areas is responsible for the increase in inequality in the United States, where the overall inequality is close to that of China. We also show that urban consumption inequality (which may be a better indicator of economic well-being than income inequality) rose considerably.
    Keywords: economic development, income distribution,
    Date: 2004–02–01
  5. By: Markus Goldstein (none); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley)
    Keywords: household models, insurance, risk, social aspects, villages,
    Date: 2003–06–01
  6. By: Renos Vakis (World Bank); Elisabeth Sadoulet (University of California, Berkeley); Alain de Janvry (University of California, Berkeley); Carlo Cafiero (Universita degli Studi di Napoli Federico II)
    Abstract: Knowing whether a household behaves according to separability or non-separability is needed for the correct modeling of production decisions. We propose a superior test to those found in the literature on separability by using a mixture distribution approach to estimate the probability that a farm household behaves according to non-separability, and test that the determinants of consumption affect production decisions for households categorized as non-separable. With non-separability attributed to labor market constraints, the switcher equation shows that Peruvian farm households that are indigenous and young, with low levels of education, and lack of local employment opportunities are more likely to be constrained on the labor market.
    Keywords: labor, separability, mixture distributions, Peru,
    Date: 2004–08–01
  7. By: Caridad Araujo (The World Bank and Georgetown University); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley)
    Abstract: Empirical evidence has shown that off-farm non-agricultural (OFNA) employment offers a major pathway from poverty for rural populations. However, the pattern of participation in these activities is heterogeneous across categories of individuals and poorly understood. We explore the role of spillovers from peers on an individual's participation in formal and informal OFNA employment using village census data for rural Mexico. We test and reject the possibility that peers' decisions could be proxying for unobserved individual, village-level, or individual-type effects. We find that peers' participation in OFNA employment has a large impact on an individual's ability to engage in this type of employment, both formal and informal, even after controlling for individual attributes and village characteristics. Peer effects are structured by similarities in gender, ethnicity, educational level, and land endowment. We find that marginal peer effects tend to be stronger for categories of individuals that are already more engaged in OFNA employment, such as men, non-indigenous people, the more educated, and the landless, contributing to reinforcing inequalities in accessing these jobs. However, the role of peer effects relative to that of education in obtaining formal OFNA employment is more important for members of groups that are less engaged in these jobs, such as women, indigenous people, the less educated, and smallholders.
    Keywords: off-farm employment, rural poverty, social aspects,
    Date: 2004–08–01
  8. By: Karen Macours (Johns Hopkins University); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley)
    Abstract: This paper analyzes the effects of insecure property rights over land on the functioning of the land rental market in the Dominican Republic. It shows that insecurity of property rights not only reduces sharply the level of activity on the land rental market, but also causes market segmentation. A principal-agent framework is used to model the landlord's utility maximization, where he takes into account the risk of losing the land when it is not traded within a narrow local circle of confidence. Using data collected with a methodology that enables to characterize the entire market, we show that insecure property rights lead to matching in the tenancy market along socio-economic lines and hence severely limit access to land for the rural poor. Simulations suggest that improving tenure security would increase the total area rented to the poor by 63%. While a small fraction of this gain is achieved via formal titling, most is obtained through reducing conflicts over land and enhancing protection of property rights. Results also show the importance of minimum working capital endowments for the poor in gaining access to land in the rental market.
    Keywords: agricultural land, land rights, property rights, rents, tenancy,
    Date: 2004–08–01
  9. By: Delia Ionaºcu; Kresimir Zigic
    Abstract: We analyze a simple “tariffs cum foreign competition” policy targeted at enhancing thecompetitive position of a domestic, developing country firm that competes with its developed country counterpart on the domestic market and that carries out an innovative (imitative) effort. We evaluate this policy with respect to social welfare, type of oligopoly conduct, information requirement, time consistency, possibility of manipulative behavior and conclude that the most robust policy set-up is that in which the domestic government is unable to precommit to the level of its policy. Finally, we examine this policy, allowing for asymmetric information, and show that the corresponding social welfare may be higher than under perfect
    Keywords: Optimal tariff protection, Government non-commitment regime, Innovative(imitative) effort, Symmetric versus asymmetric information.
    JEL: F13
    Date: 2005–01
  10. By: Parashar Kulkarni (CUTS Centre for International Trade, Economics & Environment)
    Abstract: This paper tries to understand whether importers in the North are able to push exporters in the South towards sustainable production, with the help of a case study of the Indian leather industry. After providing a short description of the global leather footwear industry, the first section provides insights into the competitive advantages of different countries, characteristics of developing country exporters and the difference between large and small European buyers of Indian leather footwear. The subsequent section provides an insight into the different chains of influence that exist in trying to make international trade more sustainable with the help of a broad understanding of the means, their effectiveness, their constraints and a few examples of such chains of influence. Section four studies whether ecolabels are in a position to be suitable indicators of sustainability. Further it delves into understanding the perspectives of consumers, producers and regulators on whether ecolabels are useful in promoting sustainable exports. The explanation of how ecolabels conflict with brand dynamics is quite interesting. The policy measures provide clear options for targeting sustainable production. Suggestions include use of eco-elasticity indicator, toolbox approach to environment policy, introducing comprehensive sustainability labels, maintaining a level of mandatory legislations as well as a constructive effort to increase transparency in supply chains. The annexure include the research methodology adopted for the paper, the reason for choosing Europe as destination for the research, a brief overview about types of ecolabels and a small description of integrated product policies.
    Keywords: Ecolabels, Export promotion, Leather footwear, Market access
    JEL: F18
    Date: 2005–01
  11. By: Paul Sarfo-Mensah (Kwame Nkrumah University of Science and Technology)
    Abstract: This paper presents an empirical analysis of the linkage between external timber trade in Ghana and the increased incidence of illegal chainsaw operations which do not only threaten the country’s forests and other natural resources but also the erosion of the basis for sustainable agriculture which is the main-stay of the country’s economy. It uses ethnographic data from case studies of a recent research in selected forest reserves fringe communities in High Forest Zone of the country to explain the frustrations of local people with government policies that favour export to the neglect of local demand for timber and wood products. Although government pronouncements suggest that it is gaining an upper hand in the battle against illegal logging operations, evidence on the ground suggests that the greater part of the lumber on the local markets is supplied through illegal means predominated by itinerant chainsaw operators and their urban financiers . The paper concludes that the country’s forest and tree resources face massive degradation and overexploitation if the government does not take a bold decision on illegal logging, especially the activities of chainsaw operators. An option, though unpalatable and politically sensitive, may be the mainstreaming of chainsaw operations through the re-introduction of limited permits to registered local groups of timber traders and their chainsaw operators to supply the domestic market. This should be under a system which enjoins such groups to be collectively responsible for the activities of their members. And, the government should also strengthen the Forestry Services Division (FSD) to design and operationalize an enhanced monitoring and surveillance system of logging activities.
    Keywords: Economic recovery program (ERP), Timber exportation, Illegal chainsaw operation, Timber traders, High forest zone, Forestry services division (FSD)
    JEL: O O5
    Date: 2005–02
  12. By: Eduardo A. Lora (Research Department, Inter-American Development Bank)
    Abstract: This paper compares growth conditions in China and Latin America to assess fears that China will displace Latin America in the coming decades. China’s strengths include the size of the economy, macroeconomic stability, abundant low-cost labor, the rapid expansion of physical infrastructure, and the ability to innovate. China’s weaknesses, stemming from insufficient separation between market and State, include poor corporate governance, a fragile financial system and misallocation of savings. Both regions share important weaknesses: the rule of law is weak, corruption endemic and education is poor and very poorly distributed
    Keywords: China, Latin America, economic growth, investment climate
    JEL: E66 O57 P52
    Date: 2004–10
  13. By: Thomas Barnebeck Andersen (Institute of Economics, University of Copenhagen); Henrik Hansen (Institute of Economics, University of Copenhagen); Thomas Markussen (Institute of Economics, University of Copenhagen)
    Abstract: This paper studies the role of US political factors in the allocation of World Bank concessional lending, where US political interests are proxied by voting similarity in the United Nations General Assembly on issues identified as important by the US Department of State. In contrast to previous studies we find that the US exerted a significant influence on IDA lending during the period 1993 - 2000. We demonstrate that the influence was both statistically as well as economically significant. Finally, we demonstrate that our result is robust with respect to the omission of the IDA Country Performance Rating index.
    Keywords: aid; World Bank; US political influence
    JEL: F34 F35 O19
    Date: 2004–08
  14. By: Sylvain E. Dessy; Flaubert Mbiekop; Stéphane Pallage
    Abstract: The trafficking of children is a thriving business. In this paper, we highlight key economic characteristics of this business. We show that the fight against child trafficking is far from trivial and that supply-side policies have very limited effect unless preceded by attacks on the demand side. Successful policies involve international cooperation on both fronts. We work within a model of a source country to highlight the necessary ingredients of a successful international cooperation towards the elimination of child trafficking.
    Keywords: Child trafficking, worst forms of child labor, international coordination
    JEL: J82 O15 O19
    Date: 2005
  15. By: Esteban Rossi-Hansberg; Mark L.J. Wright
    Abstract: Most economic activity occurs in cities. This creates a tension between local increasing returns, implied by the existence of cities, and aggregate constant returns, implied by balanced growth. To address this tension, we develop a theory of economic growth in an urban environment. We show that the urban structure is the margin that eliminates local increasing returns to yield constant returns to scale in the aggregate, which is sufficient to deliver balanced growth. In a multi-sector economy with specific factors and productivity shocks, the same mechanism leads to a city size distribution that is well described by a power distribution with coefficient one: Zipf's Law. Under certain assumptions our theory produces Zipf's Law exactly. More generally, it produces the systematic deviations from Zipf's Law observed in the data, including the under-representation of small cities and the absence of very large ones. In general, the model identifies the standard deviation of industry productivity shocks as the key parameter determining dispersion in the city size distribution. We present evidence that the relationship between the dispersion of city sizes and the variance of productivity shocks is consistent with the data.
    JEL: E0 O4 R0
    Date: 2005–04
  16. By: Roger Gordon; Wei Li
    Abstract: Tax policies seen in developing countries are puzzling on many dimensions. To begin with, revenue/GDP is surprisingly small compared with that in developed economies. Taxes on labor income play a minor role. Taxes on consumption are important, but effective tax rates vary dramatically by firm, with many firms avoiding taxes entirely by operating through cash in the informal economy and others facing very high liabilities. Taxes on capital are an important source of revenue, as are tariffs and seignorage, all contrary to the theoretical literature. In this paper, we argue that all of these aspects of policy may be sensible responses if a government is able in practice to collect taxes only from those firms that make use of the financial sector. Through use of the financial sector, firms generate a paper trail, facilitating tax enforcement. The threat of disintermediation then limits how much can be collected in taxes. Taxes can most easily be collected from the firms most dependent on the financial sector, presumably capital-intensive firms. Given the resulting differential tax rates by sector, other policies would sensibly be used to offset these tax distortions. Tariff protection for capital-intensive firms is one. Inflation, imposing a tax on the cash economy is another.
    JEL: H21 O23 O17 F23
    Date: 2005–04
  17. By: Raghbendra Jha; Raghav Gaiha; Anurag Sharma
    Abstract: The contribution of the present paper is threefold. First, we formally test whether the effect of calorie deprivation on wages is more significant/higher for the lower quantiles of workers. In the extant literature this is established through non-linear terms in the wage equation. A more satisfactory method of doing this is through quantile regressions. Second, the quantile regression approach helps us identify the exact group for which the poverty-nutrition trap holds. The extant literature is unable to establish whether there are systematic differences across different quintiles in the response of productivity/wages to nutrition. The present paper addresses this lacuna. Third, we are able to establish a critical wage level for which the PNT trap hypothesis holds. For wages higher than this the hypothesis does not hold. We then argue that this value of the wage rate should set a floor for any minimum wage for agricultural labourers.
    Keywords: nutrition, calories, wages, poverty trap, labourers Length (pages): 33
    JEL: I I I J
    Date: 2005–02
  18. By: Peter Warr
    Abstract: Indonesia is the world’s largest importer of its staple food, rice. Since the economic crisis of 1998, rice import policy has become increasingly protectionist and since early 2004, imports have been banned. This paper uses a general equilibrium model of the Indonesian economy to analyze the effects of an import ban on rice, including its effects on poverty. The analysis recognizes 1,000 individual households. The results indicate that the rice import ban raises poverty incidence by a little less than one per cent of the population. Poverty rises in both rural and urban areas. Among farmers, only the richest gain.
    Keywords: poverty; general equilibrium; rice imports; trade policy. Length (pages): 36
    JEL: Q18 F13 C68 O53
    Date: 2005–03
  19. By: Peter Warr
    Abstract: The relationship between poverty incidence and road development is analyzed in this paper, in the context of rural Laos. The results indicate that improving road access is an effective way of reducing rural poverty. Between 1997-98 and 2002-03, rural poverty incidence in Laos declined by 9.5 per cent. The results suggest that about 13 per cent of this decline can be attributed to improved road access to areas already having dry season access. There is now a high return to providing dry weather access to the most isolated households of Laos – those with no road access at all.
    Keywords: poverty incidence; rural roads; Lao PDR. Length (pages): 34
    JEL: H53 I32 O53 R41
    Date: 2005–04
  20. By: Bernardi, Luigi; Fraschini, Angela
    Abstract: This paper is part of a wider research on South-East Asia countries’ taxation carried on under the supervision of. V. Tanzi. India is a federal republic and a big, highly populated and poor country, which however since some years has entered the catching up stage of development and shows impressive rates of GDP growth. General Government budget is structurally imbalanced and public debt stays high. Public spending (about 25 percent of GDP) is mainly devoted to general services, defense, and the support of economic activities, rather than to public health and welfare programs. Total fiscal pressure (about 17 percent of GDP) is in line with per capita GDP and is shared evenly enough between central and states governments. The structure of the tax system is not much beyond the Musgravian “early stage”. A complex structure of taxes on goods and services is largely the main heading of the tax system and it is difficultly moving towards a VAT-kind structure. Direct taxes still are in an infant state, both as weight as well as structure. Import duties remain at not negligible levels. Social contributions are entirely lacking. A tax system of a country like India unavoidably raises more than one problem: foremost among these problems appear to be a too large dominance of a complex and obsolete indirect taxation and the fiscal relations among government layers. The road to updating and improving the Indian tax system has been entered since the early 1990s, but the reform is still largely to be accomplished. Introducing VAT – so successfully adopted in other developing countries – is the most striking but not the only example.
    JEL: H20 H24 H25 H29
    Date: 2005–04
  21. By: Loren BRANDT (University of Toronto); Carsten A HOLZ (Hong Kong University of Science & Technology)
    Abstract: Prices differ across space: from province to province, from rural (or urban) areas in one province to rural (or urban) areas in another province, and from rural to urban areas within one province. Systematic differences in prices across a range of goods and services in different localities imply regional differences in the costs of living. If high- income provinces also have high costs of living, and low-income provinces have low costs of living, the use of nominal income measures in explaining such economic outcomes as inequality can lead to misinterpretations. Income should be adjusted for costs of living. We are interested in the sign and magnitude of the adjustments needed, their changes over time, and their impact on economic outcomes in China. In this article, we construct a set of (rural, urban, total) provincial- level spatial price deflators for the years 1984-2002 that can be used to obtain provincial-level income measures adjusted for purchasing power. We provide illustrations of the significant effect of ignoring spatial price differences in the analysis of China's economy.
    JEL: O18 D63 D3
    Date: 2005–04–21
  22. By: Carsten A. Holz (Hong Kong University of Science & Technology)
    Abstract: Data on physical capital are an indispensable part of economic growth and efficiency studies. In the case of China, fixed asset time series are usually derived either by aggregating gross fixed capital formation data over time, net of depreciation, or by correcting the limited official fixed asset data available. These procedures, to varying degrees, ignore that (i) gross fixed capital formation does not equal investment, (ii) investment does not equal the value of fixed assets newly created through investment, (iii) depreciation is an accounting measure that has no impact on changes in the production capacity of fixed assets, (iv) official fixed asset data, where available, incorporate significant revaluations in the 1990s, and (v) the variable 'net fixed assets,' frequently used in the literature, is an inappropriate measure of fixed assets for the purpose of growth or efficiency studies. This paper derives economy-wide fixed asset values for 1954-2002, correcting for these shortcomings. It also uses the so far unexplored method of combining economy-wide depreciation data (in the income approach to the calculation of gross domestic product) with an economy-wide depreciation rate to directly yield economy-wide fixed assets. The fixed asset time series derived here are contrasted with each other as well as with those presented in the literature. The reliability of the different series is evaluated, leading to the recommendation of a specific choice of fixed asset time series.
    Keywords: Capital, fixed assets, investment, national income accounting, production function estimations, measurement of economic growth, Chinese statistics
    JEL: C80 D24 O47 P23 P24
    Date: 2005–04–21
  23. By: Carsten A. Holz (Hong Kong University of Science & Technology)
    Abstract: China's economic growth statistics of the late 1990s have repeatedly been questioned. Angus Maddison in a 1998 OECD study goes further in that he revised China's official average annual real growth rate for the first seventeen years of economic reform, 1978 through 1995, downward by 2.39 percentage points per year. His study is the most thorough criticism of Chinese official statistics to date, and the one with the largest impact on the data. By 1995, the revisions imply 150% less output, in 1978 terms, than the official data do. Angus Maddison's revisions were subsequently incorporated into the Penn World Tables; the findings of countless cross-country studies are therefore affected by Angus Maddison's growth estimates for China. This paper examines Angus Maddison's revisions to official data and finds them invalid. Angus Maddison's growth estimates for China in the reform period constitute no alternative to the official data.
    JEL: O4 P27 O53 C82
    Date: 2005–04–21
  24. By: SK Mishra (Department of Economics, North Eastern Hill University, Shillong India); Prasen Daimari (Department of Economics, North Eastern Hill University, Shillong India)
    Abstract: This study is based on primary data collected from randomly chosen 182 households inhabiting seven sample villages in the Udalguri subdivision, Assam (india). It indicates that at least 35.85 percent of the population (and 33.52 percent of households) in the sample villages is below poverty line (at Rs. 400 per capita per month). On the other hand, no more than 39.5 percent of the people (and 37.36 percent households) is likely to stand under the poverty line (at Rs. 425 per capita per month). The observed values of Gini index in the sample villages are considerably high. In the first five villages the Gini index is 41.84 while in the last two villages it is 48.69. Overall the value of Gini index in the sample villages is 44.31. The prime reasons of poverty are excessive dependence on primary sector, disguised unemployment, poor development of marketing facilities, connectivity and power supply, poor agricultural productivity, absence of any significant manufacturing activities, etc resulting into an hourglass shaped occupational distribution.
    Keywords: Poverty, Inequality, Rural economy, Assam, India, Primary data
    JEL: D31 D63 I32 Q12 Q15
    Date: 2005–04–18
  25. By: Prasen Daimari (Dept. of Economics, NEHU, Shillong); SK Mishra (Department of Economics, North Eastern Hill University, Shillong India)
    Abstract: Based on the primary data collected from 182 rural households from seven villages (five of which are inhabited by indigenous population and the rest two are inhabited by immigrants Muslim population from Bangladesh) this study aims at knowing if cultural variables make a difference to economic performance of these households. We find that the households of two groups of villages (Group-1 consisting indigenous population and Group-2 consisting the immigrants from Bangladesh) can be discriminated among themselves on the criteria of farming efforts (the inputs they apply to agriculture and the output they raise on the land) as well as the sources of income harnessed by them. The inhabitants of Group-2 villages, once they have enough land to cultivate, practise commercial agriculture for the market to earn higher income, but the inhabitants of the Group-1 villages still continue with the traditional agriculture, chiefly with an objective to sustenance, in spite of having enough land to cultivate. The land resources make little difference to economic achievements across the two groups of villages. In short, the farmers of Group-2 villages, whenever feasible, are enterprising. Secondly, most of the farmers in Group-2 villages apply family labour for supervision, management and marketing of the produce. To work on farms they hire labourers abundantly available in the village itself and in other villages around. Thirdly, many households in the Group-1 villages derive income from service and orchards (which characterizes an extensive use of land). On the other hand, most of the households of the Group-2 villages (who own land) use land intensively. Fourthly, many inhabitants of Group-2 villages, in spite of being economically well off, are thrifty. They save to invest or to tide over the adversities and eventualities. Inhabitants of Group-1 villages spend less owing to the paucity of resources. But whenever the resources permit, they do spend lavishly. As a matter of fact, their expenses on festivities are significant. On the other hand, the inhabitants of the Group-2 villages are frugal. Lastly, there is a more acute inequality in income distribution in the Group-2 villages than in the Group-1 villages. This inequality is the result of agricultural growth that has come to a few resourceful and enterprising farmers in the Group-2 villages. Agricultural development often results into enhancement of inequality. It is not scale neutral, nor does it preserve the original distribution of productive resources in its. By altering the original distribution of productive resources in favour of the more enterprising and the more rich, growth accentuates inequality. This tendency has been observed in the Group-2 villages.
    Keywords: Assam, India, cultural variables, economic performance, farming, rural economy
    JEL: D31 D63 I32 Q12 Q15
    Date: 2005–04–21

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