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on Development |
| By: | Thorvaldur Gylfason |
| Abstract: | Macroeconomic Dynamics commissioned this interview with Assar Lindbeck for a series of such conversations with economists, starting with Duncan Foley’s interview with Wassily Leontief in 1998. Other interviews in the series include Ben McCallum’s interview with Robert Lucas (1999), Olivier Blanchard’s interview with Janos Kornai (1999), Daniel Trefler’s interview with Elhanan Helpman (1999), William Barnett and Robert Solow’s interview with Franco Modigliani (2000), John Taylor’s interview with Milton Friedman (2001), James Poterba’s interview with Martin Feldstein (2003), Brian Snowdon’s interview with Axel Leijonhufvud (2003), William Barnett’s interview with Paul Samuelson (2003), and John Campbell’s interview with Robert Shiller (2004). Forthcoming interviews include Olivier Blanchard’s interview with Stanley Fischer (2005), Omar Licandro and Pierre Dehez’s interview with Jacques Drèze (2005), and George Evans and Seppo Honkapohja’s interview with Tom Sargent (2005). |
| JEL: | A10 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1408&r=dev |
| By: | Romain Ranciere; Aaron Tornell; Frank Westermann |
| Abstract: | In this paper, we document the fact that countries that have experienced occasional financial crises have, on average, grown faster than countries with stable financial conditions. We measure the incidence of crisis with the skewness of credit growth, and find that it has a robust negative effect on GDP growth. This link coexists with the negative link between variance and growth typically found in the literature. To explain the link between crises and growth we present a model where weak institutions lead to severe financial constraints and low growth. Financial liberalization policies that facilitate risk-taking increase leverage and investment. This leads to higher growth, but also to a greater incidence of crises. Conditions are established under which the costs of crises are outweighed by the benefits of higher growth. |
| Keywords: | financial constraints, growth and institutions, bailout guarantees, volatility, emerging markets |
| JEL: | F34 F36 F43 O41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1451&r=dev |
| By: | Plutarchos Sakellaris; Focco W. Vijselaar |
| Abstract: | The euro area experienced a slowdown in output and Total Factor Productivity growth in the 1990s compared to the 1980s. We ask the following questions. Is the apparent slowdown in euro area output due to a lack of proper accounting for capital quality improvement? The answer is no. Did technological change really slow down in the euro area? The answer here is mixed. The part of the technological change that is embodied in capital goods and boosts output through investment in these goods in fact accelerated in the 1990s. In contrast, disembodied technological change, which boosts output through new consumer goods or new production processes, decelerated in the 1990s more sharply than the official figures portray. |
| JEL: | O30 O47 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1452&r=dev |
| By: | Mahmud, Minhaj (Department of Economics, School of Economics and Commercial Law, Göteborg University) |
| Abstract: | Using the contingent valuation method in developing countries to value mortality risk reduction is particularly challenging because of the low level of education of the respondents. In this paper, we examine the effect of training the respondents regarding probabilities and risk reductions, in addition to using visual aids to communicate risk and risk reductions, in a contingent valuation survey. Our results indicate a significantly higher WTP for the trained sub-sample, and WTP is sensitive to the magnitude of risk reduction both with and without the training. <p> |
| Keywords: | contingent valuation; risk reduction; WTP; effect of training; sensitivity to scope; Bangladesh |
| JEL: | D60 D80 H40 I10 |
| Date: | 2005–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0169&r=dev |
| By: | Peter McGoldrick; Patrick Paul Walsh |
| Abstract: | Institutional change has taken place incrementally since 1978 for State-Owned Enterprises (SOEs) in the Industrial Sector of China. We will provide evidence for the notion that this is largely due to increased domestic competitive pressures and the opportunities arising from the integration of international markets. In this paper we estimate the effect of deep reform (the right to hire and fire labour, buy and sell capital and operate on international markets) on the productivity dynamics of entreprises. Using a unique balanced panel of681 SOEs for the period 1980 to 1994, we find consistent production function estimatesusing an algorithm put forward in Olley and Pakes (1996), which estimates using an simultaneity bias. Futhermore, we allow selection bias by formulating an entry that exposure to deep reform hav lead to higher productivity realisations while remaining under state ownership. |
| Date: | 2004–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp021&r=dev |
| By: | Howard White (OED, World Bank); Edoardo Masset (OED, World Bank) |
| Abstract: | This paper demonstrates that the delivery of hardware inputs to Ghana’s basic education system – building classrooms and supplying textbooks – has had a substantial impact on higher enrollments and better learning outcomes. The Bank’s support for school building has been a major factor behind Ghana being on track to achieve the Millennium Development Goal of Universal Primary Education. The context for these improvements was a government strongly committed to implementing a program of educational reform that refocused government resources away from secondary and tertiary education and onto the basic sector. But the Bank’s support played a critical role in allowing the government to carry out its plans. Partly because of increased reliance on community contributions, a gap is opening up between the majority of schools and those in poorer communities, particularly in off-road rural areas. Facilities in schools in poorer areas are usually inferior and teacher absenteeism high, so that little learning can take place. Special attention needs to be paid to these least-privileged schools if Ghana is to remain on track to meet the education MDG. |
| Keywords: | Impact evaluation, education, Ghana, Africa |
| JEL: | O P |
| Date: | 2005–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0504013&r=dev |
| By: | Howard White |
| Abstract: | Evaluation quality is a function of methodological and data inputs. This paper argues that there has been inadequate investment in methodology, often resulting in low quality evaluation outputs. With an increased focus on results, evaluation needs to deliver credible information on the role of developmentsupported interventions in improving the lives of poor people, so attention to sound methodology matters. This paper explores three areas in which evaluation can be improved. First, reporting agency-wide performance through monitoring systems that satisfy the Triple-A criteria of aggregation, attribution and alignment; which includes procedures for the systematic summary of qualitative data. Second, more attention need to be paid to measuring impact, both through the use of randomisation where possible and appropriate, or through quasi-experimental methods. However, analysis of impact needs to be firmly embedded in a theory-based approach which maps the causal chain from inputs to impacts. Finally, analysis of sustainability needs to move beyond its current crude and cursory treatment to embrace the tools readily available to the discipline. |
| Keywords: | Evaluation, development effectiveness, World Bank |
| JEL: | O P |
| Date: | 2005–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0504014&r=dev |
| By: | Sonja Fagernäs; John Roberts |
| Abstract: | Working Paper 10 forms part of a set of four ESAU papers on the fiscal effects of aid in African countries. The others are on Malawi (Working Paper 7), on Uganda (Working Paper 9) and a literature Survey and Synthesis (Working Paper 11). The first, historical and analytical background, part of the paper charts the course of Zambia’s economic decline and impoverishment from the high point reached in the early 1970s to the 1990s, when a tentative recovery began in the wake of radical but incomplete reforms. The fall in mining revenues caused a fall in real public expenditure only partly offset by substantial aid inflows, and public services declined. The second part, devoted to the analysis of time-series data from the early 1970s to the late 1990s, shows that the main effect of aid has been to augment the capital budget, though it has also temporarily raised recurrent expenditure. Large aid inflows have not produced satisfactory development results because they have been overwhelmed by adverse economic circumstances and uncertain economic and public expenditure management. |
| Keywords: | Fiscal, aid, aid effectiveness, Zambia, budget, economic growth |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:odi:wpaper:10&r=dev |
| By: | Sonja Fagernäs; John Roberts |
| Abstract: | Working Paper 11 gives a synthesis of Working Papers 7, 9 and 10 (see the relevant Summaries for further details). It also provides a brief synthesis of earlier literature on the fiscal effects of aid, which is related to the wider literature on the development impact of aid and on budget choice. The paper presents the econometric methodology used in the country studies of Malawi, Uganda and Zambia (vector autoregression) and its application, and discusses the problem of reconciling data on aid from donor and recipient sources. It makes some general observations from the three country studies relevant to aid effectiveness – the sui generis character of recipient countries’ policies and institutions that govern the impact of aid, the heterogeneity of calculated fiscal impacts, the persistent rigidities in countries’ uses of aid, and the absence of significant aid-financed expenditures from countries’ budgets. |
| Keywords: | Fiscal, aid, aid effectiveness, Malawi, Uganda, Zambia, budget, economic growth |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:odi:wpaper:11&r=dev |
| By: | Nirosha Gaminiratne |
| Abstract: | ESAU Working Paper 3 exploits recently collected survey data for Sri Lanka. Key findings are: Sri Lanka's already fast rising age dependency ratio is expected to double over the next 20years; income poverty in households with elderly people is below the national average - because of family support and because people continue to work into old age; Sri Lanka's existing contribution-based pension schemes only cover 25% of the working age population, but have reached their limit; providing a universal pension (as in parts of India and in South Africa) would do less to reduce poverty than a universal child allowance; it could be afforded now (e.g. by re-focusing the large social assistance programme) but would be become unaffordable as the old age population rises, unless subjected to a means test; and raising the public sector retirement age would bring no relief to the budget - which could afford to index the non-contributory civil service pension scheme. |
| Keywords: | Population ageing, elderly, retirement, social security, Sri Lanka, pension |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:odi:wpaper:3&r=dev |
| By: | Sonja Fagernäs |
| Abstract: | ESAU Working Paper 4 applies a standard (IFPRI) macroeconomic CGE model to Zimbabwe to ascertain the likely income distribution impacts of alternative policy instruments for stabilising the economy, specifically for eliminating the current account deficit, viz. devaluation or fiscal adjustment. The author finds, however, that the model is unable for structural reasons to simulate the impact of expenditure reduction on the current account; its closure procedure offsets decreases in public consumption with increases in private consumption. This leaves devaluation as the only analysable policy instrument for balance of payments adjustment. Devaluation is likely to be contractionary for GDP, and in all sectors except agriculture and export-oriented production. Profits and labour incomes in commercial farming rise, but in other sectors fall. |
| Keywords: | CGE model, stabilisation policy, Zimbabwe, PSIA, expenditure switching, expenditure reduction |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:odi:wpaper:4&r=dev |
| By: | John Roberts; Sonja Fagernäs |
| Abstract: | ESAU Working Paper 5 examines the contrasting growth experiences of Kenya and Bangladesh since the 1960s. The paper finds that, before 1980, Kenya grew strongly, and the economy diversified. Factors behind its subsequent deterioration in the 1990s were the government’s erratic, inflation-prone macroeconomic management, the overexpansion of the public sector, domestic and external indebtedness, its uncertain conduct of structural reforms, worsening cronyism and corruption, a high-cost, non-competitive, environment for the private sector and disappointing export performance. Bangladesh’s recent relative success was built on policies of macroeconomic stability, low public expenditure and taxation, the avoidance of non-concessional debt and a competitive real exchange rate. Savings and investment, once very low, rose steadily after 1990. Agriculture revived with investment in Green Revolution technology. An indigenous private sector emerged, operating in competitive conditions, out of which emerged a very successful export-oriented garment manufacturing sector. |
| Keywords: | Bangladesh, Kenya, economic growth, corruption, low-income countries |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:odi:wpaper:5&r=dev |
| By: | Sonja Fagernäs; Cedrik Schurich |
| Abstract: | Working Paper 7 is the first of three ESAU monographs on the fiscal effects of aid - the two others covering Uganda (Working Paper 9) and Zambia (Working Paper 10). Their methodology and general conclusions are summarised in a separate Survey and Synthesis paper (Working Paper 11). The purpose of this research was to find out how aid has been absorbed through recipients’ fiscal processes with a view to better understanding how aid is effective in promoting growth. Each country paper combines historical and institutional analysis with the econometric analysis of time series data. In Malawi, growth has been slow and fitful, and there has been a record of uneven macroeconomic management, poor fiscal control and debt problems, often leaving public services underfunded. The government has practised fiscal dichotomy – allocating aid to the development budget, while financing its recurrent budget from revenue and domestic borrowing. The econometric evidence confirms that aid has been used to finance the development budget. It also shows that aid has, if anything, been a stabilising influence, being associated with higher domestic revenues and lower borrowing. |
| Keywords: | Fiscal, aid, aid effectiveness, Malawi, absorption, economic growth |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:odi:wpaper:7&r=dev |
| By: | Sonja Fagernäs; John Roberts |
| Abstract: | Working Paper 9 forms part of a set of four ESAU papers on the fiscal effects of aid in African countries. The others are on Malawi (Working Paper 7), on Zambia (Working Paper 10) and a literature Survey and Synthesis (Working Paper 11). The first, historical and analytical background, part of the paper contrasts the pre-1986 period of misrule, instability, conflict, the exodus of entrepreneurs and professionals, dwindling aid and economic decline, with the subsequent period when growth resumed, poverty fell, economic stability was restored, aid was substantial, and the government implemented budget management and pro-poor expenditure reforms. The second, econometric, part shows that the main effect of aid between the 1970s and 1990s was to increase development budget expenditure, with lesser positive impacts on recurrent budget expenditure and domestic revenue. The effectiveness of aid has therefore turned on the (rising) quality of development budget expenditure and on the (growing) credibility of accompanying economic policies. |
| Keywords: | Fiscal, aid, aid effectiveness, Uganda, budget, economic growth |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:odi:wpaper:9&r=dev |