nep-dev New Economics Papers
on Development
Issue of 2005‒05‒07
34 papers chosen by
Jeong-Joon Lee
Towson University

  1. Developing the institutional framework for intergovernmental fiscal relations in decentralizing LDCs By Jameson Boex; Jorge Martinez-Vazquez
  2. Making Fiscal Decentralization Work in Vietnam By Jorge Martinez-Vazquez
  3. Linking expenditure assignments and intergovernmental grants in Indonesia By Jorge Martinez-Vazquez; Jameson Boex; Gabe Ferrazzi
  4. Societal Institutions and Tax Effort in Developing Countries By Richard M. Bird; Jorge Martinez-Vazquez; Benno Torgler
  5. Economic Growth with Imperfect Foreign Investment By Henry Thompson
  6. The Land Value Tax in Jamaica:An Analysis and Options for Reform By David L. Sjoquist
  7. Taxation and Economic Efficeincy in Jamaica By Miles K. Light
  8. Getting it Right: Financing Urban Development in China By Richard M. Bird
  9. Eastern and Southern Africa Monetary Integration: A Structural Vector Autoregression Analysis By Steven K. Buigut; Neven T. Valev
  10. Redistribution via Taxation: The Limited Role of the Personal Income Tax in Developing Countries By Richard M. Bird; Eric M. Zolt
  11. Measuring Transactions Costs from Observed Behavior: Market Choices in Peru By Renos Vakis; Elisabeth Sadoulet; Alain de Janvry
  12. 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
  13. China's Income Distribution over Time: Reasons for Rising Inequality By Ximing Wu; Jeffrey Perloff
  14. Peer Effects in Employment: Results from Mexico's Poor Rural Communities By Caridad Araujo; Alain de Janvry; Elisabeth Sadoulet
  15. Financial Globalization, Growth and Volatility in Developing Countries By Kose, Ayhan; Prasad, Eswar; Rogoff, Kenneth; Wei, Shang-Jin
  18. Africa's food and nutrition security situation By Benson, Todd
  19. Development strategies and food and nutrition security in Africa By Heidhues, Franz; Atsain, Achi; Nyangito, Hezron; Padilla, Martine; Ghersi, Gérard; Le Vallée, Jean-Charles
  20. Improved fallows in Eastern Zambia By Kwesiga, Freddie; Franzel, Steven; Mafongoya, Paramu; Ajayi, Olu; Phiri, Donald; Katanga, Roza; Kuntashula, Elias; Place, Frank; Chirwa, Teddy
  21. The case of smallholder dairying in Eastern Africa By Ngigi, Margaret
  22. Strategies for sustainable land management and poverty reduction in Uganda By Nkoya, Ephraim; Pender, John; Jagger, Pamela; Sserunkuuma, Dick; Kaizzi, Crammer; Ssali, Henry
  23. Human capital, household welfare, and children's schooling in Mozambique By Handa, Sudhanshu; Simler, Kenneth R.; Harrower, Sarah
  24. Untangling the Quality of Governance from the Level of Income: Are Sub-Saharan African Countries Governed Well? By Erich Gundlach; Susanne Hartmann
  25. The Analytics of Segmented Labor Markets By P R Agénor
  26. My Policies or Yours: Have OECD Agricultural Policies Affected Incomes in Developing Countries? By Nava Ashraf; Margaret McMillan; Alix Peterson Zwane
  27. A Global View of Economic Growth By Jaume Ventura
  28. The Chinese Approach to Capital Inflows: Patterns and Possible Explanations By Eswar Prasad; Shang-Jin Wei
  29. Child Poverty in Vietnam: Using Adult Equivalence Scales to Estimate Income-Poverty for Different Age Groups By Howard White
  30. Comparative Perspectives on Child poverty: a review of poverty measures By Howard White; Andrew Masters; Jennifer Leavy
  31. Does Foreign Direct Investment Transfer Technology Across Borders? A Reexamination By Jürgen Bitzer; Monika Kerekes
  32. Modelling and Measuring Scientific Production: Results for a Panel of OECD Countries By Gustavo Crespi; Aldo Geuna
  33. Coping Strategies in Post-War Rural Mozambique By Tilman Brück
  34. Long Term Consequences Of Early Childhood Malnutrition By Harold Alderman; John Hoddinott; Bill Kinsey

  1. By: Jameson Boex (Andrew Young School of Policy Studies, Georgia State University); Jorge Martinez-Vazquez (Andrew Young School of Policy Studies, Georgia State University)
    Abstract: Decentralized countries around the world use different institutional set-ups to assure that the system of local government finances achieves the objectives sought by the public sector through the decentralized delivery of public services. In many centralized countries, the Ministry of Local Government is tasked with the exclusive responsibility to monitor and coordinate all aspects of intergovernmental relations, including local government finances. While the Ministry of Local Government generally also plays a role in more decentralized countries, it is not unusual for broad-based or inter-ministerial commissions to be tasked with tracking and considering local government finance issues in more decentralized countries. In contrast, other decentralized countries rely more heavily on local government associations or even the legislative branch to monitor and analyze the system of local government finances and to represent local government interests at the national level to assure a balanced system of intergovernmental relations. Finally, there are a small number of decentralized countries around the world that lack a formal intergovernmental mechanism to coordinate local government finance issues altogether.
    Keywords: intergovernmental fiscal relations, decentralization, LDCs
    Date: 2004–04–01
  2. By: Jorge Martinez-Vazquez (Andrew Young School of Policy Studies, Georgia State University)
    Abstract: Vietnam is a poor country with large and increasing needs in infrastructure, education, health, and other areas of the public sector. The current policy of the Government of Vietnam (GOV) is not to increase tax effort, but actually to reduce it. Recently, the GOV has cut the rates of several taxes with the goal of making Vietnam’s exports more competitive internationally and to attract more foreign direct investment. Tax revenues will be further cut in the near future as the GOV prepares for accession to the WTO by reducing the level and dispersion of customs tariff rates.
    Keywords: Fiscal Decentralization,Vietnam, tax effort
    Date: 2004–08–01
  3. By: Jorge Martinez-Vazquez (Andrew Young School of Policy Studies, Georgia State University); Jameson Boex (Andrew Young School of Policy Studies, Georgia State University); Gabe Ferrazzi
    Abstract: Indonesia is currently in the process of evaluating and revising the decentralization legislation and the progress made during the first stage of its “big bang” decentralization reforms. This first wave of decentralization reform was implemented without major interruptions in service delivery as had been feared by some. However, initial and partial field evidence suggests that the long-term viability of service delivery may now be threatened in some local governments and in some sectors. In particular, there is a danger that the proliferation of obligatory functions and minimum service standards that far outstrip available resources will undermine functioning and credibility of local government units (LGUs). To forestall this possibility, and address other shortcomings in the decentralization framework, the Government of Indonesia (GOI) is in the process of reviewing and refining its system of intergovernmental relations.
    Keywords: expenditure,intergovernmental grants, Indonesia
    Date: 2004–09–01
  4. By: Richard M. Bird (Director of the International Tax Program, Joseph L. Rotman School of Management, University of Toronto); Jorge Martinez-Vazquez (Andrew Young School of Policy Studies, Georgia State University); Benno Torgler
    Abstract: “Will underdeveloped countries learn to tax?” asked Nicholas Kaldor (1963), forty years ago. Underlying this question is the assumption that if a country wishes to become ‘developed’ it needs to collect in taxes an amount greater than the 10-15 percent found in many developing countries. Kaldor’s answer to his question was essentially that since even the poorest country had sufficient ‘capacity’ in both economic and administrative terms to tax more, whether or not a particular country did so depended primarily on its political institutions. Would developing countries be fortunate enough to have those with political power voluntarily give up at least some of their power to block fiscal reform in exchange for social stability? Or would the ruling groups rather wait (in the spirit of après moi le deluge) for the revolutionary upheaval that he considered the only alternative?
    Keywords: Societal Institutions,Tax Effort,Developing Countries
    Date: 2004–09–01
  5. By: Henry Thompson (Department of Economics, Auburn University.)
    Abstract: Foreign investment has proven essential for economic growth and the present paper connects it explicitly to the capital stock in the neoclassical growth model. The assumption in the literature of perfect foreign investment implies no distinction between domestic and foreign capital. In the applied growth literature, the working assumption is that foreign investment shifts technology. The present paper introduces imperfect foreign investment as a function of the difference between domestic and foreign capital returns. The foreign capital stock is then separate and the small open economy may be a steady state foreign investment host (or source). Convergence is incomplete in the two country model.
    Keywords: Economic Growth,Foreign Investment, Foreign capital
    Date: 2004–09–01
  6. By: David L. Sjoquist (Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This Working Paper on the property tax contains an Executive Summary and four chapters. In Chapter One we describe how the Jamaican property tax functions. In Chapter Two we present an analysis of various problems and issues that surround of the property tax. Chapter Three, which was co-authored with Ki-Whan Choi, presents an analysis of a land value tax versus a capital value tax. Finally, in Chapter Four we present options for reform.
    Keywords: Land Value Tax,Jamaica,Tax Reform
    Date: 2004–12–01
  7. By: Miles K. Light
    Abstract: This re[prt presents a quantitative ecomonic model used to determine the macroeconomic impact of tax reforms in Jamaica. We identify the magnitude and nature of changes to production, trade, and consumer welfare related to raising additional government funds.The current results suggest that simply increasing rates under the existing tax strucure will produce a low tax yield and high efficiency costs.
    Keywords: Jamaica, taxation, economic efficiency
    Date: 2004–12–01
  8. By: Richard M. Bird
    Abstract: China is the world’s most populous country. For some years, China has sustained a remarkably fast rate of economic growth. Despite the forests of construction cranes so often noted by visiting foreigners, however, China remains to a surprising extent a rural country, with only about one-third of its population living in urban areas. But China’s cities are growing rapidly, and within a decade half or more of its population will be urban. In addition to urbanizing less rapidly than would normally be expected for its growth rate, the pattern of urban growth in China during its recent rapid economic expansion has also not followed that found in other countries. In particular, contrary to experience in most of the world, its largest urban centers have on the whole grown less rapidly than the urban sector as a whole. Moreover, in some critical respects the internal pattern of growth within Chinese cities has also deviated from what economic logic would suggest is sensible – although in this respect at least its experience is not too different to what has been seen elsewhere.
    Keywords: Urban Development, China, Economic Growth
    Date: 2004–12–01
  9. By: Steven K. Buigut (Andrew Young School of Policy Studies, Georgia State University); Neven T. Valev (Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This paper uses VAR techniques to investigate the potential for forming monetary unions in Eastern and Southern Africa. All countries in the sample are members of various regional economic organizations. Some of the organizations have a monetary union as an immediate objective whereas others consider it as a possibility in the more distant future. Our objective is to sort out which countries are suitable candidates for a monetary union based on the synchronicity of demand and supply disturbances. Although economic shocks are not highly correlated across the entire region, we tentatively identify three sub regional clusters of countries that may benefit from a currency union.
    Keywords: Eastern and Southern Africa Monetary Integration: Structural Vector Analysis
    Date: 2005–02–01
  10. By: Richard M. Bird; Eric M. Zolt
    Abstract: In developed countries, the income tax, especially the personal income tax, has long been viewed as the primary instrument for redistributing income and wealth. This article examines whether it makes sense for developing countries to rely on the income tax for redistributive purposes. We put forth three propositions. First, the personal income tax has done little to reduce inequality in many developing countries. This failure is not surprising given that in many countries personal income taxes are neither comprehensive nor very progressive—they often amount to little more than withholding taxes on labor income in the formal sector. Moreover, the personal income tax plays such a small role in the tax systems of developing countries that it would be unrealistic to believe that this tax could have a meaningful impact on distribution. Second, it is not costless to pretend to have a progressive personal income tax system. Tax systems generate real administrative, compliance, economic efficiency and political costs. The costs associated with badly designed and badly administered personal income tax systems likely exceed the costs associated with other taxes. There are opportunity costs as well. Third, given the ineffectiveness of the personal income tax, if countries want to use the fiscal system to reduce poverty or reduce inequality, alternative approaches merit consideration. Countries need to make better use of their expenditure programs in targeting resources to the poor. Given the dominance of taxes on consumption in the tax structure of developing countries, the distributional consequences of consumption taxes are of far greater importance than those of the personal income tax. Countries can also make greater use of benefit taxation and in particular fiscal decentralization may allow for better matching of those who benefit and those who pay for government activity. Finally, countries can consider alternatives to taxing income other than the current comprehensive income approach.
    Keywords: Redistribution, Taxation, Personal Income, and Developing Countries
    Date: 2005–03–01
  11. 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
  12. 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
  13. 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
  14. 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
  15. By: Kose, Ayhan; Prasad, Eswar; Rogoff, Kenneth; Wei, Shang-Jin
    Abstract: This Paper provides a comprehensive assessment of empirical evidence about the impact of financial globalization on growth and volatility in developing countries. The results suggest that it is difficult to establish a robust causal relationship between financial integration and economic growth. Furthermore, there is little evidence that developing countries have been consistently successful in using financial integration to stabilize fluctuations in consumption growth. However, we do find that financial globalization can be beneficial under the right circumstances. Empirically, good institutions and quality of governance are crucial in helping developing countries derive the benefits of globalization. Similarly, macroeconomic stability appears to be an important prerequisite for ensuring that financial globalization is beneficial for developing countries. Finally, countries that employ relatively flexible exchange rate regimes and succeed in maintaining fiscal discipline are more likely to enjoy the potential growth and stabilization benefits of financial globalization.
    Keywords: globalization; growth; international financial linkages; macroeconomic volatility
    JEL: F15 F36 F41 F43
    Date: 2004–12
  16. By: Beatriz de-Blas-Perez
    Abstract: This paper studies the consequences on growth and welfare of imposing limits to public borrowing. In the model economy, government spending may play two different roles, either as input in the production function, or providing services directly in the utility function. In these setups I study the effects of different fiscal policies with and without debt limits both in the balanced growth path and during the transitional dynamics. In the long run, if there is no limit, the growth effects of raising labor income taxes are negative, regardless of the role of government spending. However, the role public spending is crucial for the growth effects of changes in the ratio of public expenditures to output. In the presence of a limit to debt, higher labor tax rates have a positive effect on growth if government spending is productive. The opposite is true when private capital drives growth. Regarding welfare, raising labor income taxes imply a lower welfare cost of reducing debt than does cutting government spending, when this is productive.
    Date: 2005–04
  17. By: Leandro Prados de la Escosura
    Abstract: This paper explores the connections between independence from Spain and Portugal and economic backwardness in Latin America. The release of the fiscal burden was offset by higher costs of self-government, while opening up to the international economy represented a handmaiden of growth. Independence had a very different impact across regions and widened regional disparities. The commitment to the colonial mercantilism conditioned the new republics’ performance but, on the whole, GDP per head increased in the half a century after emancipation. It appears that inherited Iberian institutions cannot be blamed for Latin America’s poor performance relative to the US, especially if the scope is widened to include the post-independence performance of former European colonies in Africa and Asia. It is suggested that before jumping to the usual negative assessment of nineteenth century Latin America, a comparison of post-independence performance in other world regions will be required.
    Date: 2004–12
  18. By: Benson, Todd
    Abstract: "Efforts and initiatives to combat hunger and malnutrition in Africa are gaining momentum at all levels—local, national, continental, and international. To design and implement effective strategies for action, it is vital that we have a clear understanding of the problems and options. In this 2020 discussion paper, Todd Benson reviews the extent of food and nutrition insecurity across Africa. He assesses recent patterns and trends, exploring where significant progress has occurred, or not, and why. The differences between food and nutrition security, and how they are linked, are clarified. Benson examines the key direct and indirect determinants and consequences of food and nutrition insecurity in the African context and offers a menu of actions and strategies. Lack of access to and availability of food—the key factors behind food insecurity—remain central concerns in Africa. When food insecurity interacts with health and care problems it translates into nutrition insecurity. HIV/AIDS is an important issue in that context. This comprehensive paper gives prominent attention to the oft-neglected issue of nutrition security. Reflecting emerging Africa-wide initiatives, the paper takes a continental perspective, which should be helpful for strategic consideration by the New Partnership for Africa's Development (NEPAD) and the African Union. This paper was commissioned for the IFPRI 2020 Africa Conference on “Assuring Food and Nutrition Security in Africa by 2020: Prioritizing Actions, Strengthening Actors, and Facilitating Partnerships,” held in Kampala, Uganda on April 1-3, 2004. There, it served to illuminate the discussions on why Africa has not yet achieved food and nutrition security and what needs to be done." Foreword by Joachim von Braun, Director General, IFPRI
    Date: 2004
  19. By: Heidhues, Franz; Atsain, Achi; Nyangito, Hezron; Padilla, Martine; Ghersi, Gérard; Le Vallée, Jean-Charles
    Abstract: "Momentum is building in and around Africa today for policy action to decisively confront hunger and malnutrition. If we are to succeed, it is vital that food and nutrition security strategies be both sound and able to be implemented. Ultimately, strategies deficient in either of these two areas will be ineffectual. Lessons from past strategies provide a valuable resource in the design of future strategies, yet there is a dearth of programmatic information and rigorous evaluations of the approaches used in the past. With this in mind, the authors of this 2020 discussion paper review the multitude of approaches and strategies for achieving food and nutrition security in Africa within the context of development over the past four decades. They assess the extent to which these plans have been implemented and identify the key constraints and limitations, along with the priority investments needed for more effective design and implementation in the future." from Foreword by Joachim von Braun, Director General, IFPRI
    Keywords: Food policy ,Hunger ,Malnutrition Africa ,Food security Africa ,Development policies ,Assessment ,Investments ,
    Date: 2004
  20. By: Kwesiga, Freddie; Franzel, Steven; Mafongoya, Paramu; Ajayi, Olu; Phiri, Donald; Katanga, Roza; Kuntashula, Elias; Place, Frank; Chirwa, Teddy
    Abstract: "The decline in soil fertility in smallholder systems is a major factor inhibiting equitable development in much of sub-Saharan Africa. Some areas fallow in order to strength soil fertility for later planting, but as populations increase, demand follows and continuous cropping becomes the norm and there is a reduction in yields. This case study summarizes the development of improved tree fallows by researchers and farmers in eastern Zambia to help solve the problem of poor soil fertility. Many farmers are finding that by using improved fallows, they can substitute relatively small amounts of land and labor for cash, which they would need to buy mineral fertilizer. The study has three phases: the historical background (phase 1); an assessment of problems, description of the technology, and how it was developed (phase 2); and how the improved fallows practices were disseminated and spread (phase 3). This paper will describe each phase, the goals, and results." Authors' Abstract
    Keywords: Crop yields ,Q23 - Forestry ,Q24 - Land ,
    Date: 2005
  21. By: Ngigi, Margaret
    Abstract: "Agriculture plays a crucial role in the economy of sub-Saharan Africa. A feature of particular significance about the region is that the majority of households are heavily dependent on agriculture as their major source of livelihood. Smallholder agriculture is the principal producer of staple foods and cash crops, accounting for very large shares of national production and marketed output. For the respective countries, therefore, the performance of smallholder agriculture has crucial implications for the overall economic development process including the alleviation of rural poverty. The demands created by steadily increasing populations, and the pressing need to increase agricultural productivity means that these countries must continuously adopt methods to intensify agricultural production." Authors' Abstract
    Keywords: Poverty alleviation ,Population growth ,Agricultural productivity ,Small farmers ,Rural poor ,livestock ,Dairy products industry ,
    Date: 2005
  22. By: Nkoya, Ephraim; Pender, John; Jagger, Pamela; Sserunkuuma, Dick; Kaizzi, Crammer; Ssali, Henry
    Abstract: "The government of Uganda, with help from its development partners, is designing and implementing policies and strategies to address poverty, land degradation, and declining agricultural productivity. Land degradation, especially soil erosion and depletion of soil nutrients, is widespread in Uganda and contributes to declining productivity, which in turn increases poverty. The report has four major objectives: (1) to examine the causes of land degradation in Uganda; (2) to identify the determinants of income strategies and land management decisions and their impacts on agricultural productivity, soil erosion, and household income; (3) to assess the trade-offs and complementarities among these different objectives; and (4) to analyze the soil nutrient depletion in eastern Uganda to determine the factors that influence it." from Abstract
    Date: 2004
  23. By: Handa, Sudhanshu; Simler, Kenneth R.; Harrower, Sarah
    Abstract: "For the well-being of today's families and for future generations, how important is investment in education and other forms of human capital? This report analyzes the potential for investments in education by individual households, by government, and by donor agencies to reduce poverty in postwar Mozambique. It provides an assessment of the existing stock of human capital and examines the association between human capital and both monetary and nonmonetary dimensions of household welfare. It also explores the factors that influence the decision to send children to school, and how long children remain in school.The authors focus on human capital because of its importance in increasing labor productivity in poor countries, its contribution to poverty reduction as both a substitute for and complement to physical capital, and the role of education in determining poverty levels. Although the analysis was originally commissioned by the Government of Mozambique, in many respects the methods and findings are also applicable in other low-income countries." from Text
    Keywords: Human capital ,households ,Education ,School children ,
    Date: 2004
  24. By: Erich Gundlach; Susanne Hartmann
    Abstract: We consider whether Sub-Saharan African (SSA) countries are mainly poor because they are governed worse than other countries, as suggested by recent studies on the supremacy of institutions. Our empirical results show that the supremacy of institutions does not hold. SSA countries appear to face very specific development problems. Given their geographic and economic constraints, we conclude that SSA countries are on average not governed worse than other comparable countries. Our finding supports the basic argument of a recent UN report (UN Millennium Project 2005). However, we find that the UN report is based on empirical evidence that appears to imply the supremacy of institutions.
    Keywords: Development, institutions, disease ecology, Sub-Saharan Africa
    JEL: O1 O4
    Date: 2005–04
  25. By: P R Agénor
    Abstract: This paper provides an analytical overview of models of segmented urban labor markets in developing countries. It begins by reviewing the characteristics of the labor market in these countries, including institutions and regulations that may lead to segmentation. The wage and employment e?ects of imperfect labor mobility between the formal and informal sectors are then illustrated with a simple graphical analysis. Formal models of urban wage formation are discussed next, and a two-sector shirking model with segmented urban labor markets is presented. The model is used to analyze the impact of an increase in the minimum wage on unskilled unemployment.
    Date: 2005
  26. By: Nava Ashraf; Margaret McMillan; Alix Peterson Zwane
    Abstract: This paper seeks to understand the impact of rich-country agricultural support policies on the poor. Using non-parametric analysis we establish the fact that the majority of poor countries are currently net food importers and have been for the past thirty years. Using a a cross-country regression framework we measure the overall impact of agricultural support policies in rich countries on average income per capita in poor countries. We find some evidence that OECD support polices are positively correlated with average incomes in food-importing countries and negatively correlated with average incomes in food-exporting countries. Using the national employment and household consumption and expenditure surveys from Mexico for the period 1991-2000, we examine the implications of a reduction in the price corn on Mexico's corn farmers. We find that the poorest corn farmers in Mexico are net consumers of corn and have been largely unaffected by changes in the price of corn. Middle income corn farmers saw their real income from corn farming fall by more than fifty percent. The real income of the largest corn farmers increased by fourty percent.
    JEL: F0 O0 Q0
    Date: 2005–05
  27. By: Jaume Ventura
    Abstract: This paper integrates in a unified and tractable framework some of the key insights of the field of international trade and economic growth. It examines a sequence of theoretical models that share a common description of technology and preferences but differ on their assumptions about trade frictions. By comparing the predictions of these models against each other, it is possible to identify a variety of channels through which trade affects the evolution of world income and its geographical distribution. By comparing the predictions of these models against the data, it is also possible to construct coherent explanations of income differences and long-run trends in economic growth.
    JEL: F10 F15 F40 F43
    Date: 2005–05
  28. By: Eswar Prasad; Shang-Jin Wei
    Abstract: In this paper, we adopt a cross-country perspective to examine the evolution of capital flows into China, both in terms of volumes and composition. China's inflows have generally been dominated by foreign direct investment (FDI), a pattern that appears to be favorable in light of the recent literature on the experiences of developing countries with financial globalization. We provide a detailed documentation of the evolution of China's capital controls, a proximate determinant of the pattern of capital inflows. We also discuss a number of other intriguing hypotheses that attempt to capture the "deeper" causes underlying China's approach to capital flows. In particular, we argue that some popular mercantilist-type arguments are inconsistent with the facts. We also analyze the recent rapid rise of China's international reserves and discuss its implications. Contrary to some popular perceptions, the dramatic surge in foreign exchange reserves since 2001 is mainly attributable to non-FDI capital inflows, rather than current account surpluses or FDI.
    JEL: F2 F3 F4
    Date: 2005–05
  29. By: Howard White (Institute of Development Studies)
    Abstract: Estimates of child poverty are based on the percentage of children living in poor households, which ignores the issue of intrahousehold allocation. It is commonly argued that the fact that data are collected at the household level means it is not possible to report figures relating to the number of children living in poverty. Yet analysts using income and expenditure data routinely make adjustments to these data which implicitly tell us exactly how much of household expenditure is going on each child. These adjustments are the use of adult equivalence scales. These scales give child consumption as a proportion of that of an adult male, and hence can be used to calculate child consumption shares. These scales may be estimated econometrically, and are hence based on intra-household allocation patterns for the households under study. Moreover, the scales can be estimated separately for different sub-samples of the population, allowing estimates of child poverty rates for different groups; for example how child poverty differs between boys and girls or for different ethnic groups. This paper presents such estimates in the case of Vietnam.
    Keywords: Children, poverty measurement, Vietnam, household survey data
    JEL: O P
    Date: 2005–04–29
  30. By: Howard White (Institute of Development Studies); Andrew Masters (Institute of Development Studies); Jennifer Leavy (Institute of Development Studies)
    Abstract: Child poverty matters directly as children constitute a large share of the population and indirectly for future individual and national well- being. Developed country measures of child poverty are dominated by income-poverty, although health and education are often included. But these are not necessarily the most direct measures of the things that matter to children. Moreover, a broader range of factors than material well-being matter for child development; family and community play an important role. The conclusion is that social and psychological variables are an important component of child welfare. Can such a conclusion be extended to developing countries? It might be thought not, since the dictates of a focus on absolute poverty imply concern with fundamentals such as malnutrition, illiteracy and premature death and the things which cause these outcomes. But such a view is short-sighted. Child development concerns are at least as important in developing countries as developed ones (if less well understood). Hence approaches to child welfare in developing countries (both measurement and policy) should also adopt a broad-based approach which embraces diverse aspects of the quality of a child’s life, including child rights.
    Keywords: Children, poverty measurement, child poverty
    JEL: O P
    Date: 2005–04–29
  31. By: Jürgen Bitzer (Free University Berlin Department of Economics & Institute for East European Studies); Monika Kerekes (Free University Berlin Department of Economics & Institute for East European Studies)
    Abstract: Reexamining foreign direct investment (FDI) as a potential channel for knowledge diffusion -- based on industry data from seventeen OECD countries during the period 1973-2000 -- we find that FDI-receiving countries benefit strongly from FDI-related knowledge spillovers. We do not find evidence for positive FDI-related technology sourcing effects. Instead, our results suggest that outward FDI might have negative effects on the output of the FDI-sending country.
    Keywords: foreign direct investment, knowledge spillovers
    JEL: F21 O33 O47 E23
    Date: 2005–05–04
  32. By: Gustavo Crespi (SPRU, University of Sussex); Aldo Geuna (SPRU, University of Sussex)
    Abstract: This paper presents results from employing an econometric approach to examine the determinants of scientific production at cross-country level. The aim of this paper is not to provide accurate and robust estimates of investment elasticities (a doubtful task given the poor quality of the data sources and the modelling problems), but to develop and critically assess the validity of an empirical approach for characterising the production of science and its impact from a comparative perspective. We employ and discuss the limitations of a production function approach to relate investment inputs to scientific outputs using a sample of 14 countries for which we have information about Higher Education Research and Development (HERD). The outputs are taken from the Thomson ISI® National Science Indicators (2002) database on published papers and citations. The inputs and outputs for this sample of countries have been recorded for a period of 21 years (1981-2002). A thorough discussion of data shortcomings is presented in this paper. On the basis of this panel dataset we investigate the profile of the time lag between the investment in HERD and the research output and the returns to national investment in science. We devote particular attention to analysis of the presence of cross-country spillovers. We show their relevance and underline the international effect of the US system.
    Keywords: productivity of science, lag structure, returns to HERD investment, international spillovers
    JEL: L3 O3
    Date: 2005–04–19
  33. By: Tilman Brück (German Institute for Economic Research (DIW Berlin))
    Abstract: This paper analyses post-war coping strategies by farm households in developing countries. The analysis is based on a portfolio model of activity choices in war-affected rural Sub-Saharan Africa. A case study using farm household survey data estimates the determinants of agricultural coping strategies in post-war Mozambique. Post-war coping strategies are expected to differ from pre- and mid-crisis coping strategies. War-affected households are forced to adopt very risky coping strategies that re-enforce their vulnerability. Households choose between market and non-market forms of exchange and even exit markets entirely. Post-war reconstruction policy should focus on re-capitalizing households and providing public goods.
    Date: 2004–03
  34. By: Harold Alderman (World Bank); John Hoddinott (International Food Policy Research Institute); Bill Kinsey (University of Zimbabwe and Free University, Amsterdam)
    Abstract: This paper examines the impact of preschool malnutrition on subsequent human capital formation in rural Zimbabwe using a maternal fixed effects - instrumental variables (MFE-IV) estimator with a long term panel data set. Representations of civil war and drought “shocks” are used to identify differences in preschool nutritional status across siblings. Improvements in height-for-age in preschoolers are associated with increased height as a young adult and number of grades of schooling completed. Had the median pre-school child in this sample had the stature of a median child in a developed country, by adolescence, she would be 3.4 centimeters taller, had completed an additional 0.85 grades of schooling and would have commenced school six months earlier.
    Keywords: health, education, shocks, Zimbabwe
    JEL: I12 I20 O15
    Date: 2004–07

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