nep-dev New Economics Papers
on Development
Issue of 2005‒10‒15
fifteen papers chosen by
Jeong-Joon Lee
Towson University

  1. Social capital By Durlauf,S.N.; Fafchamps,M.
  2. Growth econometrics By Durlauf,S.N.; Johnson,P.A.; Temple,J.R.W.
  3. Empirics of growth and development By Durlauf,S.N.; Kourtellos,A.; Tan,C.M.
  4. Nonlinearities in growth : from evidence to policy By Cohen-Cole,E.B.; Durlauf,S.N.; Rondina,G.
  5. Geography, Health, and Demo-Economic Development By Holger Strulik
  6. Social Composition, Social Conflict, and Economic Development By Holger Strulik
  7. Understanding Victimization: The Case of Mozambique By Mikkel Barslund; John Rand; Finn Tarp; Jacinto Chiconela
  8. East Asian Economic Integration and its Impact on Future Growth By Phillipa Dee
  9. Cursed by resources or institutions? By Halvor Mehlum; Karl Ove Moene; Ragnar Torvik
  10. Mobilising Investment for Development: Role of ODA the 1993-2003 Experience in Vietnam By Thuc Duc Le; Thi Thanh Ha Nguyen; Thu Hang Nguyen; Thi Hanh Tran
  11. Impact of Changes in Social Institutions on Income Inequality in China By Hiroko Uchimura
  12. Trade and Structural Adjustment Policies in Selected Developing Countries By Jens Andersson; Federico Bonaglia; Kiichiro Fukasaku; Caroline Lesser
  13. "The MDGs and Exit Time: The Case of the Philippines " By Yasuyuki Sawada; Jonna P. Estudillo
  14. "Precautionary Saving under LiquidityConstraints: Evidence from Rural Pakistan" By Jeong-Joon Lee; Yasuyuki Sawada
  15. Poverty and chilidren's work in Spain and Latin America. Some preliminary remarks. By Enriqueta Camps

  1. By: Durlauf,S.N.; Fafchamps,M. (University of Wisconsin-Madison, Social Systems Research Institute)
    Date: 2004
  2. By: Durlauf,S.N.; Johnson,P.A.; Temple,J.R.W. (University of Wisconsin-Madison, Social Systems Research Institute)
    Date: 2004
  3. By: Durlauf,S.N.; Kourtellos,A.; Tan,C.M. (University of Wisconsin-Madison, Social Systems Research Institute)
    Date: 2005
  4. By: Cohen-Cole,E.B.; Durlauf,S.N.; Rondina,G. (University of Wisconsin-Madison, Social Systems Research Institute)
    Date: 2005
  5. By: Holger Strulik (Department of Economics, University of Copenhagen)
    Abstract: This paper investigates the interactive impact of subsistence consumption and child mortality on fertility choice and child expenditure. It offers an explanation for why mankind multiplies at higher rates at geographically unfavorable, tropical locations. In a macro-economic framework it proposes an indirect channel of geography’s influence on economic performance. It explains why it are the world’s unfavorably located regions where we observe exceedingly slow (if not stalled) economic development and demographic transition.
    Keywords: demographic transition; geography; health; cross-country divergence
    JEL: J10 J13 O11 O12
    Date: 2005–09
  6. By: Holger Strulik (Department of Economics, University of Copenhagen)
    Abstract: This paper investigates how social composition affects social conflict and economic development when property rights are unenforceable. Groups follow Markovian strategies for consumption and investment and may also spend effort in an resource appropriation contest. It is shown that conflict prevents investment and growth in a society of symmetric groups. In a society at peace economic growth may occur. Growth, however, is decreasing in the degree of social fractionalization and smaller than it could be under secure property rights. In an economy populated by social groups of unequal size an asymmetric equilibrium exists. A large majority may behave peacefully although continuously challenged by a predatory minority. The rebelridden economy either stagnates or grows at a low rate. Growth is decreasing in the size of the predatory minority and its conflict intensity. A final part extends the analysis towards behavior of non-benevolent social elites.
    Keywords: social conflict; social fractionalization; property rights; stagnation; growth
    JEL: C73 D74 O11
    Date: 2005–09
  7. By: Mikkel Barslund (Department of Economics, University of Copenhagen); John Rand (Department of Economics, University of Copenhagen); Finn Tarp (Department of Economics, University of Copenhagen); Jacinto Chiconela (Ministry of Planning and Development (MPD), Mozambique)
    Abstract: This paper analyzes how different economic characteristics at the individual, household and community level affect the risk of victimization, controlling for the impact of (non-economic) sociological factors. We use a nation wide household survey from Mozambique and show that the probability of being victimized is increasing in income, but at a diminishing rate. At the same time, poorer households are vulnerable. While less at risk of victimization, they tend to suffer relatively greater losses when such shocks occur. Economic development and reduction in victimization go hand in hand, and lower inequality and increased employment appear as effective means of combating crime.
    Keywords: victimization; crime; Africa; Mozambique; development; probit
    JEL: K40 K42 O55
    Date: 2005–09
  8. By: Phillipa Dee (Australia–Japan Research Centre)
    Abstract: Two propositions appear to be gaining wide currency, given the revealed preference for preferential trade agreements (PTAs) in the East Asian region and elsewhere. The first is that economic integration is a good way to promote economic growth. The second is that PTAs, particularly ones that go beyond goods trade, are an effective way to promote economic integration. Yet both propositions are empirical questions. In this paper, a partial evaluation of the evidence suggests caution is called for. Current PTAs appear to be doing little to remove the important impediments to growth in the region. Far greater income gains would come from comprehensive reform of nondiscriminatory impediments to competition, as part of a thorough-going program of unilateral domestic regulatory reform. It may be time to rethink East Asian economic integration as a policy priority, or at least review the way in which it might be pursued.
    Keywords: East Asia, economic integration, growth, preferencial trade agreements, PTA,
    JEL: O16 O19 O24
    Date: 2005–01
  9. By: Halvor Mehlum (Department of Economics, University of Oslo, Norway); Karl Ove Moene (Department of Economics, University of Oslo, Norway); Ragnar Torvik (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Natural resource abundant countries constitute both growth losers and growth winners, and the main difference between the success cases and the cases of failure lays in the quality of institutions. With grabber friendly institutions more natural resources push aggregate income down, while with producer friendly institutions more natural resources increase income. Such a theory finds strong support in data. A key question we also discuss is if resources in addition alter the quality of institutions. When that is the case, countries with bad institutions suffer a double resource curse - as the deterioration of institutions strenghtens the negative effect of more natural resources.
    Keywords: Natural resources; Institutional quality; Growth; Rent-seeking
    JEL: O4 Q0 F43
    Date: 2005–05–25
  10. By: Thuc Duc Le; Thi Thanh Ha Nguyen; Thu Hang Nguyen; Thi Hanh Tran
    Abstract: <P><OL><LI>The Vietnamese economy was in the doldrums in the 1980s and until a certain progress had been made in the context of Doi Moi there was little incentive for businesses to invest. The following reasons are commonly given for the sluggish economic activity: a lack of appropriate infrastructure (causing market disconnectedness even within the country); weak links to the world market; a shortage of skilled labour and managerial capacity; and an inefficient or business unfriendly public administration. ODA to Vietnam was allocated in such a way as to remedy these obstacles and the donors’ well designed strategies are seen as a major factor behind the success of ODA.</LI></OL></P><P><OL><LI>National ownership, an important feature of ODA programmes, has mostly been strong in ODA to Vietnam. Most of the activities of the past were closely aligned with the Vietnamese government’s development priorities. It should nevertheless be recognised that some ODA projects have aroused little enthusiasm among public ...</LI></OL></P>
    Date: 2004–12
  11. By: Hiroko Uchimura
    Abstract: This paper analyses the impact of changes in social institutions, i.e. in the informal and formal social security system, on income inequality in China. This study uses an inequality decomposition analysis approach comparing household survey data for 1988 with 1995. Since 1992 was a decisive year for accelerating to increase the role of market mechanism in China, comparing these two periods shows significant changes in social institutions and their impacts on income inequality. It provides meaningful implications for inequality issues in the present China. In a first step the paper looks at the impact of changes in the family based social security system on income inequality. Secondly, the paper investigates the contribution of current social security system reforms as a potential tool to cope with increasing inequality. Three main results emerge from the analysis: first, the family based social security is losing its importance mainly through the changes in employment pattern in a household. This change has a significant impact on income inequality. Second, this study shows that the introduction of new formal social security system helped to equalise the distribution of retired household members’ income in urban areas. Third, however, these changes have only benefited a restricted number of persons. Benefits for rural migrants are low and most of the rural population has still no access to the new system. Important steps forward will be to raise the fund-pooling level, and to include nonfarming workers into the new system. Ce document analyse l’impact des changements survenus dans les institutions sociales chinoises — à savoir le système de sécurité sociale formelle et informelle — sur l’inégalité des revenus. L’auteur procède à une décomposition des inégalités en comparant des données d’enquêtes auprès des ménages réalisées en 1988 et en 1995. L’année 1992 ayant marqué un tournant décisif en Chine, avec le rôle accru des mécanismes de marché, la comparaison de ces deux périodes fait apparaître des évolutions sensibles au sein des institutions sociales et met en évidence leurs conséquences en matière d’inégalité des revenus. Cette analyse comparative apporte un éclairage utile sur les problématiques actuelles d’inégalités en Chine. Elle s’intéresse tout d’abord aux conséquences de ces évolutions sur l’inégalité des revenus dans le système de sécurité sociale fondé sur la famille. Elle s’attache ensuite à la contribution potentielle des réformes du système de sécurité sociale pour faire face aux inégalités croissantes. Trois grands résultats émergent de cette recherche : i) le système de sécurité sociale fondé sur la famille perd de son importance, du fait notamment de l’évolution de la structure des emplois au sein des ménages, qui aggrave nettement l’inégalité des revenus ; ii) l’introduction d’un nouveau système de sécurité sociale formelle favorise l’égalisation des revenus des membres retraités dans les ménages urbains ; iii) mais ces évolutions n’ont profité qu’à un nombre restreint d’individus. Les bénéfices pour les migrants des zones rurales sont faibles et, pour l’essentiel, la population rurale n’a toujours pas accès à ce nouveau système. Deux mesures contribueront à améliorer la situation — l’augmentation du niveau des fonds gérés en commun et l’intégration des travailleurs non agricoles dans le nouveau système.
    Date: 2005–04
  12. By: Jens Andersson; Federico Bonaglia; Kiichiro Fukasaku; Caroline Lesser
    Abstract: The experience of the five examined industries (agro-food in Chile, cut flowers in Kenya, garment in Lesotho and in Mauritius and seafood in Thailand) demonstrates that non-traditional industries can emerge and achieved strong growth rates in very diverse settings in terms of geography and initial economic and social conditions. In most of these cases, the government adopted a relatively export-oriented, business-friendly attitude and adapted its policies as the industries developed. Hence, a key factor for successful structural adjustment has been the pro-active role of government in establishing an enabling economic and policy environment that allows local firms to operate on a level-playing field and strengthen their competitive edge in international markets. This highlights the importance of implementing trade policies in the framework of comprehensive development strategies and establishing a consultative national policy-making process for ensuring a coherent approach to trade and structural adjustment. The case studies also underscore that countries (government and industry) are compelled to constantly adapt in light of new sources of competition, growing wage levels, environmental constraints, technological advances and demanding product and process standards. Policy-makers in most countries under review are aware of this challenge. As a consequence, some of them have taken the initiative to set up specific mechanisms or programmes for further enhancing the competitiveness of existing export sectors and/or promoting emerging non-traditional export industries. L’expérience des cinq filières étudiées (agro-alimentaire au Chili, fleurs au Kenya, vêtements au Lesotho et à Maurice, et fruits de mer en Thaïlande) démontre que des industries non traditionnelles peuvent naître et générer de solides taux de croissance dans les contextes les plus variés de géographie ou de fondamentaux économiques et sociaux. Dans la plupart de ces cas, les pouvoirs publics ont adopté une approche relativement favorable à l’exportation et aux affaires, et adapté leurs politiques au développement de ces activités. Partant, le facteur clé d’un ajustement structurel bénéfique a été la détermination des gouvernements à adapter leur économie et le cadre politique pour permettre aux entreprises d’opérer à un stade approprié et de renforcer leurs avantages comparatifs sur les marchés internationaux. Ce qui souligne l’importance d’inscrire la politique commerciale dans le cadre des stratégies de développement global et de mettre en place, pour assurer une approche cohérente de l’ajustement commercial et structurel, une procédure consultative nationale d’adoption des politiques. Les études de cas soulignent aussi que les pays (pouvoirs publics et entreprises) sont condamnés à s’adapter constamment en fonction des nouvelles sources de concurrence, de la charge salariale croissante, des contraintes de l’environnement, des avancées technologiques, et des exigences de la demande et des progrès. Les décideurs politiques de la plupart des pays passés en revue sont conscients de ce défi. Et c’est pourquoi plusieurs d’entre eux ont pris l’initiative de mettre en oeuvre des mécanismes ou des programmes spécifiques pour renforcer la compétitivité des actuelles filières d’export et/ou pour favoriser l’émergence d’activités exportatrices non traditionnelles.
    Date: 2005–07
  13. By: Yasuyuki Sawada (Faculty of Economics, University of Tokyo); Jonna P. Estudillo (School of Economics, University of Philippines)
    Abstract: This paper evaluates whether the Philippines will be able to halve the incidence of poverty between 1990 and 2015. Using the concept of exit time and household-level data, we found that the Philippines will be unlikely to do so.
    Date: 2005–08
  14. By: Jeong-Joon Lee (Department of Economics, Towson University); Yasuyuki Sawada (Faculty of Economics, University of Tokyo)
    Abstract: This paper investigates precautionary saving under liquidity constraints in Pakistan using household panel data. In particular, while we estimates Kimball's (1990) prudence parameter, we deviate from Dynan's (1993) framework by explicitly considering liquidity constraints, as in Zeldes (1989). By doing so,we attempt to diffeerentiate the standard precautionary saving caused by uncertainty from the oneduetoliquidity constraints. Furthermore, endogenous liquidity constraints are considered toresolveis-sues of selection biases. In this study, we document substantial evidence of the presence of precautionary saving in Pakistan. More specifically, the estimated prudence is significantly higher for liquidity-constrainedhouse-holds as compared with unconstrained ones. The results support the emerging view that facilitating saving may often be more important than finding better ways of lending to the poor.
    Date: 2005–09
  15. By: Enriqueta Camps
    Abstract: In the first part of this paper we try to test the relationship between mothers earnings, fertility and children’s work in the Spanish (Catalan) context of the first third of the 20th century. Specific human capital investment of adult working women had as an outcome the sharp increase of their real wage and also the increase of the opportunity cost of time devoted to house work including child rearing. Fertility evolution is endogenous to the model and decreases as a result of women real wage increases. Human capital investment of labouring women and mandatory schooling of children shift the labour supply function to a new steady state in which the slope is steeper. According to recent papers this model applies to 20th century Spain and it causes the abolition of children’s work. Nonetheless the model do not apply to 20th century Latin America. Despite the positive evolution of literacy and life expectancy in this region, other factors involved poor results of the educational human capital investment. In this paper we remark the role of the increasing share of the informal sector of the economy ruled on the bases of women’s and children’s work. Second we stress the role of high income inequality evolution and endogamic school supplies to explain the limits of increasing literacy on more remarkable human capital improvements.
    Keywords: Children’s and women’s work, human capital, fertility evolution, income inequality
    JEL: J22 J24 J13 J16 O1 N36
    Date: 2005–09

This nep-dev issue is ©2005 by Jeong-Joon Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.