nep-dev New Economics Papers
on Development
Issue of 2005‒11‒05
thirty-one papers chosen by
Jeong-Joon Lee
Towson University

  1. A New International Division of Labor in Europe: Offshoring and Outsourcing to Eastern Europe By Marin, Dalia
  2. Will China Eat Our Lunch or Take Us to Dinner?—Simulating the Transition Paths of the U.S., E.U., Japan, and China By Hans Fehr; Sabine Jokisch,; Laurence J. Kotlikoff
  3. Contraception as Development? New Evidence from Family Planning in Colombia By Grant Miller
  4. Income Risk and the Benefits of Social Insurance: Evidence from Indonesia and the United States By Raj Chetty; Adam Looney
  5. Consumption Smoothing and the Welfare Consequences of Social Insurance in Developing Economies By Raj Chetty; Adam Looney
  6. Dams By Esther Duflo; Rohini Pande
  7. Economic Growth and Poverty Reduction: Measurement and Policy Issues By Stephan Klasen
  8. Getting the Most Out of Public Sector Decentralisation in Mexico By Isabelle Joumard
  9. Achieving Universal Primary Education: Can Kenya Afford it? By Rob Vos; Arjun Bedi; Paul K. Kimalu; Damiano K. Manda; Nancy N. Nafula; Mwangi S. Kimenyi
  10. Determinants of Poverty in Kenya: A Household Level Analysis By Alemayehu Geda; Niek de Jong; Mwangi S. Kimenyi; Germano Mwabu
  11. External Contradictions of the Chinese Development Model: Why China Must Abandon Export-led Growth or Risk a Global Economic Contraction By Thomas I Palley
  12. Distributional Conflict, The State, and Peacebuilding in Burundi By Léonce Ndikumana
  13. Can Macroeconomic Policy Stimulate Private Investment in South Africa? New Insights from Aggregate and Manufacturing Sector-Level Evidence By Léonce Ndikumana
  14. Inflation and Economic Growth: A Cross-Country Non-linear Analysis By Robert Pollin; Andong Zhu
  15. Employment, Poverty, and Gender in Ghana By James Heintz
  16. Land Reform and Sustainable Development By James K. Boyce; Peter Rosset; Elizabeth Stanton
  17. Learning About a New Technology: Pineapple in Ghana By Timothy G. Conley; Christopher R. Udry
  18. Evidence of Returns to Schooling in Africa from Household Surveys: Monitoring and Restructuring the Market for Education By T. Paul Schultz
  19. GMOs: Prospects for Increased Crop Productivity in Developing Countries By Robert E. Evenson
  20. Female Schooling, Non-Market Productivity, and Labor Market Participation in Nigeria By Adebayo B. Aromolaran
  21. The Determinants of the Global Digital Divide A Cross-Country Analysis of Computer and Internet Penetration By Menzie D. Chinn; Robert W. Fairlie
  22. The Evolution of Development Thinking: Theory and Policy By Gustav Ranis
  23. Human Development and Economic Growth By Gustav Ranis
  24. Social Networks in Ghana By Christopher Udry; Timothy G. Conley
  25. Intra-Household Redistribution of Income and Calorie Consumption in South-Western Nigeria By Adebayo B. Aromolaran
  26. Arthur Lewis' Contribution to Development Thinking and Policy By Gustav Ranis
  27. Schooling Returns for Wage Earners in Burkina Faso: Evidence from the 1994 and 1998 National Surveys By Harounan Kazianga
  28. Female Household-Headship in Rural Bangladesh: Incidence, Determinants and Impact on Children's Schooling Shareen Joshi By Shareen Joshi
  29. Motives for Household Private Transfers in Burkina Faso By Harounan Kaziango
  30. "Time-Consistent Polities and Growth in Developing Countries: An Empirical Analysis." By James L. Butkiewicz; Halit Yanikkaya
  31. Aid Effectiveness and Limited Enforceable Conditionality By Almuth Scholl

  1. By: Marin, Dalia
    Abstract: Europe is reorganizing its international value chain. I document these changes in Europe?s international organization of production with new survey data of Austrian and German firms investing in Eastern Europe. I show estimates of the share of intra-firm trade between Austria and Germany on the one hand and Eastern Europe on the other. Furthermore, I present empirical evidence of the drivers of the new division of labor in Europe. I find among other things that falling trade costs and falling corruption levels as well as improvements in the contracting environment in Eastern Europe are affecting the level of intra-firm imports from Eastern Europe. They are also favoring outsourcing over offshoring. Low organizational costs of hierarchies and large costs of hold-up (when there are no alternative investors in Old Europe or no alternative suppliers in Eastern Europe) are favoring offshoring over outsourcing. Tax holidays granted by host countries in Eastern Europe also mildly affect the organizational choice.
    JEL: O11 L14 F11 D51 D23
    Date: 2005–09
  2. By: Hans Fehr (University of Wuerzberg); Sabine Jokisch, (University of Wuerzberg); Laurence J. Kotlikoff (Boston University, National Bureau of Economic Research)
    Abstract: This paper develops a dynamic, life-cycle, general equilibrium model to study the interdependent demographic, fiscal, and economic transition paths of China, Japan, the U.S., and the EU. Each of these countries/regions is entering a period of rapid and significant aging that will require major fiscal adjustments. But the aging of these societies may be a cloud with a silver lining coming, in this case, in the form of capital deepening that will raise real wages. China eventually becomes the world’s saver and, thereby, the developed world’s savoir with respect to its long-run supply of capital and long-run general equilibrium prospects. And, rather than seeing the real wage per unit of human capital fall, the West and Japan see it rise by one fifth percent by 2030 and by three fifths by 2100. Even if the Chinese saving behavior gradually approaches that of Americans, developed world real wages per unit of human capital are roughly 17 percent higher in 2030 and 4 percent higher at the end of the century. Without China they’d be only 2 percent higher in 2030 and 4 percent lower at Century’s end. The short-run outflow of capital to China is met with a commensurate short-run reduction in developed world labor supply, leaving the short-run ratio of physical capital to human capital, on which wages positively depend, actually somewhat higher than would otherwise be the case. On the other hand, our findings about the developed world’s fiscal condition are quite troubling. Even under the most favorable macroeconomic scenario, tax rates will rise dramatically over time in the developed world to pay baby boomers their governmentpromised pension and health benefits. As Argentina has so recently shown, countries can grow quite well for years even with unsustainable fiscal policies. But if they wait too long to address those policies, the financial markets will do it for them, with often quite ruinous consequences.
    Date: 2005–09
  3. By: Grant Miller
    Abstract: There has been considerable debate in the last decade about whether or not family planning programs in developing countries reduce fertility or improve socio-economic outcomes. Despite suggestive associations, disagreement persists because the availability and use of modern contraceptives are generally determined by both supply- and demand-side factors. This paper provides new evidence on the role of contraceptive supply by exploiting the surprisingly haphazard expansion of one of the world’s oldest and largest family planning organizations  PROFAMILIA of Colombia. Its findings suggest that family planning allowed Colombian women to postpone their first birth and have approximately one-half fewer children in their lifetime. Delayed first births, in turn, seem to have enabled young women to obtain more education and to work more and live independently later in life. Although family planning explains only about 10% of Colombia’s fertility decline, it appears to have reduced the otherwise substantial costs of fertility control and may be among the most effective development interventions.
    JEL: I12 I31 J13 N36 O12
    Date: 2005–10
  4. By: Raj Chetty; Adam Looney
    Abstract: This paper examines the welfare consequences of social safety nets in developing economies relative to developed economies. Using panel surveys of households in Indonesia and the United States, we find that food consumption falls by approximately ten percent when individuals become unemployed in both countries. This finding suggests that introducing a formal social insurance program would have small benefits in terms of reducing consumption fluctuations in Indonesia. However, in contrast with households in the U.S., Indonesians use costly methods such as reducing human capital investment to smooth consumption. The primary benefit of social insurance in developing countries may therefore come not from consumption smoothing itself but from reducing the use of inefficient smoothing methods.
    JEL: H0
    Date: 2005–10
  5. By: Raj Chetty; Adam Looney
    Abstract: Studies of risk in developing economies have focused on consumption fluctuations as a measure of the value of insurance. A common view in the literature is that the welfare costs of risk and benefits of social insurance are small if income shocks do not cause large consumption fluctuations. We present a simple model showing that this conclusion is incorrect if the consumption path is smooth because individuals are highly risk averse. Empirical studies find that many households in developing countries rely on inefficient methods to smooth consumption, suggesting that they are indeed quite risk averse. Hence, social safety nets may be valuable in low-income economies even when consumption is not very sensitive to shocks.
    JEL: H0
    Date: 2005–10
  6. By: Esther Duflo; Rohini Pande
    Abstract: The construction of large dams is one of the most costly and controversial forms of public infrastructure investment in developing countries, but little is known about their impact. This paper studies the productivity and distributional effects of large dams in India. To account for endogenous placement of dams we use GIS data and the fact that river gradient affects a district's suitability for dams to provide instrumental variable estimates of their impact. We find that, in a district where a dam is built, agricultural production does not increase but poverty does. In contrast, districts located downstream from the dam benefit from increased irrigation and see agricultural production increase and poverty fall. Overall, our estimates suggest that large dam construction in India is a marginally cost-effective investment with significant distributional implications, and has, in aggregate, increased poverty.
    JEL: O21 O12 H43 H23
    Date: 2005–10
  7. By: Stephan Klasen
    Abstract: The aim of this Working Paper is to broaden the debate on “pro-poor growth”. An exclusive focus on the income dimension of poverty has neglected the non-income dimensions. After an examination of prominent views on the linkages between economic growth, inequality, and poverty reduction this paper discusses the proper definition and measurement of pro-poor growth. Bolivia serves as a case study to illustrate the usefulness of applying the analytical toolbox for pro-poor growth to non-income dimensions of poverty and offers some important new insights about differences in the evolution of both poverty dimensions. Growth in Bolivia has been more pro-poor in the non-income than in the income dimension. The analysis furthermore shows that extending use of the pro-poor growth toolbox to non-income dimensions of poverty greatly improves our understanding of the trends in non-income indicators. Such understanding is pivotal for a careful assessment of the linkages between income and nonincome poverty along the entire income distribution. It is equally important for poverty monitoring and for defining policy interventions. It also allows deeper analysis of the relative merits of economic growth, compared to direct intervention aimed at improving non-income dimensions of poverty. Ce document technique se propose d’élargir le débat sur « la croissance au bénéfice des pauvres ». Prendre exclusivement en compte le revenu comme dimension de la pauvreté néglige ses dimensions hors revenu. Après une étude des thèses en vue sur les liens entre croissance économique, inégalités et réduction de la pauvreté, l’article questionne la définition propre de « la croissance au bénéfice des pauvres » et la manière de la mesurer. La Bolivie présente un cas d’école illustrant l’utilité d’élargir les outils d’analyse de cette croissance aux dimensions hors revenu de la pauvreté, et elle offre de précieux nouveaux repères sur les différentes évolutions des deux sphères de la pauvreté. La croissance en Bolivie a davantage bénéficié aux pauvres dans le registre hors revenu que dans le registre du revenu. L’analyse développe qu’un recours aux outils d’une croissance bénéfique aux pauvres élargis aux dimensions hors revenu de la pauvreté améliore sensiblement notre compréhension des tendances des indicateurs de la sphère hors revenu. Une telle compréhension est fondamentale pour une appréciation judicieuse des liens entre pauvreté en matière de revenu et pauvreté hors revenu tout au long de la distribution du revenu global. C’est également important pour agir sur la pauvreté et pour définir des politiques d’intervention. Cette compréhension permet aussi d’approfondir en les comparant l’analyse des mérites relatifs de la croissance économique et des interventions directes visant à améliorer les paramètres hors revenu de la pauvreté.
    Date: 2005–09
  8. By: Isabelle Joumard
    Abstract: Enhanced autonomy of sub-national governments has spurred innovative management. Spending assignments across levels of government, however, often overlap and/or are not yet fully understood by most citizens. Sub-national governments’ accountability is further reduced by the heavy reliance on federal transfers, as opposed to own-revenues (taxes and user fees). In addition, the use of federal transfers as collateral for states' borrowing potentially undermines the role of financial markets in disciplining fiscal behaviour. Getting the most out of decentralisation would thus require a national agreement clarifying responsibilities for each level of government. Improving sub-national governments’ incentives in delivering cost-effective public services would further require improving the quality of information on actual spending and outcomes, raising the volume of their own taxes and reforming the grant systems. Decentralisation should also be more consistent with the aim of improving interregional equity in obtaining access to core public services. This Working Paper relates to the 2005 OECD Economic Survey of Mexico ( <P>Optimiser l'impact de la décentralisation au Mexique L’autonomie renforcée des collectivités territoriales pour la gestion des services publics a permis le développement d’innovations intéressantes. Les responsabilités pour un certain nombre de programmes publics du gouvernement fédéral, des états et des communes se recoupent néanmoins fréquemment et/ou ne sont pas pleinement comprises par la plupart des citoyens. Le rôle prépondérant des transferts fédéraux dans le budget des collectivités territoriales, par opposition aux ressources propres issues de redevances ou d’impôts locaux, n’incite pas les collectivités territoriales à se montrer redevables envers les citoyens. L’utilisation des transferts fédéraux comme garantie pour les emprunts des états nuit à la possibilité d’une discipline budgétaire dictée par les marchés financiers. Pour optimiser l’impact de la décentralisation sur l’économie, il faudrait un accord national clarifiant les responsabilités de chacune des administrations publiques dans la gestion des programmes publics. Les incitations des collectivités territoriales à offrir des services publics répondant mieux aux besoins des citoyens devraient être aussi renforcées en améliorant la qualité des informations sur les dépenses effectives et leurs résultats, en donnant aux impôts locaux un rôle accru et en réformant le système des transferts intergouvernementaux. Il est aussi souhaitable que la décentralisation soit conçue en vue d’une plus grande équité entre les régions pour l’accès aux services publics de base. Ce Document de travail se rapporte à l'Etude économique de l'OCDE du Mexique 2005 (
    Keywords: Mexico, Mexique, fiscal discipline, discipline budgétaire, fiscal federalism, fiscal rules, intergovernmental grants, règles budgétaires, fédéralisme financier, collectivités territoriales, transferts intergouvernementaux, sub-national government, impôts locaux
    JEL: H1 H2 H4 H5 H7
    Date: 2005–10–17
  9. By: Rob Vos (Institute of Social Studies, The Hague); Arjun Bedi (Institute of Social Studies, The Hague); Paul K. Kimalu (Kenya Institute for Public Policy Research and Analysis); Damiano K. Manda (Kenya Institute for Public Policy Research and Analysis); Nancy N. Nafula (Kenya Institute for Public Policy Research and Analysis); Mwangi S. Kimenyi (University of Connecticut)
    Abstract: Kenya has experienced a rapid expansion of the education system partly due to high government expenditure on education. Despite the high level of expenditure on education, primary school enrolment has been declining since early 1990s and until 2003 when gross primary school enrolment increased to 104 percent after the introduction of free primary education. However, with an estimated net primary school enrolment rate of 77 percent, the country is far from achieving universal primary education. The worrying scenario is that the allocations of resources within the education sector seems to be ineffective as the increasing expenditure on education goes to recurrent expenditure (to pay teachers salaries). Kenya's Poverty Reduction Strategy Paper (PRSP) and the Economic Recovery Strategy for wealth and Employment Creation (ERS) outlines education targets of reaching universal primary education by 2015. The Government is faced with budget constrains and therefore the available resources need to be allocated efficiently in order to realize the education targets. The paper uses Budget Negotiation Framework (BNF) to analyze the cost effective ways of resource allocation in the primary education sector to achieve universal primary education and other education targets. Budget Negotiation Framework is a tool that aims at achieving equity and efficiency in resource allocation. Results from the analysis shows that universal primary education by the year 2015 is a feasible target for Kenya. The results also show that with a more cost- effective spending of education resources - increased trained teachers, enhanced textbook supplies and subsidies targeting the poor - the country could realize higher enrolment rates than what has been achieved with free primary education.
    JEL: I22 C53 H40
    Date: 2004–12
  10. By: Alemayehu Geda (Institute of Social Studies and Addis Ababa University); Niek de Jong (Institute of Social Studies, The Hague); Mwangi S. Kimenyi (University of Connecticut); Germano Mwabu (University of Nairobi and Yale University)
    Abstract: Strategies aimed at poverty reduction need to identify factors that are strongly associated with poverty and that are amenable to modification by policy. This article uses household level data collected in 1994 to examine probable determinants of poverty status, employing both binomial and polychotomous logit models. The study shows that poverty status is strongly associated with the level of education, household size and engagement in agricultural activity, both in rural and urban areas. In general, those factors that are closely associated with overall poverty according to the binomial model are also important in the ordered-logit model, but they appear to be even more important in tackling extreme poverty.
    Keywords: Poverty, Kenya, Africa, Probability Models
    JEL: I30 I32 N97
    Date: 2005–01
  11. By: Thomas I Palley
    Abstract: China’s development model faces an external constraint that could cause an economic hard landing. China has become a global manufacturing powerhouse, and its size now renders its export-led growth strategy unsustainable. China relies on the U.S. market, but the scale of its exports is contributing to the massive U.S. trade deficit, creating financial fragility and undermining the U.S. manufacturing sector. These developments could stall the U.S. economy’s expansion, in turn triggering a global recession that will embrace China. This is the external constraint. These considerations suggest China should transition from export-led growth to domestic demand-led growth. This requires growing the economy’s demand side as well as its supply-side. To avoid stalling the U.S. economic expansion, which is critical to China’s growth, China should significantly revalue its currency as part of a generalized East Asian upward currency revaluation. Longer term, China should raise wages and improve income distribution. Under export-led growth, higher wages undermine employment. Under domestic demand-led growth, they support it. The challenge is to raise wages in an efficient decentralized manner. History shows that this requires independent democratic trade unions. However, such unions are currently unacceptable to Chinese political leadership. Creating a domestic demand-led growth regime therefore requires solving this political roadblock.
    Date: 2005
  12. By: Léonce Ndikumana
    Abstract: This paper examines the causes of conflict in Burundi and discusses strategies for building peace. The analysis of the complex relationships between distribution and group dynamics reveals that these relationships are reciprocal, implying that distribution and group dynamics are endogenous. The nature of endogenously generated group dynamics determines the type of preferences (altruistic or exclusionist), which in turn determines the type of allocative institutions and policies that prevail in the political and economic system. While unequal distribution of resources may be socially inefficient, it nonetheless can be rational from the perspective of the ruling elite, especially because inequality perpetuates dominance. However, because unequal distribution of resources generates conflict, maintaining a system based on inequality is difficult because it requires ever increasing investments in repression. It is therefore clear that if the new Burundian leadership is serious about building peace, it must engineer institutions that uproot the legacy of discrimination and promote equal opportunity for social mobility for all members of ethnic groups and regions.
    Date: 2005
  13. By: Léonce Ndikumana
    Abstract: This study explores the determinants of investment using both aggregated industry-level data and disaggretated data on 27 sub-sectors of the manufacturing sector for the period 1970-2001. According to the results in this study, the government has potentially powerful means at its disposal to stimulate private investment. In particular, a domestic demand stimulus and public investment expansion will produce large gains in private investment. While the direct effects of lowering the interest rate appear to be quantitatively small, indirect effects operating notably through domestic demand and cheaper credit are likely to be large. The evidence in this study also indicates that it is important to minimize exchange rate instability to encourage investment.
    Date: 2005
  14. By: Robert Pollin; Andong Zhu
    Abstract: This paper presents new non-linear regression estimates of the relationship between inflation and economic growth for 80 countries over the period 1961 – 2000. We perform tests using the full sample of countries as well as sub-samples consisting of OECD countries, middle-income countries, and low-income countries. We also consider the full sample of countries within the four separate decades between 1961 – 2000. Considering our full data set we consistently find that higher inflation is associated with moderate gains in GDP growth up to a roughly 15 – 18 percent inflation threshold. However, the findings diverge when we divide our full data set according to income levels. With the OECD countries, no clear pattern emerges at all with either the inflation coefficient or our estimated turning point. With the middle income countries, we return to a consistently positive pattern of inflation coefficients, though none are statistically significant. The turning points range within a narrow band in this sample, between 14 – 16 percent. With the low income countries, we obtain positive and higher coefficient values on the inflation coefficient than with the middle-income countries. With the groupings by decade, the results indicate that inflation and growth will be more highly correlated to the degree that macroeconomic policy is focused on demand management as a stimulus to growth. We consider the implications of these findings for the conduct of monetary policy. One is that there is no justification for inflation-targeting policies as they are currently being practiced throughout the middle- and low-income countries, that is, to maintain inflation with a 3 – 5 percent band.
    Date: 2005
  15. By: James Heintz
    Abstract: This paper examines the connections among gender, employment, and poverty in Ghana using data from the fourth round of the Ghana Living Standards Survey. The relationships are explored through a series of tabulations that shed light on how labor force segmentation, different forms of employment, and gender dynamics influence poverty rates and earnings of individuals and households. The estimates suggest that substantial labor force segmentation is evident in Ghana. Women are disproportionately represented in more precarious forms of employment. In addition, poverty and earnings differ markedly from one employment status category to the next. These results have important implications for “pro-poor” employment policies in Ghana.
    Date: 2005
  16. By: James K. Boyce; Peter Rosset; Elizabeth Stanton
    Abstract: Land reform – the reallocation of rights to establish a more equitable distribution of quality. This paper surveys land reform strategies, illustrated by the postwar reforms in East Asia and the ‘bottom-up’ land reform today being led by Brazil’s Landless Workers’ Movement. Land reform can reduce rural poverty not only by channeling a larger slice of the agricultural- income pie to low- income households, but also by increasing the size of the pie by raising land productivity. Land reform’s contribution to poverty reduction can be magnified by spillover effects in the urban economy. With a supportive policy environment, land reform also can foster a transition to sustainable agriculture, due to the environmental comparative advantages of small farms.
    Date: 2005
  17. By: Timothy G. Conley; Christopher R. Udry (Economic Growth Center, Yale University)
    Abstract: This paper investigates the role of social learning in the diffusion of a new agricultural technology in Ghana. We use unique data on farmers’ communication patterns to define each individual’s information neighborhood, the set of others from whom he might learn. Our empirical strategy is to test whether farmers adjust their inputs to align with those of their information neighbors who were surprisingly successful in previous periods. We present evidence that farmers adopt surprisingly successful neighbors’ practices, conditional on many potentially confounding factors including common growing conditions, credit arrangements, clan membership, and religion. The relationship of these input adjustments to experience further supports their interpretation as resulting from social learning. In addition, we apply our methods to input choices for another crop with known technology and they correctly indicate an absence of social learning effects.
    Keywords: Social Learning, Technology, Innovation
    JEL: O31 O12 O13
    Date: 2000–07
  18. By: T. Paul Schultz (Economic Growth Center, Yale University)
    Abstract: Wage-differentials by education of men and women are examined from African household surveys to suggest private wage returns to schooling. It is commonly asserted that returns are highest at primary school levels and decrease at secondary and postsecondary levels, whereas private returns in six African countries are today highest at the secondary and post secondary levels, and rates are similar for women as for men. The large public subsidies for postsecondary education in Africa, therefore, are not needed to motivate students to enroll, and those who have in the past enrolled in these levels of education are disproportionately from the better-educated families. Higher education in Africa could be more efficient and more equitably distributed if the children of well-educated parents paid the public costs of their schooling, and these tuition revenues facilitated the expansion of higher education and financed fellowships for children of the poor and less educated parents.
    Keywords: Africa, Wage Returns to Schooling, Inequality, HIV/AIDS
    JEL: O15 O55 J31 J24
    Date: 2003–12
  19. By: Robert E. Evenson (Economic Growth Center, Yale University)
    Abstract: Genetically Modified Crops (GMO foods) have been widely available to farmers since 1996. The Gene Revolution, based on recombinant DNA (rDNA) genetic engineering techniques, is seen by proponents as both supplanting Green Revolution varieties, based on conventional plant breeding techniques, and potentially enabling "disadvantaged" production environments, unreached by Green Revolution varieties to achieve productivity improvements. This paper argues that the private firms supplying GM crop products have generally had little interest in selling products in disadvantaged production environments. The paper also argues that present rDNA techniques allow only static gains from specific "trait" improvements. But these GM products can be installed on Green Revolution varieties where continued dynamic varietal improvement is possible. As a consequence, the Gene Revolution complements the Green Revolution, and because trait incorporation expands area planted to Green Revolution varieties, there is potential for productivity improvement in disadvantaged environments.
    Keywords: Genetically Modified Foods, Genetic Engineering
    JEL: O1 O4 Q1
    Date: 2003–12
  20. By: Adebayo B. Aromolaran
    Abstract: Economists have argued that increasing female schooling positively influences the labor supply of married women by inducing a faster rise in market productivity relative to non-market productivity. I use the Nigerian Labor Force Survey to investigate how own and husband's schooling affect women's labor market participation. I find that additional years of postsecondary education increases wage market participation probability by as much as 15.2%. A marginal increase in primary schooling has no effect on probability of wage employment, but could enhance participation rates in self-employment by about 5.40%. These effects are likely to be stronger when a woman is married to a more educated spouse. The results suggest that primary education is more productive in non-wage work relative to wage work, while postsecondary education is more productive in wage work. Finally, I find evidence suggesting that non-market work may not be a normal good for married women in Nigeria.
    Keywords: Nigeria, Female Schooling, Women's Labor Market Participation, Non-Market Productivity
    JEL: I21 J22 J24 O15
    Date: 2004–01
  21. By: Menzie D. Chinn; Robert W. Fairlie
    Abstract: To identify the determinants of cross-country disparities in personal computer and Internet penetration, we examine a panel of 161 countries over the 1999-2001 period. Our candidate variables include economic variables (income per capita, years of schooling, illiteracy, trade openness), demographic variables (youth and aged dependency ratios, urbanization rate), infrastructure indicators (telephone density, electricity consumption), telecommunications pricing measures, and regulatory quality. With the exception of trade openness and the telecom pricing measures, these variables enter in as statistically significant in most specifications for computer use. A similar pattern holds true for Internet use, except that telephone density and aged dependency matter less. The global digital divide is mainly -– but by no means entirely -– accounted for by income differentials. For computers, telephone density and regulatory quality are of second and third importance, while for the Internet, this ordering is reversed. The region-specific explanations for large disparities in computer and Internet penetration are generally very similar. Our results suggest that public investment in human capital, telecommunications infrastructure, and the regulatory infrastructure can mitigate the gap in PC and Internet use.
    Keywords: Computers, Internet, Digital Divide, Infrastructure, Pricing, Regulation
    JEL: O30 L96
    Date: 2004–03
  22. By: Gustav Ranis (Economic Growth Center, Yale University)
    Abstract: This paper makes an effort to trace the course of development thinking and associated development policy over the past six decades. Section I focuses on the early Post-War Consensus, with theory focused on extensions of classical dualism theory and policy concentrating on creating the pre-conditions for development. Section II traces the increasing awareness of the role of prices, a diminishing reliance on the developmentalist state and an increased reliance on structural adjustment lending associated with IFI conditionality. Section III illuminates the search for "silver bullets" which can be identified as key to the achievement of success. Finally, Section IV presents the author's assessment of where we are now and where we will, or should be, heading in the effort to achieve the third world's basic development objectives.
    Keywords: Development Theory, Development Policy
    JEL: O11 O20
    Date: 2004–05
  23. By: Gustav Ranis (Economic Growth Center, Yale University)
    Abstract: Recent literature has contrasted Human Development, described as the ultimate goal of the development process, with economic growth, described as an imperfect proxy for more general welfare, or as a means toward enhanced human development. This debate has broadened the definitions and goals of development but still needs to define the important interrelations between human development (HD) and economic growth (EG). To the extent that greater freedom and capabilities improve economic performance, human development will have an important effect on growth. Similarly, to the extent that increased incomes will increase the range of choices and capabilities enjoyed by households and governments, economic growth will enhance human development. This paper analyzes these relationships and the two-way linkages involved.
    Keywords: Economic Growth, Human Development
    JEL: O15 O11
    Date: 2004–05
  24. By: Christopher Udry (Economic Growth Center, Yale University); Timothy G. Conley
    Abstract: In this chapter we examine social networks among farmers in a developing country. We use detailed data on economic activities and social interactions between people living in four study villages in Ghana. It is clear that economic development in this region is being shaped by the networks of information, capital and influence that permeate these communities. This chapter explores the determinants of these important economic networks. We first describe the patterns of information, capital, labor and land transaction connections that are apparent in these villages. We then discuss the interconnections between the various economic networks. We relate the functional economic networks to more fundamental social relationships between people in a reduced form analysis. Finally, we propose an equilibrium model of multi-dimensional network formation that can provide a foundation for further data collection and empirical research.
    Keywords: Endogenous Networks, Informal Credit, Social Learning
    JEL: O12 D85
    Date: 2004–05
  25. By: Adebayo B. Aromolaran
    Abstract: This study investigates how per capita calorie intake in low income households of rural southwestern Nigeria responds to changes in total household income and women's share of household income. The study addresses two major questions. First, is calorie-income elasticity large enough to justify the use of income increases as a food/nutrition policy strategy for increasing calorie intake among low income households? Second, what is the potential effect of intra-household redistribution of income from men to women on per capita calorie consumption? My results show that calorie-income elasticity is small and close to zero, implying that income policies may not be the most effective way to achieve substantial improvements in calorie consumption. I also find that increases in women's share of household income are likely to result in marginal declines in per capita food calorie intake, suggesting that income redistribution from men to women would not increase per capita food energy intake in these households.
    Keywords: Nigeria, Intra-Household Redistribution of Income, Women's Income Share Elasticity, Income Elasticity, Calorie Consumption.
    JEL: D13 I12 O15 Q18
    Date: 2004–07
  26. By: Gustav Ranis (Economic Growth Center, Yale University)
    Abstract: Arthur Lewis' seminal 1954 paper and its emphasis on dualism appeared at a time when neither the work of Keynes or Harrod-Domar nor the later neoclassical production function of Solow seemed relevant for developing countries. As a consequence, his model, rooted in the classical tradition, plus its many extensions, generated an extensive literature at the center of development theory. The approach also encountered increasingly strong criticism, some of the "red herring" variety, but some, spearheaded by neoclassical microeconomists like Rosenzweig, also raised serious challenges, focused especially on its labor market assumptions. This paper reviews this landscape and asks what theoretical or policy relevance the Lewis model retains for today's developing countries.
    Keywords: Development Theory, Dualism, Labor Markets
    JEL: O11
    Date: 2004–08
  27. By: Harounan Kazianga
    Abstract: This paper uses national survey data to estimate up-to-date private rates of return to education in Burkina Faso. Mincer earning regressions are fitted to wage data for women and men, and for public and private sector workers. The main results indicate that rates of return rise by level of education, and the public sector does not compensate female primary education. The findings suggest that current education polices which focus on increasing primary schooling supply be complemented with support for children, especially girls from resource constrained households to reach the secondary and tertiary levels. The estimated returns to education are strongly influenced by sample selection. For both men and women, failing to control for both selection in the wage sector and sector choice leads to biased estimates based on my identification of the selection process.
    Keywords: Burkina, Education, Labor
    JEL: I21 J31
    Date: 2004–08
  28. By: Shareen Joshi
    Abstract: This paper uses data from Matlab, Bangladesh to examine the characteristics of female-headed households and estimate the impact of female-headship on children's schooling. Female householdheads in Matlab fall into two broad groups: widows and married women, most of whom are wives of migrants. These women differ from each other not only in their current socio-economic circumstances, but also in their backgrounds and circumstances prior to getting married. To identify the effects of female-headship on children's outcomes, I use a two-stage least squares strategy that controls for the possible endogeneity of both types of female-headship. Results indicate that children residing in households headed by married women have stronger schooling attainments than children in other households, while children of widows are more likely to work outside the home. The hypothesis of exogeneity of female-headship is rejected in most cases.
    Keywords: Female-headed Households, Widowhood, Migration, Schooling
    JEL: J12 J13 J16 I21 O15
    Date: 2004–09
  29. By: Harounan Kaziango
    Abstract: Resource transfers among households have received considerable interest among economists in recent years. Two of the main reasons for the surge of interest in household transfers are the information on human nature conveyed by transfer behavior and the implication on income redistribution policy that private transfer might have. Empirical studies, however, provide mixed results on transfer behavior. This is because previous inquiries were confronted with several estimation issues and have focused on data from developed countries where private transfers are already small. This paper contributes to the literature on transfer behavior by using a multifaceted econometric approach to examine the motives of household transfers in Burkina, a low-income country with a well-documented tradition of gift exchanges. The findings suggest that risk sharing is not central to transfers. Altruistic transfers are apparent for the middle income class, but not a low income level. The evidence implies that crowding out may be minimal at a low income level, suggesting that public transfers targeting poor households may be effective.
    Keywords: Private transfers, Altruism, Exchanges, Risk Sharing
    JEL: D63 D64 I30
    Date: 2004–10
  30. By: James L. Butkiewicz (Department of Economics,University of Delaware); Halit Yanikkaya (Department of Economics Celal Bayar University)
    Abstract: Property rights are known to promote economic growth. Durable political regimes, regardless of type, can create stable environments that facilitate growth. Polity stability has an effect similar to property rights, promoting investment enhancing growth. Examination of the growth effects of regime stability finds that stable polities are important for growth in autocracies, but not democracies. That regime stability is not important for democracies indicates that parameter heterogeneity can be important when estimating empirical growth models. Not just democracies, but also stable autocracies with predictable rules-of-the-game create positive environments for economic growth.
    Keywords: Property Rights, Stability, Growth, Democracy, Autocracy
    JEL: O40 H11
    Date: 2005
  31. By: Almuth Scholl
    Abstract: This paper analyzes optimal foreign aid policy in a neoclassical framework with a conflict of interest between the donor and the recipient government. Aid conditionality is modelled as a limited enforceable contract. We define conditional aid policy to be self-enforcing if, at any point in time, the conditions imposed on aid funds are supportable by the threat of a permanent aid cutoff from then onward. Quantitative results show that the effectiveness of unconditional aid is low while self-enforcing conditional aid strongly stimulates the economy. However, increasing the welfare of the poor comes at high cost: to ensure aid effectiveness, less democratic political regimes receive permanently larger aid funds.
    JEL: E13 F35 O11 O19
    Date: 2005–01

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