nep-dev New Economics Papers
on Development
Issue of 2006‒03‒25
39 papers chosen by
Jeong-Joon Lee
Towson University

  1. The family farm in a globalizing world By Lipton, Michael
  2. Identifying the drivers of sustainable rural growth and poverty reduction in Honduras By Jansen, Hans G.P.; Siegel, Paul B.; Pichón, Francisco
  3. Growth options and poverty reduction in Ethiopia By Diao, Xinshen; Pratt, Alejandro Nin; Ghautam, Madhur; Keough, James; Chamberlin, Jordan; You, Liangszi; Puetz, Detlev; Resnick, Danielle; Yu, Bingxin
  4. Rural non-farm development in China and India By Mukherjee, Anit; Zhang, Xiaobo
  5. Social capital and the reproduction of economic inequality in polarized societies By Mogues, Tewodaj; Carter, Michael
  6. Geographic space, assets, livelihoods and well-being in rural Central America By Alwang, Jeffrey; Jansen, Hans G.P.; Siegel, Paul B.; Pichon, Francisco
  7. Local seed systems and village-level determinants of millet crop diversity in marginal environments of India By Nagarajan, Latha; Smale, Melinda
  8. Comparing farm and village-level determinants of millet diversity in marginal environments of India By Nagarajan, Latha; Smale, Melinda; Glewwe, Paul
  9. Livelihood diversification and rural-urban linkages in Vietnam's Red River Delta By Thanh, Hoang Xuan; Anh, Dang Nguyen; Tacoli, Cecilia
  10. Livelihoods, growth, and links to market towns in 15 Ethiopian villages By Dercon, Stefan; Hoddinott, John
  11. Rural and urban dynamics and poverty: Evidence from China and India By Fan, Shenggen; Chan-Kang, Connie; Mukherjee, Anit
  12. Migration and the rural-urban continuum: Evidence from the Rural Philippines By Quisumbing, Agnes R.; McNiven, Scott
  13. Why the poor in rural Malawi are where they are: An Analysis of the Spatial Determinants of the Local Prevalence of Poverty By Benson, Todd; Chamberlin, Jordan; Rhinehart, Ingrid
  14. Evaluating the cost of poverty alleviation transfer programs: An Illustration Based on PROGRESA in Mexico By Coady, David; Perez, Raul; Vera-Ilamas, Hadid
  15. Is greater decisionmaking power of women associated with reduced gender discrimination in South Asia? By Smith, Lisa C.; Byron, Elizabeth M.
  16. Market institutions: Enhancing the Value of Rural-Urban Links By Chowdhury, Shyamal; Negassa, Asfaw; Torero, Maximo
  17. Doha scenarios, trade reforms, and poverty in the Philippines By Cororaton, Caesar B.; Cockburn, John; Corong, Erwin
  18. Are poor, remote areas left behind in agricultural development By Minot, Nicholas
  19. The dragon and the elephant By Gulati, Ashok; Fan, Shenggen; Dalafi, Sara
  20. The transformation of property rights in Kenya's Maasiland By Mwangi, Esther
  21. A note on the empirics of the neoclassical growth model By Giovanni Caggiano and Leone Leonida
  22. International Convergence and Inequality of Human Development: 1975-2001 By Farhad Noorbakhsh
  23. DETERMINANTS OF POVERTY IN LAO PDR By Andersson, Magnus; Engvall, Anders; Kokko, Ari
  24. Economic Reforms, Foreign Direct Investment and its Economic Effects in India By Chandana Chakraborty; Peter Nunnenkamp
  25. Rethinking the Concept of Long-Run Economic Growth By Christian Groth; Karl-Josef Koch; Thomas M. Steger
  26. Slavery, Institutional Development and Long-Run Growth in Africa By Nathan Nunn
  27. Global income inequality : what it is and why it matters By Milanovic, Branko
  28. On defining and measuring the informal sector By Carneiro, Francisco G.; Arabsheibani, G. Reza; Henley, Andrew
  29. The rise and fall of Brazilian inequality, 1981-2004 By Litchfield, Julie A.; Leite, Phillippe G.; Ferreira, Francisco H. G.
  30. Endogenous skill formation in developing countries By Rossana Patrón
  31. Public education and growth: cost-effectiveness of educational policies in developing countries By Rossana Patrón
  32. Understanding reform in Latin America By Alvaro Forteza; Mario Tommasi
  33. The effects of agrarian contracts of a governmental intervention into bonded labor in the western terai of Nepal By Magnus Hatlebakk
  34. Monitoring Poverty without Consumption Data: An application using the Albania panel survey By Gero Carletto; Benjamin Davis; Alberto Zezza
  35. Household Income Structure and Determinants in Rural Egypt By André Croppenstedt
  36. Do Attitudes Towards Corruption Differ Across Cultures? Experimental Evidence from Australia, India, Indonesia andSingapore By L. Cameron; A. Chaudhuri; N. Erkal; L. Gangadharan
  37. Cleaning Up the Kitchen Sink: On the Consequences of the Linearity Assumption for Cross-Country Growth Empirics. By Francisco Rodríguez
  38. Public Investment in Infrastructure and Productivity Growth: Evidence from the Venezuelan Manufacturing Sector By José Pineda; Francisco Rodríguez
  39. Openness and Growth: What Have We Learned? By Francisco Rodríguez

  1. By: Lipton, Michael
    Abstract: "The topic of family farms has been gaining prominence in the academic, policy, and donor communities in recent years. Small farms dominate the agricultural landscape in the developing world, providing the largest source of employment and income to the rural poor, yet smallholders remain highly susceptible to poverty and hunger. With the advance of globalization and greater integration of agricultural markets, the need for increases in agricultural productivity for family farms is particularly pressing. Raising productivity and output of small farmers would not only increase their incomes and food security, but also stimulate the rest of the economy and contribute to broad-based food security and poverty alleviation. In this paper, Michael Lipton builds an argument for greater focus on pro-smallholder crop science as a key solution to generate increases in productivity and income. Increasing the levels of investment into agricultural technology, improving water and land use and distribution, and creating positive incentives for developing-country farmers come to the forefront of the paper as critical steps that must be taken to ensure massive reduction in global poverty. Favorable demographic trends over the next few decades provide a window of opportunity for reforms and action that must not be squandered." From Foreword by Joachim von Braun
    Keywords: Globalization ,Poverty alleviation Developing countries ,Rural poor ,Agricultural productivity ,Agricultural technology ,Small farmers ,Crop science ,
    Date: 2005
  2. By: Jansen, Hans G.P.; Siegel, Paul B.; Pichón, Francisco
    Abstract: "The overall objective of this paper is to develop an appropriate conceptual and analytical framework to better understand how prospects for growth and poverty reduction can be stimulated in rural Honduras. We employ complementary quantitative and qualitative methods of analysis, driven by an asset-base approach. Emphasis on assets is appropriate given high inequalities in the distribution of productive assets among households and geographical areas in Honduras. Such inequalities are likely to constrain how the poor share in the benefits of growth, even under appropriate policy regimes. We focus on household assets (broadly defined to include natural, physical, human, financial, social and locational assets) and their combinations necessary to take advantage of economic opportunities. We examine the relative contributions of these assets, and identify the combinations of productive, social, and location-specific assets that matter most to raise incomes and take advantage of prospects for poverty-reducing growth. Factor and cluster analysis techniques are used to identify and group different livelihood strategies; and econometric analysis is used to investigate the determinants of different livelihood strategies and the major factors that impact on income. Spatial analysis, community livelihood studies and project stocktakings are brought in to complement some of the more quantitative household survey data used. Our conclusions and recommendations are mainly focused on hillsides and hillside areas since the majority of the available data is for these areas." Authors' Abstract
    Keywords: Poverty alleviation Latin America ,Sustainability ,Livelihoods ,Spatial analysis (Statistics) ,Hillside areas ,
    Date: 2005
  3. By: Diao, Xinshen; Pratt, Alejandro Nin; Ghautam, Madhur; Keough, James; Chamberlin, Jordan; You, Liangszi; Puetz, Detlev; Resnick, Danielle; Yu, Bingxin
    Abstract: "This study assesses which agricultural subsectors have the strongest capacity to drive economic growth and poverty reduction in Ethiopia, and what kind of agricultural and nonagricultural growth is needed to achieve the millennium development goal of halving the 1990 poverty rate by 2015. A spatially disaggregated, economywide model was developed under the study, enabling the analysis of growth and poverty reduction linkages at national and regional levels using national household surveys, agricultural sample surveys, geographic information systems, and other national and regional data. The study reveals that agriculture has the potential to play a central role in decreasing poverty and increasing growth in Ethiopia, primarily through growth in staple crops and livestock. Agricultural growth also requires concurrent investments in roads and other market conditions. At the subnational level, similar rates of agricultural growth have different effects on poverty, necessitating regionally based strategies for growth and poverty reduction." Authors' Abstract
    Keywords: Poverty alleviation ,Agricultural growth ,Millenium Development goal ,Spatial analysis (Statistics) ,Disaggregation ,Household surveys ,Ethiopia ,africa ,
    Date: 2005
  4. By: Mukherjee, Anit; Zhang, Xiaobo
    Abstract: The dynamic rural nonfarm sector in China has been a major contributor to the country's remarkable growth, while in India the growth in output and employment in this sector has been rather stagnant. The paper argues that the observed patterns in the rural nonfarm development are the results of institutional differences between the two countries, especially in their political systems, ownership structure, and credit institutions. A review of the strengths and weaknesses of the rural nonfarm economy in China and India highlights the potentials and challenges of growth in the sector.
    Keywords: Industrial policy ,Policy research ,Non-farm development ,
    Date: 2005
  5. By: Mogues, Tewodaj; Carter, Michael
    Abstract: This paper explores the idea of how wealth is distributed across social groups (ethnic or language groups, gender, etc.) and how such distribution fundamentally affects the evolution of economic inequality. By providing microfoundations suitable for this exploration, the paper hopes to enhance the understanding of when social forces contribute to the reproduction of economic inequality. In tackling this issue, the paper offers contributions in two domains. First, it models social capital as a real capital asset with direct use and collateral value. Second, it extends the concepts of identity, alienation and polarization used by Esteban and Ray (1994). This generalization permits consideration of the multiple characteristics that shape social identity, inclusion and exclusion. It also underwrites a higher-order measure of socioeconomic polarization that permits exploration of the hypothesis that economic inequality is most pernicious and persistent when it is socially embedded. Among other things the paper shows that holding constant the initial levels of economic polarization and wealth inequality, higher socioeconomic polarization increases subsequent income and wealth inequality. Far from being a distributionally neutral panacea for missing markets, social capital in this model may itself generate exclusion and deepen social and economic cleavages.
    Keywords: Equality ,Social capital ,economic distribution ,
    Date: 2005
  6. By: Alwang, Jeffrey; Jansen, Hans G.P.; Siegel, Paul B.; Pichon, Francisco
    Abstract: "This paper uses an asset-base framework to analyze the determinants of rural growth and sustainable poverty reduction for the three poorest countries in Central America: Guatemala, Honduras and Nicaragua...Using a combination of GIS mapping techniques, quantitative household analysis, and qualitative analyses of assets and livelihoods, the authors generate a description of rural territories that recognizes the differential effects of policies and asset bundles across space and households. They identify the combinations of human, natural and physical, social and location-specific assets that matter most to raise household well-being and take advantage of prospects for poverty-reducing growth." from Authors' Abstract
    Keywords: Poverty reduction ,rural livelihoods ,Households Economic aspects ,
    Date: 2005
  7. By: Nagarajan, Latha; Smale, Melinda
    Abstract: "In the subsistence-oriented, semi-arid production systems of Andhra Pradesh and Karnataka, India, the environment is marginal for crop growth and often there is no substitute for millet crops. Across communities, farmers grow thirteen different combinations of pearl millet, sorghum, finger millet, little millet, and foxtail millet varieties, but individual farmers grow an average of only two to three millet varieties per season. The notion of the seed system includes all channels through which farmers acquire genetic materials, outside or in interaction with the commercial seed industry. Data are compiled through household surveys and interviews with traders and dealers in village and district markets. Based on the concept of the seed lot, several characteristics of local seed markets are defined and measured by millet crop, including seed transfer rates for farmer-to-farmer transactions and seed replacement ratios. Most seed transactions appear to be based on money. Seed supply channels differ by improvement status of the genetic material. Econometric results indicate the significance of the seed replacement ratios and seed volumes traded in determining the levels of crop biodiversity managed by communities, in addition to the household, farm and other market-related factors identified by previous studies. These are interpreted as indicators of market strength." Authors' Abstract
    Keywords: Seed systems ,Crop diversity ,Seed industry and trade ,genetic variation ,
    Date: 2005
  8. By: Nagarajan, Latha; Smale, Melinda; Glewwe, Paul
    Abstract: "The purpose of the research paper is to characterize biological diversity related to millets in the semi-arid regions of India at various spatial scales of analysis (e.g., farm household versus community levels) and place that evidence in a broader seed systems (includes both formal and informal) context. An important finding of this research is that producer access to millet genetic resources is affected by the extent to which seed is traded via formal markets or through other social institutions, along with farm and household characteristics. Findings also underscore the need for an enhanced theoretical understanding of local seed markets in analyzing crop variety choices and the diversity of materials grown in less favored environments." Authors' Abstract
    Keywords: Crop diversity ,Seed systems ,Biological diversity ,
    Date: 2005
  9. By: Thanh, Hoang Xuan; Anh, Dang Nguyen; Tacoli, Cecilia
    Abstract: "With high population density and limited land availability, Vietnam's Red River Delta is undergoing a major transformation as its economic base moves away from subsistence farming towards intensive, high-value food production for export and local urban markets, and nonfarm employment. This paper describes the changing livelihoods of the residents of two villages that represent two different pathways to local economic development. One village relies primarily on agricultural intensification and diversification, although in combination with nonfarm activities. These nonfarm activities are either supplementary (such as handicraft production and seasonal migration) or related to farming, such as provision of agricultural services, transport and trade of agricultural produce. To a large extent, it is this nonfarm income that allows investment in agriculture at the household level. Residents of the second village, although nominally still owning rice farms, have effectively moved out of agriculture and engage almost exclusively in handicraft production. Despite these major differences, there are also important similarities between the two villages. First, much of their recent economic development is linked to access to markets — including proximity to local urban centers and to Hanoi (where demand from urban consumers and from exporting enterprises has increased substantially), a vastly improved road and transport system, and an excellent communications infrastructure. Second, each village has developed forward and backward linkages with their main production sector. Last but not least, local authorities have played an important role in supporting local economic development, providing infrastructure, training for handicraft production, and inputs for farmers. The long-term sustainability of economic growth and poverty reduction in the Red River Delta will largely depend on strengthening rural-urban linkages. This includes adopting regulations on land use that allow farmers to better respond to growing urban demand for high-value produce; incorporate more explicitly the needs of the handicraft micro-enterprises in existing and future policies and plans for rural industrialization; recognize and support the role of seasonal migration in rural local economic development; and address the changing planning and natural resource management needs of these urbanizing villages." Authors' Abstract
    Keywords: south east asia ,East and Southeast Asia ,Microenterprises Vietnam ,Migration, Internal ,Rural-urban linkages ,Livelihoods ,
    Date: 2005
  10. By: Dercon, Stefan; Hoddinott, John
    Abstract: ""This paper uses longitudinal data from 15 villages in rural Ethiopia to explore the nature and consequences of these links. It addresses the following questions: (1) What are the links between rural households and local urban centers? (2) Does better access to local market towns affect household economic behavior? and (3) Does better access to local market towns make households better off? ...In our results, market towns and cities are an important source of demand for products produced in rural areas, and rural residents are a source of demand for goods sold in urban areas. Improving the presence of roads, their quality, and improved transport are important factors that willfurther bind these spaces together and improve rural welfare market towns." from Authors' Abstract
    Keywords: Rural-urban linkages ,Livelihoods ,
    Date: 2005
  11. By: Fan, Shenggen; Chan-Kang, Connie; Mukherjee, Anit
    Abstract: "Like many developing countries, China and India followed development strategies biased in favor of the urban sector over the last several decades. These development schemes have led to overall efficiency losses due to misallocation of resources among rural and urban sectors. It also led to large income gaps between rural and urban areas. The urban bias was greater in China than in India. Indeed, official data show that both the income gap and the difference in poverty rates between rural and urban areas are much larger in China than in India. Both countries have corrected the rural-urban divide to some extent as part of reform processes. But the bias still exists. Other studies also support the idea presented here that correcting this imbalance will not only contribute to higher rural growth, but also secure future urban growth (Fan and Chan-Kang 2005). More important, correcting the urban bias will lead to larger reductions in poverty as well as more balanced growth across sectors and regions. Correcting a government's bias towards investment in urban areas is one of the most important policies to pursue." from Authors' Abstract
    Keywords: Rural-urban linkages ,Poverty ,
    Date: 2005
  12. By: Quisumbing, Agnes R.; McNiven, Scott
    Abstract: This paper explores the diversity of the experience of migrants to rural, peri–urban, and urban areas using a unique longitudinal data set from the Philippines. In 2003 and 2004, the Bukidnon Panel Study followed up with 448 families in rural Mindanao who were previously interviewed in 1984/85 by the International Food Policy Research Institute and the Research Institute for Mindanao Culture, Xavier University, and surveyed both a sample of their offspring living in the same area as well as a sample of those who had moved away to different locations. Parents (original respondents) and children who formed separate households in the same locality were interviewed in 2003; original respondents' offspring that migrated to different rural and urban areas were interviewed in 2004. Thus, migration patterns were examined using the full listing of children of the original respondents as well as a special survey of 257 of their migrant offspring who were tracked down in 2004. This migrant survey focused on differences in the migration experience of males and females who moved to other rural areas, poblaciones (the administrative seats of municipalities or towns), and urban areas. We follow this with an examination of the determinants of children's location, using the sample of all children. In addition to migration to rural, peri–urban, and urban destinations, we explicitly consider the case where the individual leaves his or her parental residence, but remains in the same village, as a locational choice." from Authors' Abstract
    Date: 2005
  13. By: Benson, Todd; Chamberlin, Jordan; Rhinehart, Ingrid
    Abstract: "We examine the spatial determinants of the prevalence of poverty for small spatially defined populations in rural Malawi. Poverty prevalence was estimated using a small-area poverty estimation technique. A theoretical approach based on the risk chain conceptualization of household economic vulnerability guided our selection of a set of potential risk and coping strategies — the determinants of our model — that could be represented spatially. These were used in two analyses to develop global and local models, respectively. In our global model—a spatial error model — only eight of the more than two dozen determinants selected for analysis proved significant. In contrast, all of the determinants considered were significant in at least some of the local models of poverty prevalence. The local models were developed using geographically weighted regression. Moreover, these models provided strong evidence of the spatial nonstationarity of the relationship between poverty and its determinants. That is, in determining the level of poverty in rural communities, where one is located in Malawi matters. This result for poverty reduction efforts in rural Malawi implies that such efforts should be designed for and targeted at the district and subdistrict levels. A national, relatively inflexible approach to poverty reduction is unlikely to enjoy broad success." Authors' Abstract
    Keywords: Spatial analysis (Statistics) ,Poverty mapping ,Spatial regression ,Poverty determinants ,
    Date: 2005
  14. By: Coady, David; Perez, Raul; Vera-Ilamas, Hadid
    Abstract: "One of the common criticisms of poverty alleviation programs is that the high share of administrative (nontransfer) costs substantially reduces the programs' impact on poverty. But very little empirical evidence exists on program costs. For example, a recent extensive international review of targeted poverty alleviation programs in developing countries could find data on costs for only 32 out of the 111 programs reviewed. Even then, the numbers available were not always comparable. In this paper, we present a detailed analysis of the cost structure of a program recently introduced in Mexico, called PROGRESA. Our analysis shows how cost data can be used as the basis for an evaluation of the cost efficiency of anti-poverty programs. It cautions, however, that one must be very careful when interpreting cost numbers or undertaking comparisons across programs in order to avoid misleading conclusions. Any credible analysis of a program's cost efficiency must involve a detailed analysis of cost structure and not simply provide aggregate cost information. We also highlight the importance of not neglecting private costs incurred by households in taking up transfers." Authors' Abstract
    Keywords: Poverty Research Methodology ,Poverty alleviation Mexico ,Transfer payments ,Education Economic aspects ,Human capital ,Cost efficiency ,
    Date: 2005
  15. By: Smith, Lisa C.; Byron, Elizabeth M.
    Abstract: "Recent research has shown that improving women's decisionmaking power relative to men's within households leads to improvements in a variety of well-being outcomes for children. In South Asia, where the influence of women's power is particularly strong, these outcomes include children's nutritional status and the quality of feeding and health care practices. Focusing on nutritional status, this paper presents the results of a study investigating whether increases in women's power have a stronger positive influence on the nutritional status of their daughters than their sons. If so, then increasing women's power not only improves the well-being of children as a group, but also serves as a force to reduce long-standing discrimination that undermines female capabilities in many important areas of life as well as human and economic development in general. To investigate this issue, the study draws on Demographic and Health Survey data collected during the 1990s in four countries: Bangladesh, India, Nepal, and Pakistan. The main empirical technique employed is multivariate regression analysis with statistical tests for significant differences in effects for girl and boy children. A total of 30,334 women and 33,316 children under three years old are included in the analysis. The study concludes that, for the South Asia region as a whole, an increase in women's decisionmaking power relative to men's, if substantial, would be an effective force for reducing discrimination against girl children. However, this finding is not applicable in all countries and for all areas and age groups of children. Indeed the study finds evidence that in some areas, for instance the northern and western states of India as a group, increasing women's power would lead to a worsening of gender discrimination against girls. This is likely the result of deeply embedded son preference associated with highly patriarchal social systems. The lesson for policymakers and development practitioners is that while increasing women's power is likely to improve the well-being of children, in some geographical areas it will not necessarily diminish discrimination against girls, which violates human rights and undermines the region's economic development and the health of its population. In these areas, to overcome son preference, economic returns to girls will have to be increased and efforts to change customs regarding marriage and inheritance associated with patriarchal kinship systems, which favor males, will have to be made." Authors' Abstract
    Keywords: Gender discrimination ,Women Social conditions ,Children Nutrition ,Economic development ,
    Date: 2005
  16. By: Chowdhury, Shyamal; Negassa, Asfaw; Torero, Maximo
    Abstract: "This paper examines how market institutions can affect links between urban and rural areas with specific emphasis on goods market integration in the national context.Traditionally, development researchers and practitioners have focused either on rural market development or on urban market development without considering the interdependencies and synergies between the two. However, more than ever before, emerging local and global patterns such as the modern food value-chain led by supermarkets and food processors, rapid urbanization, changes in dietary composition, and enhanced information and communication technologies point to the need to pay close attention to the role of markets both in linking rural areas with intermediate cities and market towns and promotion of economic development and poverty reduction. This paper begins with a presentation of a conceptual framework of market integration and then identifies five major factors that increase the transfer costs that subsequently hinder market integration between rural and urban areas: information asymmetry, transaction costs, transport and communication costs, policy induced barriers, and social and noneconomic factors. Five specific cases in five developing countries are examined in this study to demonstrate the primary sources of transfer costs and the aspects of market institutions that are important to market integration and promotion of rural-urban linkages." from Authors' Abstract
    Keywords: Rural-urban linkages ,
    Date: 2005
  17. By: Cororaton, Caesar B.; Cockburn, John; Corong, Erwin
    Abstract: "The paper examines the possible impact of Doha agreement on Philippine poverty. Using a detailed CGE analysis, the agreement is observed to depress world demand for Philippine agricultural exports, and thus slightly increase poverty, especially among rural households. However, an ambitious full trade liberalization scenario, which involves free world trade and domestic liberalization, leads to increased industrial exports that favor urban households. These impacts are driven primarily by domestic trade liberalization, as free world trade favors the agricultural sector by increasing the cost of competing agricultural imports." Authors' Abstract
    Keywords: Doha agreement ,Computable general equilibrium (CGE) ,Free trade ,
    Date: 2005
  18. By: Minot, Nicholas
    Abstract: "In Tanzania, as in many other developing countries, the conventional wisdom is that economic reforms may have stimulated economic growth, but that the benefits of this growth have been uneven, favoring urban households and farmers with good market access. This idea, although quite plausible, has rarely been tested empirically. In this paper, we develop a new approach to measuring trends in poverty and apply it to Tanzania in order to explore the distributional aspects of economic growth and the relationship between rural poverty and market access. We find that, between 1991 and 2003, a period of extensive economic reforms, the overall rate of poverty fell about 9 percentage points. The degree of poverty reduction was similar between rural and urban areas, though poverty appears not to have declined in Dar es Salaam. The poverty rate fell more among households with a less educated head of household than among those with a more educated head. The gains were greater among male-headed households than female-headed households. We find that rural poverty is associated with remoteness, but the relationship is surprisingly weak and it varies depending on the definition used. Rural poverty is more closely related to access to regional urban centers than distance to roads or to Dar es Salaam. We find little evidence that remote rural areas are being “left behind” in terms of the absolute decline in the poverty rate. " Authors' Abstract
    Keywords: Market access ,Agricultural development ,rural areas ,Economic reform ,measurement ,Rural poverty Tanzania ,
    Date: 2005
  19. By: Gulati, Ashok; Fan, Shenggen; Dalafi, Sara
    Abstract: "China's and India's rapid rise in the global arena has not only captured the attention of the world but has also set into motion a rethinking of the very paradigm of economic development....Today, China and India together account for 40 percent of the world's population. Both have implemented a series of economic reforms in the past two and half decades: China initiated this process at the end of the 1970s, while India began in the early 1990s. These reforms have led to rapid economic growth, with a growth rate of 8–9 percent per annum in China and 6–7 percent per annum in India. Despite similar trends in the reforms, the two countries have taken different reform paths; China started off with reforms in the agriculture sector and in rural areas, while India started by liberalizing and reforming the manufacturing sector. These differences have led to different growth rates and, more importantly, different rates of poverty reduction. They also have fundamentally different implications for growth and poverty reduction in the future. What can we learn from the process of economic reform in these two countries?... A number of studies looking into key aspects of reform and their relationship to outcomes, presented at two international workshops held in New Delhi and Beijing, try to offer some answers to these questions. These papers are currently being prepared by IFPRI for publication, and this discussion paper is a synopsis presented as a forerunner to the book. " from Authors' Abstract
    Keywords: Poverty alleviation China ,Poverty alleviation Egypt ,Economic reform ,
    Date: 2005
  20. By: Mwangi, Esther
    Abstract: "This paper explores the puzzle of why the pastoral Maasai of Kajiado, Kenya, supported the individualization of their collectively held group ranches, an outcome that is inconsistent with theoretical expectation. Findings suggest that individuals and groups will seek to alter property rights in their anticipation of net gains from a new assignment, even as they seek to eliminate disadvantages that were present in the status quo property rights structure. Heightened perceptions of impending land scarcity, failures of collective decision making, the promise of new income opportunities and the possibility of accessing capital markets motivated individuals to support group ranch subdivision. More importantly individuals were confronted with a declining security of tenure over their lands. Their supporting a transition to individual rights also represents a rational response anticipated to secure land claims against unauthorized appropriations by both Maasai and non-Maasai elite. Given the differentiated structure of group ranch communities, the costs and benefits of property transformation were unevenly distributed. The political process yielded beneficial outcomes for those with access to decision making, while creating vulnerabilities for those with less access such as women, the youth and poor herders." Author's Abstract
    Keywords: East Africa ,africa south of sahara ,Property rights ,Pastoral systems ,Privatization ,Land tenure ,Group membership ,
    Date: 2005
  21. By: Giovanni Caggiano and Leone Leonida
    Abstract: This paper shows that the widely used log-linearization of the neoclassical model of growth implies a relevant loss in terms of the ability of the model in replicating the patterns of convergence of an economy to its equilibrium level.
    JEL: C22 N10 O40
  22. By: Farhad Noorbakhsh
    Abstract: The concept of convergence is extended to non-income components of human development index and the index itself. Evidence of weak absolute convergence is found over 1975-2001. The results are robust and verified by various conditional ß-convergence models and also supported by the evidence of weak s-convergence. Population weighted analyses provide support for polarisation amongst developing countries but a slight reduction in world inequality. The dynamics of regional analysis reveals a movement of sub-Saharan Africa towards the low band of human development with Asia and Latin America making progress. High immobility of the early part of the period is followed by considerable upward and downward mobility in the latter part indicating a possible case of the “twin peaks” type of polarisation.
  23. By: Andersson, Magnus (Stockholm School of Asian Studies); Engvall, Anders (European Institute of Japanese Studies); Kokko, Ari (European Institute of Japanese Studies)
    Abstract: Lao PDR has been relatively successful in raising incomes and reducing poverty since the early 1990s. However, the gains in terms of poverty reduction are unevenly distributed across regions and population groups. This paper uses a detailed household survey data set to examine the determinants of income and poverty in Lao PDR. The results suggest that household size, dependency ratios, education, and access to agricultural inputs are among the main determinants of per capita consumption. In addition, geography and ethnicity matter. A closer analysis of the role of ethnicity suggests that the higher poverty incidence among minority households is due to their limited access to productive resources rather than lower efficiency in resource use. The paper also proposes some elements for a poverty reduction strategy for Lao PDR.
    Keywords: Lao PDR; Laos; development; poverty; household; ethnic minorities
    JEL: D13 O12 O18 O53
    Date: 2006–03–15
  24. By: Chandana Chakraborty; Peter Nunnenkamp
    Abstract: Foreign direct investment (FDI) has boomed in post-reform India. Moreover, the composition and type of FDI has changed considerably since India has opened up to world markets. This has fuelled high expectations that FDI may serve as a catalyst to higher economic growth. We assess the growth implications of FDI in India by subjecting industry-specific FDI and output data to Granger causality tests within a panel cointegration framework. It turns out that the growth effects of FDI vary widely across sectors. FDI stocks and output are mutually reinforcing in the manufacturing sector. In sharp contrast, any causal relationship is absent in the primary sector. Most strikingly, we find only transitory effects of FDI on output in the services sector, which attracted the bulk of FDI in the post-reform era. These differences in the FDI-growth relationship suggest that FDI is unlikely to work wonders in India if only remaining regulations were relaxed and still more industries opened up to FDI.
    Keywords: foreign direct investment, economic reform, growth effects, India, cointegration, causality
    JEL: F21 F23 O53
    Date: 2006–03
  25. By: Christian Groth (Department of Economics, University of Copenhagen); Karl-Josef Koch (Siegen University); Thomas M. Steger (ETH Zürich)
    Abstract: This paper argues that growth theory needs a more general “regularity” concept than that of exponential growth. This opens up for considering a richer set of parameter combinations than in standard growth models. Allowing zero population growth in the Jones (1995) model serves as our illustration of the usefulness of a general concept of “regular growth”.
    Keywords: exponential growth; arithmetic growth; regular growth; semi-endogenous growth; knife-edge restrictions
    JEL: O31 O40 O41
    Date: 2006–03
  26. By: Nathan Nunn (Economics University of Toronto)
    Keywords: Slave trade; Institutions; Africa; Growth
    JEL: F14 N17 N47
    Date: 2005
  27. By: Milanovic, Branko
    Abstract: The paper presents a nontechnical summary of the current state of debate on the measurement and implications of global inequality (inequality between citizens of the world). It discusses the relationship between globalization and global inequality. And it shows why global inequality matters and proposes a scheme for global redistribution.
    Date: 2006–03–01
  28. By: Carneiro, Francisco G.; Arabsheibani, G. Reza; Henley, Andrew
    Abstract: A range of alternative empirical definitions of informal activity have been employed in the literature. Choice of defini tion is often dictated by data availability. Different definitions may imply very different conceptual understandings of informality. In this paper the authors investigate the degree of congruence between three definitions of informality based on employment contract registration, social security protection, and the characteristics of the employer and employment using Brazilian household survey data for the period 1992 to 2001. The authors present evidence showing that 64 percent of the economically active population are informal according to at least one definition, but only 40 percent are informal according to all three. Steady compositional changes have been taking place among informal workers, conditional on definition. The econometric analysis reveals that the conditional impact of particular factors (demographic, educational attainment, and family circumstances) on the likelihood of informality varies considerably from one definition to another. The results suggest growing heterogeneity within the informal sector. Therefore, the authors argue that informal activity may be as much associated with entrepreneurial dynamism as with any desire to avoid costly contract registration and social protection. However, the authors confirm there is no a priori reason for entrepreneurial activity to be unprotected. Consequently definitions of informality based on occupation and employer size seem the most arbitrary in practice even if conceptually well-founded.
    Keywords: Labor Markets,Labor Standards,Work & Working Conditions,Labor Management and Relations,Tertiary Education
    Date: 2006–03–01
  29. By: Litchfield, Julie A.; Leite, Phillippe G.; Ferreira, Francisco H. G.
    Abstract: Measured by the Gini coefficient, income inequality in Brazil rose from 0.57 in 1981 to 0.63 in 1989, before falling back to 0.56 in 2004. This latest figure would lower Brazil ' s world inequality rank from 2nd (in 1989) to 10th (in 2004). Poverty incidence also followed an inverted U-curve over the past quarter century, rising from 0.30 in 1981 to 0.33 in 1993, before falling to 0.22 in 2004. Using standard decomposition techniques, this paper presents a preliminary investigation of the determinants of Brazil ' s distributional reversal over this period. The rise in inequality in the 1980s appears to have been driven by increases in the educational attainment of the population in a context of convex returns, and by high and accelerating inflation. While the secular decline in inequality, which began in 1993, is associated with declining inflation, it also appears to have been driven by four structural and policy changes which have so far not attracted sufficient attention in the literature, namely sharp declines in the returns to education; pronounced rural-urban convergence; increases in social assistance transfers targeted to the poor; and a possible decline in racial inequality. Although poverty dynamics since the Real Plan of 1994 have been driven primarily by economic growth, the decline in inequality has also made a substantial contribution to poverty reduction.
    Keywords: Inequality,Services & Transfers to Poor,Poverty Impact Evaluation,Rural Poverty Reduction,Pro-Poor Growth and Inequality
    Date: 2006–03–01
  30. By: Rossana Patrón (Departmento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: The paper provides a flexible framework to deal with educational provision and public policies in developing countries, linking the impact of quality-quantity-equity of educational policies on labour markets and the external sector. The model includes typical aspects of developing countries that require some further deviations from the structure of a 'standard' single country model as the inclusion of informal activities, which are usually dominated by the poorest qualified workers. Simulation exercises allows us to argue that more sophisticated educational policies ("multiple targets") may increase the efficiency of the government expenditure in education in terms of the quantity-quality of the output (skills) delivered to the labour market. The potential of education and educational policies to produce allocative, growth and distributive effects is also shown in the simulation exercises.
    Keywords: public education, educational policies, developing countries
    JEL: I F
    Date: 2005–05
  31. By: Rossana Patrón (Departmento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: The paper analyses the short and long term effects of education activities for an open economy, linking current costs to future benefits of alternative educational policies. The simulations find that growth effects are higher for those policies that reduce the internal inefficiency of the education sector thus improving the productivity of public expenditure. The analysis has implications for policymakers in developing countries like Uruguay with failing educational systems, as it suggests a relation between cost effectiveness of policies and growth and not a relation between enrolments and growth or between public expenditure in education and growth as it is usually tested in growth regressions.
    Keywords: public education, growth, developing countries
    JEL: I F O
    Date: 2005–10
  32. By: Alvaro Forteza (Departmento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Mario Tommasi (Departamento de Economía, Universidad de San Andrés, Argentina.)
    Abstract: This paper provides an overview of the pro-market reform process in eight Latin American countries, based on country studies undertaken within the Understanding Reform project of the Global Development Network. After a brief presentation of the reform in Latin America and in the eight countries in the project, the paper addresses some key themes on the political economy of reform. We review the initial conditions of reform; the role played by technocrats and stakeholders; political participation; the peculiar shortcut to reform represented by "policy switches" (announcing something to do the opposite); some traditional topics in the literature on reform like sequencing, shocks and learning; the apparently key role played by local characteristics; the complex feedbacks between pro-market reforms and the political process; and the recent backlash against reform in Latin America. The paper ends with some remarks mostly on normative lessons from this experience.
    Keywords: Reform, Washington Consensus, Political Economy
    JEL: O54 O57 P16
    Date: 2005–12
  33. By: Magnus Hatlebakk
    Abstract: We study an effective intervention into a specific form of bonded labor. The intervention led to a shift in agrarian contracts, from bonded labor to sharecropping. By comparing the pre- and post-liberation contracts we evaluate theoretical models of agrarian contracts. We suggest three mechanisms that jointly explain why landlords offered bonded labor contracts pre-liberation. One mechanism we apply to define bonded labor in contrast to tied labor. The mechanism, where the outside option as casual labor is endogenously determined by the choice of long-term contract, implies a trade-off for the landlord between efficiency and redistribution of surplus.
    Keywords: Tied labor Agrarian institutions Nepal
    JEL: J43 O12
    Date: 2006
  34. By: Gero Carletto (Agricultural and Development Economics Division, Food and Agriculture Organization); Benjamin Davis (Agricultural and Development Economics Division, Food and Agriculture Organization); Alberto Zezza (Agricultural and Development Economics Division, Food and Agriculture Organization)
    Abstract: In developing countries poverty is generally measured with expenditure data. Such data are difficult and costly to obtain and it is generally recommended to collect them every 3-5 years. In between surveys, however, there is a clear need to provide policymakers with information for the monitoring of poverty trends. The paper reviews several such methods and compares the poverty estimates and trends resulting from their application to a panel dataset for Albania. The results are broadly consistent across methods and point to an overall improvement in welfare conditions over time, although the magnitude of the changes differs by locale, with urban areas showing a larger improvement than their rural counterparts. However, given the sensitivity of the predictions to model specification, it is worthwhile to construct alternative welfare indicators and triangulate results. Lacking a gold standard measure, the use of a suite of welfare indicators, if duly validated, could be a viable approach to monitor poverty trends; some caution should be exercised in drawing conclusions about the actual magnitudes of the changes.
    Keywords: Poverty, Welfare, Asset index, Poverty measurement, Poverty monitoring.
    JEL: O12 O18 O47 R11
    Date: 2005
  35. By: André Croppenstedt (Agricultural and Development Economics Division, Food and Agriculture Organization)
    Abstract: Egypt is on track to achieve its long-term goal of reducing the poverty rate to 6 percent by 2022. Continued progress towards this goal will require rapid employment growth for which agriculture growth, through its impact on demand for goods and services in the rural non-tradable sector will be of fundamental importance. This paper considers which agricultural policies will be most effective at reducing rural poverty in Egypt . Using household survey data from 1997 the study analyzes household income structure and determinants. Results indicate that agricultural policies that help to raise unskilled labor wages and/or increase demand for unskilled labor as well as those that support small animal/bird raising, in particular poultry, are best suited to help the poor. A longer-term strategy must also focus on enhancing formal sector employment through increased access to education for men and in particular women.
    Keywords: Egypt, household income structure, household income determinants, income distribution, rural sector.
    JEL: D30 O12
    Date: 2006
  36. By: L. Cameron; A. Chaudhuri; N. Erkal; L. Gangadharan
    Abstract: This paper examines cultural differences in attitudes towards corruption by analysing individual-decision making in a corrupt experimental environment. Attitudes towards corruption play a critical role in the persistence of corruption. Our experiments differentiate between the incentives to engage in corrupt behaviour and the incentives to punish corrupt behaviour and allow us to explore whether, in environments characterized by lower levels of corruption, there is both a lower propensity to engage in corrupt behaviour and a higher propensity to punish corrupt behaviour. Based on experiments run in Australia (Melbourne), India (Delhi), Indonesia (Jakarta) and Singapore, we find that there is more variation in the propensities to punish corrupt behaviour than in the propensities to engage in corrupt behaviour across cultures. The results reveal that the subjects in India exhibit a higher tolerance towards corruption than the subjects in Australia while the subjects in Indonesia behave similarly to those in Australia. The subjects in Singapore have a higher propensity to engage in corruption than the subjects in Australia. We also vary our experimental design to examine the impact of a more effective punishment system and the effect of the perceived cost of bribery.
    Keywords: Corruption, Experiments, Punishment, Cultural Analysis
    JEL: C91 D73 O17 K42
    Date: 2005
  37. By: Francisco Rodríguez (Department of Economics, Wesleyan University)
    Abstract: Existing work in growth empirics either assumes linearity of the growth function or attempts to capture non-linearities by the addition of a small number of quadratic or multiplicative interaction terms. Under a more generalized failure of linearity or if the functional form taken by the non-linearity is not known ex ante, such an approach is inadequate and will lead to biased and inconsistent OLS and instrumental variables estimators. This paper uses non-parametric and semiparametric methods of estimation to evaluate the relevance of strong non-linearities in commonly used growth data sets. Our tests decisively reject the linearity hypothesis. A preponderance of our tests also rejects the hypothesis that growth is a separable function of its regressors. Absent separability, the approximation error of estimators of the growth function grows in proportion to the number of relevant dimensions, substantially increasing the data requirements necessary to make inferences about the growth effects of regressors. We show that appropriate non-parametric tests are commonly inconclusive as to the effects of policies, institutions and economic structure on growth.
    Date: 2006–01
  38. By: José Pineda (Corporación Andina de Fomento); Francisco Rodríguez (Economics and Latin American Studies, Wesleyan University)
    Date: 2006–02
  39. By: Francisco Rodríguez (Department of Economics, Wesleyan University)
    Date: 2006–02

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