nep-dev New Economics Papers
on Development
Issue of 2006‒04‒22
twenty-six papers chosen by
Jeong-Joon Lee
Towson University

  1. Who Pays China’s Bank Restructuring Bill? By Guonan Ma
  2. Wages and Human Capital in Exporting Firms in Morocco By Christophe Muller; Christophe Nordman
  3. Human Capital, Population Growth and Industrial Development in Mexico and Turkey: A Comparative Analysis with Other OECD Countries, 1964-2004 By Guisan, Carmen
  4. China's Economic Development and the Prospect for China-Korea Economic Relation By Justin Yifu Lin
  5. Development Strategies and Regional Income Disparities in China By Justin Yifu Lin; Peilin Liu
  6. China and the World Bank - How a Partnership Was Built By Pieter Bottelier
  7. Economic Growth and Poverty Reduction in Indonesia - The Effects of Location and Sectoral Components of Growth By Asep Suryahadi; Daniel Suryadarma; Sudarno Sumarto
  8. Grassroots Democracy and Local Governance: Evidence from Rural China By Shuna Wang; Yang Yao
  9. The Economics of Agricultural Development: What Have We Learned? Processes By James Roumasset
  10. Have Developing Countries Gained From the Marriage Between Trade Agreements and Intellectual Property Rights? By Sumner J La Croix; Denise Eby Konan
  11. Child education and work choices in the presence of a conditional cash transfer programme in rural Colombia By Orazio Attanasio; Emla Fitzsimons; Ana Gomez; Diana Lopez; Costas Meghir; Alice Mesnard
  12. Democratic capital: The nexus of political and economic change By Torsten Persson; Guido Tabellini
  13. New Evidence on the Causal Link between the Quantity and Quality of Children By Josh Angrist; Victor Lavy; Analía Schlosser
  14. Chronic and Transient Poverty: Measurement and Estimation, with Evidence from China By Jean-Yves Duclos; Abdelkrim Araar; John Giles
  15. Optimal Accumulation in an Endogenous Growth Setting with Human Capital By Frédéric Docquier; Oliver Paddison; Pierre Pestieau
  16. Do Population Control Policies Induce More Human Capital Investment? Twins, Birthweight, and China's 'One Child' Policy By Mark R. Rosenzweig; Junsen Zhang
  17. The Diffusion of Development By Enrico Spolaore; Romain Wacziarg
  18. Policy Coherence Towards East Asia: Development Challenges for OECD Countries By K. Fukasaku; M. Kawai; M. G. Plummer; A. Trzeciak-Duval
  19. Changing Social Institutions to Improve the Status of Women in Developing Countries By Johannes P. Jütting; Christian Morrisson
  20. Calorie Deprivation and Poverty Nutrition Trap in Rural India By Raghbendra Jha; Raghav Gaiha; Anurag Sharma
  21. "Returns to Social Capital: Estimates Based on the Augmented Augmented-Solow Model" By Hirokazu Ishise; Yasuyuki Sawada
  22. How costly is it for poor farmers to lift themselves out of poverty? By Olarreaga, Marcelo; Dutoit, Laure; Cadot, Olivier
  23. Skill Shortages, Labor Reallocation, and Growth By Pascal Hetze
  24. Voting over informal risk-sharing rules By Ambec, S.
  25. The Dynamics of Income Diversification in Ethiopia: Evidence from Panel data By Adugna Lemi
  26. Social Capital and Economic Development By Fabio Sabatini

  1. By: Guonan Ma
    Abstract: This paper addresses the questions related to the cost of China’s bank restructuring and how it has been financed. We first propose a framework for recognising losses. Then, we examine the recent major moves by the Chinese government to repair the country’s bank balance sheets. Finally, we explore the implications of the Chinese ways of funding the bank restructuring. We find that the Chinese government has been decisive in confronting the costly task of bank restructuring. Looking through the elaborate funding arrangements adopted so far, the Chinese taxpayers have paid most of the bill.
    Keywords: Bank restructuring; recapitalisation; non-performing loans; China
    JEL: G21 G28 O53 P34
    Date: 2006–02
  2. By: Christophe Muller (Departamento de Fundamentos del Análisis Económico Universidad de Alicante, Campus de San Vicente); Christophe Nordman (DIAL, IRD, Paris)
    Abstract: (english) We study the relationship between wages, human capital accumulation and work organisation in Morocco using matched worker-firm data for Metallurgical-electrical and Textile-clothing firms. While wages are found to rise with all human capital characteristics, returns to education and experience are much higher for the upper wages. Participation in on-the-job training is constrained by: a relevant industrial location; a minimal educational background; and an appropriate family situation. Moreover, work organisation and on-the-job training are dependent on the education process. Finally, we find strong interactions of human capital accumulation with involvement in chain gangs, team work and supervision. _________________________________ (français) Nous étudions le lien entre salaires, accumulation du capital humain et organisation du travail au Maroc en utilisant une enquête couplant des informations sur les entreprises et les employés de deux secteurs manufacturiers. Bien que les salaires soient sensibles à toutes les variables de capital humain, les rendements de l’éducation et de l’expérience sont beaucoup plus élevés pour les travailleurs à hauts revenus. La participation à la formation sur le tas du travailleur est favorisée par son secteur d’appartenance, son niveau d’éducation et sa situation familiale lorsqu’elle est favorable. De plus, l’organisation des tâches sur le lieu de travail (à la chaîne, en équipe) découle aussi du niveau de capital humain des salariés.
    Keywords: Africa, Morocco, Wages, On-the-job training, Human capital, Workplace organisation,Matched worker-firm data, Maroc, Salaires, Formation sur le tas, Capital humain, Organisation du travail, Données liées employeurs-employés.
    JEL: J24 J31 O12
    Date: 2006–03
  3. By: Guisan, Carmen
    Abstract: Mexico and Turkey have experienced an important growth during the last decades of the 20th century but they have, in spite of that, a low level of real income per inhabitant in comparison with OECD averages. This paper analyses the main economic features of these countries, in comparison with other OECD countries, and suggest some economic policies of interest to foster economic development and employment during the next decades, with special focus on human capital and industrial development.
    Date: 2005
  4. By: Justin Yifu Lin (China Center for Economic Research, Peking University)
    Abstract: In this paper I will breifly review the economic performance of China's economic reform starting in 1978, followed by my personal views on the experiences of Korea's economic development and lessons for China's economic reform. In the third section I will explore the prospect of China's future development. I will then review the China-Korea economic relationship since the establishment of diplomatic relations and discuss its future propect. Finally, I would like to share with you my personal feelings for the centennial anniversary of Korea University and the friendship between our two nations.
    Keywords: China, Korea, development, economic reform,
    JEL: O11 O53 O19
    Date: 2005–07
  5. By: Justin Yifu Lin (China Center for Economic Research, Peking University); Peilin Liu (Development Research Center of the State Council)
    Abstract: In this paper we propose that a flawed development strategy is responsible for the increasing disparities in economic development among provinces in China. Since the founding of the PRC, the government has pushed a "leap forward" strategy emphasizing the development of capital-intensive heavy industries. In most provinces, however, the priority industries under this strategy were inconsistent with the comparitive advantage determined by the factor endowments in those provinces. Many enterprises in the priority industries were not viable in the competitive market and required interventions in the merkets by the government to support and protect them. Consequently, this leap-forward strategy retarded the functions of market, impeded capital accumulation and hindered technology and productivity progress in the provinces. The provinces in the central and western provinces continue to follow the leap-forward strategy and have poor growth performance Therefore, it is imperitive to replace tha comparitive advantage-defying leap-forward strategy with a comparative advantage-following strategy and restructure the existing industries in each province according to the princple of comparitive advantage. This latter strategy would enhance coordinated development among regions and provinces and, in effect, work more effectively to create sustainable national economic development. The regional effects of economic strategies in China are the subject of this paper.
    Keywords: economic strategies, China, regional effects, development, PRC, leap-forward approach, capital-intensive, heavy industries, comparitive advantage
    JEL: R11 R12 R58 O12
    Date: 2005–11
  6. By: Pieter Bottelier (World Bank)
    Abstract: The World Bank played an important role in China's economic transformation since the late 1970s. China used the World Bank well and the Bank was responsive to China's needs. The Bank did not recommend early or comprehensive market liberalization or learning-by-doing - approach to economic reform. It pushed at the margin for critical institutional and policy reforms, presenting perspective based on international experience, while providing technical assisstance in numerous areas, often through Bank-supported projects. As the Chinese gained expertise, confidence and access to international capital markets, the role of the Bank in China inevitably shrank. China now uses the Bank mainly for selective technical, institutional and conceptual innovations for development. China and the World Bank both gained from their interaction.
    Keywords: World Bank, China, innovations, institutional reform, market liberalization , learning-by-doing
    JEL: O19 O11
    Date: 2006–03
  7. By: Asep Suryahadi (SMERU Research Institute); Daniel Suryadarma (SMERU Research Institute); Sudarno Sumarto (SMERU Research Institute)
    Abstract: Indonesia experienced a rapid reduction in poverty during the pre-crisis high growth period prior to 1997. On the other hand, poverty increased very significantly when the economy contracted during the economic crisis. These contrasting episodes provide a natural experiment to assess empirically the relationship between economic growth and poverty. This study finds that economic growth is indeed an essential recipe for poverty reduction. However, not all sectoral components of economic growth contribute equally to poverty reduction. In particular, growth of the services sector, both in urban and rural areas, contributes the most to the reduction in poverty. Another sectoral growth which has significant, albeit relatively small, contribution to poverty reduction is industrial growth in urban areas. This pattern of growth components with significant contributions to poverty reduction is identical for total, urban, and rural poverty.
    Keywords: economic growth, poverty, urban, rural, Indonesia
    JEL: O11 I32 N15
    Date: 2006–03
  8. By: Shuna Wang (Department of Economics, University of Virginia); Yang Yao (China Center for economic Research, Peking University)
    Abstract: This paper studies the impacts of village election on the accountability of the elected village committee, local fiscal sharing, and state taxation in rural China using panel data of 48 villages during the period of 1986-2002. Election is found to substantially increase the share of public expenditures in the village budget and reduce the shares of administrative costs and income handed to the township government. This shows that election enhances the accountability of the village committee, but weakens local fiscal sharing, and thus, may hurt public goods provision beyond the village boundary. In addition, election also reduces the amount of tax paid by each person in the village, which means that election does lessen the state's grip on the grassroots society. Finally, no significant evidence is found to support the claim that the role of a more competitive election is different from that of a closed election.
    Keywords: Multinational model, East Asian interdependency, exchange rates, asymmetric shocks
    JEL: C52 F15 F17 F42
    Date: 2006–02
  9. By: James Roumasset (Department of Economics, University of Hawaii at Manoa)
    Abstract: Agricultural development thinking has gone through several stages of fad and fancy, often without an understanding of previous fallacies. Its current doldrums are unfortunate given the unrivaled importance of agricultural development for poverty reduction in most development countries. After reviewing several policy and program areas, lessons are synthesized, and a forwardlooking research framework suggested, especially regarding role of specialization in the evolution of economic organization. The corresponding role of government is seen to be the facilitation of economic cooperation, rather than social engineering.
    JEL: Q12 Q15 O12 L23
    Date: 2006
  10. By: Sumner J La Croix (Department of Economics, University of Hawaii at Manoa); Denise Eby Konan (Department of Economics, University of Hawaii at Manoa; Chancellor's Office, University of Hawaii at Manoa)
    Abstract: Have developing countries gained from the incorporation of IPR standards into the WTO framework? We use historical, theoretical, and empirical methods to answer this question and reach several conclusions. First, U.S. history provides a clear case of a developing country which used strong patent rights and weak copyrights in the 19th century to enhance its growth prospects. Second, recent theoretical literature presents a strong case for welfare gains to developing countries from patent harmonization if developed countries pay lump-sums to offset higher royalty payments by developing countries. Third, the creation of intellectual property in new types of inventions is necessary, but the scope, depth, and enforcement of IPRs is likely to differ across countries according to their economic and political institutions, their per capita income, and their capability to engage in and disseminate the fruits of R&D.
    JEL: K33 F13 O34
    Date: 2006
  11. By: Orazio Attanasio (Institute for Fiscal Studies and University College London); Emla Fitzsimons (Institute for Fiscal Studies); Ana Gomez; Diana Lopez; Costas Meghir (Institute for Fiscal Studies and University College London); Alice Mesnard (Institute for Fiscal Studies)
    Abstract: This research is part of a large evaluation effort, undertaken by a consortium formed by IFS, Econometria and SEI, which has considered the effects of Familias en Acción on a variety of outcomes one year after its implementation. In early reports, we focussed on the effects of the programme on school enrolment. In this paper, we both expand those results, by carefully analysing anticipation effects along with other issues, and complement them with an analysis of child labour - both paid and unpaid (including domestic) work. The child labour analysis is made possible due to a rich time use module of the surveys that has not previously been analysed. We find that the programme increased the school participation rates of 14 to 17 year old children quite substantially, by between 5 and 7 percentage points, and had lower, but non-negligible effects on the enrolment of younger children of between 1.4 and 2.4 percentage points. In terms of work, the effects are generally largest for younger children whose participation in domestic work decreased by around 10 to 12 percentage points after the programme but whose participation in income-generating work remained largely unaffected by the programme. We also find evidence of school and work time not being fully substitutable, suggesting that some, but not all, of the increased time at school may be drawn from children’s leisure time.
    Date: 2006–01
  12. By: Torsten Persson; Guido Tabellini
    Abstract: We study the joint dynamics of economic and political change. Predictions of the simple model that we formulate in the paper get considerable support in a panel of data on political regimes and GDP per capita for about 150 countries over 150 years. Democratic capital — measured by a nation’s historical experience with democracy and by the incidence of democracy in its neighborhood — reduces the exit rate from democracy and raises the exit rate from autocracy. In democracies, a higher stock of democratic capital stimulates growth in an indirect way by decreasing the probability of a sucessful coup. Our results suggest a virtuous circle, where the accumulation of physical and democratic capital reinforce each other, promoting economic development jointly with the consolidation of democracy.
  13. By: Josh Angrist (MIT, NBER and IZA Bonn); Victor Lavy (Hebrew University and NBER); Analía Schlosser (Hebrew University)
    Abstract: A longstanding question in the economics of the family is the relationship between sibship size and subsequent human capital formation and economic welfare. If there is a causal "quantity-quality tradeoff," then policies that discourage large families should lead to increased human capital, higher earnings, and, at the macro level, promote economic development. Ordinary least squares regression estimates and a large theoretical literature suggest that this is indeed the case. This paper presents new evidence on the childquantity/ child-quality trade-off. Our empirical strategy exploits exogenous variation in family size due to twin births and preferences for a mixed sibling-sex composition, as well as ethnic differences in the effects of these variables and preferences for male births in some ethnic groups. We use these sources of variation to look at the causal effect of family size on completed educational attainment, fertility, and earnings. For the purposes of this analysis, we constructed a unique matched data set linking Israeli Census data with information on the demographic structure of families drawn from a population registry. Our results show no evidence of a quantity-quality trade-off, though some estimates from one subsample suggest that first-born girls from large families marry sooner.
    Keywords: fertility, quantity-quality trade-offs, instrumental variables
    JEL: J13 J24 O12
    Date: 2006–04
  14. By: Jean-Yves Duclos (Université Laval, CIRPÉE and IZA Bonn); Abdelkrim Araar (Université Laval, CIRPÉE); John Giles (Michigan State University)
    Abstract: The paper contributes to the measurement of poverty and vulnerability in three ways. First, we propose a new approach to separating poverty into chronic and transient components. Second, we provide corrections for the statistical biases introduced when using a small number of periods to estimate the importance of vulnerability and transient poverty. Third, we apply these tools to the measurement of chronic and transient poverty in China using a rich panel data set that extends over approximately 17 years. We find that alternative measurement techniques yield significantly different estimates of the relative importance of chronic and transient poverty, and that precision of estimates is enhanced with simple statistical corrections.
    Keywords: poverty dynamics, transient poverty, chronic poverty, permanent poverty, China
    JEL: C15 D31 D63 I32
    Date: 2006–04
  15. By: Frédéric Docquier (FNRS, IRES, Catholic University of Louvain and IZA Bonn); Oliver Paddison (ECLAC, United Nations Economic Commission for Latin America and the Caribbean); Pierre Pestieau (CREPP, University of Liège, CORE, PSE and CEPR)
    Abstract: This paper considers a three-overlapping-generations model of endogenous growth wherein human capital is the engine of growth. It first contrasts the laissez-faire and the optimal solutions. Three possible accumulation regimes are distinguished. Then it discusses a standard set of tax-transfer instruments that allow for decentralization of the social optimum. Within the limits of our model, the rationale for the standard pattern of intergenerational transfers (the working-aged financing the education of the young and the pension of the old) is seriously questioned. On pure efficiency grounds, the case for generous public pensions is rather weak.
    Keywords: endogenous growth, human capital, intergenerational transfers
    JEL: D90 H21 H52
    Date: 2006–04
  16. By: Mark R. Rosenzweig (Yale University); Junsen Zhang (Chinese University of Hong Kong and IZA Bonn)
    Abstract: In this paper we use a new data set describing households with and without twin children in China to quantify the trade-off between the quality and quantity of children using the incidence of twins that for the first time takes into account effects associated with the lower birthweight and closer-spacing of twins compared to singleton births. We show that examining the effects of twinning by birth order, net of the effects stemming from the birthweight deficit of twins, can provide upper and lower bounds on the trade-off between family size and average child quality. Our estimates indicate that, at least in one area of China, an extra child at parity one or at parity two, net of birthweight effects, significantly decreases the schooling progress, the expected college enrollment, grades in school and the assessed health of all children in the family. We also show that estimates of the effects of twinning at higher parities on the outcomes of older children in prior studies do not identify family size effects but are confounded by inter-child allocation effects because of the birthweight deficit of twins. Despite the evident significant trade-off between number of children and child quality in China, however, the findings suggest that the contribution of the one-child policy in China to the development of its human capital was modest.
    Keywords: family size, birthweight, twins, schooling, China
    JEL: J13 I12 I21
    Date: 2006–04
  17. By: Enrico Spolaore; Romain Wacziarg
    Abstract: This paper studies the barriers to the diffusion of development across countries over the very long-run. We find that genetic distance, a measure associated with the amount of time elapsed since two populations’ last common ancestors, bears a statistically and economically significant correlation with pairwise income differences, even when controlling for various measures of geographical isolation, and other cultural, climatic and historical difference measures. These results hold not only for contemporary income differences, but also for income differences measured since 1500 and for income differences within Europe. We uncover similar patterns of coefficients for the proximate determinants of income differences, particularly for differences in human capital and institutions. The paper discusses the economic mechanisms that are consistent with these facts. We present a framework in which differences in human characteristics transmitted across generations - including culturally transmitted characteristics - can affect income differences by creating barriers to the diffusion of innovations, even when they have no direct effect on productivity. The empirical evidence over time and space is consistent with this "barriers" interpretation.
    JEL: O11 O57
    Date: 2006–04
  18. By: K. Fukasaku; M. Kawai; M. G. Plummer; A. Trzeciak-Duval
    Abstract: OECD countries face at least five major challenges for promoting policies that are consistent with their development goals: . ensuring security and political stability; . anticipating the impacts of their macroeconomic policies on developing-country growth; . increasing both market access and capacity building for developing economies; . supporting governance structures that help maintain financial stability; . improving aid effectiveness.
    Date: 2005–05–16
  19. By: Johannes P. Jütting; Christian Morrisson
    Abstract: . Deeply rooted social institutions – societal norms, codes of conduct, laws and tradition – cause gender discrimination. . Religion per se does not systematically define such discrimination. All dominant religions show flexibility in interpreting the role of women in society. . The Millennium Development Goals demand change in gender-discriminating social institutions, which should be added to the seven strategic priorities identi?ed by the UN Task Force on Education and Gender Equality. . Donors must redesign their strategies to focus not only on improving women’s capacities and capabilities, but also and concurrently on lowering men’s resistance against reforms that improve gender equality.
    Date: 2005–07–22
  20. By: Raghbendra Jha; Raghav Gaiha; Anurag Sharma
    Abstract: This paper tests for the existence of a Poverty Nutrition Trap (PNT) in the case of the nutrient most likely to have productivity impacts, i.e., calories, for three categories of wages – sowing, harvesting, and other – and for male and female workers separately. We use household level national data for rural India for the period January to June 1994. We use robust sample selection procedures due to Tobit methods and due to Heckman to arrive at consistent estimates. It is discovered that the PNT exists for women workers engaged in harvesting and sowing in the case of the Heckman methodology. In the case of the Tobit analysis a PNT exists in the case of female harvest, male other, and female other categories of wages.
    Date: 2006
  21. By: Hirokazu Ishise (Department of Economics, Boston University); Yasuyuki Sawada (Faculty of Economics, University of Tokyo)
    Abstract: This paper estimates the aggregate output elasticity of social capital that characterizes the aggregate returns to social capital. With this aim, we apply Nonneman and Vanhoudt's (1996) augmented version of the augmented Solow model of Mankiw et al. (1992) by including social capital as an additional production input. The estimated output elasticity of social capital is approximately 0.1. While our results largely indicate that social capital positively affects economic growth, the magnitude of the effects is smaller than that of physical and human capital as well as labor inputs. Moreover, the median value of the implied aggregate return of social capital is approximately 9.77% at the global level and, in OECD countries, it is likely to be considerably smaller than the individual returns, suggesting the fallacy of composition. As a by product, the depreciation rate of social capital is estimated to be approximately 10% per annum which is significantly higher than that of physical capital.
    Date: 2006–04
  22. By: Olarreaga, Marcelo; Dutoit, Laure; Cadot, Olivier
    Abstract: The main objective of this paper is to provide estimates of the cost of moving out of subsistence for Madagascar ' s farmers. The analysis is based on a simple asset-return model of occupational choic e. Estimates suggest that the entry (sunk) cost associated with moving out of subsistence can be quite large - somewhere between 124 and 153 percent of a subsistence farmer ' s annual production. Our results make it possible to identify farm characteristics likely to generate large gains, if moved out of subsistence, yielding useful information for the targeting of trade-adjustment assistance programs.
    Keywords: Markets and Market Access,Rural Poverty Reduction,Economic Theory & Research,Agribusiness,Access to Markets
    Date: 2006–04–01
  23. By: Pascal Hetze (University of Rostock and Max Planck Institute for Demographic Research)
    Abstract: This paper explores the relationship between growth and unemployment. Knowledge formation is the source of growth, which includes the two dimensions technologies and skills. Both are connected through a technology-skill complementarity which may have limiting effects on the reallocation of labor and technology implementation in manufacturing. The reallocation of labor becomes necessary as growth leads to continuous job creation and job destruction. The ratio of job destruction to job creation identifies three regimes, two of which are associated with unemployment either due to restricted labor demand or due to skill shortages. While in the regime with full employment the model confirms the standard result that knowledge formation has positive effects on growth, the outcome is much more ambiguous if we consider a possible technology-skill mismatch and unemployment.
    Keywords: endogenous growth, knowledge formation, unemployment, skill mismatch
    JEL: E24 J63 O33
    Date: 2006
  24. By: Ambec, S.
    Abstract: People vote over risk-sharing rules to cope with random revenues. Risk-sharing rules are enforced through peer pressure : those who comply exert a negative externality on those who do not. People are differently affected by this externality. The author determines the elected risk-sharing rules and the level of compliance. It turns out that full risk-sharing is achieved only if everybody complies. Partial risk-sharing is more often achieved with, sometime, some level of non-compliance. In many cases, a majority of people votes over and complies with the risk-sharing rule that maximizes their own expected payoff.
    JEL: H21 O15 O17
    Date: 2005
  25. By: Adugna Lemi
    Abstract: Block and Webb (2001) in food policy address the issue of the dynamics of livelihood diversification in Ethiopia. Their study uses the ratio of per capita income derived from crops to the sum of all other incomes as an indicator of livelihood diversification for the years 1989 and 1994. Their study focuses only on drought-prone areas during the survey years. The aim of the present study is to explore further the demographic and economic determinants of the dynamics of income diversification using survey data. The data used in this study cover larger and more representative sample and was colleted from rural Ethiopia during 1994 and 1997 harvest years. This study investigates not only the determinants of participation and intensity of off-farm activities, but also factors that affect the dynamics between 1994 and 1997. The results of this study attempt to answer the question: to what extent initial conditions (for instance, asset holdings, production, and crop income) prompt households to diversify to off-farm activities overtime. The results show that participation in off-farm activities is mainly driven by demographic factors, whereas land and other asset ownership as well as crop production and income affect intensity of off-farm activities. The dynamic model results show that farm families who have initially diversified to more off-farm activities subsequently realized less income diversification. Families with more initial crop production from slack harvest season subsequently realized greater income from off-farm activities in 1997. The study also confirms that it is only during slack harvest season that off-farm and on-farm activities are complement each other.
    Keywords: Dynamic Livelihood, Off-farm Income, Diversification, Ethiopia
    JEL: D1 J2
  26. By: Fabio Sabatini
    Abstract: This paper carries out an empirical assessment of the causal nexus connecting social capital's diverse aspects to the "quality" of economic development in Italy. The analysis accounts for three main social capital dimensions (i.e. bonding, bridging and linking social capital) and measures them through synthetic indicators built by means of principal component analyses performed on a dataset including multiple variables. The quality of development is measured through human development and indicators of the state of health of urban ecosystems, public services, social protection, gender equality, and labour markets. The causal relationship between social capital's and development's different dimensions is then assessed through structural equations models. The analysis in this paper provides a relevant proof of Putnam's claims on the positive role of civil society organizations in development processes.
    Keywords: Social capital, Social networks, Civil Society, Economic development, Social quality, Labour precariousness, Structural Equations Modelling
    JEL: C39 O15 O18 R11 Z13
    Date: 2006–04

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