nep-dev New Economics Papers
on Development
Issue of 2006‒08‒12
fourteen papers chosen by
Jeong-Joon Lee
Towson University

  1. Growth and Inequality: A Meta-Analysis By Laura de Dominicis; Henri L.F. de Groot; Raymond J.G.M. Florax
  2. The Chinese GDP Growth Rate Puzzle: How Fast Has the Chinese Economy Grown? By Harry X. Wu
  3. The Doha Development Agenda: Mixed Prospects for Developing Countries By Alan Matthews; Keith Walsh
  4. Impact of Policy Reforms on Agriculture and Poverty in Uganda By Jacob Opolot; Rose Kuteesa
  5. Are Price Changes in the World Market Transmitted to Markets in Less Developed Countries? A Case Study of Sugar, Cotton, Wheat, and Rice in Tanzania By F. T. M. Kilima
  6. Structural Weakness in Nicaragua : Hindrances to Economic Growth and Poverty Reduction By Ruth Rios-Morales
  7. Globalisation, Inequality and Poverty Relationships: A Cross Country Evidence By Marcel Neutel; Almas Heshmati
  8. Smallholder Farming Under Increasingly Difficult Circumstances: Policy and Public Investment Priorities for Africa By T.S. Jayne; D. Mather; E. Mghenyi
  9. Innovation, Diffusion, and Trade By Jonathan Eaton; Samuel Kortum
  10. Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks By Dean Yang
  11. Regulation of Financial Systems and Economic Growth By Alain de Serres; Shuji Kobayakawa; Torsten Sløk; Laura Vartia
  12. Export Processing Zones and Environmental Policy By Noriko Yasuyuki Sugiyama
  13. Human Capital, Productivity and Growth By Abdurrahman Aydemir; Chris Robinson
  14. Cultures of Innovation of the African Poor. Common Roots, Shared Traits, Joint Prospects? On the Articulation of Multiple Modernities in African Societies and Black Diasporas in Latin America By Dirk Kohnert

  1. By: Laura de Dominicis (Vrije Universiteit Amsterdam, and Universita' degli di Tor Vergata, Rome, Italy); Henri L.F. de Groot (Vrije Universiteit Amsterdam); Raymond J.G.M. Florax (Purdue University, and Vrije Universiteit)
    Abstract: In recent years there has been a growing interest in the impact of inequality on economic growth. Both theoretical and empirical approaches have produced ambiguous results on sign and size of this relationship. Although there is a considerable part of the literature that considers inequality detrimental to growth, more recent studies have challenged this result and found a positive effect of inequality on growth. This paper contributes to the debate by using meta-analytical techniques to describe variation in observed outcomes of the empirical studies and to identify sources of variation.
    Keywords: growth; income distribution; inequality; meta-analysis
    JEL: O11 O15 C42 C52
    Date: 2006–07–27
  2. By: Harry X. Wu
    Abstract: The Chinese statistical authorities have recently adjusted the Chinese GDP level and growth rate for the period 1993-2004 following China's first national economic census. However, their methodology used in the adjustment is opaque. Using a trend-deviation interpolation approach, this study has managed to replicate the basic procedures of the adjustment and reproduced the official estimates. Through this exercise, it has found that the estimates that could be obtained by the normal interpolation procedures were significantly and arbitrarily modified to satisfy certain needs. Based on some political economy argument, we attempt to explain why the adjustment had to leave the growth rate of 1998 intact and why it had to bypass the price issue and directly work on the real growth rate adjustment. Based on previous studies and other observations, we also challenge the census results on non-service industries.
    Date: 2006–07
  3. By: Alan Matthews; Keith Walsh
    Abstract: This paper uses the GTAP computable general equilibrium model to assess the impact of a Doha Development Agenda agreement on agricultural trade liberalisation. In particular, we examine the consequences for developing countries. The simulation incorporates further liberalisation in the areas of market access, export competition and domestic support. Most developing regions can expect strong positive results from this liberalisation, however some suffer a decrease in welfare. The magnitude of the welfare effect for these countries depends on measures to be taken by developing countries themselves, and whether they will materialise must be uncertain. The results highlight the importance of the impact of further liberalisation of the erosion of preferential trading arrangements enjoyed by developing regions.
    Keywords: Agricultural trade liberalisation, GTAP, developing countries
    Date: 2006–08–01
  4. By: Jacob Opolot; Rose Kuteesa
    Abstract: This paper reviews the recent economic performance of the Ugandan economy, with a particular emphasis on the impact of the reform program on agricultural development and poverty. The constituent elements of the reform program in place since 1987 are described, and the resulting impact on the real economy is critically assessed. There was a significant fall in the headcount poverty ratio between 1992/93 and 1999/00 although more recently this trend has reversed. Uganda experienced a strong deterioration in its external terms of trade as well as high population growth rates which make it more difficult to meet its poverty eradication objectives. Government policies set out in the Poverty Eradication Action Plan and the Plan for Modernization of Agriculture are initiatives in the right direction, but require sustained effort to ensure their implementation.
    Keywords: Policy reform, agriculture, poverty, food security
    Date: 2006–08–01
  5. By: F. T. M. Kilima
    Abstract: This paper investigates the extent to which world market price changes are transmitted through changes in border prices into local producer prices for four agricultural product markets in Tanzania: sugar, cotton, wheat and rice. The changes in the marketing channels for each of these products resulting from market liberalization are described. The statistical analysis finds that, in general, Tanzanian border and world market prices for these products do not move closely together, although there is evidence that border prices are influenced by world market price levels but not vice versa. The absence of monthly price data at producer level for these products did not permit a detailed examination of the relationship between farmgate prices and either border prices or world market prices. However, the qualitative discussion suggests that the extent of price transmission is likely to be imperfect. These results have implications for the interpretation of simulation results modelling the potential impact of trade policy changes on Tanzanian producers and consumers. They also underline the need for concerted efforts by policy makers to reduce the extent of monopoly power in these marketing chains and to improve the degree of price transmission.
    Keywords: Agricultural trade, price transmission, developing countries
    Date: 2006–08–01
  6. By: Ruth Rios-Morales
    Abstract: Despite generous debt reduction under the HIPC initiative, Nicaragua is not growing at the rate required to alleviate poverty. This paper outlines Nicaragua’s vulnerability to external changes and its inability to compete in the global market. Nicaragua suffers from severe structural problems; it has a very poorly diversified industrial structure, and its trading performance is correspondingly weak, relying on basic agricultural exports that have suffered stagnant or declining prices on international markets. Nicaragua is a clear example of an HIPC country that has achieved the criteria to enter into the HIPC initiative but is struggling to maintain sustainable economic development while trying to achieve poverty reduction.
    Date: 2006–08–02
  7. By: Marcel Neutel (University of Groningen); Almas Heshmati (University of Kurdistan - Hawler, TEPP, Seoul National University and IZA Bonn)
    Abstract: In this research, the relationship between globalisation and poverty and income inequality is determined. A whole new globalisation index has been constructed based on data covering a large sample of 65 developing countries. The index is based on the globalisation index proposed by A.T. Kearney / Foreign Policy Magazine. The index is composed of four subindices, namely: economic integration, personal contacts, technological connections and political engagement. Results from cross-sectional regression analysis show that there is a significant relationship between globalisation and poverty and income inequality. Globalisation leads to poverty reduction and it reduces income inequality. The relationship between globalisation and poverty remains significant when controlled for regional heterogeneity. A non-linear analysis shows that poverty has diminishing returns to benefits from globalisation.
    Keywords: globalisation, poverty, inequality, indices
    JEL: C43 F15 O57
    Date: 2006–07
  8. By: T.S. Jayne (Department of Agricultural Economics, Michigan State University); D. Mather; E. Mghenyi
    Abstract: This paper identifies major trends affecting the future of the small farm in Sub-Saharan Africa, and identifies policy responses and public investment strategies by African governments, governments of high-income countries, and multilateral donors that can give African smallholders the chance to be viable in an increasingly globalized world.
    Keywords: food security, food policy, agriculture policy
    JEL: Q18
    Date: 2006
  9. By: Jonathan Eaton; Samuel Kortum
    Abstract: We explore the determinants of research specialization across countries and its consequences for relative wages. Using a dynamic Ricardian model we examine the effects of faster international technology diffusion and lower trade barriers on the incentive to innovate. In the absence of any diffusion at all, countries devote the same share of resources toward research regardless of trade barriers or research productivity. As long as trade barriers are not too high, faster diffusion shifts research activity toward the country that does it better. This shift in research activity raises the relative wage there. It can even mean that, with more diffusion, the country better at research ends up with a larger share of technologies in its exclusive domain.
    JEL: F1 O3 O4
    Date: 2006–07
  10. By: Dean Yang
    Abstract: This paper distinguishes between target-earnings and life-cycle motivations for return migration by examining how Philippine migrants’ return decisions respond to major, unexpected exchange rate changes in their overseas locations (due to the Asian financial crisis). Overall, the evidence favors the life-cycle explanation: more favorable exchange rate shocks lead to fewer migrant returns. A 10% improvement in the exchange rate reduces the 12-month return rate by 1.4 percentage points. However, some migrants appear motivated by target-earnings considerations: in households with intermediate foreign earnings, favorable exchange rate shocks have the least effect on return migration, but lead to increases in household investment.
    JEL: D13 F22 J22 O12 O15
    Date: 2006–07
  11. By: Alain de Serres; Shuji Kobayakawa; Torsten Sløk; Laura Vartia
    Abstract: This paper examines whether regulation that is more conducive to competitive and efficient financial systems has a significant positive impact on sectoral output and productivity growth in a sample of 25 OECD countries. More specifically, following a methodology used by Rajan and Zingales (1998), the paper tests whether industries that depend more heavily on external sources of funding tend to grow faster in countries that have more competition-friendly regulation in markets for banking services and financial instruments. The regulatory indicators are assembled from surveys conducted by the World Bank on regulations in banking and securities markets. They point to substantial variations in the stance of regulation across countries, in particular with respect to the broad rules underpinning securities market transactions. The empirical analysis indicates that financial system regulation matters for output growth both in a statistical and economic sense. <P>Réglementation des systèmes financiers et croissance économique <BR>L'objet de cette étude consiste à examiner, sur la base d'un échantillon de 25 pays de l'OCDE, dans quelle mesure une réglementation plus propice à des systèmes financiers concurrentiels et efficaces entraîne un effet positif significatif sur la croissance sectorielle. De manière plus spécifique, suivant une approche utilisée par Rajan et Zingales (1998), l'étude vérifie si les industries qui dépendent davantage des fonds externes croissent plus rapidement dans les pays dont la réglementation conduit à une concurrence plus vive sur les marchés des services bancaires et des instruments financiers. Les indicateurs de réglementation sont construits à partir d'information recueillie par la Banque Mondiale sur la réglementation dans le secteur bancaire et sur les valeurs obilières. Ils mettent en lumière des variations substantielles entre les pays, en particulier en ce qui a trait à la réglementation encadrant les transactions sur valeurs mobilières. L'analyse statistique indique que la réglementation des systèmes financiers affecte la croissance de la production de manière significative, à la fois au sens statistique et économique.
    Keywords: système financier, financial systems, external funding, financial regulation, sectoral growth, barrier to competition, investor protection, financement externe, réglementation financière, croissance sectorielle, entrave à la concurrence, protection des actionnaires
    JEL: G15 G18 G21 G28 O40
    Date: 2006–08–02
  12. By: Noriko Yasuyuki Sugiyama (Graduate School of Economics, Osaka University)
    Abstract: This paper investigates the relation between an export processing zone and a pollution quota in a small country. The model suppose that the pollution target is implemented with a marketable permit system, and the government sets the quota to maximize domestic welfare. Then we show that, if an increase in real income reduces marginal external damage, the pollution quota is relieved by the formation of an export processing zone. However, if the marginal damage is augmented with an increase in the income, the optimal quota might be strengthened by the formation of the zone.
    Keywords: export processing zone, international trade, environmental policy, pollution
    JEL: F18 O24
    Date: 2006–08
  13. By: Abdurrahman Aydemir (Statistics Canada); Chris Robinson (University of Western Ontario)
    Abstract: Recent immigration appears to be characterized by frequent return and onward migration. This has important consequences for the contribution of immigrants to the economy of the host country. Lack of longitudinal data has prevented much analysis of whether recent international migration is more like internal migration and not a once-for-all move with a possible return should the move prove to have been a mistake. A newly available longitudinal data set covering all immigrants to Canada since 1980 provides the opportunity to address the issues raised by the new migration. The results show that a large fraction of male immigrants who are working age, especially among skilled workers and entrepreneurs, are highly internationally mobile.
    Keywords: immigration; return migration; visa category
    JEL: J61 J11 J68
    Date: 2006
  14. By: Dirk Kohnert (GIGA Institute of African Affairs)
    Abstract: The globalized Western culture of innovation, as propagated by major aid institutions, does not necessarily lead to empowerment or improvement of the well-being of the stakeholders. On the contrary, it often blocks viable indigenous innovation cultures. In African societies and African Diasporas in Latin America, cultures of innovation largely accrue from the informal, not the formal sector. Crucial for their proper understanding is a threefold structural differentiation: between the formal and informal sector, within the informal sector, according to class, gender or religion, and between different transnational social spaces. Different innovation cultures may be complementary, mutually reinforcing, or conflicting, leading in extreme cases even to a ‘clash of cultures’ at the local level. The repercussions of competing, even antagonistic agencies of innovative strategic groups are demonstrated, analyzing the case of the African poor in Benin and the African Diasporas of Brazil and Haiti.
    Keywords: Economic development; cultural change; innovations; social structure; African Diaspora; Benin; Brazil; Haiti
    JEL: O31 Z1 E26 Z12 Z13 O57
    Date: 2006–07

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