nep-dev New Economics Papers
on Development
Issue of 2006‒09‒16
seven papers chosen by
Jeong-Joon Lee
Towson University

  1. China and the Dutch Economy, Stylised facts and prospects By Wim Suyker; Henri de Groot
  2. Brain drain and distance to frontier By Maria,Corrado di; Stryszowski,Piotr
  3. Micro Efficiency and Aggregate Growth in Chile By Raphael Bergoeing; Andrea Repetto
  4. How Corruption Hits People When They Are Down By Jennifer Hunt
  5. Immigration and Outsourcing: A General Equilibrium Analysis By Subhayu Bandyopadhyay; Howard Wall
  6. Has globalization increased inequality? By Axel Dreher; Noel Gaston
  7. Real Income Stagnation of Countries, 1960-2001 By Sanjay G. Reddy; Camelia Minoiu

  1. By: Wim Suyker; Henri de Groot
    Abstract: China’s spectacular economic performance over the past few decades has had a positive net impact on the Dutch economy. Imports of cheap Chinese products have lowered Dutch inflation. Increasing Chinese exports to Europe have strengthened the role of the Netherlands as a key European distribution centre. Strongly increasing Chinese exports did not have a noticeable impact on the pace of restructuring in the Netherlands. Nor did this development lead to higher unemployment or did it cause a marked widening of Dutch income differentials. Concerning competition on world markets, Chinese export products are more complements than substitutes for Dutch export products. The Chinese economy is expected to continue its rapid expansion. Over the next five years, Chinese exports are likely to double. Increasing trade with China will continue and is expected to enhance Dutch welfare in the upcoming years and will continue to be associated with modest increases in competition and continued restructuring on some markets.
    Keywords: China; Dutch economy; globalisation; trade; scenario analysis; FDI
    JEL: F14 F23 F40 F47 J31 O40 O57
    Date: 2006–09
  2. By: Maria,Corrado di; Stryszowski,Piotr (Tilburg University, Center for Economic Research)
    Abstract: In this paper we investigate the effects of emigration on growth in developing countries. We present a model in which productivity increases either through imitation or innovation, and both activities use the same types of human capital as inputs, albeit with different intensities. Heterogenous agents accumulate human capital responding to economic incentives, and might be able to emigrate. When no migration of skilled workers is allowed, backwards countries converge to the technological frontier. The possibility of migration, however, distorts the optimal accumulation of human capital and slows down, or even hinders, development. This effect is stronger the farther away a developing country is from the technological frontier. Thus, technologically backward countries are more likely to suffer from a negative brain drain effect. Among these countries, those which implement appropriate policies, subsidizing the accumulation of the most useful type of human capital, improve their growth performance. They converge faster, and possibly to a higher productivity level than countries where such policies are neglected.
    Keywords: Education;Migration;Human capital;Economic growth
    JEL: I28 F22 J24 O40
    Date: 2006
  3. By: Raphael Bergoeing; Andrea Repetto
    Abstract: Using plant-level data on Chilean manufacturing firms for the 1980-2001 period, we estimate and characterize disaggregate total factor productivity. We use these estimates to study the microeconomic sources of aggregate efficiency, a fundamental part of aggregate growth. By decomposing productivity dynamics into production reallocation and within plant efficiency changes, we find that reallocation accounted for almost all of total efficiency gains in Chile during the past few decades. The entry of new, more productive units explains most of these reallocation gains. Within-plant productivity growth contributes positively only during the 1990s, due perhaps to a lag between the implementation of major market oriented structural reforms -- mostly undertaken during the late 1970s and early 1980s -- and their complete effect on the economy. Our findings suggest that once reforms were consolidated, unbounded within-plant efficiency gains driven by technology adoption and innovation occurred.
    Date: 2006
  4. By: Jennifer Hunt (McGill University, NBER, CEPR, DIW Berlin and IZA Bonn)
    Abstract: Using cross-country and Peruvian data, I show that victims of misfortune, particularly crime victims, are much more likely than non-victims to bribe public officials. Misfortune increases victims’ demand for public services, raising bribery indirectly, and also increases victims’ propensity to bribe certain officials conditional on using them, possibly because victims are desperate, vulnerable, or demanding services particularly prone to corruption. The effect is strongest for bribery of the police, where the increase in bribery comes principally through increased use of the police. For the judiciary the effect is also strong, and for some misfortunes is composed equally of an increase in use and an increase in bribery conditional on use. The expense and disutility of bribing thus compound the misery brought by misfortune.
    Keywords: corruption, bribery, development
    JEL: H1 K4 O1
    Date: 2006–08
  5. By: Subhayu Bandyopadhyay (Department of Economics, West Virginia University and IZA, Bonn); Howard Wall (Federal Reserve Bank of St. Louis)
    Abstract: This paper analyzes the issues of immigration and outsourcing in a general-equilibrium model of international factor mobility. In our mode, legal immigration is controled through a quota, while outsourcing is determined both by the firms (in response to market conditions) and through policy-imposed barriers. A loosening of the immigration quota reduces outsourcing, enriches capitalists, leads to lossing for native workers, and raises national income. If the nation targets an exogenously determined immigration level, the second-best outsourcing tax can be either positive or negative. If in addition to the immigration target there is a wage target (arising out of income distribution concerns), an outsourcing subsidy is required. The analysis is extended to consider illigal immigration and enforcement policy. A higher legal immigration quota will lead to more illegal immigration if skilled and unskilled labor are complements in production. If the two kinds of labor are complements (substitutes), netional income increases (decreases) monotonically with the level of legal immigration.
    Date: 2005
  6. By: Axel Dreher (Department of Management, Technology, and Economics, ETH Zurich); Noel Gaston (Faculty of Business, Bond University, Queensland)
    Abstract: There has been no shortage of theories which purport to explain why globalisation may have, adverse, insignificant or even beneficial effects on income and earnings inequality. Surprisingly, the empirical realities remain an almost complete mystery. In this paper we use data on industrial wage inequality, household income inequality as well as measures of the economic, social and political dimensions of globalisation to examine this controversial issue. We find that the economic dimension of globalisation, and – less robustly – political integration, have exacerbated wage inequality in developed countries. In contrast, the impact of globalisation on both income and earnings inequality in less-developed countries has been negligible.
    Keywords: Income and earnings inequality; globalisation; democracy; panel regressions.
    JEL: F02 D30 O57 C82
    Date: 2006–06
  7. By: Sanjay G. Reddy; Camelia Minoiu
    Abstract: We examine the phenomenon of real-income stagnation in a large cross-section of countries during the last four decades. Stagnation is defined as negligible or negative growth extending over a number of years. We find that stagnation has affected more than three fifths of countries (103 out of 168). Stagnating countries were more likely to have been poor, in Latin America or sub-Saharan Africa, conflict ridden and dependent on primary commodity exports. Stagnation is recurrent: countries that were stagnators in the 1960s had a likelihood of 75 percent of having been stagnators in the 1990s.
    Keywords: real income stagnation, patterns of economic growth
    JEL: O10 O11 O47
    Date: 2006–09

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