nep-dev New Economics Papers
on Development
Issue of 2006‒12‒04
twenty-two papers chosen by
Jeong-Joon Lee
Towson University

  3. CHEAP HOME GOODS AND PERSISTENT INEQUALITY By Joanna Alexopoulos; Tiago V. de V. Cavalcanti
  4. PRO-POOR GROWTH AND SOCIAL PROGRAMMES IN BRAZIL By Nanak Kakwani; Marcelo Neri; Hyun H. Son
  6. SEGMENTATION IN THE BRAZILIAN LABOR MARKET By Fernando Botelho; Vladimir Ponczek
  7. ACCOUNTING FOR LABOR INCOME DIFFERENCES IN BRAZIL: THE ROLE OF HUMAN CAPITAL By Juliana Ferraz Guimarães; Tiago Cavalcanti; Raul Silveira Neto
  9. All Bad, All of the Time? Related Lending and Financial Development By Robert Cull; Stephen Haber; Masami Imai
  10. Growth Collapses By Ricardo Hausmann; Francisco Rodríguez; Rodrigo Wagner
  11. Education, Employment and Earnings of Secondary School and University Leavers in Tanzania: Evidence from a Tracer Study By Al-Samarrai, Samer; Reilly, Barry
  12. Abolishing school fees in Malawi: the impact on education access and equity By Al-Samarrai, Samer; Zaman, Hassan
  13. Unorganised Manufacturing Industry in the Era of Globalization: A Study of Punjab By Singh, Lakhwinder; Jain, Varinder
  14. Industrial Specific Resource Allocation, Incentive Differentiation and Industrial Development Order: the Function Evolvement of Jiangsu Laver Association in Anti-Trade Barrier Litigation By Zheng, Jianghuai; Jiang, Jing
  15. Development of Industrial Cluster By Kumar, Sudesh
  16. Income convergence? Evidence of non-linearity in the East Asian Economies: A comment By Liew, Venus Khim-Sen; Ahmad, Yusuf
  17. The impact of trade with China and India on Argentina’s manufacturing employment By Castro, Lucio; Olarreaga, Marcelo; Saslavsky, Daniel
  18. Globalization, national innovation systems and response of public policy By Singh, Lakhwinder
  19. Background, Assessment and Analysis of the Gender Issues in Pakistan By Moheyuddin, Ghulam
  20. Gender Inequality in Education: Impact on Income, Growth and Development By Moheyuddin, Ghulam
  21. Growth and inequalities of height in Brazil (1939-1981) By Monasterio, Leonardo M; Noguerol, Luiz Paulo
  22. An Empirical Investigation around the Finance-Growth Puzzle in China with a particular focus on causality and efficiency considerations By Maswana, Jean-Claude

  1. By: Rodrigo R. Soares
    Date: 2006
  2. By: Pedro S. Martins; Luiz Alberto Esteves
    Date: 2006
  3. By: Joanna Alexopoulos; Tiago V. de V. Cavalcanti
    Date: 2006
  4. By: Nanak Kakwani; Marcelo Neri; Hyun H. Son
    Date: 2006
  5. By: Nelson Barbosa-Filho; Codrina Rada; Lance Taylor; Luca Zamparelli
    Date: 2006
  6. By: Fernando Botelho; Vladimir Ponczek
    Date: 2006
  7. By: Juliana Ferraz Guimarães; Tiago Cavalcanti; Raul Silveira Neto
    Date: 2006
  8. By: Paulo Gala; Claudio R. Lucinda
    Date: 2006
  9. By: Robert Cull (World Bank); Stephen Haber (Stanford University); Masami Imai (Economics and East Asian Studies, Wesleyan University)
    Abstract: Does related lending, the practice of bankers extending credit to their own enterprises, help financial development by allowing bankers to assess risk ex ante and monitor borrowers ex post, or does it hinder financial development by creating a mechanism for bankers to loot their own banks? Drawing on both cross-country regressions and case studies we argue that whether related lending is positive or pernicious depends on the institutional context in which it takes place. Our results indicate that when rule of law is strong, related lending is positive for financial development. Our results also suggest when there are strong institutions of corporate governance, related lending is positive for financial development. Finally, our results suggest that depositor monitoring is positively associated with financial development, but that it is perhaps too blunt an instrument to detect when related lending is being used in ways that benefit (or hurt) banks. Taken as a group, our results indicate that there is no single “best policy” regarding related lending. Whether or not policy makers should deter bankers from extending credit to themselves and their business associates crucially depends on institutional context.
    Date: 2006–04
  10. By: Ricardo Hausmann (Harvard University); Francisco Rodríguez (Economics Department, Wesleyan University); Rodrigo Wagner (Harvard University)
    Abstract: We study episodes where economic growth decelerates to negative rates. While the majority of these episodes are of short duration, a substantial fraction last for a longer period of time than can be explained as the result of business-cycle dynamics. The duration, depth and associated output loss of these episodes differs dramatically across regions. We investigate the factors associated with the entry of countries into these episodes as well as their duration. We find that while countries fall into crises for multiple reasons, including wars, export collapses, sudden stops and political transitions, most of these variables do not help predict the duration of crises episodes. In contrast, we find that a measure of the density of a country’s export product space is significantly associated with lower crisis duration. We also find that unconditional and conditional hazard rates are decreasing in time, a fact that is consistent with either strong shocks to fundamentals or with models of poverty traps.
    Date: 2006–10
  11. By: Al-Samarrai, Samer; Reilly, Barry
    Abstract: The empirical evidence on the earnings of educated groups in Tanzania is limited. This study uses a recently completed tracer survey of secondary school completers to analyse the impact of educational qualifications on labour market earnings. Our findings suggest that the rates of return to the highest educational qualifications for wage employees are not negligible and, at the margin, provide an investment incentive. However, we find little evidence of human capital effects in the earnings determination process for the self-employment sector. Information contained in the tracer survey allowed the introduction of controls for father’s educational background and a set of school fixed effects designed to proxy for school quality and potential labour market network effects. Our analysis reveals that the inclusion of these controls in the earnings determination process is important and tends to reduce the estimated rates of return to educational qualifications. A comparison of our results with the available evidence from other countries in the region suggest that despite an extremely small secondary and university education system the private rates of return to education in the Tanzanian wage employment sector are comparatively low.
    Keywords: education; labour markets; school leavers
    JEL: J31 I2
    Date: 2006
  12. By: Al-Samarrai, Samer; Zaman, Hassan
    Abstract: In 1994, the newly elected Government in Malawi abolished primary school fees. Using household survey data from 1990/91 and 1997/98 this paper assesses the impact this major policy change, combined with increased Government spending on education, has had on access to schooling by the poor. This paper shows that enrolment rates have increased dramatically over the 1990s, at both the primary and secondary levels, and that crucially these gains have been greatest for the poor. In order to sustain and build-on these gains the paper suggests cutting back on the informal ‘contributions’ that are widely prevalent in primary school and improving the allocation of secondary school funding. Furthermore, the focus of policy reform, particularly at primary, should shift towards raising the quality of education. Finally the paper argues that careful advance planning and piloting of the reform in selected areas are useful strategies that other countries considering abolishing primary school fees could take to cope with the associated surge in enrolments.
    Keywords: Malawi; education; fee abolition; incidence analyis
    JEL: I22 I38 H52
    Date: 2000
  13. By: Singh, Lakhwinder; Jain, Varinder
    Abstract: The recent developments in the theory of industrial organisation have underlined the importance of small scale industry. Small industry can be equally competitive in the fast changing global economy provided it exploits economies of scale and scope while locating itself in clusters along with making technological progress endogenous. This study situates Punjab’s small scale industry in the context of recent developments both in theory and practice This study by utilising the NSSO data for the period 1994-95 to 2000-01 points out that Punjab’s unorganised industry has emerged distinctly among its counterparts in other major Indian states by recording sufficiently high growth in employment, relatively high usage of capital and labour productivity etc. It along with exploring the structure of Punjab’s unorganised industry has also identified major problems faced by it. Policy issues have been raised to draw the attention of the policy makers towards small industry so that it can become competitive in the fast globalising industrial economy.
    Keywords: Small Scale industry; Economies of Scale and scope; Industrial Clusters; Labour Productivity; Employment Growth; Public Policy; Indian Punjab
    JEL: L6 O4 O40
    Date: 2006
  14. By: Zheng, Jianghuai; Jiang, Jing
    Abstract: For sake of actualizing anti-trade barrier and changing the situation of price war after China’s taking part in WTO, Jiangsu laver association was founded. By using the Bayesian Cournot model, this paper analyzes the basis of trade association’s foundation is the ability of improving product quality and technique which is distributed heterogeneously in the firm of the industry. The paper defines this kind of ability as industrial specific resources which are formed during the process of industrial competition and development. Actually they are potential rents and laver firms can acquire them selectively by laver association’s enforcement of transaction rules in laver exchange office. It changes the industrial competition from reducing quality and price to upgrading quality and price and forms the basis of association’s existence. Whether the function is strong or not depends on association’s understanding of industrial specific resources and incentive benefits which is given to the member firms. It is not that association comes into being by the appearance of industrial specific resources and dies because of disappearance of industrial specific resources, but that association uses industrial specific resource into firms and it can reach a kind of separated equilibrium during the competition of improving quality and raising price. Association improves the quality of transaction governance continually and keeps the separated equilibrium maintained steadily. It makes the whole industry in good development order.
    Keywords: trade association; industrial specific resources; selective incentive
    JEL: Q13 L31 P23
    Date: 2006–08
  15. By: Kumar, Sudesh
    Abstract: After the 18th century India has been creating a ground for the SSI industry and they started taking shape of clusters. Headings Introduction and Background provides a bird’s eye view on the background of SSI clusters in India. Chapter one sets forth the literature that is relevant to understand the concept behind successful industry clusters. An effort is made to take a look at factors embedded in regional economies of and concept behind the SSIs clusters. Chapter Two focuses on the peculiarity of sickness in Indian SSI clusters taking an example of UNIDO’s cluster reformation program. Next Chapter Three is based on research and findings on famous Textile cluster of India, Tirupur. Later, Chapter Four of this paper integrates discussions on various elements of the Tirupur industry cluster based on interviews findings with entrepreneurs, using one particular industry cluster in achieving development. It deals with the some elements of Tirupur Cluster that is not paid attention to under the common cluster development program. Chapter Five highlights the selected and major policy implications affecting the SSIs clusters and finally there is the conclusion.
    Keywords: Industry Cluster; Development; Economics; Small Scale Industry
    JEL: O10
    Date: 2005–09–28
  16. By: Liew, Venus Khim-Sen; Ahmad, Yusuf
    Abstract: This study demonstrates the usefulness of Kapetanois et al. (2003) test in differentiating the two stages of income convergence—long run convergence and catching up. A re-examination of the “Four Asian Dragons” economies, in which their income differentials with respect to Japan have been identified as non-linear stationary in Liew and Lim (2005), reveals that the economy of Hong Kong, Korea and Singapore are catching up, while Taiwan has yet to catch up, with the Japan economy.
    Keywords: Income convergence; catching up; long run convergence; East Asia; non-linear unit root test
    JEL: F43 C32 O40
    Date: 2006–03
  17. By: Castro, Lucio; Olarreaga, Marcelo; Saslavsky, Daniel
    Abstract: For many in Latin America, the increasing participation of China and India in international markets is seen as a looming shadow of two ‘mighty giants’ on the region’s manufacturing sector. Are they really mighty giants when it comes to their impact on manufacturing employment? This paper attempts to answer this question estimating the effects of trade with China and India on Argentina’s industrial employment. We use a dynamic econometric model and industry level data to estimate the effects of trade with China and India on the level of employment in Argentina’s manufacturing sector. Results suggest that trade with China and India only had a small negative effect on industrial employment, even in a period of swift trade liberalization like the nineties.
    Keywords: China; Latin America; Trade; Import Competition; Trade and Labor Market Interactions; Employment
    JEL: F17 F14 F16 L60 F15
    Date: 2006–10–20
  18. By: Singh, Lakhwinder
    Abstract: Abstract This paper attempts to set the significance of public innovation policies in contemporary developing countries in the context of the fast pace of globalization. It is fairly well established both in theory and practice that investment expenditure on innovation projects is likely to be low if left in the hands of private economic agents as they have a tendency to under-invest due to the ‘public good’ nature of the outcomes of R&D. However, policy in developing economies seldom takes seriously the importance of investment in innovation projects. This has not been without far-reaching implications for the growth and development performance of developing countries in general. The paper explores the role of international institutions and national governments in the task of strengthening national innovation systems through innovative interventions at national and international levels.
    Keywords: globalization of technology role of state knowledge gaps global public good innovative strategy developing countries international institutions intellectual property rights innovation policy
    JEL: O38 O34 O3
    Date: 2006–11–01
  19. By: Moheyuddin, Ghulam
    Abstract: This paper describes the assessment of the gender issue in Pakistan, review and analysis of the major sector depicting gender inequalities. Before continuing to the detailed analysis of the gender issues in Pakistan, it gives a bird’s eye-view of the socio-economic, political and cultural background of Pakistan. The paper explains the areas of critical gender inequalities in Pakistan and reviews the various gender indicators in Pakistan. It also discusses the current policies and the programs addressing the gender issues in Pakistan and the suggests some policy recommendations to improve the women’s status in Pakistan.
    Keywords: Pakistan and Gender Issues; Assessment of gender issues in Pakistan; Gender Indicators
    JEL: R58 J16
    Date: 2005–11
  20. By: Moheyuddin, Ghulam
    Abstract: This Paper explains the causes of the Gender Inequality of education and analyze how the gender inequality in education impacts the economic growth & development, investment and population growth etc. The paper finds that the gender inequality in education is as an endogenous variable and show that it can be explained to a considerable extent by religious preference, regional factors, and civil freedom. For some of these variables, the direction of the effect depends on the particular measure of inequality. The fact that these variables systematically explain gender differentials in education and health suggests that low investment in women’s human capital is not simply an efficient economic choice for developing countries.
    Keywords: Gender Inequality in Education; Growth; Investment; Development; Gender Inequality
    JEL: J16
    Date: 2005–11
  21. By: Monasterio, Leonardo M; Noguerol, Luiz Paulo
    Abstract: This paper analyzes the heights of Brazilian people using anthropometric and economic data. The literature suggests that height is a good proxy of the material living conditions of different populations. Data indicate that the difference between the heights of 21 and 65-year-old men is approximately six centimetres. The same value, by coincidence, represents the difference in the stature of the poorest and richest quintiles. Adjusted data show an increase of 3.8 centimetres in the heights of adult male Brazilians born between 1939 and 1981. There are also stable regional differences; in the North and Northeast of the country, heights are about two centimetres lower than the national average for all groups. Regression analyses show that proxy variables related to living conditions during bodily growth, and using regional dummies, were statistically significant causes of the variation in the heights of individuals. In contrast, colour, urban/rural, and inequality variables were not significant. The results replicate what the historiography of the relation between living conditions and stature makes clear: the social environment has a significant impact on the average height of populations.
    Keywords: Anthropometrics – Inequality – Indicators of conditions of life – Height - Brazil
    JEL: O15
    Date: 2005–08
  22. By: Maswana, Jean-Claude
    Abstract: The paper explores a coherent perspective for understanding the multifaceted puzzle of China’s financial development. Specifically, it tests competing finance-growth nexus hypotheses using Granger causality tests in a VECM framework for China over the period 1980–2002. The empirical results support a complex set of bidirectional causality between the financial development proxies and economic growth variable. Additionally, bidirectional causality shows the Chinese financial system to be more driven by and closely aligned with real sector activities than exposed to speculative finance. Study findings have several policy implications. Notably, the development of financial institutions should not be emphasized unilaterally. Rather, attention should be given to the complementary and coordinated development of financial reforms and changes in other areas.
    Keywords: Financial development; economic growth; China; Granger causality
    JEL: O16
    Date: 2006–01–27

This nep-dev issue is ©2006 by Jeong-Joon Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.