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on Development |
| By: | Caselli, Francesco; Gennaioli, Nicola |
| Abstract: | We compare the economic consequences and political feasibility of reforms aimed at reducing barriers to entry (deregulation) and improving contractual enforcement (legal reform). Deregulation fosters entry, thereby increasing the number of firms (entrepreneurship) and the average quality of management (meritocracy). Legal reform also reduces financial constraints on entry, but in addition it facilitates transfers of control of incumbent firms, from untalented to talented managers. Since when incumbent firms are better run entry by new firms is less profitable, in general equilibrium legal reform may improve meritocracy at the expense of entrepreneurship. As a result, legal reform encounters less political opposition than deregulation, as it preserves incumbents' rents, while at the same time allowing the less efficient among them to transfer control and capture (part of) the resulting efficiency gains. Using this insight, we show that there may be dynamic complementarities in the reform path, whereby reformers can skillfully use legal reform in the short run to create a constituency supporting future deregulations. Generally speaking, our model suggests that 'Coasian' reforms improving the scope of private contracting are likely to mobilize greater political support because - rather than undermining the rents of incumbents - they allow for an endogenous compensation of losers. Some preliminary empirical evidence supports the view that the market for control of incumbent firms plays an important role in an industry’s response to legal reform. |
| Keywords: | deregulation; entry; legal reform |
| JEL: | G34 O11 O16 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6095&r=dev |
| By: | La Ferrara, Eliana |
| Abstract: | Traditional descent systems can roughly be divided into patrilineal and matrilineal. In the latter, a man’s heir is not his own child but rather his sister’s son. The paper examines the implications of this social norm for the pattern of inter-vivos transfers using household level data from rural Ghana, where the largest ethnic group is traditionally matrilineal. In particular, it tests the predictions of a model of strategic behaviour according to which children should respond to the threat of disinheritance by increasing transfers to their parents during lifetime to induce a donation of land before the default (matrilineal) inheritance is enforced. I find that the credibility of customary norms enforcement, as proxied by the presence of a nephew in the father’s household, significantly increases the probability of receiving transfers from children for Akans but not for other groups. The effect is specific to nephews and not to other co-resident boys. This pattern of behaviour can affect asset accumulation decisions across generations. |
| Keywords: | inter-vivos transfers; matrilineal inheritance; social norms; strategic bequests |
| JEL: | O16 O17 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6111&r=dev |
| By: | DIAL (DIAL, IRD, Paris) |
| Abstract: | Young people in Africa are confronted with many difficulties when it comes to their integration in the labour markets and their research for decent and productive jobs. Youth unemployment, which is substantially higher than global adult unemployment, has been growing in the last decade. In spite of the dramatic economic, social and political consequences of African youth employment problems, few studies focus on this population. This survey of literature stresses that a clear diagnosis of youth employment problems in African countries based on hard data and analytical research is badly needed. As shown by our research review, basic labour market indicators are lacking or are at best incomplete due to data availability and methodological problems. Worst, as illustrated in our paper, different sources lead to opposite diagnoses concerning youth unemployment and its trends. In order to contribute to this diagnosis, we present some new evidence based on the 1-2-3 Surveys recently conducted in 10 African countries, which provide a consistent and comparable picture of the situation of youth employment in urban labour markets in these countries. We also underline the diversity of the situation of youth employment on the continent (Southern Africa vs. other African countries; Anglophone vs. Francophone countries, etc.). We emphasize the “urban bias” in economic research on this subject, partly due to the lack of data on rural areas. Key Words : Youth, labour, unemployment, Africa _________________________________ Les jeunes en Afrique sont confrontés à de nombreuses difficultés pour s’intégrer dans le marché du travail et pour y trouver un emploi décent et productif. Le chômage des jeunes, qui est substantiellement plus élevé que le chômage global des adultes, a crû au cours de la dernière décennie. En définissant une cible spécifique sur le chômage des jeunes dans les Objectifs du Millénaire pour le Développement, la communauté internationale a reconnu la gravité de la situation. Toutefois, malgré les dramatiques conséquences économiques, sociales et politiques des difficultés d’emploi des jeunes africains, peu d’études s’intéressent spécifiquement à cette population. Cette revue de littérature souligne le fait qu’un diagnostic précis concernant l’emploi des jeunes en Afrique basé sur des données statistiques et une recherche analytique est cruellement nécessaire. Comme le montre notre étude, les indicateurs basiques sur le marché du travail manquent ou sont au mieux incomplets en raison du manque d’informations de bases et de problèmes méthodologiques. Pire, comme l’illustre notre papier, des sources différentes conduisent à des diagnostics opposés concernant le chômage des jeunes et ses tendances. Afin de contribuer à ce diagnostic indispensable, nous présentons de nouveaux résultats basés sur les enquêtes 1-2-3 conduites récemment dans 10 pays africains, qui procurent une image cohérente et comparable de la situation des marchés du travail urbains dans ces pays. Nous soulignons également la diversité de la situation de l’emploi des jeunes sur le continent (Afrique australe vs autres pays d’Afrique, pays anglophones vs francophones, etc.). Nous montrons enfin le « biais urbain » de la recherche économique sur ce sujet, dû en partie au manque de données sur les zones rurales. |
| Keywords: | Youth, labour, unemployment, Africa, Jeunes, travail, chômage, Afrique. |
| JEL: | C25 D60 D71 D72 I31 I32 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt200702&r=dev |
| By: | Xing, Yuqing (BOFIT) |
| Abstract: | This paper analyzes dynamic changes of China's intra-industry trade with its major trading partners, Japan and the US, from 1980 to 2004. It also investigates to what extent foreign direct investment promoted intra-industry trade. The empirical results show that, while shares of China's intra-industry trade with both Japan and U.S rose substantially, its intra-industry trade with Japan has reached 35 per cent of the overall trade, considerably larger than 10 per cent with the US. Sino-Japan intra-industry trade concentrated in the electrical and machinery sectors accounted for 52 per cent and 46 per cent of overall trade respectively. On the other hand, it is in the chemical and food sectors where intra-industry trade represented a relatively large proportion of Sino-US trade, 50 per cent and 30 per cent accordingly in each sector. In addition, the analysis indicates that Japanese direct investment in China performed a significant role in enhancing intra-industry trade between Japan and China. However, it found no evidence that the US direct investment in China contributed to the growth of the bilateral intra-industry trade between the two countries. |
| Keywords: | intra-industry trade; FDI; China |
| JEL: | F14 F23 |
| Date: | 2007–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2007_001&r=dev |
| By: | Timothy Philips |
| Abstract: | The Millennium Development Goals were announced to the world in the year 2000. Handed down by the United Nations, the Millennium Development Goals promised a new way forward for addressing global poverty on an international scale.A key ingredient for the achievement of the Millennium Development Goals was an across-the-board increase of modest scale in the level of development aid contributed by wealthy countries. Yet, while having signed up for as much, there has been a strong tendency among the rich countries towards non-compliance, accompanied by a generalised failure to offer accounts for as much (i.e. provide reassurances). It is my concern here to look at an important factor that might help in going some way towards explaining the apparent ‘bad faith' of rich countries: the state of public sentiment around global poverty. A key line of inquiry I wish to explore here is the condition of ambivalence among the citizens and residents of wealthy countries to social problems beyond national border.It is my contention that the active indifference of the rich nation-state towards global poverty occurs under conditions where there exists a complementary blasé attitudinal structure amongst its peoples. Using data from a 2005 national sample survey, this study provides information from Australia about the state of public dispositions around the Millennium Development Goals and global social problems. |
| Date: | 2007–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp202&r=dev |
| By: | Charles Augustine Abuka; Michael Atingi-Ego; Jacob Opolot; Patrick Okello |
| Abstract: | Ugandan data shows poverty to be entrenched in rural areas and in large households. Households with heads exposed to education, an improved health status, less reliance on agriculture as the most important source of earnings, access to electricity for lighting and, the presence of markets to sell produce in the community experience improved household well-being. The data also confirms two known stylized facts regarding poverty vulnerability. First, households in the Northern region have a higher probability of being poor than those in Central, Eastern, and Western regions. Second, the ‘annual cropping and cattle northern' and ‘annual cropping and cattle Teso' zones are the agro ecological zones that are positively correlated with poverty vulnerability . The fact that residence in rural areas is associated with higher incidence of poverty suggests that promotion of off-farm employment (for example, through rural electrification) would help reduce vulnerability. |
| Keywords: | Poverty vulnerability, logistic regression, Uganda |
| Date: | 2007–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp203&r=dev |
| By: | Thomas Masterson |
| Abstract: | This paper examines the claim that the land rental market can be an effective means of redistributing access to, if not ownership of, land to the rural poor, using Paraguay as our model. The land sales market is also examined. The land rental market in ParaguayÕs rural areas is found to be very thin, due at least in part to a lack of available credit for inputs. Renting-in substantial amounts of land is found to contribute significantly to household per-capita income. |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_491&r=dev |
| By: | Clara Delavallade (Centre d'Economie de la Sorbonne) |
| Abstract: | This paper empirically analyzes the main microeconomic determinants of different forms of corruption supply. Our study is based on a new database of near 600 Algerian, Moroccan and Tunisian firms. We show that the undeclared part of firms' sales is a major factor of their involvement in administrative corruption. The latter increases with the part of the firm's informal activity as far as it is inferior to 55% of total sales, before slightly decreasing. State capture is rather strengthened by a failing enforcement of property and contract rights. Moreover, both forms of corruption help to compensate a loss of competitiveness, which contradicts previous results on this issue. Finally, we draw a comparison of the factors of corruption in North Africa, Uganda and transition countries and derive policy recommendations. |
| Keywords: | Supply of corruption, administrative corruption, state capture, informal activity, competitiveness, North Africa. |
| JEL: | C2 D73 O17 H32 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:v07002&r=dev |
| By: | John Whalley; Li Wang |
| Abstract: | Currently proposals are actively circulating in China to move to a unified enterprise tax structure with similar tax treatment of state-owned enterprises (SOEs), other private enterprises (OPE) and foreign investment enterprises (FIEs). FIEs presently receive significant tax preferences through a sharply lower tax rate, tax holidays and other provisions. Here we use analytical representations of SOE behavior, which differ from that of the competitive firm, to argue that a unified tax structure may not be a desirable tax change and that typically a higher tax rate on SOEs is called for on efficiency grounds. Using a worker control model with endogenously determined shirking, taxes on SOEs reduce shirking and a reduced SOE tax rate under a unified tax relaxes discipline on SOEs and losses result. Our results indicate a 0.26% of GDP welfare loss using 2004 data from a unified tax, and larger loss relative to an optimal tax scheme. Alternatively, if we use a managerial control model variant, we find a 0.19% welfare loss from a unified tax, and larger losses relative to initial higher SOE tax rates. |
| JEL: | H2 P3 P35 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12899&r=dev |
| By: | Abhijit Banerjee; Lakshmi Iyer; Rohini Somanathan |
| Abstract: | This paper focuses on the relationship between public action and access to public goods. It begins by developing a simple model of collective action which is intended to capture the various mechanisms that are discussed in the theoretical literature on collective action. We argue that several of these intuitive theoretical arguments rely on special additional assumptions that are often not made clear. We then review the empirical work based on the predictions of these models of collective action. While the available evidence is generally consistent with these theories, there is a dearth of quality evidence. Moreover, a large part of the variation in access to public goods seems to have nothing to do with the "bottom-up" forces highlighted in these models and instead reflect more "top-down" interventions. We conclude with a discussion of some of the historical evidence on top-down interventions. |
| JEL: | H41 O12 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12911&r=dev |
| By: | Eric V. Edmonds |
| Abstract: | In recent years, there has been an astonishing proliferation of empirical work on child labor. An Econlit search of keywords "child lab*r" reveals a total of 6 peer reviewed journal articles between 1980 and 1990, 65 between 1990 and 2000, and 143 in the first five years of the present decade. The purpose of this essay is to provide a detailed overview of the state of the recent empirical literature on why and how children work as well as the consequences of that work. Section 1 defines terms commonly used in the study of child time allocation and provides a descriptive overview of how children spend their time in low income countries today. Section 2 reviews the case for attention to the most common types of work in which children participate, focusing on that work's impact on schooling, health, as well as externalities associated with that work. Section 3 considers the literature on the determinants of child time allocation such as the influence of local labor markets, family interactions, the net return to schooling, and poverty. Section 5 discusses the limited evidence on different policy options aimed at influencing child labor. Section 6 concludes by emphasizing important research questions requiring additional research such as child and parental agency, the effectiveness of child labor policies, and the determinants of participation in the "worst forms" of child labor. |
| JEL: | J13 J22 O15 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12926&r=dev |
| By: | Dr Sukhan Jackson; Xiaoyun Sun1; Gordon Carmichael; Adrian C. Sleigh1. (School of Economics, The University of Queensland) |
| Abstract: | In 2005, from a stratified cluster sample of 3,101 rural households we identified 375 households that might be at risk of catastrophic payments, by searching through NCMS claims and interviewing key informants. We interviewed these 375 households and confirmed that 239 had had catastrophic payments (= 40% of the household’s capacity to pay) during 2004. A validity test of our screening method found another 8 cases among immediate neighbours of these 375 households; by extrapolation, we obtained an adjusted total of 289 catastrophic households in the sample of 3,101. We measured the impact of the NCMS on hardship alleviation by counterfactual analysis, comparing catastrophic payments before and after NCMS reimbursements. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:344&r=dev |
| By: | Mustafizur Rahman; Asif Anwar |
| Abstract: | The paper tries to focus whether China's ascendancy will have any tangible impact on Bangladesh's export oriented RMG sector and identifies some of the apparel categories in which both the countries have common interests in the US market by analyzing the RCA index and recent performance of both the countries in view of the recent US-China MoU. The paper tries to assess the impact of China's accession to the WTO on Bangladesh's export oriented apparels sector by undertaking an indepth examination of the relative competitiveness correlates of Bangladesh and China in the US market and study their implications for Bangladesh's apparels export to the US market. Towards this, the study investigates the export performance of Bangladesh and China in the US market and price dynamics, and identifies the sources of strengths and weaknesses of Bangladesh vis-à-vis China. |
| Keywords: | Apparels, Export, US market, China, Bangladesh |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:opaper:62&r=dev |
| By: | Johan Fourie (Department of Economics, University of Stellenbosch) |
| Abstract: | The emphasis, both in research and in policy making, seems to be on more infrastructure, rather than better infrastructure. This research note aims to critically analyse the lack of quality indicators in infrastructure empirics and to redirect attention to improving infrastructure quality in its various forms in South Africa. |
| Keywords: | Infrastructure, South Africa, quality, international trade, port facilities, binding constraints |
| JEL: | H54 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers34&r=dev |
| By: | Ramos Mabugu (Financial and Fiscal Commission, South Africa); Margaret Chitiga (Department of Economics, University of Pretoria) |
| Abstract: | The debate about the consequences of economic growth on poverty and welfare was recently rekindled in South Africa by announcements that the government would be targeting a sustainable growth rate of 6 percent per annum under the Accelerated and Shared Growth Initiative for South Africa (ASGISA). This paper uses a sequential dynamic computable general equilibrium model linked to a nationally representative household survey to assess the poverty and economic consequences of a higher economic growth scenario. The main findings are that higher economic growth induces reductions in poverty both in the short and long run. It enhances capital accumulation, particularly in the agriculture and textiles sectors. An interesting observation is that the Mining industry benefits the least from a high economic growth scenario. However, this is not related to domestic savings/investment. Mining is strongly dependent on foreign investments and the industry return to capital is less profitable to domestic institutions, particularly households and this is what explains the lower benefits to the sector. African and Coloured households reap most of the benefits, with greater gains among urban unskilled dwellers. These findings suggest that lifting of growth constraints rather than macroeconomic stimulation would induce higher growth with the resulting beneficial effects. Economic growth of the levels simulated does not appear to be inconsistent with macroeconomic balance, as reflected in price stability, balance of payments and sectoral effects. |
| Keywords: | Sequential dynamic CGE, microsimulation, ASGISA, poverty, welfare, growth, South Africa |
| JEL: | D58 E27 F17 I32 O15 O55 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers35&r=dev |
| By: | Pierre de Villiers (Department of Economics, University of Stellenbosch); Gert Steyn (Institutional Planning Division, University of Stellenbosch) |
| Abstract: | Higher education displays characteristics of both private and public goods and there is a trend worldwide to expect individuals to pay more of the costs of their higher education. In South Africa public funding of higher education decreased from 0.86% of GDP in 1986 to only 0.66% in 2006. Due to the decrease in state appropriations, student tuition fees had to be increased to compensate for this loss of income. In the process staff numbers were kept relatively constant, while student numbers increased at a much faster rate. Two future scenarios, based on public higher education expenditure as a percentage of GDP and on real state allocation per WFTES, are included. Although the qualifications awarded per FTE academic staff member increased over time, the graduation rates of the higher education institutions in South Africa are worsening. High-level research, measured in publication units per FTE academic staff member, shows a disturbing decreasing trend since 1997. |
| Keywords: | Higher education, education financing, qualifications |
| JEL: | H52 I22 I23 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers36&r=dev |
| By: | Rossana Patrón (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República) |
| Abstract: | The paper argues that a comprehensive evaluation of education reform in particular in developing countries needs considering the triangle’ quality-quantity-equity of educational policies in the short, medium and long term in a broader context than the education system itself. There is no simple “recipe” for improving quality and internal and external efficiency in the public education system but some general results are found. Firstly, that the elasticity of the return of the reform is decreasing with the size of increased budget, making anti-economical the reliance on a reform consisting in more resources only to significantly improve the poor performance of the system. Indeed, very modest target set to improve the system performance, would require -without more sophisticated policies- huge increments in budget with a poor return. In this sense the paper investigate the capacity of focused policies to improve the productivity of the education expenditure, in particular toward basic education or the disadvantaged students. Secondly, the timing of the reform matters: most policies with very different return in the long term are almost undistinguishable by their short run merits, and policies that are more productive in the short term may be less convenient than competing alternatives in the longer term, so the actual policy may be influenced by the time horizon chosen by the policy makers. Thirdly, effects of the reform are accumulative, and to evaluate the reform by modest, in general, short run merits is myopic and may put the reform at risk of reversion or to deter future investment in the sector. |
| Keywords: | public education, developing countries, development of human resources |
| JEL: | I28 O15 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:1106&r=dev |
| By: | Graciela Sanromán (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República) |
| Abstract: | In this paper we analyze the economic returns to schooling in Uruguay. Instrumental variables are used to estimate mean and quantile regressions. An indicator of whether an Internet connection is available at home is used as an instrument for the years of schooling of the household head. The evidence shows that the simple Mincer OLS estimates are downward biased. When estimates are controlled for measurement error in schooling reports the results indicate that an additional year of schooling increases wage rates by 22 percent. |
| Keywords: | returns to schooling, schooling premium |
| JEL: | C13 I21 J24 J31 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:1406&r=dev |
| By: | Carlos Casacuberta (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Néstor Gandelman (Universidad ORT, Uruguay) |
| Abstract: | Using a panel of Uruguayan manufacturing firms we analyze the adjustment process in capital, blue collar and white collar employment. Our results confirm the lumpy nature of factor adjustment, the relevance of nonlinearities and the interdependence between factor shortages. The average annual estimated output gap due to adjustment cost for1982-1995 was 2%. Trade openness affected the adjustment functions of all three factors. Highly protected sectors adjust less when creating jobs (reducing labor shortages) than sectors with low protection. This may be due to fears of policy reversal in highly protected sectors. Also, highly protected sectors adjust more easily (than low protection sectors) when destroying jobs (reducing labor surpluses), especially in the case of blue collar labor. This suggests that trade protection may in fact destroy rather than create jobs within industries, as firms in highly protected sectors are more reluctant to hire and more ready to fire than firms in sectors with low protection. The results for capital are qualitatively similar but quantitatively smaller. Overall the impact of higher international exposure is larger for blue collar workers than white collar workers. |
| Keywords: | Adjustment costs, Adjustment functions, Openness |
| JEL: | F16 E22 J23 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:1806&r=dev |
| By: | Jeremy Greenwood (University of Pennsylvania); Juan M. Sanchez (University of Rochester); Cheng Wang (Iowa State University) |
| Abstract: | How does technological progress in financial intermediation affect the economy? To address this question a costly-state verification framework is embedded into a standard growth model. In particular, financial intermediaries can invest resources to monitor the returns earned by firms. The inability to monitor perfectly leads to firms earning rents. Undeserving firms are financed, while deserving ones are under funded. A more efficient monitoring technology squeezes the rents earned by firms. With technological advance in the financial sector, the economy moves continuously from a credit-rationing equilibrium to a perfectly efficient competitive equilibrium. A numerical example suggests that finance is important for growth. |
| Keywords: | financial intermediation, economic development, costly state verification |
| JEL: | E13 O11 O16 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:eag:rereps:14&r=dev |
| By: | Osakwe, Patrick N.; Ben Hammouda, Hakim |
| Abstract: | Access to finance is critical to successful development in Africa. This paper presents recent trends in various aspects of development finance and provides a critical assessment of the costs of meeting the Millennium Development Goals in the region. It also examines recent proposals for financing the MDGs. Furthermore, it examines the key international commitments made to Africa as well as the extent to which donors have fulfilled these commitments. Finally, it examines issues and challenges arising from recent initiatives on aid and debt. |
| Keywords: | Development; Finance; MDGs; Africa; Trends |
| JEL: | O1 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1815&r=dev |
| By: | Rao, B. Bhaskara; Gounder, Rukmini |
| Abstract: | Mankiw, Romer and Weil (1992) have extended the Solow (1956) model by augmenting the production function with human capital. Its empirical success is impressive and it showed a procedure to improve the explanatory power of the neoclassical growth model. This paper suggests an empirical procedure to further extend the neoclassical growth model to distinguish between the growth and level effects of shift variables like the human capital. We use time series data from Guatemala to show that while the growth effects of education are small, they are significant and dominate the level effects. |
| Keywords: | Solow Growth Model; Production Function; Shift Variables; Human Capital Level and Growth Effects |
| JEL: | O15 O30 O47 O54 |
| Date: | 2007–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1841&r=dev |
| By: | Arcand, Jean-Louis; d'Hombres, Beatrice |
| Abstract: | When market structure is complete, factor demands by households will be independent of their characteristics, and households will take their production decisions as if they were profit-maximizing firms. This observation constitutes the basis for one of the most popular empirical tests for complete markets, commonly known as the “separation” hypothesis. In this paper, we show that all existing tests for separation using panel data are potentially biased towards rejecting the null-hypothesis of complete markets, because of the failure to adequately control for unobservable individual effects. Since the variable on which the test for separation is based cannot be identifed in most panel datasets following the usual covariance transformations, and is likely to be correlated with the household-specific effect, neither the within nor the variance-components procedures are able to solve the problem. We show that the Hausman-Taylor (1981) estimator, in which the impact of covariates that are invariant along one dimension of a panel can be identifed through the use of covariance transformations of other included variables that are orthogonal to the household-specific effects as instruments, provides a simple solution. Our approach is applied to a rich Tunisian dataset in which separation -and thus the null of complete markets- is strongly rejected using the standard approach, but is not rejected once correlated unobservable household-specific effects are controlled for using the Hausman-Taylor instrument set. |
| Keywords: | Panel data; household-specific effects; household models; testing for incomplete markets; development microeconomics; Tunisia |
| JEL: | D13 O12 D52 C23 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1863&r=dev |
| By: | Marla, Ripoll; Juan, Cordoba |
| Abstract: | Most education around the globe is public. Moreover, investment rates in education as well as schooling attainments differ substantially across countries. We construct a general equilibrium life-cycle model that is consistent with these facts. We provide simple analytical solutions for the optimal educational choices, which may entail pure public provision of education, and their general equilibrium effects. We calibrate the model to fit cross-country evidence on demographics and educational variables. The model is able to replicate a number of key regularities in the data beyond the matching targets. We use the model to identify and quantify sources of world income differences, and find that demographic factors, in particular mortality rates, explain most of the differences. We also use the model to the role of public education and the HIV/AIDS pandemic in development. |
| Keywords: | education; human capital; development; public education; income differences |
| JEL: | I22 J24 O11 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1864&r=dev |
| By: | SBP (Strategic Business Partnerships for Growth in Africa) |
| Abstract: | Abstract: The paper aims to identify the impacts of sector-specific policies and regulations on the growth of – and job creation by – SMEs in eight sectors of the South African economy. Where appropriate and, where possible, impacts are quantified. The aim is also to develop suggestions for policy changes and regulatory reforms which would reduce the regulatory cost burden on these SMEs and permit them to grow and take on workers more readily. The paper contains descriptions of sector-specific policies and regulations in the eight selected sectors, qualitative assessment of the impacts of sector-specific policies and regulations on SMEs in the the selected sectors, quantitative assessment of these impacts and suggestions are made for policy changes and reforms to the sector-specific regulatory environments of the selected sectors. The eight sectors are agri-processing, the automotive industry, clothing and textiles, financial services, information and communications technology (ICT), mining, pharmaceuticals and tourism. |
| Keywords: | Sector-Specific Policies and Regulations, SMEs |
| JEL: | A1 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:9606&r=dev |
| By: | Jeremy Wakeford (School of Economics, University of Cape Town) |
| Abstract: | Abstract: The past two decades have witnessed an unprecedented globalisation of trade in goods and services. This process has been driven, inter alia, by technology, ideology and the availability of relatively cheap energy. By extrapolating this trend, one may expect further integration of world markets and increasingly unhindered international trade. However, there is mounting evidence of significant risks to global trade, at least in goods and possibly in certain services as well. Three main risk areas are identified here: (1) fossil fuel depletion, in particular a possible peak in world oil production within the next five to ten years; (2) climate change, and especially its effects on agricultural production, transport and financial risk; and (3) instability in the world financial system caused primarily by the US’s unsustainable twin deficits. The paper explores some possible implications of these risks for the South African economy and its foreign trade in particular. It argues that South Africa’s trade policy should take due cognizance of these threats, and advocates adaptation and mitigation strategies designed to improve self-sufficiency and to protect the poor in sensitive areas, especially food and energy security. |
| Keywords: | Sector-Specific Policies and Regulations, SMEs |
| JEL: | A1 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:9607&r=dev |
| By: | Marcelo Medeiros (International Poverty Centre); Joana Costa (International Poverty Centre) |
| Abstract: | We propose two different concepts of feminization of poverty and analyze household survey data to verify if there is an ongoing feminization of poverty in eight Latin American countries, according to each of these concepts. We also verify if our results respond to changes in values of poverty lines and to different scenarios of intra-household inequalities, concluding that poverty may be higher among women, but there is no clear evidence of a recent and widespread feminization of poverty in the countries studied. |
| Keywords: | Feminization of poverty, Gender inequalities, Poverty, Female headed households, Latin America |
| JEL: | I3 D31 H2 H3 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0020&r=dev |
| By: | Fabio Veras Soares (International Poverty Centre, UNDP/IPEA); Sergei Soares (International Poverty Centre, UNDP/IPEA); Marcelo Medeiros (International Poverty Centre, UNDP/IPEA); Rafael Guerreiro Osorio (International Poverty Centre, UNDP/IPEA) |
| Abstract: | This paper evaluates the contribution of cash transfer programmes to the observed fall in inequality in Brazil between 1995 and 2004 as well as its impact on poverty. We use the 2004 Brazilian National Household Survey (PNAD) that for the first time collected data on the incidence of some of the cash transfer programmes. We develop a methodology to separate out the income of different cash transfer programs, cross-check the survey information with administrative records, evaluate the incidence of the programmes, calculate their concentration indexes and decompose the Gini index into the contribution of each income source. We find that both BPC – the means tested old age pension and disability grant programme – and Bolsa Família are quite well targeted: 74% of BPC reported income and 80% of Bolsa Família reported income goes to families living below the poverty line (half of minimum wage per capita), and that they were jointly responsible for 28% of the fall in the Gini inequality between 1995 and 2004 (7% from BPC and 21% from Bolsa Família). This contribution is quite sizable since BPC and Bolsa Família together account for a tiny 0.82% of the total family income reported in the National Household Survey. It is also striking that pensions equal to the minimum wage – contributory or not – contributed 32% to the fall in the Gini index, but this better performance was due to the fact that they make up 4.6% of the total family income. |
| Keywords: | Income distribution, Cash tranfer programmes, Poverty |
| JEL: | D31 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0021&r=dev |
| By: | Kate Bayliss (Independent Consultant, Sussex, United Kingdom); Tim Kessler (Centro de Investigación para el Desarrollo, A.C. Mexico City, Mexico) |
| Abstract: | Basic services are essential to reducing poverty and improving quality of life. This working paper focuses on health, education, energy and water. These services contribute to achieving the Millennium Development Goals, as well as being goals in themselves. Over the past twenty years or so, the way in which these services are provided has been subject to considerable policy debate. There has been widespread questioning of the ability of the public sector to effectively deliver such services. Largely as a result, market-oriented solutions have been promoted as a means to overcome apparent constraints posed by state-provided services. Notwithstanding the weaknesses of state provision in many countries and localities, this working paper argues that reliance on private sector provision will fail to address the central challenges of public sector delivery. Furthermore, the process of privatisation creates an incentive framework that undermines, rather than strengthens, the accountability and capacity of the State to provide accessible and affordable services. In addition, the paper argues that the adoption of full cost recovery policies can seriously threaten achievement of the MDGs. This position does not constitute a blanket statement against private sector participation in public services or against user fees. Rather, it maintains that market-led policies fail to contribute to the MDGs and often reduce the likelihood of achieving them. Strengthening the State in assuming central responsibility for providing essential public services will help correct these setbacks. |
| Keywords: | Privatisation, Millennium Development Goals, Public Services, Poverty |
| JEL: | D31 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0022&r=dev |
| By: | Alex Izurieta (Cambridge Endowment for Research in Finance, University of Cambridge, United Kingdom); Terry McKinley (International Poverty Centre, United Nations Development Programme) |
| Abstract: | This working paper uses a revived ‘world trade and income model’ to examine three markedly different scenarios of the world economy. It presents criticisms of the first scenario, the ‘Consensus Growth Forecast’, which is an optimistic scenario for future global growth utilized by U.S. policymakers and international financial institutions. This forecast assumes that the gross macroeconomic imbalances currently plaguing the world economy will be resolved, in due course, by market forces—without recourse to major policy interventions. The working paper maintains, instead, that a second scenario—namely, a recession in the U.S. economy (precipitated by a drop in unsustainable household spending) and a marked slowdown in global growth—is much more plausible. In order to avoid such an adverse outcome, the working paper examines the feasibility of a third scenario, a ‘Coordinated Growth Scenario’. The paper maintains that this scenario could launch the U.S. economy on a more sustainable economic path, increase growth in other developed countries and enable developing countries to benefit disproportionately, i.e., achieve rapid ‘catch-up’ rates of growth. This third scenario is based on more expansionary macroeconomic policies, increased investment in manufacturing capacities in developing countries, greater trade integration among developing countries and greater reliance on measures to promote energy savings. While the third scenario is both feasible and desirable, it will entail major structural changes and increased policy coordination across countries. |
| Keywords: | Globalization, Global imbalances, Development, Macroeconomic policies, Poverty |
| JEL: | D31 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0023&r=dev |
| By: | Nanak Kakwani (International Poverty Centre, United Nations Development Programme); Hyun H. Son (International Poverty Centre, United Nations Development Programme); Richard Hinz (World Bank) |
| Abstract: | This study is concerned with old-age poverty in Kenya. It is also concerned with strengthening and developing social pension programs for the elderly. In this study, we develop precise socioeconomic and demographic profiles of the elderly in Kenya from the viewpoint of providing policy-makers with information that may be useful in the reform and expansion of the pension system. It also analyzes the impact of current pension systems on poverty among elderly and national poverty. Further, the current study evaluates the potential effects that alternative policies and targeting alternatives may be expected to have on poverty within the country. |
| Keywords: | Poverty, Social pensions, Kenya |
| JEL: | D31 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0024&r=dev |
| By: | Sanjay G. Reddy (Dept. of Economics, Barnard College, Columbia University); Camelia Minoiu (Dept. of Economics and Institute for Social and Economic Research and Policy, Columbia University) |
| Abstract: | This Working Paper investigates how estimates of the extent and trend of consumption poverty in China between 1990 and 2001 vary as a result of alternative plausible assumptions concerning the poverty line and estimated levels of consumption. The exercise is motivated by the existence of considerable uncertainty about the appropriate poverty lines to apply and the level and distribution of resources in China. Our methodology focuses on the following sources of variation: alternative purchasing power parity conversion factors (used to convert an international poverty line), alternative estimates of the level and distribution of private incomes, alternative estimates of the propensity to consume of lower income groups, and alternative consumer price indices. It is widely believed that substantial poverty reduction took place in China in the 1990s, and we find this conclusion to be robust to the choice of assumptions. Moreover, there is no evidence that the rate of poverty reduction declined over time. China’s record of reducing consumption poverty has been dramatic. However, estimates of the extent of Chinese poverty in any year are greatly influenced by the assumptions made. The choice among these estimates is likely to have large implications for the perceived extent and trend of world poverty. |
| Keywords: | Consumption poverty, China, Sensitivity analysis |
| JEL: | I32 D31 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0025&r=dev |
| By: | Nanak Kakwani (International Poverty Centre, United Nations Development Programme); Marcelo Neri (FGV, Centre for Social Policies - IBRE and EPGE); Hyun H. Son (International Poverty Centre, United Nations Development Programme) |
| Abstract: | From a methodological point of view, this paper makes two contributions to the literature. One contribution is the proposal of a new measure of pro-poor growth. This new measure provides the linkage between growth rates in mean income and in income inequality. In this context, growth is defined as pro-poor (or anti-poor) if there is a gain (or loss) in the growth rate due to a decrease (or increase) in inequality. The other contribution is a decomposition methodology that explores linkages between three dimensions: growth patterns, labour market performances, and social policies. Through the decomposition analysis, growth in per capita income is explained in terms of four labour market components: the employment rate, hours of work, the labour force participation rate, and productivity. We also assess the contribution of different non-labour income sources to growth patterns. The proposed methodologies are then applied to the Brazilian National Household Survey (PNAD) covering the period 1995-2004. This paper analyzes the evolution of Brazilian social indicators based on per capita income, exploring links with adverse labour market performance and social policy change, with particular emphasis on the expansion of targeted cash transfers and on devising more pro-poor social security benefits. |
| Keywords: | Inequality, Poverty, Growth, Pro-poor Growht, Labour Market, Social Policy, Brazil |
| JEL: | I32 D31 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0026&r=dev |
| By: | Sanjay Reddy (Dept. of Economics, Barnard College, and Institute for Social and Economic Research and Policy, Columbia University); Sujata Visaria (Dept. of Economics, Boston University); Muhammad Asali (Dept. of Economics, Columbia University) |
| Abstract: | We argue that inter-country comparisons of income poverty based on poverty lines uniformly reflecting the costs of the basic requirements of human beings are superior to the existing money-metric approaches. In this exercise, we implement a uniform approach to poverty assessment based on basic human capabilities for three countries: Nicaragua, Tanzania, and Vietnam. We compute standard errors of the resulting poverty estimates and compare the incidence of poverty across these three countries. The choice of approach affects both cardinal estimates and ordinal rankings of poverty across countries and over time. Meaningful and coherent inter-country poverty comparisons can be advanced through international co-ordination in survey design and in the construction of income poverty lines that uniformly reflect the costs of the basic requirements of human beings. |
| Keywords: | Poverty, Inter-Country comparisons, Capability approach |
| JEL: | I32 D31 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0027&r=dev |
| By: | Nanak Kakwani (International Poverty Centre, United Nations Development Programme); Hyun H. Son (International Poverty Centre, United Nations Development Programme) |
| Abstract: | The main objective of this study is to compute an international poverty threshold based on the food requirement to ensure an adequate calorie intake for the world’s poorest. The study proposes a new methodology based on consumer theory to provide a caloric based international poverty threshold. Using this methodology, the international poverty line is estimated to be equal to $1.22 in 1993 PPP exchange rates. According to this new yardstick, almost 1.37 billion people were poor around the world in 2001. The study also provides global estimates of hunger, according to which 13.28 percent of the world population – equivalent to 687 million people – suffered from hunger in 2001. |
| Keywords: | Poverty, Purchasing power parity, Global estimates |
| JEL: | I32 D31 O53 O57 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0029&r=dev |
| By: | Julia Johannsen (Department of Agricultural Economics and Rural Development, University of Goettingen, Germany) |
| Abstract: | The measurement of per capita daily expenditures relative to a monetary poverty line, also known as ‘sophisticated means testing’, is the most widely used approach to poverty assessment. However, it is reliant on the implementation of time- and cost-intensive household surveys. Hence, for operational purposes, it is not an effective method for targeting poor households with development services. This paper shows how to identify an alternative poverty assessment tool for Peru. The tool consists of a maximum of 15 indicators that are powerful predictors of per capita household expenditures. The indicators were selected out of a wide range of indicators used to gauge different poverty dimensions. The resultant poverty classification of households is based on the ‘percent point function’ of the predicted expenditures and validated by various accuracy measures and their confidence intervals. The results reveal that the 15 indicators correctly identify over 81 per cent of poor households when the national poverty line is employed as the benchmark. Thus, this tool might be considered, under certain conditions, as an alternative to the collection of detailed expenditure data. It offers an operational instrument for fairly accurate ex-ante poverty targeting and ex-post impact assessments. |
| Keywords: | Poverty targeting, Targeting accuracy, Expenditure predictions, Percent point function, Latin America, Peru |
| JEL: | I32 D31 O53 O57 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0030&r=dev |
| By: | Hyun H. Son (International Poverty Centre, United Nations Development Programme); Nanak Kakwani (International Poverty Centre, United Nations Development Programme) |
| Abstract: | The main objective of the present paper is to present a cross-country analysis of pro-poor growth in 80 countries in 237 growth spells during the period 1984-2001. To achieve this objective, the paper proposes a new measure of pro-poor growth that captures gains and losses of growth rates due to changes in the distribution of consumption. The gains imply pro-poor growth, while the losses imply anti-poor growth. The statistical test carried out in the paper shows that regional location of countries has a significant association with the pro-poorness of growth. The paper also attempts to test for the association between growth patterns and certain variables that the literature has identified as significant determinants of growth and inequality. Out of many variables, the paper focuses on four, namely, inflation, the share of agriculture in GDP, openness to trade, and the rule of law. |
| Keywords: | Pro-Poor Growth, Growth, Poverty, Global estimates |
| JEL: | O40 I32 D31 O53 O57 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0031&r=dev |
| By: | Phillippe G. Leite (World Bank Research Department and Previous Research and Consultant for the International Poverty Centre, United Nations Development Programme); Terry McKinley (International Poverty Centre, United Nations Development Programme); Rafael Guerreiro Osorio (International Poverty Centre, United Nations Development Programme) |
| Abstract: | This paper examines the trend in post-Apartheid earnings inequality in South Africa. By combining data sets, the paper is able to analyze the trend for the whole period 1995-2004. Earnings inequality rose sharply during 1995-1999 and then declined marginally, but remained high, during 2000-2004. A dramatic rise in unemployment was the driving force in exacerbating earnings inequality in the 1990s. Unemployment began to level off in the 2000s but remained at a high rate. An unprecedented influx of new entrants into the formal labour market in the 1990s put downward pressure on average real wages, affecting workers both in the middle of the distribution and toward the bottom. The growth of the South African economy has been neither rapid enough nor employment-intensive enough to absorb such a large influx of workers. Moreover, the economy’s greater openness to trade and financial flows appears to have left many workers behind, especially Africans, workers in low-skilled occupations, residents of rural areas in general and poor regions in particular. Earnings inequality remains high across groupings of workers differentiated by race, education and occupation although occupation has become a more important factor than the other two in the 2000s. Differentials across the mean earnings of workers classified by rural and urban residence and by province have also intensified. In the 1990s, inequalities within groupings of worker rose sharply and then moderated by the 2000s. While earnings differentials by race and the rural-urban divide also exacerbated inequality in the 1990s, they have been in modest decline since then. These changes in the dynamics of earnings inequality between the 1990s and 2000s pose new challenges for South African policymakers in their efforts to substantially reduce the Apartheid legacy of high inequality and poverty. |
| Keywords: | South Africa, Income distribution, Earnings distribution, Inequality |
| JEL: | I32 D31 N36 O15 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0032&r=dev |
| By: | Hyun H. Son (International Poverty Centre, United Nations Development Programme); Nanak Kakwani (International Poverty Centre, United Nations Development Programme) |
| Abstract: | This paper develops a methodology to measure the impact of price changes on poverty measured by an entire class of additive separable poverty measures. This impact is captured by means of price elasticity of poverty. The total effect of changes in price on poverty is explained in terms of two components. The first component is the income effect of the change in price and the second is the distribution effect captured by the price changes. It is the distribution effect which determines whether the price changes benefit the poor proportionally more (or less) than the non-poor. This paper also derives a new price index for the poor (PIP). While this index can be computed for any poverty measures, our empirical analysis applied to Brazil is based on three poverty measures, the head-count ratio, the poverty gap ratio and the severity of poverty. The empirical results show that price changes in Brazil during the 1999-2006 period have occurred in a way that favors the non-poor proportionally more than the poor. Nevertheless, during the last 2-3 years the price changes have favored the poor relative to the non-poor. |
| Keywords: | Inflation, Price elasticity, Money metric utility, Price index for the poor |
| JEL: | B41 D11 D12 E31 I32 O54 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0033&r=dev |
| By: | Angus Deaton (Princeton University) |
| Abstract: | People in poor countries live shorter lives than people in rich countries so that, if we scale income by some index of health, there is more inequality in the world than if we consider income alone. Such international inequalities in life expectancy decreased for many years after 1945, and the strong correlation between income and life-expectancy might lead us to hope that economic growth will improve people’s health as well as their material living conditions. I argue that the apparent convergence in life expectancies is not as beneficial as might appear, and that, while economic growth is the key to poverty reduction, there is no evidence that it will deliver automatic health improvements in the absence of appropriate conditions. The strong negative correlation between economic growth on the one hand and the proportionate rate of decline of infant and child mortality on the other vanishes altogether if we look at the relationship between growth and the absolute rate of decline in infant and child mortality. In effect, the correlation is between the level of infant mortality and the growth of real incomes, most likely reflecting the importance of factors such as education and the quality of institutions that affect both health and growth. |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cheawb:deaton_wider_final_annual_lecture_all&r=dev |
| By: | Alejandro Portes (Princeton University) |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cmgdev:wp0607&r=dev |
| By: | Alejandro Portes (Princeton University); Steven Shafer (Princeton University) |
| Abstract: | We review the empirical literature on ethnic economic enclaves after the concept was formulated twenty-five years ago. The balance of this literature is mixed, but many studies reporting negative conclusions were marred by faulty measurement of the concept. We discuss the original theoretical definition of enclaves, the hypotheses derived from it, and the difficulties in operationalizing them. For evidence, we turn to census data on the location and the immigrant group that gave rise to the concept in the first place – Cubans in Miami. We examine the economic performance of this group, relative to others in this metropolitan area, and in the context of historical changes in its own mode of incorporation. Taking these changes into account, we find that the ethnic enclave had a significant economic payoff for its founders – the earlier waves of Cuban exiles – and for their children, but not for refugees who arrived in the 1980 Mariel exodus and after. Reasons for this disjuncture are examined. Implications of these results for enclave theory and for immigrant entrepreneurship in general are discussed. |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cmgdev:wp0610&r=dev |
| By: | Josep M. Vilarrubia (Banco de España) |
| Abstract: | One of the most striking features of the world economy is that wealthy countries are clustered together. This paper theoretically and empirically explains a mechanism for this clustering by extending the Acemoglu and Ventura model so that it takes real geography into account. Countries close to fast growing economies experience faster growth in aggregate demand for their exports, stimulating faster domestic growth. As a result, a poor country that is surrounded by other poor countries finds it more difficult to grow because its terms of trade shift against it. When this model is estimated on data for 1965 to 1985, we find statistically and economically significant effects. If the typical European country were located in Africa, these terms of trade effects would have lowered its growth rate by almost 1 percentage point per year. The results strongly suggest that it is very difficult to raise income in poor countries without dealing with regional problems. |
| Keywords: | economic growth, economic geography, international trade, terms of trade, empirical |
| JEL: | F12 F15 F43 O11 O19 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0627&r=dev |
| By: | Ugo Gentilini |
| Abstract: | Progress toward eradicating poverty and hunger is patchy and generally too slow. New impetus is needed to meet internationally accepted goals, better informed by recent progress and challenges. The United Nations Millennium Development Goal No. 1 (MDG-1) aims to halve the proportion of people affected by poverty and hunger by 2015. The five indicators officially employed to assess progress toward MDG-1 reflect different deprivations of basic human capabilities, and progress in one domain does not guarantee progress in each of the others. Building on the statistical methodology of the widely-adopted Human Development Index, a new composite indicator – Poverty and Hunger Index (PHI) – that combines on all 5 measures together provides original insights on poverty and hunger trajectories. A number of findings emerge from the analysis, suggesting that the new index can play an important role in informing the policy debate on the prominence of all MDG-1 dimensions. |
| Keywords: | poverty, hunger, malnutrition, food insecurity, inequality, MDGs. |
| JEL: | O15 O19 O57 Q18 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0068&r=dev |