nep-dev New Economics Papers
on Development
Issue of 2007‒04‒09
27 papers chosen by
Jeong-Joon Lee
Towson University

  1. The Rise of Democracy in Europe and the Fight Against Mass Poverty in Latin America: The Implications for Marxist Thought of Some Recent Mainstream Papers By Howard Petith
  2. Marxian Insights from the Mainstream By Howard Petith
  3. Agricultural Distortions, Structural Change, and Economic Growth: A Cross-Country Analysis By Benjamin N. Dennis; Talan Iscan
  4. The impact of OECD Agricultural trade liberalization on poverty in Uganda By Charles Augustine Abuka; Michael Atingi-Ego; Jacob Opolot; Marian Mraz
  5. Globalization, Growth and Distribution in Spain 1500-1913 By Joan R. Roses; Kevin H. O'Rourke; Jeffrey G. Williamson
  6. The Effect of FDI on Child Labor By Ronald B. Davies; Annie Voy
  7. Risk, Government andd Globalization: International Survey Evidence By Anna Maria Mayda; Kevin H. O'Rourke
  8. Trends in Poverty and Inequality in Seven African Countries By Frikkie Booysen; Ronelle Burger; Gideon Du Rand; Michael von Maltitz; Servaas Van der Berg
  9. Inequality and Poverty in China during Reform By Sangui Wang; Dwayne Benjamin; Loren Brandt; John Giles; Yingxing Li; Yun Li
  10. Poverty, Inequality and Stochastic Dominance, Theory and Practice: The Case of Burkina Faso By Abdelkrim Araar
  11. The Causes of Chronic and Transient Poverty and Their Implications for Poverty Reduction Policy in Rural China By Shi Li; Pingping Wang; Ximing Yue
  12. The Urban Informal Sector and Poverty: Effects of Trade Reform and Capital Mobility in India By Suguta Marjit; Saibal Kar
  13. Liquidity Risk Aversion, Debt Maturity, and Current Account Surpluses: A Theory and Evidence from East Asia By Shin-ichi Fukuda; Yoshifumi Kon
  14. Values, Beliefs and Development By Jeffry Jacob; Thomas Osang
  15. Integration, Informalization, and Income Gaps in Developing Countries: Some General Equilibrium Explorations in Light of Accumulating Evidence By Arslan Razmi
  16. Valuing Animal Genetic Resources: A Choice Modeling Application to Indigenous Cattle in Kenya By Eric Ruto; Guy Garrod; Riccardo Scarpa
  17. Financial services and trade agreements in Latin America and the Caribbean : an overview By Stephanou, Constantinos; Goncalves, Marilyne Pereira
  18. Insurgency and credible commitment in autocracies and democracies By Keefer, Philip
  19. Substitutability and protectionism : Latin America ' s trade policy and imports from China and India By Willmann, Gerald; Silva, Peri; Olarreaga, Marcelo; Facchini, Giovanni
  20. Testing for pro-poorness of growth, with an application to Mexico By Abdelkrim Araar; Jean-Yves Duclos; Mathieu Audet; Paul Makdissi
  21. Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis By Benno Torgler; Friedrich Schneider
  22. Trust in International Organisations: An Empirical Investigation Focusing on the United Nations By Benno Torgler
  23. Contested Capitalism: Financial Politics and Implications for China By Richard, Carney
  24. Shifts in Non-Income Welfare in South Africa: 1993-2004 By Haroon Bhorat; Carlene van der Westhuizen; Pranushka Naidoo
  26. Perceived Attitude and Marine Protected Areas (MPAs) establishment: Why households’ characteristics matters in Coastal resources conservation initiatives in Tanzania By Jennifer K. Sesabo; Hartmut Lang; Richard S.J. Tol
  27. Foreign Direct Investment and Economic Growth: The Role of Domestic Financial Sector By Muhammad Arshad Khan

  1. By: Howard Petith
    Abstract: Recently a number of mainstream papers have treated the rise of democracy in 19th century Europe and its instability in Latin America in an eminently Marxist fashion. This paper sets out their implications for Marxist thought. With respect to Europe, Marx's emphasis on political action backed by the threat of violence is vindicated but his justification for socialism is not. With respect to Latin America, the unequal distribution of wealth is the cause of political instability that is, in turn, the root cause of mass poverty. In addition it is possible to explain some of the paradoxical characteristics of neo-liberalism and to make a weak argument for socialism in spite of its rejection in Europe.
    Keywords: Marxism, Democracy, Europe, Latin America
    JEL: E11 O52 O54 N46
  2. By: Howard Petith
    Abstract: Starting in 1999 a group of papers have appeared in mainstream journals that treat of the relation between capitalism and democracy in an eminently Marxian fashion. These analyses bear on a number of papers published mainly in S&S, specifically those of Castañada, Ellman, Harnacker, Nimtz and Petras. This paper provides résumés of all of these works and then sets out the implications of the mainstream papers for the left wing ones. It concludes by emphasising the importance for the left of the mainstream results.
    Keywords: Marxism, Democracy
    JEL: E11 O52 O54 N46
    Date: 2007–03–20
  3. By: Benjamin N. Dennis; Talan Iscan (Millennium Challenge Corporation, University of the Pacific; Department of Economics, Dalhousie University)
    Keywords: agriculture; industrialization; development
    Date: 2007–03–08
  4. By: Charles Augustine Abuka; Michael Atingi-Ego; Jacob Opolot; Marian Mraz
    Abstract: The paper examines the projected impacts of agricultural trade liberalisation by OECD countries on poverty in Uganda and compares them to the poverty impacts of all merchandise trade liberalisation. The overall impact of OECD agricultural trade liberalisation on welfare in Uganda from this simulation is positive in contrast to previous research, nevertheless, the poor appear to be made worse off. The liberalisation of all OECD merchandise trade including non-agricultural commodities reduces welfare for all deciles irrespective of household poverty status, residence and region. The results for global partial merchandise trade liberalisation are similar to those for total trade liberalisation with an overall welfare decline of about 0.5 percent. More specifically, even the modest welfare gains for producers from increased prices seem to be offset by welfare losses from increases in consumer goods. Overall, because of the large subsistence agricultural sector, households tend to experience little or no change in total welfare arising from agricultural price changes. Increases in market value of their agricultural based output tend to be offset by changes in the opportunity cost of their subsistence consumption of the bulk of that output.
    Keywords: Microsimulation, agricultural trade liberalization, Uganda , poverty
    Date: 2007–04–04
  5. By: Joan R. Roses; Kevin H. O'Rourke; Jeffrey G. Williamson
    Abstract: The endogenous growth literature has explored the transition from a Malthusian world where real wages, living standards and labor productivity are all linked to factor endowments, to one where (endogenous) productivity change embedded in modern industrial growth breaks that link. Recently, economic historians have presented evidence from England showing that the dramatic reversal in distributional trends – from a steep secular fall in wage-land rent ratios before 1800 to a steep secular rise thereafter – must be explained both by industrial revolutionary growth forces and by global forces that opened up the English economy to international trade. This paper explores whether and how the relationship was different for Spain, a country which had relatively poor productivity growth in agriculture and low living standards prior to 1800, was a late-comer to industrialization afterwards, and adopted very restrictive policies towards imports for much of the 19th century. The failure of Spanish wage-rental ratios to undergo a sustained rise after 1840 can be attributed to the delayed fall in relative agricultural prices (due to those protective policies) and to the decline in Spanish manufacturing productivity after 1898.
    Keywords: Growth, distribution, globalization, Spain
    Date: 2007–04–04
  6. By: Ronald B. Davies; Annie Voy
    Abstract: This paper examines the extent to which foreign direct investment (FDI) affects child labor. Using 1995 data for 145 countries, we find that, contrary to common fears, FDI is negatively correlated with child labor. This effect, however, disappears when controlling for per capita income. After doing so, we find no robust effect of either FDI or international trade on child labor. This result is robust to corrections for the endogeneity of FDI, trade, and income. Furthermore, this result is confirmed when using data from earlier years and when using fixed effects. This suggests that the impact of FDI and trade on child labor, if any, is the increases in income they generate.
    Keywords: Child Labor, Foreign Direct Investment, International Trade
    Date: 2007–04–04
  7. By: Anna Maria Mayda; Kevin H. O'Rourke
    Abstract: This paper uses international survey data to document two stylized facts. First, risk aversion is associated with anti-trade attitudes. Second, this effect is smaller in countries with greater levels of government expenditure. The paper thus provides evidence for the microeconomic underpinnings of the argument associated with Ruggie (1982), Rodrik (1998) and others that government spending can bolster support for globalization by reducing the risk associated with it in the minds of voters.
    Keywords: Trade attitudes, risk
    Date: 2007–04–04
  8. By: Frikkie Booysen; Ronelle Burger; Gideon Du Rand; Michael von Maltitz; Servaas Van der Berg
    Abstract: This paper aims to analyse trends in poverty and inequality in seven African countries using an asset index constructed from comparable, nationally representative surveys using multiple correspondence analysis. Improvements in the asset index are largely driven by progress in the accumulation of private assets, while access to public services has deteriorated. Continued efforts at the expansion of access to public services such as waterborne sanitation and piped water, particularly in rural areas, are thus required. Overall poverty has declined in five of the seven countries. The trends in urban and rural poverty for the most part mirror these trends in overall poverty. Five of the seven countries experienced an improvement in overall inequality. Only in Zambia has overall inequality increased. Experiences in regards to trends in urban and rural inequality are mixed. These results, however, should be interpreted with caution, given the various conceptual and methodological limitations of the asset index approach to poverty analysis.
    Keywords: Poverty, inequality, asset index, multiple correspondence analysis, Africa
    JEL: I32 I31 D31 I38 O55
    Date: 2007
  9. By: Sangui Wang; Dwayne Benjamin; Loren Brandt; John Giles; Yingxing Li; Yun Li
    Abstract: This paper provides an overview of the evolution of income inequality and poverty in China from 1987 to 2002, documenting significant increases of inequality within China's urban and rural populations. In rural areas, increased inequality is primarily related to the disequalizing role of non-agricultural self-employment income and the slow growth in agricultural income from the mid-1990s onward. Poverty persists, and tied in part to slow growth in agricultural commodity prices. In urban areas, the declining role of subsidies and entitlements, the increase in wage inequality, and the layoffs during restructuring have fueled the growth in inequality within urban areas. Poverty levels, however, are very low. China should give more emphasis on education, training, and other human development efforts in its poverty reduction strategy since return to education increased rapidly and became a major source of inequality. A nationwide "social safety net" and an effective redistributive taxation system should be adopted and implemented to ensure that the poor can benefit from the fruits of rapid economic growth.
    Keywords: Income inequality, poverty, welfare, growth, reform, transition, policy, China
    JEL: D31 D63 I32 O18 O53
    Date: 2007
  10. By: Abdelkrim Araar
    Abstract: In this paper we provide a set of rules that can be used to check poverty or inequality dominance using discrete data. Existing theoretical rules assume continuity in incomes or in percentiles of the population. In reality, with the usual household surveys, this continuity does not exist. However, such a discontinuity can be exploited to test for stochastic dominance. This paper also proposes stochastic dominance conditions that check for the statistical robustness of the inferred rankings. The methodology of this paper is illustrated using Burkina Faso's household surveys for the years of 1994 and 1998.
    Keywords: Stochastic Dominance, Poverty, Inequality
    JEL: D63 D64
    Date: 2007
  11. By: Shi Li; Pingping Wang; Ximing Yue
    Abstract: The study focuses on two components of total poverty: chronic and transient poverty, and investigates their relative importance in total observed poverty, as well as the determinants of each components. We found that transient poverty accounts for a large proportion of total poverty observed in the poor rural areas of China. By analyzing the determinants of the two types of poverty, we found that household demographic characteristics, such as age of the head of households, family sizes, labour participation ratio, and educational level of the head of the households, are very important to the poverty status of households. These factors matter more to chronic poverty than transient poverty, and have greater impacts on the poverty measured by consumption than that measured by income. Besides the demographic factors of households, other household factors like physical stocks, the composition of income, and the amount of cultivated lands also have significant effects on both chronic and transient poverty. It is also confirmed that change in cash holding and saving and borrowing grain are used by rural households to cope with income variation and smooth their consumption. Attributes of community where the households reside are also important to poverty. With very few exceptions, we did not find that poverty programs have significant impact on poverty reduction at the households' level. We interpreted this as the poverty programs benefiting the wealthy more than the poor in a given poor area. The main reason for this could be that the implementation design of these programs fails to target the poor.
    Keywords: Income risk, chronic poverty, transient poverty, poverty program evaluation, China
    JEL: H54 O22 O53
    Date: 2007
  12. By: Suguta Marjit; Saibal Kar
    Abstract: Studies on formal-informal interactions in the labor markets of developing countries claim that economic reform increases the level of informal activity. Although the extent of such claims differs across countries, it is generally believed that reform is likely to depress informal wage by contracting the formal sector and driving labor onto its informal counterpart. However, available empirical evidence suggests that real wage and real fixed assets in the informal manufacturing sector have risen significantly across most states in post-liberalization India. Using this as a benchmark, we formalize a general equilibrium model of inter-sectoral capital mobility and informal wage to argue that, with limited degree of capital mobility, trade reform reduces the informal wage. This is the convetional wisdom usually obtained under a partial equilibrium framework. However, with increased mobility of capital this result is reversed. We offer detailed emmpirical evidence on the movements of real wage in the informal sector in India and how this affects poverty at the state level. The basic result on income mobility is corroborated by a primary survey in the province of West Bengal, for which we offer descriptive analysis on household income levels in the province's informal manufacturing and service sectors.
    Keywords: Informal Wage, Capital Mobility, Trade Reform, Poverty, India
    JEL: F13 F16 O17 J21 J31
    Date: 2007
  13. By: Shin-ichi Fukuda; Yoshifumi Kon
    Abstract: The purpose of this paper is to show that macroeconomic impacts might be very different depending on what strategy developing countries will take. In the first part, we investigate what macroeconomic impacts an increased aversion to liquidity risk can have in a simple open economy model. When the government keeps foreign reserves constant, an increased aversion to liquidity risk reduces liquid debt and increases illiquid debt. However, its macroeconomic impacts are not large, causing only small current account surpluses. In contrast, when the government responds to the shock, the changed aversion increases foreign reserves and may lead to a rise of liquidity debt. In particular, under some reasonable parameter set, it causes large macroeconomic impacts, including significant current account surpluses. In the second part, we provide several empirical supports to the implications. In particular, we explore how foreign debt maturity structures changed in East Asia. We find that many East Asian economies reduced short-term borrowings temporarily after the crisis but increased short-term borrowings in the early 2000s. We discuss that our results have important implications for the recent deterioration in the U.S. current account.
    JEL: F21 F32 F34
    Date: 2007–04
  14. By: Jeffry Jacob (St. John’s University); Thomas Osang (SMU)
    Abstract: This paper investigates the consequences of religion for economic development. In particular, we examine whether religious attitudes, beliefs, participation and preference contribute to differences in per capita income across countries. Using a large scale international survey on values and religious behavior, we estimate both cross-section and panel data models, controlling for the “deep determinants” of development: Institutions, geography and trade. Our results indicate that religion plays an important role in economic development, but mostly in a non-linear manner. Countries with moderate religious values and behavior tend to have higher income levels than countries on both ends of the religious spectrum.
    Keywords: Development, Economics of Religion, Institutions, Openness, Geography
    JEL: O1 Z12 N1 H1 F1
    Date: 2007–03
  15. By: Arslan Razmi (University of Massachusetts Amherst)
    Abstract: Recent post-liberalization decades have seen increasing gaps between wages and profit in- come, rising skill premia, and disappointing formal sector employment growth in many develop- ing countries. This paper presents an attempt to reconcile some of these developments with the help of modified versions of simple standard trade theory factor endowment models. Measures undertaken to enhance public sector efficiency and attract investment in the export sector can create a conflict of interest between the owners of capital and labor, and increase the rental- wage and skill-unskilled wage gaps, contra the predictions of the Heckscher-Ohlin-Samuelson model. Moreover, increasing inequality can exist side-by-side with increasing informalization of the economy. The greater unskilled labor intensity of the informal sector, factor market rigidities in the formal sector, and the sector specificity of some factors crucially influence the outcomes of policy experiments. Even within a simple framework that assumes full employment of resources, large segments of labor may have good reason to fear the consequences of reform. JEL Categories: F16, O17, F11
    Keywords: Specific factors model, Ricardo-Viner model, Heckscher-Ohlin model, informaliza- tion, international production networks, elasticity of factor substitution, nominal wage rigidity, income inequality, skill premium.
    Date: 2007–03
  16. By: Eric Ruto (University of Newcastle); Guy Garrod (University of Newcastle); Riccardo Scarpa (University of Waikato)
    Abstract: In an effort to improve productivity and profits many farmers have replaced traditional livestock breeds with higher yielding alternatives. While such changes may bring about short-term economic gains, the loss of traditional livestock breeds could result in the loss of an important genetic resource as a variety of important genetic traits adapted to local conditions gradually become less common in the population. This is a particular problem in Africa, where livestock make a substantial contribution to human livelihoods. Using the example of cattle in Kenya’s pastoral livestock markets this study uses a choice experiment approach to investigate buyers’ preferences for indigenous breeds such as the Maasai Zebu. The analysis employs a latent class approach to characterize heterogeneity in valuations both within and across respondents buying cattle for breeding, slaughter or resale. The results show that there are at least three classes of buyers with distinct preferences for cattle traits and that most buyers favor exotic rather than indigenous breeds. Such preferences have implications for the conservation of indigenous cattle in Kenya and in other developing countries and suggest that some form of intervention may be required to ensure the preservation of this important animal genetic resource.
    Keywords: animal genetic resources; economic valuation; choice experiments; latent class models;indigenous livestock; Maasai Zebu cattle
    JEL: N5 O13 C25 Q26
    Date: 2007–03–23
  17. By: Stephanou, Constantinos; Goncalves, Marilyne Pereira
    Abstract: The authors review the international framework governing trade in financial services, describe the treatment of financial services in recent trade agreements involving Latin America and Caribbean countries, and analyze the liberalization commitments made in three selected country case studies-Chile, Colombia, and Costa Rica. They give emphasis to free trade agreements because of the generally deeper level of liberali zation and rule-making achieved to-date. The authors discuss some of the causes and potential implications of their findings.
    Keywords: Trade Law,Trade and Services,Trade and Regional Integration,Free Trade,World Trade Organization
    Date: 2007–04–01
  18. By: Keefer, Philip
    Abstract: This paper suggests a new factor that makes civil war more likely: the inability of political actors to make credible promises to broad segments of society. Lacking this ability, both elected and unelected governments pursue public policies that leave citizens less well-off and more prone to revolt. At the same time, these actors have a reduced ability to build an anti-insurgency capacity in the first place, since they are less able to prevent anti-insurgents from themselves mounting coups. But while reducing the risk of conflict overall, increasing credibility can, over some range, worsen the effects of natural resources and ethnic fragmentation on civil war. Empirical tests using various measures of political credibility support these conclusions.
    Keywords: Population Policies,Parliamentary Government,Economic Theory & Research,Social Conflict and Violence,Politics and Government
    Date: 2007–04–01
  19. By: Willmann, Gerald; Silva, Peri; Olarreaga, Marcelo; Facchini, Giovanni
    Abstract: The authors examine the trade policy response of Latin American governments to the rapid growth of China and India in world markets. To explain higher protection in sectors where a large share is imported from these countries, they extend the " protection for sale " model to allow for different degrees of substitutability between domestically produced and imported varieties. The extension suggests that higher levels of protection toward Chinese goods can be explained by high substitutability between domestically produced goods and Chinese goods, whereas lower levels of protection toward goods imported from India can be explained by low substitutability with domestically produced goods. The data support the extension to the " protection for sale " model, which performs better than the original specification in terms of explaining Latin America ' s structure of protection.
    Keywords: Economic Theory & Research,Markets and Market Access,Free Trade,Globalization and Financial Integration,International Trade and Trade Rules
    Date: 2007–04–01
  20. By: Abdelkrim Araar (CIRPEE, Département d'économie, Université Laval); Jean-Yves Duclos (CIRPEE, Département d'économie, Université Laval); Mathieu Audet (GREDI, Faculte d'administration, Université de Sherbrooke); Paul Makdissi (GREDI, Département d'économique, Université de Sherbrooke)
    Abstract: This paper proposes techniques to test for whether growth has been pro-poor. We first review different definitions of pro-poorness and argue for the use of methods that can generate results that are robust over classes of pro-poor measures and ranges of poverty lines. We then provide statistical procedures that rely on the use of sample data to infer whether growth has been pro-poor in a population. We apply these procedures to Mexican household surveys for the years of 1992, 1998 and 2004. We find strong statistical evidence that Mexican growth has been absolutely anti-poor between 1992 and 1998, absolutely pro-poor between 1998 and 2004 and between 1992 and 2004, and relatively pro-poor between 1992 and 2004 and between 1998 and 2004. The relative assessment of the period between 1992 and 1998 is statistically too weak to lead to a robust evaluation of that period.
    Keywords: Pro-poor growth, Poverty, Inequality
    JEL: D63 D64
    Date: 2007
  21. By: Benno Torgler; Friedrich Schneider
    Abstract: This paper analyses how governance or institutional quality and tax morale affect the shadow economy, using an international country panel and also within country data. The literature strongly emphasizes the quantitative importance of these factors to understand the level and changes of shadow economy. However, the limited number of investigations use cross-sectional country data with a relatively small number of observations, and hardly any paper has investigated tax morale and provides evidence using within country data. Using more than 25 proxies that measure governance and institutional quality we find strong support that its increase leads to a smaller shadow economy. Moreover, an increase in tax morale reduces the size of the shadow economy.
    Keywords: Shadow economy, tax morale, governance quality, government intervention, corruption.
    JEL: D73 D78 H2 H26 O17 O5
    Date: 2007–02–01
  22. By: Benno Torgler
    Abstract: The literature on social capital has strongly increased in the last two decades, but there still is a lack of substantial empirical evidence about the determinants of international trust. This empirical study analyses a cross-section of individuals, using micro-data from the World Values Survey, covering 38 countries, to investigate trust in international organizations, specifically in the United Nations. In line with previous studies on international trust we find that political trust matters. We also find that social trust is relevant, but contrary to previous studies the results are less robust. Moreover, the paper goes beyond previous studies investigating also the impact of geographic identification, corruption and globalization. We find that a higher level of (perceived) corruption reduces the trust in the UN in developed countries, but increases trust in developing and transition countries. A stronger identification with the world as a whole also leads to a higher trust in the UN and a stronger capacity to act globally in economic and political environment increases trust in the UN.
    Keywords: International Organizations, United Nations, International Trust, Political Trust, Social Trust, Corruption, Globalization.
    JEL: Z13 D73 O19
    Date: 2007–04–03
  23. By: Richard, Carney
    Abstract: As China's economy grows and matures, is it developing institutional patterns that resemble those of other wealthy countries? I offer an innovative theory that deduces the structure of nations' capitalist institutions based on distributive welfare gains to those actors representing an economy's main factors of production (land, labor, and capital), using the structure of a nation’s financial institutions as a proxy for its capitalist institutions. Based on statistical and qualitative evidence across countries and time, I then draw implications for China. I find that China resembles continental European capitalism far more than Anglo-American capitalism, and that it is likely to remain this way for the foreseeable future.
    Keywords: comparative finance; financial institutions; political economy; capitalism; China
    JEL: P00 N00 O10
    Date: 2007–03–14
  24. By: Haroon Bhorat; Carlene van der Westhuizen; Pranushka Naidoo (Development Policy Research Unit, University of Cape Town)
    Abstract: Abstract: The aim of this study is to provide an analysis of the shifts in non-income welfare that have occurred over the period 1993 to 2004. This analysis serves as a complement to existing research which has focused on shifts in income poverty and inequality in the post-apartheid period. In addition, the study is one of only a few that provides a complete overview of the first decade of democracy by means of the comprehensive time period it covers. We use a technique called factor analysis to construct an asset index as an alternative, non-income based, measure of welfare. Variables reflecting household access to a range of services and assets are used in the construction of our asset index. An initial descriptive overview of the shifts in access to services and assets provides strong evidence that government asset and service delivery between 1993 and 2004 was pro-poor in nature. When standard measures of poverty are applied to our asset index values, statistically significant decreases in the headcount asset poverty rates between 1993 and 2004 across a range of covariates are found. A series of inequality measures are also applied to our asset index. The estimates show that across all covariates, asset inequality decreased between 1993 and 2004. Inequality decompositions indicate that within-group inequality has increased in importance in determining aggregate inequality.
    Keywords: Non-income welfare, access to services, asset index, headcount asset poverty rates
    JEL: A1
    Date: 2006–05
  25. By: Richard S.J. Tol (Economic and Social Research Institute, Dublin); Kristie L. Ebi; Gary W. Yohe
    Abstract: We study the effects of development and climate change on infectious disease in Sub-Saharan Africa. Infant mortality and infectious disease are close related, but there are better data for the former. In an international cross-section, per capita income, literacy, and absolute poverty significantly affect infant mortality. We use scenarios of these three determinants, and of climate change to project the future incidence of malaria, assuming it to change proportionally to infant mortality. Malaria deaths will first increase, because of population growth and climate change, but then fall, because of development. This pattern is robust to the choice of scenario, parameters, and starting conditions; and it holds for diarrhoea, schistosomiasis, and dengue fever as well. However, the time and level of the mortality peak is very sensitive to assumptions. Climate change is important in the medium term, but dominated in the long term by development. As climate can only be changed with a substantial delay, development is the preferred strategy to reduced infectious diseases, even if that is exacerbated by climate change.
    Keywords: Development, infectious disease, climate change, Sub-Saharan Africa, malaria
    JEL: I12 O13 Q54
    Date: 2006–06
  26. By: Jennifer K. Sesabo; Hartmut Lang; Richard S.J. Tol (Economic and Social Research Institute, Dublin)
    Abstract: In recent years, conservation initiatives through Marine Protected Area (MPAs) in many developing countries have been molded to win the support and participation of local communities. Increasingly, studies have been undertaken to enhance the understandings of the characteristics of rural communities. In the case of Tanzania, the level of compliance with marine and coastal resources management is constrained by lack of knowledge regarding coastal communities’ behavior and characteristics. Indeed, it is hypothesized that the knowledge about rural coastal communities will lead to an increase in compliance of conservation initiatives. Therefore, this paper provides an empirical assessment of households’ perceived attitudes towards proposed MPA establishment in two Tanzanian coastal villages (Mlingotini and Nyamanzi) and their vicinity. Based on survey data, the results indicate that 50.23% of households had favorable attitudes towards the introduction of MPA, out of which 34% belonged to the poor class. Moreover, a majority of households indicate that there is a need of public participation in planning and implementation of MPA. Subsequently, Probit regression, which featured in the analysis revealed that perceived costs and benefits accruing from MPAs establishment, awareness of MPAs objectives and rules that govern the use of marine and coastal resources, dependency on marine and coastal-based activities, perceived fishery conditions, wealth and location variables have a significant influence on perceived attitudes towards establishing of new MPA. Based on the findings, it can be concluded that conservation initiatives through the establishment of MPAs may be more beneficial and more effective when policy makers understand the characteristics and behavior of coastal communities. In addition, conservation initiatives should be based on the consensus building and participation of all stakeholders.
    Keywords: marine protection areas, fisheries, Tanzania
    JEL: Q22
    Date: 2006–03
  27. By: Muhammad Arshad Khan (Pakistan Institute of Development Economics, Islamabad)
    Abstract: Recent theoretical and empirical literature suggests that foreign direct investment (FDI) exerted positive impact on economic growth through the process of technological diffusion. The literature also suggests that the development of the domestic financial system of the host country is an important pre-condition for FDI to have a positive impact on economic growth. A welldeveloped domestic financial sector enhances efficient allocation of financial resources and improves the absorptive capacity of a country with respect to FDI inflows. Particularly, a more developed financial system positively contributes to the process of technological diffusion associated with foreign direct investment. In this study, we examine the link between FDI, domestic financial sector, and economic growth for Pakistan over the period 1972–2005. Empirical analysis is based on the bound testing approach of cointegration advanced by Pesaran, et al. (2001). The results suggest that FDI inflows exerted positive impact on economic growth in the short-run and the long-run if the domestic financial system has achieved a certain minimum-level development. The results further suggest that better domestic financial conditions not only attract foreign companies to invest in Pakistan, but also allow maximising the benefits of foreign investment
    Keywords: Foreign Direct Investment, Financial Sector Development, Economic Growth, Technology Spillovers
    JEL: F21 F36 F43 O16
    Date: 2007

This nep-dev issue is ©2007 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.