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on Development |
| By: | Byström, Hans (Department of Economics, Lund University) |
| Abstract: | In this paper we discuss the potential for commercial microfinance in China. Particular emphasis is put on securitization of microloans and on structured microfinance in a China context. Three particular factors that we believe could support a strong growth in Chinese structured microfinance are (i) the lack of currency risk, (ii) the scale advantages and (iii) the massive potential interest from traditional, domestic as well as international, financial firms. On the policy side, structured microfinance could be an important tool for fighting unemployment in China. It could also be used to circumvent corruption or government bureaucracy in the microlending process. |
| Keywords: | commercial microfinance; structured finance; securitization; China |
| JEL: | G10 G21 O16 R51 |
| Date: | 2007–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2007_018&r=dev |
| By: | Smith, James Wilson; Iimi, Atsushi |
| Abstract: | Although it is commonly believed that aggregate economic growth must be associated with public infrastructure stocks, the possible infrastructure needs and effects are different from industry to industry. The agriculture sector is typical. Various infrastructures would affect agriculture growth differently depending on the type of commodity. This paper finds that a general transport network is essential to promote coffee and cocoa production, perhaps along with irrigation facilities, depending on local rainfall. Conversely, along with the transport network, the dairy industry necessitates rural water supply services as well. In some African countries, a 1 percent improvement in these key aspects of infrastructure could raise GDP by about 0.1-0.4 percent, and by possibly by several percent in some cases. |
| Keywords: | Transport Economics Policy & Planning,Economic Theory & Research,Crops & Crop Management Systems,Food & Beverage Industry,Rural Development Knowledge & Information Systems |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4411&r=dev |
| By: | Williamson, Jeffrey G.; Lindert, Peter H.; Milanovic,Branko |
| Abstract: | Is inequality largely the result of the Industrial Revolution? Or, were pre-industrial incomes and life expectancies as unequal as they are today? For want of sufficient data, these questions have not yet been answered. This paper infers inequality for 14 ancient, pre-industrial societies using what are known as social tables, stretching from the Roman Empire 14 AD, to Byzantium in 1000, to England in 1688, to Nueva España around 1790, to China in 1880 and to British India in 1947. It applies two new concepts in making those assessments - what the authors call the inequality possibility frontier and the inequality extraction ratio. Rather than simply offering measures of actual inequality, the authors compare the latter with the maximum feasible inequality (or surplus) that could have been extracted by the elite. The results, especially when compared with modern poor countries, give new insights in to the connection between inequality and economic development in the very long run. |
| Keywords: | Inequality,Rural Poverty Red uction,Poverty Impact Evaluation,,Services & Transfers to Poor |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4412&r=dev |
| By: | Rahman, Aminur; Li, Quan; Jensen, Nathan M. |
| Abstract: | Since the early 1990s, a large number of studies have been undertaken to understand the causes and consequences of corruption. Many of these studies have employed firm-level survey data from various countries. While insightful, these analyses based on firm-level surveys have largely ignored two important potential problems: nonresponse and false response by the firms. Treating firms ' responses on a sensitive issue like corruption at their face value could produce incorrect inferences and erroneous policy recommendations. We argue that the data generation of nonresponse and false response is a function of the political environment in which the firms operate. In a politically repressive environment, firms use nonresponse and false response as self-protection mechanisms. Corruption is understated as a result. We test our arguments using the World Bank enterprise survey data of more than 44,000 firms in 72 countries for the period 2000-2005 and find that firms in countries with less press freedom are more likely to provide nonresponse or false response on the issue of corruption. Therefore, ignoring this systematic bias in firms ' responses could result in underestimation of the severity of corruption in politically repressive countries. More important, this bias is a rich and underutilized source of information on the political constraints faced by the firms. Nonresponse and false response, like unheard melodies, could be more informative than the heard melodies in the available truthful responses in firm surveys. |
| Keywords: | Public Sector Corruption & Anticorruption Measures,Microfinance,Access to Finance,Poverty Mo nitoring & Analysis,Social Accountability |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4413&r=dev |
| By: | Espina, Carlos; Noer, John; Bogetic, Zeljko |
| Abstract: | Real GDP per capita and capital stock in Cote d ' Ivoire grew strongly from 1960 to 1979, but have declined ever since, for twenty-five years. As a result, the country has traveled a full circle from economic success to failure in little more than a generation. What are the long-term factors behind this dismal growth story? Are the Ivorian development problems mostly of recent origin? Or there are more fundamental, economic factors that explain its long term performance? Four principal conclusions are as follows: First, Cote d ' Ivoire ' s long-term growth performance is not fully explained by temporary factors (e.g., CFA overvaluation or recent conflict). Longer term factors such as capital accumulation, productivity, and terms of trade are key to understanding the country ' s performance as is the policy of specialization in a single commodity--cocoa. Second, the long-term decline in per capita output started well before the currency overvaluation, and at a time of political stability, and is related to a major, secular deterioration in terms of trade that started after 1976. Third, total factor productivity estimates indicate that TFP per capita also grew until it hit a plateau in 1976-78, and then shrank thereafter, despite gains in human capital accumulation. Fourth, Cote d ' Ivoire has pursued a policy of specialization in cocoa beans but this bet on a single commodity has ultimately failed. The strategy that brought prosperity during the 1970s resulted in a growth failu re when cocoa prices began declining since 1976. |
| Keywords: | Economic Theory & Research,Economic Growth,Emerging Markets,,Access to Finance |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4414&r=dev |
| By: | Noer, John; Espina, Carlos; Bogetic, Zeljko |
| Abstract: | Key economic variables in Cote d ' Ivoire vary widely from their long-run trends, moving in multi-year cyclical patterns. Cocoa prices move with cycles in growth rates, capital stock, real exchange rates, terms of trade, cocoa production, and coffee production and output. These patterns have become more pronounced since the 1970s as volatility increased. This paper characterize these cycles, estimates the cocoa price-quantity relationship, and analyzes co-movements due to shocks generate a forecast. Three key conclusions follow. First, the economy of Cote d ' Ivoire has experienced two fundamental transitions, one in 1976 related to cocoa, and another in 1994 related to exchange rates. From 1960 to 1976, world cocoa prices grew steadily, and then fell in real terms. The country ' s growth showed a similar pattern. An econometric model indic ates that the relationship between cocoa price and quantity experienced a break in 1976 and provides evidence of Cote d ' Ivoire ' s significant influence on world cocoa prices. Second, cocoa price shocks affect growth rates and trade indicators, and are important sources of volatility in the Cote d ' Ivoire. The terms of trade and real exchange rate are also sources of volatility for growth and productivity. Third, a forecast of per-worker output based on these variables predicts continued declines in GDP per worker in Cote d ' Ivoire for the near future. This dismal forecast implies the need for a radical and rapid improvement on political, security, and economic management to reverse the two and a half decades of economic decline. |
| Keywords: | Emerging Markets,Markets and Market Access,Economic Theory & Research,Crops & Crop Management Systems,Access to Markets |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4415&r=dev |
| By: | Noer, John; Espina, Carlos; Bogetic, Zeljko |
| Abstract: | This paper explores competitiveness of Cote d ' Ivoire ' s economy over a long period of 1960-2003 and its link with cocoa prices. The main conclusions are as follows. First, using four measures of real effective exchange rate (REER) for the 1960-2002 period, we track the evolution of REER and conclude, inter alia, that until 2003, REER remained well below its 1994 level. Second, we find that based on our measure of the multilateral REER with dynamic weights, which covers most recorded trade, France no longer dominates Cote d ' Ivoire ' s trade. Instead, Cote d ' Ivoire has diversified its set of trading partners. Unfortunately, it has also specialized in one export product, raw cocoa. This paper aims to contribute to the question to what extent do cocoa prices affect Cote d ' Ivoire ' s competitiveness in world trade? Third, the answer to this question is that cocoa prices are an important determinant of Cote d ' Ivoire ' s competitiveness. Similar to the case of a classic " Dutch Disease, " increases in the real world price of a " natural resource " (i.e., cocoa) tend to result in the appreciation of the CFA franc and a loss in competitiveness. Econometric tests further confirm that 1994 was a " break-point " not only for growth and productivity (as documented in the two related papers) but also for trade competitiveness. Recent productivity per worker trends versus wages also seem to indicate slow growth in 1996-2000, without major improvement in competitiveness. |
| Keywords: | Economic Theory & Research,Currencies and Exchange Rates,Emerging Markets,Markets and Market Access,Macroeconomic Management |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4416&r=dev |
| By: | Schroter, Dagmar; Patt , Anthony G. |
| Abstract: | Policies to promote adaptation climate risks often rely on the willing cooperation of the intended beneficiaries. If these beneficiaries disagree with policy makers and programme managers about the need for adaptation, or the effectiveness of the measures they are being asked to undertake, then implementation of the policies will fail. A case study of a resettlement programme in Mozambique shows this to be the case. Farmers and policy-maker disagreed about the seriousness of climate risks, and the potential negative consequences of proposed adaptive measures. A project to provide more information about climate change to farmers did not change their beliefs. The results highlight the need for active dialog across stakeholder groups, as a necessary condition for formulating policies that can then be successfully implemented. |
| Keywords: | Hazard Risk Management,Environmental Economics & Policies,Climate Change,Population Policies,Rural Poverty Reduction |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4417&r=dev |
| By: | The Interna tional Study Group on Exports and Productivity |
| Abstract: | The authors use comparable micro level panel data for 14 countries and a set of identically specified empirical models to investigate the relationship between exports and productivity. The overall results are in line with the big picture that is by now familiar from the literature: Exporters are more productive than non-exporters when observed and unobserved heterogeneity are controlled for, and these exporter productivity premia tend to increase with the share of exports in total sales; there is strong evidence in favour of self-selection of more productive firms into export markets, but nearly no evidence in favour of the learning-by-exporting hypothesis. The authors document that the exporter premia differ considerably across countries in identically specified empirical models. In a meta-analysis of their results the authors find that countries that are more open and have more effective government report higher productivity premia. However, the level of development per se does not appear to be an explanation for the observed cross-country differences. |
| Keywords: | E-Business,Labor Policies,Economic Theory & Research,Labor Markets,Education for Development (superceded) |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4418&r=dev |
| By: | Derek Yu (Department of Economics, Stellenbosch University) |
| Abstract: | Statistics South Africa (Stats SA) has been collecting labour market data with household surveys and in a fairly comparable format since 1993. These datasets have been studied and compared extensively in order to better understand the workings of the South African labour market. Many of these studies compare household surveys of different periods in order to identify trends, but the validity of such trends is conditional on the comparability of the different datasets. Besides, the naïve comparisons of the different datasets have been questioned. Other problems include inconsistencies in questionnaire design, coding errors, changes in the sampling frame, the oversampling of agricultural workers in OHS1995, the oversampling of subsistence agricultural workers in LFS2000a and LFS2000b, as well as the oversampling of informal workers in LFS2001a. Most of these issues have received attention in papers by Burger and Yu (2006), Casale, Muller and Posel (2005), and Wittenberg (2004). By drawing attention to a few of the lesser known problems, this paper aims to build on the existing literature by further stimulating debate around the strengths and weaknesses of the existing survey data, as well as considering the best ways in which to analyse the existing data. The inconsistencies that occur in the data independently of the way in which questions are asked by the interview, as well as the inconsistencies that result from the way in which the survey questions are formulated or placed in a given sequence are discussed. Where possible, adjustments that may contribute towards increased consistency in the responses are suggested. Ultimately, it is hoped that the lessons learnt from such discussions will serve to inform questionnaire design in future. |
| Keywords: | South Africa, Household Survey, Labour Market Trends, Earnings |
| JEL: | J00 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers48&r=dev |
| By: | Attila Ambrus (Harvard University); Markus Mobius (Harvard University); Adam Szeidl (University of California, Berkeley) |
| Abstract: | We build a model of informal risk-sharing among agents organized in a social network. A connection between individuals serves as collateral that can be used to enforce insurance payments. We characterize incentive compatible risk-sharing arrangements for any network structure, and develop two main results. (1) Expansive networks, where every group of agents have a large number of links with the rest of the community relative to the size of the group, facilitate better risk-sharing. In particular, “two-dimensional” village networks organized by geography are sufficiently expansive to allow very good risk-sharing. (2) In second-best arrangements, agents organize in endogenous “risksharing islands” in the network, where shocks are shared fully within but imperfectly across islands. As a result, risk-sharing in second-best arrangements is local: socially closer agents insure each other more. In an application of the model, we explore the spillover effect of development aid on the consumption of non-treated individuals. |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ads:wpaper:0079&r=dev |
| By: | Eduardo Zepeda (International Poverty Centre); Diana Alarcón (United Nations Department of Economic and Social Affairs); Fabio Veras Soares (International Poverty Centre); Rafael Guerreiro Osório (International Poverty Centre) |
| Abstract: | Insufficient labour income and limited access to employment are critical problems that policy makers must address when designing development strategies in Latin American countries. The persistence of the high incidence of poverty and inequality can be explained largely by the poor performance of labour markets. This Working Paper uses household survey data for Chile, Brazil and Mexico, from the early 1990s to the early 2000s, to examine the link between the growth of labour income, employment creation and the distributional impact of these factors. Through a simple decomposition of the sources of household labour income into earnings per worker and employment per population, the paper evaluates the role of economic, social and demographic factors in contributing to income changes. This decomposition shows that earnings per worker were the single most important determinant of the change in household labour income per capita. The change in earnings had the largest impact on household labour income in five of the eight country periods considered. Changes in the employment to population rate did play a role in determining labour income, but was much less important. Further decompositions show that despite favourable declines in dependency rates, the unfavourable trends of an almost ubiquitous rise of unemployment rates and, at times, the decline of participation rates dampened the contribution of employment to household labour income. The paper also decomposes labour income per capita into 20 equally sized partitions in order to evaluate its distributional pattern. A simple evaluation rule is used to validate whether changes can be considered pro-poor. Of the eight country periods analysed, only three exhibited income changes favouring the poor: Brazil in 1996-2004, Mexico in 1994-1996 and Mexico in 2000-2004. But in two of these, the pro-poor change occurred during economic contractions. In the remaining five country cases, the increase of labour income was associated with a distributional pattern that did not favour the poor. Thus, there was only one period in which labour income not only increased but was also pro-poor. But even in this case, the distribution did not favour the extremely poor. The alternating pattern of change in favour of and against the poor is explained mostly by the change in their earnings. The pattern of change in employment rarely favoured them. But when it did, usually during economic downturns, the rising participation rate of poor workers was the main reason. |
| Keywords: | Earnings, Employment, Labour Markets, Pro-Poor Growth |
| JEL: | I30 J21 O12 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:42&r=dev |
| By: | Fabio Veras Soares (International Poverty Centre); Rafael Perez Ribas (International Poverty Centre); Rafael Guerreiro Osório (International Poverty Centre) |
| Keywords: | Bolsa Família, CCT, Cash Transfer |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:pubipc:825493&r=dev |
| By: | Paola Barrientos (Department of Economics, University of Aarhus) |
| Abstract: | This paper provides a review of the literature on the reasons and consequences of international migration. The principal determinants of migration are analyzed and it is seen that educated people from developing countries are more likely to migrate for several reasons (i.e. network determinants, costs of moving, pull factors and push factors). Looking into the empirical data, the global trend is that emigration of educated people (usually called “brain drain”) has increased a lot. This trend implies that industrialized countries are importing highly skilled people from developing countries and this will certainly have important consequences for developing countries in the long run. Some researchers argue that developing countries will loose, since the most qualified people leave and stop contributing to their country. Others say that the global trend can be beneficial because positive spillovers will be created; in the sense that developing countries will experience higher investments in human capital (“brain gain”). Empirical findings show that these spillovers depend on the probability to migrate and the stock of human capital that a country has. Finally another group of researchers argues that this process is inevitable, and barriers to migration should be abolished in order to reap the benefits for both sending and receiving countries as well as the migrants themselves. |
| Keywords: | Migration, Brain Drain, Brain Gain |
| JEL: | F22 O15 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:200712&r=dev |
| By: | Nguyen Thi Thu Phuong (Centre for Analysis and Forecasting, Vietnam Academy of Social Sciences); Tran Ngo Minh Tam (Centre for Analysis and Forecasting, Vietnam Academy of Social Sciences); Remco Oostendorp (Free University, Amsterdam); Nguyen Thi Nguyet (Central Institute for Economic Management (CIEM), Vietnam) |
| Abstract: | <p>This chapter * uses the recent Vietnam Household Living Standard Survey 2004 to analyze the determinants and impacts of migration in Vietnam. Most of the previous studies on the determinants and impacts of migration have focused on destination rather than origin areas of migration. This limits our understanding of the determinants of migration and also does not provide evidence on important impacts of migration such as on household inequality in origin areas.</p><p>In terms of determinants of migration, the study shows that migration is a highly selective process and strongly affected by household and commune characteristics, although differently across type of migration and across urban and rural areas. We do find evidence for the existence of a 'migration hump' for economic long-term migration, with an inverted Ushape in the probability of migration with respect to per capita expenditures. The presence of non-farm employment opportunities does reduce short-term migration but not long-term out-migration for economic reasons.</p> <p>In terms of impacts the study analyzes the impact of migration on household expenditures and household inequality. Migration is found to have a strong positive impact on household expenditures but increases the Gini coefficient of per capita household expenditures from 0.38 to 0.42 in origin areas compared to the no-migration case.</p> |
| Keywords: | Migration; Vietnam; Household |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:1707&r=dev |
| By: | Badi H. Baltagi (Syracuse University and University of Leicester); Panicos O. Demetriades (University of Leicester); Siong Hook Law (University Putra Malaysia) |
| Abstract: | Utilising four annual panel datasets and dynamic panel data estimation procedures we find that trade and financial openness, as well as economic institutions are statistically important determinants of the variation in financial development across countries and over time since the 1980s. However, we find mixed support for the hypothesis that the simultaneous opening of both trade and capital accounts is necessary to promote financial development in a contemporary setting. |
| Keywords: | Financial development, Trade Openness, Financial Openness, Economic Institutions, Financial Liberalization, Dynamic Panel Data Analysis |
| JEL: | F19 G29 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:wef:wpaper:0022&r=dev |
| By: | Stijn Claessens (Universiteit van Amsterdam); Danny Cassimon (University of Antwerp) |
| Abstract: | We conduct an empirical study on how 22 donors allocate their bilateral aid among 147 recipient countries over the 1970-2004 period to investigate whether recent changes in the international aid architecture at the international and country levelhave led to changes in donor behavior. We find that after the fall of the Berlin Wall and especially in the late nineties, bilateral aid responds more to economic needs and the quality of a country’s policy and institutional environment and less to debt, size and colonial and political linkages. We also find more selectivity by donors when a country uses a PRSP and passes the HIPC decision point. Importantly, PRSPs and HIPCs reduce the perverse effects of large bilateral and multilateral debt shares on aid flows, suggesting less defensive lending. Overall, it appears certain international aid architecture changes have led to more selectivity in aid allocations. The specific factors causing these changes remain unclear, however. And since there remain (large) differences among donors in selectivity that appear to relate to donors’ own institutional environments, reforms will have to be multifaceted. |
| Keywords: | development aid, aid allocation, selectivity, debt relief, HIPC, PRSP, aid architecture |
| JEL: | O11 O16 O19 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:wef:wpaper:0026&r=dev |