|
on Development |
| By: | Servaas Van der Berg |
| Abstract: | Massive differentials on achievement tests and examinations reflect South Africa’s divided past. Improving the distribution of educational outcomes is imperative to overcome labour market inequalities. Historically white and Indian schools still outperform black and coloured schools in examinations, and intraclass correlation coefficients (rho) reflect far greater between-school variance compared to overall variance than for other countries. SACMEQ’s rich data sets provide new possibilities for investigating relationships between educational outcomes, socio-economic status (SES), pupil and teacher characteristics, school resources and school processes. As a different data generating process applied in affluent historically white schools (test scores showed bimodal distributions), part of the analysis excluded such schools, sharply reducing rho. Test scores were regressed on various SES measures and school inputs for the full and reduced sample, using survey regression and hierarchical (multilevel) (HLM) models to deal with sample design and nested data. This shows that the school system was not yet systematically able to overcome inherited socio-economic disadvantage, and poor schools least so. Schools diverged in their ability to convert inputs into outcomes, with large standard deviations for random effects in the HLM models. The models explained three quarters of the large between-school variance but little of the smaller within-school variance. Outside of the richest schools, SES had only a mild impact on test scores, which were quite low in SACMEQ context. |
| Keywords: | Analysis of Education |
| JEL: | J21 |
| Date: | 2008–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:69&r=dev |
| By: | Stephan Klasen (Georg-August-Universität Göttingen / Germany) |
| Abstract: | This paper discusses two recent controversies surrounding levels and trends in the number of ‘missing women’ in the world. First, the impact of fertility decline on gender bias in mortality is examined. Contrary to the expectations of some authors, fertility decline has not generally led to an intensification of gender bias in mortality. Second, the paper finds that the claim that a substantial portion of ‘missing women’ is due to higher sex ratios at birth linked to hepatitis B prevalence in the affected regions is on rather weak foundations, while there is substantial evidence countering this claim. |
| Keywords: | Missing women, fertility decline, Hepatitis B, sex-selective abortions, gender bias in mortality |
| JEL: | J16 O15 |
| Date: | 2008–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:got:iaidps:168&r=dev |
| By: | Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper investigates the hypothesis that the association between property rights institutions and economic performance is weaker in countries with high social divisions, as measured in terms of ethnic fractionalisation and income inequality. The results of the empirical estimations support this hypothesis and indicate that it could have some relevance for explaining identified regional variation in the institutional parameter. Moreover, they point to the importance of carefully evaluating the extent to which the institutions measure used captures the institutional framework applying for a broad cross-section of the population.<p> |
| Keywords: | Institutions; social divisions; parameter heterogeneity |
| JEL: | O10 O17 P14 P26 |
| Date: | 2008–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0282&r=dev |
| By: | Durevall, Dick (Department of Economics, School of Business, Economics and Law, Göteborg University); Lindskog, Annika (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | The purpose of this paper is to analyse the impact of HIV/AIDS on fertility in Malawi. The future course of fertility will have an impact on both macroeconomic variables, such as GDP per capita, and various socioeconomic factors like mother-to-child-transmission of HIV, child mortality, the number of orphans, and public expenditures on schooling. Data on both prime-age adult mortality and HIV prevalence rates at districts level are used to measure the impact of HIV/AIDS, exploiting the large geographical variation in the distribution of HIV/AIDS in Malawi. Fertility is estimated for individual women, and measured as the number of births given during the last five years. Estimations are also carried out for the desired number of children. The major finding is that HIV/AIDS reduces fertility. Uninfected women both give birth to and desire to have fewer children in districts where prime-age adult mortality and HIV-prevalence are high, and vice versa. However, for young women, aged 15-19, there is a positive relationship between fertility and prime-age adult mortality and HIV prevalence, possibly because they wish to have children while being uninfected. This is likely to have negative effects on both educational attainment and child mortality. As also shown by previous studies, HIV-infected women give birth to fewer children than uninfected women. This is probably due to changed fertility preferences, as well as to physiological factors.<p> |
| Keywords: | Adult mortality; Desired fertility; Fertility; HIV/AIDS; Malawi; Sub-Saharan Africa |
| JEL: | I12 J13 O12 |
| Date: | 2007–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0284&r=dev |
| By: | ; Singh Manjari |
| Abstract: | Child labour in India is a critical socio-economic problem that needs special attention of policy makers. In order to make effective policies to reduce child labour it is important to understand the specific factors that affect it in different situations. The paper empirically examines these factors across 35 Indian states and union territories at three levels of aggregation: total population, rural/urban, and male/female. The results showed that education, fertility, and workforce participation are the major influencing factors in our models. Interestingly, impact of economic indicators of poverty and income differed among total, rural, urban, male, and female population. The explanatory powers of models showed large variations across different levels of aggregation and were stronger for total, rural and female population. |
| Keywords: | Child labour, education, fertility, workforce participation |
| Date: | 2008–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2008-01-01&r=dev |
| By: | Pierre-Richard Agénor; Peter J. Montiel |
| Abstract: | This paper describes a simple framework for monetary policy analysis in a small open economy where bank credit is is the only source of external finance. At the heart of the model is the link between banks' lending rates (which incorporate a premium over and above the marginal cost of borrowing) and firms' net worth. In contrast to models in the Stiglitz-Weiss or Kiyotaki-Moore tradition, the supply of bank loans is perfectly elastic at the prevailing rate. The central bank sets the refinance rate and provides unlimited access to liquidity at that rate. The model is used to study the effects of changes in official interest rates, under both fixed and flexible exchange rates. Various extensions are also discussed, including income effects, the cost channel, the role of land as collateral, and dollarization. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:man:cgbcrp:90&r=dev |
| By: | Raghav Gaiha; Katsushi Imai |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0705&r=dev |
| By: | Pasquale Scandizzo; Raghav Gaiha; Katsushi Imai |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0706&r=dev |
| By: | Raghav Gaiha; Katsushi Imai; Woojin Kang |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0708&r=dev |
| By: | Jamsheed Shorish |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0709&r=dev |
| By: | Katsushi Imai; Raghav Gaiha |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0719&r=dev |
| By: | Raghav Gaiha; Ganesh Thapa; Katsushi Imai; Vani S. Kulkarni |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0723&r=dev |
| By: | Nicole M Mason (Department of Agricultural Economics, Michigan State University); Antony Chapoto (Department of Agricultural Economics, Michigan State University); T.S Jayne (Department of Agricultural Economics, Michigan State University); Robert J. Myers (Department of Agricultural Economics, Michigan State University) |
| Abstract: | 1. Consistent with the New Variant Famine (NVF) hypothesis, the negative impact of drought on crop output and output per hectare is further exacerbated where HIV prevalence rates are relatively high, particularly in the low- and medium rainfall zones of the country (agro-ecological regions I and II). 2. HIV prevalence rates and AIDS-related mortality rates in Zambia are highest in the lowest rainfall and most drought-prone zone of the country (agro-ecological region I). 3. Only for districts in agro-ecological region I do we find evidence of a robust negative effect of HIV/AIDS on agrarian livelihood indicators. Relatively stable food production zones and/or areas with relatively low HIV prevalence rates appear to be less vulnerable to the adverse effects predicted by the NVF hypothesis, which suggests that HIV/AIDS exacerbates the effects of drought and other shocks on agrarian communities. 4. HIV/AIDS reduces the crop production gains associated with fertilizer subsidy increases in the highest rainfall areas. 5. Increases in the percentage of female-headed households in a district are related to declines in agricultural production indicators, but these effects do not appear to worsen when the HIV/AIDS epidemic is severe. 6. Only in districts whose borders encompass both agro-ecological regions II and III do we consistently find weak evidence that HIV/AIDS reduces the contribution of productive assets to crop output and output per unit of land as would be expected under the NVF hypothesis. |
| Keywords: | food security, food policy, Zambia, HIV/AIDS |
| JEL: | Q20 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:msu:icpbrf:zm-fsrp-pb-023&r=dev |
| By: | Duncan Boughton (Department of Agricultural Economics, Michigan State University); David Tschirley; Danilo Abdula |
| Abstract: | As indicated by the title, this paper is an update of Research Paper 60E. While some of the wording and material are very similar to that paper, this new paper updates nearly all figures, and also deals in more detail with selected topics. Of special focus in this paper is demonstrating, explaining the reasons for, and assessing the importance of the very high prices of food staples in Mozambique. Mozambique’s food production and marketing system faces a huge set of challenges now and over the next decade, driven by structural constraints, population and income growth, and a rapidly rising urban share of population. We examine this challenge through the lens of the country’s primary staple, maize, focusing primarily on the central and southern regions of the country. |
| Keywords: | food security, food policy, Mozambique, marketing, trade |
| JEL: | Q18 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:msu:icpwrk:mz-minag-rr-62e&r=dev |
| By: | Duncan Boughton (Department of Agricultural Economics, Michigan State University); Rui M.S. Benfica |
| Abstract: | Livelihood strategies among rural HHs in the Zambezi Valley are predominantly based on agricultural activities, but income diversification is increasingly important. Cash income from agriculture comes predominantly from tobacco and cotton production. Due to cash constraints and poor access to input and credit by farmers, and high demand from buyers to meet quality and volume requirements, contract farming (CF) is the dominant form in the organization of transactions in those cash cropping sectors. |
| Keywords: | food security, food policy, Mozambique, marketing, cash crop |
| JEL: | Q18 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:msu:icpwrk:mz-minag-rr-63e&r=dev |
| By: | Duncan Boughton (Department of Agricultural Economics, Michigan State University); Rui M.S. Benfica |
| Abstract: | Poverty is widespread in Mozambique, particularly in rural areas where the highest proportion of the population lives and work. Livelihood strategies among rural HHs in the Zambezi Valley are predominantly based on agricultural activities, but income diversification is increasingly important. Cash income from agriculture comes predominantly from tobacco and cotton production. Due to cash constraints and poor access to input and credit by farmers, and high demand from buyers to meet quality and volume requirements, contract faming is the dominant form in the organization of transactions in those cash cropping sectors. The selective nature of CF implies that not all HHs may have the chance to directly participate in these schemes; some HHs are excluded. A key question, then, is how large and widespread the indirect income effects of these schemes are, compared to the direct effects. The answer to these questions has a lot to say about the poverty reduction effects of such crops, and may generate insights about policies and programs to enhance these effects. |
| Keywords: | food security, food policy, Mozambique, marketing, cash crop |
| JEL: | Q18 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:msu:icpwrk:mz-minag-rr-64e&r=dev |
| By: | Zhi Wang; Shang-Jin Wei |
| Abstract: | Chinese exports have become increasingly sophisticated. This has generated anxiety in developed countries as competitive pressure may increasingly be felt outside labor-intensive industries. Using product-level data on exports from different cities within China, this paper investigates the contributing factors to China's rising export sophistication. Somewhat surprisingly, neither processing trade nor foreign invested firms are found to play an important role in generating the increased overlap between China’s export structure and that of high-income countries. Instead, improvement in human capital and government policies in the form of tax-favored high-tech zones appear to be the key to the country's evolving export structure. On the other hand, processing trade, foreign invested firms, and government-sponsored high-tech zones all have contributed significantly to raising the unit values of Chinese exports within a given product category. |
| JEL: | F1 O1 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13771&r=dev |
| By: | Charles Calomiris; Raymond Fisman; Yongxiang Wang |
| Abstract: | We document the market response to an unexpected announcement of proposed sales of government-owned shares in China. In contrast to the "privatization premium" found in earlier work, we find a negative effect of government ownership on returns at the announcement date and a symmetric positive effect in response to the announced cancellation of the government sell-off. We argue that this results from the absence of a Chinese political transition to accompany economic reforms, so that the positive effects on profits of political ties through government ownership outweigh the potential efficiency costs of government shareholdings. Companies with former government officials in management have positive abnormal returns, suggesting that personal ties can substitute for the benefits of government ownership. The "privatization discount" is higher for firms located in Special Economic Zones, where local government discretionary authority is highest. This is consistent with the view that firms in these locations are more dependent on government connections. We also find that companies with relatively high welfare payments to employees, which presumably would fall with privatization, benefit disproportionately from the privatization announcement. |
| JEL: | G15 G38 H11 L33 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13774&r=dev |
| By: | Antonio Ciccone; Markus Brückner |
| Abstract: | According to the economic approach to political transitions, negative transitory economic shocks can give rise to a window of opportunity for democratic change. We examine this hypothesis using yearly rainfall variation over the 1980-2004 period in 41 Sub-Saharan African countries. We find that a 25% drop in rainfall increases the probability of a transition to democracy during the following two years by around 3 percentage points. A 5% fall in income due to low rainfall raises the probability of democratization by 7 percentage points. We also find that rainfall does not affect transitions from democracy to autocracy. |
| Keywords: | Democratization, transitory economic shocks |
| JEL: | O0 P0 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1063&r=dev |
| By: | Waibel, Michael; Liu, Lili |
| Abstract: | Subnational insolvency is a reoccurring event in development, as demonstrated by historical and modern episodes of subnational defaults in both developed and developing countries. Insolvency procedures become more important as countries decentralize expenditure, taxation, and borrowing, and broaden subnational credit markets. As the first cross-country survey of procedures to resolve subnational financial distress, this paper has particular relevance for decentralizing countries. The authors explain central features and variations of subnational insolvency mechanisms across countries. They identify judicial, administrative, and hybrid procedures, and show how entry point and political factors drive their design. Like private insolvency law, subnational insolvency procedures predictably allocate default risk, while providing breathing space for orderly debt restructuring and fiscal adjustment. Policymakers ' desire to mitigate the tension between creditor rights and the need to maintain essential public services, to strengthen ex ante fiscal rules, and to harden subnational budget constraints are motivations specific to the public sector. |
| Keywords: | Bankruptcy and Resolution of Financial Distress,Debt Markets,Banks & Banking Reform,,Strategic Debt Management |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4496&r=dev |
| By: | Molina, Danielken; Micco, Alejandro; Lopez-Cordova, J. Ernesto |
| Abstract: | This paper estimates the elasticity of substitution of U.S. imports using detailed trade data over the 1990-2003 period. The authors use a two-stage least squares framework in order to identify the elasticity parameter of interest. The authors use the elasticity estimates to assess the extent to which Latin American and Chinese goods compete in the U.S. market by providing forecasts of how alternative policy scenarios may affect exports to the United States. The analysis considers the following scenarios: (i) currency revaluation in China; (ii) elimination of U.S. tariffs on Latin American exports un der a hemispheric free trade agreement; and (iii) the elimination of quotas on apparel and textile exports under the Multi-Fiber Agreement. The findings show that a 20-percent appreciation of the renminbi reduces Chinese exports to the United States by a fifth, although since other regions increase sales to that market (0.5 percent for Latin America), U.S. imports decline by only 1.7 percent. Hemispheric free trade would increase Latin America ' s exports to the United States by around 3 percent. The removal of the quotas would lead to a sharp increase in Chinese sales to the United States (40 percent), but Latin America would see its share of the U.S. market decline by around 2 percent (2.5 percentage points). China ' s gains would come mainly at the expense of other regions of the world. |
| Keywords: | Economic Theory & Research,Free Trade,Markets and Market Access,Trade Policy,Debt Markets |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4497&r=dev |
| By: | Dinar, Ariel; Saleth, R. Maria |
| Abstract: | The success of development programs, including water resource projects, depends on two key factors: the role of underlying institutions and the impact synergies from other closely related programs. Existing methodologies have limitations in accounting for these critical factors. This paper fills this gap by developing a methodology, which quantifies both the roles that institutions play in impact generation and the extent of impact synergies that flows from closely related programs within a unified framework. The methodology is applied to the Kala Oya Basin in Sri Lanka in order to evaluate the impacts of three water-related programs and the roles of 11 institutions in the context of food security. The results provide considerable insights on the relative role of institutions and the flow of development synergies both within and across different impact pathways. The methodology can also be used to locate slack in impact chains and identify policy options to enhance the impact flows. |
| Keywords: | Economic Theory & Research,Food & Beverage Industry,E-Business,Rural Poverty Reduction,Climate Change |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4498&r=dev |
| By: | Akresh, Richard; Verwimp, Philip; Bundervoet, Tom |
| Abstract: | This paper combines household survey data with event data on the timing and location of armed conflicts to examine the impact of Burundi ' s civil war on children ' s health status. The identification strategy exploits exogenous variation in the war ' s timing across provinces and the exposure of children ' s birth cohorts to the fighting. After controlling for province of residence, birth cohort, individual and household characteristics, and province-specific time trends, the authors find that children exposed to the war have on average 0.515 standard deviations lower height-for-age z-scores than non-exposed children. This negative effect is robust to specifications exploiting alternative sources of exogenous variation. |
| Keywords: | Youth and Governance,Rural Poverty Reduction,Population Policies,Post Conflict Reconstruction,Health Monitoring & Evaluation |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4500&r=dev |
| By: | Leonard, Kenneth; Hammer, Jeffrey; Das, Jishnu |
| Abstract: | This paper provides an overview of recent work on quality measurement of medical care and its correlates in four low and middle-income countries-India, Indonesia, Tanzania, and Paraguay. The authors describe two methods-testing doctors and watching doctors-that are relatively easy to implement and yield important insights about the nature of medical care in these countries. The paper discusses the properties of these measures, their correlates, and how they may be used to evaluate policy changes. Finally, the authors outline an agenda for further research and measurement. |
| Keywords: | Health Monitoring & Evaluation,Health Systems Development & Reform,Gender and Health,Health Economics & Finance,Disease Control & Prevention |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4501&r=dev |
| By: | Das Gupta, Monica |
| Abstract: | China has a large deficit of females, and public policies have sought to reduce the son preference that is widely believed to cause this. Recently a study has suggested that up to 75 percent of this deficit is attributable to hepatitis B infection, indicating that immunization programs should form the first plank of policy interventions. However, a large medical dataset from Taiwan (China) shows that hepatitis B infection raises women ' s probability of having a son by only 0.25 percent. And demographic data from China show that the only group of women who have elevated probabilities of bearing a son are those who have already borne daughters. This pattern makes it difficult to see how any biological factor can explain a large part of the imbalance in China ' s sex ratios at birth -- unless it can be shown that it somehow selectively affects those who have borne girls, or causes them to first bear girls and then boys. The Taiwanese data suggest that this is not the case with hepatitis B, since its impact is unaffected by the sex composition of previous births. The data support the cultural, rather than the biological, explanation for the " missing women. " |
| Keywords: | Population Policies,Gender and Health,Disease Control & Prevention,Gender and Law,Reproductive Health |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4502&r=dev |
| By: | Perry, Guillermo; Lopez , J. Humberto |
| Abstract: | Latin America is together with Sub-Saharan Africa the most unequal region of the world. This paper documents recent inequality trends in the Latin American region, going beyond traditional measures of income inequality. The paper also reviews some of the explanations that have been put forward to understand the current situation, and discusses why reducing income inequality should be an important policy priority. In particular, the authors discuss channels through which inequality can affect growth and output volatility. On the whole, the analysis suggests a two-pronged approach to reduce inequality in the region that combines policies aimed at improving the distribution of assets (especially education) with elements aimed at improving the capacity of the state to redistribute income through taxes and transfers. |
| Keywords: | Inequality,Rural Poverty Reduction,Economic Conditions and Volatility,Achieving Shared Growth,Poverty Impact Evaluation |
| Date: | 2008–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4504&r=dev |
| By: | Yaron, Jacob; Mendoza, Juan Carlos; Mascaro, Yira; Francisco, Manuela |
| Abstract: | This paper develops and tests a proposed methodology that puts forward a new integrated method for evaluating the performance of development finance institutions. This methodology applies assessment criteria that take into account both the social objective that the development finance institution addresses and the subsidies it received in order to achieve such an objective. This methodology is applied to two pilot case studies-Banadesa (Honduras) and Banrural (Guatemala). The authors calculate the previously tested subsidy dependence index, which measures the degree of an institution ' s subsidy dependence. The paper develops and estimates a new measure-the output index- which indicates the level to which the institution fulfills the social objectives of the state. The analysis integrates the subsidy dependence index and the output index to assess the effectiveness associated with meeting the social objective. The findings suggest that the integration of the two indexes can constitute the basis of a meaningful evaluation framework for the performance of development finance institutions. This new methodology can also be a useful metric for policy makers who are seeking to decide on an optimal allocation of scarce funds for development finance institutions that pursue social goals and for management that seeks improved performance outcomes. |
| Keywords: | ,Access to Finance,Debt Markets,Banks & Banking Reform,Economic Theory & Research |
| Date: | 2008–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4506&r=dev |
| By: | Philippe Aghion; Robin Burgess; Stephen Redding; Fabrizio Zilibotti |
| Abstract: | We study whether the effects on registered manufacturing output of dismantling the License Raj – a system of central controls regulating entry and production activity in this sector – vary across Indian states with different labor market regulations. The effects are found to be unequal across Indian states with different labor market regulations. In particular, following delicensing, industries located in states with proemployer labor market institutions grew more quickly than those in proworker environments. |
| Keywords: | Distance to frontier, India, Industrial policy, Financial development, Labor regulation, Liberalization, Manufacturing, Reform. |
| JEL: | J52 L11 L52 O14 O24 O47 O53 P41 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:345&r=dev |
| By: | Alessandra Bonfiglioli |
| Abstract: | Understanding the mechanism through which financial globalization affects economic performance is crucial for evaluating the costs and benefits of opening financial markets. This paper is a first attempt at disentangling the effects of financial integration on the two main determinants of economic performance: productivity (TFP) and investments. I provide empirical evidence from a sample of 70 countries observed between 1975 and 1999. The results for both de jure and de facto indicators suggest that financial integration has a positive direct effect on productivity, while it does not directly affect capital accumulation. I control for indirect effects of financial globalization through financial development and banking and currency crises. While the evidence on financial depth as an indirect channel is weak, the results are more robust for financial crises: they depress both investments and TFP, and are favored by financial integration, though only to a minor extent. The overall effect of financial liberalization is positive for productivity and negligible for investments. |
| Keywords: | Capital account liberalization, financial development, financial crises, growth, productivity, investments. |
| JEL: | G15 F43 O40 C23 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:350&r=dev |
| By: | Antonio Ciccone (ICREA-Universitat Pompeu Fabra, Plaça de la Mercè, 10-12. 08002 Barcelona, Spain.); Marek Jarocinski (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | Many factors inhibiting and facilitating economic growth have been suggested. Will international income data tell which matter when all are treated symmetrically a priori? We find that growth determinants emerging from agnostic Bayesian model averaging and classical model selection procedures are sensitive to income differences across datasets. For example, many of the 1975-1996 growth determinants according to World Bank income data turn out to be irrelevant when using Penn World Table data instead (the WB adjusts for purchasing power using a slightly different methodology). And each revision of the 1960-1996 PWT income data brings substantial changes regarding growth determinants. We show that research based on stronger priors about potential growth determinants is more robust to imperfect international income data. JEL Classification: E01, O47. |
| Keywords: | Growth regressions, robust growth determinants. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080852&r=dev |
| By: | David Roodman |
| Abstract: | The cross-country literature on foreign aid effectiveness has relied on the use of instruments to distinguish causality from mere correlation. This paper uses simple non-instrumental techniques in the spirit of Granger to demonstrate that the main aid-growth connection is a negative causal relationship from growth to aid—-aid, that is, as a fraction of recipient GDP. Coarsely, when GDP goes up, aid/GDP goes down. The endogeneity of aid, long suspected, is real. Less understood is that adding certain common controls to regressions puts this relationship through the looking glass, flipping both its sign and apparent direction: aid seems to cause growth. Ideally, instrumentation expunges the endogeneity shown here. In practice, estimates of aid’s impact have run into problems. Autocorrelation in the errors is widespread, and can render endogenous lagged variables used as regressors or instruments. The pitfalls of “difference” and “system” include invalidity and proliferation of instruments. Multicollinearity in term pairs of interest, such as aid and aid2 or “project” and “program” aid, can amplify endogeneity bias. The combination of specification problems and widespread fragility (shown in earlier work) leads to pessimism about the ability of cross-country econometrics to demonstrate aid effectiveness. This does not rule an average positive effect, nor does it contradict the fact that aid has saved millions of lives, but it does suggest that the average effect on economic growth is too small to be detected statistically. |
| Keywords: | foreign aid, economic growth |
| JEL: | B40 F35 O11 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:137&r=dev |
| By: | Bezemer, Dirk; Headey, Derek |
| Abstract: | Throughout history, agriculture-led development strategies with state support programs have been essential to achieving rapid economy-wide growth, poverty reduction and structural transformation at early stages of development. Yet over the last three decades, the domestic and international policy environments have continued to discriminate against agricultural development in the poorest countries. This paper studies the causes and manifestations of this ‘urban bias’, including discrimination in domestic pricing policies and in the international trade regime, decreasing financial support from LDC governments and aid donors, and increasing neglect of agriculture in development theory and economic research. The authors conclude that urban bias remains a persistent and paramount obstacle to sustained growth and poverty reduction in the least developed countries. |
| Keywords: | agricultural development; urban bias; agricultural policies; foreign aid. |
| JEL: | O13 Q18 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7026&r=dev |
| By: | Dorward, Andrew; Kydd, Jonathan; Poulton, Colin; Bezemer, Dirk |
| Abstract: | This paper addresses issues relevant to a critical problem in economic development: how to get rapid pro-poor economic growth in poor rural areas in Africa and South Asia where most of the world’s dollar a day poor live. It examines constraints to the development of coordinated exchange systems in poor rural areas, focusing on the core problem of thin markets and low density of economic activity in these areas. Transaction cost and risk analysis is integrated into a conventional neoclassical production economics framework to describe the existence of low level equilibrium traps in transactions and supply chains and to generate important insights for development policy. |
| Keywords: | Development; agriculture; market liberalization; coordination problem |
| JEL: | O13 Q12 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7028&r=dev |
| By: | Bolt, Jutta; Bezemer, Dirk |
| Abstract: | Long-term growth in developing countries has been explained in four frameworks: ‘extractive colonial institutions’ (Acemoglu et al., 2001), ‘colonial legal origin’ (La Porta et al., 2004) ‘geography’ (Gallup et al., 1998) and ‘colonial human capital’ (Glaeser et al., 2004). In this paper we test the ‘colonial human capital’ explanation for sub-Saharan Africa, controlling for legal origins and geography. Utilizing freshly collected data on colonial-era population density and education, we find that in sub-Saharan Africa, high European population mortality did not lead to low European population densities, contra Acemoglu et al., (2001). Further, we find that instrumented human capital explains long-term growth better, and shows greater stability over time, than instrumented measures for extractive institutions. We therefore suggest that the impact of the disease environment on African long-term growth runs through a human capital channel rather than an extractive-institutions channel. The effect of education is robust to including variables capturing legal origin and geography, which have additional explanatory power. We also find some evidence that institutions are endogenous to education. |
| Keywords: | Africa; growth; institutions; education; colonial history |
| JEL: | O11 O10 P51 P16 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7029&r=dev |
| By: | Eggen, Andrea; Bezemer, Dirk |
| Abstract: | This paper examines the partnership in development policies between the World Bank/IMF and the United Nations. Poverty Reduction Strategy Papers (PRSPs) are instruments used by the Washington institutions to achieve the Millenium Development Goals (MDG) initiated by the UN. We review and interpret the genesis and development of MDGs and PRSPs in this perspective, and examine their institutional connections. The analytical aim of the paper is to conduct the first investigation in the literature of the impact of PRSP features on progress in achieving the MDGs. We introduce a unique dataset of PRSP indicators and match these to MDG data on MDG indicators. We find robust effects of PRSP features on the youth literacy, women’s employment and child mortality indicators. The quantitative evidence suggests that PRSPs appear to become more effective over time, and that more focused PRSPs, more participatory PRSP formulation, and better proposed policy actions may enhance their effectiveness in achieving MDGs. We discuss these findings in the context of other PRSP assessments in the literature and propose future research avenues |
| Keywords: | Development Policies; Millenium Development Goals |
| JEL: | O19 O21 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7030&r=dev |
| By: | Kumakura, Masanaga; Kuroko, Masato |
| Abstract: | Despite widespread interest in China's growing trade surplus and its impact on other countries, empirical research in these issues is handicapped by the lack of reliable statistics on aggregate import and export prices. Although researchers estimate the trade volumes of China and other East Asian countries using a variety of surrogate price indices, an inappropriate deflator can give rise to a significant bias in econometric analysis. This paper discusses the potential seriousness of this problem by examining recent studies on the export competition between China and other Asian countries. |
| Keywords: | China, East Asia, Trade Price Index, Electronics, Exports, Trade problem |
| JEL: | F14 F31 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper131&r=dev |
| By: | Dawood Mamoon |
| Abstract: | The paper examines how legal, economic, political and social institutions fare with different measures of inequality in a cross section framework. We differentiate between institutions based on four categories which are legal, economic, political and social. Among legal institutions, rule of law and control for corruption have a stronger impact on inequality than voice and accountability. We find that countries which practice democracy are less prone to unequal outcomes especially when it comes to wage inequality and income inequality whereas autocracy is associated with higher level of wage inequalities but its impact on income inequalities are insignificant. Though under good economic management, autocracies may redistribute incomes from the richest to the poorest, more generally an autocratic set up violates the median voter hypothesis. The results also show that political stability is more sensitive to inequalities than democracy and autocracy which is to say that the countries which are politically stable also form more equal societies. Though in a cross section analysis, our results indicate average sample characteristics of countries chosen which neutralise the single country case sensitivities and thus may have captured the simple observational analogy that most democracies in the world are also the ones which are politically stable and economically efficient whereas most autocracies, unless they are lead by enlightened leadership eventually suffer from unstable or repressed political systems. Economic institutions also play an important role in alleviating global inequalities. Whether the government is functioning effectively and whether it has a robust fiscal and monetary policy seems to have stronger impact on inequality than regulatory quality. Education for all, a proxy for social institutions, has a strong redistributive power. Overall, political stability, control for corruption and rule of law trumps any other institutional proxy in reducing inequalities in a country. On the other hand, middle income group is most likely to benefit from good functioning institutions than any other income group. Once controlling for institutions, openness is associated with increased wage inequalities across nations. However the results for trade policy are mixed. Decrease in import taxes increase wage inequality, whereas decrease in export taxes has an egalitarian effect. The results are applicable only to a larger sample of developed and developing countries and highlight the bottle neck faced by both developing and developed countries in WTO talks which have not been successful as yet in further decrease in trade taxes. In case the situation prevails, the paper calls for more South-South trade which would enable developing countries to decrease the relative wage gaps among labour force. |
| Keywords: | redistribution, inequality, cross section models |
| JEL: | O1 N40 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:iss:wpaper:450&r=dev |
| By: | Enzama Wilson |
| Abstract: | This paper describes and analyzes the operational strategy of West Nile region, a typical low local capability community, in pursuit of local economic development. Special emphasis has been placed on the development of groups of survival beekeeping-enterprises and their integration in the local economy. The region provides an interesting example of what public-private partnerships can offer for local economic development. Secondly, it is an attempt to document, in a coherent manner, the activities and contributions of the key actors in the honey and beeswax value chain, including support from complementary institutions. Finally, it conceptualizes and theorizes the practice of beekeeping, honey extraction, processing and marketing in West Nile. Possible lessons that can be learnt from the experience are also identified and discussed. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:iss:wpaper:452&r=dev |
| By: | John Weeks (Professor Emeritus, School of Oriental and African Studies, University of London) |
| Abstract: | During 2005-2006, appreciation of the Kwacha, Zambia?s currency, had a significant negative impact on public income. This exchange-rate effect received little notice in the debate over macroeconomic policy. The appreciation reduced fiscal space largely because of binding IMF conditionalities on monetary polices. The fiscal effect had two major revenue components: a fall in the domestic-currency income equivalent of official development assistance and a fall in trade taxes. In 2005, the negative effect on the public budget of the Kwacha appreciation was largely balanced by the positive impact on reducing external debt service. This positive impact ended, however, with debt relief and was almost zero after 2005. Obviously, these revenue effects, though little noticed, had negative implications for Zambia?s ability to achieve the MDGs. The Zambia experience underscores some important general lessons. It indicates, for example, the necessity to coordinate fiscal, monetary and exchange-rate policy in order to achieve sustained growth, employment generation and poverty reduction. Most important, this experience is also a clear example of the dysfunctional consequences of having low-inflation targets rule monetary policy. In the context of currency appreciation, setting limits on the domestic money supply prevents effective exchange-rate management. This necessarily creates, as a by-product, larger fiscal deficits and, consequently, more public borrowing. And these negative fiscal consequences could significantly constrict the resources that some developing countries need to achieve the MDGs. |
| Keywords: | The Reduction of Fiscal Space in Zambia?Dutch Disease and Tight-Money Conditionalities |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:cstudy:14&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:296686&r=dev |
| By: | Rafael Perez Ribas (International Poverty Centre); Guilherme Issamu Hirata (International Poverty Centre); Fabio Veras Soares (International Poverty Centre) |
| Abstract: | There is a lively global debate on how to target beneficiaries of Conditional Cash Transfer (CCT) programmes. In this Evaluation Note we analyze alternative targeting methods for Paraguay?s CCT programme, Tekoporã. The major practical choice for Paraguay is between a multidimensional quality-of-life index and a proxy-means test for income. We focus on the efficiency and efficacy of these approaches by examining primarily the trade-off between leakage and coverage. Tekoporã is a CCT programme that is being scaled up in Paraguay. Like other recent CCT programmes, it was designed in the context of a national strategy for combating poverty, as part of the general effort to achieve the Millennium Development Goals (MDGs). Its pilot started in August 2005, covering 4,500 households in five districts of two departments. Tekoporã is gradually expanding and intends to cover 35 districts by 2008. These districts were selected from the pool of 66 districts that had been judged to have the most vulnerable populations, according to a scoring system based on a Geographical Prioritization Index (IPG). Tekoporã?s objective is to break the intergenerational transmission of poverty by means of the cash transfer and follow-up activities for beneficiary households. This follow-up consists of the monitoring of co-responsibilities (between beneficiaries and the programme) with regard to the supply and use of health and education facilities and the development of related family-support activities. (...) |
| Keywords: | Debating Targeting Methods for Cash Transfers: A Multidimensional Index vs. an Income Proxy for Paraguay?s Tekoporã Programme |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:pubipc:820898&r=dev |
| By: | Eric Verhoogen (Columbia University - Department of Economics) |
| Abstract: | This paper proposes a new mechanism linking trade and wage inequality in developing countries ¿ the quality-upgrading mechanism ¿ and investigates its empirical implications in panel data on Mexican manufacturing plants. In a model with heterogeneous plants and quality-differentiated goods, only the most productive plants in a country like Mexico enter the export market, they produce higher-quality goods to appeal to richer Northern consumers, and they pay high wages to attract and motivate a high-quality workforce. An exchange-rate devaluation leads initially more-productive, higher-wage plants to increase exports, upgrade quality, and raise wages relative to initially less-productive, lower-wage plants within each industry. Using the late-1994 peso crisis as a source of variation and a variety of proxies for plant productivity, I find that initially more-productive plants increased the export share of sales, white-collar wages, blue-collar wages, the relative wage of whitecollar workers, and ISO 9000 certification more than initially less-productive plants during the peso crisis period, and that these differential changes were greater than in periods without devaluations before and after the crisis period. A factor-analytic strategy that relies more heavily on the theoretical structure and avoids the need to construct proxies finds similar results. These findings support the hypothesis that differential quality upgrading induced by the exchange rate shock tended to increase within-industry wage inequality. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0607-08&r=dev |
| By: | Prasanna Guru Sethupathy (Columbia University) |
| Abstract: | This paper investigates the presence of productivity spillovers due to exporting. In particular, it examines whether productivity gains from exporting spill over upstream (to suppliers), downstream (to customers) or horizontally (to competitors). Using plant-level data on Indonesian manufacturing sectors, we find productivity gains to downstream firms of approximately 2.5-3.5% during the period 1990-1996. We do not find the presence of spillovers upstream or horizontally. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0708-01&r=dev |
| By: | Maurice Kugler (Harvard University - John F. Kennedy School of Government); Eric A. Verhoogen (Columbia University - Department of Economics) |
| Abstract: | This paper uses uniquely rich and representative data on the unit values of outputs (products)and inputs of Colombian manufacturing plants to draw inferences about the extent of quality differentiation at the plant level. We extend the Melitz (2003) framework to include heterogeneity of inputs and a complementarity between plant productivity and input quality in producing output quality and we show that the resulting model carries distinctive implications for two simple reduced-form correlations ¿ between output prices and plant size and between input prices and plant size ¿ and for how those correlations vary across sectors. We then document three plantlevel facts: (1) output prices are positively correlated with plant size within industries, on average;(2) input prices are positively correlated with plant size within industries, on average; and (3) both correlations are more positive in industries with more scope for quality differentiation, as measured by the advertising and R&D intensity of U.S. firms. The correlations between export status and input and output prices are similar to those for plant size. These facts are consistent with our model of quality differentiation of both outputs and inputs, and difficult to reconcile with models that assume homogeneity or symmetry of either set of goods. Beyond recommending an amendment of the Melitz (2003) model, the results highlight shortcomings of standard methods of productivity estimation, generalize and provide an explanation for the well-known employer size-wage effect, and suggest new channels through which liberalization of trade in output markets may affect input markets and vice-versa. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0708-12&r=dev |