nep-dev New Economics Papers
on Development
Issue of 2008‒06‒07
35 papers chosen by
Jeong-Joon Lee
Towson University

  1. Cross-border Investment and Economic Integration: The Case of Guangdong Province and Hong Kong SAR By Sharif, Naubahar; Huang, Can
  2. From the ground up: Impacts of a pro-poor community-driven development project in Nigeria By Nkonya, Ephraim; Phillip, Dayo; Mogues, Tewodaj; Pender, John; Yahaya, Muhammed Kuta; Adebowale, Gbenga; Arokoyo, Tunji; Kato, Edward
  3. A tale of two countries: Spatial and temporal patterns of rice productivity in China and Brazil By You, Liangzhi
  4. Rural innovation systems and networks: Findings from a study of Ethiopian smallholders By Spielman, David J.; Davis, Kristin E.; Negash, Martha; Ayele, Gezahegn
  5. Gender difference in the long-term impact of famine: By Mu, Ren; Zhang, Xiaobo
  6. How change agents and social capital influence the adoption of innovations among small farmers: Evidence from social networks in rural Bolivia By Monge, Mario; Hartwich, Frank; Halgin, Daniel
  7. Plant genetic resources for agriculture, plant breeding, and biotechnology: Experiences from Cameroon, Kenya, the Philippines, and Venezuela By Falck-Zepeda, José; Zambrano, Patricia; Cohen, Joel I.; Borges, Orangel; Guimarães, Elcio P.; Hautea, Desiree; Kengue, Joseph; Songa, Josephine
  8. Impacts of inventory credit, input supply shops, and fertilizer microdosing in the drylands of Niger: By Pender, John; Abdoulaye, Tahirou; Ndjeunga, Jupiter; Gerard, Bruno; Kato, Edward
  9. Marriage behavior response to prime-age adult mortality: Evidence from Malawi By Ueyama, Mika; Yamauchi, Futoshi
  10. Economic partnership agreements between the European Union and African, Caribbean, and Pacific Countries: What is at stake for Senegal By Berisha-Krasniqi, Valdete; Bouet, Antoine; Mevel, Simon
  11. Global macroeconomic developments and poverty: By Bonilla, Eugenio Diaz
  12. Introducing a genetically modified banana in Uganda: Social benefits, costs, and consumer perceptions By Falck-Zepeda, José; Kilkuwe, Enoch; Wesseler, Justus
  13. Finance and cluster-based industrial development in China: By Ruan, Jianqing; Zhang, Xiaobo
  14. Impacts of the Hutan Kamasyarakatan Social Forestry Program in the Sumberjaya watershed, West Lampung District of Sumatra, Indonesia: By Pender, John; Suyanto; Kerr, John; Kato, Edward
  15. Does Africa trade less than it should, and if so, why?: The role of market access and domestic factors By Bouet, Antoine; Mishra, Santosh; Roy, Devesh
  16. Migrants as second-class workers in urban China? A decomposition analysis By Sylvie Démurger; Marc Gurgand; Li Shi; Yu Ximing
  17. Aid and Trade - A Donor´s Perspective By Felicitas Nowak-Lehmann D.; Inmaculada Martínez-Zarzoso; Stephan Klasen; Dierk Herzer
  18. Towards A Competitive Manufacturing Sector By Rajiv Kumar; Abhijit Sen Gupta
  19. Rural Nonfarm Employment andIncomes in the Himalayas By Maja Micevska; Dil Bahadur Rahut
  20. Cost of Holding Excess Reserves: The Indian Experience By Abhijit Sen Gupta
  21. Demand-Supply Trends and Projections of Food in India By Surabhi Mittal
  22. Deepening Intraregional Trade and Investment in South Asia: The Case of the Textiles and Clothing Industry By Meenu Tewari
  23. Under the Weather: Health, Schooling, and Economic Consequences of Early-Life Rainfall By Sharon L. Maccini; Dean Yang
  24. Globalization, Growth and Crises: The View from Latin America By Sebastian Edwards
  25. A Mixed-Motives Model of Private Transfers with Subjectively-Assessed Recipient Need: Evidence from a Poor, Transfer-Dependent Economy By Richard P.C. Brown; Eliana V. Jimenez
  26. A Rise By Any Other Name? Sensitivity of Growth Regressions to Data Source By Randall Filer; Jan Hanousek; Dana Hajkova
  27. The Political Economy of Corruption & the Role of Financial Institutions By Kira Boerner; Christa Hainz
  28. Rapid Economic Growth & Industrialization in India, China & Brazil: At What Cost? By KRISHNA CHAITANYA V.
  29. Entrepreneurship, Innovation and Economic Growth:The Case of Yangtze River Delta in China By Zheng, Jianghuai; Hu, Zhining; Wang, Jialing
  30. Industrial Upgrade, Adverse Employment Shock and Land Centralization By Zheng, Jianghuai; Wang, Chengsi; Song, Shunfeng
  31. Commuting times: Is there any penalty for immigrants? By Blázquez Cuesta, Maite; Llano, Carlos; Moral Carcedo, Julian
  32. Targeted Cash Transfer Programmes in Brazil: BPC and the Bolsa Familia By Marcelo Medeiros; Tatiana Britto; Fabio Veras Soares
  33. Towards an Employment-centred Development strategy for Poverty Reduction in The Gambia: Macroeconomic and Labour Market Aspects By James Heintz; Carlos Oya; Eduardo Zepeda
  34. Economic Valuation of Urban Informal Activities: Case Study of Flea Markets in Bandung Municipality By Bagdja Muljarijadi; Rahmat Thio
  35. The Economic Properties of Software By Sebastian von Engelhardt

  1. By: Sharif, Naubahar (Hong Kong University of Science and Technology); Huang, Can (UNU-MERIT)
    Abstract: In this paper, we undertake a comparative study of the performance of local and foreign competitors’ manufacturing firms in a FDI-recipient region—Guangdong Province, China—and analyzes the policy implications of the comparison for the advanced, FDI-outflow region—Hong Kong Special Administrative Region (HKSAR). By highlighting changes in productivity that vary with changes in manufacturing firm ownership, we reveal that domestic firms have been catching up with their foreign counterparts, including Hong Kong-based firms, though foreign firms have successfully strengthened their dominating position in Guangdong’s manufacturing industry.
    Keywords: Total Factor Productivity, Manufacturing Sectors, Asia, China, Guangdong, Hong Kong
    JEL: D24 L60 O47
    Date: 2008
  2. By: Nkonya, Ephraim; Phillip, Dayo; Mogues, Tewodaj; Pender, John; Yahaya, Muhammed Kuta; Adebowale, Gbenga; Arokoyo, Tunji; Kato, Edward
    Abstract: "The community-driven development (CDD) approach has become increasingly popular because of its potential to develop projects that are sustainable, are responsive to local priorities, empower local communities, and more effectively target poor and vulnerable groups. The purpose of this study is to assess the impacts of Fadama II, which is a CDD project and the largest agricultural project in Nigeria. This study used propensity score matching (PSM) to select 1728 comparable project beneficiaries and non-beneficiaries. The study also used double difference methods to compare the impact indicators. Our results show that Fadama II project succeeded in targeting the poor and women farmers in its productive asset acquisition component. Participation in the project also increased the income of beneficiaries by about 60 percent, which is well above the targeted increase of only 20 percent in the six year period of the project. Regarding rural infrastructure investments, we found that the Fadama II project had positive near-term impacts on beneficiaries' access to markets and transportation costs, although the study revealed surprising effects on beneficiaries' commercial behavior and statistically insignificant impacts on nonfarm activities. We also observed that Fadama II increased the demand for postharvest handling technologies but did not have a significant impact on the demand for financial management and market information. Fadama II reduced the demand for soil fertility management technologies. The decline likely reflects the project's focus on providing postproduction advisory services and suggests the need for the project to increase its support for soil fertility management and thus limit the potential for land degradation resulting from increased agricultural productivity. Overall, the Fadama II project has achieved its goal of increasing the incomes of the beneficiaries in the first year of its operation. The project has also succeeded in targeting the poor and vulnerable in its productive-asset component, even though that did not appear to increase significantly short-term household incomes among the poorest asset tercile. The unique feature that could have contributed to the significant impact of the project in a short time is its broad-based approach, which addresses the major constraints limiting the success of CDD projects that address only one or two constraints. This has implications on planning poverty reduction efforts in low-income countries. Given that the poor face numerous constraints, a CDD project that simultaneously addresses many constraints will likely build synergies that will lead to larger impacts than will a project that addresses only one or two constraints. This suggests the need for the government and donors to pool resources and initiate multipronged CDD projects rather than many isolated projects." from Author's Abstract
    Keywords: Community driven development, Poverty reduction, Propensity score matching, Difference-in-difference, Fadama,
    Date: 2008
  3. By: You, Liangzhi
    Abstract: "This paper examines differences in the spatial and temporal variations of rice yields in China and Brazil. Our analysis indicates that, in China, rice yields have converged over time and rice production has become increasingly homogeneous. In contrast, rice yields in Brazil have diverged over time, primarily due to variations in upland rice yields. Three hypothetical explanations may account for the different behaviors of rice yields in Brazil and China, namely: 1) differences in production systems (i.e. irrigated in China vs. upland in Brazil); 2) changes in rainfall patterns; and 3) bias in agricultural research and development (R&D) towards irrigated rice. Our empirical analysis supports the first two hypotheses by establishing that: 1) upland rice shows much more variation in yields compared to irrigated rice; and 2) changing rainfall patterns have primarily affected upland rice. We also provide evidence of the bias towards irrigated systems by looking at the patterns of varietal release." from Author's Abstract
    Keywords: Rice productivity, Spatial convergence, Technology spillover, Agricultural research, Research and development,
    Date: 2008
  4. By: Spielman, David J.; Davis, Kristin E.; Negash, Martha; Ayele, Gezahegn
    Abstract: "Agriculture in Ethiopia is changing. New players, relationships, and policies are influencing how smallholders access and use information and knowledge. Although this growing complexity suggests opportunities for Ethiopian smallholders, too little is known about how these opportunities can be effectively leveraged to promote pro-poor processes of rural innovation. This paper examines Ethiopia's smallholder agricultural sector to provide qualitative insights into the interactions between smallholders and other actors in the agricultural sector and the contribution those interactions make to the smallholders' innovation processes. Case studies of smallholder innovation networks in 10 communities suggest that public sector extension and administration exert a strong influence over smallholders' access to knowledge and information relative to market or civil society actors. Given the priority the Ethiopian government has placed on improving rural welfare by increasing market access among smallholders, the findings of this study may suggest the need to further explore policies and programs that create more space for market and civil society actors to participate in smallholder innovation networks." from Author's Abstract
    Keywords: Agricultural development, Innovation, technology, Social networks, Social learning,
    Date: 2008
  5. By: Mu, Ren; Zhang, Xiaobo
    Abstract: "An increasing literature examines the association between restricted fetal or early childhood growth and the incidence of diseases in adulthood. Little is known, however, about gender difference in this association. We assess the impact of nutritional deficiency in the early lives of survivors of the Chinese Great Famine in terms of health and economic welfare, paying special attention to gender differences. We found evidence of several significant negative impacts for female¾but not male¾survivors, and the gender differences are statistically significant. Furthermore, we show that the selection bias caused by differences in mortality plausibly explains more than two-thirds of the documented gender difference in the long-term health of famine survivors." from Author's Abstract
    Keywords: Famine, Fetal origins hypothesis, Gender difference, Health and nutrition,
    Date: 2008
  6. By: Monge, Mario; Hartwich, Frank; Halgin, Daniel
    Abstract: "This paper presents results from a study that identified patterns of social interaction among small farmers in three agricultural subsectors in Bolivia—fish culture, peanut production, and quinoa production—and analyzed how social interaction influences farmers' behavior toward the adoption of pro-poor innovations. Twelve microregions were identified, four in each subsector, setting the terrain for an analysis of parts of social networks that deal with the diffusion of specific sets of innovations. Three hundred sixty farmers involved in theses networks as well as 60 change agents and other actors promoting directly or indirectly the diffusion of innovations were interviewed about the interactions they maintain with other agents in the network and the sociodemographic characteristics that influence their adoption behavior. The information derived from this data collection was used to test a wide range of hypotheses on the impact that the embeddedness of farmers in social networks has on the intensity with which they adopt innovations. Evidence provided by the study suggests that persuasion, social influence, and competition are significant influences in the decisions of farmers in poor rural regions in Bolivia to adopt innovations. The results of this study are meant to attract the attention of policymakers and practitioners who are interested in the design and implementation of projects and programs fostering agricultural innovation and who may want to take into account the effects of social interaction and social capital. Meanwhile, scholars of the diffusion of innovations may find evidence to further embrace the complexity and interdependence of social interactions in their models and approaches." from Author's Abstract
    Keywords: Social networks, Agricultural innovation, Change agent, Social capital,
    Date: 2008
  7. By: Falck-Zepeda, José; Zambrano, Patricia; Cohen, Joel I.; Borges, Orangel; Guimarães, Elcio P.; Hautea, Desiree; Kengue, Joseph; Songa, Josephine
    Abstract: "Local farming communities throughout the world face binding productivity constraints, diverse nutritional needs, environmental concerns, and significant economic and financial pressures. Developing countries address these challenges in different ways, including public and private sector investments in plant breeding and other modern tools for genetic crop improvement. In order to measure the impact of any technology and prioritize investments, we must assess the relevant resources, human capacity, clusters, networks and linkages, as well as the institutions performing technological research and development, and the rate of farmer adoption. However, such measures have not been recently assessed, in part due to the lack of complete standardized information on public plant breeding and biotechnology research in developing countries. To tackle this void, the Food and Agricultural Organization of the United Nations (FAO), in consultation with the International Food Policy Institute (IFPRI) and other organizations, designed a plant breeding and biotechnology capacity survey for implementation by FAO consultants in 100 developing countries. IFPRI, in collaboration with FAO and national experts contracted by FAO to complete in-country surveys, identified and analyzed plant breeding and biotechnology programs in four developing countries: Cameroon, Kenya, the Philippines, and Venezuela. Here, we use an innovation systems framework to examine the investments in human and financial resources and the distribution of resources among the different programs, as well as the capacity and policy development for agricultural research in the four selected countries. Based on our findings, we present recommendations to help sustain and increase the efficiency of publicly- and privately-funded plant breeding programs, while maximizing the use of genetic resources and developing opportunities for GM crop production. Policy makers, private sector breeders, and other stakeholders can use this information to prioritize investments, consider product advancement, and assess the relative magnitude of the potential risks and benefits of their investments." from Author's Abstract
    Keywords: plant breeding, biotechnology, public research, Funding, Innovation systems, Capacity building, Biosafety,
    Date: 2008
  8. By: Pender, John; Abdoulaye, Tahirou; Ndjeunga, Jupiter; Gerard, Bruno; Kato, Edward
    Abstract: "This study investigated the impacts of access to inventory credit, input supply shops, fertilizer microdosing demonstrations, and other factors on farmers' use of inorganic fertilizer and other inputs in Niger and on crop yields. We found that access to inventory credit and input supply shops has increased the use of inorganic fertilizer and seeds and that microdosing demonstrations have increased the use of inorganic fertilizer. Ownership of traction animals and access to off-farm employment have also contributed to the use of inorganic fertilizer, while larger farms use less fertilizer and labor per hectare. The impacts of these interventions and technologies depend on the crop mix. Inorganic fertilizer has a positive impact on millet and millet–cowpea yields when applied using microdosing, with an estimated marginal value-cost ratio greater than 3 for those crops indicating significant profitability. By contrast, microdosing has a negative impact on yields of the millet–sorghum–cowpea intercrop, suggesting that microdosing should not be promoted when sorghum is part of the crop mix. However, better access to input supply shops has contributed to higher yields of the millet–sorghum–cowpea intercrop. The predicted effect of inventory credit on farmers' income as a result of increased inorganic fertilizer use is an increase of 5,000 to 10,000 FCFA per hectare (about US$10 to US$20 per hectare in 2005) in millet or millet–cowpea production. Similarly, being 10 km closer to an input supply shop is predicted to increase farmers' income by 3,200 to 4,500 FCFA per hectare. These benefits do not take into account the impacts of the interventions on seeds or other inputs, which are also generally positive. The positive impacts are linked to the use of fertilizer microdosing, which has increased the productivity of fertilizer use in millet and millet–cowpea production, indicating synergies among the various interventions. They are also linked to these specific crops, because we found less favorable impacts of these interventions for the millet–sorghum–cowpea intercrop and for peanuts. Other interventions that could help to boost the use of inputs and productivity include promotion of improved access to farm equipment and traction animals and promotion of higher-value crops such as hibiscus. Further research on these topics appears warranted. Research on the implications of interventions on land degradation would also be useful." from Author's Abstract
    Keywords: Fertilizer microdosing, Inventory credit, Warrantage, Input supply shops, Drylands, Land management,
    Date: 2008
  9. By: Ueyama, Mika; Yamauchi, Futoshi
    Abstract: "This paper examines the effect of AIDS-related mortality of the prime-age adult population on marriage behavior among women in Malawi. A rise in prime-age adult mortality increases risks associated with the search for a marriage partner in the marriage market. A possible behavioral change in the marriage market in response to an increase in prime-age adult mortality is for marriage to occur earlier to avoid women's exposure to HIV/AIDS risks under the condition that the risks are higher during singlehood. We test this hypothesis using micro data from Malawi, where prime-age adult mortality has drastically increased. In the analysis, we estimate prime-age adult mortality that sample women have observed during the adolescent period by utilizing retrospective information on the death of their siblings. Empirical analysis shows that excess prime-age adult mortality observed in the local marriage market (district) lowers the marriage age for females and reduces their premarital sexual activities. Since a lower age for first marriage implies less schooling completed, we expect that the average schooling achievement among women would decline. This behavioral change also implies a longer reproduction period during their marriage, which may lead to a higher fertility rate. However, the second implication should be discounted if the reduction of sexual activities also applies to the married population. Lower schooling attainment among women has further implications on human capital formation in the next generation." from Author's Abstract
    Keywords: HIV/AIDS, Marriage, Sexual behavior,
    Date: 2008
  10. By: Berisha-Krasniqi, Valdete; Bouet, Antoine; Mevel, Simon
    Abstract: "In recent years the European Union has sought to transform its trading regime with the ACP countries by advocating reciprocal free trade agreements with them through Economic Partnership Agreements (EPAs). As a result, the EPA talks were launched in 2002 and were expected be completed by the end of 2007. Nevertheless, many African countries, including Senegal did not reach agreements with the European Union in 2007 amid rising concerns that such agreements do not represent the interests of developing countries. This policy shift from preferential trade to free trade would imply drastic changes for Senegal's economy, which currently enjoys relatively good access to European market (but also to the U.S. through the African Growth Opportunity Act) while applying a high domestic protection on all sources of imports. As a result, this type of reform would result in improved access to foreign markets only for the EU. Furthermore, the EPA implies a loss of tariff revenues from liberalization, which has been a key concern for ACP countries from the beginning of talks because they constitute a high level of public receipts there. Finally this kind of reform could lead to trade diversion in Senegal while creating not enough trade. Using the MIRAGE computable general equilibrium model the study examines the potential impact of Economic Partnership Agreements on ACP countries with a special focus on Senegal." from Author's Abstract
    Keywords: Economic partnership agreements, European Union, economic growth, Computable general equilibrium (CGE) modeling, trade, Markets, Globalization,
    Date: 2008
  11. By: Bonilla, Eugenio Diaz
    Abstract: "In the second half of the 1990s, a series of developments led to a renewed academic and policy interest in the intersection of macroeconomic policy and poverty issues in developing countries. The focus of that work was domestic macroeconomic policies. This paper, however, focuses on the international dimension and discusses the links between global macroeconomic conditions and poverty in developing countries since the 1960s. Of course, when analyzing policy impacts, both domestic and international aspects must be considered. However, debates about domestic policies, macro or otherwise, and their impacts on poverty cannot provide an accurate analysis of developing countries' alternatives and predicaments if they ignore the role, in many cases overwhelming, of external factors. That is the story this paper tries to tell. The objectives here are to present an overview of trends and cycles in the world economy, to summarize the events of the last half century in view of the current concerns about the likely economic slowdown in the United States and other industrialized economies, and to assess the possible repercussions on the rest of the world. The hope is that the paper will serve as background material for developing countries to better characterize potential scenarios and properly define policy options for the coming years, which look like they will be far less benign than the recent past." from Author's Abstract
    Keywords: Macroeconomics, Poverty, Development, Agriculture,
    Date: 2008
  12. By: Falck-Zepeda, José; Kilkuwe, Enoch; Wesseler, Justus
    Abstract: "Banana is a staple crop consumed by Ugandan households. The Uganda National Agricultural Research Organization has implemented conventional and biotechnology programs that seek improving bananas and address the crop's most important pest and disease problems. A major thrust is the development of genetically modified (GM) bananas. The purpose of this paper is to examine potential social welfare impacts of adopting a GM banana in Uganda. The study has three objectives. First, suggest and apply an approach to calculate reversible and irreversible benefits and costs of introducing a GM banana. The study applies a real option approach to estimate, ex ante, the maximum incremental social tolerable irreversible costs (MISTICs) that would justify immediate introduction of the technology. Second, suggest an approach for assessing producer/consumer preferences and willingness to pay (WTP) for introducing a GM banana. Finally, the paper discusses main implications for biosafety decision making for GM crops in Uganda. Results of MISTICs estimation for different scenarios indicate that in delaying the approval of a GM banana, Uganda foregoes potential annual benefits ranging approximately from US$179 million to US$365 million. Average annual MISTICs per household vary between US$34 and US$ 69. Results indicate that only if the average household is willing to give up at least US$38 per year to avoid introduction of a GM banana, should postponing an immediate release be considered. Results imply that although GM bananas promise vast benefits, realization of those benefits depends on consumers' perceptions and attitudes and the willingness to pay for the GM technology." from Author's Abstract
    Keywords: GM banana, Real option, Choice experiment, Biosafety, MISTICs,
    Date: 2008
  13. By: Ruan, Jianqing; Zhang, Xiaobo
    Abstract: "The traditional literature emphasizes the causal role of finance in promoting industrial growth. China's rapid industrialization over the past several decades, which has occurred in the absence of well-functioning financial markets, seems to defy the conventional wisdom. By studying a cashmere sweater cluster in China, this paper argues that rural industrial clustering, as a new business model, lowers the entry barriers of initial capital investment through the division of labor. Within these clusters, enterprises can often acquire trade credits from upstream or downstream firms and obtain informal financing from friends and relatives, and use these funds to mitigate constraints of working capital. These findings help explain China's rapid industrialization in the absence of an efficient financial market." from Author's Abstract
    Keywords: Industrialization, Cluster, Finance, Growth, industrial development,
    Date: 2008
  14. By: Pender, John; Suyanto; Kerr, John; Kato, Edward
    Abstract: "This paper investigates the impacts of a social forestry program in Indonesia, Hutan Kamasyarakatan (HKm), based on analysis of a survey of 640 HKm and comparable non-HKm plots in the Sumberjaya watershed of southern Sumatra, and of the households operating those plots. The HKm program provides groups of farmers with secure-tenure permits to continue farming on state Protection Forest land and in exchange for protecting remaining natural forestland, planting multistrata agroforests, and using recommended soil and water conservation (SWC) measures on their coffee plantations. Using farmers' perceptions, econometric techniques, and propensity score matching, we investigated the impacts of the HKm program on perceived land tenure security, land purchase prices, farmers' investments in tree planting and SWC measures, and plot-level profits. A significant fraction of HKm group members are not aware of the program or fully aware of its requirements. Although farmers who are aware of the program perceive its strong effects on tenure security and land values, we found insignificant impacts on the actual purchase prices of plots. Nevertheless, our survey revealed that the HKm program has contributed to increased planting of timber and multipurpose trees. We did not find significant impacts on investments in SWC measures or on soil fertility management practices. HKm has had mixed impacts on profits, with timber trees reducing profitability because timber harvesting is not allowed and multipurpose nontimber trees contributing to increased profits. The policy implications of these findings are also discussed in the paper." from Author's Abstract
    Keywords: Rewards for environmental services, Land tenure contracts, Social forestry, Impact assessment, Land management,
    Date: 2008
  15. By: Bouet, Antoine; Mishra, Santosh; Roy, Devesh
    Abstract: "This paper addresses the question of whether Africa is an undertrading continent. We answer this question using a much-improved data set for obtaining predicted trade and by employing methods that correct for bias in estimates of undertrading. Our results indicate that globally Africa is an underexporter in our preferred Heckman specification. This result is robust to the addition of various controls and the application of variants of the gravity model of trade. We also looked for explanations for Africa's undertrading. We found that accounting for transport and communication infrastructure reduced the undertrading effect for Africa, and in some specifications of the gravity model, the under-trading effect vanished altogether. Results from a semiparametric model provided evidence of significant nonlinear impacts from infrastructure, and the effects for a large number of African countries was significant and compared favorably with the marginal effects of infrastructure in countries on other continents and in comparable income brackets. Using this model we also found evidence of complementarity across transport and communication infrastructure, implying that much greater impacts will be likely if the infrastructure are developed jointly rather than in isolation." from Author's Abstract
    Keywords: Gravity model, Undertrading, Trade related infrastructure, Market access,
    Date: 2008
  16. By: Sylvie Démurger (GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France); Marc Gurgand (Paris School of Economics and Crest,France); Li Shi (School of Economics and Business, Beijing Normal University, China); Yu Ximing (School of Finance,Renmin University of China, Beijing, China)
    Abstract: In urban China, urban resident annual earnings are 1.3 times larger than long term rural migrant earnings as observed in a nationally representative sample in 2002. Using microsimulation, we decompose this difference into four sources, with particular attention to path dependence and statistical distribution of the estimated effects: (1) different allocation to sectors that pay different wages (sectoral effect); (2) hourly wage disparities across the two populations within sectors (wage effect); (3) different working times within sectors (hours effect); (4) different population structures (population effect). Although sector allocation is extremely contrasted, with very few migrants in the public sector and very few urban residents working as self-employed, the sectoral effect is not robust to the path followed for the decomposition. We show that the migrant population has a comparative advantage in the private sector: increasing its participation into the public sector does not necessarily improve its average earnings. The opposite holds for the urban residents. The second main finding is that population effect is significantly more important than wage or hours effects. This implies that the main source of disparity is pre-market (education opportunities) rather than on-market.
    Keywords: chinese labor market, discrimination, earnings differentials, migration
    JEL: J31 J71 O15 P23
    Date: 2008
  17. By: Felicitas Nowak-Lehmann D. (University of Goettingen / Germany); Inmaculada Martínez-Zarzoso (University of Goettingen / Germany); Stephan Klasen (University of Goettingen / Germany); Dierk Herzer (Johann Wolfgang Goethe University, Frankfurt / Germany)
    Abstract: Foreign aid is given for a combination of economic, political, and humanitarian motives. While its impact on economic development in recipient countries has been the main focus of research recently, we concentrate on the question to what extent it also promotes donor countries’ exports. We examine this issue using Germany as a case study where the positive impact of aid on exports has been found to be extremely high. Using more advanced methods, we compute an average return (between EUR 1.49 to EUR 1.72) of one EUR of aid spent, well below previous findings, but still surprisingly large and robust.
    Keywords: bilateral aid, donors’ exports, time series properties of panel data, ECM and DOLS estimation in a panel context
    JEL: F14 F35 C
    Date: 2008–04–22
  18. By: Rajiv Kumar (Indian Council for Research on International Economic Rela); Abhijit Sen Gupta (Indian Council for Research on International Economic Rela)
    Abstract: The Indian manufacturing sector has grown at an impressive average rate of 9.5 per cent annually since 2003-04. Its sustained growth is crucial for generating employment opportunities needed to absorb the rapidly expanding workforce. In this context, this paper reviews the current state of the sector and focuses on determinants of its competitiveness. The paper finds that Indian manufacturing sector exhibits a great deal of regional variation and a marked dualism between the organized and the unorganized segments in terms of both productivity and wage levels. The level of labour absorption in the organized manufacturing sector has been weak as reflected in the declining labour intensity in this sector. This does not augur well for achieving inclusive growth. We also find that although there have been significant changes in the composition of exports in the last 20 years; India is still a very small player at the global level, especially in knowledge intensive and advanced technology products. Finally, the paper explores India's potential for transforming itself into a hub of mass manufacturing. We find that the main constraints in doing so have been the low level of R&D, relative lack of skilled personnel and relatively low FDI levels.
    Keywords: manufacturing, competitiveness, mass manufacturing
    JEL: L60 O11
    Date: 2008–01
  19. By: Maja Micevska (Indian Council for Research on International Economic Rela); Dil Bahadur Rahut (Indian Council for Research on International Economic Rela)
    Abstract: Nonfarm activities generate on average about 60 percent of rural households' incomes in the Himalayas. This paper analyzes the determinants of participation in nonfarm activities and of nonfarm incomes across rural households. A unique data set collected in the Himalayan region of India allows us to deal with the heterogeneity of rural nonfarm activities by using aggregations into categories that are useful both analytically and for policy purposes. We conduct an empirical inquiry that reveals that education plays a major role in accessing more remunerative nonfarm employment. Other household assets and characteristics such as land, social status, and geographical location also play a role
    Keywords: Nonfarm employment; Rural households; Incomes; Education; India
    JEL: O15 O18 Q12 R11
    Date: 2008–02
  20. By: Abhijit Sen Gupta (Indian Council for Research on International Economic Rela; Indian Council for Research on International Economic Rela)
    Abstract: Most of the existing literature has used single reserve adequacy measures to evaluate the volume of excess reserves. In this paper, we employ empirical methods to generate a comprehensive reserve adequacy measure, incorporating the various objectives of holding reserves, and compare the actual reserve accumulation experience of various emerging markets with the prediction of our empirical model. Using this comprehensive reserve adequacy measure, we calculate the cost of holding excess reserves for India by looking at three different alternative uses of resources. We find that India is foregoing as much as 2 of its GDP by accumulating reserves instead of employing resources in alternative uses.
    Keywords: Reserve Holdings, Reserve Management
    JEL: F37 F47 C33
    Date: 2008–03
  21. By: Surabhi Mittal (Indian Council for Research on International Economic Rela)
    Abstract: The present paper presents the supply and demand trends of rice, wheat, total cereals, pulses, edible oil/oilseeds and sugar/sugarcane. It provides the demand and supply projections for food items during 2011, 2021 and 2026. These projections have been based on change in productivity levels, changes in price, growth of population and income growth. A comparison with projections provided by other scholars has also been made in the paper. Subsequently, the future supply-demand gap has been discussed in the light of policy requirements. It is concluded that an increase in total demand is mainly due to growth in population and per capita income. A diversification in consumption basket significantly away from cereals has been observed. On the supply side, production is constrained by low yield growths. This is more specific in context of total cereals and sugarcane. While in the short and medium term, there might be surplus of cereals in the country, these prospects are likely to diminish in the years to come. This situation is even more alarming for edible oil, sugarcane and pulses. To meet the future food requirements, the country shall have to either increase agricultural production, or depend on imports. In this light, the paper suggests that the policy focus needs to be laid, towards productivity enhancement in agriculture, through public investment in irrigation, development of roads, research and extension.
    Keywords: Q11, Q18
    Date: 2008–03
  22. By: Meenu Tewari (Indian Council for Research on International Economic Rela)
    Abstract: This paper draws on recent field work within South Asia and an extensive review of secondary data to examine the dynamics of cross border trade and investment in South Asia, exploring the potential for, and obstacles to, such trade through the lens of a sector that is salient throughout South Asia: Textiles and Clothing. Despite the growing competitiveness of this sector in the SAARC region, there is very little regional inter-linkage within South Asia's textile and clothing industry. Currently less than 4 of SAARC's global T&C exports are traded within the region. There is growing evidence of widespread substitution of South Asia by East Asia as the sourcing hub of fabric and accessories by the region's major clothing exporters. Over 80 of the fabric needs of Bangladesh and Sri Lanka, for example, come from outside the region even though India and Pakistan are net exporters of textiles. At one level the history of external ties matters: the long standing role of East Asian suppliers and quota-hopping garment manufacturers in the origin of apparel exports in parts of South Asia, the institutional embedding or `bundling' of sourcing practices and input supply, as well as the role of global buyers in designating or mandating preferred input and accessory suppliers have all generated inertia in altering existing relationships. At another level, the burden of mistrusts embedded in the region's own history, the structure of its textile industry (narrowly cotton-based, not very diverse, relatively high cost), and high trade costs exacerbated by complicated rules of origin, frustrating layers of bureaucratic and administrate oversight, poor transportation, and a long list of non-tariff barriers that disrupt the movement of goods and personnel across South Asia have prevented the emergence of either a common market or regional production networks in the SAARC region. Despite these barriers, there is growing evidence that with recent shifts in the nature of the textile and clothing industry, especially post-MFA, as well as changing intra-regional dynamics there are emerging possibilities for cooperation and collective action in the region. The drivers of this potential lie in the growing importance of the domestic market and the rise of organized retail in South Asia, the rise of a new generation of younger entrepreneurs in South Asia who are increasingly professional, globally aware, and schooled in a shared cultural worldview that helps cut across traditional barriers of region and history, the emergence of new knowledge networks and an interpenetrated regional labor market in skills in the South Asian garment industry and the possibility of leveraging strategic regulatory shifts and upcoming `demands for structural change' post-2008 to foster greater regional cooperation. The paper argues that SAARC members - along with civic organizations and private sector industry associations - need to build upon and support the positive trends already underway. In addition, SAARC could enhance interregional integration in textiles and clothing by creating the conditions for greater cross-border investment within the SAARC region, first in textiles and accessories and then apparel, by expeditiously establishing a credible investment protocol in the region, while simultaneously pushing forward with trade facilitation reforms. India, in its current role as SAARC Chair should take a leading role in facilitating these reforms.
    Keywords: South Asia, Trade, Investment, Textile and clothing, Regional Cooperation.
    JEL: F15 F14 F59
    Date: 2008–04
  23. By: Sharon L. Maccini; Dean Yang
    Abstract: How sensitive is long-run individual well-being to environmental conditions early in life? This paper examines the effect of weather conditions around the time of birth on the health, education, and socioeconomic outcomes of Indonesian adults born between 1953 and 1974. We link historical rainfall for each individual's birth-year and birth-location with current adult outcomes from the 2000 wave of the Indonesia Family Life Survey. Higher early-life rainfall has large positive effects on the adult outcomes of women, but not of men. Women with 20% higher rainfall (relative to normal local rainfall) in their year and location of birth are 3.8 percentage points less likely to self-report poor or very poor health, attain 0.57 centimeters greater height, complete 0.22 more grades of schooling, and live in households that score 0.12 standard deviations higher on an asset index. These patterns most plausibly reflect a positive impact of rainfall on agricultural output, leading to higher household incomes and food availability and better health for infant girls. We present suggestive evidence that eventual benefits for adult women's socioeconomic status are most strongly mediated by improved schooling attainment, which in turn improves socioeconomic status in adulthood.
    JEL: I1 I2 I3 O1 O15 Q5
    Date: 2008–05
  24. By: Sebastian Edwards
    Abstract: In this paper I analyze the role of openness and globalization in Latin America's economic development. The paper is divided into two distinct part: I first (Sections II through IV) provide an analysis of 60 years of the region's economic history, that go form the launching of the Alliance for Progress by the Kennedy Administration in 1961, to the formulation and implementation of the market-oriented reforms of the Washington Consensus in the 1990s and 2000s. I conclude that Latin America's history has been characterized by low growth, high inflation and recurrent external crises. In Section V I deal formally with the costs of crises, and I estimate a number of variance component models of the dynamics of growth. I find that external crises have been more costly in Latin America than in the rest of the world. I also find that the cost of external crises has been inversely related to the degree of openness.
    JEL: F21 F30 F32 N26 O40
    Date: 2008–05
  25. By: Richard P.C. Brown; Eliana V. Jimenez (School of Economics, The University of Queensland)
    Abstract: We extend the mixed-motives model of transfer derivatives developed by Cox et al (2004) introducing subjectively-assessed recipient need in place of an absolute income threshold at which the donor’s dominant motive switches from altruism to exchange. This refinement provides a theoretically justifiable threshold amenable to empirical measurement. We test the extended model with customized survey data from Tonga and find evidence consistent with Cox et al in support of altruism for households below the threshold, but, we also find a positive, exchange-motivated relationship for those above the threshold. We conclude that either crowding-out or crowding-in of private transfers can occur when the recipient’s welfare improves, depending on the household’s pre-transfer welfare level. This also has implications for the distributional impact of private transfers and could explain why poverty reduction can be accompanied by increased income inequality.
    Date: 2008
  26. By: Randall Filer; Jan Hanousek; Dana Hajkova
    Abstract: Measured rates of growth in real per capita income differ drastically depending on the data source. This phenomenon occurs largely because data sets differ in whether and how they adjust for changes in relative prices across countries. Replication of several recent studies of growth determinants shows that results are sensitive in important ways to the choice of data. Previous warnings against using data adjusted to increase cross-country comparability to study within-country patterns over time (growth rates) have been largely ignored at the cost of possibly contaminating the conclusions.
    Keywords: Growth, Measurement
    JEL: C82 O47
    Date: 2007–07–01
  27. By: Kira Boerner; Christa Hainz
    Abstract: In many developing and transition countries, we observe rather high levels of corruption. This is surprising from a political economy perspective, as the majority of people in a corrupt country suffer from high corruption levels. Our model is based on the fact that corrupt offcials have to pay entry fees to get lucrative positions. In a probabilistic voting model, we show that a lack of financial institutions can lead to more corruption as more voters are part of the corrupt system and, more importantly, as the rents from corruption are distributed differently. Thus, the economic system has an effect on political outcomes. Well-functioning financial institutions, in turn, increase the political support for anti-corruption measures.
    Keywords: Corruption, Financial Markets, Institutions, Development, Voting
    JEL: D72 D73 H11 O17
    Date: 2007–10–01
    Abstract: The purpose of this paper is to examine whether the decline in environmental quality in India, China and Brazil is due to release of toxic gases which is an effect of high energy consumption? If so, the increase in energy consumption is due to rapid economic growth led by industrialization? Also examined is what effect does excessive economic growth rates have on energy consumption levels in these countries.
    Keywords: CO2 Emission, Energy Consumption, Economic Growth & Industrialization
    JEL: O13 O14 Q40 Q41 Q43
    Date: 2007–11–01
  29. By: Zheng, Jianghuai; Hu, Zhining; Wang, Jialing
    Abstract: This paper firstly discusses why the economic growth in the Yangtze River Delta has been slowed down recently and suggests a need totransform the current input-based economic growth pattern into aninnovation-based one. Next, through our theoretical analysis, we find that the change of current economic growth pattern is just the innovative reallocationof production factors, and the new economic growth driven by innovation is mainly initiated by the transmutation of entrepreneurship. Finally, we test our belief with real-world evidence. It shows that the Delta has formed a mechanism in which entrepreneurship and human capital mutually promote each other. However, the interactive relationship between R&D expenditure and entrepreneurship has not been developed in general. In addition, excessive government interventions will do harm to the growth of entrepreneurs and economic development.
    Keywords: entrepreneurship; innovation and economic growth pattern
    JEL: O31
    Date: 2008–01–07
  30. By: Zheng, Jianghuai; Wang, Chengsi; Song, Shunfeng
    Abstract: Traditional Development Economics defines economic development in the view of transferring rural surplus labor force. It implies the industrialization is in a static state at a certain level while it is in a process of continuous industrial upgrade in reality. Under the circumstances, we analyze phenomenon followed by the upgrading of industrial structure such as return migration and mid-aged rural labors’ difficulty in job-hunting and demonstrated the influence of land centralization based on the practice of industrial upgrade and rural change in Suzhou. Finally it come to the conclusion that because of the extensive competition on simple-labor market, the industrial upgrade will make a adverse employment shock upon mid-aged rural labor which will lead to the more uncertainty of peasants to get jobs in the industrial section . If government takes an improper policy of land centralization, peasants will lose guarantee in the future and resist the land centralization. After the comparison between one-off compensation and land cooperation, a further demonstration show that the method of one-off compensation will depress peasants’ enthusiasm in land centralization while the form of land cooperation can guarantee and promote peasants’ welfare under the given institution of land ownership. As a result, land cooperation allows the smooth operation of land centralization and supports the industrial upgrade to some extent.
    Keywords: Over-confidence,Regional Government Competition,Redundant Construction,Yangzte River Delta
    JEL: O10 O53 O13 O14
    Date: 2008–01
  31. By: Blázquez Cuesta, Maite (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Llano, Carlos (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Moral Carcedo, Julian (Departamento de Análisis Económico: Teoría e Historia Económica. Universidad Autónoma de Madrid)
    Abstract: Studying the relation between workers’ nationality and their commuting time has been of paramount importance in countries with high immigration rates and ethnical heterogeneity. Most of these studies focus on the spatial mismatch of racial minorities, and consider urban and social structures of the countries/cities where this segregation phenomenon may occur.Currently, immigration is one of the main challenges of the Spanish society. Foreign residents in Madrid region increased 639 % between 1996 and 2004. In this paper we explore the connection between commuting time, residential location and worker’s nationality using an ordered logit model. Our findings reveal that immigrants from ‘transition economies’ and ‘third world’ countries are significantly more likely to suffer higher commuting times compared to natives. These differences can be explained by both housing and labour market restrictions due to discrimination. This commuting penalty is in line with the spatial mismatch hypothesis and residential segregation.
    Keywords: Commuting flows; Immigration; Spatial mismatch; Labour mobility
    JEL: R15
    Date: 2008–05
  32. By: Marcelo Medeiros (International Poverty Centre); Tatiana Britto (Visiting researcher, IPC); Fabio Veras Soares (International Poverty Centre)
    Abstract: We describe several characteristics of the two most important targeted cash transfer programs in Brazil, the Continuous Cash Benefit (BPC) and the Bolsa Familia. We discuss their institutional aspects, long term sustainability, beneficiaries and levels of targeting. We also address the need for conditionalities, the effects of the transfers on labor market participation, as well as the relevance of the so called ?exit doors?. Our conclusion is that, on the one hand, the programs are accomplishing the goals they were designed to achieve. They reduce poverty and inequality, under costs which are compatible with the Brazilian budgetary capacity. On the other hand, the programmes have no negative effects on incentives to work and contributions to the pensions system. Consequently, we argue that these programmes should be kept in place and, if possible, expanded in the near future.
    Keywords: Targeted Cash Transfer Programmes in Brazil: BPC and the Bolsa Familia
    Date: 2008–06
  33. By: James Heintz (Univ. of Massachusetts); Carlos Oya (School of Oriental and African Studies, University of London); Eduardo Zepeda (International Poverty Centre)
    Abstract: This paper reviews the growth, employment, and poverty record of The Gambia focusing on the macroeconomic environment and the structure and functioning of labour markets. Its aim is to identify areas where current policies can be improved or where more knowledge needs to be generated to better inform inclusive development strategies. The growth pattern of The Gambia does not appear to be pro-poor, as improvements in the rate of growth appear to have at best halted the spread of poverty. Weak productivity performance and the low quality of employment help explain the poverty record. On the macroeconomic side, an excessive emphasis on inflation reduction and reliance on rudimentary monetary policy instruments have helped sustain a high-interest rate environment, which discourages investment and employment creation. As part of an alternative policy package, The Gambia could reformulate macroeconomic policies to target growth instead of inflation, select a more effective mix of policy instruments, and pursue financial reforms to increase the supply of credit to the economy and particularly to employment-intensive activities. In addition, targeted public investments are essential for sustaining more rapid growth and improvements in employment opportunities. A review of the available evidence suggests that labour markets in The Gambia do not function in a way conducive to poverty reduction. The employment situation conforms to the typical configuration, whereby traditional activities and informality dominate rural and urban areas. The Gambia also faces high open unemployment rates in cities, particularly among the youth. Measures to increase the labour mobility of the poor are urgently needed. The Gambia has benefited from a rapid increase in literacy and basic education, although more progress is needed to improve the quality of education and, particularly, to provide comprehensive training that adequately meets the demand for skilled labour. Finally, there is an urgent need to overhaul labour institutions with the aim of improving labour conditions, reducing labour segmentation and improving knowledge systems.
    Keywords: Towards an Employment-centred Development strategy for Poverty Reduction in The Gambia: Macroeconomic and Labour Market Aspects
    Date: 2008–05
  34. By: Bagdja Muljarijadi (Master of Applied Economics Program Graduate School of Economics-Faculty of Economics Padjadjaran University); Rahmat Thio (Master of Applied Economics Program Graduate School of Economics-Faculty of Economics Padjadjaran University)
    Abstract: This study analyzes some social economic aspects of informal activities using case study of flea markets in Bandung Municipality. The objectives are to provide a description of the information we collected during our field survey, and report our findings on the Willingness to Pay (WTP) of people who are doing informal business in the flea markets under study on some services. We use Censored Regression Model to estimate WTP for some relevant services (general user charge, waste disposal services, security, and congestion) in the flea market. We found two important determinants of WTP, which are the amount of working capital, and the ownership of the merchandise.
    Keywords: Flea market, informal activity, WTP
    JEL: O17 P35
    Date: 2008–05
  35. By: Sebastian von Engelhardt (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: Software is a good with very special economic characteristics. Taking a general deï¬nition of software as its starting-point, this article systematically elaborates the central qualities of the commodity which have implications for its production and cost structure, the demand, the contestability of software-markets, and the allocative efï¬ciency. In this context it appears to be reasonable to subsume the various characteristics under the following generic terms: software as a means of data-processing, software as a system of commands or instructions, software as a recombinant system, software as a good which can only be used in discrete units, software as a complex system, and software as an intangible good. Evidently, software is characterized by a considerable number of economically relevant qualities—ranging from network effects to a subadditive cost function to nonrivalry. Particularly to emphasise is the fact that software fundamentally differs from other information goods: First, from a consumer's perspective the readability and other aspects concerning how the information is presented, is irrelevant. Second, the average consumer/user is interested only in the funtionality of the algorithms but not in the underlying information.
    Keywords: digital goods, compatibility, information good, network effects, nonrivalry, open source, recombinability, software
    JEL: D82 D83 D62 D85 K11 L17
    Date: 2008–06–04

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