nep-dev New Economics Papers
on Development
Issue of 2008‒08‒21
fifteen papers chosen by
Jeong-Joon Lee
Towson University

  1. Educational Reform in Developing Countries: Private Involvement and Partnerships By Argentino Pessoa
  3. Land tenure and productivity: Farm level evidence from Papua New Guinea By Satish Chand and Charles Yala
  4. How invariant is South African child poverty to the choice of equivalence scale or poverty measure? By Judith Streak; Derek Yu; Servaas van der Berg
  5. The Place Premium: Wage Differences for Identical Workers across the U.S. Border By Michael Clemens; Claudio Montenegro; Lant Pritchett
  6. Measuring Progress with Tests of Learning: Pros and Cons for "Cash on Delivery Aid" in Education By Marlaine Lockheed
  7. Structural Change and the Service Sector in Brazil By Marcio José Vargas da Cruz; Gabriel Porcile; Luciano Nakabashi; Fábio Dória Scatolin
  8. Private Investment Behaviour and Trade Policy Practice in Nigeria By Dipo T. Busari
  9. Technical Efficiency of Rice Farmers in Northern Ghana By Seidu Al-hassan
  10. Debt Relief, Investment and Growth By Johansson, Pernilla
  11. Second Nature Geography and Regional Income Disparities in Colombia By Jesús López-Rodríguez; María Cecilia Acevedo
  12. Capture of Anti-Poverty Programs: An Analysis of the National Rural Employment Guarantee Program in India By Raghbendra Jha; Sambit Bhattacharyya; Raghav Gaiha; Shylashri Shankar
  13. Subnational Taxes in Developing Countries: The Way Forward. By Richard M. Bird; Roy Bahl
  14. New Methodology for Linking the Regions By Diewert, Erwin
  15. HIV and Fertility in Africa: First Evidence from Population Based Surveys By Chinhui Juhn; Sebnem Kalemli-Ozcan; Belgi Turan

  1. By: Argentino Pessoa (Faculdade de Economia do Porto, Universidade do Porto)
    Abstract: The paper looks at recent changes in the role of government in the provision of education in Developing Countries. It begins with a reflection about the concept of public-private partnership (PPP), discusses the rationale that inspires the ‘contracting out’ of educational services and describes several cases of private sector involvement in education. After looking at the conditions for building PPPs and the necessary requirements for assuring an effective regulatory framework, the paper closes concluding that while contracting out needs not be made a priority there is a large room for other forms of private sector involvement in education in developing countries.
    Keywords: Contracting out, educational reform, market/government failure, NPM, public-private partnerships.
    JEL: H52 I28 L33
    Date: 2008–07
  2. By: Enrique Moral-Benito (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: Due to model uncertainty, there is no consensus about which are the most salient determinants of economic growth. To address model uncertainty, Bayesian Model Averaging approaches have recently been used in cross-country cross-sectional analyses. This paper extends these approaches to panel data models with country specific fixed effects. We find that when using this approach the strongest evidence of robustness is for the trade openness, the size of the labor force, the government consumption level and the Latin America dummy. Moreover, our results are robust to different prior assumptions on the expected model size.
    Keywords: Growth determinants, model uncertainty, Bayesian Model Averaging, dynamic panel estimation.
    JEL: C11 C23 O4
    Date: 2007–12
  3. By: Satish Chand and Charles Yala
    Abstract: Does land tenure form affect farm level productivity? The answer, from farm level data for oil palm from the Hoskins project in West New Britain province of Papua New Guinea, is in the affirmative. Analysis of farm level output, controlling for all measured inputs, shows systematic differences in productivity across three land tenure types; namely, farms under customary purchase agreements (CP), those under the land settlement scheme (LSS), and those under village owned land schemes (VOP). The evidence is that productivity is higher under the CP and LSS schemes compared to the VOP arrangement. The empirics suggests that the higher productivity is due to benefits from economies of scale enjoyed by farms with improved tenure security and from the absence of sharing of income and harvesting effort that is present on farms with insecure tenure.
    Date: 2008
  4. By: Judith Streak (Human Sciences Research Council); Derek Yu (Department of Economics, University of Stellenbosch); Servaas van der Berg (Department of Economics, University of Stellenbosch)
    Abstract: This paper offers evidence on the sensitivity of child poverty in South Africa to changes in the Adult Equivalence Scale (AES) and updates the child poverty profile based on the Income and Expenditure Survey 2005/06. Setting the poverty line at the 40th percentile of households calculated with different AESs the scope and composition of child poverty are found to be relatively insensitive to the scale used. The rankings of children of different ages, girls versus boys, racial groupings and children living in rural versus urban areas are unaffected by choice of AES, although some provincial rankings on the poverty headcount measure are. The proportions of children and households ‘correctly’ identified as poor for the full range of scales is extremely high. These findings support the argument of Woolard & Leibbrandt (2006) that it may be appropriate for profiling poverty in South Africa to use a poverty line based on a per capita welfare measure. For the construction of the child poverty profile, per capita income is used as the welfare indicator with the poverty line set at the 40th percentile of household. The profile suggests that poverty amongst children is more extensive than amongst the population or adults even after the massive injection of transfers into households with poor children through the child support grant. The child poverty headcount, depth and severity are all highest amongst children age 0-4 and lowest amongst those aged 15-17, who are not yet beneficiaries of the grants. They are also highest amongst African and Coloured children. Large variations across provinces remain. The analysis underlines the importance of prioritising children in the fight against poverty, particularly in their earliest years.
    Keywords: Child poverty measurement, Adult equivalence scales, Social grants for children
    JEL: D31 I32
    Date: 2008
  5. By: Michael Clemens; Claudio Montenegro; Lant Pritchett
    Abstract: We compare the wages of workers inside the United States to the wages of observably identical workers outside the United States—controlling for country of birth, country of education, years of education, work experience, sex, and ruralurban residence. This is made possible by new and uniquely rich microdata on the wages of over two million individual formal-sector wage-earners in 43 countries. We then use five independent methods to correct these estimates for unobserved differences between the productivity of migrants and non-migrants, as well as for the wage effects of natural barriers to international movement in the absence of policy barriers. We also introduce a selection model to estimate how migrants’ wage gains depend on their position in the distribution of unobserved wage determinants both at the origin and at the destination, as well as the relationship between these positions. For example, in the median wage gap country, a typical Bolivian-born, Bolivianeducated, prime-age urban male formal-sector wage worker with moderate schooling makes 4 times as much in the US as in Bolivia. Following all adjustments for selectivity and compensating differentials we estimate that the wages of a Bolivian worker of equal intrinsic productivity, willing to move, would be higher by a factor of 2.7 solely by working in the United States. While this is the median, this ratio is as high as 8.4 (for Nigeria). We document that (1) for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination; (2) these gaps represent one of the largest remaining price distortions in any global market; and (3) these gaps imply that imply allowing labor mobility can reduce a given household’s poverty to a much greater degree than most known in situ antipoverty interventions.
    Keywords: wage, migration, economic development
    JEL: F22 J61 J71 O15
    Date: 2008–07
  6. By: Marlaine Lockheed
    Abstract: This paper reviews, in non-technical terms, the case for and against using tests of learning for measuring annual educational progress within programs of “progressbased aid.” It addresses three questions about testing in developing countries. One, are valid and reliable measures of student learning currently available in developing countries? Two, are existing tests used in developing countries capable of registering the changes in educational results called for under “progress-based aid”? And three, do developing countries have the technical and administrative capacity to undertake annual assessments of learning? The paper includes a brief description of existing national, regional and international testing activities in developing and transition countries, a discussion of some technical topics related to testing and assessment, and various options for using learning assessments in the context of “progress-based aid.”
    Keywords: foreign aid, international education, international development
    Date: 2008–06
  7. By: Marcio José Vargas da Cruz (Department of Economics, Universidade Federal do Paraná); Gabriel Porcile (Department of Economics, Universidade Federal do Paraná); Luciano Nakabashi (Department of Economics, Universidade Federal do Paraná); Fábio Dória Scatolin (Department of Economics, Universidade Federal do Paraná)
    Abstract: A key question with a long tradition in development economics is which patterns of structural change are more conducive for economic growth and convergence in the international economy. Although some studies show that industry has been loosing ground in the Brazilian economy (both in terms of employment and value added), there are few studies discussing how this process affects the performance of the Brazilian economy. Evidence regarding the quality of the jobs created in other sectors is yet scarce. Both topics are addressed in this paper. It is suggested that that the Brazilian deindustrialization process is not a virtuous one, i.e. it is not the result of a dynamic response to long run trends in technology and demand. On the contrary, most jobs are generated in low-productivity activities in the service sector.
    Keywords: Economic Growth, Structural Change; Service Sector; Industry; Brazilian Economy.
    JEL: L60 L80 O14
    Date: 2008
  8. By: Dipo T. Busari
    Date: 2008–04
  9. By: Seidu Al-hassan
    Abstract: Examining the level of farm-specific technical efficiency of farmers growing irrigated and non-irrigated rice in Northern Ghana, this study fitted cross-sectional data into a transcendental logarithmic (translog) production frontier. The study concludes that rice farmers are technically inefficient. There is no significant difference in mean technical efficiencies for non-irrigators (53%) and irrigators (51%). The main determinants of technical efficiency in the study area are education, extension contact, age and family size. Providing farmers with both formal and informal education will be a useful investment and a good mechanism for improving efficiency in rice farming. There is also need for training more qualified extension agents and motivating them to deliver.
    Date: 2008–04
  10. By: Johansson, Pernilla (Department of Economics, Lund University)
    Abstract: The donor community provided around $400 billion in debt relief to developing countries between 1989 and 2004. This paper empirically assesses the impact of debt relief on growth and investment by examining two potential mechanisms. The resource mechanism refers to the resources made available from reduced debt service payments whereas the incentive mechanism takes into account the incentive effects of a reduced debt stock. Based on a sample of 61 developing countries between 1989 and 2004, this study shows that debt relief did not affect growth directly or through capital investment.
    Keywords: Debt relief; growth; investment; developing countries; HIPC
    JEL: F34 F35 F43 O11 O16
    Date: 2008–08–07
  11. By: Jesús López-Rodríguez; María Cecilia Acevedo
    Abstract: In this paper, we derive and estimate a New Economic Geography model for the Colombian departments.2 We first derive an econometric specification relating wages to a distance weighted sum of the volumes of economic activities of the surrounding locations. Them, we test our econometric specification with data for Colombian departments in the period 1975-2000. The empirical results confirm the theoretical predictions of our model, showing that second nature geography factors (access to consumer markets) are a key variable in explaining the spatial distribution of wages in Colombia.
    Date: 2008–07–03
  12. By: Raghbendra Jha; Sambit Bhattacharyya; Raghav Gaiha; Shylashri Shankar
    Abstract: Using pooled household level data for the Indian states of Rajasthan and Andhra Pradesh we find that the size of landholdings is a negative predictor of participation in the National Rural Employment Guarantee Program (NREGP). In state level analysis this pattern survives in Rajasthan but reverses in Andhra Pradesh where we notice a positive relationship. This paper examines whether this sign reversal in Andhra Pradesh is indicative of program capture in Andhra Pradesh and better targeting in Rajasthan. We compare land inequality, political interference, and geographical remoteness across the two states and conclude that program capture may be an issue in Andhra Pradesh, largely because of these reasons. We also find evidence of complementarity between NREGP and the Public Distribution System (PDS).
    Keywords: Capture; Poverty; India
    JEL: I38 O12
    Date: 2008
  13. By: Richard M. Bird (University of Toronto); Roy Bahl (University of Toronto; Georgia State University)
    Abstract: This paper reviews the literature and evidence on the most appropriate structure of regional and local taxes in developing countries. A good subnational tax system is critical to an effective and sustainable system of intergovernmental fiscal relations – a need that has become increasingly important around the world as more and more public services are being delivered through subnational governments. In most developing countries potentially sound and productive taxes exist that are suitable for regional and local governments: property taxes, taxes on motor vehicles, surcharges on national personal income taxes, payroll taxes, and even, in some cases, regional value added taxes and properly designed local business taxes.
    Keywords: local taxes; regional taxes; fiscal decentralization
    JEL: H71 H77 O23
    Date: 2008–08
  14. By: Diewert, Erwin
    Abstract: The paper explains new methodology that was used in the 2005 International Comparison Program (ICP) that compared the relative price levels and GDP levels across 146 countries. In this round of the ICP, the world was divided into 6 regions: OECD, CIS, Africa, South America, Asia Pacific and West Asia. What is new in this round compared to previous rounds of the ICP is that each region was allowed to develop its own product list and collect prices on this list for countries in the region. The regions were then linked using another separate product list and 18 countries across the 6 regions collected prices for products on this list and this information was used to link prices and quantities across the regions. An additional complication was that the final linking of prices and volumes across regions had to respect the regional price and volume measures that were (separately) constructed by the regions.
    Keywords: Index numbers, multilateral comparison methods, GEKS, EKS, Geary-Khamis, Balk, Dikhanov, Iklé, Country Product Dummy (CPD) method, basic headings, St
    JEL: C43 C81 E31 O57
    Date: 2008–07–24
  15. By: Chinhui Juhn; Sebnem Kalemli-Ozcan; Belgi Turan
    Abstract: The historical pattern of the demographic transition suggests that fertility declines follow mortality declines, followed by a rise in human capital accumulation and economic growth. The HIV/AIDS epidemic threatens to reverse this path. A recent paper by Young (2005), however, suggests that similar to the "Black Death" episode in Europe, HIV/AIDS will actually lead to higher growth per capita among the affected African countries. Not only will population decline, behavioral responses in fertility will reinforce this decline by reducing the willingness to engage in unprotected sex. We utilize recent rounds of the Demographic and Health Surveys which link an individual woman's fertility outcomes to her HIV status based on testing. The data allows us to distinguish the effect of own positive HIV status on fertility (which may be due to lower fecundity and other physiological reasons) from the behavioral response to higher mortality risk, as measured by the local community HIV prevalence. We show that HIV-infected women have significantly lower fertility. In contrast to Young (2005), however, we find that local community HIV prevalence has no significant effect on non-infected women's fertility.
    JEL: I12 J13 O12
    Date: 2008–08

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