nep-dev New Economics Papers
on Development
Issue of 2008‒10‒07
24 papers chosen by
Jeong-Joon Lee
Towson University

  1. On Trade Openness, Institutional Change and Economic Growth By Antonio Navas-Ruiz
  2. Inequality of Opportunity for Income in Five Countries of Africa By Denis Cogneau; Sandrine Mesplé-Somps
  3. Technical Appendix for "Labor Markets and Productivity in Developing Countries" By Mathan Satchi; Jonathan Temple
  4. Indonesia: Growth Performance and Policy Challenges By Luiz de Mello
  5. Improving the Business and Investment Climate in Indonesia By Diego Moccero
  6. Rice prices and poverty in Liberia By Tsimpo, Clarence; Wodon, Quentin
  7. Making regional cooperation work for South Asia's poor By Ahmed, Sadiq; Ghani, Ejaz
  8. Comparing the impact of food and energy price shocks on consumers : a social accounting matrix analysis for Ghana By Parra, Juan Carlos; Wodon, Quentin
  9. Governance, corruption, and trade in the Asia Pacific region By Abe, Kazutomo; Wilson, John S.
  10. The relevance of a rules-based maize marketing policy : an experimental case study of Zambia By Abbink, Klaus; Jayne, Thomas S.; Moller, Lars C.
  11. Determinants of choice of migration destination By Fafchamps, Marcel; Shilpi, Forhad
  12. The sub prime crisis : implications for emerging markets By Gwinner, William B.; Sanders, Anthony
  13. Assessing the potential impact on poverty of rising cereals prices : the case of Ghana By Wodon, Quentin; Tsimpo, Clarence; Coulombe, Harold
  14. Foreign direct investment in services and manufacturing productivity growth: evidence for Chile By Fernandes, Ana M.; Paunov, Caroline
  15. Potential impact of higher food prices on poverty : summary estimates for a dozen west and central African countries By Wodon, Quentin; Tsimpo, Clarence; Backiny-Yetna, Prospere; Joseph, George; Adoho, Franck; Coulombe, Harold
  16. The great proletarian cultural revolution, disruptions to education, and returns to schooling in urban China By Giles, John; Park, Albert; Wang, Meiyan
  17. Rising food prices in Sub-Saharan Africa : poverty impact and policy responses By Wodon, Quentin; Zaman, Hassan
  18. Is the developing world catching up ? global convergence and national rising dispersion By Bussolo, Maurizio; De Hoyos, Rafael E.; Medvedev, Denis
  19. Assessing the geographic impact of higher food prices in Guinea By Coulombe, Harold; Wodon, Quentin
  20. Labor Supply Response to International Migration and Remittances in the Republic By Evans Jadotte
  21. On the Determinants and Implications of School Choice: Semi-Structural Simulations for Chile By Francisco Gallego; Andrés E. Hernando.
  22. Trade, product variety and welfare: a quantitative assessment for mainland China By Ralf Ruhwedel; Michael Funke
  23. Poverty Reduction Through Long-term Growth: The Thai Experience By Peter Warr
  24. Aid Effectiveness in Bangladesh By Quibria, M.G; Ahmad, Shafi

  1. By: Antonio Navas-Ruiz (Universidad Carlos III Madrid - Universidad Carlos III Madrid , GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579)
    Abstract: This paper explores the relationship between trade openness and economic growth through a change in institutions. To do so, the paper creates a theory of endogenous institutional change wherethere are three social groups, each one owns a speci…c production factor. An ellite (landowners) controlling the political power …x higher taxes to extract rents from the other groups of the society(capitalists). This reduces investment in capital, the source for endogenous growth. Endogenous institutional change is done by allowing the rival group (capitalists) to invest in a military action which expels out the group in power. The model studies optimal taxation, growth and institutional change under two scenarios, autarky and free trade.We calibrate the model according to Western European experience on the XVIth century deriving that: First: Economies opened to trade will experiment higher growth and faster institutionalchange. Second: Economies specializing in manufacturing products tend to grow more and rise the institutional change earlier. These results are very robust to change in parameter values and it seems to …t quite well with historical experience.
    Keywords: endogenous growth ; institutional change ; liberalization of capital
    Date: 2008–10–02
  2. By: Denis Cogneau (DIAL, IRD, Paris); Sandrine Mesplé-Somps (DIAL, IRD, Paris)
    Abstract: This paper examines for the first time inequality of opportunity for income in Africa, by analyzing large-sample surveys, all providing information on individuals' parental background, in five comparable Sub-Saharan countries: Ivory Coast, Ghana, Guinea, Madagascar and Uganda. We compute inequality of opportunity indexes in keeping with the main proposals in the literature, and propose a decomposition of between-country differences that distinguishes the respective impacts of intergenerational mobility between social origins and positions, of the distribution of education and occupations, and of the earnings structure. Among our five countries, Ghana in 1988 has by far the lowest income inequality between individuals of different social origins, while Madagascar in 1993 displays the highest inequality of opportunity from the same point of view. Ghana in 1998, Ivory Coast in 1985-88, Guinea in 1994 and Uganda in 1992 stand in-between and can not be ranked without ambiguity. Inequality of opportunity for income seems to correlate with overall income inequality more than with national average income. Decompositions reveal that the two former British colonies (Ghana and Uganda) share a much higher intergenerational educational and occupational mobility than the three former French colonies. Further, Ghana distinguishes itself from the four other countries, because of the combination of widespread secondary schooling, low returns to education and low income dualism against agriculture. Nevertheless, it displays marked regional inequality insofar as being born in the Northern part of this country produces a significant restriction of income opportunities. _________________________________ Ce papier analyse, pour la première fois en Afrique, les inégalités de chance en termes de revenu. Cinq pays sont étudiés, à savoir la Côte d’Ivoire, le Ghana, la Guinée, Madagascar et l’Ouganda à partir d’enquêtes représentatives au niveau national contenant des informations sur les origines sociales de chaque individu. Nous calculons les différents indices d’inégalités de chance proposés par la littérature et nous proposons une décomposition des différences d’inégalités de chance entre pays. Cette décomposition distingue les influences respectives des différences dans la mobilité sociale intergénérationnelle, dans la structure de l'éducation et des professions et enfin dans les échelles de rémunération. Il apparaît que parmi les cinq pays étudiés, le Ghana en 1988 est le pays dans lequel l'inégalité de revenu entre origines sociales est la plus faible, tandis que c’est à Madagascar en 1993 qu’elle est la plus élevée. Les positions intermédiaires respectives du Ghana en 1998, de la Côte d'Ivoire en 1985-88, de la Guinée en 1994 et de l’Ouganda en 1992 ne peuvent pas être classées de manière robuste. L'inégalité des chances en termes de revenu semble plus corrélée avec l'inégalité de revenu globale qu’avec le niveau de revenu moyen par tête. La décomposition des inégalités de chances montre que la mobilité intergénérationnelle est plus élevée dans les deux anciennes colonies britanniques (le Ghana et l’Ouganda) que dans les trois anciennes colonies françaises. De plus, le Ghana se distingue des quatre autres pays par une plus large diffusion de l’enseignement primaire et secondaire, des rendements bas de l’éducation, et un faible dualisme entre le secteur agricole et les autres secteurs. Il n’en demeure pas moins que le fait d’être né au Nord du pays diminue fortement les opportunités de revenu, de même qu'en Côte d'Ivoire.
    Keywords: Income inequality, Equality of opportunity, Intergenerational mobility, Africa, inégalité de revenu, égalité de chance, mobilité intergénérationnelle, Afrique.
    JEL: D31 D63 J62 O15
    Date: 2008–09
  3. By: Mathan Satchi (University of Kent); Jonathan Temple (University of Bristol)
    Abstract: This appendix provides more details on how we calibrate the model, including parameter choices. Our solution procedure is to reduce each model to a set of nonlinear equations and then solve them numerically to obtain the unconstrained parameters and outcomes at the baseline equilibrium. We then use a similar procedure to solve for the new equilibrium in response to a parameter change. At each stage we check that the key equations for the steady-state of the model are satisfied by the derived equilibrium. These calculations are carried out in three interconnected worksheets, all found in the single Excel spreadsheet, satchitemplecalib.xls Use of this Excel spreadsheet requires the Solver Add-in to be installed (use Add-ins under the Tools menu to install the Solver Add-in). The Solver should be available under the Tools menu.
    Date: 2008–08
  4. By: Luiz de Mello
    Abstract: Indonesia’s growth performance is improving, following a slow recovery from the 1997-98 financial crisis. Investment is picking up, despite considerable business-climate obstacles to entrepreneurship. Unemployment remains high, and labour informality is pervasive. Fiscal policy has been conducted responsibly and in an increasingly decentralised manner. Monetary policy is now carried out within a fully-fledged inflation-targeting framework. This paper argues that the main barriers to raising the economy’s growth potential are to be found on the supply side of the economy. Indonesia will need to improve the business environment and to make better use of labour inputs to put the economy on a higher growth trajectory. The country’s income gap relative to the OECD is sizeable, and several years of sustained growth will be needed to eliminate it. This Working Paper relates to the 2008 OECD Economic Assessment of Indonesia ( <P>Indonésie : Performances économiques et enjeux de l’action publique <BR>Les résultats de l’Indonésie sur le front de la croissance s’améliorent, amélioration qui s’inscrit dans le prolongement d’une phase de lente reprise après la crise financière de 1997-98. L’investissement suit une pente ascendante, malgré un climat des affaires très peu porteur. Le chômage demeure élevé et l’emploi dans le secteur informel très largement répandu. La politique budgétaire est conduite de façon responsable et aussi plus décentralisée. La politique monétaire s’articule désormais autour d’un dispositif de ciblage de l’inflation. D’après ce document, les principaux obstacles au relèvement du potentiel de croissance de l’économie indonésienne se situent du côté de l’offre. L’Indonésie va devoir s’efforcer d’offrir aux entrepreneurs des conditions d’ensemble plus propices au développement de leurs activités et de mieux utiliser le facteur travail pour mettre son économie sur une trajectoire de croissance plus prometteuse. L’écart de revenu par rapport aux pays de l’OCDE n’est pas négligeable et plusieurs années de croissance soutenue seront nécessaires pour le combler. Ce Document de travail se rapporte à l’Évaluation économique de l’OCDE de l’Indonésie, 2008 (
    Keywords: growth, croissance, réforme structurelle, macroeconomic policies, politique macro-économique, structural reforms, Indonesia, Indonésie
    JEL: E50 E60 O10
    Date: 2008–09–22
  5. By: Diego Moccero
    Abstract: Indonesia’s business environment is discouraging entrepreneurship and holding back private-sector growth and development. Weaknesses in the regulatory framework, infrastructure bottlenecks and poor governance continue to weigh down on investment. Policies have been put in place to address these problems, but much remains to be done. An important recent initiative is the enactment of the Investment Law in 2007, which strengthened the foreign investment regime. This paper argues that options for reform could focus on making regulations more pro-business, including by removing red tape and onerous provisions at the local level of government, improving governance and relaxing remaining restrictions on foreign investment. Further financial deepening would facilitate access by enterprises to more abundant, cheaper sources of finance. This Working Paper relates to the 2008 OECD Economic Assessment of Indonesia ( <P>Améliorer le cadre des affaires et des investissements en Indonésie <BR>En Indonésie, le cadre des affaires décourage la création d’entreprises et freine la croissance du secteur privé. Les faiblesses de la réglementation, les goulets d’étranglement dans les infrastructures et la médiocrité de la gouvernance continuent à entraver les investissements. Des mesures ont été prises pour remédier à ces problèmes, mais beaucoup reste à faire. L’une des importantes initiatives prises récemment a été l’adoption, en 2007, d’une loi sur les investissements qui a amélioré le régime des investissements étrangers. On soutient dans ce papier que la réforme pourrait viser surtout à rendre la réglementation plus favorable à l’activité privée, notamment en supprimant les tracasseries et les lourdeurs administratives aux échelons locaux des pouvoirs publics, en améliorant la gouvernance et en assouplissant les restrictions qui subsistent à l’égard des investissements étrangers. En outre, la poursuite de l’approfondissement des marchés financiers permettrait aux entreprises de se procurer davantage de fonds à moindre coût. Ce Document de travail se rapporte à l’Évaluation économique de l’OCDE de l’Indonesie, 2008 (
    Keywords: financial sector, secteur financier, foreign direct investment, investissement direct étranger, infrastructure, infrastructure, Indonesia, investment climate, Indonésie, climat des affaires
    JEL: E22 F21 G20
    Date: 2008–09–23
  6. By: Tsimpo, Clarence; Wodon, Quentin
    Abstract: When assessing the impact of changes in food prices on poverty, it is important to consider food producers (who may benefit from an increase in prices) as well as consumers (who loose out when the price increases), with a focus on poor consumers and producers. In the case of rice in Liberia however, the impact of a change in price is not ambiguous because a large share of the rice consumed is imported, while the rice locally produced is used mostly for auto-consumption. An increase in the price of rice will result in higher poverty in the country as a whole (even if some local producers will gain from this increase), while a reduction in price will reduce poverty. Furthermore, because rice represents a large share of food consumption, any change in its price is likely to have a large impact on poverty. Using data from the 2007 CWIQ survey, the paper finds that an increase or decrease of 20 percent in the price of rice could lead to an increase or decrease of three to four percentage points in the share of the population in poverty.
    Keywords: Food&Beverage Industry,Rural Poverty Reduction,Crops&Crop Management Systems,Population Policies
    Date: 2008–10–01
  7. By: Ahmed, Sadiq; Ghani, Ejaz
    Abstract: South Asia has attracted global attention because it has experienced rapid GDP growth over the last two decades. What is not so well known is that South Asia is the least integrated region in the world. South Asia has opened its door to the rest of the world but it remains closed to its neighbors. Poor market integration, weak connectivity, and a history of friction and conflict have resulted in two South Asias. The first South Asia is dynamic, growing rapidly, highly urbanized, and is benefiting from global integration. The second South Asia is rural, land locked, full of poverty, and lagging. The divergence between the two South Asias is on the rise. Policy makers in South Asia have realized that countries and regions can not grow in isolation. The unique geography of South Asia-distance and density--has the potential to raise growth through increased flow of labor, capital, ideas, technology, goods and services within the region and with the rest of the world. Most lagging regions, in terms of both per capita income and poverty incidence, in South Asia are either land-locked or located in the border areas. Regional cooperation and market integration will unlock the development of these lagging regions in South Asia.
    Keywords: Transport Economics Policy&Planning,Economic Theory&Research,Achieving Shared Growth,Rural Poverty Reduction,Population Policies
    Date: 2008–09–01
  8. By: Parra, Juan Carlos; Wodon, Quentin
    Abstract: Many countries have been affected by food and oil price shocks. Rising energy costs have manifested themselves through higher prices of gas at the pump and through price increases for many other goods such as kerosene and transport. But in some countries there has also been some degree of protection for consumers for example when authorities have chosen to try to keep electricity tariffs affordable through implicit subsidies (which are unfortunately often poorly targeted). For food prices, the effect on consumers has often been more rapid than for oil-related products, as the increase in import prices have been typically fully passed on to consumers and has often been accompanied by increases in the prices of domestically produced foods. Recent attention has therefore rightly been focused on food prices, but the issue of oil prices is important as well. While food prices tend to have a larger direct impact on consumers due to the larger share of food in total household consumption, oil prices may have larger multiplier effects than food prices because oil-related products are used as intermediary products in many productive sectors. It therefore remains an open question as to whether the medium-term impact of food or oil prices is likely to be larger in any given country. It also remains open to question as to whether urban as opposed to rural households are most likely to be affected. While urban households are likely to rely on consumption of imported goods more than rural households, the weight of food and possibly oil-related products may well be larger in the consumption patterns of rural than urban households. Answering these questions may be useful to guide discussions on compensatory measures that governments can take to respond to the twin crisis of higher food and oil prices. In this context the objective of this paper is to provide a comparative analysis of the multiplier impact of both types of price shocks using a recent Social Accounting Matrix for Ghana. The paper finds that both the direct impacts of food prices and the indirect impacts of oil prices are potentially large, so that both should be dealt with by authorities when considering compensatory measures to protect households from higher consumer prices.
    Keywords: Markets and Market Access,Food&Beverage Industry,Energy Production and Transportation,Emerging Markets,Access to Markets
    Date: 2008–10–01
  9. By: Abe, Kazutomo; Wilson, John S.
    Abstract: This paper examines the impact of reducing corruption and improving transparency to lower trade costs in the Asia Pacific Economic Cooperation region. The authors find, based on a computable general equilibrium model, significant potential trade and welfare gains for Asia Pacific Economic Cooperation members, with increased transparency and lower levels of corruption. Results suggest that trade in the region would increase by 11 percent and global welfare would expand by $406 billion by raising transparency to the average in the region. Most of the increase in welfare would take place in member economies undertaking reform. Among the reformers, the gross domestic product of Vietnam, Thailand, Russia, and the Philippines would increase approximately 20 percent. The benefits to Malaysia and China would also be substantial with increased transparency and lower levels of corruption.
    Keywords: Economic Theory&Research,Free Trade,Trade Policy,Emerging Markets,Currencies and Exchange Rates
    Date: 2008–09–01
  10. By: Abbink, Klaus; Jayne, Thomas S.; Moller, Lars C.
    Abstract: Strategic interaction between public and private actors is increasingly recognized as an important determinant of agricultural market performance in Africa and elsewhere. Trust and consultation tend to positively affect private activity while uncertainty of government behavior impedes it. This paper reports on a laboratory experiment based on a stylized model of the Zambian maize market. The experiment facilitates a comparison between discretionary interventionism and a rules-based policy in which the government pre-commits itself to a future course of action. A simple precommitment rule can, in theory, overcome the prevailing strategic dilemma by encouraging private sector participation. Although this result is also borne out in the economic experiment, the improvement in private sector activity is surprisingly small and not statistically significant due to irrationally cautious choices by experimental governments. Encouragingly, a rules-based policy promotes a much more stable market outcome, thereby substantially reducing the risk of severe food shortages. These results underscore the importance of predictable and transparent rules for the state's involvement in agricultural markets.
    Keywords: Markets and Market Access,Food&Beverage Industry,Public Sector Corruption&Anticorruption Measures,Food Security,Access to Markets
    Date: 2008–09–01
  11. By: Fafchamps, Marcel; Shilpi, Forhad
    Abstract: Internal migration plays an important role in moderating regional differences in well-being. This paper analyzes migrants'choice of destination, using Census and Living Standard Surveys data from Nepal. The paper examines how the choice of a migration destination is influenced by income differentials, distance, population density, social proximity, and amenities. The study finds population density and social proximity to have a strong significant effect: migrants move primarily to high population density areas where many people share their language and ethnic background. Better access to amenities is significant as well. Differentials in expected income and consumption expenditures across districts are found to be relatively less important in determining migration destination choice as their effects are smaller in magnitude than those of other determinants. The results of the study suggest that an improvement in amenities (such as the availability of paved roads) at the origin could slow down out-migration substantially.
    Keywords: Population Policies,Economic Theory&Research,Transport Economics Policy&Planning,,Inequality
    Date: 2008–09–01
  12. By: Gwinner, William B.; Sanders, Anthony
    Abstract: This paper discusses some of the key characteristics of the U.S. subprime mortgage boom and bust, contrasts them with characteristics of emerging mortgage markets, and makes recommendations for emerging market policy makers. The crisis has raised questions in the minds of many as to the wisdom of extending mortgage lending to low and moderate income households. It is important to note, however, that prior to the growth of subprime lending in the 1990s, U.S. mortgage markets already reached low and moderate-income households without taking large risks or suffering large losses. In contrast, in most emerging markets, mortgage finance is a luxury good, restricted to upper income households. As policy makers in emerging market seek to move lenders down market, they should adopt policies that include a variety of financing methods and should allow for rental or purchase as a function of the financial capacity of the household. Securitization remains a useful tool when developed in the context of well-aligned incentives and oversight. It is possible to extend mortgage lending down market without repeating the mistakes of the subprime boom and bust.
    Keywords: Debt Markets,,Access to Finance,Bankruptcy and Resolution of Financial Distress,Emerging Markets
    Date: 2008–09–01
  13. By: Wodon, Quentin; Tsimpo, Clarence; Coulombe, Harold
    Abstract: Concerns have been raised about the impact of rising food prices worldwide on the poor. To assess the (short term) impact of rising food prices in any particular country it is necessary to look at both the impact on food producers (who benefit from an increase in prices) and food consumers (who loose out when the price increases), with a focus on poor producers and consumers. In Ghana, the impact of a change in the price of rice is not ambiguous because a large share of the rice consumed is imported, so that the negative impact for consumers is much larger than the positive impact for producers. For maize by contrast, the impact is ambiguous since much of the consumption is locally produced. Using a recent and comprehensive household survey, this paper provides an assessment of the potential impact of higher food prices on the poor in Ghana using both simple statistical analysis and non-parametric methods. The paper finds that rising food prices for rice, maize, and other cereals would together lead to an increase in poverty, but that by contrast to a number of other countries, this increase, while not negligible, may not be as large as feared.
    Keywords: Rural Poverty Reduction,Population Policies,Food&Beverage Industry,Achieving Shared Growth
    Date: 2008–10–01
  14. By: Fernandes, Ana M.; Paunov, Caroline
    Abstract: During the 1990s, foreign direct investment in producer service sectors in Latin America was massive. Such investment may increase the quality of services, reduce their cost, and offer opportunities for knowledge spillovers to downstream users of the services. This paper examines the effects of foreign direct investment in services on manufacturing productivity growth in Chile between 1992 and 2004. The authors estimate an extended production function where plant output growth depends on input growth and a weighted measure of foreign direct investment in services. The novelty of the approach is that the authors are able to assess the intensity of usage of various types of services at the plant level and use that information in the estimation of the importance of foreign direct investment in those services. The econometric results show a positive and significant effect of foreign direct investment in services on productivity growth of Chilean manufacturing plants which is robust to a multitude of tests. The economic impact of the estimates is that forward linkages from foreign direct investment in services account for almost 5 percent of the observed increase in Chilean manufacturing productivity growth during the sample period. This evidence therefore suggests that reducing the barriers restricting foreign direct investment in services in many developing economies may help accelerate productivity growth in their manufacturing sectors.
    Keywords: Banks&Banking Reform,ICT Policy and Strategies,E-Business,Knowledge Economy,Education for the Knowledge Economy
    Date: 2008–09–01
  15. By: Wodon, Quentin; Tsimpo, Clarence; Backiny-Yetna, Prospere; Joseph, George; Adoho, Franck; Coulombe, Harold
    Abstract: Concerns have been raised about the impact of rising food prices worldwide on the poor. To assess the impact of rising food prices in any particular country it is necessary to look at both the impact on food producers who are poor or near-poor and could benefit from an increase in prices and food consumers who are poor or near-poor and would loose out when the price increases. In most West and Central African countries, the sign (positive or negative) of the impact is not ambiguous because a substantial share of food consumption is imported, so that the negative impact for consumers is larger than the positive impact for net sellers of locally produced foods. Yet even if the sign of the impact is clear, its magnitude is not. Using a set of recent and comprehensive household surveys, this paper summarizes findings from an assessment of the potential impact of higher food prices on the poor in a dozen countries. Rising food prices for rice, wheat, maize, and other cereals as well as for milk, sugar and vegetable oils could lead to a substantial increase in poverty in many of the countries. At the same time, the data suggest that the magnitude of the increase in poverty between different countries is likely to be different. Finally, the data suggest that a large share of the increase in poverty will consist of deeper levels of poverty among households who are already poor, even if there will also be a larger number of poor households in the various countries.
    Keywords: Rural Poverty Reduction,Food&Beverage Industry,Population Policies,Poverty Lines
    Date: 2008–10–01
  16. By: Giles, John; Park, Albert; Wang, Meiyan
    Abstract: In determining whether a country's higher education system should be expanded, it is important for policymakers first to determine the extent to which high private returns to post-secondary education are an indication of the scarcity of graduates instead of the high unobserved ability of students who choose to attend post-secondary education. To this end, the paper identifies the returns to schooling in urban China using individual-level variation in educational attainment caused by exogenous city-wide disruptions to education during the Cultural Revolution from 1966 to 1976. For city-cohorts who experienced greater disruptions, children's educational attainment became less correlated with that of their fathers and more influenced by whether their fathers held administrative positions. The analysis calculates returns to college education using data from the China Urban Labor Survey conducted in five large cities in 2001. The results are consistent with the selection of high-ability students into higher education. The analysis also demonstrates that these results are unlikely to be driven by sample selection bias associated with migration, or by alternative pathways through which the Cultural Revolution could have affected adult productivity.
    Keywords: Education For All,Tertiary Education,Secondary Education,Primary Education,Population Policies
    Date: 2008–09–01
  17. By: Wodon, Quentin; Zaman, Hassan
    Abstract: The increase in food prices represents a major crisis for the world's poor. This paper aims to review the evidence on the potential impact of higher food prices on poverty in sub-Saharan Africa, and examines the extent to which policy responses will benefit the poor. The paper shows that rising food prices are likely to lead to higher poverty in sub-Saharan Africa as the negative impact on net poor consumers outweighs the benefits to poor producers. A recent survey shows that the most common policy response in sub-Saharan African countries is reducing taxes on food while outside the region price controls or targeted consumer subsidies are the most popular measure. Sub-Saharan African countries also have a higher prevalence of food-based safety net programs which are being scaled up to respond to rising prices. The review suggests that the benefits from reducing import tariffs on staples may accrue largely to the non-poor. Social protection programs show more promise, but geographic targeting is likely to be crucial in ensuring that benefits reach the neediest. The paper also argues that anti-poverty interventions ought to retain their focus on rural areas where poverty remains highest even after taking into account the adverse impact on the urban poor due to the rise in food prices.
    Keywords: Food&Beverage Industry,Rural Poverty Reduction,Safety Nets and Transfers,Population Policies
    Date: 2008–10–01
  18. By: Bussolo, Maurizio; De Hoyos, Rafael E.; Medvedev, Denis
    Abstract: The present study uses the GIDD, a CGE-microsimulation model for Global Income Distribution Dynamics, to understand the ex-ante dynamics of global income distribution. Three main robust results emerge. First, under a set of realistic assumptions, there will be a reduction in global income inequality by 2030. This potential reduction can be fully accounted for by the projected convergence in average incomes across countries, with poor and populous countries growing faster than the rest of the world. Second, this convergence process will be accompanied by a widening of income distribution in two-thirds of the developing countries; the main cause being increasing skill premia. Third, a trend that may counter-balance the potential anti-globalization sentiment is the emergence of a global middle class: a group of consumers who demand access to, and have the means to purchase, international goods and services. The results show that the share of these consumers in the global population is likely to more than double in the next 20 years. These ex-ante trends in global income distribution suggest that the mid-1990s could be seen as a turning point after which global inequality began showing a negative tendency.
    Keywords: Inequality,Poverty Impact Evaluation,Economic Theory&Research,Achieving Shared Growth,
    Date: 2008–09–01
  19. By: Coulombe, Harold; Wodon, Quentin
    Abstract: Telling a policy maker that poverty will increase due to the recent increase in food prices is not very useful; telling the policy makers where the impact is likely to be larger is better, so that measures to cope with the impact of the crisis can be targeted to areas that need them the most. This paper shows how to use poverty mapping techniques to assess where higher food prices are likely to hurt the most using Guinea census and survey data as a case study. The results suggest that in the case of a rice price increase, the poorest areas of the country will not be the hardest hit, especially if the potential positive impact of higher food prices on rice producers is taken into account, in which case poverty may decline in some of these areas even if for the country as a whole poverty will increase significantly due to the large share of rice in the household consumption budget.
    Keywords: Rural Poverty Reduction,Population Policies,Small Area Estimation Poverty Mapping,Achieving Shared Growth
    Date: 2008–10–01
  20. By: Evans Jadotte (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: The Republic of Haiti is the prime international remittances recipient country in the Latin American and Caribbean (LAC) region relative to its gross domestic product (GDP). The downside of this observation may be that this country is also the first exporter of skilled workers in the world by population size. The present research uses a zero-altered negative binomial (with logit inflation) to model households’ international migration decision process, and endogenous regressors’ Amemiya Generalized Least Squares method (instrumental variable Tobit, IV-Tobit) to account for selectivity and endogeneity issues in assessing the impact of remittances on labor market outcomes. Results are in line with what has been found so far in this literature in terms of a decline of labor supply in the presence of remittances. However, the impact of international remittances does not seem to be important in determining recipient households’ labor participation behavior, particularly for women.
    Keywords: Republic of Haiti, international migration, remittances, labor supply
    JEL: C39 F22 F24 J22
    Date: 2008–09
  21. By: Francisco Gallego (Instituto de Economía. Pontificia Universidad Católica de Chile.); Andrés E. Hernando.
    Abstract: This paper studies the implications of school choice in the context of the Chilean quasivoucher system. We use information of school choices of about 80,000 students that lived in the Metropolitan Area of Santiago in Chile in 2002 and the results of the discrete choice model estimated in Gallego and Hernando (2008) to perform a number of exercises aimed at quantifying what we call the “value of choice” (i.e. how much do households gain from a school choice system?) against a number of counterfactuals that restrict school choice in several dimensions (geographic choice, the existence of top ups, and the supply of voucher schools). We also (i) analyze the effects on socioeconomic segregation of students and (ii) study the potential effects of introducing a non-flat voucher that is decreasing in students’ SES. Our results suggest that overall, school choice seems to be valuable to households, but there is a lot of heterogeneity in its value. In some simulations, school choice is regressive (as when lotteries are used to allocate students to current schools; or when we consider the effects of the increase in the supply of voucher schools) and in other progressive (when students are allowed to choose outside the county in which they live). Interestingly, policies that restrict the use of top ups to the voucher do not seem to reduce segregation in a significant way. This contrasts with the introduction of a differentiated voucher, which would mostly benefit the poor and even compensate them for loses from some dimensions of school choice observed in particular groups.
    Keywords: School choice, Chile, Vouchers, Segregation, Structural estimates, Parents preferences
    JEL: I20 I21 I22 I28
    Date: 2008
  22. By: Ralf Ruhwedel; Michael Funke
    Abstract: We calculate a variety of welfare gains for Mainland China, following the approach of Romer (1994), who emphasized that proper modelling of the impact of trade restrictions on the number of available product varieties is crucial for quantifying the welfare impact of trade liberalization. The empirical work presented relies on direct measures of product variety calculated from highly disaggregated trade data. The emerging conclusion is that freer trade has indeed boosted welfare.
    Keywords: trade liberalization; product variety; welfare; China
    Date: 2008–06
  23. By: Peter Warr
    Abstract: Thailand’s impressive long-term rate of economic growth has resulted mainly from accumulation of physical capital. Significant total factor productivity growth can be identified at an aggregate level, explaining as much as one third of the aggregate growth of output. But this TFP growth was due entirely to resource reallocation from low productivity sectors to higher productivity sectors. TFP at the sectoral level has been important only in agriculture. Poverty has declined remarkably over time despite a long-term increase in income inequality. The short-term rate of decline in poverty incidence has been directly related to the rate of economic growth.
    Keywords: Economic growth; poverty incidence; Thailand
    JEL: O40 I32 O53
    Date: 2008
  24. By: Quibria, M.G; Ahmad, Shafi
    Abstract: This paper provides a critical review of aid effectiveness in Bangladesh . It focuses on the contributions of three major, high-profile donors: the World Bank, the Asian Development Bank (ADB), and the Government of Japan (GOJ). In assessing aid effectiveness, the paper uses a qualitative triangulation approach based on the subjective judgments of donors and recipients. This approach is dictated by the deficiencies of quantitative methods for this purpose and the lack of adequate and reliable quantitative data. The paper then discusses the causes of aid ineffectiveness. As this theme has a wider resonance beyond Bangladesh, the discussion next turns to the experiences of the developing world as a whole. Recommendations for making aid more effective follow, and the paper ends with some concluding remarks.
    Keywords: aid effectiveness; poverty; conditionality; cross-country regressions
    JEL: F35
    Date: 2007–12

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