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on Development |
| By: | Patrick Eozenou (European University Institute, Villa San Paolo, Via Della Piazzuola 43, 50133 Florence, Italy) |
| Abstract: | We use the Vietnam Living Standard Survey conducted in 1993 and in 1998 to analyze the determinants of private transfers among rural farmers. Private transfers are widespread and important relative to pre-transfer income levels of recipients in both years. Conducting parametric and semiparametric analysis of single-index models for transfer status, we find that private transfers help smoothing income across the life cycle and across states of nature. Pre-transfer income is positively related to the net donor status and negatively associated with the net recipients status, especially for low levels of income. These results suggest that crowding-out of public redistributive policies targeted to the rural poor might be an issue to take into account in Vietnam. |
| Keywords: | Private Transfers; Single-Index Model; Probit; Semiparametric Estimation; Vietnam. |
| JEL: | D63 D64 I30 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:0409&r=dev |
| By: | Lakshmi Iyer (Harvard Business School, Business, Government and the International Economy Unit) |
| Abstract: | This paper documents the short-term and long-term trends in internal conflict in South Asian countries, using multiple data sources. I find that incidents of terrorism have been rising across South Asia over the past decade, and this increase has been concentrated in economically lagging regions in the post-2001 period. This is in contrast to both the historical patterns of conflict, and the evolution of other types of violence. Analyzing the role of economic, geographic and demographic factors, I find that poorer areas have significantly higher levels of conflict intensity. The paper reviews the various approaches taken by governments to deal with conflict, contrasting security-based approaches with political accommodation and economic approaches. Finally, the paper reviews the potential role of regional cooperation in mitigating conflict. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:09-086&r=dev |
| By: | Manoj Atolia (Department of Economics, Florida State University); Santanu Chatterjee (Department of Economics, Terry College of Business, University of Georgia); Stephen J. Turnovsky (Department of Economics, University of Washington) |
| Abstract: | This paper examines the significance of the time path of a given productivity increase on growth and inequality. We show that whereas the time path impacts only the transitional path of aggregate quantities and has no effect on their ultimate steady-state levels, it has both transitional and permanent consequences for wealth and income distribution. As a result, the growth-inequality trade-off generated by a given discrete increase in productivity contrasts sharply with that obtained when the same ultimate productivity increase is acquired gradually. This is true both in transition and across steady states. We show that a gradual productivity increase can generate a Kuznets-type inverted U-shaped relationship between inequality and per-capita income. The distance from the technology frontier is also shown to have important implications for both the magnitude and persistence of inequality. Finally, our results suggest that economies with similar aggregate structural characteristics may have very different outcomes for income and wealth inequality, depending on the intrinsic nature of the productivity growth path. |
| Keywords: | Reverse shooting, global saddle path, distance mapping |
| JEL: | C63 C61 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2009_01_02&r=dev |
| By: | Céline Azémar; Rodolphe Desbordes |
| Abstract: | Using 1985-2004 yearly panel data for 70 developing countries, including 28 from Sub-Saharan Africa (SSA), the paper finds that once market size is accounted for, SSA's FDI deficit with other regions of the world is mainly explained by the insufficient provision of public goods: relatively low human capital accumulation, in terms of education and health in SSA. Based on additional cross-sectional data, the paper finds that in the absence of HIV and malaria, net FDI inflows in the median SSA country could have been one-third higher during 2000-2004, with slightly more than one-half of this deficit explained by malaria. |
| Keywords: | Public Governance, Foreign Direct Investment, Health |
| JEL: | F21 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2009_04&r=dev |
| By: | Mwabu, Germano (U of Kenya) |
| Abstract: | The paper investigates birth weight and its correlates in Kenya using nationally representative data collected by the government in the early 1990s. I find that immunization of the mother against tetanus during pregnancy is strongly associated with improvements in birth weight. Other factors significantly correlated with birth weight include age of the mother at first birth and birth orders of siblings. It is further found that birth weight is positively associated with mother's age at first birth and with higher birth orders, with the first born child being substantially lighter than subsequent children. Newborn infants are heavier in urban than in rural areas and females are born lighter than males. There is evidence suggesting that a baby born at the clinic is heavier than a newborn baby drawn randomly from the general population. |
| JEL: | C31 C34 I11 I12 J13 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:52&r=dev |
| By: | Coxhead, Ian (U of Wisconsin and Norwegian University of Life Sciences); Jayasuriya, Sisira (La Trobe U) |
| Abstract: | The rapid growth of China and, more recently, of India, is having major effects on every facet of the global economy. The supply of labor-intensive manufactured exports (from China in particular) has been accompanied by a huge expansion in their imports both of raw materials and of skill-intensive manufactured parts and components. This ‘offshoring’ of intermediates production by large, labor-abundant economies has economic and environmental implications for other developing economies drawn into their trade networks. We sketch a trade-theoretic model showing how the growth of the ‘giants’ generates adjustment pressures on their trading partners and competitors among developing economies. We discuss in particular how differences in relative factor endowments of resource-rich economies can produce quite different outcomes in the context of product fragmentation and expanding commodity trade. We also explore the effects on production, trade, environment and prospects for future growth, recognizing that commodity extraction and production can have strong environmental impacts, particularly in the context of weak institutions and other market failures. We illustrate these different impacts by considering the cases of Indonesia, Malaysia and Thailand and highlight implications for growth, development and policy. |
| JEL: | F14 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:wisagr:528&r=dev |
| By: | Coxhead, Ian (U of Wisconsin and Norwegian University of Life Sciences); Li, Muqun (U of Wisconsin) |
| Abstract: | In an integrated global economy, specialisation in trade is an increasingly prominent strategy. A labour-abundant, resource-rich economy like Indonesia faces stiff competition for labourintensive manufactures; meanwhile, rapid growth in demand for resources from China and India exposes it to the ‘curse’ of resource wealth. This diminishes prospects for more diversified growth based on renewable resources like human capital. Using an international panel data set we explore the influence of resource wealth, foreign direct investment, and human capital on the share of skill-intensive products in total exports. FDI and human capital increase this share; resource wealth diminishes it. We use the results to compare Indonesia with Thailand and Malaysia. Indonesia’s reliance on skill-intensive exports would have been higher had it achieved higher levels of FDI and skills. Indonesia’s performance in accumulating these endowments, and its relative resource abundance, impede diversification in production and trade. Finally, we discuss policy lessons and options. |
| JEL: | F14 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:wisagr:524&r=dev |
| By: | Jha, Saumitra (Stanford U) |
| Abstract: | This paper analyses the incentives that shaped Hindu and Muslim interaction in India's towns from the rise of Islam to the rise of European intervention in the 17th century; it argues that differences in the degree to which medieval Hindus and Muslims could provide complementary, non-replicable services and a mechanism to share the gains from exchange has resulted in a sustained legacy of religious tolerance. Due to Muslim-specific advantages in Indian Ocean shipping, incentives to trade across ethnic lines were strongest in medieval trading ports, leading to the development of institutional mechanisms that further supported inter-religious exchange. Using new town-level data spanning India's medieval and colonial history, this paper finds that medieval trading ports were 25 percent less likely to experience a religious riot between 1850-1950, two centuries after Europeans disrupted Muslim dominance in overseas shipping. Medieval trading ports continued to exhibit less widespread religious violence during the Gujarat riots in 2002. The paper shows that these differences are not the result of variation in geography, political histories, wealth, religious composition or of medieval port selection, and interprets these differences as being transmitted via the persistence of institutions that emerged to support inter-religious medieval trade. The paper further characterises these institutions and the lessons they yield for reducing contemporary ethnic conflict. |
| JEL: | F10 N25 O17 Z12 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:2004&r=dev |
| By: | Hausmann, Ricardo (Harvard U); Klinger, Bailey (Harvard U) |
| Abstract: | This paper presents a growth diagnostic of Peru. It notes that although Peru has recently enjoyed high rates of economic growth, this growth is actually a recovery from a significant and sustained growth collapse that began in the 1970s. The growth collapse was caused by a decline in export earnings due to the fall in international prices and an inadequate investment regime in export activities that led to a fall in market share. This situation led to collateral damage in the form of a balance of payments, fiscal and financial crisis, accompanied by hyperinflation and violence, but these aspects were corrected in the 1990s. However, the transformation of the export sector has been surprisingly small: the same activities that declined--mining and energy--are the ones that are leading the current recovery in exports to levels that in real per capita terms are similar to those achieved 30 years ago. We argue that the lack of structural transformation is associated with Peru's position in a poorly connected part of the product space and this accentuates coordination failures in the movement to new activities. In addition, Peru's current export package, is very capital intensive and generates few jobs, especially in urban areas where the bulk of the labor force is now located. This limits the welfare benefits of the current growth path. The key policy message is that the public sector must act to encourage the development of new export activities that better utilize the human resources of the country. This involves action on the macro front to achieve a more competitive real exchange rate, improvements in the capacity to solve coordination failures in the provision of specific public sector inputs and programs to stimulate investment in new tradable activities. |
| JEL: | O54 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-62&r=dev |
| By: | Jensen, Robert T. (U of California, Los Angeles); Miller, Nolan (Harvard U) |
| Abstract: | World food prices have increased dramatically in recent years. We use panel data from 2006 to examine the impact of these increases on the consumption and nutrition of poor households in two Chinese provinces. We find that households in Hunan suffered no nutrition declines. Households in Gansu experienced a small decline in calories, though the decline is on par with usual seasonal effects. The overall nutritional impact of the world price increase was small because households were able to substitute to cheaper foods and because the domestic prices of staple foods remained low due to government intervention in grain markets. |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-039&r=dev |
| By: | Rodrik, Dani (Harvard U) |
| Abstract: | Development economics is split between macro-development economists--who focus on economic growth, international trade, and fiscal/macro policies--and micro-development economists--who study microfinance, education, health, and other social programs. Recently there has been substantial convergence in the policy mindset exhibited by micro evaluation enthusiasts, on the one hand, and growth diagnosticians, on the other. At the same time, the randomized evaluation revolution has led to an accentuation of the methodological divergence between the two camps. Overcoming the split requires changes on both sides. Macro-development economists need to recognize the distinct advantages of the experimental approach and adopt the policy mindset of the randomized evaluation enthusiasts. Micro-development economists, for their part, have to recognize that the utility of randomized evaluations is restricted by the narrow and limited scope of their application. As the Chinese example illustrates, extending the experimental mindset to the domain of economy-wide reforms is not just possible, it has already been practiced with resounding success in the most important development experience of our generation. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-055&r=dev |
| By: | Hausmann, Ricardo (Harvard U) |
| Abstract: | This paper performs a Growth Diagnostic for Brazil. It shows that many aspects of the Brazilian economy have been improving including the macro picture, educational progress and the external front. Moreover, Brazil has many productive possibilities and high-return investments. Yet growth is hampered because of a relatively old-fashioned problem that has been solved in many other countries in the region: creating a financially viable state that does not over-borrow, over-tax or under-invest. We show that domestic saving is the binding constraint on growth and that it has a fiscal cause. Although things are trending in the right direction, the challenge is to exploit the current good times to create the fiscal basis for a sustained growth acceleration. |
| JEL: | O54 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-061&r=dev |
| By: | Garcia-Fuentes, Pablo A.; Kennedy, P. Lynn |
| Abstract: | Remittances are one source of external financing for developing countries that have been increasing in both size and importance as of late. However, the issue about the impact on economic growth from remittances is still opened for discussion. This paper adds to this discussion by investigating the impact of remittances on growth through human capital using a panel data analysis for a sample of 14 Latin American and Caribbean (LAC) countries during the period 1975-2000. The results indicate that remittances have a positive impact on economic growth in the representative countries from the LAC region; however, the realization of this impact holds only when the remittance receiving country has a minimum threshold of human capital stock. |
| Keywords: | Remittances, Human Capital, Growth, Latin America and the Caribbean, International Development, International Relations/Trade, Labor and Human Capital, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saeana:46751&r=dev |
| By: | Grant, Jason H.; Meilke, Karl D. |
| Abstract: | On July 30, 2008, the WTO negotiations broke down because Members could not bridge their differences on the operation of a Special Safeguard Mechanism (SSM) for low-income countries. This study evaluates two scenarios concerning the recent July (2008) SSM proposal – one in which low-income countries are allowed to breach their pre-Doha bound tariffs and one in which they are not -- using a global, stochastic, partial equilibrium model of world wheat markets. We find that the July (2008) SSM proposal is not very trade distorting despite leading to sizeable SSM duties. Moreover, the question of whether developing countries should be allowed to exceed their pre-Doha bound tariffs depends heavily on the product under consideration, the extent of tariff cuts to bound rates, and the gap between a Members bound and applied tariffs, particularly when the volume-based SSM remedies are used |
| Keywords: | WTO, SSM, special safeguard mechanism, Doha, Agricultural and Food Policy, International Relations/Trade, |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:catpwp:46627&r=dev |
| By: | Neri, Marcelo |
| Abstract: | The objective of the paper is to build a Perceived Human Development Index (PHDI) framework by assembling the HDI components, namely indicators on income, health and education on their subjective version. We propose here to introduce a fourth dimension linked to perceptions on work conditions, given its role in the “happiness†literature and in social policy making. We study how perceptions on satisfaction about the individual’s satisfaction with income, education, work and health are related to their objective counterparts. We use a sample of LAC countries where we take advantage of a larger set of questions on the four groups of social variables mentioned included in the Gallup World Poll by the IADB. We emphasize the impacts of objective income and age on perceptions. Complementarily, in the appendix we use the full sample of 132 countries where a smaller set of variables can be included, which provides a greater degree of freedom to study the impact of objective HDI components observed at country level on the formation of individual’s perception on income, education, work, health and life satisfaction. These exercises provide useful insights about the workings of beneficiaries’ point of view to understand the transmission mechanism of key social policy ingredients into perceptions. In particular, the so-called PHDI may provide a complementary subjective reference to the HDI. We also study how one’s satisfaction with life is established, measuring the relative importance given to income vis-à -vis health and education. Estimating these “instantaneous happiness functions†will help to assess the relative weights attributed to income, health and education in the HDI, which is a benchmark in the multidimensional social indicators toolbox used in practice. |
| Date: | 2008–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:epgewp:687&r=dev |
| By: | Pansini, Rosaria Vega |
| Abstract: | The aim of this paper is to show how and why is possible to assess both direct and indirect effects of exogenous income injections on mean income of different household groups using a new approach based on the decomposition of SAM-based multipliers. The approach we propose in this paper allows analyzing the level of inequality in the distribution of income linking the formation of individual/family income to the features of each country’s productive structure and it can be used both for structural analysis and for simulations of redistributive and antipoverty policies. The first step in order to link changes in the level of poverty and inequality to policy measures will be to derive the “accounting price multipliers matrix”, which allows considering the effects of policies affecting the labour market, thus changing the level of wages for different workers ‘categories. Using the traditional Pyatt and Round’s multiplicative decomposition method, we will be then able to disentangle the transfer, the open-loop and the closed-loop effects of a change in the income of exogenous SAM’s accounts. The second step will be to use a new technique introduced by Pyatt and Round (2006) to further decompose each element of the total multiplier matrix in order to enlighten in “microscopic detail” the linkages between each household group’s income of and other accounts whose income has been exogenously injected (i.e. Activities account and Factors account). Moreover, this new approach allows assessing the linkages between each household endowment in terms of factors and the features of the productive system and shading light on the most powerful links among different components of the economic system affecting the distribution of income. The empirical results obtained using the Vietnamese SAM for year 2000 show that the highest direct effects are related to exogenous injections to the agricultural sector and to less skilled labour force and that these effects involved not only on rural male headed but also other household groups. At the same time, the new type of multiplier decomposition shows which are the sectors and factors of production whose increase in income will have the greater indirect effects, increasing also the level of income of all household types. For example, investing in the sector of food processing and on female labour force will benefit the most all household groups, thus representing a policy option good for aggregate growth and for improving the distribution of income. |
| Keywords: | Income distribution; social accounting matrix; multiplier decomposition; growth; labour market; structure of production. |
| JEL: | D31 D33 D57 O43 O15 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13156&r=dev |
| By: | Pascaline Dupas |
| Abstract: | I use a randomized experiment to test whether information can change sexual behavior among teenagers in Kenya. Providing information on the relative risk of HIV infection by partner's age led to a 28% decrease in teen pregnancy, an objective proxy for the incidence of unprotected sex. Self-reported sexual behavior data suggests substitution away from older (riskier) partners and towards protected sex with same-age partners. In contrast, the national abstinence-only HIV education curriculum had no impact on teen pregnancy. These results suggest that teenagers are responsive to risk information but their sexual behavior is more elastic on the intensive than on the extensive margin. |
| JEL: | C93 I1 O12 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14707&r=dev |
| By: | Marco Manacorda; Edward Miguel; Andrea Vigorito |
| Abstract: | We estimate the impact of a large anti-poverty program -- the Uruguayan PANES -- on political support for the government that implemented it. The program mainly consisted of a monthly cash transfer for a period of roughly two and half years. Using the discontinuity in program assignment based on a pre-treatment score, we find that beneficiary households are 21 to 28 percentage points more likely to favor the current government (relative to the previous government). Impacts on political support are larger among poorer households and for those near the center of the political spectrum, consistent with the probabilistic voting model in political economy. Effects persist after the cash transfer program ends. We estimate that the annual cost of increasing government political support by 1 percentage point is roughly 0.9% of annual government social expenditures. |
| JEL: | D72 H53 O12 O23 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14702&r=dev |
| By: | MOTOHASHI Kazuyuki; YUAN Yuan |
| Abstract: | This study compares knowledge spillovers from multinationals to local firms in China between the automobile and electronics industries. In the automobile industry we find that multinationals in the assembly industry affect vertical spillovers to domestic parts supply firms, and horizontal spillovers also exist between domestic parts suppliers. In contrast, we cannot find vertical spillover effects of multinationals in the assembly industry to domestic suppliers in the electronics industry, only horizontal spillover effects from multinationals to domestic supply firms can be found. A different pattern of technology spillover suggests the importance of customization of FDI policy by industry. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:09005&r=dev |