nep-dev New Economics Papers
on Development
Issue of 2009‒04‒18
sixteen papers chosen by
Jeong-Joon Lee
Towson University

  1. Asia's Underachiever: Deep Constraints in Philippine Economic Growth By Briones, Roehlano M.
  2. Analysis of the Impact of Changes in the Prices of Rice and Fuel on Poverty in the Philippines By Reyes, Celia M; Sobrevinas, Alellie B.; Bancolita, Joel; de Jesus, Jeremy
  3. Impact Assessment of National and Regional Policies Using the Philippine Regional General Equilibrium Model (PRGEM) By Briones, Roehlano M.
  4. Do institutions limit clientelism?: A study of the district assemblies common fund in Ghana By Banful, Afua Branoah
  5. Dynamics of structural transformation: An empirical characterization in the case of China, Malaysia, and Ghana By Badibanga, Thaddee; Diao, Xinshen; Roe, Terry; Somwaru, Agapi
  6. Potential Consequences of Intra-Regional Trade in Short- Term Food Security Crises in Southeastern Africa By Steven Haggblade; Hunter Nielson; Jones Govereh; Paul Dorosh
  7. Do Immigrants Take the Jobs of Native Workers? By Malchow-Møller, Nikolaj; Munch, Jakob Roland; Skaksen, Jan Rose
  8. The Gender Education Gap in China: The Power of Water By Maimaiti, Yasheng; Siebert, W. Stanley
  9. Do Immigrants Affect Firm-Specific Wages? By Malchow-Møller, Nikolaj; Munch, Jakob Roland; Rose Skaksen, Jan
  10. Inequality, Poverty and Social Policy: Recent Trends in Chile By Osvaldo Larrañaga
  11. The Olympic effect By Andrew K. Rose; Mark M. Spiegel
  12. Beyond Kuznets: persistent regional inequality in China By Christopher Candelaria; Mary Daly; Galina Hale
  13. Explaining Productivity Variation among Smallholder Maize Farmers in Tanzania By Msuya, Elibariki Emmanuel; Hisano, Shuji; Nariu, Tatsuhiko
  14. How useful is Growth Literature for Policies in the Developing Countries? By Rao, B. Bhaskara; Cooray, Arusha
  15. The Importance of History for Economic Development By Nathan Nunn
  16. Liberalization with Endogenous Institutions: A Comparative Analysis of Agricultural Reform in Africa, Asia, and Europe By Johan F.M. Swinnen; Anneleen Vandeplas; Miet Maertens

  1. By: Briones, Roehlano M.
    Abstract: Numerous studies have tried to explain the poor growth performance of the Philippines. This paper critically reviews related literature on constraints to long-run growth, as it applies to the Philippines. We evaluate several factors, namely: culture, corruption, and institutions. The last offers the most convincing explanation for mediocre growth. Hence, to raise the country’s growth trajectory, I recommend: sustained policy reform; less hand-wringing over Filipino culture and corruption; and above all, focused and sustained development of functional capitalistic institutions.
    Keywords: Philippines, development, institutions, growth constraints
    Date: 2009
  2. By: Reyes, Celia M; Sobrevinas, Alellie B.; Bancolita, Joel; de Jesus, Jeremy
    Abstract: <p>The study aims to assess the impact of rising prices of rice and fuel on poverty in the Philippines. In particular, the variations in the potential effects among different group of households were analyzed using household level data. Results of the study confirm that the impact of increasing prices of rice and fuel vary across different groups of households depending on the sector of employment, level of urbanity, income group, and geographical location. In fact, there are losers and gainers from the recent increases in the prices of rice and fuel.</p> <p>In response to higher prices, households adopted different coping mechanisms, some of which are damaging and counterproductive in the medium- and long-run. The Philippine government has also responded by implementing programs that would mitigate the negative impact of soaring prices. It is recommended that household level data for all households in the community, such as those being generated by the community-based monitoring system (CBMS) being implemented by local government units, be used to identify eligible beneficiaries through some proxy means test model. This would help reduce leakage of program benefits to the nonpoor as well as ensure that the poor benefit from these programs.</p>
    Keywords: poverty, impact analysis, community-based monitoring system, rice, prices, fuel, coping mechanisms, pass-through rates, net benefit ratio
    Date: 2009
  3. By: Briones, Roehlano M.
    Abstract: For the Philippines, quantitative policy analysis should incorporate regional differences in welfare and economic structure, which arise partly from geographic constraints. However, existing CGE models offer limited analysis of regional effects or national impacts of region-specific interventions, owing to the absence of key regional data. This study formulates a regional CGE model that overcomes these limitations. Applications of the model yield the following results: i) completion of the tariff reform program in agriculture will contract some import-competing sectors in lagging regions, but improve welfare across all regions; ii) massive investments in marketing infrastructure promise bigger pay-offs, though with a trade-off between the size and spread of welfare gains across regions; iii) combining trade reform with marketing infrastructure investments mitigate some of the contractionary effects from the former; however the absence of welfare synergies suggest that the two sets of policies can be pursued independently.
    Keywords: trade liberalization, computable general equilibrium (CGE), regional economics, agricultural development, marketing infrastructure, welfare impact
    Date: 2009
  4. By: Banful, Afua Branoah
    Abstract: "Analyses of how coveted central-government resources in Africa are shared have shown widespread patronage, ethnic cronyism, and pork-barrel politics. While some governments have attempted to rectify the situation by establishing revenue-sharing formulas, a key unanswered question is whether such institutions are able to achieve this goal. This paper presents an empirical investigation of a pioneering formula-based system of resource allocation from the central government to local governments in Ghana—the District Assemblies Common Fund (DACF). The evidence is consistent with governments being able to politically manipulate resource allocation within the confines of the formula-based system. Nevertheless, this does not suggest that the DACF completely fails to limit political influence. It indicates that other guiding structures of a formula-based system—in particular, how and when the formula can be altered—are important determinants of how well a program such as the DACF is able to resist political pressures." from authors' abstract
    Keywords: Resource sharing, Grants in aid, Intergovernmental relations, Development strategies,
    Date: 2009
  5. By: Badibanga, Thaddee; Diao, Xinshen; Roe, Terry; Somwaru, Agapi
    Abstract: "The paper develops a metric of structural transformation that can account for the production of new varieties of goods embodying advancements in technological know-how and design. Our measure captures the dynamics of an economy's transformation and can be viewed as an extension of Hausmann and Klinger's static measure. We apply our measure to four-digit-level SITC trade data of China, Malaysia, and Ghana over the period 1962–2000. The results show that two important factors characterize the rapid transformation of the Chinese economy: the high proximity of its export basket to three main industrial clusters—capital goods, consumer durable goods, and intermediate inputs—and the increase in the values of the new goods belonging to those three clusters. Malaysia exhibits a similar but more modest pattern. In contrast, the structure of the Ghanaian economy appears unchanged over the entire 1962–2000 period. That economy is dominated by primary goods clusters, and the values of the goods in those clusters have remained relatively low. We also discuss qualitatively the role of policies and institutions in spurring transformation in the three countries." from authors' abstract
    Keywords: Structural transformation, Discovery, technological change, Development strategies,
    Date: 2009
  6. By: Steven Haggblade; Hunter Nielson; Jones Govereh; Paul Dorosh
    Abstract: This paper aims to evaluate the potential impact of intra- regional trade in moderating food price shocks in south eastern Africa, in the market shed centered in Northern Mozambique, Malawi and Southeastern Zambia. To do so, the following analysis develops a spatially disaggregated model of maize and cassava markets in the region in order to evaluate the impact of supply shocks confronting the region, with and without cross-border trade.
    Keywords: Africa, trade, emergency
    JEL: Q13
    Date: 2008–06
  7. By: Malchow-Møller, Nikolaj (CEBR, Copenhagen); Munch, Jakob Roland (University of Copenhagen); Skaksen, Jan Rose (Copenhagen Business School)
    Abstract: In this paper, we focus on the short-run adjustments taking place at the workplace level when immigrants are employed. Specifically, we analyse whether individual native workers are replaced or displaced by the employment of immigrants within the same narrowly defined occupations at the workplace. For this purpose, we estimate a competing risks duration model for job spells of native workers that distinguishes between job-to-job and job-to-unemployment transitions. In general, we do not find any signs of native workers being displaced by immigrants. Furthermore, we find only very limited signs of replacement of native workers by immigrants. Instead, in particular low-skilled native workers are less likely to lose or leave their jobs when the firms hire immigrants.
    Keywords: immigration, adjustment costs, displacement, job spells, duration model
    JEL: F22 J61 J63
    Date: 2009–04
  8. By: Maimaiti, Yasheng (University of Birmingham, UK); Siebert, W. Stanley (University of Birmingham, UK)
    Abstract: We investigate girls' school dropout rates, bringing forward a novel variable: access to water. We hypothesise that a girl's education suffers when her greater water need for female hygiene purposes after menarche is not met because her household has poor access to water. For testing we use data from rural villages in the China Health and Nutrition Survey. We find that menarche is associated with an increase in the school dropout rate, and indeed the effect is weaker for girls who have good access to water. Water engineering can thus contribute significantly to reducing gender education gaps in rural areas.
    Keywords: education, gender gaps, menarche, water, China
    JEL: I21 J16 O15 L95 Q25
    Date: 2009–04
  9. By: Malchow-Møller, Nikolaj (Department of Economics, Copenhagen Business School); Munch, Jakob Roland (Department of Economics, Copenhagen Business School); Rose Skaksen, Jan (Department of Economics, Copenhagen Business School)
    Abstract: In this paper, we propose and test a novel effect of immigration on the wages of native workers. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, the use of immigrants may also affect wage formation at the most disaggregate level – the workplace. Using linked employeremployee data, we find that an increased use of workers from less developed countries has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and IV. Additional evidence suggests that this effect works at least partly through a general effect on the wage norm in the firm of hiring employees with poor outside options (the immigrants).
    Keywords: na
    JEL: D21 H32
    Date: 2009–01–01
  10. By: Osvaldo Larrañaga
    Abstract: This report aims to outline the main trends in income distribution and poverty in Chile, as well as the role of social policy in these areas. The report includes five sections. First, it discusses recent trends in income inequality and poverty, including a brief overview of the data available in the country. Second, it describes the country’s social protection programs, including with respect to coverage, financing and distributional impact. The third section examines how social policy has affected poverty reduction in recent decades, which is followed by an analysis of the relative stability of income inequality and its relation to public policy instruments. Section five presents future trends in social policy and their potential impact on inequality and poverty.<BR>Le présent rapport passe en revue les principales tendances d’évolution de la distribution des revenus et de la pauvreté au Chili, ainsi que le rôle de la politique sociale dans ces domaines. Ce rapport comprend cinq parties. La première passe en revue les tendances récentes en matière d’inégalité des revenus et de pauvreté et donne une vue d’ensemble des données disponibles correspondantes. La deuxième partie décrit les programmes de protection sociale du pays, notamment leur étendue, leur financement et leur impact sur la distribution. La troisième partie vise à déterminer les effets exercés par la politique sociale sur la réduction de la pauvreté durant les récentes décennies. La quatrième partie analyse la stabilité relative des inégalités de revenus et le lien avec les instruments de la politique publique. La cinquième partie présente les tendances futures d’évolution de la politique sociale et son impact potentiel sur les inégalités et la pauvreté.
    JEL: I30 I38
    Date: 2009–04–08
  11. By: Andrew K. Rose; Mark M. Spiegel
    Abstract: Economists are skeptical about the economic benefits of hosting "mega-events" such as the Olympic Games or the World Cup, since such activities have considerable cost and seem to yield few tangible benefits. These doubts are rarely shared by policymakers and the population, who are typically quite enthusiastic about such spectacles. In this paper, we reconcile these positions by examining the economic impact of hosting mega-events like the Olympics; we focus on trade. Using a variety of trade models, we show that hosting a mega-event like the Olympics has a positive impact on national exports. This effect is statistically robust, permanent, and large; trade is around 30% higher for countries that have hosted the Olympics. Interestingly however, we also find that unsuccessful bids to host the Olympics have a similar positive impact on exports. We conclude that the Olympic effect on trade is attributable to the signal a country sends when bidding to host the games, rather than the act of actually holding a mega-event. We develop a political economy model that formalizes this idea, and derives the conditions under which a signal like this is used by countries wishing to liberalize.
    Keywords: Trade ; Exports ; Economic development
    Date: 2009
  12. By: Christopher Candelaria; Mary Daly; Galina Hale
    Abstract: Regional inequality in China appears to be persistent and even growing in the past two decades. We study potential offsetting factors and interprovincial migration to shed light on the sources of this persistence. We find that some of the inequality could be attributed to differences in quality of labor, industry composition, and geographical location of provinces. We also demonstrate that interprovincial migration, while driven in part by wage differences across provinces, does not offset these differences. Finally, we find that interprovincial redistribution did not help offset regional inequality during our sample period.
    Keywords: Income distribution ; China
    Date: 2009
  13. By: Msuya, Elibariki Emmanuel; Hisano, Shuji; Nariu, Tatsuhiko
    Abstract: Using a stochastic frontier production model proposed by Battese and Coelli (1995), the paper estimates the levels of technical efficiency of 233 smallholder maize farmers in Tanzania and provides an empirical analysis of the determinants of inefficiency with the aim of finding way to increase smallholders’ maize production and productivity. Results shows that smallholder productivity is very low and highly variable, ranging form 0.01t/ha to 6.77t/ha, averaging 1.19t/ha. Technical efficiencies of smallholder maize farmers range from 0.011 to 0.910 with a mean of 0.606. Low levels of education, lack of extension services, limited capital, land fragmentation, and unavailability and high input prices are found to have a negative effect on technical efficiency. Smallholder farmers using hand-hoe and farmers with cash incomes outside their farm holdings (petty business) are found to more efficient. However, farmers who use agrochemicals are found to be less efficient. Policy implications drawn from the results include a review of agricultural policy with regard to renewed public support to revamp the agricultural extension system, and interventions towards improving market infrastructure in order to reduce the transaction element in the input and output marketing.
    Keywords: Productivity variation; smallholder farmers; technical efficiency; maize; tanzania
    JEL: Q12 D24
    Date: 2008–07
  14. By: Rao, B. Bhaskara; Cooray, Arusha
    Abstract: This paper examines the growing gap between the theoretical and empirical growth literature and the policy needs of the developing economies. Growth literature has focussed mainly on the long term growth outcomes, but policy makers of the developing economies need rapid improvements in the short to medium term growth rates; see Pritchett (2006). This paper argues that this gap can be reduced by distinguishing between the short to medium term dynamic effects of policies from their long run equilibrium effects. With data on Singapore, Malaysia and Thailand we show that an extended version of the Solow (1956) model is well suited for this purpose. This is despite the common belief that the Solow model has no use for policy and is not applicable to the developing countries. We find that the short to medium term growth effects of the investment ratio are quite significant and they may persist for up to 10 years.
    Keywords: Solow Growth Model; Endogenous Growth; Dynamic Growth Effects of Investment Ratio; Policies for Developing Countries.
    JEL: O11
    Date: 2009–04–10
  15. By: Nathan Nunn
    Abstract: This article provides a survey of a growing body of empirical evidence that points towards the important long-term effects that historic events can have on current economic development. The most recent studies, using micro-level data and more sophisticated identification techniques, have moved beyond testing whether history matters, and attempt to identify exactly why history matters. The most commonly examined channels include: institutions, culture, knowledge and technology, and movements between multiple equilibria. The article concludes with a discussion of the questions that remain and the direct of current research in the literature.
    JEL: N0 O0
    Date: 2009–04
  16. By: Johan F.M. Swinnen; Anneleen Vandeplas; Miet Maertens
    Abstract: Thirty years ago, a vast share of the poor and middle income countries were heavily state-controlled. The effects of the liberalizations in the 1980s and 1990s differed strongly between regions in Africa, Asia and Europe. This paper first documents these differences in reform effects in a comparative framework and then develops a model to formally analyze how liberalization affects production and income distribution when institutions that govern production and exchange are also affected. We derive hypotheses on how the endogenous institutional adjustments affect the supply response to the liberalizations. We use these insights to forward a series of explanations on the differences in performance across countries following liberalization.
    Keywords: Agricultural supply chains, growth, development, regional comparisons
    JEL: O12 O18 O43 O57 Q12 Q13
    Date: 2009

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