nep-dev New Economics Papers
on Development
Issue of 2009‒06‒03
twenty-six papers chosen by
Jeong-Joon Lee
Towson University

  1. Analysis of Calorie and Micronutrient Consumption in Vietnam By Linh Vu Hoang
  2. Impacts of Rising Food Prices on Poverty and Welfare in Vietnam. By Linh Vu Hoang; Paul Glewwe
  3. Estimation of Food Demand from Household Survey Data in Vietnam. By Linh Vu Hoang
  4. Capitalising on Innovation for Exports by the SME Sector By Anh Ngoc Nguyen; Nicola Jones; Nhat Duc Nguyen; Chuc Dinh Nguyen
  5. Stata in the measurement and analysis of poverty in Mexico By Héctor H. Sandoval; Rodrigo Aranda Balcazar; Martín Lima
  6. Evaluation of the Impact of the Mother and Infant Health Project in Ukraine By Olena Nizalova; Maria Vyshnya
  7. Locational Determinants of Rural Non-agricultural Employment: Evidence From Brazil By Erik Jonasson; Steven M Helfand
  8. On the Channel and Type of International Disaster Aid By Paul A. Raschky; Manijeh Schwindt
  9. Superiority of Exporters and the Causality Between Exporting and Firm Characteristics in Vietnam By Nguyen Hiep; Hiroshi Ohta
  10. Two-Way Outsourcing, International Migration, and Wage Inequality By Morihiro Yomogida; Laixun Zhao
  11. Foreign Aid, Government Behaviour and Fiscal Policy Outcomes in Papua New Guinea By Aaron Batten
  12. The comparability of Labour Force Survey (LFS) and Quarterly Labour Force Survey (QLFS) By Derek Yu
  13. The Evolution of an Industrial Cluster in China By Belton M. Fleisher; Dinghuan Hu; William McGuire; Xiaobo Zhang
  14. Corruption and the Shadow Economy: A Structural Equation Model Approach By Buehn, Andreas; Schneider, Friedrich
  15. Endogenous Skill Formation and the Source Country Effects of Emigration By Hartmut Egger; Gabriel Felbermayr
  16. On Growth and Development. By Mina Baliamoune-Lutz
  17. The Impact of Conditional Cash Transfers on Marriage and Divorce By Gustavo J Bobonis
  18. The Microeconomic Determinants of Emigration and Return Migration of the Best and Brightest: Evidence from the Pacific By John Gibson; David McKenzie
  19. Task Organization, Human Capital and Wages in Moroccan Exporting Firms By Christophe Muller; Christophe Nordman
  20. Anti-Poverty Transfers and Spatial Prices in Tunisia By Christophe Muller
  21. The Financial Crisis and Its Impact on Developing Countries By Stephany Griffith-Jones; José Antonio Ocampo
  22. Access to Water in the Slums of the Developing World By Hulya Dagdeviren; Simon A. Robertson
  23. An Analysis of SAFTA in the Context of Bangladesh By Md. Joynal Abdin
  24. People’s Participation in Health Services: A Study of Bangladesh’s Rural Health Complex By Mohammad Shafiqul Islam; Mohammad Woli Ullah
  25. Endogenous Health Investment, Saving and Growth - A theoretical study with an application to Chinese data By Chen, Yan
  26. Costs and health consequences of chlamydia management strategies among pregnant women in sub-Saharan Africa By Romoen, Maria; Sundby, Johanne; Hjortdahl, Per; Hussein, Fatrima; Steen, Tore W.; Velauthapillai, Manonmany; Kristiansen, Ivar Sønbø

  1. By: Linh Vu Hoang (Center for Agricultural Policy, Institute of Policy and Strategy for Agriculture and Rural Development)
    Abstract: This paper analyzes calorie and micronutrient consumption in Vietnam using the recent household survey data collected in 2006. The data suggest that food insecurity is still a major problem in Vietnam, with nearly 40 percent of the population being unable to meet their calorie requirement. Employing nonparametric and parametric estimation techniques, the paper examines the relationship between household calorie consumption and per capita household expenditure in Vietnam. The analysis indicates a positive and significant relationship between per capita expenditure and per capita calorie consumption. The mean calorie elasticity is estimated to be between 0.21 and 0.31 by the parametric method and 0.20 by non-parametric method. In addition, simulated income and food price changes indicate that undernutrition is very responsive to changes in income and food prices. This paper also estimates protein and micronutrient elasticities, an area often overlooked in empirical studies. Estimates of expenditure elasticities of micronutrients are high, ranging from 0.3 for iron and calcium, to nearly 0.7 for vitamin C and 0.8 for vitamin A. This implies that income growth leads to large increase in household micronutrient intakes, particularly for vitamin intakes.
    Keywords: Vietnam, food, calorie, micronutrient, elasticity
    Date: 2009
  2. By: Linh Vu Hoang (Center for Agricultural Policy, Institute of Policy and Strategy for Agriculture and Rural Development); Paul Glewwe (Professor, Department of Applied Economics, University of Minnesota)
    Abstract: This paper examines the impacts of rising food prices on poverty and welfare in Vietnam. Increases in food prices raise the real incomes of those selling food, but reduce the welfare of net food purchasers. Overall, the net impact of higher food prices on an average Vietnamese household's welfare is positive. However, the benefits and costs are not spread evenly across the population. A majority of the population would be worse off from increases in food prices. More specifically, a uniform increase in both food consumer and producer prices would reduce the welfare of 56 percent of Vietnamese households. Similarly, a uniform increase in the price of rice would reduce the welfare of about 54 percent of rural households and about 92 percent of urban households. The reason why average household welfare increases is that the average welfare loss of the households whose welfare declines (net purchasers) is smaller than the average welfare gain of the households whose welfare increases (net sellers). A relatively small increase in food prices reduces poverty rate slightly because poorer households in Vietnam tend to be net sellers. However, a large food price increase, for example a 50 percent increase, may increase the poverty rate.
    Keywords: Vietnam poverty rate
    Date: 2009
  3. By: Linh Vu Hoang (Center for Agricultural Policy, Institute of Policy and Strategy for Agriculture and Rural Development)
    Abstract: This paper analyzes food consumption patterns of Vietnamese households, using a complete demand system and socio-demographic information. Demand elasticities are estimated using the AIDS model and the latest Vietnamese household survey data in 2006. The results indicate that food consumption pattern in Vietnam are affected by income, price as well as socioeconomic and geographic factors. All food has positive expenditure elasticities and negative own-price elasticities. In particular, rice has mean expenditure elasticity of 0.36 and mean own-price elasticity of -0.80. Thus, an increase in the price in rice by one percent will reduce rice consumption by 0.8 percent, on average. On the other hand, an increase in the income by 1 percent leads to an increase in rice demand by 0.36 percent. It indicates that food consumption in urban and rural areas, and among regions and income groups are different. It points out that targeted food policies should be formulated based on specific food demand patterns in the groups.
    Keywords: Vietnam, food consumption, food demand, AIDS, elasticity
    Date: 2009
  4. By: Anh Ngoc Nguyen (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam); Nicola Jones (Oversee Development Institute, UK); Nhat Duc Nguyen (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam); Chuc Dinh Nguyen (Aston Business School, Aston University, UK)
    Abstract: A key question facing Vietnamese policy makers is how to improve the competitiveness of the small and medium enterprises. Among the many initiatives being proposed to improve their competitiveness innovation policy has attracted attention not only from policy makers, but also from researchers and the business community. Innovation in SMEs has also been given special emphasis in a recent declaration in Hanoi by APEC ministers. These initiatives are based on the assumption that innovation can affect a firm's competitiveness and hence export status by increasing productivity (and reducing costs) and by developing new goods for the international market. Improving the export competitiveness of Vietnamese SMEs has become even more pressing given (i) that Vietnam's trade deficit as a percentage of GDP widened significantly to an alarming level of double digit figures in two recent years, 2007 and 2008 and (ii) that the world economic recession has made exporting more challenging due to falling demand. Based on quantitative data analysis and qualitative case-studies, the paper highlights the importance of innovation for the success of Vietnamese firms in their exporting and provides several policy recommendations.
    Keywords: Vietnam's economic growth, SME, financial incentives for R&D
    Date: 2009
  5. By: Héctor H. Sandoval (Consejo Nacional de Evaluación de la Política de Desarrollo Social); Rodrigo Aranda Balcazar (Consejo Nacional de Evaluación de la Política de Desarrollo Social); Martín Lima (Consejo Nacional de Evaluación de la Política de Desarrollo Social)
    Abstract: Following the General Law of Social Development, the National Council of Evaluation of Social Development Policy (the acronym for its name in Spanish is CONEVAL) has the responsibility to establish the criteria to define, identify, and measure poverty in Mexico. To develop this assignment, CONEVAL primarily uses the information from censuses and surveys carried out by the National Institute of Statistics (INEGI). This type of data usually requires the intensive use of statistical software, which facilitates its analysis; in this way, Stata is the prime tool to elaborate work on poverty. Among the principal products that CONEVAL has presented using Stata as a platform are: 1) an income poverty measure from 1992 to 2006, 2) an estimation of the Social Gap Index 2005, and 3) all the data at the Executive Report of Poverty, Mexico 2007. As well, the versatility of Stata allowed us to process all the census data to develop Income Poverty Maps 2000–2005. The primary objective of this presentation is to exemplify how we have used Stata to estimate and analyze poverty in CONEVAL’s publications.
    Date: 2009–06–05
  6. By: Olena Nizalova (Kyiv School of Economics and Kyiv Economics Institute); Maria Vyshnya (Kyiv Economics Institute and Kyiv Mohyla Academy)
    Abstract: This paper exploits a unique opportunity to evaluate the impact of improvement in the quality of prenatal care and labor and delivery services on maternal and infant mortality and morbidity. Since basic medical care has been universally available in Ukraine, implementation of the Mother and Infant Health Project allows addressing quality rather than quantity effect of medical care. Employing program evaluation methods we find that the administrative units (rayons) participating in the Project have exhibited greater improvements in both maternal and infant health compared to the control rayons. Among the infant health characteristics, the MIHP impact is most pronounced for stillbirths, as well as infant mortality and morbidity resulted from deviations in perinatal period and congenital anomalies. As for the maternal health, the MIHP is most effective at combating such complications related blood circulation, veins, and urinary-genital systems, as well as late toxicosis and anemia. The analysis suggests that the effects are due to early attendance of antenatal clinics, lower share of C-sections, and greater share of normal deliveries. Preliminary cost-effectiveness analysis shows enormous benefit per dollar spent on the project: the cost to benefit ratio is one to 85 taking into account both maternal and infant lives saved as well as cost savings due to changes in labor and delivery practices.
    Keywords: Maternal health, maternal mortality, infant health, infant mortality; prenatal care
    JEL: I12 I18
    Date: 2009–05
  7. By: Erik Jonasson (Lund University, Sweden); Steven M Helfand (Department of Economics, University of California Riverside)
    Abstract: By paying particular attention to the local economic context, this paper analyzes the determinants of non-agricultural employment and earnings in non-agricultural jobs. The empirical analysis is based on the Brazilian Demographic Census, allowing for disaggregated controls for the local economy. Education stands out as one of the key determinants of employment outcome and earnings potential. Failure to control for locational effects, however, can lead to biased estimation of the importance of individual and household-specific characteristics. The empirical results show that local market size and distance to population centers have a significant impact on non-agricultural employment prospects and earnings.
    Keywords: Rural non-agricultural employment, economic geography, Latin America, Brazil
    Date: 2008–01
  8. By: Paul A. Raschky; Manijeh Schwindt
    Abstract: Research suggests that a donor country’s decision to provide post-disaster assistance is not only driven by the severity of a disaster and the resulting humanitarian needs in the recipient country but also by strategic considerations. We argue that the identification of the determinants of the size of disaster assistance is a first step in the analysis of the donor’s behavior. Since all aid is not motivated by the same reasons, the evaluation of the donor country’s behavior requires a second step accounting for the type and the channel of aid provided. Using data on international disaster assistance between 2000 and 2007 one can examine both the donor countries' decision on the channel (bilateral vs. multilateral) and the type of disaster relief (cash vs. in-kind). The empirical results suggest that international disaster relief is not as much driven by the needs of the recipient country but also by strategic interests (e.g. oil, trade relationships) of the donor country. Bilateral and cash transfers are used as a vehicle to signal strategic interests, while multilateral and in-kind transfers are chosen to control for misuse in badly governed recipient countries.
    Keywords: Foreign aid, natural disasters, bilateral vs. multilateral, type of aid
    JEL: O17 O19 Q54
    Date: 2009–05
  9. By: Nguyen Hiep (Research Institute for Economics and Business Administration, Kobe University); Hiroshi Ohta (Graduate School of International Cooperation Studies (GSICS), Kobe University)
    Abstract: The study in this paper is on the causal relationship between export activities of firms and their characteristics in a transition country that is pursuing export-led growth strategies and experiencing a fast track of trade liberalization. For this purpose, we examine the superiority of exporters using a panel of firm-level data of manufacturing firms in Vietnam. We observe that exceptional performance of exporters, especially in TFP, does prevail in this country. Via testing self-selection hypothesis using a random-effects dynamic probit model to examine the causality from firm characteristics to export probability, we find significantly positive impacts of factors such as firm size, age or foreign ownership but not that of TFP. However, TFP superiority of exporters is satisfactorily explained by the existence of learning-by-exporting effects that are tested in a multivariate analysis using matching technique in combination with difference-in-differences approach. Besides contributing an empirical analysis to heterogeneous-firm trade theories, this study gives us some insights into the interpretation of mixed findings in macro-analysis of the effects of exports on growth in Vietnam.
    Keywords: Exporter superiority, self-selection, learning-by-exporting, Vietnam
    JEL: F10 F14 F43 D21 D24 L20 L60
    Date: 2009–03
  10. By: Morihiro Yomogida (Faculty of Economics, Sophia University); Laixun Zhao (Research Institute for Economics and Business Administration, Kobe University)
    Abstract: This paper develops a general equilibrium model with a vertical production structure to examine the relationship between offshore outsourcing and international migration,especially emphasizing their effects on the wages of skilled and unskilled workers. Two-way outsourcing (simultaneous insourcing and outsourcing) in skilled-labor intensive services arises due to product differentiation and scale economies, and outsourcing in unskilled-labor intensive processing occurs because of factor endowment differences. The tractability of the model allows us to rank outsourcing and migration, according to the wages of both types of workers. Finally, we also analyze under what conditions outsourcing and international migration are complements or substitutes.
    JEL: F11 F12 F16 F22
    Date: 2009–04
  11. By: Aaron Batten
    Abstract: Foreign aid in Papua New Guinea (PNG) has been heavily criticised on the grounds that it has undermined incentives for domestic revenue collection, encouraged irresponsible expenditure behaviour and high levels of public debt, and contributed to the poor composition of government spending towards wasteful expenditure items. This paper seeks to determine what impact foreign grants have had on the fiscal behaviour of the PNG Government with the use of a dynamic Vector Error Correction Model which estimates a simultaneous system of fiscal equations between 1974 and 2008. Results show that foreign grants have indeed lowered domestic revenue collection but they have also been an important source of debt reduction. In some circumstances aid has improved the composition of government expenditure but the revenue and debt repayment effects mean that it has had a weak effect on increasing overall expenditure levels. Preliminary results also suggest that these effects vary considerably according to how aid is delivered, comparing budget support vis-à-vis project and program aid delivery. A number of policy implications follow.
    Date: 2009
  12. By: Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: Statistics South Africa (Stats SA) has been collecting labour market data since 1993 with the October Household Survey (OHS), which was conducted annually between 1993 and 1999, as well as the Labour Force Survey (LFS), which was a biannual survey introduced in 2000 to replace the OHS. In March 2005, consultants from the International Monetary Fund (IMF) were appointed to revise all aspects of the LFS. All documents, processes and procedures relating to the LFS were reviewed, before a report on the findings was presented to Stats SA in June 2005. At the end, it was decided to re-engineer the LFS, and this took place in October 2005. Moreover, consultants were appointed in 2006 to help improve the survey questionnaire, sampling and weighting, data capture and processing systems. Eventually, Stats SA came up with a decision that the LFS would take place on a quarterly basis from 2008, i.e., the Quarterly Labour Force Survey (QLFS) was introduced to replace the LFS. The comparability issues between the OHSs and LFSs have been discussed thoroughly by Burger and Yu (2006), Casale, Muller and Posel (2005), Wittenberg (2004) and Yu (2007), focusing on changes in the sampling frame, inconsistencies in the questionnaire design, changes in the methodology to derive labour market status, trends in numerous variables (e.g., demographics, educational attainment, labour force participation rates, unemployment rates, earnings, etc.), oversampling of informal sector workers in 2000, overestimation of the earnings of self-employed in the OHSs, and the continuous improvement of the questionnaire by Stats SA. Therefore, this paper rather focuses on the comparability between LFS and QLFS, so as to assist researchers and policy makers when they try to analyze or compare both the LFS and QLFS data. As only four QLFSs have taken place at the time of writing, trends in variables will not be the focus of this paper. Instead, this paper will mainly look at the changes in questionnaire design, sampling method, derivation of new variables (i.e., underemployment status and unemployment status), a new methodology to capture the formal/informal status of the employed, as well as the drastic changes in methodology to capture labour market status. With regard to the latter, it is found that there is no longer a clear distinction between strict and broad labour market status in the QLFS, and this makes it difficult to derive long-term trends in the labour force participation rates (LFPRs) and unemployment rates under both strict and broad definitions.
    Keywords: South Africa, Household survey
    JEL: J00
    Date: 2009
  13. By: Belton M. Fleisher (Department of Economics, Ohio State University); Dinghuan Hu (China Academy of Agricultural Sciences); William McGuire (Department of Agricultural, Environmental, and Development Economics, Ohio State University); Xiaobo Zhang (International Food Policy Research Institute (IFPRI))
    Abstract: We use two rounds of surveys, in 2000 and 2008, in the Zhili Township children’s garment cluster in Zhejiang Province to examine in depth its evolution. Firm size has grown on average in terms of output and employment, and increasing divergence in firm sizes has been associated with a significant increase in specialization and outsourcing among firms in the cluster. Although initial investments have more than tripled, they remain low enough so that formal bank loans remain an insignificant source of finance. Accompanying lower entry barriers, there have been an increasing number of firms in the cluster, which have driven down profit and bid up wages, particularly since the year 2000. Facing severe competition, more firms have begun to upgrade their product quality. By the year 2007, nearly half of the sampled had established registered trademarks and nearly 20 percent had become ISO certified. Declining profit ratios to initial investment and stagnant TFP imply that the future of this industry is likely to rest on using more advanced technology and higher ratios of capital to labor, which imply increases in firm size and initial investment. Thus traditional sources of finance that do not require honest, efficient, and transparent courts are likely to fade as the need for improved legal and financial institutions become critical factor influencing China’s growth prospects.
    JEL: L22 O14 P23
    Date: 2009–05
  14. By: Buehn, Andreas (Dresden University of Technology); Schneider, Friedrich (University of Linz)
    Abstract: The relationship between corruption and the shadow economy is not clear. Theoretically, they either substitute or complement each other – exhibiting either a negative or positive relationship. This paper – using a structural equation model with two latent variables – extracts information on various dimensions of corruption and the shadow economy to contribute to the debate on their relationship. It presents empirical evidence of a positive relationship between the shadow economy and corruption. The results show that the shadow economy influences corruption more than corruption influences the shadow economy.
    Keywords: shadow economy, corruption, SEM models
    JEL: O17 O5 D78 H11 H26
    Date: 2009–05
  15. By: Hartmut Egger; Gabriel Felbermayr
    Abstract: In this paper we set up a simple theoretical framework to study the possible source country effects of skilled labor emigration. We show that for given technologies, labor market integration necessarily lowers GDP per capita in a poor source country of emigration, because it distorts the education decision of individuals. As pointed out by our analysis, a negative source country effect also materializes if all agents face identical emigration probabilities, irrespective of their education levels. This is in sharp contrast to the case of exogenous skill supply. Allowing for human capital spillovers, we further show that with social returns to schooling there may be a counteracting positive source country effect if the prospect of emigration stimulates the incentives to acquire education. Since, in general, the source country effects are not clear, we calibrate our model for four major source countries - Mexico, Turkey, Morocco, and the Philippines - and show that an increase in emigration rates beyond those observed in the year 2000 is very likely to lower GDP per capita in poor economies.
    Keywords: Emigration; endogenous skill formation; source country effects
    JEL: F22 J24
  16. By: Mina Baliamoune-Lutz
    Abstract: We examines how institutional and policy reforms affect the relationship between entreprene urship and growth. We perform Arellano-Bond GMM estimations on annual data (over the period 1990-2002) from a large group of developing countries and focus in particular on the interplay between policy and institutional reforms and entrepreneurship. We find that the joint effect of trade reform and entrepreneurship on growth is negative, suggesting that trade reform diminishes the positive effects of entrepreneurial ability on growth, while the joint effect of financial sector reform and entrepreneurship has a non- linear impact on growth. Financial sector reforms enhance the growth effects of entrepreneurship at initial levels and diminish it a high levels of reform. In addition, we find that the interplay of institutional reform and entrepreneurship does not seem to matter for the growth effects of entrepreneurship.
    Keywords: growth, entrepreneurship, institutions, policy reform
    JEL: E6 O1 O4
    Date: 2008–06
  17. By: Gustavo J Bobonis
    Abstract: A growing number of less-developed countries have introduced conditional cash transfer programs in which funds are targeted to women. Economic models of the family suggest that these transfer programs may lead to marital turnover among program beneficiaries. We use data from the experimental evaluation of the PROGRESA program in Mexico to provide new evidence on the short-run impacts of targeted transfers on couples’ union dissolution and individuals’ new union formation decisions. We find that, although the overall share of women in union does not change as a result of the program, marital turnover increases. Intact families eligible for the transfers experienced a modest (0.32 percentage points) increase in separation rates, with most of the effect concentrated among young and relatively educated women households. In contrast, young single women with low educational attainment levels experienced a substantial increase in new union formation rates. The marital transition patterns are consistent with the workhorse economic model of the marriage market – individuals with the greatest prospects to start new unions and those who may become more attractive in the marriage market are more likely to transition out of existing relationships and form new ones.
    Keywords: conditional cash transfers; welfare policy; marriage; divorce
    JEL: J13 I38
    Date: 2009–05–24
  18. By: John Gibson; David McKenzie
    Abstract: A unique survey which tracks worldwide the best and brightest academic performers from three Pacific countries is used to assess the extent of emigration and return migration among the very highly skilled, and to analyze, at the microeconomic level, the determinants of these migration choices. Although we estimate that the income gains from migration are very large, not everyone migrates and many return. Within this group of highly skilled individuals the emigration decision is found to be most strongly associated with preference variables such as risk aversion, patience, and choice of subjects in secondary school, and not strongly linked to either liquidity constraints or to the gain in income to be had from migrating. Likewise, the decision to return is strongly linked to family and lifestyle reasons, rather than to the income opportunities in different countries. Overall the data show a relatively limited role for income maximization in distinguishing migration propensities among the very highly skilled, and a need to pay more attention to other components of the utility maximization decision.
    Keywords: Brain Drain, Brain Gain, Highly Skilled Migration, Return Migration, Selectivity
    JEL: O15 F22 J61
    Date: 2009–05
  19. By: Christophe Muller; Christophe Nordman
    Abstract: We conduct a case study of the linkages of task organization, human capital accumulation and wages in Morocco, using matched worker-firm data for Electrical-mechanical and Textile-clothing industries. In order to integrate task organization into the interacting processes of workers’ training and remunerations, we use a recursive model, which is not rejected by our estimates: task organization influences on-the-job training that affects wages. Beyond sector and gender determinants, assignment of workers to tasks and on-the-job training is found to depend on former education and work experience in a broad sense. Meanwhile, participation in on-the-job training is stimulated by being assigned to a team, especially of textile sector and for well educated workers. Finally, task organization and on-the-job training are found to affect wages.
    Keywords: Morocco, Wages, On-the-job training, Human capital, Task organization.
  20. By: Christophe Muller
    Abstract: In this paper, we study the role of price correction in estimating the impact of price subsidies and anti-poverty cash transfer schemes on poverty in Tunisia. Three types of price corrections are considered: (a) no corrections; (b) living standards deflated by spatial Laspeyres price indices; (c) living standards deflated by true price indices that are estimated from a quadratic almost ideal demand system. Distinguishing these corrections and using data from Tunisia, we study the effects of the price deflation and the demand system estimation on poverty and budget leakage estimates. These effects can intervene at two stages of the estimation: (1) the calculation of the transfer levels for each household from predicted living standards, and (2) the estimation of the post-transfer poverty or budget leakage statistics. Our results show that price correction, whatever its form, may have only limited role for the assessment of anti-poverty policy in Tunisia. Correcting or not for spatial price differences, or for consumption substitution does not modify the ranking of the studied transfer policies. This is at odd with other findings in the empirical literature that price differences may be important for poverty monitoring.
    Keywords: Poverty; Targeting; Transfers, Spatial Prices.
  21. By: Stephany Griffith-Jones (Columbia University); José Antonio Ocampo (Columbia University)
    Abstract: This working paper has been commissioned by the Poverty Group, Bureau for Development Policy at UNDP, to identify the transmission mechanisms of the financial crisis from developed to developing countries and to provide broad policy recommendations at the national, global and regional level. The paper identifies three mechanisms that play a key role in spreading the consequences of the financial crisis to the developing world: remittances, capital flows and trade. The policy responses take MDG achievement and poverty reduction as the central policy concern. The paper indicates that a fair number of countries have policy space to protect vulnerable groups in the short run as well as to undertake investments to build resilience and reach these goals in the longer term. Other countries will need additional development assistance to protect development achievements. The authors point to a number of factors that need to be taken into account in determining what mix of policies to deploy including the macroeconomic, fiscal and policy stance of countries and their dynamics. The paper also proposes far-reaching reforms to address the global financial crisis, which would help to put the global macroeconomic, fiscal and financial coordination mechanisms on a firmer footing.
    Keywords: The Financial Crisis and Its Impact on Developing Countries
    Date: 2009–04
  22. By: Hulya Dagdeviren (University of Hertfordshire); Simon A. Robertson (University of Hertfordshire)
    Abstract: According to the United Nations Human Settlements Programme (UN-Habitat), 924 million people lived in slums in 2001. Population growth in these settlements is much greater than in other urban areas. The estimates suggest that this figure may rise to 1.5 billion by 2020 (Payne, 2005). This rapid increase is expected despite ?slum upgrading? efforts that have been taking place for decades, though inconsistently and with disruptions over time. There is a prolific literature on informal settlement areas, but research on access to essential services such as water and sanitation (WS) in these areas is very limited. Most studies consider issues of access in connection to urban poverty, an approach that often reduces the discussion to the income and expenditure constraints faced by households. Examining access to WS in the slums spurs an appreciation of the multidimensional nature of the problem, including income poverty, infrastructural limitations, asset ownership and housing quality. Moreover, developments in the slums concern every aspect of the Millennium Development Goals (MDGs). This paper examines the conditions of access to water in the slums of the developing world. It has three goals. The first is to identify the objective and policy-related challenges that hinder progress in the provision of safe, affordable, continuous and easy access to water in countries where there is a sizeable slum population. The second is to explore the existing systems of provision in informal settlements and to discuss the weaknesses and strengths of each. The third is to make policy recommendations. Though the discussion on access to sanitation is limited, this is not to deny the importance of that issue. Besides, water and sanitation services are often intrinsically linked and therefore are provided together by network utilities. The discussion reveals the failure of public policies as well as markets to provide satisfactory solutions to the problems of access to a safe, affordable and continuous water supply. In many countries, especially those in Sub-Saharan Africa, access to safe water through household connections declined in the 1990s. Achievements in access rates in many Asian and African economies are the due to widespread use of public water points such as public standpipes and kiosks. These sources are important, but doubtless the quality of access to water with these facilities is unsatisfactory since they involve greater effort by households, involving queuing, carrying water and lacking continuous access. A substantial proportion of urban dwellers in developing countries, especially in unplanned settlements, rely on a wide range of small-scale providers whose services are vital in the absence of alternatives. Their services, however, are often inferior to those provided by the formal network. Invariably, the water charges of alternative sources are higher than those for supply from the public network. Section 2 provides a general discussion of informal settlements and outlines the growth of slum development and trends in access to water supply since 1990. Section 3 examines changing public policies towards squatter settlements and the challenges such settlements pose. Section 4 presents the problems associated with the existing market-based water supply arrangements in countries where a sizeable proportion of the urban population resides in informal settlement areas. We then argue for the need to pursue a more proactive public policy on the basis of a discussion that highlights the limitations of private sector ventures. The paper concludes with a number of policy recommendations.
    Keywords: Access to Water in the Slums of the Developing World
    Date: 2009–06
  23. By: Md. Joynal Abdin (Federation of Bangladesh Chambers of Commerce and Industry (FBCCI))
    Abstract: One of the main economic reasons behind regional trade blocks is to allow their regional members to benefit from economic cooperation and comparative advantages. In 1980, Bangladesh had suggested a regional cooperative body of South Asian leaders, which then led to the establishment of the South Asian Association for Regional Cooperation (SAARC) in 1985, the adoption of the SAARC Preferential Trading Arrangement (SAPTA) in 1993, and the agreement on the South Asian Free Trade Area (SAFTA) in 2004. This paper focuses on a review of the progress made with SAFTA, what Bangladesh’s prospects are in SAFTA, and how SAFTA can be made more active. It provides the historical background about the various initiatives within South Asia, reviews the actual trade data, and reviews the main trade restrictions within SAFTA. It also provides a set of recommendations based on this analysis.
    Keywords: Bangladesh, trade, SAFTA, regional trade blocks
    Date: 2009–05
  24. By: Mohammad Shafiqul Islam (Shahjalal University of Science & Technology (SUST)); Mohammad Woli Ullah (Shahjalal University of Science & Technology (SUST))
    Abstract: Health is a basic requirement to improve the quality of life. A national economic and social development depends on the state of health. A large number of Bangladesh’s people, particularly in rural areas, remained with no or little access to health care facilities. The lack of participation in health service is a problem that has many dimensions and complexities. Education has a significant effect on participation in health services and administrative factors could play a significant role in increasing the people’s participation in Bangladesh’s health sector. But the present health policy is not people oriented. It mainly emphasizes the construction of Thana Health Complexes (THCs) and Union Health and Family Welfare Centers (UHFWCs) without giving much attention to their utilization and delivery services. The study reveals that financial and technical support is very helpful to ensure health service among village people. However, the Government allocates only 5 percent of the budget to the health sector, while it allocates 13 percent for defense. The paper shows that the Government’s allocation and technical support (medical equipments) are not sufficient in the rural health complex and that the people’s participation is far from being satisfactory. The paper concludes with a variety of recommendations.
    Keywords: Bangladesh, health, participation, rural health
    Date: 2009–06
  25. By: Chen, Yan (Department of Economics)
    Abstract: The idea behind this thesis stems from the existing abundance of empirical studies suggesting the strong correlation between longevity and economic growth. In a simple two period overlappinggeneration framework, we establish a direct link between health investment and economic growth through endogenous survival rate. We find that health expenditure complements saving in equilibrium, thereby contributes to economic growth, which in turn leads to a further increase in health investment. The simulation with calibrated parameters also manifests the consistence between our results and the worldwide data as well as the fact of China.
    Keywords: health investment; economic growth; China
    JEL: I31
    Date: 2009–06–03
  26. By: Romoen, Maria (Faculty of Medicine); Sundby, Johanne (Faculty of Medicine); Hjortdahl, Per (Faculty of Medicine); Hussein, Fatrima (Ministry of Health); Steen, Tore W. (Ministry of Health); Velauthapillai, Manonmany (Ministry of Health); Kristiansen, Ivar Sønbø (Institute of Health Management and Health Economics)
    Abstract: Objectives: Chlamydia is the most common bacterial sexually transmitted infection worldwide and a major cause of morbidity – particularly among women and neonates. We compared costs and health consequences of using point-of-care (POC) tests with current syndromic management among antenatal care attendees in sub-Saharan Africa. We also compared erythromycin with azithromycin treatment and universal with age-based chlamydia management. Methods: A decision analytic model was developed to compare diagnostic and treatment strategies, using Botswana as a case. Model input was based upon 1) a study of pregnant women in Botswana, 2) literature reviews and 3) expert opinion. We expressed the study outcome in terms of costs (US$), cases cured, magnitude of overtreatment and successful partner treatment. Results: Azithromycin was less costly and more effective than was erythromycin. Compared to syndromic management, testing all attendees on their first visit with a 75% sensitive POC test increased the number of cases cured from 1 500 to 3 500 in a population of 100 000 women, at a cost of US$38 per additional case cured. This cost was lower in high-prevalence populations or if testing was restricted to teenagers. The specific POC tests provided the advantage of substantial reductions in overtreatment with antibiotics and improved partner management. Conclusions: Using POC tests to diagnose chlamydia during antenatal care in sub-Saharan Africa entails greater health benefits than syndromic management does – and at acceptable costs – especially when restricted to younger women. Changes in diagnostic strategy and treatment regimens may improve people’s health and even reduce health care budgets.
    Keywords: Chlamydia trachomatis (MeSH); Cost-effectiveness analysis (non-MeSH); Cost Analysis (MeSH); Developing countries (MeSH); Africa (MeSH); Sub-Saharan Africa (MeSH) Maternal health (non-MeSH); Maternal Health Services (MeSH); Women’s Health (MeSH); Point-of-care tests (non-MeSH); Diagnostic tests (non-MeSH); Diagnosis (MeSH); Syndromic approach (non-MeSH); STI management (non-MeSH)
    JEL: I18
    Date: 2009–06–03

This nep-dev issue is ©2009 by Jeong-Joon Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.