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on Development |
| By: | Fan, Tijun (East China University Of Science And Technology, School of Business); Sandal, Leif K. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration); Kong, Jiehong (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration); Li, Dandan (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | The aim of this study is to investigate whether outsourcing activities in east china are associated with a theoretical framework derived from the literature. By the methodology of Statistics Package for the Social Science (SPSS), the results of survey indicate that outsourcing will more extensively practiced in the future, the principal outsourcing motivation are to reduce costs and focus on core businesses. The purchasing outsourcing has the largest correlation coefficients with short-term contract, the total outsourcing has a significant correlation coefficient with long-term contract at the level of =0.05. The findings indicate that high service quality and mutual trust are the main criteria for selecting outsourcing vendors. However, it is found that outsourcing satisfaction is generally low. The main benefits of outsourcing are to reduce cost, concentrate on core businesses and improve the service quality, while the main problems with outsourcing are legal disputes, disclosure of commercial secrets and conflicts with vendors. |
| Keywords: | Outsourcing; strategy; contract; survey |
| JEL: | L20 |
| Date: | 2009–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2009_005&r=dev |
| By: | Saccone Donatella (University of Turin); Valli Vittorio (University of Turin) |
| Abstract: | The comparison of the periods of rapid economic growth in China since 1978 and India since 1992 markedly show different patterns of development and structural change. However, both countries experienced some of the advantages of “relative economic backwardness” and some aspects of the “fordist model of growth”. China had an anticipated and deeper structural change, spurred mainly by economic reforms and the growth of the internal market in the 1980s and since the mid-1990s by a very rapid penetration of its industrial products in the world market. However, a substantial part of its exports in medium and high tech sectors are due to joint- ventures with foreign multinationals. India had a more balanced structural change and a slower insertion in the world market, although some sectors, such as software, steel, automotive and pharmaceuticals are recently increasing their share in the world markets. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:200907&r=dev |
| By: | Przemyslaw Kowalski; Nora Dihel |
| Abstract: | This study examines economic implications of India’s trade and trade policy reforms during the period from 1990 to 2007. It first describes India’s economic growth and the composition and performance of its trade at the product and broad sector level. Next, recent reforms and the current trade policy stance are assessed and recommendations for further policy reforms are discussed. The impact of India’s openness on its total factor productivity is also addressed. The analysis shows that India has gone a long way in reducing its tariffs on non-agricultural products as well as selected non-tariff barriers and that this had a positive impact on the economy. Nevertheless, moderate to high protection still persists and adds to the hurdles faced by Indian enterprises. Overall, India’s pattern of specialisation is still affected by the pre- 1990s policies; while certain services have recently performed very well, their high reliance on skilled labour and capital means they can only address a small portion of the Indian jobless growth problem. India’s endowment structure and the recent services-dominated export profile suggest that it needs to improve conditions for the development of its manufacturing sector, with a particular emphasis—at this stage—on labour-intensive activities. The remaining goods and services trade barriers combine with domestic red tape, infrastructure bottlenecks and factor markets rigidities that restrict new entry and competition to keep India’s competitiveness, particularly in agriculture and manufacturing, at relatively low levels. In an effort to offset the remaining protection, India has developed a complex system of duty exemption schemes, special investment and establishment rules and special economic zones (SEZs) that provide incentives particularly to exporting firms. The paper argues that, while such a policy can have important demonstration effects, across-the-board reduction of trade and business barriers could have more beneficial economy-wide and export effects. |
| Keywords: | productivity, trade, services, tariffs, revealed comparative advantage, manufacturing, India, services trade barriers, special economic zones |
| Date: | 2009–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:88-en&r=dev |
| By: | Barry Eichengreen (Indian Council for Research on International Economic Rela); Poonam Gupta (Indian Council for Research on International Economic Rela) |
| Abstract: | The positive association between the service sector share of output and per capita income is one of the best-known regularities in all of growth and development economics. Yet there is less than complete agreement on the nature of that association. Here we identify two waves of service sector growth, a first wave in countries with relatively low levels of per capita GDP and a second wave in countries with higher per capita incomes. The first wave appears to be made up primarily of traditional services, the second wave of modern (financial, communication, computer, technical, legal, advertising and business) services that are receptive to the application of information technologies and increasingly tradable across borders. In addition, there is evidence of the second wave occurring at lower income levels after 1990. But this change in the second wave is not equally evident in all economies: it is most apparent in democracies, in countries that are open to trade, and in those that are relatively close to the major global financial centers. This points to both political and economic conditions that can help countries capitalize on the opportunities afforded by an increasingly globalized post-industrial economy. |
| Keywords: | Services, Growth, Structural change, traditional services modern services |
| JEL: | O10 O11 O14 |
| URL: | http://d.repec.org/n?u=RePEc:ind:icrier:235&r=dev |
| By: | Bart Van Ark (Indian Council for Research on International Economic Rela); Abdul Azeez (Indian Council for Research on International Economic Rela); Erumban Vivian Chen (Indian Council for Research on International Economic Rela); Chen Utsav Kumar (Indian Council for Research on International Economic Rela) |
| Abstract: | This paper focuses on comparisons of productivity, (unit) labor cost and industry-level competitiveness for the manufacturing sector of China and India. We first provide a comparison between India and China using a broad international perspective. We find that China has increased its labor productivity to a level above that of India, but due to a somewhat higher compensation level, China is still somewhat at a disadvantage in terms of unit labor cost in manufacturing relative to India. In the second half of the paper, we make an analysis of industry level differences in productivity, labor compensation and unit labor costs at state and province level in the two countries from the mid 1990s to the early 2000s. We find rapid declines in unit labor cost across industries and provinces in China, but increases in many instances in India. This suggest that productivity and compensation growth have become much more aligned across regions in China whereas this is not (yet) the case in India. We relate these results to differences in the implementation of market reforms between the two countries and removal of barriers to resource mobility eradicating inefficient manufacturing activity |
| Keywords: | O14, J24 |
| URL: | http://d.repec.org/n?u=RePEc:ind:icrier:228&r=dev |
| By: | T.N. Srinivasan (Indian Council for Research on International Economic Rela); Vani Archana (Indian Council for Research on International Economic Rela) |
| Abstract: | This paper contributes to two strands of literature on empirical models of trade flowsand trade policy. The first and the older strand is that of gravity models of bilateraltrade flows going back to Hans Linneman (1966) and Tinbergen (1962) and its recentapplications, particularly by Adams et al (2003) and De Rosa (2007) in analyzing theimpact of Preferential Trade Agreements (PTAs). Our focus is on applying the gravitymodel to analyze India's trade flows (exports and imports) with its trading partnersaround the world and to examine the impact of various PTAs in which India or itstrading partner or both are members. Clearly this is of interest, since, from 1991 Indiais aggressively negotiating and concluding PTAs of which South Asian preferentialtrade (and later free trade) agreement is the most prominent. We find that India is notwell served by its pursuit of PTAs and should instead push for multilateral tradeliberalisation by contributing to conclusion of the Doha round of negotiations with anagreement beneficial to all WTO members.The second and the more recent strand is the analysis of trade flows using data onexports of individual firms. It is well known that in all countries of the worldrelatively few firms participate in world trade, thus suggesting that characteristics ofa firm (such as its size and productivity) are relevant besides country level barriers ontrade matter for participation in world trade. This strand is rapidly growing. Ours isone of the very few attempts at modeling and estimating the decision of Indian firmson their participation using firm level data. The paper reports on our preliminaryresults. We have also collected primary data from a sample survey of firms to explorethis issue deeper. While these data are yet to be fully analyzed, nevertheless somepreliminary descriptive tables summarizing them are included in an Appendix. |
| Keywords: | PTAs/RTAs, Non-discriminatory trade liberalisation, Gravity model,Intrabloc trade effect, Trade diversion, Trade creation, Firm heterogeneity,Probability of exporting, Export performance, Logit, Probit, Fixed effect, Random effect, Tobit model, firm-specific effect, sunk cocost, Hazard model |
| URL: | http://d.repec.org/n?u=RePEc:ind:icrier:232&r=dev |
| By: | Alan Heston (Indian Council for Research on International Economic Rela) |
| Abstract: | Comparisons of India and China have been made for over 50 years. This paper focuses on purchasing power estimates in China and India in the 2005 round of the UN International Comparison Programme (ICP) that was coordinated by the World Bank, the Regional Banks and Economic Commissions. The 2005 ICP round provides estimates of purchasing power parities (PPPs) of currencies and real product per capita for 146 countries, and the results for China and India are discussed in the context of the size of these economies. It also provides insights into the prospects of future economic growth in China and India as also policy recommendations for China and the likely scenarios in the future. |
| Keywords: | purchasing power, China, India, economic growth, tertiary sector,capital stock |
| JEL: | O14 J24 |
| URL: | http://d.repec.org/n?u=RePEc:ind:icrier:229&r=dev |
| By: | Zhi Wang (Indian Council for Research on International Economic Rela); Shang-Jin Wei (Indian Council for Research on International Economic Rela) |
| Abstract: | China's exports have become increasingly sophisticated. This has generated anxiety in developed countries as the competitive pressure may be increasingly felt outside labor-intensive industries. Using product-level data on exports from different cities within China, this paper investigates the contributing factors to the rising export sophistication. Somewhat surprisingly, neither processing trade nor foreign invested firms are found to play an important role in generating the increased overlap in the export structure between China and high-income countries. Instead, improvement in human capital and government policies in the form of tax-favored high-tech zones appear to be the key in the country's evolving export structure. On the other hand, processing trade, foreign invested firms, and government-sponsored high-tech zones all have contributed significantly to raising the unit values of China's exports within a given product category. |
| Keywords: | China, India, Export sophistication, Export structure, high-tech zones,human capital |
| JEL: | F1 F14 |
| URL: | http://d.repec.org/n?u=RePEc:ind:icrier:226&r=dev |
| By: | Anne O. Krueger (Indian Council for Research on International Economic Rela) |
| Abstract: | Though recent economic growth in India has increased productivity and living standards significantly, the need for more growth and more reform remains. Rapid growth of unskilled labor-intensive manufacturing combined with growth of productivity in agriculture is necessary to enable a more inclusive growth that raises living standards in rural areas and in non-agricultural employment of relatively unskilled labor. India's comparative advantage in services does not preclude the need for a rapid-manufacturing growth phase of development due to the service sector's low contribution to output and its demand for educated and skilled, as opposed to unskilled, workers. The failure of manufacturing output and employment to grow more rapidly can be attributed to (1) regulations governing enterprises in the private sector and (2) regulations covering conditions of employment of labor. Reducing the barriers to entry of unskilled labor into manufacturing and relaxing some of the most restrictive labor laws would increase prospects for even faster growth than current high rates. |
| Keywords: | purchasing power, China, India, economic growth, tertiary sector, capital stock |
| JEL: | F4 F41 F43 |
| URL: | http://d.repec.org/n?u=RePEc:ind:icrier:230&r=dev |
| By: | Arpita Mukherjee (Indian Council for Research on International Economic Rela); Ramneet Goswami (Indian Council for Research on International Economic Rela) |
| Abstract: | Energy plays a vital role in the development of any economy and given its unequal distribution trade in energy, especially fossil fuels, is an important component of international trade. In the past, due to its public good characteristics, energy-related services were mostly supplied by the government. With liberalization and globalization the sector underwent significant transformation. Many new services developed and large multinationals emerged which increased global trade in energy services. Energy services is now an important component of all trade agreements. In the above context, this paper examines India's opportunities and constraints to trade in energy services within the GATS framework. The study found that India has the capability of exporting high-skilled manpower at competitive prices but is facing various market access, discriminatory and regulatory barriers in markets of export interest. With the entry of energy- producing countries such as Saudi Arabia into the WTO, the Doha negotiations provide an important platform to offensively push for liberalization in this sector. India needs foreign investment, technical know-how and international best practices in energy. The country has progressively liberalized this sector and there are no major entry barriers. However, India has not been successful in attracting large foreign investment and technology. This is due to various domestic barriers which make it difficult to set up a competitive operation. The study lists the reform measures which will help the sector become globally competitive, protect the interests of consumers and meet the energy needs of society. Since this sector is sensitive and is closely monitored by governments across the world, government-to-government collaborations would ease the entry process for Indian companies in foreign markets, diversify our energy resource base and improve energy security |
| Keywords: | GATS, Energy, Trade, India & the WTO |
| JEL: | F13 F14 L71 L72 L94 L95 Q4 |
| URL: | http://d.repec.org/n?u=RePEc:ind:icrier:231&r=dev |
| By: | Beck, T.H.L.; Büyükkarabacak, B.; Rioja, F.; Valev, N. (Tilburg University, Center for Economic Research) |
| Abstract: | While theory predicts different effects of household credit and enterprise credit on the economy, the empirical literature has mainly used aggregate measures of overall bank lending to the private sector. We construct a new dataset from 45 developed and developing countries, decomposing bank lending into lending to enterprises and lending to households and assess the different effects of these two components on real sector outcomes. We find that: 1) enterprise credit raises economic growth whereas household credit has no effect; 2) enterprise credit reduces income inequality whereas household credit has no effect; and 3) household credit is negatively associated with excess consumption sensitivity, while there is no relationship between enterprise credit and excess consumption sensitivity. |
| Keywords: | Financial Intermediation; Household Credit; Firm Credit |
| JEL: | D14 G21 G28 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200941&r=dev |
| By: | Ziesemer, Thomas (UNU-MERIT, Department of Economics, Maastricht University) |
| Abstract: | The credit crisis of OECD countries has a negative impact on the growth of the world economy according to a simple error correction model. This causes negative growth effects in poor developing countries. The reduced growth has a direct or indirect impact on the convergence issue, aid, remittances, labour force growth, investment and savings, net foreign debt, migration, tax revenues, public expenditure on education and literacy. We estimate dynamic equations of all these variables using dynamic panel data methods for a panel of countries with per capita income below $1200 (2000). The estimated equations are then integrated to a dynamic system of fourteen equations for fourteen variables that allows for highly non-linear baseline simulations for these open economies. Then we analyze the effects of shocks as predicted by the international organizations for the OECD and world growth for 2008 and 2009. Whereas growth rates return to the baseline scenario very quickly, the GDP per capita returns to its baseline level in OECD countries and the world economy after some years but in poor developing countries it remains below the baseline scenario for more than 200 years. This long run blow to convergence leads to more remittances and emigration, a lower labour force growth, higher shares of GDP for saving, tax revenues, public expenditure on education and investment, and higher literacy. However, all these stabilizing forces through remittances and emigration cannot compensate the losses in levels of growth. Short and medium run effects are driven by a return to baseline for OECD and world GDP growth rates by the end of 2010, but for levels only 10 to 30 years later. Therefore we first get 15 to 20 years of fewer remittances, tax revenues, savings, public expenditure on education, literacy, and investment, more emigration and lower labour force growth. |
| Keywords: | crisis, migration, remittances, accumulation, growth |
| JEL: | F22 F24 O15 J61 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2009026&r=dev |
| By: | Mirza, Bilal (UNU-MERIT); Kemp, Rene (UNU-MERIT, ICIS, Maastricht University) |
| Abstract: | The paper tries to explore the rationale behind the complexities of energy poverty among different income groups in rural communities. We attempted to understand why rural rich, despite their relatively high purchasing power use energy sources which tend to categorize them as energy poor. Using Energy Poverty Survey (EPS), a dataset of more than 600 rural households from 27 different rural communities of Punjab, Pakistan, we presented energy access situation in rural households among different income groups. Subsequently, we used logit to assess access factors which could impact the energy source choices among different income groups. The insignificance of household income for traditional biomass use and high significance of community remoteness indicators imply that households give high importance on the proximity of energy sources available to them and, in many cases, will prefer to be in the state of energy poor, than to use modern energy source like LPG. |
| Keywords: | energy poverty, rural rich, rural poor, rural communities, Punjab, Pakistan, fuelwood, animal waste, plant waste, kerosene, liquid petroleum gas |
| JEL: | Q01 Q42 I32 O33 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2009024&r=dev |
| By: | Alicia García-Herrero (Banco Bilbao Vizcaya Argentaria); Sergio Gavilá (Banco de España); Daniel Santabárbara (Banco de España) |
| Abstract: | This paper analyzes empirically what explains the low profitability of Chinese banks for the period 1997-2004. We find that better capitalized banks tend to be more profitable. The same is true for banks with a relatively larger share of deposits and for more X-efficient banks. In addition, a less concentrated banking system increases bank profitability, which basically reflects that the four state-owned commercial banks -China’s largest banks- have been the main drag for system’s profitability. We find the same negative influence for China’s development banks (so called Policy Banks), which are fully state-owned. Instead, more market oriented banks, such as joint-stock commercial banks, tend to be more profitable, which again points to the influence of government intervention in explaining bank performance in China. These findings should not come as a surprise for a banking system which has long been functioning as a mechanism for transferring huge savings to meet public policy goals. |
| Keywords: | China, Bank profitability, Bank reform |
| JEL: | G21 G28 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0910&r=dev |
| By: | Ilan Noy (Department of Economics, University of Hawaii at Manoa); Tam Bang Vu (College of Business and Economics, University of Hawaii at Hilo) |
| Abstract: | We examine impact of natural disasters on annual output and output growth in Vietnam. Using provincial data for primary and secondary industries in Vietnam, we employ the Blundell-Bond System GMM procedure to estimate the impact of disasters on the macro-economy. Results show that more lethal disasters result in lower output growth but that more costly disasters (in terms of destroyed capital) actually appear to boost the economy in the short-run. This result is consistent with the ‘creative destruction’ hypothesis that we outline. However we find that disasters have different macroeconomic impact in different geographical regions; and these differences are potentially related to the ability to generate transfers from the central government. |
| Keywords: | Vietnam, natural disasters, growth, exogenous shocks |
| JEL: | O40 Q54 |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200903&r=dev |
| By: | Louis Putterman; David Weil |
| Abstract: | We construct a matrix showing the share of the year 2000 population in every country that is descended from people in different source countries in the year 1500. Using this matrix, we analyze how post-1500 migration has influenced the level of GDP per capita and within-country income inequality in the world today. Indicators of early development such as early state history and the timing of transition to agriculture have much better predictive power for current GDP when one looks at the ancestors of the people who currently live in a country than when one considers the history on that country’s territory, without adjusting for migration. Measures of the ethnic or linguistic heterogeneity of a country’s current population do not predict income inequality as well as measures of the ethnic or linguistic heterogeneity of the current population’s ancestors. An even better predictor of current inequality in a country is the variance of early development history of the country’s inhabitants, with ethnic groups originating in regions having longer histories of agriculture and organized states tending to be at the upper end of a country’s income distribution. However, high within-country variance of early development also predicts higher income per capita, holding constant the average level of early development. |
| Keywords: | Economic Growth; Migration; Income Inequality; State History; Linquistic Distance |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2008-15&r=dev |
| By: | Oded Galor |
| Abstract: | This paper provides an overview of the modern perspective on the relationship between inequality and economic development. |
| Keywords: | Inequality; Growth; Development |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2009-3&r=dev |
| By: | Yu Zhu; Zhongmin Wu; Liquan Peng; Laiyun Sheng |
| Abstract: | We focus on the impact of migrants’ remittances on consumption patterns in rural China, allowing for endogeneity of remittances and county fixed-effects. We find that the marginal propensity to consume out of remittances is close to unity, which is far greater than that out of non-migrant earnings or farm income. These findings imply that rural households take remittances as permanent income and are consistent with the prevalence of circular and repeat migration which is largely caused by the combination of the restrictive hukou (household registration) system and the rigid land tenure system in China. |
| Keywords: | Rural-Urban Migration; Remittances; Consumption Patterns; Fixed-Effect Instrumental-Variables Estimation |
| JEL: | D12 D13 J61 R23 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:0907&r=dev |
| By: | Miet Maertens |
| Abstract: | The rapid spread of modern supply chains in developing countries is profoundly changing the way food is produced and traded. In this paper we examine the gender implications in modern supply chains. We conceptualize the various mechanisms through which women are directly affected, we review existing empirical evidence and add new survey-based evidence. Empirical findings from our own survey suggest that modern supply chains may be associated with reduced gender inequalities in rural areas. We find that women benefit more and more directly from large-scale estate production and agro-industrial processing, and the creation of employment in these modern agro-industries than from smallholder contract-farming.[LICOS DP 231/2008] |
| Keywords: | modern supply chains; developing countries; Supply chain governance; Intra-household and gender issues; Case-studies; Horticulture supply chains; Female participation; Agro-industrial employment; Feminization of the rural labor force; Gender discrimination |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:1996&r=dev |
| By: | Ravindra H Dholakia |
| Abstract: | Gujarat, West Bengal, Karnataka, Maharashtra, Kerala and Tamil Nadu were the major contributors to the growth acceleration in India after 1991-92. Although the Regional Disparity may increase temporarily, causality test provides support to the hypothesis about spread effects. The Regional growth targets assigned by the 11th Plan in India seem to rely on the spread effects of economic growth acceleration in the better off states to achieve its 9 percent growth target and reduce regional disparity in the long run. To strengthen spread effects, the domestic economy should be further integrated and interlinked with free flow of goods, services and factors of production.[IIMA WP no. 2009-03-06] |
| Keywords: | India; growth acceleration; regional growth; regional sources; regional disparity; contribution of state in growth acceleration; gross state domestic product |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2010&r=dev |
| By: | Cull , Robert; Demirguc-Kunt , Asli; Morduch, Jonathan |
| Abstract: | Regulation allows microfinance institutions to evolve more fully into banks, particularly for institutions aiming to take deposits. But there are potential trade-offs. Complying with regulation and supervision can be costly. The authors examine the implications for the institutions’ profitability and their outreach to small-scale borrowers and women. The tests draw on a new database that combines high-quality financial data on 245 of the world’s largest microfinance institutions with newly-constructed data on their prudential supervision. Ordinary least squares regressions show that supervision is negatively associated with profitability. Controlling for the non-random assignment of supervision via treatment effects and instrumental variables regressions, the analysis finds that supervision is associated with substantially larger average loan sizes and less lending to women than in ordinary least squares regressions, although it is not significantly associated with profitability. The pattern is consistent with the notion that profit-oriented microfinance institutions absorb the cost of supervision by curtailing outreach to market segments that tend to be more costly per dollar lent. By contrast, microfinance institutions that rely on non-commercial sources of funding (for example, donations), and thus are less profit-oriented, do not adjust loan sizes or lend less to women when supervised, but their profitability is significantly reduced. |
| Keywords: | Access to Finance,Debt Markets,Banks&Banking Reform,,Economic Theory&Research |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4948&r=dev |
| By: | Seo, John; Mahul, Olivier |
| Abstract: | Catastrophe risk models allow insurers, reinsurers and governments to assess the risk of loss from catastrophic events, such as hurricanes. These models rely on computer technology and the latest earth and meteorological science information to generate thousands if not millions of simulated events. Recently observed hurricane activity, particularly in the 2004 and 2005 hurricane seasons, in conjunction with recently published scientific literature has led risk modelers to revisit their hurricane models and develop climate conditioned hurricane models. This paper discusses these climate conditioned hurricane models and compares their risk estimates to those of base normal hurricane models. This comparison shows that the recent 50 year period of climate change has potentially increased North Atlantic hurricane frequency by 30 percent. However, such an increase in hurricane frequency would result in an increase in risk to human property that is equivalent to less than 10 years’ worth of US coastal property growth. Increases in potential extreme losses require the reinsurance industry to secure additional risk capital for these peak risks, resulting in the short term in lower risk capacity for developing countries. However, reinsurers and investors in catastrophe securities may still have a long-term interest in providing catastrophe coverage in middle and low-income countries as this allows reinsurers and investors to better diversify their catastrophe risk portfolios. |
| Keywords: | Natural Disasters,Hazard Risk Management,Insurance&Risk Mitigation,Disaster Management,Insurance Law |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4959&r=dev |
| By: | Gibson, John; McKenzie, David; Stillman, Steven |
| Abstract: | The impacts of international migration on development in the sending countries, and especially the effects on remaining household members, are increasingly studied. However, comparisons of households in developing countries with and without migrants are complicated by a double-selectivity problem: households self-select into migration, and among households involved in migration, some send a subset of members with the rest remaining while other households migrate en masse. The authors address these selectivity issues using the randomization provided by an immigration ballot under the Pacific Access Category of New Zealand’s immigration policy. They survey applicants to the 2002-05 ballots in Tonga and compare outcomes for the remaining household members of emigrants with those for members of similar households that were unsuccessful in the ballots. The immigration laws determine which household members can accompany the principal migrant, providing an instrument to address the second selectivity issue. Using this natural experiment, the authors examine the myriad impacts that migration has on remaining household members, focussing on labor supply, income, durable assets, financial service usage, diet, and physical and mental health. The analysis uses multiple hypothesis testing procedures to examine which impacts are robust. The findings indicate that the overall impact on households left behind is largely negative. The findings also reveal evidence that both sources of selectivity matter, leading studies that fail to adequately address them to misrepresent the impact of migration. |
| Keywords: | Population Policies,Access to Finance,Health Monitoring&Evaluation,Housing&Human Habitats,Anthropology |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4956&r=dev |
| By: | Raschky, Paul A.; Schwindt, Manijeh |
| Abstract: | This paper discusses the impact of foreign aid on the recipient country's preparedness against natural disasters. The theoretical model shows that foreign aid can have two opposing effects on a country's level of mitigating activities. In order to test the theoretical propositions, the authors analyze the effect of foreign aid dependence on ex-ante risk-management activity proxied by the death toll from major storms, floods and earthquakes occurring worldwide between 1980 and 2002. They find evidence that the crowding-out effect of foreign aid outweighs the preventive effect in the case of storms, while there is mixed evidence in the case of floods and earthquakes. |
| Keywords: | Natural Disasters,Hazard Risk Management,Disaster Management,Population Policies,Post Conflict Reconstruction |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4952&r=dev |
| By: | Brenton, Paul; Saborowski, Christian; von Uexkull, Erik |
| Abstract: | Successful export growth and diversification require not only entry into new export products and markets, but also the survival and growth of export flows. This paper uses a detailed, cross-country dataset of product level bilateral export flows to illustrate that exporting is an extremely perilous activity and especially so in low-income countries. The authors find that unobserved individual heterogeneity in product-level export flow data prevails despite controlling for a wide range of observed country and product characteristics. This questions previous studies that have used the Cox proportional hazards model to model export survival. The authors estimate a Prentice-Gloeckler model, amended with a gamma mixture distribution summarizing unobserved individual heterogeneity. The empirical results confirm the significance of a range of products as well as country-specific factors in determining the survival of export flows. From a policy perspective, an interesting finding is the importance of learning-by-doing for export survival: experience with exporting the same product to other markets or different products to the same market are found to strongly increase the chance of export survival. A better understanding of such learning effects could substantially improve the effectiveness of export promotion strategies. |
| Keywords: | Economic Theory&Research,Free Trade,Trade Policy,Emerging Markets,Markets and Market Access |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4951&r=dev |
| By: | Lofgren, Hans; Nielsen, Hannah; Ezemenari, Kene |
| Abstract: | Rwanda is not on track to achieve most of the Millennium Development Goals at a time when hopes for scaled-up aid are mixed with concerns that, in the context of the global economic crisis, aid instead will be scaled down. This paper analyzes the effects of alternative scenarios for grant aid, government spending allocations (between infrastructure, agriculture, and human development), and government efficiency. The authors use an economy-wide model for development strategy analysis, Maquette for Millennium Development Goal Simulations. Under a plausible scenario for increased aid, annual growth in gross domestic product increases by as much as 0.6 percentage points relative to a baseline with a growth rate of 6 percent; by 2020, the headcount poverty rate declines to 32 percent, 3 percentage points lower than for the baseline. A plausible scenario for reduced aid leads to a symmetric growth reduction but a more pronounced increase in poverty, at 40 percent in 2020. When aid increases, the most positive growth and poverty reduction impacts occur if spending increases are allocated to infrastructure and agriculture; progress in human health and education is significant but weaker than if additional spending is focused on these areas. Given synergies and diminishing marginal returns from expansion in a limited area, the scenarios that may appear most attractive and politically feasible have a broad and balanced expansion across government functions, promoting both growth and human development. |
| Keywords: | Population Policies,Economic Theory&Research,,Debt Markets,Achieving Shared Growth |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4958&r=dev |
| By: | McKenzie, David |
| Abstract: | Until recently rigorous impact evaluations have been rare in the area of finance and private sector development. One reason for this is the perception that many policies and projects in this area lend themselves less to formal evaluations. However, a vanguard of new impact evaluations on areas as diverse as fostering microenterprise growth, microfinance, rainfall insurance, and regulatory reform demonstrates that in many circumstances serious evaluation is possible. The purpose of this paper is to synthesize and distil the policy and implementation lessons emerging from these studies, use them to demonstrate the feasibility of impact evaluations in a broader array of topics, and thereby help prompt new impact evaluations for projects going forward. |
| Keywords: | Access to Finance,,Debt Markets,Banks&Banking Reform,Microfinance |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4944&r=dev |
| By: | Jhingran, Dhir; Sankar, Deepa |
| Abstract: | The challenge of development work in the social sector in India today is one of bridging huge disparities across regions of the country, gender and social groups. Unless national and state policies specifically target resources to address these disparities, achieving higher level outcomes in an inclusive manner, which is the real goal for human development in education and health, will be a distant dream. This paper takes up the case of the Indian government’s Elementary Education for All Mission to understand how this flagship program relates investments to spatial and social disparities. For identifying the most deprived districts in terms of educational inputs, outputs and overall development, the authors estimate district level education development indices for 2003-2004. The contribution of the largest investment program is measured by"per child allocations"and expenditures at the state and district levels for 2005-2006. An analysis of comparing the ratio of allocations to expenditures with the ratio of district level indices to sub-dimensional indices shows that there is an apparent disconnect between the"real investment needs"of the districts, reflected in their level of educational development and the actual allocations made on an annual basis. The analysis shows that although all districts received more funds for investing in elementary education programs, the most disadvantaged and needy districts received proportionately more funds, which helped these districts to bridge access and infrastructure gaps and appoint more teachers. Benchmarking sector development by spatial entities helps not only in monitoring the outcomes, but also in targeting planning and funding to reduce disparities. |
| Keywords: | Primary Education,Education For All,Gender and Education,Access&Equity in Basic Education, |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4955&r=dev |
| By: | Raschky, Paul A.; Schwindt, Manijeh |
| 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. The authors 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, the analysis examines both the donor countries'decision on the channel (bilateral versus multilateral) and the type of disaster relief (cash versus 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 (for example, oil or 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: | Hazard Risk Management,Natural Disasters,Gender and Health,Development Economics&Aid Effectiveness,Governance Indicators |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4953&r=dev |
| By: | Rajadel , Tania; Pontara, Nicola; Sanchez Puerta, Maria Laura |
| Abstract: | This paper provides a snapshot of Mauritania’s labor market using data from the 2004 national household survey. The results show that the labor market is characterized by lower participation rates, lower employment-to-population rates, and relatively higher unemployment rates than in neighboring countries. The non poor fare better in the labor market than the poor. Although the labor force participation of the poor is higher than that of the non poor, the poor display a higher unemployment rate and a lower employment rate than the non poor. The data also suggest a negative correlation between wage employment and poverty. Substantial differences in labor market indicators emerge when disaggregating the analysis by gender and age-group. Female non-participation is extremely high. Women systematically earn less than men independently of their sector and type of employment and controlling for other factors, such as education. Young adults face considerable difficulties in entering the labor market: more than half of the population aged 15-24 is neither studying nor participating in the labor force. As gender disparities remain important for similar levels of education, more work is needed to understand whether cultural factors may prevent women from entering the labor market. Concerning young adults, future poverty reduction strategies need to pay more explicit attention to the promotion of employment through informed labor market policies. |
| Keywords: | Labor Markets,Population Policies,Rural Poverty Reduction,Labor Policies, |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4954&r=dev |
| By: | Seker, Murat |
| Abstract: | Many recent models have been developed to fit the basic facts on establishment and industry evolution. While these models yield a simple interpretation of the basic features of the data, they are too stylized to confront the micro-level data in a more formal quantitative analysis. In this paper, the author develops a model in which establishments grow by innovating new products. By introducing heterogeneity to a stylized industry evolution model, the analysis succeeds in explaining several features of the data, such as the thick right tail of the size distribution and the relations between age, size, and the hazard rate of exit, which had eluded existing models. In the model, heterogeneity in producer behavior arises through a combination of exogenous efficiency differences and accumulated innovations resulting from past endogenous research and development investments. Integrating these forces allows the model to perform well quantitatively in fitting data on Chilean manufacturers. The counterfactual experiments show how producers respond to research and development subsidies and more competitive market environments. |
| Keywords: | Water and Industry,Science Education,Scientific Research&Science Parks,Markets and Market Access,Industrial Management |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4947&r=dev |
| By: | Rijkers, Bob; Soderbom, Mans; Loening, Josef |
| Abstract: | This paper compares and contrasts the performance of rural and urban manufacturing firms in Ethiopia to assess the impact of market integration and the investment climate on firm performance. Rural firms are shown to operate in isolated markets, have poor access to infrastructure and a substantial degree of market power, whereas urban firms operate in better integrated and more competitive markets, where they have much better access to inputs. Fragmentation may also help explain why urban firms are much larger, much more capital intensive and why they produce much more output per worker. Capital intensity and labor productivity are strongly correlated with firm size. Manufacturing technology choice does not vary strongly across space and increasing returns to scale are modest at best, suggesting that rural-urban differences in output per worker are predominantly driven by differences in capital intensity and Total Factor Productivity (TFP). The average TFP of firms in rural towns is much higher than that of rural firms in remote areas, but small firms in rural towns are not significantly less productive than small firms in other urban areas. A key finding of the paper is that market fragmentation and investment climate constraints impair the growth of the rural non-farm sector. Whereas urban firms exhibit a healthy dynamism, rural firms are stagnant and lack incentives to invest. Paradoxically, limited local demand due to market fragmentation is the most pressing constraint for rural firms, even though they face more severe supply-side constraints than urban firms. Promoting market towns in Ethiopia might be an effective means of capitalizing on the gains from market integration. |
| Keywords: | Access to Finance,Microfinance,Economic Theory&Research,,Debt Markets |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4946&r=dev |
| By: | Calvo-Pardo, Hector; Freund, Caroline; Ornelas, Emanuel |
| Abstract: | Using detailed data on trade and tariffs from 1992-2007, the authors examine how the ASEAN Free Trade Agreement has affected trade with nonmembers and external tariffs facing nonmembers. First, the paper examines the effect of preferential and external tariff reduction on import growth from ASEAN insiders and outsiders across HS 6-digit industries. The analysis finds no evidence that preferential liberalization has led to lower import growth from nonmembers. Second, it examines the relationship between preferential tariff reduction and MFN tariff reduction. The analysis finds that preferential liberalization tends to precede external tariff liberalization. To examine whether this tariff complementarity is a result of simultaneous decision making, the authors use the scheduled future preferential tariff reductions (agreed to in 1992) as instruments for actual preferential tariff changes after the Asia crisis. The results remain unchanged, suggesting that there is a causal relationship between preferential and MFN tariff reduction. The findings also indicate that external liberalization was relatively sharper in the products where preferences are likely to be most damaging, proving further support for a causal effect. Overall, the results imply that the ASEAN agreement has been a force for broader liberalization. |
| Keywords: | Free Trade,Trade Policy,Trade Law,Trade and Regional Integration,International Trade and Trade Rules |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4960&r=dev |
| By: | Chellaraj, Gnanaraj; Maskus, Keith E.; Mattoo, Aaditya |
| Abstract: | Singapore is an interesting example of how the pattern of foreign investment changes with economic development. The authors analyze inbound and outbound investment between Singapore and a sample of industrialized and developing countries over the period 1984-2003. They find that Singapore’s two-way investment with industrialized nations has shifted into skill-seeking activities over the period, while Singapore’s investments in developing countries have increased sharply and become concentrated in labor-seeking activities. Singapore’s increasing skill abundance relative to all countries in the sample accounted for 41 percent of average inbound stocks during the period, that is, US$18 billion annually; the corresponding figure for outbound stocks was 40 percent, that is, US$5.51 billion annually. |
| Keywords: | Debt Markets,Non Bank Financial Institutions,Investment and Investment Climate,Economic Theory&Research, |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4950&r=dev |
| By: | Beck , Thorsten; Demirguc-Kunt, Asli |
| Abstract: | This paper introduces the updated and expanded version of the Financial Development and Structure Database and presents recent trends in structure and development of financial institutions and markets across countries. The authors add indicators on banking structure and financial globalization. They find a deepening of both financial markets and institutions, a trend concentrated in high-income countries and more pronounced for markets than for banks. Similarly, the recent increase in cross-border lending and debt issues has been concentrated in high-income countries, while low and lower-middle income countries have experienced an increase in remittance flows. Low net interest margins, rising profitability and declining stability in high-income countries’ banking sectors characterize the recent financial sector boom in high income countries leading up to the global financial crisis of 2007. |
| Keywords: | ,Debt Markets,Emerging Markets,Banks&Banking Reform,Economic Theory&Research |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4943&r=dev |
| By: | Skoufias, Emmanuel; Lunde, Trine; Patrinos, Harry Anthony |
| Abstract: | This paper examines the extent to which social networks among indigenous peoples have a significant effect on a variety of human capital investment and economic activities, such as school attendance and work among teenage boys and girls, and migration, welfare participation, employment status, occupation and sector of employment among adult males and females. The analysis uses data from the 10 percent population sample of the 2000 Population and Housing Census of Mexico and an empirical strategy that allows taking into account the role of municipality and language group fixed effects. The authors confirm empirically that social network effects play an important role in the economic decisions of indigenous people, especially in rural areas. The analysis also provides evidence that better access to basic services, such as water and electricity, increases the size and strength of network effects in rural areas. |
| Keywords: | Population Policies,Access to Finance,Anthropology,Labor Policies,Housing&Human Habitats |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4949&r=dev |
| By: | Pranab Bardhan (Department of Economics, University of California, Berkeley); Dilip Mookherjee (Department of Economics, Boston University); Neha Kumar (International Food Policy Research Institute, Washington DC) |
| Abstract: | This paper estimates respective roles of private investments in irrigation and local government programs (land reforms, extension services, and infrastructure investments) in the growth of farm productivity in West Bengal, India between 1981-95. Using a farm panel from a stratified random sample of farms from major agricultural districts of West Bengal, we find evidence that private investment in irrigation which reduced irrigation costs for farms played an important role in the growth process. However, the growth in private investment was itself stimulated by tenancy registration and minikit distribution programs implemented by local governments. This channel helps account for the substantial spillover effects of the tenancy reform on non-tenant farms noted in an earlier study. Hence the observed productivity growth was a result of complementarity between private investment incentives and state-led institutional reforms. |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-184&r=dev |
| By: | Ulf von Lilienfeld-Toal (Stockholm School of Economics); Dilip Mookherjee (Boston University); Sujata Visaria (Boston University) |
| Abstract: | It is generally presumed that strengthening legal enforcement of lender rights increases credit access for all borrowers, by expanding the set of incentive compatible loan contracts. This is based on an implicit assumption of infinitely elastic supply of loans. With inelastic supply, strengthening enforcement generates general equilibrium effects which reduce credit access for small borrowers while expanding it for wealthy borrowers. We find evidence from a firm-level panel data set of such adverse distributional impacts of an Indian judicial reform which increased banks’ ability to recover non-performing loans in the 1990s. |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-183&r=dev |
| By: | Dilip Mookherjee (Boston University); Stefan Napel (University of Bayreuth); Debraj Ray (New York University) |
| Abstract: | This paper examines steady states of an overlapping generations economy with a given distribution of household locations over a one-dimensional interval. Parents decide whether or not to educate their children. Such decisions are aected by location: parental aspirations depend on the earnings of their neighbors. At the same time, economy-wide wages endogenously adjust to bring factor supplies into line with demand. The model therefore combines local social interaction with global market interaction. The paper studies steadystate configurations of skill acquisition, both with and without segregation, and studies the macroeconomic and welfare effects of segregation on aggregate economic outcomes. |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-182&r=dev |
| By: | Prema-chandra Athukorala |
| Abstract: | This paper examines Vietnam’s export performance in the process of economic transition. The key theme of analysis is the complementary role of domestic policy shifts and the ongoing changes in world trade patterns in determining trends and patterns of exports. The analysis yields clear evidence that when market forces are unleashed, albeit in a constrained fashion, specialisation patterns assert themselves as predicted by the received trade theory. On the contrary, there is no evidence to suggest that the state-mediated attempts in the early stage of reforms to mould the emerging patterns of manufacturing exports had any tangible effect. Vietnam’s export performance looks impressive, particularly when we take into account the nature of the reform process, and the constraining effects of the US trade embargo during the first decade of reforms and the historic overwhelming reliance on the Soviet-block markets. |
| Keywords: | Vietnam, exports, FDI, global production sharing, processed food |
| JEL: | F14 F15 F33 O24 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2009-05&r=dev |
| By: | Desh Gupta |
| Abstract: | This paper explains the complex of factors in the weakening of the Congress Party from the height of its power at the centre in 1984. They are connected with the rise of state and regional-based parties, the greater acceptability of BJP as an alternative in some of the states and at the Centre, and as a partner to some of the state-based parties, which are in competition with Congress. In addition, it demonstrates that even as the dominance of Congress has diminished, there have been substantial improvements in the economic performance and primary education enrolment. It is argued that V.P. Singh played an important role both in the diminishing of the Congress Party and in India’s improved economic performance. Competition between BJP and Congress has led to increased focus on improved governance. Congress improved its position in the 2009 Parliamentary elections and the reasons for this are briefly covered. But this does not guarantee an improved performance in the future. Whatever the outcomes of the future elections, India’s reforms are likely to continue and India’s economic future remains bright. Increased political contestability has increased focus on governance by Congress, BJP and even state-based and regional parties. This should ensure improved economic and outcomes and implementation of policies. |
| Keywords: | Indian Elections, Congress Party's Performance, Governance, Nutrition, Economic Efficiency, Productivity, Economic Reforms, Fiscal Consolidation |
| JEL: | O5 N4 M2 H6 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2009-06&r=dev |
| By: | David Maddison; Eleanor Field; Zubaida Choudhury (Department of Land Economy, University of Cambridge); Unai Pascual (Department of Land Economy, University of Cambridge) |
| Abstract: | The Ganges Delta of Bangladesh faces a major environmental and development problem from arsenic groundwater contamination. Here we address the rural population’s health preferences and estimate how much a given risk of arsenicosis would have to be postponed to make that risk acceptable. We also derive implicit rates of time preference associated with this health hazard based on an experimental field study in Bangladesh. Results suggest that households exposed to arsenic contaminated water do trade-off risk against latency of developing arsenicosis. The results can also be interpreted as if households face a time-varying (hyperbolic) pure rate of time preference. |
| Keywords: | Time varying discounting, Water pollution, Arsenic contamination, Bangladesh |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:452009&r=dev |
| By: | Krueger, Anne O. |
| Keywords: | International Development, International Relations/Trade, |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umaesp:50093&r=dev |
| By: | Deininger, Klaus; Jin, Songqing; Yadav, Vandana |
| Abstract: | Land reforms in India were aimed at securing access to land for poor rural households. We use data from West Bengal to highlight the impact of the stateâs 1978 land reform program on human capital accumulation within the beneficiary households. The results from the study indicate that reform positively impacted the decision to invest in education. We ascertain a highly significant positive effect on long-term accumulation of human capital, and find that the size of benefit was modest in first generation and much larger for second generation beneficiaries. The second generation also does not have a gender bias, allowing women to catch up in their levels of education. |
| Keywords: | Human Capital, Impact Evaluation, Land Reforms, International Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49969&r=dev |