nep-dev New Economics Papers
on Development
Issue of 2009‒10‒31
thirty-one papers chosen by
Mark Lee
Towson University

  1. Are skilled women more migratory than skilled men? By FrŽdŽric DOCQUIER; Abdeslam MARFOUK; Sara SALOMONE; Khalid,SEKKAT
  2. Crime and Happiness Amongst Heads of Households in Malawi By Davies, Simon; Hinks, Timothy
  3. Gini’s Transvariation Analysis: An Application on Financial Crises in Developing Countries By Bragoli, D; Ganugi, P; Ianulardo, Giancarlo
  4. Choice Experiment Study on the Wilingness to Py to Improve Electricity Services By Abdullah, Sabah; Mariel, P
  5. Job Satisfaction and Employment Equity in South Africa By Hinks, Timothy
  6. India Transformed? Insights from the Firm Level 1988-2005 By Laura Alfaro; Anusha Chari
  7. Does age matter for the value of life? - Evidence from a choice experiment in rural Bangladesh By Johansson-Stenman, Olof; Mahmud, Minhaj; Martinsson, Peter
  8. China as a regulatory state By Du, Julan; Tao, Zhigang
  9. Are there industrial and agricultural convergence clubs in China? By Pääkkönen, Jenni
  10. Market Structure, Welfare, and Banking Reform in China By Hoy, Chun-Yu
  11. The recent decline of inequality in Latin America: Argentina, Brazil, Mexico and Peru By Luis F. Lopez-Calva; Nora Lustig
  12. Unconventional Central Bank Measures for Emerging Economies By Etienne B. Yehoue; Kotaro Ishi; Mark R. Stone
  13. What Determines Bond Market Development in sub-Saharan Africa? By Olatundun Janet Adelegan; Bozena Radzewicz-Bak
  14. Determinants and Macroeconomic Impact of Remittances in Sub-Saharan Africa By Kyung-woo Lee; Markus Haacker; Raju Singh
  15. Emerging Market Concerns: An Indian Perspective By D Subbarao
  16. International trade and income differences By Michael E. Waugh
  17. FDI and growth: A new look at a still puzzling issue By Dalila NICE-CHENAF (GREThA UMR CNRS 5113); Eric ROUGIER (GREThA UMR CNRS 5113)
  18. Monetary and Exchange Rate Policies for the Perfect Storm: The Case of The Bahamas, Barbados, Guyana, Haiti, Jamaica, Suriname, and Trinidad & Tobago By Andre Minella; Alessandro Rebucci; Nelson Souza-Sobrino
  19. Gender Wage Gaps in Central American Countries: Evidence from a Non-Parametric Approach By Ted Enamorado; Ana Carolina Izaguirre; Hugo Nopo
  20. Is Productivity Linked To Wages? An Empirical Investigation in Malaysia By Goh, Soo Khoon
  21. Contract Enforcement and Family Control of Business: Evidence from China By Yi, Lu; Zhigang, Tao
  22. Managing the Impossible Trinity: The Case of Malaysia By Goh, Soo Khoon
  23. Emerging Multinationals from India and China: Origin, Impetus and Growth By Pradhan, Jaya Prakash
  24. Agricultural Dualism, Incidence of Child Labour and Subsidy Policies By Dwibedi, Jayanta; Chaudhuri, Sarbajit
  25. International Trade, Foreign Direct Investment, and Technology Spillovers By Wolfgang Keller
  26. Is Newer Better? Penn World Table Revisions and Their Impact on Growth Estimates By Simon Johnson; William Larson; Chris Papageorgiou; Arvind Subramanian
  27. How Can Indian Railways Service the Steel Sector Better? By G Raghuram,Rachna Gangwar
  28. Effect of Mobiles on Socio-economic Life of Urban Poor By Ankur Sarin; Rekha Jain
  29. An Arrested Virtuous Circle? Higher Education And High-Tech Industries In India By Rakesh Basant,Partha Mukhopadhyay
  30. A Preliminary Estimate of Immediate Cost of Chikungunya and Dengue to Gujarat, India By Dileep V. Mavalankar; Tapasvi I. Puwar; Dipti Govil; Tiina M. Murtola; S.S. Vasan
  31. Regional Sources of Growth Acceleration in India By Ravindra H. Dholakia

    Abstract: This paper empirically studies emigration patterns of skilled males and females. In the most relevant model accounting for interdependencies between women and menÕs decisions, we derive the gendered responses to traditional push factors. Females and males do not respond with the same intensity to the traditional determinants of labor mobility and gender-specific characteristics of the population at origin. Moreover, being other factors equal, the female willingness to follow the spouse seems to be much more pronounced with respect to the male one. From a quantitative perspective, our model reveals that skilled women are not more migratory than skilled men internationally, thus rejecting the existence of a genetic or social gender gap in international skilled migration.
    Date: 2009–08–17
  2. By: Davies, Simon; Hinks, Timothy
    Date: 2009
  3. By: Bragoli, D; Ganugi, P; Ianulardo, Giancarlo
    Abstract: The damage and the recurrence of financial crises have increased the concern of investors and policymakers on one hand and the interest of macroeconomists on the other. This paper presents an original non parametric methodology, whose aim is to give a very intuitive and rigorous method for variable selection in order to analyze financial crises. The transvariation analysis compares the distributions of two different groups of countries (sound and distressed) with respect to a single macroeconomic variable and selects the indicators on the basis of a low transvariation probability index. The current account deficit to GDP ratio, differently from other studies on financial crises, seems to be a suitable variable in discriminating distressed countries from sound ones, and the case of Argentina and Turkey confirms this finding.
    Date: 2009
  4. By: Abdullah, Sabah; Mariel, P
    Abstract: Modern forms of energy are an important vehicle towards poverty alleviation in rural areas of developing countries. Most developing countries’ households heavily rely on wood fuel which impact their health and social–economic status. To ease such a dependency, other modern forms of energy, namely electricity, need to be provided. However, the quality of the electricity service, namely reliability, is an important factor in reducing this dependency. This paper discusses a choice experiment valuation study conducted among electrified rural households located in Kisumu, Kenya, in which the willingness to pay (WTP) to avoid power outages or blackouts was estimated. A mixed logit estimation was applied to identify the various socio-economic and demographic characteristics which determine preferences to reduce power outages among a household’s users. In conclusion, several of the socio-economic and demographic characteristics outlined in this paper were identified and can assist service differentiation to accommodate the diverse households’ preferences towards the improvement of the electricity service.
    Keywords: developing country; rural; power outages; willingness to pay; random parameter logit
    Date: 2009
  5. By: Hinks, Timothy
    Abstract: This paper is the first to estimate job satisfaction equations in post-Apartheid South Africa. Earnings and relative earnings are both found to contribute to greater job satisfaction. Racial group is also an important predictor of job satisfaction but when interacted with a proxy for affirmative action legislation it is found that black job satisfaction is positively correlated with this legislation whereas coloured and to a lesser extent white job satisfaction is diminished.
    Keywords: Job satisfaction; Employment Equity; ordered probit; South Africa
    Date: 2009
  6. By: Laura Alfaro (Harvard Business School, Business, Government and the International Economy Unit); Anusha Chari (Department of Economics, University of North Carolina at Chapel Hill)
    Abstract: Using firm-level data this paper analyzes, the transformation of India's economic structure following the implementation of economic reforms. The focus of the study is on publicly-listed and unlisted firms from across a wide spectrum of manufacturing and services industries and ownership structures such as state-owned firms, business groups, private and foreign firms. Detailed balance sheet and ownership information permit an investigation of a range of variables such as sales, profitability, and assets. Here we analyze firm characteristics shown by industry before and after liberalization and investigate how industrial concentration, the number, and size of firms of the ownership type evolved between 1988 and 2005. We find great dynamism displayed by foreign and private firms as reflected in the growth in their numbers, assets, sales and profits. Yet, closer scrutiny reveals no dramatic transformation in the wake of liberalization. The story rather is one of an economy still dominated by the incumbents (state-owned firms) and to a lesser extent, traditional private firms (firms incorporated before 1985). Sectors dominated by state-owned and traditional private firms before 1988-1990, with assets, sales and profits representing shares higher than 50%, generally remained so in 2005. The exception to this broad pattern is the growing importance of new and large private firms in the services sector. Rates of return also have remained stable over time and show low dispersion across sectors and across ownership groups within sectors.
    JEL: O12 O14 O19 L10
    Date: 2009–10
  7. By: Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University); Mahmud, Minhaj (Queen’s University Belfast); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Using a random sample of individuals in rural Bangladesh, this paper investigates people’s preferences regarding relative values of lives when it comes to different ages of the individuals being saved. By assuming that an individual has preferences concerning different states of the world, and that these preferences can be described by an individual social welfare function, the individuals’ preferences for life-saving programs are elicited using a pair-wise choice experiment between different life-saving programs. In the analyses, we calculate the social marginal rates of substitution between saved lives of people of different ages. We also test whether people have preferences for saving more life-years rather than only saving lives. In particular, we test and compare the two hypotheses that only lives matter and that only life-years matter. The results indicate that the value of a saved life decreases rapidly with age and that people have strong preferences for saving life-years rather than lives per se. Overall, the results clearly show the importance of the number of life-years saved in the valuation of life.<p>
    Keywords: social preferences; life-saving programs; choice experiment; relative value of life
    JEL: D63 I18 J17
    Date: 2009–10–19
  8. By: Du, Julan (BOFIT); Tao, Zhigang (BOFIT)
    Abstract: Market economy models differ in the degree of the power of the government vis-à-vis the market in the economy. Under the classications set forth by Glaeser and Shleifer (2002, 2003), and Djankov et al. (2003), these market models range from those emphasizing low government intervention in the market (private orderings and private litigation through courts) to those where the state is an active participant (regulatory state). This paper, using data from a survey of 3,073 private enterprises in China, constructs an index to quantify the power of the government vis-à-vis the market. Regional government power is found to vary considerably across China's regions. Notably, enterprises located in regions where government exerts more power in the market perform better, suggesting that the regulatory state model of the market economy is appropriate for China.
    Keywords: regulatory state; disorder costs; dictatorship costs; market economy models; China's economic reform
    JEL: D02 L25 P30
    Date: 2009–10–21
  9. By: Pääkkönen, Jenni (BOFIT)
    Abstract: This paper discusses growth differentials of Chinese provinces geared to agricultural activities and those focusing on industrial production over three decades of economic reform. Following trade theory and endogenous growth theory, we suggest that the fundamental differences between regions arise from their resource allocations at the start of reforms. Thus, capital-abundant regions have tended to specialize in industrial production, while the labor-abundant regions have concentrated on labor-intensive production (agriculture). Many of China's agricultural provinces suffer from oversupplies of labor, which has led large numbers of people to migrate within the country to work in non-farming sectors of economy. We show that provinces with high shares of industrial production (the industrial club) have converged, and that agricultural provinces shifting to industrial production have been catching up to initially industrialized provinces. Provinces that have stayed with an agricultural strategy (the agricultural club) show no evidence of convergence and appear to have been left behind in terms of economic development.
    Keywords: growth; agriculture; convergence
    JEL: O17 O40 O57
    Date: 2009–10–21
  10. By: Hoy, Chun-Yu (BOFIT)
    Abstract: This paper examines the effects of market deregulation on consumers and state commercial banks in China, a large developing country. I jointly estimate a system of differentiated product demand and pricing equations under alternative market structures. While China's banking reforms overall have achieved mixed results, the consumer surplus of the deposit market has increased. The welfare effects from reforms are unevenly distributed, with losses skewed toward inland provinces and certain consumer groups. There is no clear evidence that the pricing of banking services has become more competitive after the reform, and such pricing remains subject to government intervention. Encouragingly, the price-cost margins of some state commercial banks have fallen over time.
    Keywords: banking reform; banks in China; demand estimation; market structure
    JEL: G21 L11
    Date: 2009–10–21
  11. By: Luis F. Lopez-Calva (UNDP Regional Bureau for Latin America); Nora Lustig (Tulane University and Center for Global Development)
    Abstract: Between 2000 and 2006, the Gini coefficient declined in 12 of the 17 Latin American countries for which data are available. Why has inequality declined? Have the changes in inequality been driven by market forces such as the demand and supply for labor with different skills? Or have governments become more redistributive than they used to be, and if so, why? This paper attempts to answer these questions by focusing on the determinants of inequality in four countries: Argentina, Brazil, Mexico and Peru. The analysis suggests that the decline in inequality is accounted for by two main factors: (i) a fall in the earnings gap between skilled and low-skilled workers (through both quantity and price effects); and (ii) more progressive government transfers (monetary and in-kind transfers). Demographic factors, such as a change in the proportion of adults (and working adults) per household, have been equalizing but the magnitude of their contribution has been small by comparison. In Brazil, Mexico and Peru, the fall in earnings gap, in turn, is mainly the result of the expansion of basic education over the last couple of decades, which reduced inequality in attainment and made the returns to education curve less steep. It also results from the petering out of the unequalizing effect of skill-biased technical change in the 1990s associated with the opening up of trade and investment. In Argentina, the decline in earnings inequality seems to be associated with government policies that without the windfall of high commodity prices will be hard to sustain.
    Keywords: Income inequality, Latin America, wage gap, government transfers.
    JEL: O15 H53 J48
    Date: 2009
  12. By: Etienne B. Yehoue; Kotaro Ishi; Mark R. Stone
    Abstract: Unconventional central bank measures are playing a key policy role for many advanced economies in the 2007-09 global crisis. Are they playing a similar role for emerging economies? Emerging economies have widely used unconventional foreign exchange and domestic short-term liquidity easing measures. Their use of credit easing and quantitative easing measures has been much more limited. Thus, unconventional measures are much less important for emerging economies compared to advanced economies in achieving broader macroeconomic objectives. The difference can be attributed to the relatively limited financial stress in emerging economies, their external vulnerabilities and their limited scope for quasifiscal activities.
    Date: 2009–10–16
  13. By: Olatundun Janet Adelegan; Bozena Radzewicz-Bak
    Abstract: This study empirically analyzes the determinants of bond market development in a cross section of 23 sub-Saharan African (SSA) countries between 1990 and 2008. It considers the stage of development and the size of the bond market, as well as the historical, structural, institutional and macroeconomic factors driving bond market development in SSA. The study finds that the savings constraint is a key impediment to domestic bond markets development as well as financial market deepening, as it results in a low level of financial intermediation by the banks. Overall, the results show that a confluence of factors matters for the development of domestic bond markets in SSA; these include structure of the economy, investment profile, law and order, size of the banking sector, the level of economic development, and various macroeconomic factors. Policy implications include increased efforts to strengthen the investment environment and the need for a regional approach to bond market development.
    Keywords: Access to capital markets , Banking sector , Bond markets , Bonds , Capital markets , Cross country analysis , External debt , Financial institutions , Financial systems , Investment , Nonbank financial sector , Public debt , Savings , Sub-Saharan Africa ,
    Date: 2009–09–30
  14. By: Kyung-woo Lee; Markus Haacker; Raju Singh
    Abstract: The paper investigates the determinants and the macroeconomic role of remittances in sub-Saharan Africa, assembling the most comprehensive dataset available so far on remittances in the region and incorporating data on the diaspora. It finds that remittances are larger for countries with a larger diaspora or when the diaspora is located in wealthier countries, and that they behave countercyclically, consistent with a role as a shock absorber. Although the effect of remittances in growth regressions is negative, countries with well functioning domestic institutions seem nevertheless to be better at unlocking the potential for remittances to contribute to faster economic growth.
    Keywords: Cross country analysis , Developing countries , Economic growth , Economic models , Sub-Saharan Africa , Workers remittances ,
    Date: 2009–10–02
  15. By: D Subbarao
    Abstract: From the perspective of Emerging Market Economies (EMEs) and particularly for that of India, five concerns are expressed. These are: first, timing of exit from the accommodative monetary policy in the context of rising food price-led inflation but still weak growth; second, the possibility of another surge in capital flows, especially if we turn out to be an outlier in withdrawal of monetary stimulus; third, monetary transmission mechanism as it is evolving from the crisis period; fourth, return to fiscal consolidation and quality of fiscal adjustment; and finally, the implications of the efforts towards financial stability on financial inclusion and growth. [Remarks by Dr. D. Subbarao, Governor, Reserve Bank of India at G-30 International Banking Seminar in Istanbul on organized on the occasion of the IMF-World Bank Annual Meetings 2009].
    Keywords: India, emerging markets, monetary policy, capital flows, fiscal, adjustments, reserve bank India, financial stability, inclusion, growth, food price, inflation, consolidation
    Date: 2009
  16. By: Michael E. Waugh
    Abstract: I develop a novel view of the trade frictions between rich and poor countries by arguing that to reconcile bilateral trade volumes and price data within a standard gravity model, the trade frictions between rich and poor countries must be systematically asymmetric, with poor countries facing higher costs to export relative to rich countries. I provide a method to model these asymmetries and demonstrate the merits of my approach relative to alternatives in the trade literature. I then argue that these trade frictions are quantitatively important to understanding the large differences in standards of living and total factor productivity across countries.
    Keywords: Trade ; Developed countries ; Developing countries ; Exports
    Date: 2009
  17. By: Dalila NICE-CHENAF (GREThA UMR CNRS 5113); Eric ROUGIER (GREThA UMR CNRS 5113)
    Abstract: In this paper, we argue that the inadequacy of their underlying formal model can explain the failure of the existing empirical studies to exhibit a robust and convergent estimation of the effect of FDI on growth. We build a structural model of growth with endogenous attraction to FDI, and we estimate it on panel data for a sample of Middle East and North Africa countries (MENA). Direct effects of FDI on growth are not significant, and we show that FDI is not only responsive to growth, but it is also likely to promote increases of GDP through indirect channels as it spurs the formation of human capital and exports.
    Keywords: FDI, growth, attraction, MENA, simultaneous equations
    JEL: F21 F43 O11 O15
    Date: 2009
  18. By: Andre Minella; Alessandro Rebucci; Nelson Souza-Sobrino
    Abstract: This study provides a set of tools to analyze the monetary and exchange rate policy issues in the seven countries of the Inter-American Development Bank’s Caribbean region (The Bahamas, Barbados, Jamaica, Haiti, Guyana, Suriname, and Trinidad and Tobago). It then applies some of them to the analysis of the impact of the global turmoil on these economies in the last quarter of 2008. The paper also discusses, in light of both recent theoretical developments and key aspects of these economies, the monetary and exchange policy responses to the initial phase of the global turmoil.
    Keywords: Caribbean countries, Global crisis, Monetary policy
    JEL: F33 E52
    Date: 2009–10
  19. By: Ted Enamorado; Ana Carolina Izaguirre; Hugo Nopo
    Abstract: This paper compares gender wage gaps for Costa Rica, Honduras, Nicaragua and El Salvador from the mid-1990s to the mid-2000s using the non-parametric matching methodology introduced by Ñopo (2008), which allows an analysis not only of average gaps but also their distributions. While a simple comparison of average wages would suggest small or even negative gaps, the wage gap is substantial when workers with comparable human capital characteristics are considered. Although the gender wage gap declined from the mid-1990s to 2000, the gap appears to increase thereafter. The results also indicate that females have access barriers to certain human capital profiles, which contributes to wage gaps. The unexplained component of the gender wage gaps is more pronounced among poorer individuals. In Nicaragua, particularly, these unexplained gaps are negative for those at the lowest extreme of the earnings distribution.
    Keywords: Gender, Race, Wage gaps, Central America
    JEL: C14 D31 J16 O54
    Date: 2009–10
  20. By: Goh, Soo Khoon
    Abstract: This study investigates the relationship between real wages, labor productivity and unemployment in Malaysia at the macroeconomic level, using time-series econometric techniques. The study found a long-term equilibrium relationship between labor productivity and real wages, but that unemployment was apparently unconnected to the system. The results suggested that labor productivity is positively related to real wage in the long run. However, the increase in real wage exceeds the increase in labor productivity causing an increase in unit labor cost. In addition, the study found a positive causal flow from productivity to wages in the short-run supporting the marginal productivity theory.
    Keywords: real wages; productivity; Malaysia
    JEL: J30
    Date: 2009–08
  21. By: Yi, Lu; Zhigang, Tao
    Abstract: Family control of business is prevalent in developing economies, and one of the leading theories suggests that it is a response to weak contract enforcement in such economies. In this paper, we investigate the impacts of contract enforcement on the degree of family control of business using a sample of China's private enterprises. It is found that weaker contract enforcement is associated with the higher degree of family control of business. Our results are robust to the control for omitted variables and reserve causality issues, to the adjustment for the sample attrition bias, to the use of a sub-sample, and to the inclusion of other explanations for the family control of business.
    Keywords: Family Control of Business; Contract Enforcement; China's Private Enterprises
    JEL: D21 P37 K12 L22
    Date: 2009–06
  22. By: Goh, Soo Khoon
    Abstract: This paper discusses how Malaysia manages the impossible trinity, the conjecture that a country cannot simultaneously maintain an open capital account, an exchange rate stability and monetary policy independence. Only two out of these three goals can be mutually consistent and policy makers have to decide which third goal to give up. The paper shows how Malaysia adopts an intermediate regime -- a regime that enables policy makers to manage all the three goals simultaneously. The impact of the global financial crisis on the Malaysian economy and the policy options for Malaysia to deal with the recent huge capital outflows are discussed in this paper. The willingness by Bank Negara Malaysia to allow a certain extent of exchange rate adjustments in the face of current global crisis reflects that Malaysia is not exempted from the impossible trinity
    Keywords: Impossible Trinity; Malaysia; Global Financial Crisis
    JEL: F41
    Date: 2009–08–07
  23. By: Pradhan, Jaya Prakash
    Abstract: This study deals with the outward FDI (OFDI) behaviours of the emerging multinationals from India and China. In the backdrop of changing public policies and economic performance of the home country, it traces the evolution of OFDI by these emerging multinationals over a long period, from early 1950s to the present decade. Indian and Chinese multinationals, in addition to their similarity of achieving high growth rates of OFDI with long term sectoral and geographical diversification, are observed to have a number of important differences in terms of characteristics of outward investing firms and their locational motivations.
    Keywords: Outward FDI; Emerging multinationals; India; China
    JEL: F23 O53 F21
    Date: 2009–10–23
  24. By: Dwibedi, Jayanta; Chaudhuri, Sarbajit
    Abstract: This paper purports to examine the validity of the common belief that in a developing economy the backward agricultural sector should be subsidized as poorer group of the working population are employed in this sector that send their children out to work out of sheer poverty. A three-sector general equilibrium framework with agricultural dualism and child labour has been employed for the purpose of analysis. It finds that a price subsidy policy to backward agricultural sector is likely to aggravate the child labour incidence while a credit subsidy to advanced agriculture may be effective in reducing the gravity of the problem in the economy. The paper, therefore, questions the desirability of assisting backward agriculture for eradicating child labour in the society.
    Keywords: Child labour; general equilibrium; agricultural dualism; subsidy policy.
    JEL: J13 J10 O17 D10
    Date: 2009–06–15
  25. By: Wolfgang Keller
    Abstract: This paper examines how international flows of technological knowledge affect economic performance across industries and firms in different countries. Motivated by the large share of the world's technology investments made by firms that are active across borders, we focus on international trade and multinational enterprise activity as conduits for technological externalities, or spillovers. In addition to reviewing the recent empirical research on technology spillovers, the discussion is guided by a new model of foreign direct investment, trade, and endogenous technology transfer. We find evidence for technology spillovers through international trade and the activity of multinational enterprises. The analysis also highlights challenges for future empirical research, as well as the need for additional data on technology and innovation.
    JEL: F1 F2 L2 O3 O4
    Date: 2009–10
  26. By: Simon Johnson; William Larson; Chris Papageorgiou; Arvind Subramanian
    Abstract: This paper sheds light on two problems in the Penn World Table (PWT) GDP estimates. First, we show that these estimates vary substantially across different versions of the PWT despite being derived from very similar underlying data and using almost identical methodologies; that this variability is systematic; and that it is intrinsic to the methodology deployed by the PWT to estimate growth rates. Moreover, this variability matters for the cross-country growth literature. While growth studies that use low frequency data remain robust to data revisions, studies that use annual data are less robust. Second, the PWT methodology leads to GDP estimates that are not valued at purchasing power parity (PPP) prices. This is surprising because the raison d'être of the PWT is to adjust national estimates of GDP by valuing output at common international (purchasing power parity [PPP]) prices so that the resulting PPP-adjusted estimates of GDP are comparable across countries. We propose an approach to address these two problems of variability and valuation.
    JEL: O11 O40 O47
    Date: 2009–10
  27. By: G Raghuram,Rachna Gangwar
    Abstract: The focus of this paper is on how Indian Railways can service the steel sector better. The steel sector is a core sector, with railways playing a critical role in its logistics. The paper examines the changing industry structure and brings to light the increased need for transportation, as compared to normal planning processes. Traditionally, crude and finished steel making was done in the same location by big producers having integrated plants. Now the industry has a large number of producers who primarily focus on crude steel making or finished steel making, necessitating the need for transporting crude steel to the finished steel makers. Even within finished steel making, there could be levels of value addition where the output of one finished steel maker could become the input for another.
    Date: 2009–04–28
  28. By: Ankur Sarin; Rekha Jain
    Abstract: Using a survey of 1774 users and non-users in 84 slums in three metropolitan cities (Delhi, Ahmedabad and Kolkata), we try to understand the impact of mobiles on their social and economic lives. Urban slum dwellers spend significant amounts on communications, both for a first time acquisition of handset and SIM (nearly 40% of the average household earnings per month), as well as on going expenditure. However, a majority of respondents believe that the use of mobiles has led to an improvement in their economic situation and that these benefits are greater than ownership and usage costs. Mobile also appears to change how slum residents interact with each other. Despite reducing face-to-face interactions, mobile usage is associated with stronger social relationships. In comparing users and non-users, we find differences between users and non-users in terms of income, education and other social characteristics. We also find evidence of hierarchies within households, with women far more likely than men to be only infrequent mobile users or not to have access at all. While cost of a handset is the primary barrier to owning a mobile, non-owners report difficulty in using a mobile, clarity of charges for call-plans and information dissemination as other barriers to ownership.
    Date: 2009–03–03
  29. By: Rakesh Basant,Partha Mukhopadhyay
    Abstract: We provide a brief but comprehensive overview of linkages between higher education and the high tech sector and study the major linkages in India. We find that the links outside of the labor market are weak. This is attributed to a regulatory structure that separates research from the university and discourages good faculty from joining, which erodes the quality of the intellectual capital necessary to generate new knowledge. In the labor market, we find a robust link between higher education and high-tech industry, but despite a strong private sector supply response to the growth of the high-tech industry, the quality leaves much to be desired. Poor university governance may be limiting both labor market and non-labor market linkages. Industry efforts to improve the quality of graduates are promising but over reliance on industry risks compromising workforce flexibility. Addressing the governance failures in higher education is necessary to strengthen the links between higher education and high tech industry.
    Date: 2009–05–05
  30. By: Dileep V. Mavalankar; Tapasvi I. Puwar; Dipti Govil; Tiina M. Murtola; S.S. Vasan
    Abstract: Background In this working paper, a preliminary estimate of the immediate cost of chikungunya and dengue to the Indian state of Gujarat has been estimated by combining nine earlier studies on major cost factors such as costs of illness and control, and thus building a more comprehensive picture of the immediate cost of these Aedes mosquito-borne diseases to Gujarat. Methods Costs of illness and vector control comprise the immediate cost of chikungunya and dengue. In this working paper, cost of illness has been calculated using the RUHA matrix approach. Using the shares of reported (R) and unreported (U) hospitalised (H) and ambulatory (A) cases of chikungunya and dengue, a RUHA matrix has been constructed for the state of Gujarat. Cost of illness has been estimated by combining this matrix with ambulatory and hospitalisation costs per case and the number of reported cases. For this study, chikungunya and dengue were assumed to be identical from the point of view of disease control and management. Vector control cost includes state and municipal expenditure to prevent/control these diseases, a conservative fraction of the household insecticides market, and private sector cost. Comparisons with Asian countries have been used to estimate a parameter if direct data is unavailable. Monte-Carlo sensitivity analysis was carried out to find out how uncertainties in each cost parameter affected the total cost of chikungunya and dengue. Findings Using Monte-Carlo sensitivity analysis, the immediate cost of chikungunya and dengue to Gujarat has been estimated to be 3.7 (range 1.6-9.0) billion rupees per annum. This is a preliminary estimate; research is in progress to refine key parameters from the Monte-Carlo analysis such as ambulatory cost per case and reporting rate. The emotional and long-term burden of illness and deaths due to these diseases including impact on tourism, education, economic growth, per capita income, FDI, etc. are beyond the scope of this study. Extrapolating from Gujarat to the whole of India (after adjusting for the relative number of cases in each state and differences in state GSDP per capita), the immediate cost of chikungunya and dengue to the whole of India is approximately INR 61 billion (range INR 26-148 billion). Interpretation The annual cost of INR 3.7 billion (range INR 1.6-9.0 billion) translates to approximately INR 66 per capita (range INR 29-159), or US$ 1.6 (range US$ 0.7-3.8) per capita using an exchange rate 42 INR/US$. Comparable cost of dengue is US$ 5.3 in Malaysia and US$ 6.2 in Panama, while Brazil spends US$ 4.3 per capita on dengue prevention alone. The differences in these costs can be partially be explained by roughly five times higher GDP per capita in Malaysia, Panama and Brazil than in Gujarat. However, higher incidence of chikungunya increases the relative cost in Gujarat. As policy makers weigh investments in new technologies and expanded use of existing interventions to control neglected tropical diseases, the economic cost of illness is a major input into decision making. It is hoped that this preliminary estimate will trigger more refined studies on cost of illness as well as cost-effectiveness of vaccines and other interventions to combat these neglected tropical diseases
    Date: 2009–01–27
  31. 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.
    Date: 2009–03–16

This nep-dev issue is ©2009 by Mark 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.