nep-dev New Economics Papers
on Development
Issue of 2009‒12‒05
fifteen papers chosen by
Mark Lee
Towson University

  1. Human capital spillovers, productivity and regional convergence in Spain By Raul Ramos; Jordi Suriñach; Manuel Artís
  2. NAFTA, Trade, and Development By Robert A. Blecker; Gerardo Esquivel
  3. Competitiveness and Growth of the Mexican Economy. By Daniel Chiquiar; Manuel Ramos Francia
  4. Evidence of neighborhood e?ects on educational performance in the chilean school voucher system By Dante Contreras; Patricia Medrano
  5. The Reliability of Matches in the 2002-2004 Vietnam Household Living Standards Survey Panel By Brian McCaig
  6. Growth, Foreign Direct Investment and the Environment: Evidence From Chinese Cities By Matthew A Cole; Robert J R Elliott; Jing Zhang
  7. Corruption, Governance and FDI Location in China: A Province-Level Analysis By Matthew A Cole; Robert J R Elliott; Jing Zhang
  8. Assessing the Economic Vulnerability of Small Island Developing States and the Least Developed Countries By Patrick GUILLAUMONT
  9. Aid and Income Stabilization By Sylviane GUILLAUMONT JEANNENEY; Sampawende Jules TAPSOBA
  10. Why Migrants' Remittances Reduce Income Inequality in some Countries and not in Others? By Christian EBEKE; Maëlan LE GOFF
  11. Aid effectiveness for poverty reduction:macroeconomic overview and emerging issues By Patrick GUILLAUMONT
  12. Why is Access to Basic Services Not Inclusive? A Synthesis with a Special Focus on Developing Asia By Wan, Guanghua; Francisco, Ruth
  13. How is the Global Recession Impacting on Poverty and Social Spending? An ex ante assessment methodology with applications to developing Asia By Francisco, Ruth; Wan, Guanghua
  14. Evidence and Policy Lessons on the Links between Disaster Risk and Poverty in Latin America By Lopez-Calva, Luis Felipe; Ortiz-Juarez, Eduardo
  15. Nutrition and Risk Sharing Within the Household By Dubois, Pierre; Ligon, Ethan

  1. By: Raul Ramos (AQR-IREA, Universitat de Barcelona); Jordi Suriñach (AQR-IREA, Universitat de Barcelona); Manuel Artís (AQR-IREA, Universitat de Barcelona)
    Abstract: This paper analyses the differential impact of human capital, in terms of different levels of schooling, on regional productivity and convergence. The potential existence of geographical spillovers of human capital is also considered by applying spatial panel data techniques. The empirical analysis of Spanish provinces between 1980 and 2007 confirms the positive impact of human capital on regional productivity and convergence, but reveals no evidence of any positive geographical spillovers of human capital. In fact, in some specifications the spatial lag presented by tertiary studies has a negative effect on the variables under consideration.
    Keywords: Regional convergence, productivity, human capital composition, geographical spillovers.
    JEL: O18 O47 R23
    Date: 2009–11
  2. By: Robert A. Blecker; Gerardo Esquivel
    Abstract: The post-Keynesian tradition contains two different models of long-run growth in open economies -- the model of export-led cumulative causation (ELCC) originally conceived by Nicholas Kaldor and the model of balance-of-payments-constrained growth (BPCG) developed by A.P. Thirlwall. These models diverge significantly in their core underlying assumptions. For example, they disagree about whether long-term gains in relative price competitiveness are possible and whether import demand constrains long-run growth. The two modeling approaches also yield conflicting policy implications. For example, some ELCC models imply that a domestic demand stimulus can boost long-run growth by sparking a virtuous circle of cumulative causation (including an endogenous increase in productivity growth), while most BPCG models imply that only policies that raise the income elasticity of export demand or lower the income elasticity of import demand can permit faster growth in the long run. The fact that both models have found econometric support suggests that each contains empirically supported elements, but the tests that have been conducted to date have not had sufficient power to distinguish between them. This paper will present both models in a common analytical framework to compare their theoretical differences and policy implications. The paper will argue that a generalized BPCG model that allows for financial flows and relative price effects can incorporate the cumulative causation feedbacks from the ELCC approach while also imposing the balance of payments equilibrium condition that is missing from the latter. The paper will also explore under what conditions different versions of the models apply.
    Date: 2009–08
  3. By: Daniel Chiquiar; Manuel Ramos Francia
    Abstract: We address the role that deep, structural factors may have as determinants of Mexico’s economic growth. We argue that Mexico’s poor growth performance appears to be associated not only with shorter-run events such as the "lost decade" of the eighties, but also with supply-side features of the economy that have been present for at least four decades. Mexico’s low competitiveness and poor growth potential seem to reflect an institutional framework that tends to support rigid, non-competitive market structures, and incentives that promote the allocation of resources towards unproductive rent-seeking activities relatively more than into investment, production, productivity, and adoption of superior technologies. We present examples of input markets where we believe these issues are central. We conclude that solving this situation requires microeconomic policies that lead to fundamental changes in the incentive structure of the economy.
    Keywords: Competitiveness and growth, productivity, efficiency, comparative advantage.
    JEL: O31 O43 O12
    Date: 2009–11
  4. By: Dante Contreras; Patricia Medrano
    Abstract: This paper uses alternative measures of neighborhood quality to study its impact on student performance in school. The Chilean voucher-based education system allows us to test separately for neighborhood and traditional in-classroom peer effects, which have been traditionally empha- sized by the literature. We use the Human Development Index reported by United Nations, and the relative number of books in public libraries at the county level, to measure neighborhood quality. We ?nd that a 5 basis point increase in the HDI Index, is related to an increase of 1 to 4 points in the SIMCE test, depending on the speci?cation. The e?ect is equivalent to half a year increase in mothers education (one additional year achieves a 7 point increase in SIMCE scores). Interestingly, the e?ect remains when we look at the sample of random movers.
    JEL: O18 Z13 J18
    Date: 2009–11
  5. By: Brian McCaig
    Abstract: Tracking households and individuals over time is important for a variety of research and policy questions. Exploring the validity of matched household and individuals within a dataset is a necessary step for ensuring the reliability of analysis designed to address such questions. This paper examines the quality of matching in the household panel between the 2002 and 2004 Vietnam Household Living Standards Surveys (VHLSS). Of the original 4,476 matches suggested in the household datasets, 429 matches are found to be incorrect, almost ten percent of total matches. Revised matches are suggested for 402 of these mismatches. Two simple applications illustrate the potential problems associated with analysis conducted using a poorly matched panel. The original panel overestimates the frequency of changes in household size. It also leads to biased estimates of per capita consumption growth, as it overestimates growth for poor households and underestimates growth for rich households.
    Keywords: Vietnam Household Living Standards Survey, household panel
    JEL: C8 O12
    Date: 2009–09
  6. By: Matthew A Cole; Robert J R Elliott; Jing Zhang
    Abstract: In this paper we investigate the relationship between economic growth and industrial pollution emissions in China using data for 112 major cities between 2001 and 2004. Using disaggregated data we separate FDI inflows from Hong Kong, Macao and Taiwan from those of other foreign economies. We examine two industrial water pollution indicators (wastewater and petroleum-like matter) and four industrial air pollution indicators (waste gas, sulphur dioxide, soot and dust). Our results suggest that most air and water emissions rise with increases in economic growth at current income levels. The share of output of domestic and foreign owned firms increases several pollutants in a statistically significant manner while output of firms from Hong Kong, Macao and Taiwan either reduces pollution or is statistically insignificant.
    Keywords: FDI, economic growth, pollution, cities
    Date: 2009–11
  7. By: Matthew A Cole; Robert J R Elliott; Jing Zhang
    Abstract: China's rapid growth in recent years has been matched by large increases in exports and foreign direct investment (FDI). However, within China considerable regional disparities in FDI flows exist. In this paper we use detailed province level data for China to examine the determinants of intra-country FDI flows. Specifically, we investigate whether FDI is attracted to those regions that exhibit good governance and are most strongly engaged in the fight against corruption. We first construct proxies for provincial government efficiency and the extent of a region's anti-corruption effort. Our subsequent regression results confirm that FDI is attracted to provinces with relatively high levels of government efficiency and those that are actively involved in the fight against corruption.
    Keywords: FDI, corruption, governance
    JEL: O13 L60 Q21 Q25 Q28
    Date: 2009–11
  8. By: Patrick GUILLAUMONT (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: Macro vulnerability of the small island developing states (SIDS) as well as of least developed countries (LDCs) has been an increasing concern for the international community. This concern has led to the design of an economic vulnerability index (EVI). EVI assesses the structural economic vulnerability resulting from natural or external shocks faced by countries, and from their exposure to these shocks. Focussing on the consequences of exogeneous instabilities, we first explain how vulnerability affects growth, development and poverty reduction, particularly in small developing countries. The channels of transmission of shocks are explored. We then examine how the EVI, as a synthetic measure of structural vulnerability, has been designed and how it can be used to compare SIDS and LDCs, two groups of developing countries particularly vulnerable, but in a different way. Lastly, we argue that EVI is a relevant tool not only for the identification of LDCs, but also for the geographical aid allocation, so as to favour vulnerable countries, including both LDCs and SIDS, even though not all SIDS qualify as LDCs.
    Date: 2009
  9. By: Sylviane GUILLAUMONT JEANNENEY (Centre d'Etudes et de Recherches sur le Développement International); Sampawende Jules TAPSOBA (Ministère de l'Economie et des Finances [France])
    Abstract: This article contributes to the debate on aid volatility and argues that official assistance copes with exogenous output shocks in recipient countries and stabilizes resources available for the financing of consumption, investment and net trade. Stabilizing aid is effective in aid-dependent and vulnerable states. Aid volatility and disbursement lags are not significant determinants of the stabilizing impact of aid.
    Keywords: Income stabilization, developing countries, foreign aid
    Date: 2009
  10. By: Christian EBEKE; Maëlan LE GOFF
    Abstract: According to the literature, the effect of remittances on income inequality in origin countries of migrants is not clear, whatever empirical approach is used. Aiming at clearing up this ambiguity, some authors took into account the historical, social or economic context of the home countries considered. The underlying idea of most of these studies is actually that the impact of remittances on income inequality depends on whom migrates, i.e. on the location migrants occupy in income distribution in their home country. However, to our knowledge, no macroeconomic study examining the remittances effect on inequality, consider the composition of migratory flows. To reveal at the macroeconomic level the position of migrants in income distribution at origin, we introduce in our equation of inequality non-linearities in the level of development of the recipient countries, in the costs of migration and in the level of brain drain. Using a panel sample of 80 developing countries over the period 1970-2000, and even by factoring in the endogeneity of remittances, this paper provides evidence of some characteristics of countries of origin in which there is an inequality-decreasing effect of remittances on income inequality. It turns out that countries belonging to the Mediterranean Basin have the characteristics revealed.
    Keywords: Brain drain, Income, Mediterranean basin, Migrants' remittances, income inequality, instrumental variables, migration costs
    Date: 2009
  11. By: Patrick GUILLAUMONT (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: The aim of this paper is to examine the main reasons how aid can contribute to poverty reduction, the channels through which it can do so and the lessons of the literature on these issues, with a special focus on the way aid can address the vulnerability faced by many developing countries.
    Keywords: Poverty Reduction, aid effectiveness, developing countries, vulnerability
    Date: 2009
  12. By: Wan, Guanghua; Francisco, Ruth
    Abstract: This paper synthesizes factors that could contribute to the failure of basic service delivery to the poor. It also highlights successful projects and good practices from developing Asian countries which may help promote inclusiveness in providing basic social services in developing countries. While both demand and supply factors are discussed, special attention is given to noneconomic factors including institutional deficiencies, the lack of information or awareness, and the multiplicity of basic services.
    Keywords: service delivery; social services; poor
    JEL: H42 A1 H0 H30
    Date: 2009–04
  13. By: Francisco, Ruth; Wan, Guanghua
    Abstract: The global economic recession is severely affecting Asian economies. Timely assessment of the economic and social impacts is critical to the formulation and implementation of policy responses. This paper presents a simple methodology of ex ante impact assessment, focusing specifically on how the global recession will affect poverty and social expenditures in developing Asian countries. This involves two steps: first, to gauge how the crisis will affect national and household incomes; and, second, to assess how the income effects are transmitted to poverty and social spending.
    Keywords: social impact assessment; developing asia; global recession
    JEL: O11 C02
    Date: 2009–08
  14. By: Lopez-Calva, Luis Felipe; Ortiz-Juarez, Eduardo
    Abstract: Extreme climate-related events have a direct impact on the welfare of households. The frequency and magnitude of those shocks appear to be closely linked to increasing vulnerability of households and communities in developing countries. Yet, the link between natural disasters and living standards is complex and causality is difficult to capture empirically. Among other reasons, there is a two-way relationship between the vulnerability to natural disasters and poverty, and disentangling the direction of the causal impacts is rather challenging, especially in terms of the intensity of the effects of the events and not only their incidence. This paper pursued two main goals. First, the empirical analysis estimated the relation between natural events and social indicators at the local level, establishing a causal link whenever possible. Second, analysis was carried out at the household level in order to determine the potential role played by coping mechanisms to influence long-term impacts on welfare.
    Keywords: Natural hazards; Poverty; Well-being
    JEL: I30 O10 O54 Q54
    Date: 2009–01–20
  15. By: Dubois, Pierre; Ligon, Ethan
    Abstract: Using data on individual consumption from farm households in the Philippines, we construct a direct test of risk-sharing within the household. We contrast the efficient outcomes predicted by the unitary household model with the outcomes we might expect if food consumption delivers not only utils, but also nutrients affecting future productivity. The efficiency conditions which characterize the within-household allocation of food under the unitary model are violated, as consumption responds to earnings shocks. If productivity depends on nutrition, this explains some but not all of the response, as earnings "surprises" have some effect on the cost and composition of diet.
    Keywords: Nutrition; Risk sharing; Within Household
    JEL: D12 O12
    Date: 2009–11

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