nep-dev New Economics Papers
on Development
Issue of 2010‒08‒14
eighteen papers chosen by
Mark Lee
Towson University

  1. A Review of Conceptual and Measurement Innovations in National and Regional Human Development Reports, 1998-2009 By Amie Gaye; Shreyasi Jha
  2. Success and Failure in Human Development, 1970-2007 By Gustav Ranis; Frances Stewart
  3. Advances in sub national measurement of the Human Development Index: The case of Mexico By Rodolfo de la Torre; Hector Moreno
  4. Acute Multidimensional Poverty: A New Index for Developing Countries By Sabina Alkire; Maria Emma Santos
  5. Improving the Measurement of Human Development By Carmen Herrero; Ricardo Martínez; Antonio Villar
  6. What are the successful strategies for reducing malnutrition among young children in East Africa? By Ibrahim Kasirye
  7. Hope in Hard Times: Women’s Empowerment and Human Development By Manisha Desai
  8. In Time of Troubles: Challenges and Prospects in the Middle East and North Africa By Imed Drine
  9. Globalization and Exclusionary Urban rowth in Asian Countries By Kundu, Amitabh and Kundu, Debolina
  10. Community based health insurance schemes in Africa: The case of Rwanda By Shimeles, Abebe
  11. FDI and Human Capital Development By P. Srinivas Subbarao
  12. Experimental approaches in migration studies By McKenzie, David; Yang, Dean
  13. Why are developing countries so slow in adopting new technologies ? the aggregate and complementary impact of micro distortions By Bergoeing, Raphael; Loayza, Norman V.; Piguillem, Facundo
  14. Quantifying the impact of financial development on economic development By Jeremy Greenwood; Juan M. Sánchez; Cheng Wang
  15. "The Effect of Child Health on Schooling: Evidence from Rural Vietnam" By Thuan Quang Thai; Evangelos M. Falaris
  16. The Spatial Dimension of Human Development Index in Indonesia By Rullan Rinaldi; Eva Nurwita
  17. Assessing Socioeconomic Impacts of Transport Infrastructure Projects in the Greater Mekong Subregion By Stone, Susan; Strutt, Anna; Hertel, Thomas
  18. Trade Logistics and Regional Integration in Latin America and the Caribbean By Guerrero, Pablo; Lucenti, Krista; Galarza, Sebastián

  1. By: Amie Gaye (Human Development Report Office. United Nations Development Programme); Shreyasi Jha (Human Development Report Office. United Nations Development Programme)
    Abstract: This paper presents the results from an analysis of sub-national, national and regional human development reports nominated for the Human Development Awards between 1998 and 2009 to highlight conceptual and measurement innovations in human development. Through a careful selection process, nearly 70 reports were identified for this study of which this paper describes innovations in 38 reports along five categories: (a) creating a new measure of human development; (b) using new data source; (c) creating a disaggregated measure of human development; (d) using a new methodology; and (e) adapting the existing measure of human development by adding/modifying an existing dimension. The objective of this paper is to analyze the innovations in the national and regional reports from the perspective of their statistical soundness as well as feasibility of their application at the global level in preparation for the twentieth anniversary issue of the Global HDR in 2010. The study concludes that a majority of the conceptual and measurement innovations in the national and regional reports are highly context driven and therefore, may not be feasible at the global level. Data requirements also limit feasibility of conceptual innovations at the global level. However, there are several interesting and novel ideas that can potentially be replicated at the global level with slight modifications.
    Keywords: Human development, innovations, measurement, disaggregation
    JEL: I32 Y80
    Date: 2010–07
  2. By: Gustav Ranis (Yale University); Frances Stewart (Centre for Research on Inequality, Human Security and Ethnicity, University of Oxford)
    Abstract: The paper reviews experience in advancing Human Development since 1970 by investigating behaviour among countries that made the largest improvements in HD, and those that made the least improvement. The three developing countries with the fastest growth in the HDI over the period are selected from initial low-HDI, middle HDI- and high HDI country groupings, and their experience compared on a range of indicators. Certain characteristics were common to all success cases: good or moderate educational enrolment ratios; good or moderate female/male enrolment ratios; and good or moderate Human Poverty Indices. The other three major inputs into success appear to be growth, social expenditure and income distribution, and the successful countries showed different combinations of performance on these. Weak performers all experienced poor or moderate economic growth. Two classes of weak performance were: low income countries with weak growth, poor distribution and high poverty; and transition countries where economic, institutional and demographic disruptions led to poor progress. We also look beyond the HDI as an indicator of HD, explore such other features as political freedoms, security and environmental sustainability, and find little correlation between achievements on these indicators (both in levels and changes) with success and failure with respect to the HDI. Finally we provide short country vignettes of some of the success and failure cases, exploring some historical and institutional features associated with their performance.
    Keywords: Human Development, growth, income distribution
    JEL: O11 O2 O20 O15
    Date: 2010–07
  3. By: Rodolfo de la Torre (Human Development Research Office (HDRO), PNUD Mexico and Centro de Investigación y Docencia Económicas (CIDE)); Hector Moreno (Human Development Research Office (HDRO), PNUD Mexico)
    Abstract: This paper surveys the main informational, conceptual and theoretical adjustments made to the HDI in the Mexican Human Development Reports and presents a way in which the calculation of the HDI could be carried out to the individual level. First, informational changes include redistributing government oil revenues from oil producing regions to the rest of the country in order to obtain a better picture of available resources and imputing per capita average household income to all municipalities combining census and income surveys. Also, state information is used to set counterfactuals about the first effects of internal migration on development, and municipal data is applied to decompose inequality indices to identify the sources and regions contributing to overall human development inequality. Second, conceptual adjustments consider introducing two additional dimensions to the HDI: being free from local crime and the absence of violence against women. Third, a key theoretical contribution from the Mexican National Reports to the HDI literature is the proposal of an inequality sensitive development index based on the concept of generalized means. Finally, the proposed disaggregation of the HDI at the household and individual level allows analyzing development levels for subgroups of population either by age, ethnic condition, sex and income or HDI deciles across time.
    Keywords: Human Development Index, individual HDI, household HDI, inequality, migration, local crime, absence of violence against women, generalized means
    JEL: C81 I3 D63
    Date: 2010–07
  4. By: Sabina Alkire (Oxford Poverty & Human Development Initiative (OPHI), Queen Elizabeth House (QEH), Department of International Development, Oxford University); Maria Emma Santos (Oxford Poverty and Human Development Initiative, UK and Consejo Nacional de Investigaciones Científicas y Técnicas, Universidad Nacional del Sur, Argentina)
    Abstract: This paper presents a new Multidimensional Poverty Index (MPI) for 104 developing countries. It is the first time multidimensional poverty is estimated using micro datasets (household surveys) for such a large number of countries which cover about 78 percent of the world´s population. The MPI has the mathematical structure of one of the Alkire and Foster poverty multidimensional measures and it is composed of ten indicators corresponding to same three dimensions as the Human Development Index: Education, Health and Standard of Living. Our results indicate that 1,700 million people in the world live in acute poverty, a figure that is between the $1.25/day and $2/day poverty rates. Yet it is no $1.5/day measure. The MPI captures direct failures in functionings that Amartya Sen argues should form the focal space for describing and reducing poverty. It constitutes a tool with an extraordinary potential to target the poorest, track the Millennium Development Goals, and design policies that directly address the interlocking deprivations poor people experience. This paper presents the methodology and components in the MPI, describes main results, and shares basic robustness tests.
    Keywords: Poverty Measurement, Multidimensional Poverty, Capability Approach, Multidimensional Welfare, Human Development, HDI, HPI
    JEL: I3 I32 D63 O1 O15
    Date: 2010–07
  5. By: Carmen Herrero (University of Alicante and Ivie); Ricardo Martínez (University of Málaga); Antonio Villar (Pablo de Olavide University and Ivie)
    Abstract: We propose a new Human Development Index that involves a number of changes with respect to the present one, even though it keeps the basic structure of the index (namely, preserving “health”, “education” and “material wellbeing” as the three basic dimensions of human development). The first change refers to the substitution of the arithmetic mean by the geometric mean, as a way of aggregating the different dimensions in a more sensible way. The second one leads to the introduction of distributive considerations in the evaluation of material wellbeing. The last change consists of the introduction of new variables to approach health and education, looking for a higher sensitivity of the index with respect to the differences between countries. These new variables are specially indicated for the analysis of human development in highly developed countries. Besides the conceptual discussion, that includes a characterization of the chosen aggregation formula, we present a comparative analysis of this new index and the standard one, focusing on the OECD countries.
    Keywords: Human Development, multiplicative indices, distributive concerns, highly developed countries, HDI
    Date: 2010–07
  6. By: Ibrahim Kasirye (University of Manchester and Economic Policy Research Centre)
    Abstract: We analyzed the role that health programs played in improving the nutritional status of children aged five years and younger in East Africa during a period when health policies aiming to reduce malnutrition were implemented. We used several waves of Demographic and Health Surveys over the 1992–2006 period for Kenya, Rwanda, Tanzania, and Uganda. Our results show that malnutrition rates fell substantially over the sample period but that some countries then registered reversals. This finding suggests that the implementation of nutrition policies was not consistent. However, the country-level results show that different factors matter in different countries. For example, maternal health is most important in Uganda and Rwanda. Furthermore, different levels of education matter for different countries. For example, in Kenya, only the mother’s post-secondary education is significant, but in other countries, it is important to address generally low education levels to improve child nutritional health. Overall, due to resource constraints, addressing the nutritional health of young children in East Africa will continue to rely on low cost approaches, such as nationwide vaccinations and maternal education, and not on programs like conditional cash transfer schemes, which have proved successful in addressing under-nutrition in wealthy and middle-income countries.
    Keywords: East Africa, Child Malnutrition
    JEL: I12 I18 J13
    Date: 2010–07
  7. By: Manisha Desai (University of Connecticut)
    Abstract: This paper addresses the conceptual and methodological issues related to women’s empowerment, the trends in women’s empowerment over the last 20 years in key areas such as education, health, economic and political participation, and finally the best practices of state and non-state actors in empowering women. Following a brief critique of human development, it begins with a discussion of the growing conceptual consensus around empowerment, i.e., empowerment being control over resources, women’s agency, a process and outcomes, to the methodological issues involved in its measurement, specifically focusing on the Gender Empowerment Measure and arguing that minimally the measure needs to move away from its urban, elite, and formal employment bias. The trends in women’s empowerment over the past 20 years show that while there have been gains in primary and secondary education, in political representation at the national level, and in waged labor, and a decline in fertility and maternal mortality, violence against women and HIV/AIDS continue to be endemic and these trends vary across regions and within countries urban and rural poor, ethnic minorities, and older and disabled women fare worse on all indicators with the current economic crisis reversing many gains. Furthermore, a decrease in measures of gender gap do not translate into gender equality and positive trends are often accompanied by negative trends resulting from unintended consequences of development. Finally, it highlights some government best practices such as quotas, cash transfer programs, gender budgeting, and community based micro enterprises, some movement practices, i.e., local women run community based programs to combat violence and HIV/AIDS and transnational exchanges, unions campaigns such as Decent Work for Women and corporate practices such as gender equality seals and corporate social responsibility.
    Keywords: gender, women’s empowerment, human development
    JEL: Y8
    Date: 2010–07
  8. By: Imed Drine
    Abstract: The recent crises concerning food and finances highlight the extreme fragility of the MENA countries and question the sustainability of the development processes. The social stress and economic instability caused by these challenges give a good indication of what might be expected in the future. This paper intends to provide a comprehensive analysis for understanding the major challenges faced by the region and the kind of internal impediments that will need to be dealt with in order to achieve a higher level of economic development and more resilience to external shocks.
    Keywords: MENA region, Economic Fragility
    JEL: O1 N2
    Date: 2010–04–01
  9. By: Kundu, Amitabh and Kundu, Debolina
    Abstract: This paper overviews the debate on the relationship between the measures of globalization, economic growth and pace of urbanization, and speculates on its impact on the quality of life and poverty in the context of Asian countries. After experiencing moderate to high urban growth for three to four decades since the 1950s, most of these countries have reported a significant deceleration. This questions the postulate of the epicentre of urbanization shifting to Asia. It also lends credence to the thesis of exclusionary urban growth, which is linked with the formal or informal denial of entry to poor migrants and increased unaffordability of urban space of the rural people. An analysis of the policies and programmes at the national and regional levels shows that these have contributed to the ushering in of this era of urban exclusion. The process of elite capture in the global cities has led to ‘sanitization’ and cleaning up of the micro environment by pushing out the current and prospective migrants and informal activities out of the city boundaries. Given the political economy of urban growth and the need to attract global and domestic capital into cities, governments would not interfere with ‘elitist interests’. Asia, thus, is unlikely to go the same way as Latin America did in the second half of the last century. To absorb incremental labourforce outside agriculture, many of the large countries may, however, promote the small and medium towns that have unfortunately reported economic stagnation and deceleration in population growth. Furthermore, a few among the small and less developed countries are likely to experience high urban growth, largely due to foreign investment. This would impact on the geopolitical balance on the continent despite the fact that expansion in the urban and industrial base in these countries would not make a dent on macro-level aggregates.
    Keywords: globalization, urbanization, urban growth, URGD, exclusionary urbanization, inequality, poverty, small towns, small Asian countries economic resiliency, Liberia
    Date: 2010
  10. By: Shimeles, Abebe (Development Research Department African Development Bank)
    Abstract: Community-based health insurance schemes (Mutuelles) in Rwanda are one of the largest experiments in community based risk-sharing mechanisms in Sub-Saharan Africa for health related problems. This study examines the impact of the program on demand for modern health care, mitigation of out-of-pocket catastrophic health expenditure and social inclusiveness based on a nationally representative household survey using traditional regression approach and matching estimator popular in the evaluation literature. Our findings suggest that Mutuelles have been successful in increasing utilization of modern health care services and reducing catastrophic health related expenditure. According to our preferred method, higher utilization of health care services was found among the insured non-poor than insured poor households, with comparable effect in reducing health-related expenditure shocks. This reinforces the inequity already inherent in the Mutuelles system.<p>
    Keywords: demand for health services; catastrophic health expenditure; average treatment effects; endogenous dummy variable; matching estimator
    JEL: I10
    Date: 2010–08–06
  11. By: P. Srinivas Subbarao
    Abstract: This paper explains importance of human capital skilling, the relation between the FDI and Human Capital development besides the experiences of these two in different regions of the world i.e., Asian and Latin American experiences. [W.P. No.2008-02-01]
    Keywords: FDI, human capital skilling, Human Capital development, Asian, Latin American
    Date: 2010
  12. By: McKenzie, David; Yang, Dean
    Abstract: The decision of whether or not to migrate has far-reaching consequences for the lives of individuals and their families. But the very nature of this choice makes identifying the impacts of migration difficult, since it is hard to measure a credible counterfactual of what the person and their household would have been doing had migration not occurred. Migration experiments provide a clear and credible way for identifying this counterfactual, and thereby allowing causal estimation of the impacts of migration. The authors provide an overview and critical review of the three strands of this approach: policy experiments, natural experiments, and researcher-led field experiments. The purpose is to introduce readers to the need for this approach, give examples of where it has been applied in practice, and draw out lessons for future work in this area.
    Keywords: Population Policies,Access to Finance,Remittances,Anthropology,Debt Markets
    Date: 2010–08–01
  13. By: Bergoeing, Raphael; Loayza, Norman V.; Piguillem, Facundo
    Abstract: This paper explores how developmental and regulatory impediments to resource reallocation limit the ability of developing countries to adopt new technologies. An efficient economy innovates quickly; but when the economy is unable to redeploy resources away from inefficient uses, technological adoption becomes sluggish and growth is reduced. The authors build a model of heterogeneous firms and idiosyncratic shocks, where aggregate long-run growth occurs through the adoption of new technologies, which in turn requires firm destruction and rebirth. After calibrating the model to leading and developing economies, the authors analyze its dynamics in order to clarify the mechanism based on firm renewal. The analysis uses the steady-state characteristics of the model to provide an explanation for long-run output gaps between the United States and a large sample of developing countries. For the median less-developed country in the sample, the model accounts for more than 50 percent of the income gap with respect to the United States, with 60 percent of the simulated gap being explained by developmental and regulatory barriers taken individually, and 40 percent by their interaction. Thus, the benefits from market reforms are largely diminished if developmental and regulatory distortions to firm dynamics are not jointly addressed.
    Keywords: Economic Theory&Research,Emerging Markets,E-Business,Technology Industry,Political Economy
    Date: 2010–08–01
  14. By: Jeremy Greenwood; Juan M. Sánchez; Cheng Wang
    Abstract: How important is financial development for economic development? A costly state verification model of financial intermediation is presented to address this question. The model is calibrated to match facts about the U.S. economy, such as intermediation spreads and the firm-size distribution for the years 1974 and 2004. It is then used to study the international data, using cross-country interest-rate spreads and per-capita GDP. The analysis suggests a country like Uganda could increase its output by 140 to 180 percent if it could adopt the world?s best practice in the financial sector. Still, this amounts to only 34 to 40 percent of the gap between Uganda?s potential and actual output.
    Keywords: Economic development ; Intermediation (Finance)
    Date: 2010
  15. By: Thuan Quang Thai (Max Planck Institute for Demographic Research); Evangelos M. Falaris (Department of Economics,University of Delaware)
    Abstract: We study the relationship between long term child health and human capital. Child health may suffer if a child is inadequately nourished or is exposed to disease early in life and this may affect subsequent accumulation of human capital. We use data from rural Vietnam to examine the impact of child health on delay in starting school and schooling progress taking into account that choices of families affect children’s health and schooling. Our instrument is early life rainfall shocks that have differential effects arising from regional economic diversity. Our estimates indicate that better child health results in meaningfully improved schooling outcomes.
    Keywords: child health, z-score, school entry delay, schooling gap, rainfall shocks, Vietnam
    JEL: I12 J24 J13 O15
    Date: 2010
  16. By: Rullan Rinaldi (Department of Economics, Padjadjaran University); Eva Nurwita (Department of Economics, Padjadjaran University)
    Abstract: As the new paradigm of economic development pioneered by UNDP and Mahbub Ul-Haq undertaken, development processes no longer viewed as monodimensional process of economic growth indicated by GDP growth solely. Human Development Index on the other side offer an indicator that takes into account other aspecta as proxies of life quality such as life expectancy and literacy rate wrapped as a composite index. Several previous researches has try to explain the determinant of HDI, but as HDI was start to calculated at sub national level, the complexity of the task to explain the determinants was escalating due the fact that sub national data has geographical information attached in it. This paper tries to explain the spatial pattern on HDI achievement at sub national level in Indonesia, and estimate the determinants of HDI using spatial econometrics method. The use of the tools based on the necessity to put into account spatial dependence as special form of cross-sectional serial correlation, which is a common situation in observations that has geographical information.
    Keywords: Human Development Index, Spatial Econometrics, Sub National Data
    JEL: O15 R58 R11
    Date: 2010–06
  17. By: Stone, Susan (Asian Development Bank Institute); Strutt, Anna (Asian Development Bank Institute); Hertel, Thomas (Asian Development Bank Institute)
    Abstract: This study attempts to quantify the links between infrastructure investment and poverty reduction using a multi-region general equilibrium model, supplemented with household survey data for the Greater Mekong Subregion (GMS). Infrastructure investment is an important step in economic development, with improvements in transportation infrastructure boosting economic opportunities throughout the region, for example by significantly reducing travel times and costs. In this study, we concentrate on quantifying the effects of some of the key linkages between upgraded infrastructure, economic growth, and poverty reduction. We model the impact of both reducing transport costs and improving trade facilitation in the GMS. Our findings suggest strong gains to the GMS countries as a result of infrastructure development and trade facilitation with national poverty reduced throughout the region. However, the impact on various segments of these populations differs, depending in part on factor returns.
    Keywords: greater mekong subregion; poverty reduction; infrastructure investment
    JEL: F15 I32 O12
    Date: 2010–08–03
  18. By: Guerrero, Pablo (Asian Development Bank Institute); Lucenti, Krista (Asian Development Bank Institute); Galarza, Sebastián (Asian Development Bank Institute)
    Abstract: <p>During the past few decades, the landscape of the world economy has changed. New trade patterns reflect the globalization of the supply chain and intra-industry trade, and increasing flows between neighboring countries and trading blocs with similar factor endowments. Similarly, the approach to production, trade, and transportation has evolved incorporating freight logistics as an important value-added service in global production. This integrated approach have become essential, and as such, both the trade agenda and freight logistics are beginning to converge providing an unparalleled opportunity for countries to deepen their integration with neighboring countries and their national performance in transport related services. Consequently, developing countries are finding themselves hard-pressed to adjust their policy agendas to take into account costs not covered in past rounds of trade negotiations. <p>This paper focuses on the importance of freight logistics in trade facilitation measures, examines the transport and logistics cost in international trade, addresses logistics performance in Latin America and the Caribbean and regional initiatives to advance the integration process and finally, exchanges views on the potential for trade logistics to impact the regional agenda and to deepen integration.
    Keywords: latin america caribbean trade; regional integration; infrastructure trade facilitation
    JEL: F15
    Date: 2010–08–02

This nep-dev issue is ©2010 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.