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on Development |
| By: | Cagatay Bircan; Tilman Brück; Marc Vothknecht |
| Abstract: | This paper analyses the distributive impacts of violent conflicts, which is in contrast to previous literature that has focused on the other direction. We use cross-country panel data for the time period 1960-2005 to estimate war-related changes in income inequality. Our results indicate rising levels of inequality during war and especially in the early period of postwar reconstruction. However, we find that this rise in income inequality is not permanent. While inequality peaks around five years after the end of a conflict, it declines again to prewar levels within the end of the first post-war period. Lagged effects of conflict and only subsequent adjustments of redistributive policies in the period of post-war reconstruction seem to be valid explanations for these patterns of inequality. A series of alternative specifications confirms the main findings of the analysis. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12910&r=dev |
| By: | Samuel Kobina Annim |
| Abstract: | This study argues that patterns, trends and drivers of the efficiency of microfinance institutions (MFIs) depend on the scope of financial sustainability measures and on MFIs’ inclination to either of the dual objectives of financial systems and outreach. A balanced panel data of 164 MFIs for the period 2004-08 is extracted from the MIX website for the study’s use. Both parametric and non-parametric efficiency estimation techniques are used. Contrary to a trade-off between financial efficiency and outreach, the latter tends to have a positive link with social efficiency. Negative effects of bureaucracies in property registration and lack of credit information on social efficiency are also observed. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12710&r=dev |
| By: | Sue Bowden; Paul Mosley |
| Abstract: | We investigate the historical roots of poverty, with particular reference to the experience of Africa during the 20th century. We find that institutional inheritance is an important influence on current underdevelopment; but in addition, we argue that the influence of policies on institutions is highly significant, and that in Africa at least, a high representation of European settlers in land ownership and policy-making was a source of weakness, and not of strength. We argue this thesis, using mortality rates as a proxy for poverty levels, with reference to two settler colonies – Zimbabwe and Kenya – and two peasant export colonies – Uganda and Ghana. Our findings suggest that in Africa, settler-type political systems tended to produce highly unequal income distributions and, as a consequence, patterns of public expenditure and investment in human and infrastructural capital which were strongly biased against smallholder agriculture and thence against poverty reduction. Peasant-export type political systems, on the other hand, produced more equal income distributions, whose policy structures and, consequently, production functions were less biased against the poor. As a consequence, liberalisation during the 1980s and 1990s produced asymmetric results, with poverty falling sharply in the ‘peasant export’ systems, and rising in settler economies. These contrasts in the evolution of poverty in the late 20th and early 21st centuries, we argue, can only be understood by reference to differences between the settler and peasant export economies, whose roots lie in political decisions taken 100 years previously. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12510&r=dev |
| By: | Miguel Niño-Zarazúa; Armando Barrientos; David Hulme; Sam Hickey |
| Abstract: | This paper provides an overview of the recent extension of social protection in sub- Saharan Africa. It identifies two main ‘models’ of social protection in the region: the Southern Africa and Middle Africa models. It then assesses the contrasting policy processes behind these models and examines the major challenges they face as regards financing, institutional capacity and political support. It concludes that, for an effective institutional framework for social protection to evolve in sub-Saharan African countries, the present focus on the technical design of social protection programmes needs to be accompanied by analyses that contribute to also ‘getting the politics right’. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:11610&r=dev |
| By: | Göran Holmqvist |
| Abstract: | The potential link between child-related cash transfers and increased fertility is often raised as an issue of concern when debating their use. Old-age pension is a form of cash transfer where theory would suggest the opposite impact, i.e. pensions equal decreasing fertility. A handful of Sub-Saharan African countries have introduced non-contributory social pensions that cover the great majority of the older population. It makes them into a distinct group in relation to the rest of the region where public old-age security arrangements, if existing at all, are largely reserved for the formal sector. This paper attempts to trace any impact these high-coverage pension schemes may have had on fertility. Findings suggest that there has been such an impact, in the range of 0,5 to 1,5 children less per woman depending on model specification. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:11910&r=dev |
| By: | Kunal Sen; Bibhas Saha; Dibyendu Maiti |
| Abstract: | There has been increasing ‘flexibilisation’, in the formal labour markets of both developed and developing countries. Labour institutions and globalisation are often taken to be causally related to this phenomenon, but the evidence remains inconclusive. In India, there has been an increasing use of temporary workers employed through contractors (contract workers), who are not represented by trade unions and who do not fall under the purview of the labour laws that are applicable to directly employed workers (formal workers) in formal labour markets. We develop a model of labour demand where firms choose a mix of contract workers and formal workers, rather than formal workers alone. Then we test the model using state-industry-year panel data for Indian manufacturing from 1998 to 2005. We find that both pro-worker labour institutions and increased import penetration lead to greater use of contract labour in Indian manufacturing. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12310&r=dev |
| By: | Manojit Bhattacharjee; Meenakshi Rajeev |
| Abstract: | Access by the poor to financial resources on favourable terms and conditions is a necessary prerequisite for achieving any developmental goal for an economy. However, in India, about 50 percent of the population are financially excluded from the formal banking network. These households avail loans from informal lenders, who generally impose unfavourable terms and conditions on the borrower. This paper, based on an in-depth analysis of National Sample Survey Organisation (59th round, All India Debt and Investment Survey, 2003) unit record data, seeks to understand the factors that influence the formation of interest rates in the developed region vis-àvis the less developed ones, as the latter are seen to experience higher rates of interest. Using an ordered logit model, our analysis shows how in the developed regions the lack of monopoly power of lenders brings down interest rate levels. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12610&r=dev |
| By: | Ralitza Dimova; Kunal Sen |
| Abstract: | What drives income diversification among rural households in developing countries? A large literature has examined whether household income diversification is a means of survival or a means of accumulation, which has so far remained inconclusive. This paper attempts to evaluate which explanation of household income diversification – diversification as survival or diversification as accumulation – stands up to empirical scrutiny. We use household panel data from Tanzania of approximately 800 households for four years and use fixed and random effects models to sweep out unobserved households’ attitudes to risk that may be correlated with household income diversification behaviour. We also use instrumental variable methods to address the possibility of reverse causality and that the household’s income status may be endogenous to its diversification behaviour. Our results suggest that the ‘diversification as accumulation’ motive of household income diversification seems to have stronger empirical validity in the Tanzanian context. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12210&r=dev |
| By: | Blessing M. Chiripanhura |
| Abstract: | This paper analyses poverty in three districts of Zimbabwe. It uses household data to argue that there are two dominant poverty traps individually and jointly afflicting households. It argues that asset poverty is less severe than income poverty. It further argues that assets indicate potential for future production, especially in the context of employment opportunities for the poor, and that this is the most potent and cost-effective strategy to fight poverty. It concludes by estimating household demand for labour, concluding that increasing non-farm incomes and ownership of a minimum bundle of productive assets is necessary for long-term poverty reduction. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:12110&r=dev |
| By: | Anirudh Krishna; Meri Poghosyan; Narayan Das |
| Abstract: | We develop a framework for assessing community-level development programmes, building upon five related elements that are centrally important: confidence, cohesion, capacity, connections and cash (the five ‘Cs’). We use this framework for evaluating the impacts over a six-year period (2002-2008) of an innovative programme, implemented in rural Bangladesh, which has assisted extremely poor households, literally the poorest of the poor. Asset transfers constitute the centrepiece of this multidimensional programme, which also supports training, organisation building, cash supports, microfinance, and so on. The provision of a substantial dose of assets has helped produce very positive results by and large. Impressive income gains have been achieved (and sustained) by the majority of assisted households. But vulnerability to downturns on account of negative events, such as illnesses and house damage, has resulted in asset losses for several assisted households. Better social protection measures will help complete the good work commenced by the asset transfer plan. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:13010&r=dev |
| By: | Wei Heyuan (Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto; OBEGEF) |
| Abstract: | The impact of human capital on foreign direct investment (FDI) has been assessed in an essentially descriptive manner. In general, most quantitative studies focus on the macroeconomic level, that is, the level of countries. Microeconomic studies, with firms as the unit of analysis, are scarce internationally and even more so in the case of China. Based on a survey performed on several innovative firms in China, this study assesses the importance of human capital in attracting FDI to China, and estimates is corresponding impact. This impact is analyzed based not only on the direct, but also the indirect effects of human capital, through the firms’ Research and Development (R&D) efforts and contacts with universities. Using a sample of 77 firms, and considering two proxies for human capital (general and specific), we concluded that even though human capital does not constitute a direct factor in attracting FDI to China, it is a positive indirect factor by way of R&D efforts. We have also established that knowledge infrastructures (universities) and physical infrastructures (transport network) comprise important factors to attract FDI. |
| Keywords: | Foreign Direct Investment (FDI); Human Capital; Research and Development (R&D); China |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:388&r=dev |
| By: | Yasser Abdih (International Monetary Fund; International Monetary Fund); Jihad Dagher (University of Southern California); Peter Montiel (Williams College) |
| Abstract: | This paper addresses the complex and overlooked relationship between the receipt of workers’ remittances and institutional quality in the recipient country. Using a simple model, we show how an increase in remittance inflows can lead to deterioration of institutional quality – specifically, to an increase in the share of funds diverted by the government for its own purposes. In a cross section of 111 countries we empirically verify this proposition and find that a higher ratio of remittances to GDP leads to lower indices of control of corruption, government effectiveness, and rule of law, even after controlling for potential reverse causality. |
| Keywords: | Remittances, Institutions, Corruption |
| JEL: | D02 D64 F02 F22 F24 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2010-15&r=dev |
| By: | Servaas van der Berg (Department of Economics, University of Stellenbosch) |
| Abstract: | This paper describes and analyses current poverty and income distribution in South Africa, with a central concern the relationship between poverty, inequality and growth. The paper also investigates patterns of and trends in poverty and income distribution, a literature with a long and distinguished history. Drawing from recent literature in this regard, the paper shows that the labour market – rather than access to wealth or to political and fiscal power – currently sets the limits to redistribution. Wage inequality, deeply rooted in South Africa’s history, plays a central role in overall income distribution, and patterns of human capital development are fundamental to the future growth path and therefore to poverty and income distribution. The paper therefore concludes that reducing inequality substantially is currently unlikely without a massive increase in the human capital of those presently poor, but that prospects in this regard are inauspicious. |
| Keywords: | South Africa, poverty, income distribution, labour market |
| JEL: | O15 D31 D63 J31 N37 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers121&r=dev |
| By: | Webster, Douglas; Bertaud, Alain; Jianming,Cai; Zhenshan, Yang |
| Abstract: | Land efficiency in urban China is examined, using Tianjin as a case study, from the perspective of agricultural land conservation; reduction in energy use, conventional pollution, and greenhouse gas emissions; and human time savings. Issues addressed include increased scatter on the periphery, over-consumption of industrial land, over fiscal dependence on land sales, and loss of valuable agricultural and environmental services land. Policy implications discussed include the need for greater variation in urban densities (leveraging already high densities in urban China – one-third the global median), less broad-brush agricultural land conservation policies, higher floor area ratios near rapid transit stations, etc. |
| Keywords: | China, land conversion, land efficiency, land use policy, urban density |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-97&r=dev |
| By: | Fosu, Augustin K. |
| Abstract: | Analysing a large sample of 1980–2004 unbalanced panel data, the current study presents comparative global evidence on the role of (income) inequality in poverty reduction. The evidence involves both an indirect channel via the tendency of high inequality to decrease the rate at which income is transformed to poverty reduction and the tendency of rising inequality to increase poverty. Based on the basic needs approach, an analysis-of-covariance model is estimated, with the headcount measure of poverty as the dependent variable and the Gini coefficient and PPP-adjusted mean income as explanatory variables. The study finds that the responsiveness of poverty to income growth is a decreasing function of inequality and that the income elasticity of poverty is actually smaller than the inequality elasticity. Thus, income distribution can play a more important role than might be traditionally acknowledged. Found also is a large variation across regions (and countries) in the poverty effects of inequality. |
| Keywords: | inequality, income, poverty, comparative global evidence |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-93&r=dev |
| By: | Thurlow, James; Tarp, Finn; McCoy, Simon; Hai, Ngugyen Manh; Breisinger, Clemens; Arndt, Channing |
| Abstract: | Economic growth in Vietnam has been fairly resilient to the global commodity and financial crises, but it is unclear why. In addition, the impact of the crises on employment and poverty is in dispute. We develop a dynamic computable general equilibrium model to decompose impacts and estimate distributional outcomes. Our results indicate that the 2008 commodity crisis increased employment and reduced poverty by favouring labour-intensive exports, especially in agriculture. The 2009 financial crisis reversed these gains. It pushed more than a million workers into unemployment and about 3 million people below the US$2-a-day poverty line, with the vast majority of these being rural dwellers. The net effect of the crises left Vietnam little changed from a baseline (no crises) path in terms of aggregate indicators including the poverty rate. An effective stimulus package has the potential to offset one third of the increase in poverty caused by the financial crisis leaving poverty rates below the (no crises) baseline. |
| Keywords: | Economic crisis, growth, poverty, Vietnam |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-98&r=dev |
| By: | Camacho, Andriana; Rodriguez, Catherine |
| Abstract: | This paper uses two unique panel data sets to study the causal effect that armed conflict has over entrepreneurial activity in Colombia. Using a fixed effect estimation methodology at the plant level and controlling for the possible endogeneity of armed conflict through the use of instrumental variables, we find that a one standard deviation in the number of guerrilla and paramilitary attacks in a municipality increases the probability of firm exit in 8.1 percentage points. This effect is stronger for smaller plants and has a differential impact with respect to firms’ age. |
| Keywords: | conflict, firm exit, entrepreneurship, Colombia |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-94&r=dev |
| By: | Fosu, Augustin K. |
| Abstract: | The present study examines the degree to which income distribution affects the ability of economic growth to reduce poverty, based on 1990s data for a sample of rural and urban sectors of African economies. Using the basic needs approach, an analysis-ofcovariance model is derived and estimated, with the headcount, gap and squared gap poverty ratios serving as the respective dependent variables and the Gini coefficient and PPP-adjusted incomes as explanatory variables. The study finds that the responsiveness of poverty to income growth is a decreasing function of inequality, albeit at varying rates for the three poverty measures: lowest for the headcount, followed by the gap and fastest for the squared gap. The ranges for the income elasticity in the sample are estimated at: 0.02-0.68, 0.11-1.05 and 0.10-1.35, respectively, for these poverty measures. Furthermore while, on average, the responsiveness of poverty to income growth appears to be the same between the rural and urban sectors, there are substantial sectoral differences across countries. The results suggest the need for country-specific emphases on growth relative to inequality, with special attention accorded the possible rural-urban dichotomy. |
| Keywords: | Income distribution, income growth, poverty, rural and urban African economies |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-92&r=dev |
| By: | Channing, Arndt; Jones, Sam; Tarp, Finn |
| Abstract: | The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro and meso-levels, recent literature doubts the ability of foreign aid to foster economic growth and development. This paper assesses the aid-growth literature and, taking inspiration from the program evaluation literature, we re-examine key hypotheses. In our findings, aid has a positive and statistically significant causal effect on growth over the long run, with confidence intervals conforming to levels suggested by growth theory. Aid remains a key tool for enhancing the development prospects of poor countries. |
| Keywords: | Foreign aid, growth, aid effectiveness, causal effects |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-96&r=dev |
| By: | Arvin-Rad, Hassan (University of Illinois at Urbana-Champaign); Basu, Arnab K. (College of William and Mary); Willumsen, Maria (Florida International University) |
| Abstract: | Within a general equilibrium framework of a developing economy with a foreign owned factor of production, this paper questions whether the informal-formal sector relationship is pro-cyclical/ complementary – expansion or contraction in one necessarily implies an expansion or contraction in the other – when the informal sector is subject to a technological shock. We derive a necessary and sufficient condition under which a positive shock to the informal sector results in a contraction in both the size of the urban formal sector and the informal sector. Thus, although our result shows that the informal-formal sector relationship is pro-cyclical, it nevertheless calls into question the conventional wisdom on the benefits of intervention in the informal sector of developing economies, particularly where multinational corporations sub-contract certain labor intensive stages of production to the informal sector. |
| Keywords: | Within a general equilibrium framework of a developing economy with a foreign owned factor of production, this paper questions whether the informal-formal sector relationship is pro-cyclical/ complementary – expansion or contraction in one necessarily implies an expansion or contraction in the other – when the informal sector is subject to a technological sho, although our result shows that the informal-formal sector relationship is pro-cyclical, it nevertheless calls into question the conventional wisdom on the benefits of intervention in the informal sector of developing economies, particularly where multinational corporations sub-contract certain labor intensive stages of production to the informal sector. |
| JEL: | J8 R13 R23 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5229&r=dev |
| By: | José Vicente Blanes (Universidad Pablo de Olavide) |
| Abstract: | International trade can foster economic development. This paper examines the link between immigration from developing countries to OECD countries and their bilateral trade; it also explores some possible mechanism behind this link. It uses a gravity equation for trade augmented by an immigrant stock variable and a set of control variables. The immigrants’ variable enters the estimated equation in different ways depending on immigrants’ relevant characteristics both individual and non individual-specific. Results show that in developing countries there is a positive link between immigration and both exports and imports. We find evidence for the trade transaction cost channel but not for the preference one. We identify the social or ethnic network effect as the mechanism behind this link since immigrants related to business activities are the ones who have a positive effect on bilateral trade. |
| Keywords: | International Trade, Migration, Economic Development. |
| JEL: | F10 F22 O10 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:aee:wpaper:1007&r=dev |
| By: | Christian Lehmann |
| Abstract: | High levels of inequality are a persistent feature of many rural areas in the developing world. Rural inequality is correlated with major impediments of rural development, such as crime, elite-capture, and lack of collective action. Government transfer programs, such as conditional cash transfer, unemployment insurance, old-age pension or similar programs that target the lower tail of a village's cumulative welfare distribution function have become a very popular public policy to tackle poverty and inequality in rural areas. While the poverty impacts of those programs are well documented in the literature less attention has been given to the redistributive capacity of such policies at the village level. Among the main reasons for the neglect is a common belief that monetary transfers to the lower tail of the village welfare distribution (i.e. "the poor"), while excluding the upper tail (i.e. "the rich") from the program, must lead to a reduction in inequality. In this paper we show that the impact of such programs on reducing rural inequality may be lower than previously thought. This is because program-eligible lower and program-ineligible upper tail do not behave in isolation from each other. They are linked via interactions in credit & insurance, as well as factor & commodity markets. If, consequently, a government transfer triggers the lower tail to shift then the upper tail follows, leading to modest reductions in local inequality. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2010-32&r=dev |
| By: | Rana Hasan (Asian Development Bank); Karl Robert L. Jandoc (School of Economics, University of the Philippines Diliman) |
| Abstract: | We examine the role of trade liberalization in accounting for increasing wage inequality in the Philippines from 1994 to 2000--a period over which trade protection declined and inequality increased dramatically. Using the approach of Ferreira, Leite, and Wai-Poi (2007), we find that trade-induced effects on industry wage premia and industry-specific skill premia account for an economically insignificant increase in wage inequality. A more substantial role for trade liberalization comes through trade-induced employment reallocation effects whereby reductions in protection appear to have led to a shift of employment to more protected sectors, especially services where wage inequality tended to be high to begin with. Nevertheless, the key drivers of wage inequality appear to be changes in economy-wide returns to education and changes in industry membership over and above those accounted for by our estimates of trade-induced employment reallocation effects. In order for trade liberalization to account for a relatively large portion of the increases in wage inequality, it would have to be a major determinant of the changes in economy-wide returns to education. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201006&r=dev |
| By: | Arsenio M. Balisacan (School of Economics, University of the Philippines Diliman); Sharon Piza (Asia Pacific Policy Center); Dennis Mapa (University of the Philippines School of Statistics); Carlos Abad Santos (Asia Pacific Policy Center); Donna Odra (Asia Pacific Policy Center) |
| Abstract: | Anecdotal evidence permeates accounts on the impact of the global economic crisis (GEC) on Philippine poverty. This study systematically assesses the evidence and recent data. It adopts a somewhat eclectic approach, applying regression and decomposition techniques to trace the GEC impact on GDP and its major components, constructing panel data from nationally representative household surveys to trace the changes in household welfare during the crisis, and combining national income accounts and household survey data to simulate the differential effects of the crisis across population groups and social divides. Empirical findings suggest that although the Philippine economy did not slide to recession during the GEC, the impact of the crisis on the economy and poverty across population groups was nonetheless severe -- and may linger for many years to come. |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201008&r=dev |
| By: | Joseph J. Capuno (School of Economics, University of the Philippines Diliman) |
| Abstract: | Many developing countries exhibit imbalanced spatial development, but corrective policies are hampered by lack of adequate sub-regional development data. Building on the insights of the factor price equalization theorem and by applying measures of spatial autocorrelation on land values, patterns of local development and linkages in the Philippines are traced. Evidence of convergence in provincial and urban land values is found in 1986-2000, although the clustering is more local than global. Thus, greater infrastructure investments and use of land values by local governments as policy guides should be made to facilitate in-country trade and migration, and to disperse growth. |
| Keywords: | Spatial development, land values, convergence, Philippines |
| JEL: | O18 R12 R14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201001&r=dev |
| By: | Suma Scaria |
| Abstract: | This paper makes an attempt at understanding why inequalities continue to exist in the educational profile of the population despite high literacy, universal enrollment in schools and relatively better infrastructural facilities. In this connection, the questions relating to entry barriers in higher education and labour market outcomes gain considerable significance. |
| Keywords: | kerala, village, population, literacy, enrollment, schools, educational, infrastructural, entry barriers, education, labour market, inequalities, access, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3013&r=dev |
| By: | Prabir De |
| Abstract: | This study is a comprehensive, empirical analysis of the linkages between governance, institutions, and regional infrastructure. The empirical results indicate that governance and institutions are crucial for regional infrastructure development: every one point improvement in governance results in a 1 to 1.5 point rise in regional infrastructure. Countries (and regions) with higher income, stronger institutions, better governance, and more open economies are likely to have higher levels of regional infrastructure. The findings of this paper suggest that our efforts to promote regional infrastructure must not be limited to traditional policy measures aimed at attracting investment in infrastructure, but must also address policy reform across a number of areas. Thus, institutions and governance must play an important complementary role in strengthening Asia’s regional infrastructure. [ADBI Working Paper 183] |
| Keywords: | comprehensive, governance, institutions, development, traditional, policy measures |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3029&r=dev |
| By: | Farzana Afridi; Sherry Xin Li; Yufei Ren |
| Abstract: | They conduct an experimental study to investigate the causal impact of social identity on individuals' response to economic incentives. They focus on China‟s decades old household registration system, or the hukou institution, which categorizes citizens into urban and rural residents, and favors the former over the latter in resource allocation. Their results indicate that making individuals' hukou status salient and public significantly reduces the performance of rural migrant students on an incentivized cognitive task by 10 percent. This leads to a leftward shift of their earnings distribution – the proportion of rural migrants below the 25th earnings percentile increases significantly by almost 19 percentage points. [Working Paper No. 190] |
| Keywords: | social identity, hukou, inequality, field experiment, China |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3003&r=dev |
| By: | Nicola Jones; Carol Watson; Caroline Harper |
| Abstract: | Childhood, adolescence and early adulthood remain for many girls and young women a period of deprivation, danger and vulnerability, resulting in a signifcant lack of agency and critical development defcits. In many cases, overlapping and intersecting experiences of deprivation, foregone human development opportunities and abuse or exploitation serve to perpetuate and intensify poverty for girls and women over the life-course. Girls’ vulnerabilities in relation to poverty dynamics are diferent to those of boys and to those of adult women. This is in part because of their relative powerlessness and the particularities of their life stage. What happens at this critical time in their lives can reinforce their poverty status and that of their of spring, or infuence their movement into or out of poverty. |
| Keywords: | Childhood, adolescence, adulthood, intersecting experiences, dynamics, poverty |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3020&r=dev |
| By: | Rehman Sobhan |
| Abstract: | This paper argues that poverty originates in the structural injustices of a social order which incapacitates the poor from participating in the growth generating sectors of the economy and leaves them captives in the so called informal sector, characterized by low productivity and low earning capacity. In such a system the poor remain individualized and hence disempowered which compels them to interface with the market economy on highly inequitable terms which relegates them to the lowest tiers of the value addition chain. The need for a macro-policy designed to eliminate poverty is premised on the argument that poverty originates in the structural features of society which can only be addressed at the macro-level. Policy interventions, to redesign the structural sources of poverty, bring into consideration issues of social, political as well as economic reform. [Discussion Paper No. 2005/03] |
| Keywords: | Bangladesh, cooperatives, institutions, land, micro-credit, women |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3025&r=dev |
| By: | Cuong, Nguyen Viet; Truong, Tran Ngoc; van der Weide, Roy |
| Abstract: | The objective of the paper is to update the small area estimates of poverty and inequality for rural Vietnam. The new estimates of province and district level poverty for the year 2006, when combined with estimates available for 1999, allow for examination of how poverty has changed in rural Vietnam over the past seven years. The analysis finds that all provinces across the country experienced a noticeable reduction in rural poverty during the period 1999-2006. Some of the largest reductions in poverty are observed for provinces with poverty rates close to the national average. The poorest provinces have also experienced reductions in poverty, albeit at a more modest pace. Provinces and districts with lower levels of inequality in 2006 have seen above average poverty reductions. The authors consider both expenditure and income based measures of poverty and inequality, and find the results to be very similar. |
| Keywords: | Rural Poverty Reduction,Regional Economic Development,Achieving Shared Growth,Services&Transfers to Poor |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5443&r=dev |
| By: | Thomas Markussen (Department of Economics, University of Copenhagen) |
| Abstract: | Political parties can be vehicles for economic and social development in poor countries. They can also serve as rent seeking instruments. Uncovering how parties function is therefore key to establishing the preconditions for good governance. The paper discusses when and why clientelism on the basis of party affiliation may arise. Operationally, party-based clientelism is defined as a bias of public policy in favour of members of the governing political party. In a sample of local governments in India, party-based clientelism is shown to exist in two out of four states and to be strongly affected by economic inequality. |
| Keywords: | decentralization; patronage; clientelism; inequality; poverty; India |
| JEL: | D31 D72 H7 O1 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1026&r=dev |
| By: | Tisdell, Clem |
| Abstract: | Secondary data are used to discuss and compare the consequences for agriculture of economic growth and transition in Vietnam and China. It is found that China and Vietnam have experienced similar adjustments in their agricultural sectors and face at this time, similar agricultural policy problems. China began its economic reforms in 1979 and Vietnam followed in 1986. Since then both countries have experienced rapid economic growth, falling poverty rates and significant rises in per capita income. At the same time, substantial restructuring of their economies has occurred, a feature of which has been a decline in the relative contribution of agriculture to total employment and output. These changes are outlined. Significant changes have also occurred within the agricultural sectors of China and Vietnam and these are reviewed. In both countries, the livestock sector has grown in relative importance. Households are the main contributors to agricultural production but their individual holdings of land are small by Western standards and households keeping livestock mostly only hold a few head. Given the exit of farmers from agriculture, pressures are mounting for increasing the size of agricultural units. This exit can add to economic efficiency and growth. Policies to facilitate movements from farm to non-farm employment are discussed and analysed. Property rights and the marketability of agricultural land can facilitate such movements and contribute to economic efficiency. In recent times, China and Vietnam have extended property rights in agricultural land and have increased its marketability. These measures are outlined. With further economic development and transition, it is predicted that these rights and the marketability of agricultural land will be further extended. However, if previous practice is followed, those policy changes are likely to be gradual. |
| Keywords: | Agricultural development, Asia, China, economic transition, farm employment, land reforms, land rights, livestock, non-farm employment, structural change., Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, Livestock Production/Industries, O25, O5, P32, Q1, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseee:94305&r=dev |
| By: | Celia Reyes; Alellie Sobreviñas; Jeremy de Jesus (Philippine Institute for Development Studies) |
| Abstract: | The recent global financial and economic crisis which started in the United States and expanded to other developed countries has, to some extent, affected developing countries as well. Given the vulnerability of most developing countries, it is important to monitor the impact of this global crisis on poverty. This study, therefore, aims to assess the impact of the crisis on poverty in the Philippines. The result of this study would serve as inputs to policymakers in prioritizing mitigating measures that would address the impact of the crisis. In this study, monitoring is done primarily through the conduct of CBMS surveys in selected sentinel sites. Household- and community-level data were collected to capture the different dimensions of poverty. In addition to the CBMS core indicators, specific indicators (including the outcome and impact indicators) were monitored to determine the impact of the global crisis. These indicators were identified based on the relevant key transmission channels for the Philippines including overseas employment and remittances, and local employment. The study also looked at the different coping mechanisms adopted by the households in response to the crisis. The study also attempted to identify who are able to access the programs which were being implemented in the community. Ten (10) barangays all over the Philippines were selected to serve as poverty observatories or sentinel sites for monitoring the impact of the global crisis. Selection of these sites was also based on the relevant transmission channels for the Philippines. Results reveal that although the impact of the crisis is generally minimal, the crisis has affected some specific sectors in the economy. The degree of impact also varies among different groups of households. Hence, policies should be designed to mitigate the impact of the crisis on these affected sectors and groups of households. |
| Keywords: | global financial and economic crisis, poverty impact, community-based monitoring system (CBMS), impact transmission channels, CBMS indicators, household-coping strategies, program targeting, leakages and exclusion |
| JEL: | G10 O10 G39 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:2308&r=dev |
| By: | Hélène EHRHART (Centre d'Etudes et de Recherches sur le Développement International) |
| Abstract: | This paper goes beyond traditional political budget cycles studies by considering the impact of the election calendar on the composition of tax revenue (direct taxes versus indirect taxes) rather than on the global level. We develop a theoretical model, based on Drazen and Eslava (2010) to predict how the taxation structure will be modif ied during election years. Using a panel of 56 developing countries over 1980-2006, our study reveals clear patterns of electorally timed interventions. We found robust evidence that indirect taxes decreases are the preferred vehicle for incumbents in de veloping countries to increase their popularity just before elections. On average, they are falling of 2.6 percent in an election year while the direct taxes remain unchanged. These manipulations constitute reversals in the developing countries' tax reforms aim- ing at broaden tax bases and increase tax mobilization and point at the importance of both good fiscal institutions and fiscal discipline. |
| Keywords: | Political budget cycles, Tax structure, developing countries |
| JEL: | O10 E62 D72 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1204&r=dev |
| By: | Orazio Attanasio (Institute for Fiscal Studies and University College London); Valérie Lechene (Institute for Fiscal Studies and University College London) |
| Abstract: | <p>We examine the effect of large cash transfers on the consumption of food by poor households in rural Mexico. The transfers represent 20% of household income on average, and yet, the budget share of food is unchanged following receipt of this money. This is an important puzzle to solve, particularly so in the context of a social welfare programme designed in part to improve nutrition of individuals in the poorest households. We estimate an Engel curve for food. We rule out price increases, changes in the quality of food consumed and homotheticity of preferences as explanations for this puzzle. We also show that food is a necessity, with a strong negative effect of income on the food budget share. The decrease in food budget share caused by the large increase in income is cancelled by some other relevant aspect of the programme so that the net effect is nil. We argue that the program has not changed preferences and that there is no labelling of money. We propose that the key to the puzzle resides in the fact that the transfer is put in the hands of women and that the change in control over household resources is what leads to the observed changes in behaviour.</p> |
| Keywords: | Demand, conditional cash transfer, Engel curves, income elasticities, QUAIDS, food, nutrition. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:10/17&r=dev |