nep-dev New Economics Papers
on Development
Issue of 2011‒08‒09
twenty-two papers chosen by
Mark Lee
Towson University

  1. Improving aid effectiveness in aid-dependent countries : lessons from Zambia By Monica Beuran; Gaël Raballand; Julio Revilla
  2. Who benefits the most from peer effects within ethnic group ? Empirical evidence on the South African Labour Market By Gaëlle Ferrant; Yannick Bourquin
  3. Measuring the contribution of extractive industries to local development : the case of oil companies in Nigeria By Abdou Kâ Diongue; Gaël Giraud; Cécile Renouard
  4. Efficiency in Saving Infant Lives: the Influence of Water and Sanitation Coverage By Gustavo Ferro; Carlos A. Romero; Ignacio Castiglione,
  5. Income Redistribution in Urban China by Social Security System: An Empirical Analysis Based on Annual and Lifetime Income By Lixin He; Hiroshi Sato
  6. Recalibrating Development Co-operation: How Can African Countries Benefit from Emerging Partners? By Myriam Dahman Saidi; Christina Wolf
  7. Lasting welfare effects of widowhood in a poor country By van de Walle, Dominique
  8. The"resource curse"in MENA ? political transitions, resource wealth, economic shocks, and conflict risk By Ross, Michael; Kaiser, Kai; Mazaheri, Nimah
  9. Measuring aversion to debt: an experiment among student loan candidates By Caetano, Gregorio; Patrinos, Harry A.; Palacios, Miguel
  10. Efficiency in public procurement in Rural Road Projects of Nepal By Benamghar, Radia; Iimi, Atsushi
  11. Commitments to save : a field experiment in rural Malawi By Brune, Lasse; Gine, Xavier; Goldberg, Jessica; Yang, Dean
  12. Who is vouching for the input voucher ? decentralized targeting and elite capture in Tanzania By Pan, Lei; Christiaensen, Luc
  13. Does parental disability matter to child education ? evidence from Vietnam By Cuong, Nguyen Viet; Mont, Daniel
  14. What did the Maoists ever do for us ? education and marriage of women exposed to civil conflict in Nepal By Valente, Christine
  15. War and women's work : evidence from the conflict in Nepal By Menon, Nidhiya; Rodgers, Yana van der Meulen
  16. The labor market, education and armed conflict in Tajikistan By Shemyakina, Olga N.
  17. When Does Ethnic Diversity Lead to Violence? Evidence from the 2007 Elections in Kenya By Thomas Markussen; Kitavi Mbuvi
  18. Development in the Midst of Drought: Evaluating an Agricultural Extension and Credit Program in Nicaragua. By Mullally, Conner
  19. Institutions, macroeconomic policy and foreign direct investment: South Asian countries case By Azam, Muhammad; Khan, Hashim; Hunjra, Ahmed Imran; Ahmad, H. Mushtaq; Chani, Muhammad Irfan
  20. The 'Out of Africa' Hypothesis, Human Genetic Diversity, and Comparative Economic Development By Ashraf, Quamrul; Galor, Oded
  21. China and India as Suppliers of Affordable Medicines to Developing Countries By Tamara Hafner; David Popp
  22. Trade and Inequality in India By Pravin Krishna; Guru Sethupathy

  1. By: Monica Beuran (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, World Bank Country Office in Zambia - LUNWB); Gaël Raballand (World Bank Country Office in Zambia - LUNWB); Julio Revilla (World Bank Country Office in Zambia - LUNWB)
    Abstract: Zambia was a middle-income country when it achieved independence from Great Britain in 1964. After decades of international aid Zambia has become a low-income country, and its per capita GDP is only now returning to the levels it had reached over forty years ago. While aid is far from the only variable at work in Zambia's development, its impact has been questionable. This paper examines the issue of aid effectiveness in Zambia, especially in terms of how the incentive structure faced by donors may lead to decreased accountability and inadequate concern for long-term outcomes, rendering aid less beneficial. The paper concludes by proposing a revised approach to the provision and use of international aid in Zambia, as well as in other aid-dependent countries in Sub-Saharan Africa.
    Keywords: Aid effectiveness, Zambia, donors, projects, aid incentives.
    Date: 2011–07
  2. By: Gaëlle Ferrant (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Yannick Bourquin (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: This paper provides evidence that local social interactions within etnic groups may explain the puzzling variations in labour-market outcomes across individuals. Peer effects work first by creating pressure on labor-market participation, second, by conveying information about job opportunities and by raising wages. These effects differ through a selection effect : gender and ethnic groups who are less integrated in the labour market benefit more from peer effect. Finally, networks exhibit decreasing returns. The problems of endogeneity and simultaneity of local peer effects are addressed by using (i) data aggregated at the province level, (ii) the distribution of the sex of the peers' siblings as an instrumental variable and (iii) a quasi-panel data approach relying on the Hausman-Taylor estimator. The importance of social interactions in the labour market suggests that a social multiplier exists and our estimates show that any labour-market shock is magnified with an elasticity of 0.5.
    Keywords: Peer effects, development economics, labour, South Africa.
    Date: 2011–07
  3. By: Abdou Kâ Diongue (UFR SAT - Université Gaston Berger de Saint-Louis Sénégal - Université Gaston Berger de Saint-Louis); Gaël Giraud (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, ESCP-Europe - Campus de Paris); Cécile Renouard (ESSEC - ESSEC Business School)
    Abstract: Extractive industries face two main challenges in terms of CSR and poverty reduction : 1) recognize that societal activity is part of their core business ; 2) take part in socio-economic projects that contribute to their stakeholders' empowerment and not only to their living conditions. Based on surveys achieved in Nigeria in 2008, the paper presents two societal performance indices meant to be complementary : the Poverty Exit Index (PEI) and the Relational Capability Index (RCI). We show that, while they have fostered the PEI of the local communities, the development projects of the oil companies had a rather negative impact on their RCI. We then identify key variables that can influence positively the RCI and on which a sensible development policy should focus.
    Keywords: Development indices, capability approach, relational capability, development, poverty, impact assessment.
    Date: 2011–07
  4. By: Gustavo Ferro (Instituto de Economía UADE and CONICET - FACE UADE); Carlos A. Romero (Instituto de Economía UADE - UADE); Ignacio Castiglione, (Departamento de Economía UADE - FACE)
    Abstract: In this paper, we aim to assess the relationship between water and sanitation coverage and saved infant lives. Our hypothesis is that extended coverage implies measurable results in terms of reduced infant mortality. Moreover, we suspect that with the same resources, ceteris paribus, different countries can achieve better or worst results depending on the efficiency which the resources are used. We explore the policy consequences, simulating the effects that improvements in efficiency can yield in terms of the reduction in child mortality. Our approach is first to explore with a database of Latin American countries the "production function" of survivor infants on 1,000 births. Once we identify the causal relationship with an econometric model, we estimate a production frontier with Data Envelopment Analysis in order to determine the best performers: countries which can do better with the same "inputs". Finally, we simulate the consequence of catching up to the frontier in each country. The impressive quantitative results are interesting for policy concerns, since efficiency is reconciled with equity (in the sense that the winners of the coverage increases and the health improvements are the poorer).
    Keywords: water; sanitation; health
    Date: 2011–08–01
  5. By: Lixin He; Hiroshi Sato
    Abstract: This study investigates the redistributive effect of the social security reform in urban China using the nationally representative urban household surveys in 1995 and 2002. The main findings are as follows. First, public pension is the main income for the elderly in urban China. Majority of people aged 60 and over (72% in 1995, 82% in 2002) have pension. Second, the social security system in urban China improved the income of low-income and older age groups and reduced the relative poverty rate. However, the redistributive effect did not offset the expanding income inequality, which resulted in the Gini coefficient of redistributed income in 2002 being higher than that in 1995. Third, during 1995 and 2002, both low income group and high income group get positive net benefit from social security system, but the net benefit is increasing with income. There is an adverse income transfer in social security system no matter measured on annual income or lifetime income. Fourth, assuming that the reformed policy were applied to public sector employees, the long-term redistributive effect of the pension system for the working population, as calculated using their lifetime income, would be larger.
    Keywords: lifetime income, income redistribution, social security, pension, China
    JEL: E21 H55 P43
    Date: 2011–07
  6. By: Myriam Dahman Saidi; Christina Wolf
    Abstract: With the recent boost of emerging economies in African economic relations, a different philosophy of development co-operation is progressively gaining momentum. Indeed, there are critical differences in the way development co-operation is provided by traditional and emerging partners. For the latter, aid is only one element of a broader economic engagement toolbox. These new realties on the ground mark a qualitative change in the provision of development co-operation both in terms of sectoral allocation and modalities of delivery, which in turn impacts on outcomes as well as the challenges for the recipient countries. We evaluate concerns often raised in this respect (e.g. the lack of policy conditionality destroying Western efforts to promote better governance) and stress that a new set of challenges emerges for African governments in the light of these different engagement modalities. The challenges for African governments to make the most of the new modes of co-operation could be summarised as follows: i) to define a clear strategy; ii) to ensure maintenance; and iii) to enhance their bargaining position.<BR>L’augmentation des relations économiques entre l’Afrique et les partenaires émergents rend plus claire la différence de concept qui sous-tends la coopération au développement offerte par les partenaires traditionnels et émergeants. Dans la philosophie des partenaires émergents l’aide n’est qu’un élément d’une boite à outils beaucoup plus large. Ces nouvelles réalités de terrains sont la marque d’un réel changement qualitatif dans l’offre de coopération au développement, aussi bien en termes d’allocation sectorielle des ressources que de modalités d’approvisionnement, ce qui a un impact sur les résultats et sur les défis auxquels les pays bénéficiaires auront à faire face. Ce rapport analyse les sujets d’inquiétudes récurrents (comme par exemple l’absence de conditionnalité politique qui pourrait détruire les efforts des partenaires occidentaux pour promouvoir la bonne gouvernance) et souligne l’émergence de nouveaux défis pour les gouvernements africains à la lumière de ces différentes modalités. Afin de tirer tout l’avantage de ces nouveaux modes de coopération les gouvernements africains devront : définir une stratégie explicite, assurer la maintenance et renforcer leur pouvoir de négociation.
    Keywords: development co-operation, emerging partners, coopération pour le développement, partenaires émergeants
    JEL: F21 F3 O16 O19 O55 Q3
    Date: 2011–07
  7. By: van de Walle, Dominique
    Abstract: Little is known about the situation facing widows and their dependent children in West Africa especially after the widow remarries. Women in Malian society are vulnerable to the loss of husbands especially in rural areas. Households headed by widows have significantly lower living standards on average than male or other female headed households in both rural and urban areas; this holds both unconditionally and conditional on observable household and individual characteristics including age. Furthermore, the adverse welfare effects of widowhood appear to persist even after widows are absorbed into male headed households. An examination of individual measures of well-being further reveals that, relative to other women, worse outcomes for ever-widowed women persist through remarriage. These detrimental effects are passed on to children, indicating an intergenerational transmission of poverty stemming from widowhood.
    Keywords: Gender and Law,Population Policies,Gender and Development,Population&Development,Anthropology
    Date: 2011–07–01
  8. By: Ross, Michael; Kaiser, Kai; Mazaheri, Nimah
    Abstract: The recent political upheavals in the Middle East and North Africa region have exposed growing concerns about conflict risk, political stability, and reform prospects across its societies. Given the prevalence of oil and gas resource endowments in the region, which a voluminous literature suggests can be associated with adverse development consequences, this paper examines the interplay between their associated rents and political economy trajectories. The contribution of the paper is threefold: first, to examine the quantitative evidence of violent conflict in the region since 1960; second, to provide a nuanced review of the regional case study literature on the relationship between resource endowments, political stability, and conflict risk; and third, to assess how prospective political transitions have implications for the World Bank Group's work in the region on public sector management and private sector development. The authors find that resources and regimes have intersected to provide stability and limited violent conflict in the region, but that these development patterns have yielded a set of policy choices and development patterns that are proving increasingly brittle and unsustainable. A major institutional challenge for reforms will be to consolidate a requisite degree of inter-temporal credibility and stability in these regimes, while expanding inclusiveness in state-society relations.
    Keywords: Environmental Economics&Policies,Post Conflict Reconstruction,Economic Theory&Research,Labor Policies,Emerging Markets
    Date: 2011–07–01
  9. By: Caetano, Gregorio; Patrinos, Harry A.; Palacios, Miguel
    Abstract: This paper reports the results of an experiment designed to test for the presence of debt aversion. The population who participated in the experiment were recent financial aid candidates and the experiment focused on student loans. The goal is to shed new light on different aspects of the perceptions with respect to debt. These perceptions can prevent agents from choosing an optimal portfolio or from undertaking attractive investment opportunities, such as in education. The study design disentangles two types of debt aversion: one that is studied in the previous literature, which encompasses both framing and labeling effects, and another that controls for framing effects and identifies only what we denote labeling debt aversion. The results suggest that participants in the experiment exhibit debt aversion, and most of the debt aversion is due to labeling effects. Labeling a contract as a"loan"'decreases its probability of being chosen over a financially equivalent contract by more than 8 percent. The analysis also provides evidence that students are willing to pay a premium of about 4 percent of the financed value to avoid a contract labeled as debt.
    Keywords: Access to Finance,Debt Markets,Bankruptcy and Resolution ofFinancial Distress,Economic Theory&Research,Tertiary Education
    Date: 2011–07–01
  10. By: Benamghar, Radia; Iimi, Atsushi
    Abstract: Transport infrastructure is important for economic growth. In Nepal, about 20 percent of rural residents have to spend more than 3 hours to go to the nearest marketplace or agriculture center. Public procurement is an important policy instrument to use resources wisely and efficiently. This paper analyzes a series of policy questions, from procurement design to contract management and project quality assurance. The paper finds that the competition effect is significant. To enhance competition, bidding documents can be distributed free of charge on a website. The bid preparation period can be extended. Security issues are also found to be particularly important to avoid unnecessary cost overruns and project delays. Heavy rainfall and the bidders'low-balling strategy are identified as other factors of project delays. The quality of roads would deteriorate with not only security incidence but also time, precipitation and traffic volume.
    Keywords: Transport Economics Policy&Planning,Government Procurement,Debt Markets,Investment and Investment Climate,Post Conflict Reconstruction
    Date: 2011–07–01
  11. By: Brune, Lasse; Gine, Xavier; Goldberg, Jessica; Yang, Dean
    Abstract: This paper reports the results of a field experiment that randomly assigned smallholder cash crop farmers formal savings accounts. In collaboration with a microfinance institution in Malawi, the authors tested two primary treatments, offering either: 1)"ordinary"accounts, or 2) both ordinary and"commitment"accounts. Commitment accounts allowed customers to restrict access to their own funds until a future date of their choosing. A control group was not offered any account but was tracked alongside the treatment groups. Only the commitment treatment had statistically significant effects on subsequent outcomes. The effects were positive and large on deposits and withdrawals immediately prior to the next planting season, agricultural input use in that planting, crop sales from the subsequent harvest, and household expenditures in the period after harvest. Across the set of key outcomes, the commitment savings treatment had larger effects than the ordinary savings treatment. Additional evidence suggests that the positive impacts of commitment derive from keeping funds from being shared with one's social network.
    Keywords: Economic Theory&Research,Emerging Markets,Banks&Banking Reform,Debt Markets,Rural Poverty Reduction
    Date: 2011–08–01
  12. By: Pan, Lei; Christiaensen, Luc
    Abstract: Input subsidy programs carry support as instruments to increase agricultural productivity, provided they are market-smart. This requires especially proper targeting to contain the fiscal pressure, with decentralized targeting of input vouchers currently the instrument of choice. Nonetheless, despite clear advantages in administrative costs, the fear of elite capture persists. These fears are borne out in the experience from the 2008 input voucher pilot program in Kilimanjaro, Tanzania, examined here. Elected village officials received about 60 percent of the distributed vouchers, a factor that significantly reduced the targeting performance of the program, especially in more unequal and remote communities. When targeting the poor, greater coverage and a focus on high trust settings helped mitigate these concerns. The findings highlight the continuing need for scrutiny when relying on decentralized targeting. A clearer sense of purpose (increasing productivity among poorer farmers versus increasing aggregate output) could also enhance the targeting performance.
    Keywords: Rural Poverty Reduction,Economic Theory&Research,Housing&Human Habitats,Services&Transfers to Poor,Regional Economic Development
    Date: 2011–05–01
  13. By: Cuong, Nguyen Viet; Mont, Daniel
    Abstract: This paper examines the effect of parental disability on school enrollment and educational performance for children in the 2006 Vietnam Household Living Standards Survey. Results from instrumental-variables regressions indicate that children of parents with a disability have a lower enrollment rate in primary and secondary school of about 8 percentage points: 73 percent compared with 81 percent. However, the association of parental disability with educational performance is small and not statistically significant. The conclusion of the paper is that to achieve the Millennium Development Goal of universal primary school as well as increased coverage of secondary education, the government should have policies and programs that either directly support the education of children with disabled parents and/or have policies that support disabled adults, thus lessening the incentive for their children not to attend school.
    Keywords: Disability,Primary Education,Gender and Law,Education For All,Youth and Governance
    Date: 2011–08–01
  14. By: Valente, Christine
    Abstract: Between 1996 and 2006, Nepal experienced violent civil conflict as a consequence of a Maoist insurgency, which many argue also brought about an increase in female empowerment. This paper exploits within and between-district variation in the intensity of violence to estimate the impact of conflict intensity on two key areas of the life of women in Nepal, namely education and marriage. Overall conflict intensity had a small, positive effect on female educational attainment, whereas abductions by Maoists had the reverse effect. Male schooling was not significantly affected by either conflict measure. Conflict intensity and Maoist abductions during school age both increased the probability of early female marriage, but exposure to conflict during marriageable age does not appear to have affected women's long-term marriage probability.
    Keywords: Population Policies,Education and Society,Post Conflict Reconstruction,Primary Education,Rural Poverty Reduction
    Date: 2011–07–01
  15. By: Menon, Nidhiya; Rodgers, Yana van der Meulen
    Abstract: This paper examines how Nepal's 1996-2006 civil conflict affected women's decisions to engage in employment. Using three waves of the Nepal Demographic and Health Survey, the authors employ a difference-in-difference approach to identify the impact of war on women's employment decisions. The results indicate that as a result of the Maoist-led insurgency, women's employment probabilities were substantially higher in 2001 and 2006 relative to the outbreak of war in 1996. These employment results also hold for self-employment decisions, and they hold for smaller sub-samples that condition on husband's migration status and women's status as widows or household heads. Numerous robustness checks of the difference-in-difference estimates based on alternative empirical methods provide compelling evidence that women's likelihood of employment increased as a consequence of the conflict.
    Keywords: Population Policies,Rural Poverty Reduction,Labor Markets,Regional Economic Development,Gender and Law
    Date: 2011–08–01
  16. By: Shemyakina, Olga N.
    Abstract: Shortly following its independence in 1991, Tajikistan suffered a violent civil war. This study explores the effect of this conflict on education and labor market outcomes for men and women. The results are based on the data from the 2003 and 2007 Tajik Living Standards Measurement Surveys that were separated from the 1992-1998 Tajik civil war by five and nine years, respectively. The regression analysis that controls for the cohort and regional-level exposure points toward a persistent and lasting gap in the educational attainment by women who were of school age during the war and lived in the more conflict-affected regions as compared with women the same age who lived in the lesser affected regions and also to the older generation. These empirical results support the anecdotal and observational evidence about the decline in female educational attainment in Tajikistan. Interestingly, this group of young women is more likely to hold a job as compared with the rest of the analytical sample. Conditional on being employed, men and women in the more conflict-affected areas do not receive wages that are significantly different from wages received by men and women in the lesser affected areas.
    Keywords: Population Policies,Labor Markets,Gender and Development,Labor Policies,Population&Development
    Date: 2011–07–01
  17. By: Thomas Markussen (Department of Economics, University of Copenhagen); Kitavi Mbuvi (Kenya Institute of Education)
    Abstract: Some people have a concern for a fair distribution of incomes while others do not. Does such a concern matter for majority voting on redistribution? Fairness preferences are relevant for redistribution outcomes only if fair-minded voters are pivotal. Pivotality, in turn, depends on the structure of income classes. We experimentally study voting on redistribution between two income classes and show that the effect of inequality aversion is asymmetric. Inequality aversion is more likely to matter if the “rich” are in majority. With a “poor” majority, we find that redistribution outcomes look as if all voters were exclusively motivated by self-interest.
    Keywords: Conflict; ethnicity; poverty; unemployment; public services; Kenya
    JEL: D74 H4 J6 O55
    Date: 2011–07
  18. By: Mullally, Conner
    Abstract: This essay is an evaluation of year one of the Rural Business Development (RBD) program for small rice farmers in León, Nicaragua. The RBD program is administered by the Millennium Challenge Corporation, and is designed to deliver agricultural extension advice and affordable credit in the form of inputs to farm households. This essay estimates the average impact of the program on rice yields and revenues utilizing inverse propensity score weighting combined with linear regression. In conducting statistical inference, it also accounts for the fact that agricultural outcomes are likely correlated over space in a small area such as the one studied here. The results suggest that the program had no impact on average, likely due to the presence of a severe drought during the 2008 â 2009 rice growing season, but that poorer households may have done better than their wealthier counterparts. This does not account for program costs, which when factored in would likely make the overall net benefit of the program negative. There may very well be long term benefits to exploiting extension advice and better access to credit created by the RBD program, and the it appears to have shielded poorer farmers somewhat from the impact of the drought. But the results highlight the danger of introducing programs aimed at raising productivity and incomes in areas subject to system unanticipated shocks. Incorporating risk management techniques or insurance against systemic risk into extension programs may improve welfare and encourage broader participation in agricultural productivity programs going forward.
    Keywords: Development, program evaluation, agricultural extension., International Development,
    Date: 2011–07
  19. By: Azam, Muhammad; Khan, Hashim; Hunjra, Ahmed Imran; Ahmad, H. Mushtaq; Chani, Muhammad Irfan
    Abstract: Recent economic literature suggests that institutional quality factors exerted positive effect on foreign direct investment (FDI) inflows. The main focus of this study is to examine the role of institutional factors and macro economic policy factors on FDI inflows in a panel data of seven South Asian countries over the period of 12 years since 1996-2007. This study implies that a good institutional quality plays a key role in attractiveness of FDI inflows. A poor macroeconomic policy situation produces negative impact on FDI. Good Institutional quality and macroeconomic policy generate negative in a combined form on FDI. This study further implies that poor economic policy deteriorates institutional quality and creates negative effect on FDI inflows. Incredibility in trade liberalization policy may be a part of poor macro economic policy.
    Keywords: Institutional quality; Macro economic policy; Attractiveness; Incredibility; South Asia
    JEL: E60
    Date: 2011–01–01
  20. By: Ashraf, Quamrul; Galor, Oded
    Abstract: This research argues that deep-rooted factors, determined tens of thousands of years ago, had a significant effect on the course of economic development from the dawn of human civilization to the contemporary era. It advances and empirically establishes the hypothesis that, in the course of the exodus of Homo sapiens out of Africa, variation in migratory distance from the cradle of humankind to various settlements across the globe affected genetic diversity and has had a long-lasting effect on the pattern of comparative economic development that is not captured by geographical, institutional, and cultural factors. In particular, the level of genetic diversity within a society is found to have a hump-shaped effect on development outcomes in both the pre-colonial and the modern era, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. While the intermediate level of genetic diversity prevalent among Asian and European populations has been conducive for development, the high degree of diversity among African populations and the low degree of diversity among Native American populations have been a detrimental force in the development of these regions.
    Keywords: Comparative development; Human genetic diversity; Income per capita; Land productivity; Neolithic Revolution; Population density; The 'Out of Africa' hypothesis
    JEL: N10 N30 N50 O10 O50 Z10
    Date: 2011–08
  21. By: Tamara Hafner; David Popp
    Abstract: As countries reform their patent laws to be in compliance with the Trade Related Intellectual Property Rights Agreement, an important question is how increased patent protection will affect drug prices in low-income countries. Using pharmaceutical trade data from 1996 to 2005, we examine the role of China and India as suppliers of medicines to other middle- and low-income countries and evaluate the competitive effect of medicine imports from these countries on the price of medicines from high- income countries. We find that imports of antibiotics and unspecified medicaments from India and China significantly depress the average price of these commodities imported from high-income trading partners, suggesting that India and China are not only important sources of inexpensive medicines but also have an indirect effect by lowering prices through competition. As India is the leading supplier of medicines in Sub-Saharan Africa, this region will likely be affected most adversely.
    JEL: I10 O10 O34
    Date: 2011–07
  22. By: Pravin Krishna; Guru Sethupathy
    Abstract: To study the effects of the dramatic economic reforms undertaken in India in the early 1990s on inequality, this paper examines Theil inequality as well as other inequality measures constructed using Indian household expenditure survey data from 1988-2005. Overall inequality shows some variation over the period, falling between 1988 and 1994, rising between 1994 and 2000, but falling again by 2005. The evolution of inequality in the post reform period is thus non-monotonic. A similar inequality trend is seen within most Indian states over this time period. Finally, the change in inequality across households within states is found to be uncorrelated with the change in state-level measures of tariff and non-tariff protection.
    JEL: F1 F14 F16
    Date: 2011–07

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