|
on Development |
| By: | Robert C. Feenstra; Hong Ma; J. Peter Neary; D.S. Prasada Rao |
| Abstract: | The latest World Bank estimates of real GDP per capita for China are significantly lower than previous ones. We review possible sources of this puzzle and conclude that it reflects a combination of factors, including substitution bias in consumption, reliance on urban prices which we estimate are higher than rural ones, and the use of an expenditure-weighted rather than an output-weighted measure of GDP. Taking all these together, we estimate that real per-capita GDP in China was 50% higher relative to the U.S. in 2005 than the World Bank estimates. |
| Keywords: | EKS, Geary-Khamis and GAIA indexes, Gerschrnekron effect, International comparisons of real income and GDP, Measurement economics, Substitution bias |
| JEL: | F10 C43 O53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:566&r=dev |
| By: | AfDB |
| Date: | 2011–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:327&r=dev |
| By: | AfDB |
| Date: | 2011–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:328&r=dev |
| By: | John Ataguba; William M. Fonta; Hyacinth E. Ichoku |
| Abstract: | This paper explores factors that predict deprivation and are associated with multiple counts of deprivation in Nsukka, Nigeria. Different conceptions of poverty were constructed: the traditional money-metric measure and differing multidimensional constructs of poverty. Data from a survey of households in Nsukka were used. The counting and FGT methodologies were used to measure poverty and deprivation. Ordinary least squares, probit and counting models were also used to assess factors that predict poverty. The results indicate that between 70% and 78% of the population in the study is categorized as deprived or poor. The major determinants of deprivation across its various constructs include large family size, a low level of education, poor employment, rural location and poor health. In order to effectively alleviate poverty, an integrated approach that accounts for inter-linkages between factors associated with poverty is required. |
| Keywords: | Multidimensional poverty, deprivation, determinants of poverty, missing dimensions, Nsukka |
| JEL: | I3 I32 D63 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2011-13&r=dev |
| By: | Stephen C. Smith (Department of Economics/Institute for International Economic Policy, George Washington University); Sungil Kwak (Department of Economics/Institute for International Economic Policy, George Washington University) |
| Abstract: | This paper examines the impact and potential interactions of health, education and consumption dimensions of persistent poverty at the household level. Our application is to indictors of assets, undernutrition, and illiteracy drawn from the Ethiopia Rural Household Survey (ERHS) panel data set. We develop a framework for operationalizing the concept of multidimensional traps, involving two or more simultaneous distinct poverty dimensions of persistent poverty; these include a subset of cases in which an interlocking poverty trap is effectively formed as a result of deprivations functioning as complements. We test an implication of the multiple trap framework by comparing structural income dynamics across groups. We find that in the poorest of the three main agro-ecological regions in Ethiopia, those with both chronic undernutrition and illiteracy have the lowest implied equilibrium; those with one of these chronic conditions have intermediate (but still deeply poor) equilibria; and those without either condition have the highest asset equilibrium. Evidence for complementarity of persistence across dimensions of poverty - what we term an interlocking poverty trap - is found in only a limited number cases, however. We present several robustness checks for our results. |
| Keywords: | Poverty, poverty trap, Ethiopia, multidimensional poverty, interlocking poverty, regional poverty, literacy, undernutrition, asset dynamics |
| JEL: | O1 I3 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2011-04&r=dev |
| By: | Michael Owen Moore (Department of Economics/Institute for International Economic Policy, George Washington University) |
| Abstract: | Argentina, once a prominent example of the 'Washington consensus', took dramatic steps to reduce its integration in the world economy in the aftermath of the peso crisis in 2001. This pattern might suggest that the Argentine government would turn aggressively to contingent protection measures such as antidumping and safeguards in the wake of the 2008 global financial crisis. The data suggest that the share of imports subject to ongoing Argentine contingent protection measures (especially antidumping) has increased from about 1.2% of total imports in 2006 to about 2.7% in 2009. If one considers the impact of suppressed imports, this rises to an estimated 5% in 2009. Argentine antidumping use has retained its focus on developing countries. However, while in earlier periods Brazil was the most frequent target, almost all of the recent antidumping activity has been focused very narrowly on China, a pattern that predates the 2008 crisis. While Argentina has certainly become more aggressive in its use of antidumping since the 1990s, there is little to suggest that it has done so specifically in the wake of the crisis. Instead, Argentine import restrictions are increasingly focused on China alone. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2011-06&r=dev |
| By: | Tony Castleman (Institute for International Economic Policy, George Washington University) |
| Abstract: | This paper develops and applies a methodology for measuring human recognition, which is defined as the acknowledgement provided to an individual by other individuals, groups, or organizations that he is of inherent value with intrinsic qualities in common with the recognizer. A framework is developed that organizes the sources of human recognition into various domains of an individual's life. The framework is used to develop an index of indicators that measures human recognition received in each of the domains and combines these domain-specific measures into a single overall measure of human recognition received. Two empirical applications of the index are presented with cross-sectional survey data from India and Kenya. Exploratory factor analysis is used to generate measures of human recognition with the index, and the resulting measures are used in multivariate regression models of nutritional status. Results from both datasets provide evidence that human recognition is a significant, independent, positive determinant of nutritional status, controlling for socio-economic characteristics. The method and applications demonstrate how latent, intangible aspects of development such as human recognition can be measured and indicate that further empirical work on the determinants and effects of human recognition is both feasible and needed. |
| Keywords: | human recognition, nutrition, health, dehumanization, dignity, respect, domestic violence, measurement, India, Kenya, economic development, poverty |
| JEL: | I12 I31 O15 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2011-10&r=dev |
| By: | Stephen C. Smith (Department of Economics/Institute for International Economic Policy, George Washington University); Sungil Kwak (Department of Economics/Institute for International Economic Policy, George Washington University) |
| Abstract: | We introduce new approaches to research on poverty traps, focusing on changes in patterns of equilibria over time and across regions, applied to the Ethiopia Rural Household Survey. We revisit the incidence of multiple equilibria using new nonparametric techniques; we also emphasize conditions of single equilibria that remain stagnant below the poverty line. We identify a single equilibrium in our initial interval (1994 - 1999) but and evidence that a second, higher equilibrium is emerging in the subsequent (1999 - 2004) interval. One of three major regions exhibits a deeply impoverished equilibrium that does not improve despite a national environment of pro-poor growth. |
| Keywords: | poverty trap, Ethiopia, multiple equilibria, asset dynamics, regional poverty, sequence of equilibria |
| JEL: | O1 I3 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2011-01&r=dev |
| By: | Kazuya Wada |
| Abstract: | This study investigates the effects of an improvement in female autonomy on children's welfare in the developing world, taking into consideration intra-household resource allocation through decision-making processes within households. Using a female autonomy index constructed from India's 1998/99 National Family Health Survey, the study tries to capture women's bargaining power and examine the effects on children's health and medical condition. The results of the empirical analysis suggest that often, though not always, children's health and medical condition can be enhanced by improving female autonomy. In addition, the results also imply that fostering female autonomy may play a crucial role in achieving economic development from a long-term perspective. |
| Keywords: | Female Autonomy, Intra-household Resource Allocation, Child Health |
| JEL: | D13 I12 J13 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd11-202&r=dev |
| By: | Clara Delavallade |
| Abstract: | This paper empirically analyzes the main microeconomic determinants of two forms of corruption supply, administrative corruption and state capture, by Maghrebi firms. This study is based on a new database of nearly 600 Algerian, Moroccan and Tunisian firms. I show that tax evasion is a major factor in the engagement of firms in administrative corruption. The latter increases with the share of sales hidden by the firm as long as it is below half of total sales, and slightly decreases thereafter. State capture is fostered by a failing enforcement of property and contract rights. Interestingly, less competitive firms appear to engage more in both forms of corruption than the most dynamic ones. After assessing the robustness of my empirical results, I draw a comparison of the factors of corruption in North Africa, Uganda and transition countries. |
| Keywords: | Supply of Corruption, Administrative Corruption, State Capture, Tax Evasion, Competitiveness, North Africa |
| JEL: | C2 D73 O17 H32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:244&r=dev |
| By: | Abebe Damte; Steven F. Koc |
| Abstract: | This study examines the relationship between property rights, defined by land tenure security and the strength of local-level institutions, and household demand for fuel wood, as measured by the source from which fuel wood is collected. A multinomial regression model is applied to survey data collected in rural Ethiopia. Results from the discrete choice model indicate that active local-level institutions increase household dependency on open access forests, while land security reduces open access forest dependence. However, local-level institutions are found to reduce the role of private fuel wood sources, while tenure security has not, at least yet, had any impact on private fuel wood source collection activities. The results suggest that there is a need to bring more open access forests under the management of the community and increase the quality of community forestry management in order to realize improvements in forest conservation |
| Keywords: | property rights, institutions, fuel wood, rural, Ethiopia |
| JEL: | C2 D73 O17 H32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:245&r=dev |
| By: | Levision S. Chiwaula |
| Abstract: | This study assesses the impact of income and asset poverty on child work using the rural sub-sample of the 2004 Malawi Integrated Household Survey. Instrumenting consumption expenditure with a location dummy variabl and interacting consumption expenditure with household land-holding size in probit models, the likelihood of child labour is found to relate negatively with household consumption. On the other hand child labour relates positively with household land-holding size for consumption poor households only and when labour markets are imperfect. These findings do not discourage asset accumulation policies as a remedy agaisnts child labour but support policies that aim at increasing returns on the assets. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_208&r=dev |
| By: | Awoyemi Taiwo Timothy |
| Abstract: | The study examines some of the factors which determine the type of non-agricultural activities in rural Nigeria an individual engages in. It is argued that diversification from subsistence farming and support for rural on-farm employment opportunities could be poverty-reducing. It has been noticed that an increase in foreign remittances reduces the incidence, depth and severity of poverty in developing countries. This study considers remittances as a source of incomewhich could possibly reduce poverty in the rural sector of the economy.We focus on the non-farmsector because of its potential for development and poverty alleviation in Nigeria. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_224&r=dev |
| By: | Francis Menjo Baye |
| Abstract: | This study attempts to carry out a comprehensive analysis of poverty, inequality and polarization trends using Cameroon household surveys collected before and during the Heavily Indebted Poor Countries (HIPC) process. The theoretical decomposition frameworks propelling the study are motivated mainly by the Shapley value. Empirical estimates are obtained from the software DAD 4.4 using both money-metric and child nutrition indicators, and poverty lines, with the monetary threshold derived nonparametrically. Effects within-zones account for much of monetary poverty changes than effects between-zones. The findings that inter-zone effects contribute to alleviating rural poverty while aggravating urban poverty, suggests the potential for rural–urban migration to alleviate rural poverty. Changes in money-metric poverty and health deprivation sharply contrast each other. While health poverty deteriorated, income poverty retreated. This is an indication that economic growth may not necessarily engender significant reduction in all dimensions of well-being. Changes in health poverty are driven largely by effects of redistribution, whereas for income poverty the growth component seems to be more important. Both income and non-income dimensions highlight the dominant role of within-group components in accounting for inequality trends. However, while the between-group contributions to inequality are negligible in the health dimension, they are non-negligible in the income space. In terms of levels, polarization and inequality are more of an urban than a rural problem, yet inequality and polarization worsened only in rural areas in the period 1996–2001. As a whole, polarization indices do not give dissimilar trends from standard measures of inequality. The conflicting results from income and health well-being indicators are attributable to the observation that the economic rebound in Cameroon was preceded by fiscal austerity measures embedded in the Structural Adjustment Programmes that engendered a decline in the availability of public goods. Moreover, health indicators are slow-moving compared with income or expenditure, which does not include the quality of service received from social expenditures on health and nutrition. These results have implications for policy making: in terms of income deprivation, emphasis could be on growth-based labour-intensive policies that create opportunities for the rural poor to increase their incomes; and in terms of child health and perhaps general health, emphasis could be on redistribution of health infrastructure and personnel to increase outreach. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_207&r=dev |
| By: | Sunday A. Khan |
| Abstract: | Cameroon is a small open economy that relies on the export of a few primary products for its foreign exchange earnings. The low rate of savings cannot meet the investment requirements, and investment has been declining despite many years of economic reform. There is consequently a resource gap that has to be filled by both official and private resource inflows, but these resource inflows have similarly been declining. They have also become highly volatile, thus undermining their positive effects on capital formation and consequently on economic growth and poverty reduction. This study examined the effect of resource inflows and their volatility on domestic investment in Cameroon. The results show that inflow volatility is high and that export revenue volatility is the prime mover of aggregate volatility. There is no evidence of inflow volatilities reinforcing or offsetting each other. Aggregate resource flow is important for both public and private domestic investment, while its volatility is detrimental. When total resource flows is disaggregated into export revenue, official flows, foreign direct investment and “other private flows”, only export revenue and “other private flows” significantly affect private investment, indicating that the impact on investment varies depending on the type of inflow. The volatility of official flows and export revenue hurts investment directly, but also negates the influence of the other inflows on both private and public investment. The study suggests that government make more efforts to attract more resource flows into the country and, especially, to reduce their volatility. Diversifying export supplies to minimize price fluctuations, complying with aid conditionalities (this should be facilitated with the country ownership of the poverty reduction strategy), developing a robust and transparent financial sector and stock exchange, and avoiding frequent and unpredictable policy shifts are among the actions that can go a long way to reduce resource flow volatility. Domestic investment, and consequently growth and poverty reduction, should be the main beneficiaries. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_221&r=dev |
| By: | Olanrewaju Olaniyan |
| Abstract: | This study explores the determinants of child schooling in Nigeria and takes current enrolment and delayed entry into schools as measures of schooling outcome. The study utilized reduced form relationships for male and female children within urban and rural households. Using data from the 1999 Multiple Indicator Cluster Survey (MICS) of Nigeria, the study found that socioeconomic backgrounds of children are significant determinants of schooling with education of parents being the most important determinant. Educated parents desire more schooling for their children. Our decomposition analysis revealed that the way a household treats boys and girls in urban areas contracts the gender gap in enrolment, while it widens the gap in rural areas. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_217&r=dev |
| By: | Adam Mugume |
| Abstract: | By using the non-structural models of competitive behaviour—the Panzar-Rosse model—the study measures competition and emphasizes the competitive conduct of banks without using explicit information about the structure of the market. Estimations indicate monopolistic competition, competition being weaker in 1995–1999 compared with 2000–2005. Moreover, the relationship between competition, measuring conduct, and concentration measuring the market structure, is negative and statistically significant; which could suggest that a few large banks can restrict competition. Overall, the results suggest that while competition in the Ugandan banking sector falls within a range of estimates for comparator markets, it tends to be on the weaker side. The structural approach to model competition includes the structure-conductperformance(SCP) paradigm and the efficiency hypothesis. Using the SCP framework, we investigate whether a highly concentrated market causes collusive behaviour among larger banks resulting in superior market performance; whereas under the efficiency hypothesis we test whether it is the efficiency of larger banks that makes for enhanced performance. Using Granger causation test, we establish that the efficiency Granger causes concentration and using instrumental variable approach, the study establishes that market power and concentration as measured by market share and Herfindahl index, respectively, positively affect bank profitability. In addition, bank efficiency also affects bank profitability. Other factors that affect bank profitability include operational costs, taxation and core capital requirement. A major policy implication derived from this analysis is that the Ugandan banking system has been subject to deep structural transformation since the early 1990s. Advances in information technology, liberalization of international capital movement, consolidation and privatization have permitted economies of scale in the production and distribution of services and increased risk diversification. These forces have led to lower costs and, undoubtedly, higher efficiency. However, to ensure that lower costs are passed through to households and firms, greater efficiency must be accompanied by a similar strengthening in the competitive environment in the banking sector. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_203&r=dev |
| By: | Alarudeen Aminu |
| Abstract: | The study investigated the impact Nigeria’s government wage review of 1998 had on the differential in pay for public and private sector workers of the same educational qualifications and ages. Empirical analysis based on the Mincerian human capital model was carried out for urban male employees only (as they constitute a homogeneous group) in the public and private sectors. The results obtained show that before the wage review of 1998, public sector workers suffered a pay disadvantage of 6.78% while about one year after the review, public sector workers enjoyed a premium of 35.07%. In the absence of any wage reduction in the private sector, this result suggests that the implementation of the 1998 wage review succeeded in making public sector workers better remunerated than their private sector counterparts and it can be concluded that the wage increase in the public sector achieved its disguised goal of redressing the age-long poor pay in the sector. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_223&r=dev |
| By: | Bédia F. Aka; Souleymane S. Diallo |
| Abstract: | The objective of this paper is to examine how a small open economy such as Côte d’Ivoire (CI) can obtain growth-based internal tax resources, and how the tax system affects households and individuals through relative prices. A microsimulated CGE model is used to analyse the effects of an alternative tax system on households by utilizing a survey. It is postulated that the military and political crisis that started in 1999 with the first coup d’etat in Côte d’Ivoire is transitory and that CI has an internal tax policy capacity. This paper indicates that an alternative tax structure can reduce distortion in regional poverty, inequality for households, and in cities and small areas of the country. A model is formulated using Côte d’Ivoire’s 1998-based social accounting matrix and the 1998 population survey of 4,200 households. The main findings of this study are that the post-crisis tax policies envisioned by the government (reducing the tax rate on firms, reducing import taxes and increasing taxes on household income) result in an increase in poverty and inequality at the regional, city and small area levels. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_218&r=dev |
| By: | Tochukwu E. Nwachukwu; Peter Odigie |
| Abstract: | This study discusses the trend in Nigerian saving behaviour and reviews policy options to increase domestic saving. It also examines the determinants of private saving in Nigeria during the 1970-2007 period. It makes an important contribution to literature by evaluating the magnitude and direction of the effects of the following key policy and non-policy variables on private saving: Income growth, interest rate, fiscal policy and financial development. The framework for analysis involves the estimation of a saving rate function derived from the life cycle hypothesis while recognizing the structural characteristics of a developing economy. The study employs the Error-Correction Modelling procedure which minimizes the possibility of estimating spurious relations, while retaining long-run information. The results of the analysis show that the saving rate rises with both the growth rate of disposable income and the real interest rate on bank deposits. Public saving seems not to crowd out private saving, suggesting that government policies aimed at improving the fiscal balance have the potential of bringing about a substantial increase in the national saving rate. Finally, the degree of financial depth has a negative but insignificant impact on saving behaviour in Nigeria. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_212&r=dev |
| By: | Sosthène Ulrich Gnansounou |
| Abstract: | Investment is one of the mainsprings of economic growth. In order to analyse the factors explaining the weakness of investment by private firms in Benin, this paper used a capital demand function. This function was estimated using data from a panel of 123 firms in Benin and covering the 19972003 period. The findings showed that demand uncertainty and, more importantly, the fluctuations in the imports of manufactured goods from Nigeria have a negative effect on investment by private firms in Benin. The investment behaviour of these firms strongly hinges on the cost of capital utilization: When this cost is high, it weighs negatively on the purchase and installation of new production infrastructure. The magnitude of the effect of this cost of capital utilization and of the demand uncertainty which investment firms face depends on the nature of their activities. |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_209&r=dev |
| By: | Paul Ningaye; Laurent Ndjanyou; Guy Marcel Saakou |
| Abstract: | The study examined the usefulness and relevance of the contingent valuation method (CVM) in community-based (CB) project planning and implementation. To elicit willingness to pay (WTP) values for the restocking of Lake Bamendjim with Tilapia nilotica and Heterotis niloticus fish species, the study used pre-tested questionnaires interviewer-administered to 1,000 randomly selected households in the Bambalang Region of Cameroon.The datawere elicitedwith the conventional referendumdesign and analysed using a referendum model. Empirical findings indicated that about 85% of the sampled households were willing to pay about CFAF1,054 (US$2.1) for the restocking project. This amount was found to be significantly related to the starting price used in the referendum design, household income, the gender of the respondent, the age of the respondent, household poverty status, and previous participation of a household in a community development project.The findings prompted the following recommendations. Firstly, in order to reduce community burden due to cash constraints, it is advisable for the mean estimate obtained for the scheme to be split into four instalments over a year. Secondly, since the success of the scheme largely depends on the governing roles of the scheme, it is further advisable for the community to allowthemanagement of the scheme to be handled by the elderly community members. Finally, it will be important during the financing of the scheme, to levy wealthier household heads an amount sufficient to subsidize poorer household heads who cannot afford to pay the threshold price. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_211&r=dev |
| By: | Ben E. Aigbokhan |
| Abstract: | The Nigerian labour market, like other sectors of the economy, witnessed dramatic changes following the introduction of the structural adjustment programmes (SAPs) in mid 1986. The labour market has a central role to play in the attainment of SAP objectives such as employment, income growth, and poverty reduction. In 1998 and 2000 the Federal Government implemented two jumbo salary increases which raised minimum salaries in the public sector. This had further implications for wages and employment in the formal sector of the economy. It then becomes necessary to understand the labour market process in the country. This study, focusing on the wage determination process, particularly in the manufacturing sector seeks to do this. Through this, it is possible to answer to the question: “Why would wages not adjust to equate labour supply to labour demand?” Drawing inspiration from the efficiency wage and related literature, the study uses data from an annual survey of manufacturing establishments conducted by the United Nations Industrial Development Organization in collaboration with the Centre for the Study of African Economies, Oxford, to analyse wage determination process in the manufacturing sector in Nigeria. Production and earning function approaches were used in the analysis. The ordinary least squares and instrumental two-stage least squares techniques were used in the analysis. Results from the production function analysis show that there is a positive and statistically significant relation between relative wage and productivity, consistent with prediction of the efficiency wage model. Estimation of further augmented production function suggests that some rent-sharing variables such as unionization are also relevant. Results from analysis of the earnings function show that earnings differentials seem to be explained mainly by human capital, as predicted by the competitive models. Efficiency wage and rent-sharing models both provide additional explanations. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:aer:rpaper:rp_222&r=dev |
| By: | Atamanov, Aziz (Maastricht Graduate School of Governance, Maastricht University); Berg, Marrit van den (Wageningen University, The Netherlands) |
| Abstract: | This paper addresses the issue of self-selection of individuals in international labour migration, non-agricultural and agricultural employment in Tajikistan and its link to earnings from these activities. Unlike most empirical studies, we could attribute selection bias on unobservable characteristics to the allocation of individuals to alternative employment sectors and analyse its impact on earnings abroad and at home. We have found positive selection in migration against local non-agricultural activities and positive selection in local non-agricultural activities against local agricultural activities. This indicates that the most capable individuals with regards to unobservable characteristics choose to migrate, while the somewhat less able choose non-agricultural activities, and individuals with the worst capabilities stay in poorly-paid agricultural activities. Controlling for self-selection, labour income returns to education of migrants and individuals in non-agricultural activities are slightly lower than those from Ordinary Least Squares (OLS). |
| Keywords: | international migration, self-selection, earnings, Tajikistan |
| JEL: | J24 J31 F22 O15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2011047&r=dev |
| By: | Kwasi Fosu, Augustin (UNU-WIDER); Getachew, Yoseph Yilma (Durham Business School, Durham University); Ziesemer, Thomas (UNU-MERIT, and Department of Economics, Maastricht UNiversity) |
| Abstract: | How much does public capital matter for economic growth? How large should it be? This paper attempts to answer these questions, taking the case of SSA countries. It develops and estimates a model that posits a nonlinear relationship between public investment and growth, to determine the growth-maximizing public investment GDP share. It empirically also accounts for the crowding-in and crowding-out effects between public and private investment, with equations estimated separately and simultaneously, using System GMM. The paper further runs simulation and examines the public investment GDP share that maximizes consumption. This is estimated to be between 8.4 percent and 11.0 percent. The results from estimating the growth model are in the middle of this range, which is larger than the observed value of 7.2 percent at the end of the sample period. These outcomes suggest that, on average, there has been public under-investment in Africa, contrary to previous findings. |
| Keywords: | Public investment, Economic Growth, Nonlinearity |
| JEL: | H40 O40 O47 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2011051&r=dev |
| By: | Julio Cáceres-Delpiano (Universidad Carlos III de Madrid) |
| Abstract: | Using multiple births as an Instrumental Variable (IV) for family size and data for 43 developing countries, I find evidence that a shock in fertility has a cost for a family as a whole. Mothers are more likely to live under less stable family arrangements and they are more likely to use contraceptives. Children are less likely to receive some vaccines, attend school, live their mother and there is an increase in odds of mortality. The analysis by level of development reveals the cost of fertility comes from those countries with lower level of development. |
| Keywords: | Fertility, Health, Education, Family Arrangements, Developing Countries |
| JEL: | J11 J12 J13 J18 O15 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1117&r=dev |
| By: | Adhvaryu, Achyuta (Yale University) |
| Abstract: | I show that malaria misdiagnosis, common in resource-poor settings, decreases the expected effectiveness of an important new therapy--since only a fraction of treated individuals have malaria--and reduces the rate of learning via increased noise. Using pilot program data from Tanzania, I exploit variation in the location and timing of survey enumeration to construct reference groups composed of randomly chosen, geographically and temporally proximate acutely ill individuals. I show that learning is stronger and adoption rates are higher in villages with more misdiagnosis. Subsidizing diagnostic tools or improving initial targeting of new technologies may thus accelerate uptake through learning. |
| JEL: | O12 O33 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:92&r=dev |
| By: | Ranis, Gustav (Yale University) |
| Abstract: | This paper reviews the literature on the impact of ethnic diversity on economic development. Ethnically polarized societies are less likely to agree on the provision of public goods and more likely to engage in rent seeking activities providing lower levels of social capital. Initial conditions are important determinants of adverse development outcomes. The role of decentralization, democracy and markets as potential remedies are discussed. The paper then presents a number of preliminary hypotheses on the relationship between diversity and instability in order to stimulate future research. |
| JEL: | O11 O40 O43 O55 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:93&r=dev |
| By: | Greenstone, Michael (MIT); Hanna, Rema (Harvard University) |
| Abstract: | Using the most comprehensive data file ever compiled on air pollution, water pollution, environmental regulations, and infant mortality from a developing country, the paper examines the effectiveness of India's environmental regulations. The air pollution regulations were effective at reducing ambient concentrations of particulate matter, sulfur dioxide, and nitrogen dioxide. The most successful air pollution regulation is associated with a modest and statistically insignificant decline in infant mortality. However, the water pollution regulations had no observable effect. Overall, these results contradict the conventional wisdom that environmental quality is a deterministic function of income and underscore the role of institutions and politics. |
| JEL: | H20 O10 Q20 Q50 R50 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp11-034&r=dev |
| By: | Rodrik, Dan (Harvard University) |
| Abstract: | Novelists have a better track record than economists at foretelling the future. Consider then Gary Shteyngart's timely comic novel "Super Sad True Love Story" (Random House, 2010), which provides a rather graphic vision of what lies in store for the world economy. The novel takes place in the near future and is set against the backdrop of a United States that lies in economic and political ruin. The country's bankrupt economy is ruled with a firm hand by the IMF from its new Parthenon-shaped headquarters in Singapore. China and sovereign wealth funds have parceled America's most desirable real estate among themselves. Poor people are designated as LNWI ("low net worth individuals") and are being pushed into ghettoes. Even skilled Americans are desperate to acquire residency status in foreign lands. This is sheer fantasy of course, but one that seems to resonate well with the collective mood. A future in which the U.S and other advanced economies are forced to play second fiddle to the dynamic emerging economies in Asia and elsewhere is rapidly becoming cliche. This vision is based in part on the very rapid pace of economic growth that emerging and developing economies experienced in the run-up to the global financial crisis of 2008-2009. Latin America benefited from a pace of economic development that it had not experienced since the 1970s, and Africa began to close the gap with the advanced countries for the first time since countries in the continent received their independence. Even though most of these countries were hit badly by the crisis, their recovery has also been swift. Optimism on developing countries is matched by pessimism on the rich country front. The United States and Europe have emerged from the crisis with debilitating challenges. They need to address a crushing debt burden and its unpleasant implications for fiscal and monetary policy. They also need to replace growth models which were based in many instances on finance, real estate, and unsustainable levels of borrowing. Japan has long ceased to exhibit any growth dynamism. And the eurozone's future remains highly uncertain--with the economic and political ramifications of its unraveling looking nothing less than scary. In such an environment, rapid growth in the developing world is the only thing that could propel the world economy forward and generate increasing demand for rich-country goods and services--the only silver lining in an otherwise dreary future. The question I address in this paper is whether this gap in performance between the developed and developing worlds can continue, and in particular, whether developing nations can sustain the rapid growth they have experienced of late. I will not have anything to say on the prospects for the advanced economies themselves, assuming, along with conventional wisdom, that their growth will remain sluggish at best. My focus is squarely on the developing and emerging countries and on the likelihood of continued convergence. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp11-033&r=dev |
| By: | Devarajan, Shantayanan (World Bank); Khemani, Stuti (World Bank); Walton, Michael (Harvard University) |
| Abstract: | This paper examines the potential role of civil society action in increasing state accountability for development in Sub-Saharan Africa. It further develops the analytical framework of the World Development Report 2004 on accountability relationships, to emphasize the underlying political economy drivers of accountability and implications for how civil society is constituted and functions. It argues on this basis that the most important domain for improving accountability is through the political relations between citizens, civil society, and state leadership. The evidence broadly suggests that when higher-level political leadership provides sufficient or appropriate powers for citizen participation in holding within-state agencies or frontline providers accountable, there is frequently positive impact on outcomes. However, the big question remaining for such types of interventions is how to improve the incentives of higher-level leadership to pursue appropriate policy design and implementation. The paper argues that there is substantial scope for greater efforts in this domain, including through the support of external aid agencies. Such efforts and support should, however, build on existing political and civil society structures (rather than transplanting "best practice" initiatives from elsewhere), and be structured for careful monitoring and assessment of impact. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp11-036&r=dev |
| By: | Böddeling, Annika; Witte, Benjamin |
| Abstract: | -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:uwhdps:92011&r=dev |
| By: | Gunther Bensch,; Jochen Kluve; Jörg Peters |
| Abstract: | Rural electrifi cation is believed to contribute to the achievement of the MDG. In this paper, we investigate electrifi cation impacts on diff erent indicators. We use household data that we collected in Rwanda in villages with and without electricity access. We account for self-selection and regional diff erences by using households from the electrifi ed villages to estimate the probability to connect for all households – including those in the non-electrifi ed villages. Based on these probabilities we identify counterfactual households and fi nd robust evidence for positive eff ects on lighting usage. Eff ects on income and children’s home studying become insignifi cant if regional diff erences are accounted for. |
| Keywords: | Rural electrifi cation; energy access; impact evaluation; matching |
| JEL: | O12 O13 O18 O22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0284&r=dev |
| By: | Milanovic, Branko |
| Abstract: | Inequality between world citizens in mid-19th century was such that at least a half of it could be explained by income differences between workers and capital-owners in individual countries. Real income of workers in most countries was similar and low. This was the basis on which Marxism built its universal appeal. More than 150 years later, in the early 21st century, the situation has changed fundamentally: more than 80 percent of global income differences is due to large gaps in mean incomes between countries, and unskilled workers'wages in rich and poor countries often differ by a factor of 10 to 1. This is the basis on which a new global political issue of migration has emerged because income differences between countries make individual gains from migration large. The key coming issue will be how to deal with this challenge while acknowledging that migration is probably the most powerful tool for reducing global poverty and inequality. |
| Keywords: | Inequality,Emerging Markets,Economic Theory&Research,Poverty Impact Evaluation,Income |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5820&r=dev |
| By: | Corduneanu-Huci, Cristina; Hamilton, Alexander; Masses-Ferrer, Issel |
| Abstract: | The political economy of health care is complex, as stakeholders have conflicting preferences over efficiency and equity. This paper formally models the preferences of consumer and producer groups involved in priority setting and judicialization in public health care. It uses a unique dataset of stakeholder perceptions, from Uruguay, to test whether these hypotheses are consistent with empirical evidence. The results suggest that the expectations of the political economy literature are supported: 1) regulators of public healthcare are less concerned with efficiency considerations than consumers; and 2) less organized groups are more concerned about equity than more organized interest groups. With respect to the consequences of health litigation, the findings are only partially consistent with the health care governance literature. Consumers perceive litigation as more beneficial than health care providers and regulators do. Counter-intuitively, powerful interest groups seem less willing to use litigation to shape policy outcomes. |
| Keywords: | Health Systems Development&Reform,Health Monitoring&Evaluation,Health Economics&Finance,Population Policies,Health Law |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5821&r=dev |
| By: | Torres, Clemencia; Briceno-Garmendia, Cecilia M.; Dominguez, Carolina |
| Abstract: | Infrastructure contributed 1 percentage point to Senegal's improved per capita growth performance between 2000 and 2005, placing it in the middle of the distribution among West African countries. Raising the country's infrastructure endowment to that of the region's middle-income countries (MICs) could boost annual growth by about 2.7 percentage points. Senegal has made significant progress in some areas of its infrastructure, including the transport, electricity, water, and information-and-communication-technology (ICT) sectors. But looking ahead, the country faces important infrastructure challenges, including improving road conditions, boosting air and rail traffic, updating electricity infrastructure, and boosting the pace of expansion of the water-and-sanitation network. Senegal currently spends around $911 million per year on infrastructure, with $312 million lost annually to inefficiencies. Comparing spending needs with existing spending and potential efficiency gains leaves an annual funding gap of $578 million per year. Senegal has the potential close this gap by bringing in more private-sector investment. |
| Keywords: | Transport Economics Policy&Planning,Infrastructure Economics,Public Sector Economics,E-Business,Roads&Highways |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5817&r=dev |
| By: | Santos, Indhira; Sharif, Iffath; Rahman, Hossain Zillur; Zaman, Hassan |
| Abstract: | This paper uses household survey data collected in September-October 2009 on a nationally representative sample of 2,000 households in Bangladesh to examine the nature of shocks experienced by households over the preceding 12 months and the type of coping mechanisms that were adopted. The analysis finds that more than half the sample claimed to have faced a shock -- economic, health, climatic, or asset related -- over the previous year. Surprisingly, the non-poor face a larger share of these shocks compared with the poor. A closer look at this result shows that the non-poor report a significantly larger share of"asset-related"shocks, which is consistent with the fact that the poor have fewer assets to lose. Health-related shocks dominate and households appear to have coped with these shocks through savings and loans, help from friends, and depletion of assets. The results show that households, when faced with covariate shocks due to climatic reasons, are less able to cope. As would be expected, the poor are less able to cope with shocks compared with the non-poor; the poor are more likely to use coping mechanisms that could have negative welfare implications in the longer term, including the depletion of assets, reduction of essential consumption, and use of high-interest loans. Econometric analysis suggests that geographical location, socio-economic status, and access to microfinance all affect the ability to cope with shocks. Policy implications include the importance of developing safety nets that take into account the vulnerability to climate-related shocks and further developing the links between micro-finance and safety net programs. |
| Keywords: | Access to Finance,Safety Nets and Transfers,Rural Poverty Reduction,Small Area Estimation Poverty Mapping,Housing&Human Habitats |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5810&r=dev |
| By: | Ranganathan, Rupa; Briceno-Garmendia, Cecilia M. |
| Abstract: | Newly independent South Sudan faces a challenge in making its own way in infrastructure development. Despite earning $6 billion in oil revenues since 2005, South Sudan's spending has not been proportional to its income, but rather has lagged behind North Sudan's development of infrastructure and social support. South Sudan benefitted from strong donor support during 2004-10, the interim period defined by the Comprehensive Peace Agreement. It focused on reestablishing regional transport links and access to seaports as well as rehabilitating its ports, airstrips, and single rail line. South Sudan also successfully liberalized the ICT sector. Nonetheless, the new country's infrastructure remains in such a dismal state that it is difficult to pinpoint a single most pressing challenge. The transport sector accounts for half of the country's spending needs, and water and sanitation account for a further quarter of the total. But so many improvements are needed that the nation cannot realistically catch up with its neighbors within 10 years, or even longer. South Sudan's annual infrastructure funding gap is $879 million per year. Given that the country's total needs are beyond its reach in the medium term, it must adopt firm priorities for its infrastructure spending. It also must attract international and private-sector investment and look to lower-cost technologies to begin to close its funding gap. Although South Sudan loses relatively little to inefficiencies, redressing those inefficiencies will be vital to creating solid institutions to attract new investors and get the most out of their investments. |
| Keywords: | Transport Economics Policy&Planning,E-Business,Infrastructure Economics,Energy Production and Transportation,Roads&Highways |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5814&r=dev |
| By: | Dominguez-Torres, Carolina; Foster, Vivien |
| Abstract: | The poor state of Cameroon's infrastructure is a key bottleneck to the nation's economic growth. From 2000 to 2005, improvements in information and communications technology (ICT) boosted Cameroon's growth performance by 1.26 percentage points per capita, while deficient power infrastructure held growth back by 0.28 points per capita. If Cameroon could improve its infrastructure to the level of Africa's middle-income countries, it could raise its per capita economic growth rate by about 3.3 percentage points. Cameroon has made significant progress in many aspects of infrastructure, implementing institutional reforms across a broad range of sectors with a view to attracting private-sector participation and finance, which has generally led to performance improvements. But the country still faces a number of important infrastructure challenges, including poor road quality, expensive and unreliable electricity, and a stagnating and uncompetitive ICT sector. Cameroon currently spends around $930 million per year on infrastructure, with $586 million lost to inefficiencies. Removing those inefficiencies would leave an infrastructure funding gap of $350 million per year. Given Cameroon's relatively strong economy and natural-resource base, as well as its success in attracting private financing, the country should be able to close that gap and meet its infrastructure goals within 13 years. |
| Keywords: | Transport Economics Policy&Planning,Infrastructure Economics,Town Water Supply and Sanitation,Energy Production and Transportation,Banks&Banking Reform |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5822&r=dev |
| By: | Briceno-Garmendia, Cecilia; Dominguez-Torres, Carolina |
| Abstract: | Infrastructure contributed 1.3 percentage points to Burkina Faso's annual per capita gross domestic product (GDP) growth over the past decade, much of it due to improvements in information and communication technology (ICT). Raising the country's infrastructure endowment to that of the region's middle-income countries (MICs) could boost annual growth by more than 3 percentage points per capita. Burkina Faso has made significant progress developing its infrastructure in recent years, especially in the ICT sector. The country has also moved forward in the areas of road maintenance and water and sanitation, but still faces challenges in these sectors, as well as in the electricity sector. As of 2007, Burkina Faso faced an annual infrastructure funding gap of $165 million per year, or 4 percent of GDP. That gap could be cut in half by the adoption of more appropriate technologies to meet infrastructure targets in the transport and the water and sanitation sectors. Even if Burkina Faso were unable to increase infrastructure spending or otherwise close the infrastructure funding gap, simply by moving from a 10- to 18-year horizon the country could address its efficiency gap and meet the posited infrastructure targets. |
| Keywords: | Transport Economics Policy&Planning,Infrastructure Economics,Town Water Supply and Sanitation,E-Business,Energy Production and Transportation |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5818&r=dev |
| By: | Ranganathan, Rupa; Briceno-Garmendia, Cecilia M. |
| Abstract: | Improvements in infrastructure across Sudan in recent years have contributed 1.7 percentage points to the country's per capita growth. Consistent with trends in other countries, the ICT revolution that swept Africa contributed more than any other sector to growth in Sudan. Raising the infrastructure endowment of all parts of Sudan to that of the region's best performer -- Mauritius -- could boost annual growth by about 3.5 percentage points. Sudan has heavily invested in infrastructure in recent years. Notable achievements include tripling power-generation capacity, liberalizing the ICT sector, and connecting to an undersea fiber-optic cable. Looking ahead, Sudan's most pressing infrastructure challenges lie in the water and transport sectors. In the water sector, the country needs to dramatically improve access to safe sources of water and sanitation while improving utility efficiency. In the transport sector the country needs to vastly expand rural and international connectivity and improve quality across the network. Sudan presently spends about $1.5 billion per year on infrastructure, with $580 million a year lost to inefficiencies. Even if the inefficiencies were eliminated, however, Sudan would face an infrastructure funding gap of $2.9 billion per year. This gap could be reduced by half by choosing lower-cost water, sanitation, and road-surfacing technologies, and could be bridged by continuing to capture financing from the private sector and abroad. |
| Keywords: | Transport Economics Policy&Planning,Infrastructure Economics,Energy Production and Transportation,E-Business,Banks&Banking Reform |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5815&r=dev |
| By: | Portner, Claus C; Beegle, Kathleen; Christiaensen, Luc |
| Abstract: | Although reproductive health advocates consider family planning programs the intervention of choice to reduce fertility, there remains a great deal of skepticism among economists as to their effectiveness, despite little rigorous evidence to support either position. This study explores the effects of family planning in Ethiopia using a novel set of instruments to control for potential non-random program placement. The instruments are based on ordinal rankings of area characteristics, motivated by competition between areas for resources. Access to family planning is found to reduce completed fertility by more than one child among women without education. No effect is found among women with some formal schooling, suggesting that family planning and formal education act as substitutes, at least in this low-income, low-growth setting. This provides support to the notion that increasing access to family planning can provide an important, complementary entry point to kick-start the process of fertility reduction. |
| Keywords: | Population Policies,Health Monitoring&Evaluation,Adolescent Health,Reproductive Health,Rural Development Knowledge&Information Systems |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5812&r=dev |
| By: | Pushak, Nataliya; Foster, Vivien |
| Abstract: | Infrastructure made a net contribution of around 1 percentage point to Angola's improved per capita growth performance in recent years, despite unreliable power supplies and poor roads, which each holding back growth by 0.2 percentage points. Raising the country's infrastructure endowment to that of the region's middle-income countries (MICs) could boost Angola's annual growth by about 2.9 percentage points. As a resource-rich, postconflict country, Angola has shown an exceptionally strong commitment to financing the reconstruction and expansion of its infrastructure. It has recently expanded its generation capacity, embarked on an ambitious multibillion-dollar road rehabilitation program, begun to make investments aimed at easing congestion at the Port of Luanda, and embarked upon an ambitious rehabilitation program for urban water systems. Numerous challenges remain, however. Angola needs to upgrade its electricity transmission and distribution infrastructure, expand its urban water-supply system, improve efficiency at the Port of Luanda, and make policy and regulatory adjustments across the board. Angola presently spends around $4.3 billion per year on infrastructure, with $1.3 billion lost to inefficiencies. After taking sectoral allocations and inefficiencies into account, a modest funding gap of $115 million per year remains, which could be largely eliminated by focusing on lower-cost water and sanitation options. Angola's infrastructure needs are manageable relative to its fast-growing economy, as long as the country can address inefficiencies. |
| Keywords: | Transport Economics Policy&Planning,Infrastructure Economics,Town Water Supply and Sanitation,Energy Production and Transportation,Economic Theory&Research |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5813&r=dev |
| By: | Pushak, Nataliya; Briceno-Garmendia, Cecilia M. |
| Abstract: | Despite general economic decline and power-supply deficiencies, infrastructure made a modest net contribution of just less than half a percentage point to Zimbabwe's improved per capita growth performance in recent years. Raising the country's infrastructure endowment to that of the region's middle-income countries could boost annual growth by about 2.4 percentage points. Zimbabwe made significant progress in infrastructure in its early period as an independent state, building a national electricity network with regional interconnections, an extensive and internationally connected road network, and a water and sewer system. But the country has been unable to maintain its existing infrastructure since it became immersed in economic and political turmoil in the late 1990s. Zimbabwe now faces a number of important infrastructure challenges, the most pressing of which lie in the power and water sectors, where deteriorating conditions pose risks to the economy and public health. Zimbabwe currently spends about $0.8 billion per year on infrastructure, though $0.7 billion of this is lost to inefficiencies of various kinds. Even if these inefficiencies were fully captured, Zimbabwe would still face an infrastructure funding gap of $0.6 billion per year. That staggering figure can be reduced, however, to $0.4 billion if the country adopts a more modest spending scenario, or even to $0.1 billion under a minimalist, maintenance-only scenario. To close the gap, Zimbabwe needs to raise additional public, private-sector, and international funding, which, when coupled with the prospect of economic rebound and prudent policies, would allow the country to regain its historic infrastructure advantages. |
| Keywords: | Transport Economics Policy&Planning,Infrastructure Economics,Energy Production and Transportation,Town Water Supply and Sanitation,Water Supply and Systems |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5816&r=dev |
| By: | Subhayu Bandyopadhyay; Sajal Lahiri; Javed Younas |
| Abstract: | We examine the interaction between foreign aid and binding borrowing constraint for a recipient country. We also analyze how these two instruments affect economic growth via non-linear relationships. First of all, we develop a two-country, two-period trade-theoretic model to develop testable hypotheses and then we use dynamic panel analysis to test those hypotheses empirically. Our main findings are that: (i) better access to international credit for a recipient country reduces the amount of foreign aid it receives, and (ii) there is a critical level of international financial transfer, and the marginal effect of foreign aid is larger than that of loans if and only if the transfer (loans or foreign aid) is below this critical level. |
| Keywords: | Foreign aid program |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2011-023&r=dev |
| By: | Nicholas Oulton |
| Abstract: | I set out a new method for estimating true (Konüs) PPPs. Household consumption per head deflated by these PPPs answers the question: by how much must the average expenditure per head of poor country A be increased to enable the typical inhabitant of A to enjoy the same utility level as the typical inhabitant of rich country B? Conventional multilateral PPPs for household consumption, such as the ones published by the World Bank, are not based explicitly on economic theory. So it is not clear that they can answer the question above, particularly if consumer demand is not homothetic. And there is overwhelming empirical evidence against homotheticity. The estimates of the standard of living in this paper are based on the economic theory of consumer demand. The main tool is the expenditure function. It turns out that it is not necessary to estimate all the parameters of the expenditure function but only the relatively small number which measure the consumer's response to income changes. This makes the method feasible even when there are large numbers of products. The method is applied to 141 countries included in the World Bank's 2005 International Comparison Program, at the level of 100 products. The results give strong support for nonhomotheticity and also for the importance of background factors such as climate, demography, culture and religion. The gap between the richest and the poorest countries is wider than when household consumption is deflated by a conventional multilateral index such as the World Bank's PPP for consumption. |
| Keywords: | Purchasing power parity (PPP), standard of living, international comparisons, Konüs, index number, welfare, homothetic |
| JEL: | C43 D12 E01 I31 O47 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1080&r=dev |
| By: | John Gibson (University of Waikato); David McKenzie (World Bank, BREAD, CReAM and IZA) |
| Abstract: | High-skilled emigration is an emotive issue that in popular discourse is often referred to as brain drain, conjuring images of extremely negative impacts on developing countries. Recent discussions of brain gain, diaspora effects, and other advantages of migration have been used to argue against this, but much of the discussion has been absent of evidence. This paper builds upon a new wave of empirical research to answer eight key questions underlying much of the brain drain debate: 1) What is brain drain? 2) Why should economists care about it? 3) Is brain drain increasing? 4) Is there a positive relationship between skilled and unskilled migration? 5) What makes brain drain more likely? 6) Does brain gain exist? 7) Do high-skilled workers remit, invest, and share knowledge back home? and 8) What do we know about the fiscal and production externalities of brain drain? |
| Keywords: | Brain drain, Brain gain, High-skilled Emigration, Development |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1111&r=dev |
| By: | Catalina Amuedo-Dorantes (San Diego State University); Susan Pozo (Western Michigan University) |
| Abstract: | Due to inadequate savings and binding borrowing constraints, income volatility can make households in developing countries particularly susceptible to economic hardship. We examine the role of remittances in either alleviating or increasing household income volatility using Mexican household level data over the 2000 through 2008 period. We correct for reverse causality and endogeneity and find that while income smoothing does not appear to be the main motive for sending remittances in a non-negligible share of households, remittances do indeed smooth household income on average. Other variables surrounding income volatility are also considered and evaluated. |
| Keywords: | remittances, income smoothing |
| JEL: | F22 O |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1107&r=dev |
| By: | Salma Ahmed |
| Abstract: | The paper examines whether there is any trade-off between child labour hours and child schooling outcomes. By drawing on Bangladesh National Child Labour Survey data, we find that children’s work, even in limited amounts, does adversely affect child human capital. This is reflected in reduced school attendance and age-adjusted school attendance rates. We find that parents do not have identical preferences towards boys’ and girls’ schooling decisions. While both, educated mother and father shifts the trade-off towards girls’ schooling as opposed to market work, the differential impact of mother’s education on girls is significantly larger. These conclusions persist even after allowing for sample selection into child’s work. Our results intensify the call for better enforcement of compulsory schooling for children. |
| Keywords: | Child labour, education, Bangladesh |
| JEL: | J13 J22 J24 O12 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2011-21&r=dev |
| By: | Salma Ahmed; Pushkar Maitra |
| Abstract: | This paper decomposes the gender wage gap along the entire wage distribution into an endowment effect and a discrimination effect, taking into account possible selection into full-time employment. Applying a new decomposition approach to the Bangladesh Labour Force Survey (LFS) data we find that women are paid less than men every where on the wage distribution and the gap is higher at the lower end of the distribution. Discrimination against women is the primary determinant of the wage gap. We also find that the gap has widened over the period 1999 - 2005. Our results intensify the call for better enforcement of gender based affirmative action policies. |
| Keywords: | Gender wage Gap, Discrimination Effect, Selection, Unconditional Quantile Regression, Bangladesh |
| JEL: | C21 J16 J24 J31 J71 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2011-20&r=dev |
| By: | Cunha, Jesse; De Giorgi, Giacomo; Jayachandran, Seema |
| Abstract: | This paper compares how cash and in-kind transfers affect local prices. Both types of transfers increase the demand for normal goods, but only in-kind transfers also increase supply. Hence, in-kind transfers should lead to lower prices than cash transfers, which helps consumers at the expense of local producers. We test and confirm this prediction using a program in Mexico that randomly assigned villages to receive boxes of food (trucked into the village), equivalently-valued cash transfers, or no transfers. The pecuniary benefit to consumers of in-kind transfers, relative to cash transfers, equals 11% of the direct transfer. |
| Keywords: | Cash and In-Kind Transfers; Prices |
| JEL: | D4 O12 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8581&r=dev |
| By: | Prados de la Escosura, Leandro |
| Abstract: | Long-run trends in Africa’s well-being are provided on the basis of a new index of human development, alternative to the UNDP’s HDI. A sustained improvement in African human development is found that falls, nonetheless, short of those experienced in other developing regions. Within Africa, Sub-Saharan Africa has fallen steadily behind the North since mid-20th century. Human development improvement is positively associated to being coastal and resource-rich and negatively to political-economy distortions. Contrary to the world experience, in which life expectancy dominated, education has driven progress in African human development during the last half-a-century and, due to the impact of HIV/AIDS on life expectancy and the arresting effect of economic mismanagement and political turmoil on growth, advances in human development since 1990 have depended almost exclusively on education achievements. The large country variance of the recovery during the last decade suggests being cautious about the future’s prospects. |
| Keywords: | Africa; Education; HDI; Human Development; Life Expectancy; Sub-Saharan Africa |
| JEL: | I30 N37 O15 O55 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8586&r=dev |