nep-dev New Economics Papers
on Development
Issue of 2012‒06‒25
29 papers chosen by
Mark Lee
Towson University

  1. Time Poverty, Work Status and Gender: The Case of Pakistan By Najam us Saqib; G. M. Arif
  2. Land Deals in Africa: Pioneers and speculators By Paul Collier; Anthony J Venables
  3. Saving lives: Evidence from a micronutrient intervention in Ecuador By Stephan Litschig; Marian Meller
  4. Poverty and headship in post-apartheid South Africa, 1997-2008 By Michael Rogan
  5. The Effects of International Remittances on Poverty and Inequality in Ethiopia By Beyene, Berhe Mekonnen
  6. Do poor health conditions lead to higher allocation of development assistance? By Katharina Stepping
  7. Financial inclusion in Africa : an overview By Demirguc-Kunt, Asli; Klapper, Leora
  8. Does it pay to be a Cadre ? estimating the returns to being a local official in rural China By Zhang, Jian; Giles, John; Rozelle, Scott
  9. Does Africa need a rotten Kin Theorem ? experimental evidence from village economies By Jakiela, Pamela; Ozier, Owen
  10. Who is deprived ? who feels deprived ? labor deprivation, youth and gender in Morocco By Serajuddin, Umar; Verme, Paolo
  11. Investing mineral wealth in development assets : Ghana, Liberia and Sierra Leone By Boakye, Daniel; Dessus, Sebastien; Foday, Yusuf; Oppong, Felix
  12. Liberia : strategic policy options for medium term growth and development By Dessus, Sebastien; Hoffman, Jariya; Lofgren, Hans
  13. Effects of Population Density on Smallholder Agricultural Production and Commercialization in Rural Kenya By Muyanga, Milu; Jayne, T.S.
  14. State and Power in Rural Africa: Evidence from Madagascar By Bellemare, Marc F.; Moser, Christine M.
  15. Long-run costs of piecemeal reform: wage inequality and returns to education in Vietnam By Phan, Diep; Coxhead, Ian A.
  16. Sex Imbalance, Marriage Competition, and Entrepreneurship: Evidence from rural China By Yuan, Yan; Rong, Zhao; Xu, Lihe
  17. Labor Migration Choice and Its Impacts on Households in Rural China By Rong, Zhao; Yang, Liu; Yuan, Yan
  18. Distortions to Agriculture and Economic Growth in Sub-Saharan Africa By Anderson, Kym; Bruckner, Markus
  19. Land Reallocations, Passive Land Rental, and the Development of Rental Markets in Rural China By Kung, James; Shimokawa, Satoru
  20. Rural-Urban Migration and Vietnamese Agriculture By Brennan, Donna C.; Petersen, Elizabeth H.; Que, Nguyen Ngoc; Vanzetti, David
  21. Impact of a Commodity Price Spike on Poverty Dynamics: Evidence from a Panel of Rural Households in Bangladesh By Balagtas, Joseph Valdes; Bhandari, Humnath; Mohanty, Samarendu; Cabrera, Ellanie; Hossain, Mahabub
  22. Maximizing Human Development By Merwan Engineer; Ian King
  23. On the allocation of talented people in developing countries: the role of oil rents By Christian Ebeke; Luc Désiré Omgba; Rachid Laajaj
  24. Push and pull forces and migration in Vietnam By Huynh Truong, Huy; Walter, Nonneman
  25. Health and the Intergenerational Persistence of Inequality and Child Labour By Jayanta Sarkar; Dipanwita Sarkar
  26. How Deep Are the Roots of Economic Development? By Spolaore, Enrico; Wacziarg, Romain
  27. Water Availability as a Constraint on China's Future Growth By Dana Medianu; John Whalley
  28. The Life Cycle of Plants in India and Mexico By Chang-Tai Hsieh; Peter J. Klenow
  29. Trade Openness and Economic Growth: A Panel Causality Analysis By Thomas Gries; Margarete Redlin

  1. By: Najam us Saqib (Pakistan Institute of Development Economics, Islamabad.); G. M. Arif (Pakistan Institute of Development Economics, Islamabad.)
    Abstract: Time is an important economic resource that can be spent in a variety of ways. Diverse demands on a person’s time may reach a point where the individual may be categorized as time poor. Time poverty may vary across gender, occupational groups, industries, regions, and income levels. The present study focuses on measurement of time poverty and its incidence among these categories using Time Use Survey (TUS) 2007, the first nationwide time use survey for Pakistan. The results of this study provide some important insights into the phenomenon of time poverty in Pakistan and lead to some interesting conclusions. In the entire TUS sample, the incidence of time poverty is 14 percent. Women are found to be more time poor than men whether they are employed or not. A closer look at time use statistics reveals the reason behind this occurrence. There are certain women-specific activities that they have to perform irrespective of their employment status. This additional time burden plays a key role in making them more time poor. Working women are far more time poor as compared to not working women. Thus, while accepting a job, women have to deal with a major tradeoff between time poverty and monetary poverty. People in certain professions and industries are more time poor as compared to people in other professions and industries. These professions and industries generally require extended hours from the workers, while offering low wage rates. This entails a situation of double jeopardy for the workers who tend to be monetary and time poor at the same time. The close association of time poverty with low income found in this study corroborates this conclusion. In the light of these findings, several policy areas emerge where we need to focus. First thing that needs to be done is to generate awareness about a fair distribution of responsibilities between men and women. Government can also play its part in reducing time poverty by enforce minimum wage laws and mandatory ceiling on work hours in the industries which have high concentration of time poverty. Eradication of monetary poverty can also go a long way in this respect by eliminating the need to work long hours at the lowest wage rate just to survive. Improving education also has significant potential in this regard, as high education is found to be associated with low time poverty.
    Keywords: Time Poverty, Gender Disparities, Time Use, SNA Activities, Time Use Survey, Pakistan
    Date: 2012
  2. By: Paul Collier; Anthony J Venables
    Abstract: Much African land currently has low productivity and has attracted investors leasing land as a speculative option on higher future prices or productivity. To be beneficial land deals need to induce productivity enhancing investments. Some of these will be publicly provided (infrastructure, agronomic knowledge), and some can only be provided by ‘pioneer’ investors who discover what works and create demonstration effects. Such pioneers can be rewarded for the positive externalities they create by being granted options on large areas of land. However, pioneers must be separated from speculators by screening and by requirements to work a fraction of the land.
    Keywords: land deals, farmland, Africa, rent, lease
    JEL: O13 O55 Q1
    Date: 2012
  3. By: Stephan Litschig; Marian Meller
    Abstract: Many governments in developing countries implement programs that aim to address nutrional failures in early childhood, yet credible evidence on the effectiveness of these interventions is scant. In this paper, we evaluate the impact of a large-scale, government-run, food fortification program -the Programa de Alimentación y Nutrición Nacional (PANN) 2000- on child mortality in Ecuador. The program was implemented by regular administrative staff at local public health posts and consisted of offering free micronutrient-fortified powder, Mi Papilla, for children aged 6 to 24 months in exchange for health check-ups for the children. Our regression discontinuity design exploits the fact that at its inception, the PANN 2000 was running for about eight months only in the poorest communities (parroquias) of the country. Our main result is that the presence of the program reduced child mortality in the exposed cohort from a level of about 2.5 percent by 1 to 1.5 percentage points. Consistent with this effect, we also find evidence that the number of check-ups at health posts increased in treatment parroquias, even if only in the Sierra region, where check-ups were lower to start with.
    Keywords: early childhood nutrition, mortality, nutritional interventions, regression discontinuity, Ecuador
    JEL: I15 I18
    Date: 2012–02
  4. By: Michael Rogan
    Abstract: In this paper, I investigate the characteristics and poverty status of female- and male-headed households in South Africa using nationally representative household survey data from the October Household Surveys (1997 and 1999) and the General Household Surveys (2004 and 2008). These years (1997-2008) represent a period for which there is an extensive poverty literature documenting (particularly in the 2000s) an overall decrease in the poverty headcount rate. At the same time, however, there is evidence to suggest that female-headed households have a far higher risk of poverty and that the poverty differential between femaleand male-headed households widened over the period. The aim of this paper is to identify some of the main reasons that female-headed households are more vulnerable to poverty in post-apartheid South Africa and why poverty has decreased by more in male-headed households (relative to female-headed households). The study examines the key features which distinguish female- and male-headed households and whether these have changed over time. In order to link these characteristics with the poverty differential between female- and male-headed households, I then examine whether (and by how much) controlling for the observable differences between female- and male-headed households reduces the significantly greater risk of poverty in female-headed households.
    Keywords: Female-headed households; poverty; South Africa
    Date: 2012
  5. By: Beyene, Berhe Mekonnen (Dept. of Economics, University of Oslo)
    Abstract: The paper studies the effects of international remittances on poverty and inequality in Ethiopia using an urban household survey from 2004. In order to identify the effects of remittances on poverty and inequality, counterfactual consumption in the hypothetical case of no remittance is estimated in a selection corrected estimation framework. Inequality and poverty values in the hypothetical and actual cases are then compared. There is a significant reduction in poverty while inequality does not change. The head count, the poverty gap and the squared poverty gap ratios decreased by 2.5%, 1.1% and 0.6% respectively.
    Keywords: remittances; poverty; inequality; Ethiopia
    JEL: F24 I32 O15
    Date: 2012–03–15
  6. By: Katharina Stepping (Colegio Carlo Alberto)
    Abstract: This paper analyzes the targeting of development assistance for health across countries in a multivariate regression framework, based on data from 22 bilateral donors to 160 recipients between 1990 and 2007. Donor characteristics, recipient characteristics and the donor-recipient-relationship are argued to be important determinants. The results show that health indicators influence the average allocation decision, but not to the same degree. HIV prevalence significantly increases aid receipts, while under-five mortality and maternal mortality are insignificant. The quality of the institutional environment in the recipient country, programmatic preferences of the donor and the relationship between donor and recipient also affect the average allocation pattern.
    Keywords: Foreign aid; Assistance; Health; Aid policy; MDGs
    JEL: F35 O15 O19
    Date: 2012
  7. By: Demirguc-Kunt, Asli; Klapper, Leora
    Abstract: This paper summarizes financial inclusion across Africa. First, it provides a brief overview of the African financial sector landscape. Second, it uses the Global Financial Inclusion Indicators (Global Findex) database to characterize adults in Africa that use formal and informal financial services and identify the barriers to formal account ownership. Next, it uses World Bank Enterprise Survey data to examine how the use of financial services by small and medium enterprises in Africa compares with small and medium enterprises in other developing regions in terms of account ownership and availability of lines of credit. The authors find that less than a quarter of adults in Africa have an account with a formal financial institution and that many adults in Africa use informal methods to save and borrow. Similarly, the majority of small and medium enterprises in Africa are unbanked and access to finance is a major obstacle. Compared with other developing economies, high-growth small and medium enterprises in Africa are less likely to use formal financing, which suggests formal financial systems are not serving the needs of enterprises with growth opportunities.
    Keywords: Access to Finance,Banks&Banking Reform,Emerging Markets,Debt Markets,E-Business
    Date: 2012–06–01
  8. By: Zhang, Jian; Giles, John; Rozelle, Scott
    Abstract: Recruiting and retaining leaders and public servants at the grass-roots level in developing countries creates a potential tension between providing sufficient returns to attract talent and limiting the scope for excessive rent-seeking behavior. In China, researchers have frequently argued that village cadres, who are the lowest level of administrators in rural areas, exploit personal political status for economic gain. Much existing research, however, compares the earnings of cadre and non-cadre households in rural China without controlling for unobserved dimensions of ability that are also correlated with success as entrepreneurs or in non-agricultural activities. The findings of this paper suggest a measurable return to cadre status, but the magnitudes are not large and provide only a modest incentive to participate in village-level government. The paper does not find evidence that households of village cadres earn significant rents from having a family member who is a cadre. Given the increasing returns to non-agricultural employment since China's economic reforms began, it is not surprising that the returns to working as a village cadre have also increased over time. Returns to cadre-status are derived both from direct compensation and subsidies for cadres and indirectly through returns earned in off-farm employment from businesses and economic activities managed by villages.
    Keywords: Small Area Estimation Poverty Mapping,Housing&Human Habitats,Labor Policies,Rural Poverty Reduction,Emerging Markets
    Date: 2012–06–01
  9. By: Jakiela, Pamela; Ozier, Owen
    Abstract: This paper measures the economic impact of social pressure to share income with kin and neighbors in rural Kenyan villages. The authors conduct a lab experiment in which they randomly vary the observability of investment returns. The goal is to test whether subjects reduce their income in order to keep it hidden. The analysis finds that women adopt an investment strategy that conceals the size of their initial endowment in the experiment, although that strategy reduces their expected earnings. This effect is largest among women with relatives attending the experiment. Parameter estimates suggest that women behave as though they expect to be pressured to share four percent of their observable income with others, and substantially more when close kin can observe income directly. Although this paper provides experimental evidence from a single African country, observational studies suggest that similar pressure from kin may be prevalent in many rural areas throughout Sub-Saharan Africa.
    Keywords: Economic Theory&Research,Investment and Investment Climate,Emerging Markets,Labor Policies,Debt Markets
    Date: 2012–06–01
  10. By: Serajuddin, Umar; Verme, Paolo
    Abstract: One of the recurrent explanations of the Arab spring is that governments were disconnected from their populations and that public policies were simply not in line with people's sentiments and expectations. This paper provides a methodology to better understand how objective conditions of deprivation are translated into subjective feelings of deprivation using a strand of the recent literature on relative deprivation. The authors apply this methodology to better understand the question of gender and youth deprivation in the context of the Moroccan labor market. They find that the reference group (the people with whom people compare themselves) plays a pivotal role in understanding how feelings of labor deprivation are generated. This can explain the apparent mismatch between objective conditions and subjective feelings of deprivation related to joblessness among young men and women. The methodology can help us understand why greater discontent may be exhibited by a group of individuals who are in fact less deprived in a material sense. It can also potentially help governments design public policies that address objective conditions of deprivation, such as unemployment, with a better understanding of subjective implications.
    Keywords: Labor Markets,Population Policies,Labor Policies,Gender and Development,Housing&Human Habitats
    Date: 2012–06–01
  11. By: Boakye, Daniel; Dessus, Sebastien; Foday, Yusuf; Oppong, Felix
    Abstract: Promoting sustainable development calls for investing rents from exhaustible mineral resources into human, physical and social capital, so as to protect the wealth of countries and the economic opportunities of their citizens. This has been difficult in well-governed Ghana in the last decade; and might prove to be extremely challenging in post-conflict countries such as Liberia and Sierra Leone, where preference for the present is high and institutions to collect rents and convert them into effective investments weak. The paper reviews the countries'degrees of preparedness to confront the various challenges associated with ongoing mineral booms, and tries to identify country-specific policy areas of particular relevance and potential impact for sustainable development.
    Keywords: Debt Markets,Economic Theory&Research,Public Sector Economics,Environmental Economics&Policies,Public Sector Expenditure Policy
    Date: 2012–06–01
  12. By: Dessus, Sebastien; Hoffman, Jariya; Lofgren, Hans
    Abstract: The objective of this paper is to inform Liberia's medium-term growth and development strategy for 2012-17 and its National Vision: Liberia Rising 2030, both of which are under preparation. The analysis is based on MAMS (Maquette for MDG [Millennium Development Goal]) Simulations, a computable general equilibrium model. A base scenario (designed to represent a central case for the evolution of Liberia's economy up to 2030) is compared to a set of non-base scenarios that introduce alternative assumptions for the mining sector, government spending on infrastructure and human development, as well as foreign borrowing. The simulations, which cover the period 2012-2030, indicate that rapid expansion of mining output, front-loaded investment in infrastructure, and improved government efficiency may bring about rapid growth. The findings underscore the importance of allocative and operational efficiency of public spending. It is also important that the government balance spending on infrastructure and human development as they complement each other and face different constraints. Spending on infrastructure tends to have relatively strong and immediate growth and poverty reduction effects, whereas spending on human development has a stronger positive impact on non-poverty MDG indicators at the cost of lowered economic growth in the short to medium terms. It is important to consider that growth driven by rapid mining expansion entails drawbacks and risks, including the persistence of an enclave economy that will not benefit the majority of the population, and increased vulnerability to fluctuations in iron ore world prices.
    Keywords: Economic Theory&Research,Debt Markets,Emerging Markets,Access to Finance,Labor Policies
    Date: 2012–06–01
  13. By: Muyanga, Milu; Jayne, T.S.
    Abstract: This study analyzes the implications of increasing population density in Kenya’s rural areas on smallholder production and commercialization. Using data from five panel surveys on 1,146 small-scale farms over the 1997-2010 period, we use econometric techniques to determine how increasing rural population density is affecting farm household behavior and its implication to smallholder commercialization. We find that farm productivity and incomes tend to rise with population density up to 600-650 persons per km2; beyond this threshold, rising population density is associated with sharp declines in farm productivity. Currently 14% of Kenya’s rural population resides in areas exceeding this population density. The study concludes by exploring the nature of institutional and policy reforms needed to address these development problems.
    Keywords: Land, population density, smallholder agriculture, food security, policy, Kenya, Community/Rural/Urban Development, International Relations/Trade, Production Economics,
    Date: 2012
  14. By: Bellemare, Marc F.; Moser, Christine M.
    Abstract: Despite the presumed importance of a strong state in the development process, there has been very little empirical work assessing the state’s ability to exercise power in isolated areas and understanding the means through which the state exerts that power. This paper begins to fill this gap in the literature by examining the relationship between state power and isolation using several proxies for state power with a rich panel data set from Madagascar. We find strong evidence that the extent of state power is severely limited in isolated areas.
    Keywords: State, State Power, Africa, Sub-Saharan Africa, Marketing, Political Economy,
    Date: 2012
  15. By: Phan, Diep; Coxhead, Ian A.
    Abstract: “Shock therapy” transitions in Eastern Europe facilitated movement of skilled workers into privatized industries offering high wage premia relative to state industries. Other transitional economies (notably China and Vietnam) have been slower to relinquish control over key industries and factor markets. Some costs of this piecemeal approach are now becoming apparent. We examine the spillover of continuing capital market distortions into the market for a complementary factor, skilled labor. Using Vietnamese data we find that capital market segmentation creates a two-track market for skills, in which state sector workers earn high salaries while non-state workers face lower demand and lower compensation. Growth is reduced directly by diminished allocative efficiency and incentives to acquire education, and indirectly by higher wage inequality and rents for workers with access to state jobs.
    Keywords: Labor, skills, state-owned, inequality, wages, Vietnam, International Development, Labor and Human Capital, J31, P23, F16,
    Date: 2012
  16. By: Yuan, Yan; Rong, Zhao; Xu, Lihe
    Abstract: It is well acknowledged that the entrepreneurship is important to economic development. In this paper, we suggest a gender-related determinant of entrepreneurship, local sex imbalance. Using a 2009 rural finance survey, we examine how this imbalance influences the venturing at the household level in China. We find that households with a son in more sex-imbalanced villages are more likely to have a business. Further examination reveals that these households have any advantage in borrowing.
    Keywords: entrepreneurship, sex ratio, China, Community/Rural/Urban Development, Consumer/Household Economics, Farm Management, Financial Economics, J1, J2,
    Date: 2012
  17. By: Rong, Zhao; Yang, Liu; Yuan, Yan
    Abstract: Cross-sectional analysis is problematic when examining the determinants of migration as well as its impacts. Panel data may potentially solve the problem by tracking households over different time periods. Using panel data from household surveys in six provinces in rural China over 1986 to 1999, this paper examines the determinants of rural-to-urban migration and its impacts on rural households. We find that number of laborers, income, education level and village migrating network increase the likelihood of migration for households with no migration experience as well as households with experience. By estimating the dynamic difference on migration impacts, at the household level we find that grain output declines by less than 2 percent while net income increases by 16 percent upon migration.
    Keywords: internal migration, grain output, labor migration, rural China, Consumer/Household Economics, Labor and Human Capital, O15, J61, Q12,
    Date: 2012
  18. By: Anderson, Kym; Bruckner, Markus
    Abstract: To what extent has Sub-Saharan Africa’s slow economic growth over the past five decades been due to price and trade policies that discouraged production of agricultural relative to non-agricultural tradables? This paper uses a new set of estimates of policy induced distortions to relative agricultural prices to address this question econometrically. We first test if these policy distortions respond to economic growth, using rainfall and international commodity price shocks as instrumental variables. We find that on impact there is no significant response of relative agricultural price distortions to changes in real GDP per capita growth. We then test the reverse proposition and find a statistically significant and sizable negative effect of relative agricultural price distortions on the growth rate of Sub-Saharan African countries. Our fixed effects estimates yield that, during the 1960-2005 period, a ten percentage points increase in distortions to relative agricultural prices decreased the region’s real GDP per capita growth rate by about half a percentage point per annum.
    Keywords: Economic growth, Trade restrictions, Agricultural incentives, Agribusiness, F1, F4, O1, O2, O4,
    Date: 2012–06
  19. By: Kung, James; Shimokawa, Satoru
    Abstract: Based on a unique farm survey, this article intends to shed new light on the intriguing relationship between administrative land reallocations and the development of land rental markets in China. We find that the two alternative mechanisms of allocating arable land tend to be substitutes where land is reallocated “partially” only among households affected by demographic change (PLR). Where village-wide or “full-scale” reallocations (FSLR) are conducted among all households, however, land rental market transactions have increased in response to the enlarging mismatch in labor-land ratios across households; transactions that would not have occurred otherwise. While inefficient in the short-run, FSLR potentially facilitates the development of land rental markets as it unwittingly brings together parties with a mere arms-length relationship (e.g., non-relatives) to contract with each other, in light of the finding that households affected by PLR tend to lease land primarily to/from their own relatives or through the village authorities.
    Keywords: Land reallocations, Passive Land rental, Rural, China, Agricultural and Food Policy, Land Economics/Use, O12, Q12, Q15,
    Date: 2012
  20. By: Brennan, Donna C.; Petersen, Elizabeth H.; Que, Nguyen Ngoc; Vanzetti, David
    Abstract: Vietnam has achieved remarkable economic growth since it liberalised its markets, and further economic growth and opportunities are predicted both within and outside the agriculture sector. However, growth has not been evenly distributed across regions and significant structural adjustment pressures are expected in the medium to long term. A dynamic, eight region, 13 commodity, non-linear programming model of Vietnam’s agricultural sector is used to analyse the likely impact of a change in rural-urban migration on agricultural production, prices, trade and regional incomes.
    Keywords: Community/Rural/Urban Development,
    Date: 2012–02
  21. By: Balagtas, Joseph Valdes; Bhandari, Humnath; Mohanty, Samarendu; Cabrera, Ellanie; Hossain, Mahabub
    Abstract: In this paper we assess the effects of the dramatic rise in agricultural commodity prices during 2007-2008 on income dynamics and poverty among rural households in Bangladesh. We use data from a nationally representative longitudinal survey of rural households in Bangladesh collected in four waves in 1988, 2000, 2004, and 2008. Nargis and Hossain (2006) analysed income dynamics and poverty incidence for the first three waves, finding a declining trend in both the incidence and depth of poverty, aided by in particular by human capital development and the off-farm labor opportunities. Here we update the analysis to include data collected in 2008, at the height of the aforementioned spike in agricultural prices. We find that various measures of rural poverty in Bangladesh had sunk back to pre-2000 levels. The price of a balanced food basket more than doubled from 2000-2008, while household incomes rose only 15 percent during the same time period. We present updated analysis of income determinants and document a reduction in upward poverty mobility during 2004-2008. Moreover, we present new analysis that suggests that determinants of poverty have not been time-invariant.
    Keywords: poverty, income, commodity price spike, rural households, Bangladesh, panel data, Demand and Price Analysis, Food Security and Poverty,
    Date: 2012–02
  22. By: Merwan Engineer (University of Victoria, Canada); Ian King (The University of Melbourne, Australia)
    Abstract: The Human Development Index (HDI) is widely used as an aggregate measure of overall human well-being. We examine the allocations implied by the maximization of this index using a standard growth model. Maximization of the HDI leads to consumption (excluding education and health expenditures) being pushed to minimal levels. It also leads to the overaccumulation of education and/or health capital and possibly physical capital, relative to the standard golden rule. We propose an alternative specification of the HDI, where permanent consumption replaces income as the proxy for a decent standard of living. Maximization of this alternative index yields a "human development golden rule" which balances consumption, education and health expenditure in promoting human development. We also advocate the method of optimization subject to constraints for revealing the consequences of taking a policy measure seriously and testing its congruence with its underlying philosophy.
    Keywords: Economic growth, Human Development Index, Planning
    JEL: O21 O15
    Date: 2012–06
  23. By: Christian Ebeke; Luc Désiré Omgba; Rachid Laajaj
    Abstract: Evidence has shown that the allocation of talented people affects the long-term growth. It has been found that a large population of engineers tends to foster innovation and growth more rapidly than population of lawyers and other activities with access to the public rent. Yet little is known about what determines the allocation of talents. This paper uses a sample of 69 developing countries to address this question. It shows that the oil rent tends to orient talents towards productive activities in well-governed countries, and towards rentseeking activities in poorly governed countries. These results are robust to different specifications, datasets on governance quality and estimation methods. The paper sheds light on the sources and mechanisms of the resource curse through its effect on human resources and rent-seeking activities.
    Keywords: Rent-seeking; occupational choice; oil rents.
    JEL: D72 J24 Q32
    Date: 2012
  24. By: Huynh Truong, Huy; Walter, Nonneman
    Abstract: This paper adopts the push and pull model of migration to explain inter-provincial migration flows across 63 provinces or cities of Vietnam in the period 2004-2009. We used a solution to a quadratic cost migration problem by combining the total number of in and out-migration of various provinces and inverse distances between provinces that aims at calculating the push and pull factors of each province. The result confirms the hypothesis that push factors correlate well with total out flows of provinces and pull factors with total inflows of provinces. In addition, it is found that pull and push factors are explained rather well by population size and income, but not so by urbanization and poverty
    Keywords: push factors; pull factors; migration; distance
    JEL: C00 J00
    Date: 2012–04
  25. By: Jayanta Sarkar (QUT); Dipanwita Sarkar (QUT)
    Abstract: The paper develops a theory of intergenerational persistence of child labour. Using an overlapping generations model with heterogeneous agents, we highlight the interaction between human capital inequality, health and child labour. The intergenerational evolution of human capital distribution is shown to generate multiple equilibria, leading to child-labour traps and polarisation of human capital. The results suggest that public provision of education can lead to perfect equality in the long run, but a ceteris paribus ban on child labour is likely to exacerbate both health and schooling outcomes for the poor.
    Keywords: Child labour, Health, Human capital, Inequality, Multiple equilibria, Polarisation
    JEL: I1 J2 O1
    Date: 2012–06–07
  26. By: Spolaore, Enrico; Wacziarg, Romain
    Abstract: The empirical literature on economic growth and development has moved from the study of proximate determinants to the analysis of ever deeper, more fundamental factors, rooted in long-term history. A growing body of new empirical work focuses on the measurement and estimation of the effects of historical variables on contemporary income by explicitly taking into account the ancestral composition of current populations. The evidence suggests that economic development is affected by traits that have been transmitted across generations over the very long run. This article surveys this new literature and provides a framework to discuss different channels through which intergenerationally transmitted characteristics may impact economic development, biologically (via genetic or epigenetic transmission) and culturally (via behavioral or symbolic transmission). An important issue is whether historically transmitted traits have affected development through their direct impact on productivity, or have operated indirectly as barriers to the diffusion of productivity-enhancing innovations across populations.
    Keywords: Economic development; Growth; Intergenerational transmission; Long-run persistence
    JEL: N10 O11 O33 O47 O57
    Date: 2012–06
  27. By: Dana Medianu; John Whalley
    Abstract: Recent writings on China’s water situation often portray China’s water problems as severe and suggest that water availability could threaten the sustainability of China’s future growth. However, China’s high growth of the last 20 years or more has been obtained with relatively little increase in the physical volume of water. In this paper, we use a growth accounting approach to investigate both the contribution played in the past by water availability in constraining China’s growth performance, and what would be involved in the future. We use a modified version of Solow growth accounting in which water in efficiency units enters the production technology, and investment in water management assets raises efficiency of water use. Our results suggest that if investments in water assets in the future were lower than they were in the past, growth might slightly increase by about 0.1 percentage points if non-water capital and water in efficiency units are close substitutes but growth rates could decrease by as much as 0.2-3.9 percentage points if investments in water assets were small, and if the elasticities of substitution were low. On the other hand, our experiments suggest that with faster growth of investments in water assets than in the past and a low elasticity of substitution growth rates could increase. But if non-water capital and water in efficiency units are close substitutes growth rates could even decrease, as in other cases.
    JEL: O44 O47 Q25
    Date: 2012–06
  28. By: Chang-Tai Hsieh; Peter J. Klenow
    Abstract: In the U.S., the average 40 year old plant employs almost eight times as many workers as the typical plant five years or younger. In contrast, surviving Indian plants exhibit little growth in terms of either employment or output. Mexico is intermediate to India and the U.S. in these respects: the average 40 year old Mexican plant employs twice as many workers as an average new plant. This pattern holds across many industries and for formal and informal establishments alike. The divergence in plant dynamics suggests lower investments by Indian and Mexican plants in process efficiency, quality, and in accessing markets at home and abroad. In simple GE models, we find that the difference in life cycle dynamics could lower aggregate manufacturing productivity on the order of 25% in India and Mexico relative to the U.S.
    JEL: D24 O40
    Date: 2012–06
  29. By: Thomas Gries (University of Paderborn); Margarete Redlin (University of Paderborn)
    Abstract: This paper examines the short-term and long-run dynamics between per capita GDP growth and openness for 158 countries over the period 1970-2009. We use panel cointegration tests and panel error-correction models (ECM) in combination with GMM estimation to explore the causal relationship between these two variables. We approach the problem of a potential endogeneity between openness and growth by including only growth rates and lagged values of the independent variable. Additionally, we apply Difference GMM and System GMM estimation. These estimators also address the issue of a possible correlation between the lagged endogenous variable and the error term. The results suggest a long-run relationship between openness and economic growth with a short-run adjustment to the deviation from the equilibrium for both directions of dependency. The long-run coefficients indicate a positive significant causality from openness to growth and vice versa, indicating that international integration is a beneficial strategy for growth in the long term. By contrast the short-run coefficient shows a negative short-run adjustment, suggesting that openness can be painful for an economy undergoing short-term adjustments. In addition to the entire panel we subdivide the data into income-related subpanels. While the long-run effect remains predominantly positive and significant, the short-run adjustment becomes positive when the income level increases. This result suggests that different trade structures in low-income and high-income countries have different effects on economic growth.
    Keywords: openness, trade, growth, development, panel cointegration
    JEL: F10 F15 F43
    Date: 2012–06

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