nep-dev New Economics Papers
on Development
Issue of 2013‒01‒26
ten papers chosen by
Mark Lee
Towson University

  1. Intersectoral Health Action in Tanzania – Determinants and Policy Implications By Simon, Michael; Tsegai, Daniel W.; Flessa, Steffen
  2. Birthplace Diversity and Economic Prosperity By Alberto Alesina; Johann Harnoss; Hillel Rapoport
  3. Housing and Urbanization in Africa: unleashing a formal market process By Paul Collier; Anthony J. Venables
  4. World human development : 1870-2007 By Leandro Prados de la Escosura
  5. Comprehensive wealth and sustainable development in India By Kumar, Surender
  6. Remittances and Business Cycles: Comparison of South Asian Countries By Mazhar MUGHAL; Junaid AHMED
  7. Modernization of Agriculture and Long-Term Growth By Dennis Tao Yang; Xiaodong Zhu
  8. Private Chinese investment in Africa : myths and realities By Shen, Xiaofang
  9. Explaining Africa's (dis)advantage : the curse of party monopoly By Harrison, Ann E.; Lin, Justin Yifu; Xu, L. Colin
  10. How long will it take to lift one billion people out of poverty ? By Ravallion, Martin

  1. By: Simon, Michael; Tsegai, Daniel W.; Flessa, Steffen
    Abstract: The tremendous human resource and economic burden of HIV/AIDS, malaria and diarrhoeal diseases is well acknowledged in many developing countries. Most of these diseases have multifaceted causes such as malnutrition, the consumption of contaminated water or poor education. Thus, cross-sectoral action is needed to lower the burden of disease in the long run. However, little has been done to investigate the causal relationship between investments in ‘health related’ sectors and the reduction of disease prevalence. This paper aims at analysing the marginal health returns to cross-sectoral government spending for the case of Tanzania. For this, the normative assumption is to maximise the amount of Disability Adjusted Life Years (DALYs) averted per dollar invested. A Simultaneous Equation Model (SEM) is developed to estimate the required elasticities. The results of the quantitative analysis show that the highest returns on DALYs are obtained by improved nutrition and access to safe water sources, followed by sanitation. Looking at the impact of indirect factors, the health effect of investments in mother education exceeds the effect of additional short- and long-term public spending on water.
    Keywords: Health Promotion, Public Health Policy, Intersectoral Health Action, Disability Adjusted Life Years, Health Determinants, Cost-effectiveness, Tanzania, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Health Economics and Policy,
    Date: 2012–12
  2. By: Alberto Alesina (Harvard University and IGIER Bocconi); Johann Harnoss (EQUIPPE, University of Lille, Harvard University and HWWI Hamburg); Hillel Rapoport (Bar-Ilan University, EQUIPPE and Center for International Development, Harvard University)
    Abstract: The diversity of people has economic costs and benefits. Using recent immigration data from 195 countries, we propose an index of diversity based on people's birthplaces. This new index is decomposed into a "size" (share of foreign born) and a "variety" (diversity of immigrants) component and is available for 1990 and 2000 and for the overall as well as for the high (workers with college education) and low-skill fractions of the workforce. We show that birthplace diversity is largely uncorrelated with ethnic and linguistic fractionalization and that - unlike fractionalization - it is positively related to economic development even after controlling for education, institutions, ethnic and linguistic fractionalization, trade openness, geography, market size, and origin-effects. This positive association appears particularly strong for the diversity of skilled immigrants in richer countries. We make progress towards addressing endogeneity by specifying a gravity model to predict the diversity of immigration based on exogenous bilateral variables. The results are robust across various OLS and 2SLS specifications.
    Keywords: Birthplace diversity, ethnic diversity, economic growth, productivity, immigration.
    JEL: O1 O4 F22 F43
    Date: 2013–01
  3. By: Paul Collier; Anthony J. Venables
    Abstract: In many African countries a market for private provision of formal sector mass housing is largely absent. This is not inevitable, but is the consequence of policy failure surrounding five key issues. The affordability of housing, with costs often inflated by inappropriate building regulations and inefficient construction sectors; lack of clarity in land titling and legal enforcement; lack of innovation in supply of housing finance; failure to supply supporting infrastructure and to capture development gains to finance this; and failure to plan cities in a manner conducive to employment creation. Since responsibility for these policies is divided between different parts of government, a coordinated push is needed to secure reform and activate this market.
    Date: 2013
  4. By: Leandro Prados de la Escosura
    Abstract: How has wellbeing evolved over time and across regions? How does the West compare to the Rest? What explains their differences? These questions are addressed using an historical index of human development. A sustained improvement in wellbeing has taken place since 1870. The absolute gap between OECD and the Rest widened over time, but an incomplete catching up –largely explained by education- has occurred since 1913 but fading away after 1970, when the Rest fell behind the OECD in terms of longevity. As the health transition was achieved in the Rest, the contribution of life expectancy to human development improvement declined. Meanwhile, in the OECD, as longevity increased, healthy years expanded. A large variance in human development is noticeable in the Rest since 1970, with East Asia, Latin America and North Africa catching up to the OECD, while Central and Eastern Europe and Sub-Saharan Africa falling behind
    Keywords: Wellbeing, Human Development, HDI, Life Expectancy, Education
    JEL: O15 O50 I00 N30
    Date: 2013–01
  5. By: Kumar, Surender
    Abstract: Sustainable development requires that the per capita productive base or comprehensive wealth of an economy should, at least, not decline over the period of time. This study provides estimates of the growth rate of per capita comprehensive wealth for the Indian economy for the period 1991-2006. The growth rate of per capita comprehensive wealth is estimated to be 4.39 percent whereas the growth rate of per capita GDP is 4.42 percent. We find that though the growth rate of manufactured and human capital has been more than enough to offset the decline in natural assets, thereby leading to an improvement in the productive base of the economy, the growing resource and energy use intensity remains an issue of major concern.
    Keywords: Sustainability; development; human capital; comprehensive wealth
    JEL: D62 N50 E01 H23 D92
    Date: 2013–01–15
  6. By: Mazhar MUGHAL; Junaid AHMED
    Abstract: Remittances and Business Cycles: Comparison of South Asian Countries
    Date: 2012–08
  7. By: Dennis Tao Yang; Xiaodong Zhu
    Abstract: This paper develops a two-sector model that illuminates the role played by agricultural modernization in the transition from stagnation to growth. When agriculture relies on traditional technology, industrial development reduces the relative price of industrial products, but has a limited effect on per capita income because most labor has to remain in farming. Growth is not sustainable until this relative price drops below a certain threshold, thus inducing farmers to adopt modern technology that employs industry-supplied inputs. Once agricultural modernization begins, per capita income emerges from stasis and accelerates toward modern growth. Our calibrated model is largely consistent with the set of historical data we have compiled on the English economy, accounting well for the growth experience of England encompassing the Industrial Revolution.
    Keywords: long-term growth, transition mechanisms, relative price, agricultural modernization, structural transformation, the Industrial Revolution, England
    JEL: O41 O33 N13
    Date: 2013–01–18
  8. By: Shen, Xiaofang
    Abstract: Private Chinese outbound investment, not as well-known as government-led investment, offers special opportunities and challenges for Africa today. The significance of Chinese private-sector investment is already visible in the burgeoning manufacturing sector in some parts of Africa, and the trend will continue to grow in the near future. The underlying force behind this trend is the increased pressure of industrial restructuring in coastal China, a force that drives some labor-intensive firms to relocate to other parts of the developing world, including Africa. African host country governments can respond to this phenomenon with proactive development policies and strategies to maximize private Chinese investment for the benefit of their own economies.
    Keywords: Debt Markets,Investment and Investment Climate,Emerging Markets,ICT Policy and Strategies,Labor Policies
    Date: 2013–01–01
  9. By: Harrison, Ann E.; Lin, Justin Yifu; Xu, L. Colin
    Abstract: Africa's economic performance has been widely viewed with pessimism. This paper uses firm-level data for 89 countries to examine formal firm performance. Without controls, manufacturing African firms do not perform much worse than firms in other regions. But they do have structural problems, exhibiting much lower export intensity and investment rates. Once the analysis controls for geography and the political and business environment, formal African firms robustly lead in sales growth, total factor productivity levels and productivity growth. Africa's conditional advantage is higher in low-tech than in high-tech manufacturing, and exists in manufacturing but not in services. While geography, infrastructure, and access to finance play an important role in explaining Africa's disadvantage in firm performance, the key factor is party monopoly. The longer a single political party remains in power, the lower are firm productivity levels, growth rates, and sales growth for manufacturing. In contrast, the business environment and firm characteristics (except for foreign investment) do not matter as much. The paper also finds evidence that the effects of the political and business environment are heterogeneous across sectors and firms of various levels of technology.
    Keywords: Environmental Economics&Policies,Economic Theory&Research,Labor Policies,E-Business,Emerging Markets
    Date: 2013–01–01
  10. By: Ravallion, Martin
    Abstract: Alternative scenarios are considered for reducing by one billion the number of people living below $1.25 a day. The low-case,"pessimistic,"path to that goal would see the developing world outside China returning to its slower pace of growth and poverty reduction of the 1980s and 1990s, though with China maintaining its progress. This path would take another 50 years or more to lift one billion people out of poverty. The more optimistic path would maintain the (impressive) progress against poverty since 2000, which would instead reach the target by around 2025-30. This scenario is consistent with both linear projections of the time series data and non-linear simulations of inequality-neutral growth for the developing world as a whole.
    Keywords: Achieving Shared Growth,Inequality,Regional Economic Development,Rural Poverty Reduction,Services&Transfers to Poor
    Date: 2013–01–01

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