nep-sea New Economics Papers
on South East Asia
Issue of 2006‒01‒24
fifty-five papers chosen by
Kavita Iyengar
Asian Development Bank

  1. What does the Bank of Japan do to East Asia? By Bartosz Mackowiak
  2. The Japan–Australia Partnership in the Era of the East Asian Community: Can they Advance Together? By Takashi Terada
  3. Prospects For Enhanced Exchange Rate Cooperation in East Asia: Some Preliminary Findings from Generalized PPP Theory By Peter Wilson; Choy Keen Meng
  4. Shichoson Gappei niha Saishutsu Sakugen kouka ga arunoka (in Japanese) By Takeshi Miyazaki
  5. Deflationary Expansion: an Overshooting Perspective to the Recent Business Cycle in China By Gang Gong; Justin Yifu Lin
  6. What%u2019s So Special about China%u2019s Exports? By Dani Rodrik
  7. Financial Market Integration in East Asia: Regional or Global? By Jongkyou Jeon; Yonghyup Oh; Doo Yong Yang
  8. Reconsidering the Effects of Intranational and nternational R&D Spillovers on Productivity Growth: Firm-level Evidence from Japan By Kozo Kiyota
  9. AMU Deviation Indicator for Coordinated Exchange Rate Policies in East Asia and its Relation with Effective Exchange Rates By Eiji Ogawa; Junko Shimizu
  10. Fiscal Decentralization and Local Public Good Provision in China By Xin-Qiao; Jie Bai
  11. Emissions Trading to Improve Air Quality in an Industrial City in the People's Republic of China By Krupnick, Alan; Bell, Ruth; Morgenstern, Richard; Anderson, Robert; Abegunawardena, Piya; Schreifels, Jeremy; Dong, Cao; Jinan, Wang; Jitian, Wang; Larsen, Steiner
  12. Public Disclosure of Industrial Pollution: The PROPER Approach for Indonesia? By Afsah, Shakeb; Sterner, Thomas; López, Jorge
  13. Two decades of reform : the changing organization dynamics of Chinese industrial firms By Nabeshima, Kaoru; Yusuf, Shahid
  14. CEO Turnover, Firm Performance and Enterprise Reform in China: Evidence from New Micro Data By Takao Kato; Cheryl Long
  15. Foreign Direct Investment in China's Power Sector: Trends, Benefits and Barriers By Blackman, Allen; Wu, Xun
  16. Trade, Poverty and Employment: The Social Consequences of Integration with China By Lucio Castro; Daniel Saslavsky
  17. Industrial Policy and Technology Diffusion: Evidence from Paper Making Machinery in Indonesia By Dijk van, M.; Szirmai, A.
  18. The Ancillary Carbon Benefits of SO2 Reductions from a Small-Boiler Policy in Taiyuan, PRC By Krupnick, Alan; Morgenstern, Richard; Zhang, Xuehua
  19. China?s Emerging Tax Regime: Local Tax Farming and Central Tax Bureaucracy By Zhu, Z.; Krug, B.
  20. Environmental Goods and Services A Synthesis of Country Studies By Maxime Kennett; Ronald Steenblik
  21. Climate Policy in the United States and Japan: Prospects in 2005 and Beyond, Workshop Summary By Pizer, William; Tamura, Kentaro
  22. Trade Policy at the Cross-Roads By Bill Carmichael
  23. Fast-Falling Barriers and Growing Concentration: The Emergence of a Private Economy in China By Sean Dougherty; Richard Herd
  24. Preferential trading in South Asia By Pitigala, Nihal; Panagariya, Arvind; Baysan, Tercan
  25. Age, Health, and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey in Japan By Krupnick, Alan; Alberini, Anna; Simon, Nathalie; Itaoka, Kenshi; Akai, Makoto; Cropper, Maureen
  26. Nonfarm activity and rural income inequality : a case study of two provinces in China By Luo, Xubei; Zhu, Nong
  27. Forest Carbon Sinks: European Union, Japanese, and Canadian Approaches By Sedjo, Roger; Amano, Masahiro
  28. Links between the Indian, U.S. and Chinese Stock Markets By Heng Chen; Bento J. Lobo; Wing-Keung Wong
  29. Di Bao : a guaranteed minimum income in urban China? By Wang, Youjuan; Ravallion, Martin; Chen, Shaohua
  30. Climate Policy in the United States and Japan: A Workshop Summary By Pizer, William; Tamura, Kentaro
  31. Environmental Goods: A Comparison of the APEC and OECD Lists By Ronald Steenblik
  32. An Introduction to Water Management By P Nair; Deepak Kumar
  33. Is time ripe for a currency union in emerging East Asia? The role of monetary stabilisation By Marcelo Sánchez
  34. What Determines the Gradient among Children in Developing Countries? Evidence from Indonesia By Cheolsung Park
  35. Structural Breakpoints in Volatility in International Markets By Viviana Fernandez;
  36. Mortality Risk Valuation for Environmental Policy By Krupnick, Alan; Cropper, Maureen; Alberini, Anna; Simon, Nathalie; Itaoka, Kenshi; Akai, Makoto
  37. Competition Policy and Regulation in Power and Telecommunications By Epictetus E. Patalinghug; Gilberto M. Llanto
  38. Tariff Liberalization, Wood Trade Flows, and Global Forests By Sedjo, Roger; Simpson, R. David
  39. International Trade and Knowledge Spillovers: The Case of Indonesian Manufacturing By Jacob, J.; Szirmai, A.
  40. The Effect on Asset Values of the Allocation of Carbon Dioxide Emission Allowances By Burtraw, Dallas; Palmer, Karen; Bharvirkar, Ranjit; Paul, Anthony
  41. A Comparison between Latent Class Model and Mixed Logit Model for Transport Mode Choice: Evidences from Two Datasets of Japan By Junyi Shen; Yusuke Sakata; Yoshizo Hashimoto
  42. Air Pollution Control Policy Options for Metro Manila By Krupnick, Alan; Fischer, Carolyn; Morgenstern, Richard; Logarta, Jose; Rufo, Bing
  43. Labour Protection in China: Challenges Facing Labour Offices and Social Insurance By Anders Reutersward
  44. Money, Interest Rate and Stock Prices: New Evidence from Singapore and The United States By Wong Keung-Wing; Habibullah Khan; Jun Du
  45. Valuing Medical Schools in Japan: National versus Private Universities By Mototsugu Fukushige; Hideo Yunoue
  46. How Do Public Disclosure Pollution Control Programs Work? Evidence from Indonesia By Blackman, Allen; Afsah, Shakeb; Ratunanda, Damayanti
  47. Income distribution, technical change and the dynamics of international economic integration By Michael Landesmann; Robert Stehrer
  48. The Social Impact of Globalization in the Developing Countries By Eddy Lee; Marco Vivarelli
  49. The Gender Wage Gap in Four Countries By Anne Daly; Akira Kawaguchi; Xin Meng; Karen Mumford
  50. 05-06 "Policy Space for Development in the WTO and Beyond: The Case of Intellectual Property Rights" By Ken Shadlen
  51. A Spatial-Intertemporal Model for Tropical Forest Management Applied to Khao Yai National Park, Thailand By Albers, Heidi
  52. The Economics of a Lost Deal By Ghersi, Frederic; Hourcade, Jean-Charles
  53. The Long Run Impact of Bombing Vietnam By Edward Miguel; Gerard Roland
  54. Efficiency and Productivity Growth of Domestic and Foreign Commercial Banks in Malaysia By Matthews, Kent; Ismail, Mahadzir
  55. Environmental Goods: Where Do the Dynamic Trade Opportunities for Developing Countries Lie? By Robert Hamwey

  1. By: Bartosz Mackowiak
    Abstract: In recent policy debates some have argued that expansionary monetary policy in Japan can increase real output in Japan and in Japan´s neighbors, while others have warned that it is a beggar-thy-neighbor policy. In this paper we estimate structural vector autoregressions to assess the effects of Japanese monetary policy shocks. We find that the effects of Japanese monetary policy shocks on macroeconomic variation in East Asia have been modest and difficult to reconcile with the beggar-thy-neighbor view. We estimate that the Asian crisis was preceded by expansionary monetary policy shocks in Japan, but we fail to find support for the view that these shocks contributed to the crisis.
    Keywords: Structural vector autoregression, sign restrictions, monetary policy shocks, spillover effects, beggar-thy-neighbor, Japan, East Asia
    JEL: F41 E3 E52
    Date: 2005–12
  2. By: Takashi Terada (National University of Singapore)
    Abstract: This paper aims to examine the implications of the rise of East Asian regionalism for the Australia-Japan partnership. In particular, it investigates whether both nations can sustain their partnership, which evolved around Asia Pacific regionalism over the last few decades, by exploring the upsurge of Japan’s interest in East Asian regionalism and examining characteristics of Australia’s foreign policy under the Howard government, which lacked a regionalist approach in its first three terms but has shown a keener interest in furthering relations with East Asian countries and promoting East Asian regionalism since late 2004.
    Keywords: East Asia, Australia-Japan partnership, regionalist approach, trade liberalisation
    JEL: E6 O19 F13 F14
    Date: 2005–11
  3. By: Peter Wilson (Department of Economics, National University of Singapore); Choy Keen Meng
    Abstract: The Asian financial crisis increased economic disparities in the East Asian region, thus making monetary integration more difficult, but rekindled political interest in Asian monetary and exchange rate cooperation. This paper applies the theory of Generalized Purchasing Power Parity (G-PPP), which looks at the behavior of long-run real exchange rates, to assess the potential for an optimum currency area (OCA) among a subset of East Asian countries based on five of the more advanced members of the Association of Southeast Asian Nations (ASEAN5). Our findings suggest little support for an OCA for ASEAN5 as a bloc prior to the Asian financial crisis and mixed results in the post-crisis period. In particular, asymmetries in the way countries adjust to shocks and low or insignificant speeds of adjustment were found. Thus, although the application of single OCA criteria is notoriously demanding and our tests apply to only one of the many criteria for the successful formation of an OCA, we cannot find persuasive evidence that ASEAN5 as a group constitute a potential currency area with either the USA or Japan, even when the ‘noisy’ period of the Asian financial crisis is omitted.
    Keywords: Optimum currency area, exchange rates, East Asia, ASEAN
    JEL: F31 F33 F36
  4. By: Takeshi Miyazaki
    Date: 2006–11
  5. By: Gang Gong (School of Economics and Managment, Tsinghua University); Justin Yifu Lin (China Center of Economic Research, Peking University)
    Abstract: Deflationary expansion has puzzled economists both in and outside China. We study this business cycles phenomenon within a model of discrete time dynamics. We find that deflationary expansion could be possible if driven by an overshooting in investment and if the state of the economy maintains high rate of growth. This expression is consistent with the recent time series variation of some key macroeconomic variables. The high steady state of growth could be explained by the current insttutional environment of China.
    Keywords: Deflationary Expansion, Overshooting , Business Cycle, China, growth, discrete time dynamics
    JEL: C62 E32 E50 P24
    Date: 2005–11
  6. By: Dani Rodrik
    Abstract: Much more than comparative advantage and free markets have been at play in shaping China's export success. Government policies have helped nurture domestic capabilities in consumer electronics and other advanced areas that would most likely not have developed in their absence. As a result, China has ended up with an export basket that is significantly more sophisticated than what would be normally expected for a country at its income level. This has been an important determinant of China's rapid growth. What matters for China's future growth is not the volume of exports, but whether China will continue to latch on to higher-income products over time.
    JEL: F1 O4
    Date: 2006–01
  7. By: Jongkyou Jeon (Kyung Hee University); Yonghyup Oh (Korea Institute for International Economic Policy); Doo Yong Yang (Korea Institute for International Economic Policy)
    Abstract: One of the main culprits of the Asian crisis in 1997-1998 is believed to have been the lack of the strong regional financial market in East Asia. While East Asian countries do not seem to have completely tided over the memory of the crisis, two policy objectives are certianly set up: regional exchange rate stability and regional financial market development, aiming to strengthen financial market deepening within the region. This paper attempts to see how strong the degree of regional financial market integration in east Asia, viewed in a market perspective. We use three approaches and try to infer on how strong regional integration of these markets is relative to their integration with a global market.
    Keywords: Integration, East Asia, regional, financial market, exchange rate, global economy
    JEL: G15 G34 O24
    Date: 2005–10
  8. By: Kozo Kiyota
    Abstract: Surprisingly, nearly 70 percent of Japanese manufacturing firms do not invest in Research and Development (R&D). Using firm-level longitudinal data in Japan, this paper asks why many firms can achieve high productivity growth without any R&D investments. We found the positive effects of intranational and international R&D spillovers on productivity growth both at the firm level (between a parent firm and its affiliate) and the industry level (among firms in the same industry). The effects of international R&D spillovers are much stronger than those of intranational spillovers. Even firms in developed countries like Japan have benefit from international R&D spillovers.
    Date: 2006–01
  9. By: Eiji Ogawa; Junko Shimizu
    Abstract: The monetary authorities in East Asian countries have been strengthening their regional monetary cooperation since the Asian Currency Crisis in 1997. In this paper, we propose a deviation measurement for coordinated exchange rate policies in East Asia to enhance the monetary authorities' surveillance process for their regional monetary cooperation. We calculate the AMU as a weighted average of East Asian currencies following the method used to calculate the European Currency Unit (ECU) and the AMU Deviation Indicators, which how the degree of deviation from the hypothetical benchmark rate for each of the East Asian currencies in terms of the AMU. Furthermore, we investigate the relationships between the AMU and its Deviation Indicators and the effective exchange rates of each East Asian currency. As a result, we found the strong relationships between the AMU or the AMU Deviation Indicators and the effective exchange rates except for some currencies. These results indicate that the AMU Deviation Indicators have positive relationship with their effective exchange rates. Accordingly, we should monitor both the AMU and the AMU Deviation Indicator for the monetary authorities' surveillance in order to stabilize effective exchange rate in terms of trader partners' currencies.
    Date: 2006–02
  10. By: Xin-Qiao (China Center of Economic Research, Peking University); Jie Bai (China Center of Economic Research, Peking University)
    Abstract: Fiscal incentive is closely related with the extra-budgetary revenues. Based on our definition of fiscal incentive, we explore the impacts of fiscal incentives under decentralization on responsiveness of public good provision to real local needs. There are also some problems in fiscal decentralization in China: first, with a huge basis of extra-budgetary revenue, the size of local government would be expanded, resulting in a heavier burden on the shoulder of local citizens and peasants; second, there exist some decreasing return to scale in local extra-budgetary expenditure; thirdly, ¡°urbanization¡± (measured as the ratio of rural population to the total population) is negatively correlated with the local extra-budgetary expenditure on urban maintenance, indicating that in China, the process of industrialization and urban construction are not consistent.
    Keywords: Fiscal Decentralization, Local Public Good Provision, Fiscal Incentives
    JEL: H61 H71 H72
    Date: 2005–06
  11. By: Krupnick, Alan (Resources For the Future); Bell, Ruth (Resources For the Future); Morgenstern, Richard (Resources For the Future); Anderson, Robert; Abegunawardena, Piya; Schreifels, Jeremy; Dong, Cao; Jinan, Wang; Jitian, Wang; Larsen, Steiner
  12. By: Afsah, Shakeb; Sterner, Thomas; López, Jorge
    Abstract: This paper evaluates the effectiveness of the Program for Pollution Control Evaluation and Rating (PROPER) in Indonesia. PROPER, the first major public disclosure program in the developing world, was launched in June 1995; though it collapsed in 1998 with the Asian financial crisis, it is currently being revived. There have been claims of success for this pioneering scheme, yet little formal analysis has been undertaken. We analyze changes in emissions concentrations (mg/L) using panel data techniques with plant-level data for participating firms and a control group. The results show that there was indeed a positive response to PROPER, especially among firms with poor environmental compliance records. The response was immediate, and firms pursued further emissions reductions in the following months. The total estimated reductions in biochemical oxygen demand (BOD) and chemical oxygen demand (COD) were approximately 32%.
    Keywords: environmental policy, pollution control, public disclosure, Asia, Indonesia
  13. By: Nabeshima, Kaoru; Yusuf, Shahid
    Abstract: Since the early 1980s, China has begun gradually integrating with the global system. In doing so the country has moved toward its own unique brand of market socialism, which recognizes private ownership, and is adopting market institutions and pursuing industrial change within the framework of an urban economic environment. The process of transition has now permeated every corner of Chinese life and no organization has been left untouched. Yet industrial organization in China-especially in the state sector-has been slow to shed many of the distinctive structural characteristics of the old line Maoist era state enterprises. The main prong of the industrial strategy in support of urban change is ownership reform that transforms state-owned enterprises into corporate entities with majority state ownership or places them wholly in private hands, in the process also bolstering the incentives for and the dynamism of the private sector. While the central government spearheads the ownership reform initiative, in the majority of cases the actual implementation is in the hands of municipal, county, and prefectural governments that must coordinate their efforts with other factors influencing urban changes. This paper situates industrial change in China within the context of urban development and examines the interplay of broad reform strategy with local implementation, and its actual practice by the reformed firms.
    Keywords: Municipal Financial Management,Private Participation in Infrastructure,Economic Theory & Research,State Owned Enterprise Reform,Microfinance
    Date: 2006–01–01
  14. By: Takao Kato (Colgate University, Columbia University and IZA Bonn); Cheryl Long (Colgate University, Stanford University and University of Electronic Science and Technology of China)
    Abstract: Using comprehensive financial and accounting data on China’s listed firms from 1998 to 2002, augmented by unique data on CEO turnover, ownership structure and board characteristics, we estimate Logit models of CEO turnover. We find consistently for all performance measures including both stock return and various accounting measures that: (i) overall, CEO turnover is significantly and inversely related to firm performance though the magnitude of the relationship is modest; (ii) CEO turnover-performance link is stronger when the percentage of company shares owned by the largest shareholder is larger. Furthermore, insofar as stock performance is concerned, (iii) turnover-performance link is found to be weaker for listed firms still controlled by the state; (iv) the appointment of independent directors enhances turnover-performance link; (v) the listing suspension mechanism, i.e., the ST designation, adopted by China’s securities regulatory agency appears to be effective in improving turnover-performance tie; and (vi) listed firms with CEOs holding additional positions in the controlling shareholders have weaker turnover-performance link. Consistent with the "law and finance" approach to corporate governance and the literature on economic transition, our findings suggest that any fundamental improvement in China’s corporate governance will require a broad program that encompasses not only privatization but also laws and their effective implementation to provide better protection for investors.
    Keywords: executive turnover, firm performance, enterprise reform, corporate governance, ownership structure, China, and transition economies
    JEL: M52 M12 J33 P34 G30 O16 O53 G30 G15
    Date: 2006–01
  15. By: Blackman, Allen (Resources For the Future); Wu, Xun
    Abstract: In the early 1990s, hoping to reduce chronic electricity shortages and enhance the efficiency of Chinese power plants, China opened its doors to foreign direct investment (FDI) in electricity generation. Using data from an original survey of US private investors, official Chinese statistics, and other sources, we assess the volume and characteristics of FDI in China's power sector, its impact on energy efficiency, and the factors that limit this impact. Our five principal findings are as follows. First, the volume FDI in China's power sector will likely fall short of the government's 1995 - 2000 capacity expansion target by a substantial margin, most likely because of persistent institutional barriers to FDI. Second, to avoid the lengthy central government approval process for large plants and to minimize risk, early FDI tended to be in small-scale, gas- and oil-fired plants using imported equipment and located in coastal provinces. However, more recent FDI tends to be in larger coal-fired plants that use more Chinese equipment and tends to be located in the north as well as the east. Third, and perhaps most important, FDI is likely having a significant positive impact on energy efficiency. Almost a third of the 20 FDI plants in our survey sample use advanced efficiency-enhancing generating technologies, and a fifth are cogeneration plants. Fourth, the main factor that has hampered the contribution of FDI to energy efficiency is an institutional bias in favor of small-scale plants which are generally not as energy efficient as the large-scale plants. And finally, the most important barriers to FDI generally are uncertainty associated with the approval process of FDI projects, electricity sector regulation, and the risk of default on power purchase contracts.
  16. By: Lucio Castro (Maxwell Stamp PLC); Daniel Saslavsky (Inter American Development Bank)
    Abstract: This paper estimates the potential effects of a free trade agreement (FTA) between China and Mercosur on poverty, income distribution, welfare and employment. The case of Argentina, in particular, is investigated. To this end, partial equilibrium techniques are combined with micro econometric methodologies employing data from household surveys to examine the likely effects of an FTA with China on poverty and income distribution. We find that the FTA would result in a small reduction in poverty as well as an improvement in the income distribution. Highly disaggregated data at the industry level is used for the first time to estimate labor demand-output and wage elasticities in order to estimate the effects of an agreement with China on sectoral and aggregate employment rates. According to this, trade with the PRC did not have a significant effect on industrial employment, even in a period of swift trade liberalization like the nineties.
    Keywords: China, Import Competition, Trade and Labor Market Interactions, Employment, Income Distribution, Poverty
    JEL: F14 F15 F16 F17 L60
    Date: 2005–12–28
  17. By: Dijk van, M. (Ecis, Technische Universiteit Eindhoven); Szirmai, A. (Ecis, Technische Universiteit Eindhoven)
    Keywords: technology diffusion, Indonesia
    Date: 2005
  18. By: Krupnick, Alan (Resources For the Future); Morgenstern, Richard (Resources For the Future); Zhang, Xuehua
    Abstract: To reduce carbon emissions worldwide, it makes sense to consider the possibility of developed countries paying for carbon reductions in developing countries. Developing countries may be interested in such activities if the ancillary air pollution benefits are large. This paper reports on an RFF survey of the emissions benefits (and costs) of reducing sulfur dioxide (SO2) emissions from small, coal-burning boilers in Taiyuan, an industrial, northern Chinese city that recently banned uncontrolled coal combustion in certain small boilers in the downtown area. We find significant carbon benefits in percentage terms - on the order of 50% to 95% reduction - associated with this SO2 control policy, with large reduction potential elsewhere in Taiyuan and China. While the cost for boilers that switched out of coal was almost $3,600 per ton of SO2 reduced, these ancillary carbon reductions are truly "free" from a social cost perspective.
    Keywords: Carbon, air pollution, informal sector, ancillary benefits, abatement costs, survey
    JEL: O12 O2 Q12 Q25 Q48
  19. By: Zhu, Z.; Krug, B. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: China like other transition economies needs to establish a tax system compatible with a market economy, in particular, an efficient tax administration system with capable tax bureaucrats. The paper singles out the general and China-specific features by which central government attempts to accompany economic transformation via tax farming to tax bureaucratisation in tax administration. Based on empirical study in two provinces this paper shows that without including local government agencies and their budgets, China?s fiscal federalism cannot be analysed and argues that China?s emerging tax system depends on the institutional and organizational design that shapes the interaction between central government, local governments and economic agents.
    Keywords: Tax Governance;Tax Farming;Tax Bureaucratisation;Fiscal Federalism;
    Date: 2005–12–21
  20. By: Maxime Kennett; Ronald Steenblik
    Abstract: This study presents a synthesis of 17 country studies on environmental goods and services (EG&S) commissioned by the OECD, UNCTAD and the UNDP. The countries examined are Brazil, Chile, China, Cuba, the Czech Republic, the Dominican Republic, Guatemala, Honduras, Israel, Kenya, Korea, Mexico, Nicaragua, Pakistan, Panama, Thailand and Vietnam. Its aim is to identify determinants of demand for EG&S; to show common themes and experiences in the EG&S markets of different countries; and to draw attention to key trade, environment and development policy linkages. It also seeks to contribute to the exchange of expertise and experience in the area of trade and environment so that liberalisation of trade in EG&S can benefit all countries, developing and developed alike.
    Keywords: trade, developing countries, environmental goods, environmental services
    JEL: F14 F18 Q56
    Date: 2005–11–29
  21. By: Pizer, William (Resources For the Future); Tamura, Kentaro
    Abstract: Resources for the Future and the Institute for Global Environmental Strategies convened a one and one-half day workshop on domestic and international climate policy May 11–12, 2005, in Tokyo, Japan. The first day included 49 participants hearing presentations from 13 speakers and discussing domestic activities, economics, and politics. The second day included a smaller group of participants listening to a panel of four experts and discussing opportunities for future international climate regimes. Participants included government officials from the Japanese Ministry of the Environment; the Japanese Ministry of Economy, Trade and Industry; the U.S. Environmental Protection Agency; the U.S. Department of State; and the Massachussetts Department of Commonwealth Development; representatives from business and environmental groups; and academic experts. Over the course of both days, it was clear that great opportunities exist for regularly informing experts from both countries on recent policy developments, economic analyses, and political nuances in the other country. For example, U.S. participants had an opportunity to learn the process through which Japanese technology standards are set and implemented, the subtle evolution of mandatory policy discussions, and details of current policies on voluntary trading and an emission registry. Japanese participants benefited from a frank discussion with U.S. experts of how and why it would be difficult to link different domestic emissions trading markets, the current process to establish a regional emissions trading program, and the evolving dynamics in the U.S. Senate. Looking forward, important lessons may be taken from past negotiating experiences. A small group of national leaders, including large emitters of greenhouse gases and major economies, addressing not only climate change but also developmental issues, could be a useful vehicle for meaningful international efforts. Such a small-group process should be carried out in parallel with the multilateral United Nations Framework Convention on Climate Change process. In addition, policies in both the United States and Japan reflect a strong emphasis on technology development and commercialization; this may be an area where bilateral cooperation could be particularly beneficial.
    Keywords: climate change, global warming, United States, Japan, Kyoto
  22. By: Bill Carmichael (Australia–Japan Research Centre)
    Abstract: It is now widely agreed that the World Trade Organization (WTO) is in trouble, struggling to deliver the national rewards available from liberalising through multilateral negotiations. Prime Minister Howard and President Bush have committed to help restore the ability of the WTO system to deliver those rewards. This paper examines the contribution of domestic transparency procedures, introduced by and operating within participating countries, in dealing with the domestic causes of the problem facing the multilateral system. It explains the relevance of the proposal, prepared for Prime Minister Howard, in meeting the commitment he has taken. The Hong Kong Ministerial Meeting in December 2005 provides an opportunity to advance such a proposal and, in doing so, enhance our own trade performance.
    Keywords: World Trade Organization, WTO, multilateral negotiations, transparency, trade
    JEL: E6 O19 F13 F14
    Date: 2005–11
  23. By: Sean Dougherty; Richard Herd
    Abstract: This paper assesses the progress of China’s transition toward a market economy by examining the structure of ownership, productivity, and profitability, as well as the concentration of production across firms, industries and regions. It does this by analyzing a database of firm microdata of the quarter of a million industrial companies in operation during the 1998–2003 period. Results show that the private sector now accounts for more than half of industrial output, compared with barely more than a quarter in 1998, and operates much more efficiently than the public sector. Higher productivity has fed through to profitability, motivating greater regional specialization of production. These changes are consistent with what would be expected in a market-based economy, and suggests that reforms are making rapid progress. This Working Paper relates to the 2005 OECD Economic Survey of China ( <P>La chute rapide des barrières et la concentration croissante de l’activité économique Ce document examine les progrès réalisés par la Chine dans la transition vers une économie de marché en étudiant plus particulièrement la structure de la propriété, la productivité et la rentabilité, ainsi que la concentration de la production à l'échelle des entreprises, des secteurs d'activité et des régions. Pour cela, il analyse une base de microdonnées portant sur 250 000 entreprises industrielles qui étaient en activité au cours de la période 1998-2003. Les résultats montrent que le secteur privé représente désormais plus de la moitié de la production industrielle, contre à peine plus d'un quart en 1998, et qu'il est bien plus efficace que le secteur public. Par ailleurs, l'accroissement de la productivité et ses effets positifs sur la rentabilité de l'activité économique ont entraîné une plus grande spécialisation régionale de la production. Ces évolutions, conformes à ce que l'on peut attendre dans une économie fondée sur le jeu du marché, sont sans doute le signe que les réformes progressent rapidement. Ce Document de travail se rapporte à l'Étude économique de l'OCDE de la Chine, 2005 (
    Keywords: productivity, productivité, transition, transition, restructuring, restructuration, private sector, secteur privé, firm microdata, micro-données d'entreprise, regional concentration, concentration régionale, market economy, économie de marché
    JEL: D4 F15 L11 O12 P23
    Date: 2005–12–16
  24. By: Pitigala, Nihal; Panagariya, Arvind; Baysan, Tercan
    Abstract: The authors examine the economic case for the South Asia Free Trade Area (SAFTA) Agreement signed on January 6, 2004 by India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, and the Maldives. They start with a detailed analysis of the preferential trading arrangements in South Asia to look at the region ' s experience to date and to draw lessons. Specifically, they examine the most effective free trade area in existence-the India-Sri Lanka Free Trade Area-and evaluate the developments under the South Asian Preferential Trade Area (SAPTA). The authors conclude that, considered in isolation, the economic case for SAFTA is weak. When compared with the rest of the world, the region is tiny both in terms of economic size as measured by GDP (and per capita incomes) and the share in world trade. It is argued that these facts make it unlikely that trade diversion would be dominant as a result of SAFTA. This point is reinforced by the presence of high levels of protection in the region and the tendency of the member countries to establish highly restrictive " sectoral exceptions and sensitive lists " and stringent " rules of origin. " The authors argue that the SAFTA makes sense only in the context of a much broader strategy of creating a larger preferential trade area in the region that specifically would encompass China and the member nations of the Association of South East Asian Nations. In turn, the case for the latter is strategic: the pursuit of regionalism in the Americas and Europe has created increasing discrimination against Asian exports to those regions, which must inevitably affect the region ' s terms of trade adversely. An Asian bloc could be a potential instrument of changing incentives for the trade blocs in the Americas and Europe and forcing multilateral freeing of trade. Assuming that the SAFTA Agreement is here to stay, the authors suggest steps to ensure that the Agreement can be made more effective in promoting intra-regional trade, while minimizing the likely trade-diversion costs and maximizing the potential benefits.
    Keywords: Free Trade,Trade Policy,Trade Law,Economic Theory & Research,Trade and Regional Integration
    Date: 2006–01–01
  25. By: Krupnick, Alan (Resources For the Future); Alberini, Anna; Simon, Nathalie; Itaoka, Kenshi; Akai, Makoto; Cropper, Maureen
    Abstract: A contingent valuation survey was conducted in Sizuoka, Japan, to estimate the willingness to pay (WTP) for reductions in the risk of dying and calculate the value of statistical life (VSL) for use in environmental policy in Japan. Special attention was devoted to the effects of age and health characteristics on WTP. We find that the VSLs are somewhat lower (103 to 344 million yen) than those found in the virtually identical survey applied in some developed countries. These values were subject to a variety of validity tests, which they generally passed. We find that the WTP for those over age 70 is lower than that for younger adults, but that this effect is eliminated in multiple regression. Rather, when accounting for other covariates, we find that WTP generally increases with age throughout the ages in our sample (age 40 and over). The effect of health status on WTP is mixed, with WTP of those with cancer being lower than that of healthy respondents while the WTP of those with heart disease is greater. The VSLs for future risk changes are lower than those for contemporaneous risk reductions. The implicit discount rates of 5.8–8.0% are relatively larger than the discount rate regularly used in environment policy analyses. This first-of-its-kind survey in Japan provides information directly useful for estimating the benefits of environmental and other policies that lower mortality risks to the general population and sub-groups with a variety of specific traits.
    Keywords: willingness to pay, value of statistical life, mortality risk, contingent valuation, age
  26. By: Luo, Xubei; Zhu, Nong
    Abstract: Nonfarm activity plays an increasingly important role in rural household income. Based on data from the Living Standards Measurement Study in the provinces of Hebei and Liaoning, the authors study the distribution of nonfarm income in rural China. First, they assume nonfarm income as an exogenous transfer to total income to decompose the Gini index. Second, they assume nonfarm income as a potential substitute for farm income to take household choices into account and simulate household income. The results show that nonfarm activity reduces rural income inequality by raising the income of poor households to a larger extent than that of rich households. Improving rural infrastructure and implementing universal basic education are critical to build up the capacity of households (in particular, poor households) to participate in nonfarm activity. Strengthening the links between farm activity and nonfarm activity is essential to optimize the contribution of nonfarm activity to pro-poor rural economic development.
    Keywords: Rural Poverty Reduction,Poverty Monitoring & Analysis,Services & Transfers to Poor,Poverty Diagnostics,Inequality
    Date: 2006–01–01
  27. By: Sedjo, Roger (Resources For the Future); Amano, Masahiro
    Abstract: This report compares the approaches of the governments of Japan, Canada, and the European Union member countries toward using carbon sinks to meet their respective Kyoto Protocol carbon reduction targets. Various policies have been proposed by which governments can sequester carbon by promoting afforestation and reforestation, slowing deforestation, and undertaking forest management activities under Articles 3.3 and 3.4. At this time, carbon emissions reduction programs are still under development, both within individual countries and within the context of the protocol. Although some of the details have been worked out, concrete definitions are often still lacking, especially as regards impermanence of forests, additionality, leakage, and socioeconomic and environmental impacts. Japan appears most likely to rely most heavily on forest and biological sinks to meet its Kyoto targets. For Canada, sinks are likely to play a rather modest role. For the EU, the role of sinks is likely to be even smaller, with sinks playing no role for some EU countries (including Sweden, our case study country). However, the final decisions have not yet been made for any of these countries, and the actual role of sinks remains to be determined.
    Keywords: Climate, Sinks, Kyoto Protocol, Forestry. Canada, Japan, European Union
    JEL: F01 Q23 Q28 Q48
  28. By: Heng Chen (Department of Economics, National University of Singapore); Bento J. Lobo (University of Tennessee at Chattanooga); Wing-Keung Wong (Department of Economics, National University of Singapore)
    Abstract: This study examines the bilateral relations between three pairs of stock markets, namely India-U.S., India-China and China-U.S. We use a Fractionally Integrated Vector Error Correction Model (FIVECM) to examine the cointegration mechanism between markets. By augmenting the FIVECM with a multivariate GARCH formulation, we study the first and second moment spillover effects simultaneously. Our empirical results show that all three pairs of stock markets are fractionally cointegrated. The U.S. stock market plays a dominant role in the relations with the other two markets, whereas there is an interactive relationship between the Indian and Chinese stock markets. In particular, the Indian stock market dominates the first moment feedback with the Chinese market, while the latter dominates the second moment feedback with the former.
    Keywords: Stock market, Cointegration, Fractionally Integrated Vector Error Correction Model, Multivariate GARCH
  29. By: Wang, Youjuan; Ravallion, Martin; Chen, Shaohua
    Abstract: Concerns about incentives and targeting naturally arise when cash transfers are used to fight poverty. The authors address these concerns in the context of China ' s Di Bao program, which uses means-tested transfers to try to assure that no registered urban resident has an income below a stipulated poverty line. There is little sign in the data of poverty traps due to high benefit withdrawal rates. Targeting performance is excellent by various measures. Di Bao appears to be better targeted than any other program in the developing world. However, all but one measure of targeting performance is found to be uninformative, or even deceptive, about impacts on poverty. The authors find that the majority of the poor are not receiving help, even with a generous allowance for measurement errors. While on paper, Di Bao would eliminate urban poverty, it falls well short of that ideal in practice.
    Keywords: Services & Transfers to Poor,Poverty Monitoring & Analysis,Poverty Impact Evaluation,Inequality,Poverty Diagnostics
    Date: 2006–01–01
  30. By: Pizer, William (Resources For the Future); Tamura, Kentaro
    Abstract: Resources for the Future and the Institute for Global Environmental Strategies (Japan) convened a one-and-one-half day workshop on domestic and international climate policy on February 12–13, 2004 in Washington, D.C. On the first day, 55 participants heard presentations from 14 speakers and discussed domestic activities, economics, and politics. The second day featured a smaller group of 27 participants hearing six informal sets of comments and discussing opportunities for international collaboration. Participants included government officials from the Japanese Ministry of the Environment, the U.S. Environmental Protection Agency, and other U.S. administration and congressional staff; representatives from business and environmental groups; and academic experts. Over the course of both days, it was clear that great opportunities exist for informing participants from both countries on recent developments, economic analyses, and political nuances in the other country. For example, American participants were unaware of the Keidanren’s success at exceeding required efficiency standards. Japanese participants were unaware of U.S. treaty tradition, by which ratification cannot occur until implementing legislation is in place—a fact that makes the Kyoto Protocol virtually unratifiable. Participants on both sides benefited from a frank discussion of how and why it may be unwise for the international community to attempt to re-engage the United States in international climate policy until the United States settles on its own course of meaningful domestic action. Looking forward, an important lesson may be taken from U.S. experience with early environmental regulation, where state action provided experience and impetus for federal action. As an alternative to the Kyoto model, distinct national actions may provide experience and impetus for international action. In addition, policies in both the United States and Japan reflect a strong emphasis on technology development and commercialization; this may be an area where bilateral cooperation could be particularly beneficial.
    Keywords: climate change, global warming, United States, Japan, Kyoto
  31. By: Ronald Steenblik
    Abstract: This paper compares two lists of environmental goods that have been used in the WTO negotiations on liberalising trade in environmental goods and services. It describes the genesis of the lists, which were compiled in the late 1990s. The OECD list was developed as a basis for analysing trade and tariffs. The APEC list emerged from nominations by member economies of the Asia-Pacific Economic Co-operation forum, as part of an effort to attain early voluntary liberalisation of trade in particular sectors. The concluding section of the chapter identifies common elements in the two lists and explains important differences.
    Keywords: trade negotiations, environmental goods, pollution-control technology
    Date: 2005–11–29
  32. By: P Nair (ICFAI University ,Hyderabad,India); Deepak Kumar (ICFAI University Press , Hyderabad,India)
    Abstract: The UN has declared 2005-15 as “Water for Life” period. This means how to use available water and find out the alternative measures for future. This states the urgency to come out of thinking that water is a “free resource” on this planet as for millennia, this has been true.The population of human beings was well below the level the planet could support. But once the advancements of science and technology have enabled this race of Homo sapiens to weather the “vicissitudes of nature” at least to a greater extent than before, the population and standard of living have begun to rise. This has been particularly so over the last 300 years, starting with the Industrial revolution in the West. In case of India and China, the need of water is increasing with burgeoning population that needs more water for domestic consumption than ever. The crisis of water in the cities of India during summer season is the live example of such a situation. Apart from domestic consumption, water is very much needed for industrial and agricultural purposes. This article discusses the present water scenario in the world, drinking water scenario in India, water management and agriculture, challenges in marketing water, ecological affairs, administrative control of water and provides some international examples.
    Keywords: Water Management,Infrastructure
    JEL: R
    Date: 2005–12–30
  33. By: Marcelo Sánchez (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany)
    Abstract: This paper assesses the prospects for monetary integration between Emerging East Asian (EEA) economies. Our empirical analysis is based on a simple analytical framework for currency unions of small open economies, with a focus on the conduct of monetary policy in the presence of different types of shocks. Our empirical analysis looks at a number of supply-side characteristics of EEA countries, distinguishing between aggregate and tradable sector structural features. Moreover, we discuss the evidence on the cross-country variation of disturbances hitting the region. Our study indicates that, at present, EEA economies exhibit a high degree of cross-country supply diversity, while there is no compelling evidence that shocks are highly correlated across the region.
    Keywords: East Asia, emerging economies, currency union, stabilisation.
    JEL: E52 E58 F33 F40
    Date: 2005–12
  34. By: Cheolsung Park (Department of Economics, National University of Singapore)
    Abstract: I estimate the gradient among children 0 to 14 years old across different age groups using data from Indonesia. I find that while the gradient is strong among the very young, it gets weaker and almost disappears among children older than 6. I find that unequal mortality of children by socioeconomic status depresses the gradient among children 3 years old or younger. I also find evidence that limited access to private healthcare providers decreases the gradient among children 4 to 12 years old. Schooling, on the other hand, is found to have a positive impact on health status of children from low-SES families but little impact on health status of high-SES children. It weakens the gradient among school-age children.
  35. By: Viviana Fernandez;
    Abstract: In this article, we test for the presence of structural breaks in volatility by two alternative approaches: the Iterative Cumulative Sum of Squares (ICSS) algorithm and wavelet analysis. Specifically, we look at the effect of the outbreak of the Asian crisis and the terrorist attacks of September 11, 2001 on Emerging Asia, Europe, Latin America and North America's stock markets. In addition, we focus on the behavior of interest rates in Chile after the Central Bank switched its monetary policy interest rate from an inflationindexed to a nominal target in August 2001. Our estimation results show that the number of shifts detected by the two methods is substantially reduced when filtering out the data for both conditional heteroskedasticity and serial correlation. In addition, we conclude that the wavelet-based test tends to be more robust.
    Keywords: ICSS algorithm, wavelet analysis, volatility breakpoints.
    Date: 2005–12–15
  36. By: Krupnick, Alan (Resources For the Future); Cropper, Maureen; Alberini, Anna; Simon, Nathalie; Itaoka, Kenshi; Akai, Makoto
    Abstract: Most benefit-cost analyses of reductions in air pollutants and other pollutants carrying mortality risks rely on estimates of the value of reductions in such risks produced by compensating wage studies, or contingent valuation studies that value risk reductions in the context of transport or job-related accidents. As the authors argue below, these estimates are inappropriate when valuing risk changes produced by environmental programs. The objectives of this paper are to explain why these estimates are inappropriate and to describe an improved approach to valuing reductions in risk of death from environmental programs, especially programs to reduce air pollution. The authors have implemented this approach in a pilot study in Tokyo, Japan. The paper provides estimates of the value of a statistical life based on the pilot study and describes extensions of the approach based on test results. The preliminary results from the Tokyo pilot indicate that individuals are able to distinguish between different magnitudes of small changes in mortality risks and between the same change in these risks occurring at different times (although the latter has not yet been subjected to an external scope test). Changes to the survey and a big increase in sample size may improve performance on the internal validity tests and the results of the scope tests. Although the current results can only be considered suggestive, if they were to remain after administration of the survey to a larger sample, and subject to some other caveats, they would imply that the VSL's currently used in benefit-cost analyses of environmental policies are significant overestimates.
  37. By: Epictetus E. Patalinghug (U.P. College of Business Administration); Gilberto M. Llanto (Philippine Institute for Development Studies)
    Abstract: Following the global trend in using private sector participation in infrastructure financing and development, the Philippines has largely utilized privatization as a major approach to the development of infrastructure, particularly in power, water, transport, and telecommunications sectors. To provide a legal framework for private sector participation in infrastructure projects, Congress passed the build-operate-transfer (BOT)law, as amended, to expand the scope of private sector involvement in infrastructure provision. Regulatory reform has accompanied the effort to ensure operational efficiency and competitive provision. This paper intends to review and evaluate the regulatory framework that has been established or suggested for the Philippines, focusing on the power and telecommunications sectors. This study will primarily evaluate the existing regulatory framework. It aims to identify issues and gaps, paying particular attention on the competition-related provisions as well as the institutional capacities of regulatory institutions.
    Keywords: telecommunications, competition policy, BOT scheme, private sector participation, infrastructure development,regulatory framework,power sector,Electric Power Industry Reform Act (EPIRA), voice over internet protocol (VOIP),
    JEL: L96 F12
    Date: 2005–08
  38. By: Sedjo, Roger (Resources For the Future); Simpson, R. David
    Abstract: This paper examines the question of the likely effects on global forests of a further reduction in wood products tariffs including both solid wood products and pulp and paper, as has been proposed to the World Trade Organization (WTO) by the Asia Pacific Economic Community (APEC). The tariff reductions would be an extension of the tariff reductions associated with the Uruguay Round (Federal Register 1999). The questions include both how international trade is likely to change in response to further tariff reduction and also the implications for timber harvests and forests generally of such trade liberalization in the various forest regions. The paper finds that the evidence suggests further reductions in tariffs on forest products are likely to generate only very modest increases in worldwide trade and production, and the increased harvest pressures on forests due to tariff reduction should be quite modest. The major countries likely to experience export and production increases are found largely in the northern hemisphere and are likely to be able to facilitate additional harvests with minimal effects on the forests due to the modest nature of the impact, new forest practices laws, new forest set-asides, and movement toward improved practices designed to achieve multifaceted sustainable forestry. Furthermore, there is little reason to expect that tariff reductions will significantly increase harvests from tropical forests. Earlier tariff reductions appear to have had minimal impacts on tropical harvests or exports. Nevertheless, tropical forests will remain under deforestation pressure due to land conversion objectives, commonly to provide additional agricultural lands.
  39. By: Jacob, J. (Ecis, Technische Universiteit Eindhoven); Szirmai, A. (Ecis, Technische Universiteit Eindhoven)
    Keywords: Indonesian, trade, spillovers
    Date: 2006
  40. By: Burtraw, Dallas (Resources For the Future); Palmer, Karen (Resources For the Future); Bharvirkar, Ranjit; Paul, Anthony
    Abstract: Paradoxically, owners of existing generation assets may be better off paying for carbon dioxide emission allowances than having them distributed for free. This analysis shows that it takes just 7.5% of the revenue raised under an auction to preserve the asset values of existing generators.
    Keywords: carbon dioxide, emission allowance trading, allocation, electricity, restructuring, air pollution, auction, grandfathering, generation performance standard, outputbased allocation, cost-effectiveness
    JEL: Q2 Q25 Q4 L94
  41. By: Junyi Shen (Osaka School of Interna ional Public Policy, Osaka University); Yusuke Sakata (School of Economics, Kinki University); Yoshizo Hashimoto (Osaka School of Interna ional Public Policy, Osaka University)
    Abstract: This paper applies two recent stated choice survey datasets of Japan to investigate the difference between the latent class model (LCM) and the mixed logit model (MLM) for transport mode choice. A detailed comparison is carried out, focusing on comparing values of time savings, direct choice elasticities, predicted choice probabilities and prediction success indices. Furthermore, a test on non-nested model is also utilized to help determine which model is superior to another one. The results suggest that the LCM performs better than the MLM in both datasets.
    Keywords: latent class model (LCM), mixed logit model (MLM), transport mode choice, predicted choice probability, prediction success index
    JEL: C35 D12 R41
    Date: 2006–01
  42. By: Krupnick, Alan (Resources For the Future); Fischer, Carolyn (Resources For the Future); Morgenstern, Richard (Resources For the Future); Logarta, Jose; Rufo, Bing
    Abstract: The Asian Development Bank has sponsored research on market-based instruments for managing pollution in Metro Manila, Philippines, where air quality is seriously degraded. This report offers three policy options for reducing particulate emissions and their precursors. For stationary sources, we recommend an emissions fee that creates efficient financial incentives to reduce emissions while raising revenues for monitoring and enforcement activities. For mobile sources, we propose a pilot diesel retrofit program using a low-cost technology that is effective at existing 2,000 ppm sulfur content. Second, we recommmend a charge on the sulfur content of diesel fuel to encourage meeting and surpassing the 500 ppm standard to allow for more advanced particulate trap technologies. Although better data are needed—both for designing controls and for evaluating their efficacy—much can be learned just by implementing these programs, so we make recommendations for starting points.
    Keywords: air pollution, emissions tax, Philippines, particulates
    JEL: Q25 Q01
  43. By: Anders Reutersward
    Abstract: One of the key institutional outcomes of China’s economic reforms has been to create a new role for employers that is separate from the state, and allows enterprises to concentrate on their business. To protect workers, the government has set up public institutions for many social and administrative functions that until recently pertained to work units (danwei), or did not exist. This paper focuses on three such functions for which the 1994 Labour Law makes the government responsible: employment services, labour inspection and social insurance. Un des résultats institutionnels clés des réformes économiques en Chine a été la promotion du nouveau rôle joué par les employeurs, en dehors de l’Etat, qui permet aux entreprises de gérer leurs propres affaires. Le gouvernement, pour protéger les travailleurs, a créé des institutions publiques couvrant de nombreuses fonctions sociales et administratives qui, jusqu’à une date récente, ne concernaient que les unités de travail (danwei) ou n’existaient pas. Ce document se concentre sur trois des fonctions que la Loi de 1994 sur le travail place sous la responsabilité du gouvernement : les services de l’emploi, l’inspection du travail et l’assurance sociale.
    JEL: J2 J42 J52 J6 J8
    Date: 2005–11–07
  44. By: Wong Keung-Wing (Department of Economics, National University of Singapore); Habibullah Khan (Graduate School of Business, Universitas21Global); Jun Du (Department of Economics, National University of Singapore)
    Abstract: This paper examines the long-term as well as short-term equilibrium relationships between the major stock indices and selected macroeconomic variables (such as money supply and interest rate) of Singapore and the United States by employing the advanced time series analysis techniques that include cointegration, Johansen multivariate cointegrated system, fractional cointegration and Granger causality. The cointegration results based on data covering the period January 1982 to December 2002 suggest that Singapore’s stock prices generally display a long- run equilibrium relationship with interest rate and money supply (M1) but a similar relationship does not hold for the United States. To capture the short-run dynamics of the relationship, we replicate the same experiments with different subsets of data representing shorter time periods. It is evident that stock markets in Singapore moved in tandem with interest rate and money supply before the Asian Crisis of 1997, but this pattern was not observed after the crisis. In the United States, stock prices were strongly cointegrated with macroeconomic variables before the 1987 equity crisis but the relationship gradually weakened and totally disappeared with the emergence of Asian Crisis that also indirectly affected the United States. The results of fractional cointegration and the Johansen multivariate system are consistent with the earlier cointegration result that both Singapore and US stock markets did possess equilibrium relationship with M1 and interest rate at the early days. However, the stability of the systems was disturbed by a series of well-known financial turbulence in the past two decades and eventually weakened for Singapore and completely disappeared for the U.S. This may imply that monetary authority may take action to respond to the asset price turbulence in order to maintain the stability of monetary economy and thus break the existing equilibrium between stock markets and macroeconomic variables like interest rate and M1. Another possible explanation is that the market became more efficient after 1997 Asian crisis. Finally, the results of Granger causality tests uncover some systematic causal relationships implying That stock market performance might be a good gauge for Central Bank’s monetary policy adjustment.
  45. By: Mototsugu Fukushige (Graduate School of Economics, Osaka University); Hideo Yunoue (Graduate School of Economics, Osaka University)
    Abstract: Medical school usually has the highest tuition fees among the university departments. The reason why students pay such expensive fees is that they estimate that their earnings will greatly increase after graduation. We construct a model about student behavior on entering college and estimate the value-added of medical schools using college data from Japan. Our results show that a school with a long tradition of providing high quality education is evaluated as rendering high value-added to students. Those empirical results enable us to simulate the effects of the privatization of a public university. This simulation indicates that there is no difference between public and private schools when the tuition fees of the public university become as high as those of the private university.
    Keywords: Value-added of University, Medical school tuition fee, Public and private schools, Privatization
    JEL: I21 L33
    Date: 2006–01
  46. By: Blackman, Allen (Resources For the Future); Afsah, Shakeb; Ratunanda, Damayanti
    Abstract: Although a growing body of evidence suggests that publicly disclosing information about plants’ environmental performance can motivate emissions reductions, this phenomenon remains poorly understood. To help fill this gap, this paper presents original data from a survey of plants participating in the Program for Pollution Control, Evaluation and Rating (PROPER), Indonesia’s widely-acclaimed public disclosure program. These data suggest that a key means by which PROPER spurs abatement is improving factory managers’ information about their own plants’ emissions and abatement opportunities. This finding contrasts with the prevailing view in the literature that public disclosure enhances pressures to abate placed on firms by external agents such as community groups and shareholders. But our data also suggest that PROPER’s "environmental audit" effect operates in concert with external pressures. Therefore, simply supplying new information to plant managers without making that information public may not be sufficient to motivate significant abatement
  47. By: Michael Landesmann (Department of Economics, Johannes Kepler University Linz, Austria); Robert Stehrer (Vienna Institute for International Economic Studies)
    Abstract: This paper explores the features of a dynamic multisectoral model which focuses on the relationship between income distribution, growth and international specialization. The model is explored both for the steady-state properties and the transitory dynamics of integrated economies. Income inequality affects the patterns of growth and international specialization as the model uses non-linear Engel curves and hence different income groups are characterized by different expenditure patterns. At the same time income distribution is also reflected in the relative wage rates of skilled to unskilled workers, i.e. the skill premium, and hence the wage structure affects comparative costs of industries which have different skill intensities. The model is applied to a situation which analyses qualitatively different economic development strategies of catching-up economies (a 'Latin American' scenario and a 'South East Asian' scenario).
    Keywords: income distribution; growth; international economic integration; catching-up; international specialization
    JEL: F15 F16 F43 O15 O41
    Date: 2005–12
  48. By: Eddy Lee (ILO, Geneva); Marco Vivarelli (Catholic University of Piacenza, Max Planck Institute of Economics, Jena, CSGR, University of Warwick and IZA Bonn)
    Abstract: In this paper an ex-post measurable definition of globalization has been used, namely increasing trade openness and FDI. A general result is that the optimistic Heckscher- Ohlin/Stolper-Samuelson predictions do not apply, that is neither employment creation nor the decrease in within-country inequality are automatically assured by increasing trade and FDI. The other main findings of the paper are that: 1) the employment effect can be very diverse in different areas of the world, giving raise to concentration and marginalisation phenomena; 2) increasing trade and FDI do not emerge as the main culprits of increasing within-country income inequality in DCs, although some evidence emerges that import of capital goods may imply an increase in inequality via skill-biased technological change; 3)increasing trade seems to foster economic growth and absolute poverty alleviation, although some important counter-examples emerge.
    Keywords: trade, FDI, employment, poverty, within-country income inequality
    JEL: F02 O1
    Date: 2006–01
  49. By: Anne Daly (University of Canberra); Akira Kawaguchi (Doshisha University); Xin Meng (Australian National University and ERMES, University of Paris II); Karen Mumford (University of York, National Institute for Labour Studies, Australia and IZA Bonn)
    Abstract: In a series of studies written during the 1980s Bob Gregory and his co-authors compared the gender wage gap in Australia with that found in other countries. They found it was not the difference in human capital endowments that explained different gender wage gaps but rather the rewards for these endowments. They concluded that country-specific factors, especially the institutional environment, were important in explaining the gender wage gap. This study updates Gregory’s work by comparing the gender wage gap across four countries, Australia, France, Japan and Britain. Our results concord with those of Gregory: institutions are still important in explaining the relative size of the gender wage gap.
    Keywords: gender earnings, wage gap, institutions, workplace effects
    JEL: J3 J7
    Date: 2006–01
  50. By: Ken Shadlen
    Abstract: Global governance in intellectual property (IP) has changed dramatically in the last two decades, and these changes have profound – and worrying – implications for late development. What was once principally an instrument of national policy is now increasingly subject to international disciplines, as the world moves ever-closer to harmonization in the area of IP management. But moving toward harmonization and achieving harmonization are different matters, and it is essential to keep in mind that the former and not the latter describes contemporary arrangements: the trend is toward a reduction in policy space, a feature that many scholars and activists point to with great concern (Gallagher, 2005), but the outcome remains one where countries retain space for autonomous IP management. This paper examines the relationship between IP and development, presenting a framework for assessing IP regimes both cross-nationally and over time. It is then shown how the trend toward harmonization places new and significant restrictions on developing countries’ opportunities for policy innovation in IP management. The implications of harmonization for a range of issues are then considered, including late industrialization, promotion of public health, and protection of biodiversity. The paper shows that the new regulations are most accentuated at the regional and bilateral level. Thus, for all of the concerns that academics and policy analysts have legitimately and rightly expressed over TRIPS, the biggest threat to using IP policy as tool for realizing development objectives comes not so much from the World Trade Organization (WTO) as from bilateral and regional Preferential Trade Agreements (PTAs) between developed and developing countries. I demonstrate this by examining various aspects of IP policy: over and over, we see that countries that are parties to such PTAs have significantly less autonomy in their management of IP. In the conclusion, a set of policy recommendations are put forth, at both regional and multilateral levels, for restoring countries’ ability to use IP as a tool for economic development. The policy challenges are twofold: developing countries must utilize and exploit the remaining opportunities under TRIPS to use IP management for national development purposes, and developing countries must be careful to avoid bargaining away their remaining rights under PTAs.
  51. By: Albers, Heidi
    Abstract: This paper discusses the application of a spatial-intertemporal model for tropical forest management to Khao Yai National Park in Thailand. This type of model, especially the spatial components, finds different optimal land allocations than do traditional models at empirically relevant levels of benefits. The spatial analysis here suggests that most of this park can be best used as a preserved area and also provides support for expanding the park into an adjacent unpopulated area. The analysis demonstrates that the park’s benefits to regional agriculture and villagers are large enough that preservation can proceed without international support, and that local people, as a group, have incentives to maintain most of the area as preserved land. Although the data cannot support a full case-study, these results underscore the need for empirical assessment of the spatial aspects of protected area management.
    Keywords: parks, protected areas, people-park conflict, spatial, biodiversity, option value
    JEL: Q2 Q15 O13
  52. By: Ghersi, Frederic; Hourcade, Jean-Charles
    Abstract: This paper examines compromise spaces between competing perspectives on four key climate change issues- costs, level of domestic action, environmental integrity, and developing world involvement. Based on extensive simulations of a model integration tool, SAP12 (Stochastic Assessment of Climate Policies, 12 models), the analysis considers options for fine-tuning the Kyoto Protocol, such as concrete ceilings or levies on carbon imports; restoration payments to be made on excess emissions; credits for sequestration activities in Annex B countries; and others. It shows the critical importance of the baseline against which the performance of each tool has to be assessed in the absence of direct economic penalties for noncompliance. The restoration payment option (also known as a safety valve) emerges as a superior means of addressing the core policy issues, including environmental integrity, and provides a large compromise space between payments of $35 to $100 per ton of carbon.
    Keywords: limate negotiations, 2010 carbon markets, uncertainty about abatement costs
    JEL: Q25 D74 D78 D80
  53. By: Edward Miguel; Gerard Roland
    Abstract: We investigate the impact of U.S. bombing on later economic development in Vietnam. The Vietnam War featured the most intense bombing campaign in military history and had massive humanitarian costs. We use a unique U.S. military dataset containing bombing intensity at the district level (N=584). We compare the heavily bombed districts to other districts controlling for baseline demographic characteristics and district geographic factors, and use an instrumental variable approach exploiting distance to the 17th parallel demilitarized zone. U.S. bombing does not have a robust negative impact on poverty rates, consumption levels, infrastructure, literacy or population density through 2002. This finding suggests that local recovery from war damage can be rapid under certain conditions, although further work is needed to establish the generality of the finding in other settings.
    JEL: E2 O5 P5 H7
    Date: 2006–01
  54. By: Matthews, Kent (Cardiff Business School); Ismail, Mahadzir
    Abstract: This study examines the technical efficiency and productivity of domestic and foreign commercial banks in Malaysia 1994-2000. We find that foreign banks have a higher efficiency level than domestic banks, and that efficient banks are characterised by size but not profitability or loan quality. The main source of productivity growth is technical change rather than improvement in efficiency. The productivity of domestic banks is more susceptible to macroeconomic shocks than foreign banks but over the medium term foreign banks are only marginally superior to domestic banks.
    Keywords: domestic and foreign banks; technical efficiency; Malmquist productivity index
    JEL: D2 G2
    Date: 2006–01
  55. By: Robert Hamwey (Cen2eco: Centre for Economic & Ecological Studies)
    Abstract: This study seeks to review some of the key issues surrounding ongoing WTO negotiations on trade liberalisation of environmental goods and to provide trade data and analyses to assess developing countries’ current and potential performance in environmental goods trade. Data indicate that developing countries have significant export strength and potential, not only in environmentally preferable products, but in many manufactured and chemical goods used in the provision of environmental services as well. For many developing countries, this latter class of goods includes some of their most dynamic exports, which can be significantly expanded by trade liberalisation, particularly through increased South-South trade. For other developing countries, trade liberalisation of environmentally preferable products may provide immediate gains needed to support rural economies and facilitate the integration of their small and medium sized enterprises into global supply chains. The study finds that to provide gains for all countries – each with a unique production and export profile – the scope and spectrum of environmental goods targeted for liberalisation must be wide and selective, allowing developing countries to select a limited ‘best- fit’ subset of goods for their tariff reduction commitments within an eventual WTO agreement.
    Keywords: trade liberalisation, environmental goods, developing countries, WTO, negotiations
    JEL: F1 F2
    Date: 2005–12–27

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