nep-sea New Economics Papers
on South East Asia
Issue of 2007‒12‒01
ten papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Using Complex Network Analysis to Assess the Evolution of International Economic Integration: The cases of East Asia and Latin America By Javier Reyes; Stefano Schiavo; Giorgio Fagiolo
  2. Indonesia’s Changing Economic Geography By Hal Hill; Budy Resosudarmo; Yogi Vidyattama
  3. Wages, Prices, and Living Standards in China,1738-1925: in comparison with Europe, Japan, and India By Robert Allen; Jean-Pascal Bassino; Debin Ma; Christine Moll-Murata; Jan Luiten van Zanden
  4. Robust Multiperiod Poverty Comparisons By Gräb, Johannes; Grimm, Michael
  5. Emperical Applications of Neoclassical Growth Models the "Fit" of the Solow Augmented Growth Model By Jalles, João Tovar
  6. ATLAS INDUSTRI MEBEL KAYU DI JEPARA, INDONESIA By Jean-Marc Roda; Philippe Cadène; Philippe Guizol; Levania Santoso; Achmad Uzair Fauzan
  7. Geography vs. Institutions at the Village Level By Grimm, Michael; Klasen, Stephan
  8. Household Risk Management in Rural and Urban Thailand By Rungruxsirivorn, Ornsiri
  9. Incentive Effects of Transfers within the Extended Family: The Case of Indonesia By Schueler, Dana
  10. Fifty Years of Malaysian Economic Development:Policies and Achievements By Hasan, Zubair

  1. By: Javier Reyes; Stefano Schiavo; Giorgio Fagiolo
    Abstract: Over the past four decades the High Performing Asian Economies (HPAE) have followed a development strategy based on the exposure of their local markets to the presence of foreign competition and on an outward oriented production. In contrast, Latin American Economies (LATAM) began taking steps in this direction only in the late eighties and early nineties, but before this period these countries were more focused in the implementation of import substitution policies. These divergent paths have led to sharply different growth performance in the two regions. Yet, standard trade openness indicators fall short of portraying the peculiarity of the Asian experience, and to explain why other emerging markets with similar characteristics have been less successful over the last 25 years. This paper offers an alternative perspective on the issue by exploiting recently-developed indicators based on weighted network analysis. This allows us to investigate the whole structure of international trade relationships and to determine both the position of HPAE countries in the network and its evolution over time. We show that HPAE countries are more integrated into the world economy, as they have moved -over the past 25 years- from the periphery of the network towards its core. In contrast, the LATAM region seems to be loosing presence within the network or, at best, its integration process has remained stagnant.
    Keywords: International trade, High Performing Asian Economies, Latin American Economies, Development, Growth, Networks, Complex Weighted Networks, World Trade Web, Centrality
    Date: 2007–11–25
  2. By: Hal Hill (Division of Economics, RSPAS, The AUstralian National University); Budy Resosudarmo (Division of Economics, RSPAS, The AUstralian National University); Yogi Vidyattama (Division of Economics, RSPAS, The AUstralian National University)
    Abstract: Indonesia is the world’s largest archipelagic state, and one of the most spatially diverse nations on earth in its resource endowments, population settlements, location of economic activity, ecology and ethnicity. The regional socio-economic data base now extends over 30 years, and so it is possible to draw conclusions about the country’s regional development dynamics since the 1970s. In this paper, we examine economic growth, inequality, convergence, structural change and social indicators for a consolidated group of 26 provinces, ie, the 27 of the late Soeharto period excluding East Timor. Our major conclusions include the following: (a) There continues to be great diversity in economic and social outcomes, but growth and social progress have been remarkably even. The poorest regions, mainly located in Eastern Indonesia, have generally performed about as well as the national average. (b) The better performing regions are typically those that are the most ‘connected’ to the global economy. In this respect, Jakarta stands out as a special case, growing richer than the rest of the country over time. (c) As expected, conflict is particularly harmful to economic development, as illustrated in the case of Maluku and to a lesser extent Aceh. (d) There is no clear natural resource story, in that the performance of the resource-rich provinces has varied considerably.
    Keywords: Economic Geography, economic growth, convergence, Indonesia
    JEL: R0 R1
    Date: 2007–11
  3. By: Robert Allen; Jean-Pascal Bassino; Debin Ma; Christine Moll-Murata; Jan Luiten van Zanden
    Abstract: The paper develops data on the history of wages and prices in China from thr eighteenth century to the twentieth. These data are used to coompare Beijing, Canton, Suzhou and Shanghai to leading cities in Europe, India, and Japan in terms of nominal wages, the cost of living, and the standard of living. In the eighteenth century, the real income of building workers in Asia was similar to that of workers in the backward parts of Europe and far behind that of workers in the leading economies of northwestern Europe. Industrialization led to rising real wages in Europe and Japan. Real wages declined in China in the eighteenth and early nineteenth centuries and rose slowly in the late nineteenth and early twentieth. There was little cumulative changae in the standard of living or workers in Beijing, Canton, and lower Yangzi cities for two hundred years. The income disparities of the early twentieth century were due to long run stagnation in China combined development in Japan and Europe.
    Keywords: Great Divergence, Preindustrial Real Wages, England, Europe, China, Japan, India
    JEL: N33 N35
    Date: 2007
  4. By: Gräb, Johannes; Grimm, Michael
    Abstract: We propose a methodology for comparing poverty over multiple periods across time and space without arbitrarily aggregating income over various years or relying on arbitrarily specified poverty lines. Following Duclos et al. (2006a), we use the multivariate stochastic dominance methodology to create dominance surfaces for different time spans. We elaborate the method for the bi-dimensional case, using income observed over two periods, one at the beginning and one at the end of a time span, as dimensions. We also embed in this framework a new concept of chronic and transient poverty. We illustrate our approach by performing poverty comparisons using data for Indonesia and Peru.
    Keywords: Chronic Poverty, Multiperiod Poverty, Poverty Dominance, Poverty Dynamics, Transient Poverty
    Date: 2007
  5. By: Jalles, João Tovar
    Abstract: The theories of country growth models are supported by the high scale variation observed in these countries’ growth rates. This is the reason behind those typical questions, like “Why did some East Asian countries grow so much?”, amongst others. Therefore, a lot of recent research has been focused in trying to explain why some countries are richer than others, using, for example, the human capital-augmented Solow Swan model of dispersion in income levels. The article by Mankiw, Romer and Weil [1992] contains a thorough empirical analysis of this type of Solow model augmented with human capital, based on version Penn World Table (ab hinc PWT) 4.0 of the famous Summers and Heston dataset. In this paper I apply a similar analysis to the augmented Solow model as presented in Jones [2002], Chapter 3. Like the augmented Solow model of Mankiw, Jones’ model has the basic Solow model as a special case. Using a more recent version PWT 5.6 of the Summers and Heston dataset, updated until 1997 and with the variable referring to the fraction of time individuals spend on learning new skills added, this paper aims to perform a new and revisited level and convergence analysis of both the (un)restricted basic and augmented Solow-Swan Model.
    Date: 2007
  6. By: Jean-Marc Roda (Bois Tropicaux - Production et valorisation des bois tropicaux - CIRAD : UPR40); Philippe Cadène (SDEDT - Sociétés en developpement dans l'espace et dans le temps - CNRS : UMR7135 - Université Denis Diderot - Paris VII); Philippe Guizol (Bois tropicaux - Production et valorisation des bois tropicaux - CIRAD : UPR40); Levania Santoso (CIFOR - Center for International Forestry Research - CGIAR); Achmad Uzair Fauzan (CIFOR - CIFOR - Center for International Forestry Research - CGIAR)
    Abstract: Dokumen ini merupakan kajian terhadap sentra industri di Kabupaten Jepara, Indonesia, yang mengkhususkan diri pada produksi mebel untuk dipasarkan dalam negeri maupun luar negeri. Kami mengambil kesimpulan dari ciri-ciri utama dan dinamika yang terjadi pada berbagai perusahaan di Jepara dengan menggunakan analisis kuantitatif terhadap alur yang terjadi antara perusahaanperusahaan tersebut dan dengan pasar di tempat lain. Suatu metode analisis spasial telah dirancang khusus, dan digabungkan dengan metode lain yang sudah ada untuk menganalisa jaringan produksi hutan serta jaringan sosial. Metode tersebut memungkinkan adanya pertimbangan serta evaluasi yang lebih tepat dan akurat terhadap jumlah bengkel-bengkel kecil (lebih dikenal dengan sebutan “brak” atau workshop) yang tidak dapat dievaluasi dengan menggunakan metode-metode klasik. Tulisan ini menunjukkan bahwa statistik resmi dan berbagai tulisan yang sudah ada tentang Jepara selama ini ternyata memberikan taksiran yang terlalu rendah terhadap jangkauan industri kayu dan kegiatan di Jepara. Hasilnya disajikan melalui peta sintesis. Sebanyak 15.271 unit produksi telah diidentifikasi di Jepara, yang memperkerjakan sekitar 170.000 orang. Kegiatan tersebut menghasilkan pendapatan yang cukup besar, yaitu nilai tambah antara Rp 11.900 - 12.300 miliar/ tahun (sekitar Euro 1 miliar/tahun), atau Rp 70 - 78 juta/pekerja/tahun. Konsumsi kayu bulat di Kabupaten Jepara adalah sebesar 1,5 hingga 2,2 juta m³/tahun, dengan kata lain, 9 m³ kayu bulat dapat menyokong pekerjaan 1 pekerja tetap selama satu tahun. Penataan produksi di daerah ini sama seperti di sentra industri lainnya, di mana hubungan dan sistem sub kontrak antara sesama unit produksi serta tingkat spesialisasi tergolong tinggi, dan unit ukuran kecil dan sangat kecil menjadi cukup dominan dalam berbagai tahap produksi dibandingkan dengan unit terpadu yang lebih besar.
    Keywords: Indonesia, Jawa, mebel, kayu, sentra industri, jaringan produksi, daerah klaster manufaktur, spesialisasi yang fleksibel, UKM, jati, dagang.
    Date: 2007–10–01
  7. By: Grimm, Michael; Klasen, Stephan
    Abstract: - There is well-known debate about the respective role of geography versus institutions in explaining the long term development of countries. These debates have usually been based on cross country regressions where questions about parameter heterogeneity, unobserved heterogeneity, and endogeneity cannot easily be controlled for. The innovation of Acemoglu, Johnson and Robinson (2001) was to address this last point by using settler morality as an instrument for endegenous institutions and found that this supported their line of reasoning. We believe there is value-added to consider this debate at the micro level within a country as particularly questions of parameter heterogeneity and unobserved heterogeneity are likely to be smaller than between countries. Hence, we examine the determinants of agricultural growth across villages on the Indonesian Island of Sulawesi and find technology adoption to play a crucial role. We show that geography through its effects on migration and institutions is a valid instrument to establish the causal links between institutions and technology adoption as well as technology and agricultural growth.
    Keywords: Geography, land rights, migration, technology adoption, agricultural developement, Indonesia
    JEL: K11 O12 Q12
    Date: 2007
  8. By: Rungruxsirivorn, Ornsiri
    Abstract: This paper examines the nature of risk faced by households in Thailand and the strategies that these households adopt to mitigate the adverse effect from income shortfalls. I use a new cross-section dataset that is based on a sample of both urban and rural households. I find that price shock is the most prevalent source of income shortfalls. I also find that the most common risk-mitigating strategy employed by households is to borrow from the Village Fund. Nonetheless, there is a high degree of heterogeneity among households, especially in terms of their sources of income and this plays a key role in determining how a household responds to shocks. Thus, it may not be advisable to design policy based on the paradigm of a representative consumer.
    Date: 2007
  9. By: Schueler, Dana
    Abstract: This study sheds light on the efficiency of informal mutual insurance systems. Evidence on the behavioral effects of remittances and inter-family transfers is still rare. This paper intends to analyze the incentive effects of internal interfamily transfers in Indonesia with improved econometric techniques. First differences and three-stage least squares are used to analyze incentive effects on working hours. The endogeneity of transfers received by the household and the number of migrants sent away are explicitly taken into account. Furthermore, different sectors of employment are distinguished in the analysis. The empirical analysis shows that inter-family transfers adversely influence the incentive to work. This finding holds for the informal non-agricultural sector. However, the negative incentive effect is partly compensated by migrants, who are recipients rather than providers of transfers in the short run.
    Keywords: Remittances, Transfers, Incentives, Three-Stage Least Squares
    Date: 2007
  10. By: Hasan, Zubair
    Abstract: Malaysia is a small country but has big achievement in economic development to its credit. This year (August 2007) the country celebrates the completion of the first 50 years of its independence. It is in the fitness of things that this paper takes a look at its economic achievements over the past decades and the policies that shaped its success story in the matter. This is all the more apt as not a few regard Malaysia as a role model for the developing countries, especially the OIC members. The paper does not follow the historical sequence of events. That is available in numerous publications spread over time. It highlights the major achievements of the country and the policies that made them possible. Here it talks about the long-run vision of the social order the economic effort had to establish, the form and speed of transformation the policies ushered in, the model of growth it chose, the measures it took to enforce equity, the way it managed crises, and the Islamic elements that it was always seizes with to incorporate in its plans.
    Keywords: Economic vision; Planning; Structural transformation; Capital controls; Islamic finance.
    JEL: O5
    Date: 2007

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