nep-sea New Economics Papers
on South East Asia
Issue of 2012‒07‒23
39 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. National Innovation Systems and Regional Cooperation in Asia: Challenges and Strategies from a Study of China By Khan, Haider A.
  2. Climate Change Mitigation and Green Growth in Developing Asia By Howes, Stephen; Wyrwoll, Paul
  3. The Impact of ACFTA on People’s Republic of China–ASEAN Trade: Estimates Based on an Extended Gravity Model for Component Trade By Sheng, Yu; Tang, Hsiao Chink; Xu, Xinpeng
  4. Predictors of Maternal and Child Double Burden of Malnutrition in Rural Indonesia and Bangladesh. The American Journal of Clinical Nutrition, vol. 95, no. 4 By Vanessa M. Oddo; Jee H. Rah; Richard D. Semba; Kai Sun; Nasima Akhter; Mayang Sari; Saskia de Pee; Regina Moench-Pfanner; Martin Bloem; Klaus Kraemer
  5. Is contract farming in the Indonesian oil palm industry pro-poor? By Cahyadi, Eko; Waibel, Hermann
  6. Combating Widespread Currency Manipulation By Joseph E. Gagnon
  7. Dual Burden Households and Nutritional Inequality in Indonesia By Roemling, Cornelia; Qaim, Matin
  8. Climate Change, Perceptions and the Heterogeneity of Adaptation and Rice Productivity: Evidence from Indonesian Villages By Futoshi, Yamauchi; Hiroyuki, Takeshima; Reno, Dewina; Sony, Sumaryanto; Akiko, Haruna
  9. On The Complexity of Eliminating Fuel Subsidy in Indonesia; A Behavioral Approach By Pradiptyo, Rimawan; Sahadewo, Gumilang Aryo
  10. Capital Controls in Brazil – Stemming a Tide with a Signal By Yothin Jinjark; Ilan Noy; Huanhuan Zheng
  11. Oil Price Effects on Land Use Competition – An Empirical Analysis By Matthias Diermeier; Torsten Schmidt
  12. ASEAN-China Free Trade Area and the Competitiveness of Local Industries: A Case Study of Major Industries in the Lao People's Democratic Republic By Leebouapao, Leebeer; Insisienmay, Sthabandith; Nolintha, Vanthana
  13. The Political Economy of Deforestation in the Tropics By Burgess, Robin; Hansen, Matthew; Olken, Benjamin; Potapov, Peter; Sieber, Stefanie
  14. Seeing REDD: A Microeconomic Analysis of Carbon Sequestration in Indonesia By Skidmore, Samuel; Santos, Paulo; Leimona, Beria
  15. Private and Social Levels of Pesticide Overuse in Rapidly Intensifying Upland Agriculture in Thailand By Grovermann, Christian; Schreinemachers, Pepijn; Berger, Thomas
  16. Poverty and Tropical Deforestation by Smallholders in Forest Margin Areas: Evidence from Central Sulawesi, Indonesia By Reetz, Sunny W.H.; Schwarze, Stefan; Bruemmer, Bernhard
  17. Regional Integration in East Africa Diversity or Economic Conformity By Goto, Junichi
  18. RED Versus REDD: The Battle Between Extending Agricultural Land Use and Protecting Forest By Dixon, Peter B.; van Meijl, Hans; Rimmer, Maureen T.; Tabeau, Andrzej A.
  19. Early warning indicator of economic vulnerability By Wong, Shirly Siew-Ling; Puah, Chin-Hong; Abu Mansor, Shazali; Liew , Venus Khim-Sen
  20. GMM Estimation of Mixtures from Grouped Data: By William E. Griffiths and Gholamreza Hajargasht
  21. The health effects of universal health care : evidence from Thailand By Wagstaff, Adam; Manachotphong, Wanwiphang
  22. Facilitating access to rural services in Vietnam: The invisible social capital link By Hoang Dinh, Quoc; Dufhues, Thomas; Buchenrieder, Gertrud
  23. Smallholder competitiveness: insights from household pig production systems in Vietnam By Lapar, Ma. Lucila A.; Nguyen, Ngoc Toan; Staal, Steven J.; Minot, Nicholas; Tisdell, Clement A.; Nguyen, Ngoc Que; Nguyen, Do Anh Tuan
  24. Impacts of Site-Specific Nutrient Management in Irrigated Rice Farms in the Red River Delta, Northern Vietnam By Rodriguez, Divina Gracia P.; Nga, Nguyen Thi Duong
  25. Rice market participation and channels of sale in rural Vietnam By Cazzuffi, Chiara; McKay, Andrew
  26. Incentives and Social Preferences in a Traditional Labor Contract: Evidence from Rice Plantng Field Experiments in the Philippines By Goto, Jun; Aida, Takeshi; Aoyagi, Keitaro; Sawada, Yasuyuki
  27. Examine the Agriculture, Poverty, and Climate Change Nexus in Vietnam By Yu, Bingxin; Zhu, Tingju; Breisinger, Clemens; Manh Hai, Nguyen
  28. Inequality in democracy: Insights from an empirical analysis of political dynasties in the 15th Philippine Congress By Beja Jr, Edsel; Mendoza, Ronald U.; Venida, Victor S.; Yap, David B.
  29. Contract farming and smallholder incentives to produce high quality: experimental evidence from the Vietnamese dairy sector By Saenger, Christoph; Qaim, Matin; Torero, Maximo; Viceisza, Angelino
  30. Inefficiency in the Shadow of Unobservable Outside Options By Madhav S. Aney
  31. Returns to Education in Sri Lanka: A Pseudo Panel Approach By Rozana Himaz; Harsha Aturupane
  32. The local electoral impacts of conditional cash transfers: Evidence from a field experiment. By Julien Labonne
  33. Irrigation water productivity in Cambodian rice systems By Wokker, Chris; Santos, Paulo; Ros, Bansok
  34. Language, Mixed Communes and Infrastructure: Sources of Inequality and Ethnic Minorities in Vietnam By Hoa Thi Minh Nguyen; Tom Kompas; Trevor Breusch; Michael B. Ward
  35. Geography and economic growth in Vietnam By Ngo, Thu Hien Laura; Santos, Paulo
  36. Geography and economic growth in Vietnam By Ngo, Thu Hien Laura; Santos, Paulo
  37. Rebuilding the Philippine economy By Beja, Edsel Jr.
  38. Which Farmers Benefit the Most from Bt Corn Adoption in the Philippines? Estimating Heterogeneity Effects By Mutuc, Maria Erlinda M.; Rejesus, Roderick M.; Yorobe, Jose M., Jr.
  39. Sectoral Growth Linkages and the Role of Infrastructure Development: Revisiting the sources of nonfarm development in the rural Philippines By Fuwa, Nobuhiko; Balisacan, Arsenio M.; Mapa, Dennis; Abad Santos, Carlos; Piza, Sharon Faye

  1. By: Khan, Haider A.
    Abstract: I provide a quick assessment of the effectiveness and potentialities of National Innovation Systems (NIS) in the Asia-Pacific for deeper economic integration. To this end,I formulate some preliminary policy suggestions aimed at enhancing the region’s overall innovation strategy. My approach focuses particularly on the evolving relationship between China's NIS and the Asia-Pacific region with some references to Japan, Korea, Taiwan, India, Thailand, Singapore, Malaysia and Indonesia. I argue that while the policy challenges for regional cooperation are far from trivial, strengthening the NIS and the various sub- regional systems with a view to building up a broad-based and inclusive Regional Innovation System(RIS) for the Asia-Pacific can be a substantive area of enhancing economic integration in the Asia-Pacific . Conceptually, the paper presents an enhanced view of NIS for inclusive growth. I call this new model of regional innovation an “Augmented NIS(ANIS)”. The attempt to build ANIS is one conceptually and practically sound approach towards enhancing economic integration in the Asia-Pacific. Three areas of concrete applications are suggested in the concluding part.
    Keywords: National Innovation Systems (NIS); Augmented National Innovation Systems (ANIS); China; regional cooperation; Asia-Pacific region
    JEL: O53
    Date: 2012–01
  2. By: Howes, Stephen (Asian Development Bank Institute); Wyrwoll, Paul (Asian Development Bank Institute)
    Abstract: Developing Asia is the driver of today’s emissions intensive global economy. As the principle source of future emissions, the region is critical to the task of global climate change mitigation. Reflecting this global reality and a range of related domestic issues, the governments of the People’s Republic of China, India, Indonesia, Thailand, and Viet Nam have embarked upon an ambitious policy agenda. This report reviews the present and future policy settings for climate change mitigation and green growth in Asia’s major emerging economies.
    Keywords: global climate change; developing asia; green growth; asia emerging economies
    JEL: O10 O44 Q40 Q42 Q53 Q54 Q56 Q58
    Date: 2012–07–11
  3. By: Sheng, Yu (The Australian National University); Tang, Hsiao Chink (Asian Development Bank); Xu, Xinpeng (The Hong Kong Polytechnic University)
    Abstract: This paper uses an extended gravity model to shed light on the impact of the free trade area agreement between the Association of Southeast Asian Nations (ASEAN) and the People's Republic of China (PRC) on the members' trade flows and trade patterns. New determinants that capture the rising importance of global production sharing and intraregional trade in parts and components in East Asia are proposed. Results from the extended gravity model show that the free trade agreement leads to substantially higher bilateral trade between ASEAN and the PRC, more than what a conventional gravity model predicts. The increase is concentrated in the ASEAN countries with stronger industrial linkages with the PRC.
    Keywords: ACFTA; gravity model; parts and components trade
    JEL: F17 O53
    Date: 2012–07–01
  4. By: Vanessa M. Oddo; Jee H. Rah; Richard D. Semba; Kai Sun; Nasima Akhter; Mayang Sari; Saskia de Pee; Regina Moench-Pfanner; Martin Bloem; Klaus Kraemer
    Abstract: This article identifies maternal, child, and household characteristics in rural Indonesia and Bangladesh associated with maternal and child double burden of malnutrition, the coexistence of a stunted child and an overweight mother within the same household. Maternal and child double burden was observed in 11 percent and 4 percent of the households in rural Indonesia and Bangladesh, respectively. The study found double burden is not exclusive to urban areas.
    Keywords: Malnutrition, Indonesia, Bangladesh, Obesity
    JEL: I F Z I0 I1
    Date: 2012–04–30
  5. By: Cahyadi, Eko; Waibel, Hermann
    Abstract: This paper assesses the impact of contract farming in the oil palm industry in Indonesia on smallholders’ well-being and investigates its implication for poverty reduction. Data were collected randomly from 245 smallholders in the province of Jambi, Sumatra. A treatment effects model was applied in order to capture endogeneity and selection bias. Results show that participation in contract farming is significantly associated with type of household, age of household head, size of oil palm plot, and the time of plantation establishment. While overall, contract farming has a significant positive effect on smallholder income; it discriminates against the poorer smallholders. It is recommended that agro industry and government should review contractual arrangements in order to increase the chances of the poor to benefit from oil palm expansion in Indonesia.
    Keywords: contract farming, oil palm, treatment effect model, poverty, Agribusiness, Agricultural and Food Policy, O13, Q13,
    Date: 2012–07–27
  6. By: Joseph E. Gagnon (Peterson Institute for International Economics)
    Abstract: Widespread currency manipulation, mainly in developing and newly industrialized economies, is the most important development of the past decade in international financial markets. In an attempt to hold down the values of their currencies, governments are distorting capital flows by around $1.5 trillion per year. The result is a net drain on aggregate demand in the United States and the euro area by an amount roughly equal to the large output gaps in the two economies. In other words, millions more Americans and Europeans would be employed if other countries did not manipulate their currencies and instead achieved sustainable growth through higher domestic demand. Gagnon identifies the 20 most egregious currency manipulators over the past 11 years. Four groups of countries stand out: (1) longstanding advanced economies such as Japan and Switzerland; (2) newly industrialized economies such as Israel, Singapore, and Taiwan; (3) developing Asian economies such as China, Malaysia, and Thailand; and (4) oil exporters such as Algeria, Russia, and Saudi Arabia. Although currency manipulation to boost trade balances is a violation of the Articles of Agreement of the International Monetary Fund (IMF), there is currently no procedure to punish or curtail it. The best forum for sanctions against currency manipulators is the World Trade Organization, operating in consultation with the IMF. Countries affected by currency manipulation would be authorized to impose tariffs on imports from manipulators. In order to get manipulators to agree to this change in international rules, the main targets of currency manipulation—the United States and the euro area—may have to play tough. One strategy would be to tax or otherwise restrict purchases of US and euro area financial assets by currency manipulators.
    Date: 2012–07
  7. By: Roemling, Cornelia; Qaim, Matin
    Abstract: Overweight is an increasing problem in many developing countries, coexisting with underweight and contributing to a dual burden of malnutrition, sometimes in the same households. We analyze the dual burden phenomenon in Indonesia, using panel data that span a time period of 15 years. Today, 17 percent of the Indonesian households are classified as dual burden. In these households, children are often underweight, whereas adults are overweight. The nutrition transition seems to have differential impacts on the body mass index of different age cohorts. Dual burden is a transitory phenomenon. It started in the richer population segments, but today the highest prevalence is observed in the lowest expenditure quintile. Most households that moved out of the dual burden category end up as overweight. We also develop a continuous Theil index of intra-household nutritional inequality. While the prevalence of dual burden households has hardly changed over the last 10 years, the Theil index increased steadily. The reason is that intra-household inequality is also rising within household categories. Such inequality makes policy design more complex; food and nutrition interventions need to be targeted more specifically at subgroups within households. Further socioeconomic determinants are analyzed econometrically. Female decision-making reduces intra-household nutritional inequality.
    Keywords: Dual burden, Intra-household inequality, Nutrition transition, Asia, Indonesia, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, International Development, I10, O12,
    Date: 2012–07
  8. By: Futoshi, Yamauchi; Hiroyuki, Takeshima; Reno, Dewina; Sony, Sumaryanto; Akiko, Haruna
    Abstract: This paper examines how change in rainfall patterns induces autonomous adaptation of farmers and affects their rice production. Based on recently collected household data from seven provinces in Indonesia, the analysis clearly demonstrate delays in the onset of rainy season and increased uncertainty in rainfall patterns in the region. Farmers make sequential decisions: adjusting planting timing in response to delays in the onset of rainy season while changing crop variety responding to delays in the end of the previous year’s rainy season. In the case of rice production, (i) delay in the onset significantly decreases land productivity growth in rice production; one month delay offsets the average growth observed in 1999-2007, and (ii) though irrigation share significantly explains the growth of land productivity, delayed onset increasingly constrains the role of irrigation.
    Keywords: climate change, rainy season, adaptation, rice production, irrigation, Indonesia, Agricultural and Food Policy, Community/Rural/Urban Development, Crop Production/Industries, Food Security and Poverty,
    Date: 2012
  9. By: Pradiptyo, Rimawan; Sahadewo, Gumilang Aryo
    Abstract: People’s attachment to a subsidy creates difficulties for the government to phase out, and eventually eliminate, the subsidy. Elimination of fuel subsidy scheme in Indonesia is a perfect example of such occurrence. The subsidy has been implementing to commodity as opposed to households, thus individuals may not necessarily realized that they have been enjoying the subsidy when they buy fuel. In this case people may feel as if they are endowed by the values from the provision of the policy. The elimination of the subsidy consequently may be perceived as a loss - as opposed to a foregone gain. This study aims to obtain the most acceptable exit strategy to eliminate the subsidy from the perspective of households by conducting a laboratory-based survey. The alternative exit strategies include methods of elimination of the subsidy and of reallocation of resources saved from eliminating the subsidy. The policy options have been derived using insight from behavioral economics ranging from endowment effect, status quo bias, to present biasness. The survey includes 335 subjects, who come from four different backgrounds: 1) households with no motor vehicle; 2) households with only motorcycle(s); (3) households with one car and; 4) households with one luxurious car or more than one car. Each subject faces 55 paired-wise policy alternatives and the method proposed by Dunn-Rankin (1983) has been used to derive the ordering of preferences. The result shows that gradual elimination of fuel subsidy and reallocation to earmarked programs were the most acceptable policy elements of the exit strategy. The survey, indirectly, showed that subjects’ valuation of losses is greater for direct elimination strategies than that of the equivalent gradual elimination strategies. The results also show that respondents chose “to pay” later at a smaller amount than “to pay” immediately of the equivalent total value. The reallocation of resources saved to earmarked programs is more acceptable than the reallocation to non-earmarked programs. In particular, respondents opted for a more immediate compensation from the elimination or reduction of the subsidy.
    Keywords: Fuel subsidy; experimental economics; laboratory-based survey; paired comparison; preference relation; reallocation of resources
    JEL: D03 D12 Q48 C91
    Date: 2012–07–13
  10. By: Yothin Jinjark (SOAS, University of London); Ilan Noy (University of Hawaii and Victoria Business School in Wellington); Huanhuan Zheng (The Chinese University of Hong Kong)
    Abstract: Controls on capital inflows have been experiencing a period akin to a renaissance since the beginning of the global financial crisis in 2008, with several prominent countries choosing to impose controls; e.g., Thailand, Korea, Peru, Indonesia, and Brazil. We focus on the case of Brazil, a country that instituted five changes in its capital account regime in 2008-2011, and ask what the impacts of these policy changes were. Using the Abadie et al. (2010) synthetic control methodology, we construct counterfactuals (i.e., Brazil with no capital account policy change) for each policy change event. We find no evidence that any tightening of controls was effective in reducing the magnitudes of capital inflows, but we observe some modest and short-lived success in preventing further declines in inflows when the capital controls are relaxed as was done in the immediate aftermath of the Lehman bankruptcy in 2008 and in January 2011 by the newly inaugurated government of Dilma Rousseff. We hypothesize that price-based capital controls’ only perceptible effect are to be found in the content of the signal they broadcast regarding the government’s larger intentions and sensibilities. Brazil’s left-of-center government was widely perceived as ambivalent to markets. An imposition of controls was not perceived as ‘news’ and thus had no impact. A willingness to remove controls was perceived, however, as a noteworthy indication that the government was not as hostile to the international financial markets as many expected it to be.
    Keywords: Capital control; Brazil; Global financial crisis; Mutual fund flows; Exchange rate
    JEL: F32 G15 G18 G23 E60
    Date: 2012–07–17
  11. By: Matthias Diermeier; Torsten Schmidt
    Abstract: The increasing use of food commodities for biofuel production has substantial impact on prices and quantities of these and other food commodities. It is therefore likely that this trend also intensifies the competition for arable land. However, evidence for this hypothesis is generated by calibrated models while empirical evidence is rare. In this paper we analyze the effects of crude oil price and prices of input factors for biofuel production on prices, areas and quantities of selected food commodities empirically performing Granger causality and cointegration tests as well as calculating impulse response functions. On the world aggregated level we reveal that the crude petroleum price only Granger causes the price of maize and wheat but the area used for the production of maize, soybean oil, sugar and wheat. The effect on wheat indicates an indirect effect on land use. Moreover, the price index of fats and oils has a stronger effect on prices, areas and quantities of other food commodities. At the country level, we identify that for the U.S., the maize price is the key variable influencing area and quantity of cereals. Additionally, in Indonesia and Malaysia we find that the palm oil price has significant effects on the area and quantity of rice. Despite these positive effects of commodity prices on land use we find no evidence for direct land competition between oil crops and cereals.
    Keywords: Biofuel; food commodity prices; crude oil price; Granger causality;cointegration
    JEL: L71 Q11 Q42 C32
    Date: 2012–05
  12. By: Leebouapao, Leebeer (National Economic Research Institute, Lao People's Democratic Republic); Insisienmay, Sthabandith (National Economic Research Institute, Lao People's Democratic Republic); Nolintha, Vanthana (National Economic Research Institute, Lao People's Democratic Republic)
    Abstract: This paper provides an evaluation of the impact of the ASEAN-China Free Trade Agreement (ACFTA) on industries in the Lao People's Democratic Republic (Lao PDR). In general, the paper finds that price competitiveness in the three industries under review falls substantially if tariffs are completely removed. However, the degree of impact varies substantially across industries. In the wood processing and cement industries, of which the latter benefits from import substitution policies, competitiveness based on both price and product quality will be affected by the removal of tariffs. Ensuring product quality in the face of increased competition from neighboring countries will be crucial for both industries in order to maintain domestic market share and expand into ASEAN and People's Republic of China (PRC) markets. For a foreign direct investment (FDI)-led industry such as motorcycle assembly, the concern over price competitiveness seems to be less significant. However, strengthening product quality and brand reputation should be high on the agenda of Lao People's Democratic Republic motorcycle assemblers as they seek to penetrate the neighboring Thai market. This paper concludes by recommending a package of industry-specific policy interventions to prepare Lao People's Democratic Republic industries for increased competition in domestic markets and possible expansion into the more competitive regional markets of ASEAN and the People's Republic of China.
    Keywords: ACFTA; FTA; Laos; Lao Peoples Democratic Republic; ASEAN; Peoples Republic of China; Free Trade Area
    JEL: F15
    Date: 2012–07–01
  13. By: Burgess, Robin; Hansen, Matthew; Olken, Benjamin; Potapov, Peter; Sieber, Stefanie
    Abstract: Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions worldwide and threatens the world's most diverse ecosystems. The prevalence of illegal forest extraction in the tropics suggests that understanding the incentives of local bureaucrats and politicians who enforce forest policy may be critical to combating tropical deforestation. We find support for this thesis using a novel satellite-based dataset that tracks annual changes in forest cover across eight years of institutional change in post-Soeharto Indonesia. Increases in the numbers of political jurisdictions are associated with increased deforestation and with lower prices in local wood markets, consistent with a model of Cournot competition between jurisdictions. We also show that illegal logging and rents from unevenly distributed oil and gas revenues are short run substitutes, but this effect disappears over time as political turnover occurs. The results illustrate how incentives faced by local government o¢ cials affect deforestation, and provide an example of how standard economic theories can explain illegal behavior.
    Keywords: biodiversity; climate change; corruption; Cournot competition; deforestation; environmental monitoring; illegal logging; political economy; satellite imagery
    JEL: D73 L73
    Date: 2012–06
  14. By: Skidmore, Samuel; Santos, Paulo; Leimona, Beria
    Abstract: Reducing Emissions through Deforestation and Degradation (REDD) is one of the few interventions to mitigate global warming being pur- sued at a global scale. Its implementation requires knowledge of the willingness to accept land use change contracts and its eectiveness re- quires its application over large areas. In this paper we use data from Sumatra, Indonesia, to contrast two approaches to the elicitation of the supply curve for carbon sequestration: a reverse uniform auction and a budgetary analysis of opportunity costs. The analysis of the supply curves highlights that individual preferences, namely time and risk preferences, but not the opportunity costs, play a signicant role in determining the price villagers are willing to accept land use con- tracts that promote high carbon sequestration systems. The results also indicate that there are signicant gains from trade to be made through the implementation of this program, as the price requested by land users in the setting we study is much lower than current carbon prices. Finally, we analyse possible targeting techniques, concluding that a combination of geographic and self selection targeting would be the most ecient way to implement this policy.
    Keywords: Resource /Energy Economics and Policy,
    Date: 2012–08
  15. By: Grovermann, Christian; Schreinemachers, Pepijn; Berger, Thomas
    Abstract: This study quantifies private and social levels of agricultural pesticide overuse by combining an abatement function approach to estimate the marginal benefits of pesticide use with the Pesticide Environmental Accounting (PEA) tool to estimate marginal social costs. We applied the method to one intensive vegetable production system in the mountainous north of Thailand by using farm and plot level survey data. We find that the exponential specification for the abatement effect of pesticides gives more realistic outcomes than the logistic specification. Based on an exponential specification, we estimate that private overuse is 78-79% of the applied quantify of pesticides, while social overuse is 79-80%. The difference between private and social overuse is small as the exponential form reaches an optimum at a relatively low level of pesticide use.
    Keywords: Damage control, Externality, Pesticide Environmental Accounting (PEA), Southeast Asia, Environmental Economics and Policy, Land Economics/Use, Production Economics, Productivity Analysis,
    Date: 2012
  16. By: Reetz, Sunny W.H.; Schwarze, Stefan; Bruemmer, Bernhard
    Abstract: The negative impacts of climate change have made poverty and deforestation topics of heightened interest within global community discussions in recent years. Our study contributes to the debate over the links between poverty and deforestation by providing an alternative approach from the village level perspective, whilst broadening the range of poverty measures based on poverty proxies and subjective well-being (SWB). We use a beta regression in our empirical model. Our results suggest that there is a non-linear relationship between SWB, as well as other poverty proxies, and deforestation. We found that objective and subjective poverty measures yielded contrasting results.
    Keywords: Deforestation, Subjective well-being, Poverty proxies, Community/Rural/Urban Development, Environmental Economics and Policy, Land Economics/Use,
    Date: 2012–06–27
  17. By: Goto, Junichi
    Abstract: The present paper examines the economic rationale for regional economic integration, such as a common market and currency union, in the East African Community (EAC). For that purpose, I examined the degree of regional economic interdependence in terms of trade, macroeconomic indicators, and real disturbances (IS shocks) in the EAC. First, I used the trade intensity indices (TTI) to examine whether the degree of trade interdependence in East Africa is higher or lower than that in other regions (e.g., Asia), and whether the region’s economic interdependence has deepened since the reformation of the EAC in 2000. Surprisingly, the interdependence in terms of trade in Africa is very strong, much stronger than that in Asian countries. Second, I investigated whether the macroeconomic links among the East African economies are strong and whether they became tighter in the 1990s. Relying on the principal component analysis, I have found that the degree of confluence in macroeconomic variables, such as inflation, growth, and exchange rates, is high in East Africa, although I did not observe a clear trend of increases. Third, relying on the theory of the optimum currency area, I examined the prospects for currency unification in the EAC. For that purpose, I examined the degree of synchronization of real disturbances (IS shocks) among EAC countries, and compared it with that among Asian countries. By applying the principal component analysis on IS shocks in each country, I found that the EAC countries face similar real disturbances. This suggests that the need for independent monetary policy is less than otherwise, and therefore the EAC is a good candidate for the optimal currency area. All these findings suggest that there is a strong case for a common market and currency union in the EAC.
    Keywords: African Community , regional economic integration , common market , currency union , principal component analysis , optimal currency area
    Date: 2012–06–29
  18. By: Dixon, Peter B.; van Meijl, Hans; Rimmer, Maureen T.; Tabeau, Andrzej A.
    Abstract: This paper analyses the complex battle between RED and REDD policies and the resulting global consequences on land use, agricultural production, international trade flows and world food prices. A key methodological challenge is the representation of land use and the possibility to convert forestry land into agricultural land as REDD policies might prevent the use of forestry and wood lands for agriculture. The paper introduces a flexible land supply function allowing large changes in the total potential land availability for agriculture due to environmental considerations such as reducing emissions from deforestation. The parameters of the new land supply function are defined as variables of the model. In the paper, we simplify the implementation of the REDD policies as a shift in potential availability for agricultural land in various regions in the world. Both analysed policies are designed to save emissions but their land use impacts are opposite. The paper shows that global RED policies expand global land use with 3% relative to the baseline. Land abundant countries such as Canada, USA and Indonesia extend their use of agricultural land and their agricultural production. Severe REDD policies that protect all forest and woodlands in especially tropical land abundant regions such as Central and South America, South Africa and Indonesia imply a global reduction of agricultural land by 5% and lead to higher food and land prices. REDD policies reverse production and trade patterns as previous land abundant countries become land scarce countries.
    Keywords: RED, REDD, flexible land supply function, land, land use changes, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2012
  19. By: Wong, Shirly Siew-Ling; Puah, Chin-Hong; Abu Mansor, Shazali; Liew , Venus Khim-Sen
    Abstract: The initiative to capture the information content behind the rise and fall of the business cycle has popularized the study of leading indicators. Many of the foreign experiences shared by economically advanced countries reveal that the leading indicator approach works well as a short-term forecasting tool. Thus, exploring an indicator-based forecasting tool for business cycle analysis and economic risk monitoring would provide insight into the Malaysian economy as well as that of other emerging countries. By extending the ideology of indicator construction from the US National Bureau of Economic Research (NBER), the present study demonstrated the strong potential of the leading indicator approach to be a good gauge of the business cycle movement in addition to being a practical and functional early warning indicator for economic vulnerability prediction.
    Keywords: Business Cycle; Composite Leading Indicator; Early Warning Indicator
    JEL: E32 C82 E37
    Date: 2012
  20. By: William E. Griffiths and Gholamreza Hajargasht
    Abstract: We show how the generalized method of moments (GMM) framework developed in Hajargasht et al. (2012) for estimating income distributions from grouped data can be adapted for estimating mixtures. This approach can be used to estimate a mixture of any distributions where the moments and moment distribution functions of the mixture components can be expressed in terms of the parameters of those components. The required expressions for mixtures of lognormal and gamma densities are provided; in our empirical work we focus on estimation of mixtures of lognormal distributions. Two- and three-component lognormal mixtures are estimated for the income distributions of China rural, China urban, India rural, India urban, Pakistan, Russia, South Africa, Brazil and Indonesia. Their performance, in terms of goodness-of-fit and validity of moment conditions, is compared with that of a generalized beta (GB2) distribution. We find that the three-component lognormal mixture always outperforms the GB2 distribution, but the two-component mixture does not. For Brazil and Indonesia we have single observations, making it possible to compare maximum likelihood estimation of the mixtures from a complete set of single observations with GMM estimates obtained after grouping the data. Estimates from both procedures are found to be comparable, lending support to the usefulness of the GMM approach.
    Keywords: Lognormal distribution, Generalized beta distribution, Inequality measures
    Date: 2012
  21. By: Wagstaff, Adam; Manachotphong, Wanwiphang
    Abstract: This paper exploits the staggered rollout of Thailand’s universal health coverage scheme to estimate its impacts on whether individuals report themselves as being too ill to work. The statistical power comes from the fact that there is an average of 62,000 respondents in the labor force survey at each survey date and no less than 68 survey dates, most of which are just one month apart. The analysis finds that universal coverage reduced the likelihood of people reporting themselves to be too sick to work: the authors estimate the effect to be -0.004 one year after universal coverage and -0.007 three years after. The estimated effects are much larger among those age 65 and over. Universal coverage had a much larger effect on health (about four times larger) than the Village Fund scheme, which provided free credit to rural households through a subsidized microcredit scheme and which was rolled out around the same time as universal coverage.
    Keywords: Health Monitoring&Evaluation,Health Systems Development&Reform,Health Economics&Finance,Population Policies,Health Law
    Date: 2012–07–01
  22. By: Hoang Dinh, Quoc; Dufhues, Thomas; Buchenrieder, Gertrud
    Abstract: This paper investigates the effects of network based individual social capital on the access of rural households to services. In the context of development economics, an innovative data collection approach is used to determine network based social capital. The approach originates from the field of sociology and entails a personal network survey. We define four social capital variables according to tie strength (bonding/bridging) and social distance (bondinglink/bridginglink) between the respondent and his/her network member. The econometric results suggest that social capital with weaker ties in combination with socially distant ties bridginglink social capital) can potentially improve households’ access to rural services.
    Keywords: rural services, social capital, rural households, Vietnam, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Farm Management, Financial Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, Industrial Organization, Institutional and Behavioral Economics, International Development, International Relations/Trade, Labor and Human Capital, Land Economics/Use, Livestock Production/Industries, Marketing, Political Economy, Production Economics, Productivity Analysis, Public Economics, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, Risk and Uncertainty, Teaching/Communication/Extension/Profession,
    Date: 2012
  23. By: Lapar, Ma. Lucila A.; Nguyen, Ngoc Toan; Staal, Steven J.; Minot, Nicholas; Tisdell, Clement A.; Nguyen, Ngoc Que; Nguyen, Do Anh Tuan
    Keywords: Livestock Production/Industries,
    Date: 2012
  24. By: Rodriguez, Divina Gracia P.; Nga, Nguyen Thi Duong
    Abstract: This study estimates the impact of the adoption of SSNM practices on rice production of smallholder farmers in Vietnam using cross-section household data (n = 371) gathered from the provinces of Ha Nam and Ha Tay in the Red River Delta. Specifically, it investigates the economic impact of SSNM, focusing on SSNM-induced changes in the yield, profit, nitrogen use and pesticide use of farmers. The instrumental variables (IV) approach is used to achieve this objective because it deals with endogeneity and self-selection bias present in the study. SSNM improves the paddy yield of farmers by 0.6 tons per hectare and profit by $150 per hectare. It has no statistically significant effect on the amount of pesticide and nitrogen use of farmers. The higher profits for adopters versus non-adopters of SSNM arise from increased grain yield rather from reducing fertilizer costs and pesticide costs. Results of the impact analysis identified several directions that can be pursued to improve further the adoption of SSNM.
    Keywords: Site-specific nutrient management, instrumental variables, nitrogen, Red River Delta, smallholder farmers, Crop Production/Industries, Farm Management,
    Date: 2012
  25. By: Cazzuffi, Chiara; McKay, Andrew
    Abstract: This paper contributes to the existing literature on agricultural commercialisation by focussing on the channels through which households sell their crops, as well as considering the determinants of their participation behaviour. An important innovation of this paper is to look at both the type of purchaser households use (trader or other household) and the location of sale (farmgate or not). We study these issues for the case of Vietnam, which over time has achieved an impressive success in agricultural commercialisation, and in relation to rice, drawing on data from a detailed rural panel survey for 2006, 2008 and 2010. We find that household asset endowments and access to public goods such as transport infrastructure significantly increase the probability of selling rice. We also find that larger scale of production and low transport costs are significant determinants of the probability of using more established channels of sale, such as traders or enterprises. Wealthier farmers are more likely to sell via this channel, but not if the quantity they produce is large, which is consistent with their better ability to meet costs for reaching more remunerative marketing opportunities. With respect to location of sales, we find that wealthier households with access to phones and own means of transport, but also households located in areas where transport infrastructure is less developed, are less likely to sell at the farmgate.
    Keywords: Agriculture, Market participation, Rice, Transactions costs, Vietnam., Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, International Development, Marketing, O13, Q12, Q13,
    Date: 2012–06
  26. By: Goto, Jun; Aida, Takeshi; Aoyagi, Keitaro; Sawada, Yasuyuki
    Keywords: Labor and Human Capital,
    Date: 2012
  27. By: Yu, Bingxin; Zhu, Tingju; Breisinger, Clemens; Manh Hai, Nguyen
    Abstract: Vietnam is likely to be among the hardest hit countries by climate change, which may threaten the recent progress it has made in accelerating agricultural growth and poverty reduction. To examine how agriculture and the rural poor may be affected by a changing climate, this paper measures Vietnamese farmers’ adaptation behavior in terms of adjustments to the production portfolio and input usage. Specifically, the paper estimates a rice yield function based on household-level crop production, long-term climate measurements and recent weather shocks. The results suggest that rice production will suffer from climate change. However, Vietnamese farmers are likely to respond to changes in rainfall and temperature by adjusting input usage. While this will help maintaining productivity levels, expanding irrigation and agricultural intensification will be key components of climate change adaptation strategies at farm and national level. Localized policy packages aiming at increasing yield by focusing on vulnerable groups (ethnic-minority and/or the poor) can help achieve multiple development goals of poverty reduction, food security and climate change adaptation.
    Keywords: Climate change, poverty, Vietnam, rice, control function, weak instruments, multiple endogenous variables, Heckman, Agricultural and Food Policy, Environmental Economics and Policy, Food Security and Poverty,
    Date: 2012
  28. By: Beja Jr, Edsel; Mendoza, Ronald U.; Venida, Victor S.; Yap, David B.
    Abstract: This paper presents metrics to estimate the size of political dynasties in the 15th Congress of the Republic of the Philippines and analyze the relationship between political dynasty and socio-economic outcomes. Results show that political dynasties comprise 70 percent of jurisdiction-based legislators in the current Congress. They possess higher net worth and win elections by larger margins of victory compared to not political dynasties. Jurisdictions of political dynasties are characterized by lower standards of living, lower human development, and higher levels of deprivation and inequality.
    Keywords: Democracy; political dynasty; Philippines; Philippine Congress
    JEL: D70 D63 P00 O53 D72 H00
    Date: 2012–07–15
  29. By: Saenger, Christoph; Qaim, Matin; Torero, Maximo; Viceisza, Angelino
    Abstract: In emerging markets for high-value food products in developing countries, processing companies search for efficient ways to source raw material of consistent quality. One widely embraced approach is contract farming. But relatively little is known about the appropriate design of contracts, especially in a small farm context. We use the example of the Vietnamese dairy sector to analyze the effectiveness of existing contracts between a processor and smallholder farmers in terms of incentivizing the production of high quality milk. A framed field experiment is conducted to evaluate the impact of two incentive instruments, a price penalty for low quality and a bonus for consistent high quality milk, on farmers’ investment in quality-improving inputs. Statistical analysis suggests that the penalty drives farmers into higher input use, resulting in better output quality. The bonus payment generates even higher quality milk. We also find that input choice levels depend on farmers’ socio-economic characteristics such as wealth, while individual risk preferences seem to be less important. Implications for the design of contracts with smallholders are discussed.
    Keywords: Contract farming, incentives, risk, experimental economics, framed field experiment, dairy, Vietnam, developing countries, Agribusiness, Institutional and Behavioral Economics, International Development, Risk and Uncertainty,
    Date: 2012
  30. By: Madhav S. Aney (School of Economics, Singapore Management University)
    Abstract: This paper considers the problem of allocating an object between two players in an environment with one sided asymmetric information when their outside options depend on each other's type, causing the outside option of the uninformed player to be unobservable to her. Consequently efficient mechanisms under budget balance are not always available even when there is no uncertainty about which of the two players values the object more. A simple condition on the outside options turns out to be both necessary and sufficient to guarantee the first best. I also characterise the second best allocation under some conditions and show how it varies with changes in the outside options. I argue that the model applies to an environment where property rights over the object are not well defined and their enforcement is subject to an inefficient default game such as a contest. In such cases type dependent outside options arise naturally as the equilibrium payos from the default game. The model can explain why the best ways of avoiding inefficient default games, such as arbitration as a way of avoiding litigation, typically involve a degree of inefficiency.
    Date: 2012–07
  31. By: Rozana Himaz; Harsha Aturupane
    Abstract: This study employs the pseudo-panel approach to estimate returns to education among income earners in Sri Lanka. Pseudo-panel data are constructed from nine repreated cross-sections of Sri Lanka’s Labor Force Survey data from 1997-2008 for workers born during 1953-1974. The results show that for males, one extra year of education increases monthly earnings by about 5 per cent using the pseudo panel estimation rather than 8 per cent as in the OLS estimation. This indicates that not controlling for unobservables such as ability and motivation bias the OLS estimation of returns upwards by about 3 per cent on average. It also suggests that males with higher ability seem to be acquiring more years of education contrary to what has been observed recently in countries such as Thailand (Warunsiri and McKnown 2010) where the opportunity cost of education seems to be high.
    Keywords: Sri Lanka, Education, Returns, Pseudo panels, Synthetic cohorts
    JEL: I00 I20 I25 C23
    Date: 2012
  32. By: Julien Labonne
    Abstract: I develop and test two competing models assessing the impacts of targeted government transfers on a local incumbent’s electoral performance. I take advantage of the randomized roll-out of a large-scale Conditional Cash Transfer program in the Philippines, which offers an ideal setting to test the models. Although the program was usually implemented in all villages in a municipality, a subset of beneficiary municipalities were randomly selected to receive the program in a randomly selected subset of villages. I find that, in a competitive political environment, incumbent vote share is 26 percentage points higher in municipalities in which the program was implemented in all villages than in municipalities in which the program was implemented in half of the villages. The program had no impact in municipalities with low levels of political competition. Further, within municipalities, there is evidence consistent with the argument that incumbents compensated households in control villages by redistributing their own budget there. Results suggest that anti-poverty programs might have nefarious long-term consequences by preventing replacements of local incumbents.
    Keywords: Elections, Conditional cash transfers, Decentralization
    JEL: D72
    Date: 2012
  33. By: Wokker, Chris; Santos, Paulo; Ros, Bansok
    Abstract: In the context of increasing competition for water, knowledge of the marginal productivity of water is crucial in determining its opti- mal allocation between users. Using primary, plot level panel data, this paper estimates the marginal productivity of water from supple- mentary irrigation in lowland rice systems in Cambodia, taking into account farmer and plot heterogeneity as well as self-selection of sup- plementary irrigation. Our estimates indicate a range of elasticity for rice output with respect to water inputs between 0.057 and 0.069 for wet season production, and an estimate of 0.125 in the dry season, sub- stantially lower than previous estimates based on either aggregate or trial data. We discuss the policy implications of these results, in par- ticular with respect to the utility of demand management policies and the challenges they pose to the decentralization of water management to Water Users Groups that are meant to be nancially independent.
    Keywords: Water productivity Cambodia rice, Food Security and Poverty, International Development, Land Economics/Use, Productivity Analysis,
    Date: 2012
  34. By: Hoa Thi Minh Nguyen; Tom Kompas; Trevor Breusch; Michael B. Ward
    Abstract: This paper re-examines the sources of inequality in Vietnam, a transitional economy with large reductions in poverty from recent and dramatic economic growth, but vastly unequal gains across ethnic groups. Using an instrumental variable approach to provide consistent estimators of explanatory variables at household and commune levels for ethnic differences in real household expenditure per person, we draw four key conclusions. First, removing language barriers would signifcantly reduce inequality among ethnic groups, narrowing the ethnic gap, and especially so through enhancing the gains earned by minorities from education. Second, variations in returns to education exist in favour of the majority in mixed communes, suggesting that either the special needs of minority children have not been adequately addressed in the classroom, or preferential treatment and the possibility of some form of discrimination exists in the labour market. Third, in contrast to recent literature, there is little dierence between ethnic groups in terms of the benefits drawn from enhanced infrastructure, such as power and clean water, at the commune level. An exception is the returns to roads, which differentially benefits the minority group. Finally, contrary to established views, we find that as much as 50 to 70 percent of the ethnic gap is attributed to differences in endowments, and not to differences in the returns to endowments.
    Keywords: ethnic inequality, poverty, language, instrumental variables, Vietnam, infrastructure, human capital
    JEL: O10 O12 P20
    Date: 2012–07
  35. By: Ngo, Thu Hien Laura; Santos, Paulo
    Abstract: Using panel data from Vietnam, this paper estimates the determinants of consumption growth for the period 2002-04, using a microgrowth model. While controlling for individual heterogeneity, particular attention is devoted to the question of whether geography, broadly defined to include natural and man-made characteristics at the level of the commune, can be responsible for lower growth rates and, consequently, poverty persistence. We find very limited support for this hypothesis. Neither public nor private investment at commune levels seem to have, per se, a signicant effect on growth. However, local poverty rate does have an important, nonlinear, relation with growth rate of consumption at individual level, suggesting the importance of local externalities in this process. The policy implications of this finding are discussed.
    Keywords: International Development,
    Date: 2012
  36. By: Ngo, Thu Hien Laura; Santos, Paulo
    Abstract: Using panel data from Vietnam, this paper estimates the determinants of consumption growth for the period 2002-04, using a microgrowth model. While controlling for individual heterogeneity, particular attention is devoted to the question of whether geography, broadly defined to include natural and man-made characteristics at the level of the commune, can be responsible for lower growth rates and, consequently, poverty persistence. We find very limited support for this hypothesis. Neither public nor private investment at commune levels seem to have, per se, a significant effect on growth. However, local poverty rate does have an important, nonlinear, relation with growth rate of consumption at individual level, suggesting the importance of local externalities in this process. The policy implications of this finding are discussed.
    Keywords: International Development,
    Date: 2012
  37. By: Beja, Edsel Jr.
    Abstract: This articple presents a historical macroeconomic perspective to present a brief analysis on why the Philippines is performing the way it does today.
    Keywords: Deindustrialization; role of government; Philippines
    JEL: H10 N65 A20 O53 N15 O14
    Date: 2012–07–15
  38. By: Mutuc, Maria Erlinda M.; Rejesus, Roderick M.; Yorobe, Jose M., Jr.
    Abstract: The potential contributions of new biotechnologies to sustainable food and income security have been the subject of widespread discussions around the turn of the twenty-first century. But distributional issues of which segments of GMO adopters benefit the most have not been given ample attention. Using propensity scores, we apply the (a) stratification-multilevel method of estimating heterogeneous treatment effects (SM-HTE); and the (b) matching-smoothing method of estimating heterogeneous treatment effects (MS-HTE) proposed by Xi, Brand, and Jann (2011). We find that the incidence of higher yields, lower insecticide use and reduced seed utilization in the Philippines diminishes progressively as a farmer’s propensity to adopt Bt corn increases. Farmers with a low propensity to adopt Bt are those who farm smaller, non-irrigated farms located farther from seed suppliers and farmers without previous training on pest identification. In most cases, while these farmers are typically poorer farmers in smaller parcels, cannot afford irrigation and are situated in remote areas away from easily accessible seed suppliers, there is no evidence, however, that profits differ across farmers with varying propensities to adopt the Bt variety.
    Keywords: Bt corn, food security, GMO, propensity score, stratification-multilevel method of estimating heterogeneous treatment effects (SM-HTE), matching-smoothing method of estimating heterogeneous treatment effects (MS-HTE), Community/Rural/Urban Development, Crop Production/Industries, Food Security and Poverty, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, C31, Q16, Q12,
    Date: 2012
  39. By: Fuwa, Nobuhiko; Balisacan, Arsenio M.; Mapa, Dennis; Abad Santos, Carlos; Piza, Sharon Faye
    Abstract: This paper analyzes the sources of rural non-farm sector growth in the Philippines, which has become the main driver of rural poverty reduction. We find that agricultural growth has significantly positive effects on service sector growth (with elasticity of about 0.20) but little effects on manufacturing growth, suggesting that rural labor force is sufficiently mobile or capital is relatively immobile across provinces. We also identify different roles played by national road networks, on the one hand, and local roads, on the other. We find that local road facilitates rural service sector development while national road facilitates agricultural growth.
    Keywords: sectoral linkages, nonfarm growth, agricultural development, road infrastructure, Philippines, Community/Rural/Urban Development, International Development,
    Date: 2012–06–28

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