nep-sea New Economics Papers
on South East Asia
Issue of 2014‒01‒24
fifteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Is there a Southeast Asian Development Model? By Hal Hill
  2. Financial Inclusion: Household Access to Credit in Indonesia By Beta Y. Gitaharie; Lana Soelistianingsih; Triasih Djutaharta
  3. The impact of fiscal and political decentralization on local public investments in Indonesia By Krisztina Kis-Katos; Bambang Suharnoko Sjahrir
  4. Women of Asian Descent in Ivy League Golf, 1999–2013 By Douglas Coate; Chih-Sheng Chen
  5. The Legal Framework of Vietnam’s Water Sector: Update 2013 By Nguyen, Thi Phuong Loan
  6. What drives child health improvements in Indonesian households? A micro-level perspective on complementarities in MDG achievements By Maria Carmela Lo Bue
  7. Almost Steady East Asian Rise: Implications for Labour Markets and Income Distribution By Singh, Ajit; Singh, Gurmail
  8. An alternative estimate of school-based management impacts on students'achievements : evidence from the Philippines By Yamauchi, Futoshi
  9. Technical Efficiency of Takaful Industry- A Comparative Study of Malaysia and GCC Countries By Hela Miniaoui; Anissa Chaibi
  10. Basel Accords and Islamic finance with special reference to Malaysia By Hasan, Zubair
  11. School Resource and Performance Inequality : evidence from the Philippines By Yamauchi, Futoshi; Parandekar, Suhas
  12. When the Cat\'s Away... The Effects of Spousal Migration on Investments on Children By Lucia Rizzica
  13. Shocks to Philippine households: Incidence, idiosyncrasy and impact By Joseph J. Capuno; Aleli D. Kraft; Stella A. Quimbo; Carlos Antonio R. Tan, Jr.
  14. Will History Repeat Itself? Lessons for the Yuan By Cohen, Benjamin J.
  15. Just how good is unemployment as a measure of welfare? A policy note By Emmanuel S. de Dios; Katrina Dinglasan

  1. By: Hal Hill
    Abstract: The 10 states of Southeast Asia have combined to form the developing world’s most successful and durable regional grouping, the Association of Southeast Asian Nations, ASEAN. Economic integration among them is high and increasing. The ambitious ASEAN Economic Community is scheduled to take effect from December 2015, and should further accelerate this integration. But the socio-economic and institutional disparities among them are also very large. This paper therefore asks the question, does it make sense to contemplate a ‘Southeast Asian development model’? Given this diversity, such a model obviously does not yet exist. But over time, these countries are converging with respect to their openness, their macroeconomic management and some aspects of their social policy. The poorer countries are generally growing faster than the richer ones, suggesting gradual convergence. There are also important spillover and demonstration effects evident from the region’s leaders to its followers. Whether these developments will lead to the adoption of some sort of coherent regional development strategies remains to be seen.
    Keywords: development models, Southeast Asia, regional economic integration.
    JEL: F55 H11 O21 O53
    Date: 2013
  2. By: Beta Y. Gitaharie (Department of Economics, Faculty of Economics, University of Indonesia); Lana Soelistianingsih (Department of Economics, Faculty of Economics, University of Indonesia); Triasih Djutaharta (The Demographic Institute, Faculty of Economics, University of Indonesia)
    Abstract: Literatures on financial development and economic growth nexus have rapidly grown. Over more than a decade, research topics have been extended to a wider nexus of financial sector development-economic growth-and poverty alleviation. Regarding to the topic, access to finance becomes an important one. The World Bank (2010) reports only 21% of Indonesia's population has access to banks and another 2% engages in other formal financial services. The figure shows that access to financial services in Indonesia is still very low. This study is to examine determinant factors that deter households from access to financial services, particularly business credits. The study employs desciptive analysis and performs microeconometric exercise utilizing the 2008 and 2012 Susenas data. The results of the study provide the household profile and identify determinant factors for households to access business credit from several sources, namely bank, non-bank, and individual. The probabilities for household to obtain business credit is affected by the demographic characteristics (age, sex, marrital status, location, education) and social-economic factors (employment sector, employment status, status of poverty) and the effectiveness of the implementation of banking public education program. The study employs multinomial logit method. The findings of this study is vital in providing policy recommendation to alleviate poverty in Indonesia.
    Keywords: financial sector, access, business credit, households, poor, poverty
    JEL: I38 O16 O17
    Date: 2014–01
  3. By: Krisztina Kis-Katos; Bambang Suharnoko Sjahrir (Department of International Economic Policy, University of Freiburg)
    Abstract: We investigate the effects of the Indonesian decentralization and democratization process on budget allocation at the sub-national level. Based on panel data for 271 Indonesian districts for the years of 1994 to 2009, we address the determinants of local investment expenditures in public infrastructure in the sectors of education, health, and physical infrastructure. We find that after the dramatic expenditure decentralization of 2001, districts with relatively lower levels of public infrastructure started to invest more in these sectors. In contrast to the marked budgeting changes following the fiscal and administrative decentralization, we find no consistent effects of the democratization process on local public investments. Our results reflect initial improvements in local targeting but show no evidence of increasing electoral accountability.
    Keywords: Decentralization, democratic elections, budget allocation, Indonesia
    JEL: H72 H75
    Date: 2014–01
  4. By: Douglas Coate; Chih-Sheng Chen
    Abstract: In the 1999-2000 women’s collegiate golf season the proportion of women golfers competing for Ivy League schools that were Asian (of Asian descent) and played in at least six tournaments was .22. Over the next eight collegiate golf seasons this proportion fell as low as .08 and was .14 for the 2007–2008 season. Then, over the next five collegiate seasons, through 2012-2013, the proportion of players Asian in Ivy League women’s golf who competed in at least six tournaments per season increased to .18, .23, .44, .68, and .56. The marked increase in Asian representation in women’s Ivy League golf was much greater than the increase in Asians in women’s college golf in general and in men’s Ivy League golf. We suggest Asian parents with academically and athletically gifted daughters have turned with their daughters to golf over the past decade or longer to increase the daughter’s chances of admission to selective universities in the US. This emphasis on golf may result from: 1. recognition that Asian women can compete successfully against generally taller Caucasian women given the success of Asian golfers on the LPGA tour since the late 1990’s; 2. recognition that the close parental supervision of children in the Asian family, particularly the girls, and the emphasis on discipline and practice can help build a strong golf game. Short game practice in particular may have a potentially large payoff and does not lead to physical breakdown. Variable effects regression models show that the skill (rankings) advantage of Asians over non-Asians has actually increased in women’s golf in the Ivy League in recent years; thus, Asian representation in women’s Ivy golf should continue to increase.
    Keywords: Ivy League, women’s college golf, college admissions, Asian parenting
    JEL: L83 I23
    Date: 2014–01
  5. By: Nguyen, Thi Phuong Loan
    Abstract: In order to deal with problems related to both water quality and quantity as well as to strengthen the sustainable and integrative management of the nation’s water resources, the Vietnamese Government has adopted a wide spectrum of laws and regulations. In recent years, more than 300 water related regulations on the guidance and implementation of the Law on Water Resources have been issued and often amended to meet the requirements of the country’s development and its increasing international integration. In spite of this, the current legal framework for water resources management in Vietnam remains ineffective and does not correspond with the reality on the ground. Furthermore, law enforcement is deficient and often national regulations are ignored by local authorities, who priorities rapid growth of their communities over sustainability. Under these circumstances, the legal framework cannot properly guide sustainable use of water resources in order to achieve a degree of environmentally sustainable and, in particular, to protect the livelihoods of marginalized groups in society, such as landless fishermen, small-holders or poor people in periurban areas. Despite the gaps in this legal framework, water-related policies and programs in Vietnam consistently refer back to it while, at the same time, policy advisors typically call for reform. Understanding the legal framework is therefore important for both researchers and practitioners. In this view, a previous study was carried out by the author, entitled ‘Legal Framework of the Water Sector in Vietnam’ (Nguyen 2010), which aimed at presenting the key dimensions and the structure of that framework. Both the Vietnamese and the English version of the book were widely disseminated. This update became necessary because the government of Vietnam recently issued a new law on water resources as well as supplementary legislation. So far, no official English version of any of these new documents exists. Therefore, a detailed presentation of the contents of the laws is particularly timely. In addition to presenting the laws, this paper aims at shedding light on some of the critical aspects of the current legislation and illustrates how the law making process proceeded.
    Keywords: Environmental impact assessment (EIA), regulatory impact assessment (RIA), integrated water resource management(IWRM), law on water resources, law making process, Mekong Delta,Vietnam, water quality management, water resources management
    JEL: K23 K4 L5 L52 Q53 Q54 Q56 Q58
    Date: 2013–08
  6. By: Maria Carmela Lo Bue (Georg-August-University Göttingen)
    Abstract: Using panel data from Indonesia, this paper analyzes the linkages between child nutrition, health care, household wealth and parental education in order to detect transmission channels between health, education, nutrition, water and sanitation access, five critical MDG targets. This paper therefore also aims at providing an empirical analysis of the drivers of complementarities between these goals at the micro level micro-level perspective. We find that maternal education has a positive and long term effect on child health and that this effect is partly reflected in reproductive behavior and partly conveyed to child health outcomes through child caring practices such as breastfeeding. Although we cannot rule out the existence of strong complementarities existing between household wealth or income and child health, the effect of positive changes in this variable appears to be present only in the short term. On the other hand, there are supply-side factors such as lack of sanitation and access to health facilities which also strongly affect children in terms of anthropometric outcomes.
    Keywords: Millennium Development Goals; Child undernutrition; Panel data; Mundlak model; Indonesia
    JEL: I12 I30 O15
    Date: 2014–01–13
  7. By: Singh, Ajit; Singh, Gurmail
    Abstract: Abstract: The extraordinary growth of the East Asian economies during the last fifty years has drawn attention of the economists worldwide. This paper provides a commentary on this epic story. This paper explores the reasons for the extraordinary growth and analysis specific changes which have occurred in income inequality and labour market institutions during this time span. One main conclusion of the paper that contrary to commonly held belief that the globalization and nature of technological progress has been the main cause of increased income inequality in the period after East Asian crises. We conclude that country specific factors were at least as important, if not more so, in this respect. Analysis shows that in addition to varying pattern of income inequality which has not been observed by other commentators have also been major changes in labour market indicators, including unionization and collective bargaining, employment protection, and minimum and real wages. Last part of the paper discusses policy implications. ,
    Keywords: Income inequality, East Asian crisis, labour market, growth, labour market institutions, policy implications
    JEL: J0
    Date: 2013–10–01
  8. By: Yamauchi, Futoshi
    Abstract: This paper aims to estimate the impact of school-based management on students'test scores in the Philippines. Estimation results using double differencing combined with propensity score matching show that school-based management increases the average national achievement test score by 4.2 points over three years. The increase in mathematics reached 5.7 points. This is larger than the estimate previously reported from the Philippines, probably because the sample schools had learned about implementation of school-based management from experiences accumulated in other provinces that introduced it earlier. The empirical results also show that schools with experienced principals and teachers are eager to introduce school-based management.
    Keywords: Education For All,Tertiary Education,Primary Education,Teaching and Learning,Secondary Education
    Date: 2014–01–01
  9. By: Hela Miniaoui; Anissa Chaibi
    Abstract: The present study empirically investigates the technical efficiency of takaful industry operations in Malaysia and the Gulf Cooperation Council (GCC) countries. Data Envelopment Analysis (DEA) was employed to estimate the technical efficiency of using Constant Returns to Scale (CRS) and Variable Return to Scale (VRS) during the period 2006- 2009. The study reveals that takaful companies operating in GCC countries are more efficient than Malaysian operators that are encouraged to have aggressive marketing and wider distribution channels to capture more demand.
    Keywords: Takaful Industry, DEA, Efficiency, Malaysia, GCC
    JEL: C7 D8
    Date: 2014–01–06
  10. By: Hasan, Zubair
    Abstract: The worldwide colossal failures of financial institutions in the wake of the 2007–2010 financial turmoil the yesteryear advocates of liberalization and privatization converted almost overnight into vocal supporters of raising the safety walls around the interests of various stakeholders, especially the depositors. Admittedly, it was the heightened lure of leverage gains that led the financial institutions to expand credit beyond what the volume and quality of their capital assets warranted without crossing the limits of safety. The devastation led to a focus-shift so to say at the national and international levels in finance specifically to capital adequacy that financial institutions must observe for their own safety as also in the wider social interest. Stringent and regular watch was needed; it was felt, to make adequacy work. The Basel Committee on Banking Supervision (BCBS), an organ of the Bank for International Settlements (BIS) developed what are known as Accords i.e.agreements defining capital and its adequacy for banks to limit the risks they could take within reasonable confines. It is interesting to find that Malaysia was in a sense predictive to revamp and strengthen its own regulatory framework. Also, the IFSB was alert to announce some new standards.This paper briefly takes stock of these developments with a view to assess how far Basel Accords are likely to be absorbed by the Islamic system.
    Keywords: Islamic finance; Capital Adequacy; Basel Accords; Shari’ah compliance; Bank Negara action.
    JEL: G21 G28
    Date: 2014–01–15
  11. By: Yamauchi, Futoshi; Parandekar, Suhas
    Abstract: This paper examines inequality patterns of school and teacher resources as well as student performance in the Philippines. School and teacher resources, measured by pupil classroom and teacher ratios and per-pupil teacher salary, became more unequal over time. Strikingly, a large portion of the variation is attributed to their within-division distributions, especially the non-city areas in each province (rural schools), where pupil classroom and teacher ratios have significantly positive returns in terms of student test scores. Concavity built into the education production function implies that reallocation of teachers and classrooms within a division can potentially increase average test scores. The estimates also imply that it is optimal to deploy young, inexperienced teachers to rural schools and reassign them to urban schools when the teachers are more experienced.
    Keywords: Tertiary Education,Education For All,Primary Education,Teaching and Learning,Secondary Education
    Date: 2014–01–01
  12. By: Lucia Rizzica (University College of London)
    Abstract: This paper analyzes the effects of parental migration on children left behind in order to understand whether and how the effects of migration on children depend on which of their parents migrates. I describe the migration of one of the spouses as a sequential game in which the spouse who migrated chooses how much to send back to the spouse left behind in the form of remittances and then the latter decides how to allocate his total available budget within the household. A similar mechanism generates no difference in the share of total household income devoted to investment on children no matter which of the parents migrates, even when the two spouses have different preferences. These predictions are tested using data from Indonesia, where female migration is particularly widespread. To solve the selection problems entailed in the comparison between households with migrant fathers and households with migrant mothers, I focus on households that have at least one migrant parent and develop a model in which the decision about whether to send the man or the woman eventually depends on the expected returns and risk associated to each of the two choices. These measures will provide me with a set of instrumental variables to test the theoretical model. In accordance with the predictions of the model I find that the difference in children related expenditure is not significant between households in which mothers migrate and households in which fathers do. On the other hand I find that in households with migrant mother a significantly larger share of income is devoted to adult goods consumption; this difference reflects the difference in tastes for investment on children between men and women.
    Keywords: Migration, Gender, Human Capital
    JEL: F22 O15 J13
  13. By: Joseph J. Capuno (School of Economics, University of the Philippines); Aleli D. Kraft (School of Economics, University of the Philippines); Stella A. Quimbo (School of Economics, University of the Philippines); Carlos Antonio R. Tan, Jr. (School of Economics, University of the Philippines)
    Abstract: With their country located in the Pacific Ring of Fire and in the monsoon belt, Philippine households are perennially exposed to natural disasters and calamities. In addition, they face health, economic and sociopolitical risks. Using a nationally representative sample of households, we assess the overall incidence of different shocks, the extent to which they simultaneously affect households in the same area, and their impact. A huge majority of households experience shocks, with the incidence of different shocks being roughly the same for poor and rich households. Natural and economic shocks appear to affect more households simultaneously in the same area than sociopolitical shocks, health shocks and deaths. Health shocks and deaths lead to greater short-term and long-term impacts. Richer households are able to recover better than the poor. We draw some implications for the design and targeting of social health insurance, disaster management and other social protection programs.
    Keywords: Household shocks; coping mechanisms; welfare
    JEL: D10 I38
    Date: 2013–11
  14. By: Cohen, Benjamin J. (Asian Development Bank Institute)
    Abstract: For many observers, internationalization is the yuan’s manifest destiny and a by-product of the remarkable economic success of the People’s Republic of China (PRC). But is such confidence warranted? Recent history has seen the emergence of other currencies that were also expected, at least for a while, to attain wide, growing cross-border use. These included the deutsche mark (DM), the Japanese yen, and the euro (successor to the DM). Yet in the end, their internationalization reached an upper limit, short of expectations. Will history repeat itself? Or will the yuan prove exceptional, as the currency that finally managed to keep ascending where others faltered? The aim of this paper is to see what lessons may be drawn from these earlier experiences for the anticipated internationalization of the yuan.
    Keywords: yuan; deutsche mark; japanese yen; euro; internationalization
    JEL: F31 F33 F41
    Date: 2014–01–17
  15. By: Emmanuel S. de Dios (School of Economics, University of the Philippines Diliman); Katrina Dinglasan (Philippine Center for Economic Development, Diliman, Quezon City)
    Abstract: The government is rightly concerned with employment generation to make growth inclusive. The use of the open unemployment rate to measure its success, however, is misplaced. In a developing country with a large informal sector and in the absence of unemployment insurance, open unemployment is primarily a middle-class phenomenon: the unemployed are not predominantly poor, and the poor are not predominantly unemployed. Measures of productivity and shifts of labour across sectors may contain more information.
    Keywords: unemployment, underemployment, labour force, welfare, poverty
    JEL: J21 I32
    Date: 2014–01

This nep-sea issue is ©2014 by Kavita Iyengar. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.