nep-sea New Economics Papers
on South East Asia
Issue of 2014‒09‒25
fifteen papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Mining and Indonesia’s Economy: Institutions and Value Adding, 1870-2010 By Eng, Pierre van der
  2. Genres Of Call-And-Response Songs In Vietnam By Ekaterina O. Starikova
  3. Policies for balanced development of LDCs By Clovis Freire
  4. Service Sector Productivity and Economic Growth in Asia By Jong-Wha Lee; Warwick J. McKibbin
  5. Estimates of Domestic Resource Cost in Philippines Agriculture By Roehlano M. Briones
  6. Taking Stock : An Update on Vietnam's Recent Economic Development By World Bank
  7. Japanese Development Cooperation in a New Era: Recommendations for Network-Based Cooperation By Izumi Ohno
  8. Socialist Republic of Vietnam : Results-Based National Urban Development Program in the Northern Mountains Region By World Bank
  9. Beyond the remittances-driven economy: Notes as if the long run mattered By Felipe M. Medalla; Raul V. Fabella; Emmanuel S. de Dios
  10. Asia's Little Divergence: State Capacity in China and Japan before 1850 By Sng, Tuan-Hwee; Moriguchi, Chiaki
  11. Factors behind Foreign Currency Holding by Household in Cambodia By Reza Y. Siregar; Narith Chan
  12. Patterns of Structural Change in Developing Countries By Vries, Gaaitzen de; Timmer, Marcel; Vries, Klaas de
  13. Socio-economic Status and Early Childhood Cognitive Skills Is Latin America Different? (Documento de Trabajo 127 Nivel socioeconómico y habilidades cognitivas en la infancia temprana ¿América Latina es diferente?) By Florencia López Boo
  14. Does Local Governments' Budget Deficit Push Up Housing Prices in China? By Guiying Laura WU; Qu FENG; Pei LI
  15. The Life and Work Of Martin Stuart (“Marty”) Feldstein By Charles Yuji Horioka

  1. By: Eng, Pierre van der
    Abstract: Indonesia has long been a major producer of minerals for international markets. Starting in 2014, it implemented legislation banning exports of unprocessed minerals and requiring producers to invest in processing facilities to add more value before export. This paper establishes what light past experiences in Indonesia with mining sheds on this recent development. It quantifies and discusses the growth of mining production in Indonesia since 1870. It analyses the institutional arrangements that past governments used to maximise resource rents and domestic value adding. The paper finds that production and exports of mining commodities were long dominated by oil, but increased and diversified over time, particularly since the 1960s. The development of the mining sector depended on changes in market prices, mining technologies and the cost of production, but particularly on the institutional arrangements that guided the decisions of foreign investors to commit to mining production and processing in Indonesia.
    Keywords: natural resources, mining sector, Indonesia, resource rents
    JEL: L71 L72 L78 N55 O13 Q32
    Date: 2014–08
  2. By: Ekaterina O. Starikova (National Research University Higher School of Economics)
    Abstract: This paper is devoted to different genres of call-and-response songs in Vietnam. The call-and-response song is an antiphonal song dialogue between female and male singers. The main differences between the genres of call-and-response are related to the location and the season when they are performed. Antiphonal singing of this kind is not a distinctive feature of Viets. Similar types of singing are widely represented throughout the country among different ethnic minorities. Moreover, song dialogues are also widespread among the ethnic minorities of China and in other countries of East and South-East Asia. In Vietnam these genres have become extremely popular and exist in a variety of forms.
    Keywords: Vietnam, folk song, Vietnamese culture, folk poetry, song lore
    JEL: Z19
    Date: 2014
  3. By: Clovis Freire (Macroeconomic Policy and Development Division, United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: Least developed countries (LDCs) in the Asia-Pacific region face severe structural impediments to growth and sustainable development.1 The majority of their population makes living from agriculture, including horticulture, livestock, fisheries and forestry, and the development of that sector is a key priority of action for their inclusive and sustainable development. Given their particular situation, LDCs in Asia-Pacific should consider an integrated strategy that uses intersectoral linkages and labour movements between agriculture and agro-industries to promote balanced and inclusive development.
  4. By: Jong-Wha Lee (Asian Development Bank Institute (ADBI)); Warwick J. McKibbin
    Abstract: This paper explores the impacts of more rapid growth in labor productivity in the service sector in Asia based on an empirical general equilibrium model. The model allows for input–output linkages and capital movements across industries and economies, and consumption and investment dynamics. We find that faster productivity growth in the service sector in Asia benefits all sectors eventually, and contributes to the sustained and balanced growth of Asian economies, but the dynamic adjustment is different across economies. This adjustment depends on the sectoral composition of each economy, the capital intensity of each sector, and the openness of each sector to international trade. In particular, during the adjustment to higher services productivity growth, there is a significant expansion of the durable manufacturing sector that is required to provide the capital stock that accompanies the higher aggregate economic growth rate.
    Keywords: the service sector, Labour Productivity, general equilibrium model, balanced growth
    JEL: J21 O11 O14 O41 O53
    Date: 2014–07
  5. By: Roehlano M. Briones
    Keywords: Crops and Crop Management Systems Macroeconomics and Economic Growth - Markets and Market Access Economic Theory and Research Food and Beverage Industry Private Sector Development - Emerging Markets Industry Agriculture
    Date: 2014–01
  6. By: World Bank
    Keywords: Banks and Banking Reform Finance and Financial Sector Development - Debt Markets Economic Theory and Research Private Sector Development - Emerging Markets Finance and Financial Sector Development - Bankruptcy and Resolution of Financial Distress Macroeconomics and Economic Growth
    Date: 2014–07
  7. By: Izumi Ohno (National Graduate Institute for Policy Studies)
    Abstract: The landscape of international development has changed markedly, with the acceleration of global integration and the shaping of the post-2015 development framework. This paper discusses the new era of Japan’s development cooperation from two perspectives—broader and deeper partnerships with the private sector, as well as ‘cooperation and competition’ with Asian emerging donors. It proposes ‘network-based cooperation’ as a central pillar of Japan’s future development cooperation, based on the analyses of the nature of a new wave of internationalization of Japanese manufacturing foreign direct investment (FDI) which involves small-and medium enterprises (SMEs), as well as the extensive local human and organizational networks accumulated in Asia through sixty years of Japan’s official development assistance (ODA). Unique roles of Japan as a mature knowledge partner based on international comparative analysis and a quality leader in global business activity are also discussed. Japan should leverage its distinctive strengths in both the corporate and ODA sectors, and actively embark on the new era of development cooperation.
    Date: 2014–09
  8. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Public Sector Expenditure Policy Transport Economics Policy and Planning Public Sector Economics Macroeconomics and Economic Growth - Subnational Economic Development Transport Public Sector Development
    Date: 2014–04
  9. By: Felipe M. Medalla (School of Economics, University of the Philippines Diliman); Raul V. Fabella (School of Economics, University of the Philippines Diliman); Emmanuel S. de Dios (School of Economics, University of the Philippines Diliman)
    Abstract: This paper discusses the causes and consequences of the current trend in which a principal driver of growth is inward remittances by workers deployed overseas. The main benefit of the phenomenon is an easing of the fiscal burden arising from the effectively large transfer from workers to the government. On the other hand, the “Dutch Disease” it causes takes a longterm toll on the tradables sector. The paper concludes that the fiscal payoffs from the phenomenon are best used by reinvesting these in the foundations of domestic competitiveness—particularly education and focused infrastructure—to offset the worst effects of the trend and prepare prudently for the time it ends or reverses.
    Keywords: Philippine economy, labour migration, migrant remittances, remittances-driven economy, services sector, exchange rate, Dutch Disease, “divide-by- N” syndrome, transport infrastructure, political infrastructure cycle, political institutions
    JEL: B52 F22 F24 O24 O53 R42
    Date: 2014–08
  10. By: Sng, Tuan-Hwee; Moriguchi, Chiaki
    Abstract: This paper explores the role of state capacity in the comparative economic development of China and Japan. Before 1850, both nations were ruled by stable dictators who relied on bureaucrats to govern their domains. We hypothesize that agency problems increase with the geographical size of a domain. In a large domain, the ruler's inability to closely monitor bureaucrats creates opportunities for the bureaucrats to exploit taxpayers. To prevent overexploitation, the ruler has to keep taxes low and government small. Our dynamic model shows that while economic expansion improves the ruler's finances in a small domain, it could lead to lower tax revenues in a large domain as it exacerbates bureaucratic expropriation. To test these implications, we assemble comparable quantitative data from primary and secondary sources. We find that the state taxed less and provided fewer local public goods per capita in China than in Japan. Furthermore, while the Tokugawa shogunate's tax revenue grew in tandem with demographic trends, Qing China underwent fiscal contraction after 1750 despite demographic expansion. We conjecture that a greater state capacity might have prepared Japan better for the transition from stagnation to growth.
    Keywords: Comparative Institutional Analysis, Geography, Principal-Agent Problem, Institutions and Growth
    JEL: D73 N15 N40 O43 P52
    Date: 2014–08
  11. By: Reza Y. Siregar; Narith Chan
    Abstract: Cambodia has never officially adopted the U.S. dollar or other foreign currency as means for transaction, unit account or store of value. Yet, over the past decade, the country has become one of the most “dollarized” economies in the world. The objective of this study is to provide some insights into motives behind the usage of foreign currencies by domestic households. While early studies have been constrained by their reliance on official macroeconomic and financial data, especially from the banking sector, our analyses will largely be based on a unique database generated from a survey conducted on 1500 households across rural and urban areas of 17 provinces (out of total 24 provinces) in the country.
    Keywords: Foreign Currency in Circulation, Dollarization, Household, Cambodia
    JEL: E50 G21 G28
    Date: 2014–09
  12. By: Vries, Gaaitzen de; Timmer, Marcel; Vries, Klaas de (Groningen University)
    Abstract: This paper introduces the updated and extended Groningen Growth and Development Centre (GGDC) 10-Sector database. The database includes annual time series of value added and persons employed for ten broad sectors of the economy from 1950 onwards. It now includes eleven countries in Asia (China has been added compared to the previous release), nine in Latin America and eleven in Sub-Saharan Africa. We use the GGDC 10-Sector database to document patterns of structural change in developing countries. We find that the expansion of manufacturing activities during the early post World War II period was related to a growth-enhancing reallocation of resources in most countries in Asia, Africa and Latin America. This process of structural change stalled in many African and Latin American countries during the mid-1970s and 1980s. When growth rebounded in the 1990s, workers mainly relocated to market services industries, such as retail trade and distribution. Though such services have higher productivity than much of agriculture, they are not technologically dynamic and have been falling behind the world frontier.
    Date: 2014
  13. By: Florencia López Boo
    Abstract: Este documento de trabajo presenta las brechas en el desarrollo cognitivo –medido por una prueba de vocabulario– entre niños de hogares con niveles socioeconómicos (NSE) alto y bajo en dos fases distintas de la infancia (antes y después de los primeros años de escuela) en los cuatro países de bajos y medianos ingresos donde se realiza el estudio Niños del Milenio: Perú, Etiopía, Vietnam y la India (estados de Andhra Pradesh y Telangana). El trabajo provee evidencia intercontinental sobre la significancia del tiempo en que ocurren las brechas, patrones encontrados, y la persistencia de las diferencias. El análisis no paramétrico sugiere que las diferencias halladas a la edad de 5 años persisten en los primeros años escolares en los cuatro países, mientras que el análisis condicional indica que la magnitud de las brechas entre los NSE al interior de cada país parece disminuir con el tiempo (a excepción de la India). Sin embargo, tanto la magnitud de la diferencia como el grado de la persistencia varían. Así, el principal resultado es que Perú destaca de los cuatro países no solo como el de la brecha cognitiva más grande entre niños de familias con más ingresos y los niños más pobres (de alrededor de 1,30 a 1,40 desviaciones estándar), sino también como el país cuyas diferencias persisten más en el desarrollo cognitivo de los niños (como señalan las especificaciones de valor agregado). El documento discute ciertas razones que expliquen estas tendencias, pero en general, las diferencias según NSE se mantienen, incluso cuando se controla mediante una serie de variables, tales como educación inicial, nutrición temprana, y los años de escolaridad. El test de vocabulario que usa la autora es el Peabody Picture Vocabulary, TVIP por sus siglas en inglés), y encuentra que el rendimiento en dicho test a los 5 años de edad es un determinante importante de las diferencias según NSE a la edad de 8 años.
    Date: 2014
  14. By: Guiying Laura WU (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological Univer- sity. Address: 14 Nanyang Drive, Singapore, 637332.); Qu FENG (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological Univer- sity. Address: 14 Nanyang Drive, Singapore, 637332.); Pei LI (Institute of Real Estate Studies, National University of Singapore.)
    Abstract: Budget deficit has been a common fiscal pressure facing Chinese cities since the 1994 fiscal reform. Meanwhile, land lease sales have become a signi?cant o¤-budgetary revenue to local governments since 2003. This paper investigates whether ?nancing budget deficit is an important driving force of the recent soaring housing prices when local governments function as the monopoly supplier of urban land. A conceptual framework is developed to illustrate a transmission mechanism from budget deficit to housing prices. This leads to an empirical model consisting of two simultaneous structural equations for housing prices and land prices. Using data for the 35 major Chinese cities from 2003 to 2011, an empirical exercise shows although budget deficit has a positive effect on land prices, it is the factors from demand side, such as amenities, income and the user cost of housing capital, that have been pulling up the housing prices.
    Keywords: Housing Prices, Land Prices, Public Finance, Chinese Economy
    JEL: R21 R31 H27 G10
    Date: 2014–09
  15. By: Charles Yuji Horioka (School of Economics, University of the Philippines Diliman)
    Abstract: Martin Stuart (“Marty”) Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is a renowned American economist who has made important contributions to public finance, macroeconomics, social insurance, health economics, the economics of national security, and many other fields of economics.
    Keywords: Capital accumulation, capital flows, capital gains, capital mobility, charitable contributions, Council of Economic Advisers, depreciation, Feldstein-Horioka paradox, Feldstein-Horioka puzzle, Harvard University, health economics, health insurance
    JEL: B31 D14 D22 F21 F32 F52 H20 H55 I13 J65
    Date: 2014–07

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