nep-sea New Economics Papers
on South East Asia
Issue of 2015‒08‒01
twenty-one papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Causality between financial development and economic growth, and the Islamic finance imperative: A case study of Indonesia By Ismail, Mohamed Ayaz Mohamed; Masih, Mansur
  2. RCEP – Thailand Trade Creation and Trade Diversion: Evidence and Analysis By Sattayanuwat, Wanasin
  3. The Privacy and Security of An Identification Card: Malaysian Perspective By Mohd Shukri, Muhammad Hafiz
  4. The BPO Challenge: Leveraging Capabilities, Creating Opportunities By del Prado, Fatima
  5. Finance, growth and human development: An Islamic economic development perspective By Uddin, Md. Akhter; Masih, Mansur
  6. The Opportunity Cost of Engaging in Reduced-Impact Logging to Conserve the Orangutan: A Case Study of the Management of Deramakot Forest Reserve, Sabah, Malaysia By Swarna Nantha, Hemanath; Tisdell, Clem
  7. Determinants of Rice Productivity and Technical Efficiency in the Philippines By Koirala, Krishna H.; Mishra, Ashok K.; Mohanty, Samarendu
  8. Recent Developments in Myanmar and New Opportunities for Sub-Regional Cooperation: A Bangladesh Perspective By Debapriya Bhattacharya; Deepti Mashfique Ibne Akbar
  9. Social Enterprises and Employment: Mainstreaming SMEs and Employment Creation By Lanzona, Leonardo Jr. A.
  10. Spatial Dependency of Technical Efficiency in Rice Farming: The Case of Bohol, Philippines By Pede, Valerien O.; McKinley, Justin; Singbo, Alphonse; Kajisa, Kei
  11. Farm Production Diversity and Dietary Diversity in Developing Countries By Sibhatu, Kibrom T.; Krishna, Vijesh V.; Qaim, Matin
  12. Islamic banking: 40 years later, still interest-based? Evidence from Malaysia By Gulzar, Rosana; Masih, Mansur
  13. Joint Evaluation of Cash and In-kind Transfer programs in Indonesia: What are the roles in Food and Nutrition Security? By Afkar, Rythia; Matz, Julia Anna
  14. Does the conventional benchmark prop up non-performing loans in Islamic banks? A case study of Malaysia with ARDL Approach By Shamsudheen, Shinaj Valangattil; Masih, Mansur
  15. Rural Livelihood Strategies in Cambodia: Evidence from a household survey in Stung Treng By Bühler, Dorothee; Grote, Ulrike; Hartje, Rebecca; Ker, Bopha; Lam, Do Truong; Nguyen, Loc Duc; Nguyen, Trung Thanh; Tong, Kimsun
  16. An Analysis of the Pass-Through of Exchange Rates in Tropical Forest Product Markets: A Smooth Transition Approach By Guney, Selin
  17. Agriculture in Developing Countries and the Role of Government: Economic Perspectives By Kanza, Patrick; Vitale, Jeffrey
  18. The Role of International Policy Transfer and Diffusion for Policy Change in Social Protection - A Review of the State of the Art By Katja Bender; Sonja Keller; Holger Willing
  19. The Effect of Indonesian Farmer Preferences for Crop Attributes in the Adoption of Horticultural Crops: A Best-Worst Scaling Approach By Supehatin; Umberger, Wendy J.; Yi, Dale; Stringer, Randy; Minot, Nicholas
  20. A Coasian Model of International Production Chains By Russell Hillberry; Thibault Fally
  21. Soybean Transportation Profile By Denicoff, Marina R.; Prater, Marvin; Bahizi, Pierre

  1. By: Ismail, Mohamed Ayaz Mohamed; Masih, Mansur
    Abstract: Indonesia has been rapidly showing signs of advanced economic development. The country’s central bank is of the view that with the unbanked accounting for more than half of the population, the potential for growth in the world’s biggest Muslim population is immense. This article makes an attempt to test the possible directions of causality between financial development and economic growth, with Indonesia as a case study. It also discusses the results in the context of the development of Islamic finance in Indonesia. The study is conducted by applying the Autoregressive Distributed Lag model (ARDL) analysis (also known as the Bounds testing procedure) proposed by Pesaran et al. (2001). This article is believed to be one of the first to extend the finance-growth nexus discussion to include the development of Islamic finance. The study finds a unique cointegrating relationship among GDP per capita, gross fixed capital formation, annual population growth rate, and domestic credit to private sector. These findings have clear policy implications in that a policy of development and growth of the financial sector will help enhance economic growth, and will provide the necessary base from which Indonesia can significantly enhance its Islamic finance industry.
    Keywords: Financial Development, Economic Growth, Islamic Finance, ARDL Approach, Indonesia
    JEL: C22 C58 E44
    Date: 2015–07–18
  2. By: Sattayanuwat, Wanasin
    Keywords: International Development,
    Date: 2015
  3. By: Mohd Shukri, Muhammad Hafiz
    Abstract: Identification cards have long been associated with national security. In some countries, citizens are required to have a national identification card while others offer a voluntary one. Identification cards are being used in many countries around the world including most European countries, Hong Kong, Malaysia, Singapore and Thailand. Since new developments have emerged in the collection, analysis and dissemination of information about individuals, this article will elaborate on the collection, storage and disclosure of personal data in the form of identification cards while focusing on the new ‘smart card’ electronic identification methods with automated individual identification, biometrics technology and encryption controls. Several surrounding issues of privacy and security with regards to identification cards will also be clarified.
    Keywords: biometric technology; encryption controls; identification cards; individual identification; national identification; national security; personal data; smart card.
    Date: 2015–07–30
  4. By: del Prado, Fatima
    Abstract: As the Asia-Pacific Economic Cooperation (APEC) seeks to promote free trade and economic cooperation in the Asia-Pacific region, cross-border ICT-enabled services and business process outsourcing (BPO) are expected to contribute to economic integration and growth in the region. ICT-enabled services have grown significantly over the years and across many parts of the globe including several developing countries in the Asia-Pacific region. While there may not be a single standard approach to developing the ICT-BPO sector, the successful experiences of developing countries can provide useful insights and practical lessons for countries contemplating to set up their ICT-BPO service industries. Using data from the Philippines, this paper describes the evolution of ICT-BPO services exports in the country and examines the factors that facilitated its transition from providing low-end contact center services to back-office operations, and to higher value-added services. The paper also reviews some of the APEC initiatives relevant to the growth and expansion of ICT-BPO services in the region. The Philippine experience has shown that IT-BPO services is one area of trade in services where developing countries can take a shot at sustainable development, without relying so much on traditional primary industries and natural resource. Although the presence of an educated workforce and good telecommunication infrastructure do not always guarantee success in this area, the investments in human capital and critical telecoms infrastructure--considered by many as a backbone for other important industries--are more than enough reward for the decision or attempt to pursue and board the IT-BPO bandwagon. There is still enough space and opportunity for other developing countries to "build appropriate domestic capacity" to effectively participate in this sector.
    Keywords: Philippines, information and communications technology (ICT), IT-BPO, services trade liberalization
    Date: 2015
  5. By: Uddin, Md. Akhter; Masih, Mansur
    Abstract: In a growing body of literature, importance of financial sector development and growth on human development has been emphasized but so far little empirical evidence to support this. Islam is a progrowth religion but the concept of development in Islam is multidimensional, understanding the relationship between finance, growth and human development would help us better explain and develop a sustainable pro-Islamic economic growth model, which would help eradicate mass poverty, income inequality and develop human capital in the Muslim world. This study aims to investigate how finance and growth affect human development in Malaysia from Islamic economic development perspective by using standard time series technique, ARDL. The study finds that there is a long term relationship between finance, growth and human development. Human development is found significantly correlated with the growth in the long run. It can be argued that financial development supports growth and growth ultimately promotes human development in the long run, also, macroeconomic stability is found significant for sustainable economic growth in Malaysia. However, oil price is found not correlated with growth in the long run for the Malaysian economy.
    Keywords: economic growth, financial development, human development, ARDL
    JEL: C22 C58 E44
    Date: 2015–06–25
  6. By: Swarna Nantha, Hemanath; Tisdell, Clem
    Abstract: Managing the forested landscape in Malaysia and Indonesia for timber extraction while also conserving the endangered orangutan that inhabit some of the remaining forests in this region is a challenge. Heavy logging is a common feature of the Indonesian and Malaysian timber industries. It is profitable but detrimental to the survival of this primate species. A type of logging which appears to be compatible with maintaining orangutans in the forested landscape is light logging. It involves extracting fewer logs and ensures that the logged area is minimally damaged. However, switching to a light logging regime involves a financial opportunity cost, a cost which is an obstacle to the widespread adoption of this type of logging by businesses and the state. This paper reviews the case study of a unique light logging experiment conducted in the Deramakot Forest Reserve, in one of the orangutan’s strongholds, the Malaysian state of Sabah. The Deramakot experiment claims to generate revenue from low-impact logging while also sustaining its population of orangutans. Here, we survey the importance of the timber industry to Sabah, the profitability of the Deramakot scheme, the orangutan conservation aspect of this scheme, and the influence of the politico-bureaucratic factor or public economics on sustaining the domestic light-logging agenda. Then, this paper attempts to answer the question of whether economic returns could be balanced with orangutan conservation given the light and heavy logging regimes, bearing in mind the opportunity costs associated with these. More specifically, using the data that has been made available from the Deramakot case study, this paper employs a mathematical model to analyse whether the foregone profits of pursuing light logging is higher than setting aside strict protected areas while more intense logging the remaining forests, subject to the goal of maintaining a desired orangutan population size. The results reveal that, under certain conditions, the option of conserving the orangutan under mainly light logging is economically more attractive for a scenario involving Sabahan forests than the option of strictly protecting orangutan habitats and heavily logging the forests without significant orangutan populations. This finding contributes to the question asked by conservationists of how forests should be partitioned to satisfy both economic and conservation needs.
    Keywords: Biodiversity conservation, government, orangutan (Pongo pygmaeus spp.), opportunity cost, sustainable logging, timber, Community/Rural/Urban Development, Environmental Economics and Policy, Land Economics/Use, H00, Q23, Q57,
    Date: 2014–05
  7. By: Koirala, Krishna H.; Mishra, Ashok K.; Mohanty, Samarendu
    Abstract: Agricultural production determines the efficiency level of households in their farming activities. In the developing countries farmers do not use all potential technological resources, thus making inefficient decisions in their agricultural activities. So, this paper focuses to measure the technical efficiency of rice production and identified determinants of technical efficiency of rice farmers in Philippines. The Loop Survey of the Institute of Rice Research Institute (2007-2012) was analyzed using stochastic frontier production method in the Cobb-Douglas functional form. Result shows that fuel, fertilizer, land rent, planting season, and land area are the factors that affect both production and technical efficiency of rice production. We found mean technical efficiency score of 0.54.
    Keywords: Food security, technical efficiency, Stochastic Frontier Production, Philippines, Production, Crop Production/Industries, Production Economics,
    Date: 2014–01
  8. By: Debapriya Bhattacharya; Deepti Mashfique Ibne Akbar
    Abstract: The current paper analyses the potential opportunities between Bangladesh and Myanmar stemming from sub-regional cooperation. With the election of a new quasi-civilian government in 2011, doors have opened for the international community to make the most of Myanmar's untapped resources. The paper examines Myanmar's integration into the regional and global economy together with modalities and trends of Bangladesh-Myanmar relations. Opportunities and challenges have been discussed in the areas of trade, investment (together with business set up at special economic zones), agricultural cooperation (with contract farming prospects), energy collaboration, transport connectivity and the role of political and non-state actors. The Asian giants, China and India, have vested interests in Bangladesh-Myanmar cooperation, as the latter can serve as a bridge between South and Southeast Asia. Hence, Bangladesh and Myanmar should earnestly consider their sub-regional association, allowing them to progress together and consequently, further.
    Keywords: regional cooperation, Myanmar, Bangladesh, BCIM
    Date: 2014–09
  9. By: Lanzona, Leonardo Jr. A.
    Abstract: This paper argues that mainstreaming small and medium enterprises (SMEs) and social enterprises (SEs) into various international treaties will require the assumption of positive externalities, which markets cannot fully evaluate. To show this, the possible influence that SEs may have on SME development and, eventually, on employment will be discussed. SEs are small- and medium-sized commercial businesses providing valuable social service to customers and sustainable jobs and training for up to about 200 people. Their goal is to provide public goods to the communities, in the form of increased productivity and employment. What separates SEs from SMEs is that it addresses the social issues at the forefront. Through this paper, the importance of providing such public goods to SME development will be highlighted. This study shall provide inputs to the analytical framework for the Philippines' engagement in APEC under the priority theme of "Mainstreaming Small and Medium Enterprises and Employment Creation" and shall make concrete recommendations on how employment can be created through the formation of social enterprises or socially-inclusive companies.
    Keywords: poverty, Asia-Pacific Economic Cooperation (APEC), social enterprises (SEs), small and medium-scale enterprises
    Date: 2015
  10. By: Pede, Valerien O.; McKinley, Justin; Singbo, Alphonse; Kajisa, Kei
    Abstract: We investigate spatial dependency among technical efficiency levels of rice producers on the Central Visayan island of Bohol, Philippines in two separate ecosystems: rainfed and irrigated. Results revealed evidence of spatial correlation in technical efficiency levels for both residential and plot neighborhood. There is a stronger spatial dependency among farmers in the rainfed ecosystem and particularly in the farm plot neighborhood structure. These results are most likely a result of producers facing similar environments with less control over their fields than producers in the irrigated ecosystem. This study also used spatial panel econometrics techniques to investigate spatial dimension in farmers’ technical efficiency in regression models. Results strongly show evidence of spatial dependence in household and farm plot neighborhood.
    Keywords: Efficiency analysis, rice, spatial dependency, technical efficiency, Community/Rural/Urban Development, Farm Management, International Development, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods,
    Date: 2015
  11. By: Sibhatu, Kibrom T.; Krishna, Vijesh V.; Qaim, Matin
    Abstract: Enhancing the diversity of agricultural production systems is increasingly recognized as a potential means to sustainably provide diversified food for rural communities in developing countries, hence ensuring their nutritional security. However, empirical evidences connecting farm production diversity and farm-households’ dietary diversity are scarce. Using comprehensive datasets of market-oriented smallholder farm households from Indonesia and Kenya, and subsistence farmers from Ethiopia and Malawi, the present study is carried out with an objective to investigate the effect of farm production diversity on households’ dietary diversity, and the role of market access and other potential influencing factors. Often, farmers from the market-oriented production systems are found consuming more diversified diet than those from the subsistence systems. Even among the subsistence farms, the crucial role of farm diversity to augment dietary diversity is mixed and evident only among those who have limited access to food markets. While farm diversity enhances dietary diversity of Indonesian and Malawian households either through direct consumption, and/or by increasing and stabilizing farm income - which is also dependent on the type of crop on the farm. In Kenya and Ethiopia however no meaningful connection could be found. The study concludes that the link between farm production diversity and dietary diversity does not universally exist and diversifying diets through farm diversification need not require that the production system should be subsistence in nature.
    Keywords: Farm production diversity, Dietary diversity, Market access, Farm-household, Developing countries, Agricultural and Food Policy, Environmental Economics and Policy, D13, I15, O12, Q10, Q12, Q18,
    Date: 2015–05
  12. By: Gulzar, Rosana; Masih, Mansur
    Abstract: As Islamic banking comes of age 40 years after its beginning, scholars and academics are calling for a better version 2. Regulators in Malaysia and Pakistan are pushing the industry to adopt more Islamic contracts which live up to the spirits of Shariah. Malaysia, specifically, has launched the Islamic Financial Services Act 2013 (IFSA) as a step in this direction. To facilitate the transition, this study has two objectives; to test whether conventional rates is still cointegrated with Islamic banks’ profit rates in Malaysia and a ranking of the exogeneity of the factors that affect the profit rates. It uses a range of multivariate time series techniques namely the cointegration test, vector error correction model (VECM), cumulative sum (CUSUM) and cumulative sum of squares (CUSUMSQ) tests, variance decomposition (VDC), impulse response and persistence profiles. This study contributes to the literature through its use of the latest data (up to December 2014) and its rank of less-tested variables such as the ratio of Islamic deposits to total Islamic assets. The VDC ranking can also serve as a basis for comparison for the effects of IFSA. This research finds that Islamic profit rates are still cointegrated withconventional rates such as the overnight policy rate (OPR) and fixed deposit rates. Additionally, it is also led by Islamic banks’ dependency on deposits for funding and their market shares. These findings may give urgency to policy makers and practitioners to evolutionise current Islamic banking practices towards what is likely to be a more stable financial system.
    Keywords: Profit rates, investment account rates, interest rates, OPR, IFSA, Time Series
    JEL: C22 C58 E43
    Date: 2015–07–15
  13. By: Afkar, Rythia; Matz, Julia Anna
    Abstract: Social protection plays crucial roles in the response of rising food prices. It helps households to maintain access to food and other basic needs, leading to an increase in food and nutrition security, and ultimately prevent an increase in poverty. In this paper, we evaluate the relative and multiple overlapping effects of two main social protection programs in Indonesia, namely Conditional Cash Transfer (CCT) and in-kind transfer/Subsidized Rice Program (Raskin), on food and nutrition security indicators. Using panel data from household surveys which recorded both CCT and Raskin recipient status, we estimate the impact of CCT and Raskin on food and nutrition security using both Inverse Probability Weighting models and conventional regression method. We find that CCT had a much greater impact on food and nutrition security. However, the multiple-treatment effect between CCT and Raskin is not significantly different from zero. Thus, it is important to re-formulate these two overlapping policies.
    Keywords: food and nutrition security, impact evaluation, social protection, multiple treatment, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, I38, H43, H53, Q18,
  14. By: Shamsudheen, Shinaj Valangattil; Masih, Mansur
    Abstract: Non-performing loan rate is one of the most significant issues for the banks to survive. The key motivation of this study is the profound statement that “Islamic banks are free from interest rates” and it is indeed to check the validity of this statement in the area of Non-performing loan rate. The principal objective of this study is to examine the short and long run impact of interest rate (KLIBOR) on Islamic bank’s Nonperforming loan rate. The methodology applied is ‘Auto – Regressive Distributive Lag’ model which has taken care of a major limitation of the conventional cointegrating tests in that they suffer from pre-test biases. Based on the above rigorous methodology, we try to measure both long- and short-run relationships between the interest Rate (KLIBOR) and the non-performing loan by using other controlling variables (loan growth rate unemployment rate, & industrial production index). This study may be considered significantly different from previous studies since to the best of our knowledge, there is no literature available that directly examines the impact of KLIBOR on non-performing loans in Islamic banks. From the detailed theoretical and literature study it is found that most of the theories related to Nonperforming loan rate connected with interest rate are not applicable to Islamic banking. The empirical findings show that the interest rate (KLIBOR) makes impact only in the short run and shows the insignificant impact in the long run. It is also found that there is no effect of crisis in the short and long run on Non-performing loans in this model.
    Keywords: Non performing loans, interest rate (KLIBOR), Islamic banks, ARDL, Malaysia
    JEL: C22 C58 G21
    Date: 2015–07–15
  15. By: Bühler, Dorothee; Grote, Ulrike; Hartje, Rebecca; Ker, Bopha; Lam, Do Truong; Nguyen, Loc Duc; Nguyen, Trung Thanh; Tong, Kimsun
    Abstract: The overall objective of this discussion paper is to advance the knowledge on rural livelihoods in Stung Treng, Cambodia. In a cluster analysis, five clusters with very different livelihood strategies are identified based on a sample of 600 rural households. Despite the fact that nearly all households are engaged in some form of subsistence farming, especially by growing rice, the richer clusters build on self-employment and higher-skilled wage employment. In contrast the middle income cluster mainly depends on natural resources (fish and firewood). The poorer two clusters are engaged in lowerskilled wage employment. The incidence of poverty is widespread but differences between the clusters are clearly visible. Even the better-off households have consumption poverty headcount ratios of between 37 to 50% at PPP $1.25. For households from the poorest clusters the poverty headcount ratio amounts to even 70% for income and 80% for consumption. Especially the households largely depending on natural resource extraction are characterized by a high incidence of poverty and high vulnerability. In addition, there are a number of pressures which are expected to increase poverty problems in the future. Policies aimed at reducing poverty and improving rural livelihoods need to carefully consider the close linkages between rural livelihoods and natural resources. But also a diversification away from natural resource extraction into higher-skilled jobs is found to be a strategy opening up new opportunities to improve livelihood security and raise the living standards of the poor.
    Keywords: Livelihoods, Rural Poverty, Cluster Analysis, Diversification, Cambodia, Environmental Economics and Policy, Labor and Human Capital, J23, J43, N55, R23, Q12,
    Date: 2015–03
  16. By: Guney, Selin
    Abstract: This paper assesses exchange rate pass through for forest product prices, namely sawnwood, plywood, lumber spruce and logs prices by incorporating smooth structural changes. The major countries investigated are the USA, Japan (Tokyo), Nigeria (Sapele), Malaysia and Gabon and similar or identical products that are traded are examined. In keeping with Hanninen et al.(2000, 20006), paper examines regime-specific ERPT effects. Results suggest evidence for the convenience of the STAR type models (SETAR and LSTAR) to model deviations from LOP in a nonlinear fashion for tropical forest product markets. Reasonable estimates of the threshold values that may be a representation of transaction costs that are in line with the theoretical arguments in international trade were found. It was also observed that the values of threshold variables vary hugely across different countries and also the impulse responses analysis for each price pairs are also supporting the changing behavior of price ratios in high and low regimes that may be regarded as another justification to use models accounting for structural changes to model LOP and/or ERPT in a nonlinear fashion.
    Keywords: Exchange Rate Pass-Through, Smooth Transition Models, Forest Product Market, Agricultural and Food Policy, Demand and Price Analysis, Production Economics, F10, F30, F41, L16,
    Date: 2014
  17. By: Kanza, Patrick; Vitale, Jeffrey
    Abstract: Agriculture in Developing countries and the Role of Government: From an Economic Perspective Agriculture has been a critical driver of well-being for centuries, ensuring food security and catalyzing productivity needed for economic prosperity (Robin, 2011). According to the International Food Policy Research Institute, sixty-five percent of African relies on agriculture as a primary source of livelihood, where small-scale famers are responsible for ninety percent of agricultural production (IFPRI, 2009). Across the African continent, there has been a renewed commitment from governments, non-governmental organizations and the private sector to move agriculture from a development challenge to a business opportunity. As a result, countries such as Nigeria are moving to once again become a net exporter rather than importer of agricultural commodities (Robin, 2011). However, despite these developments, many smallholder farmers, who form the backbone of Africa’s agriculture sector, remain trapped in poverty (Robin, 2011). Indeed, African spending on agriculture represented 6 to 7 per cent of the total national budget for 1980-05, while in Asia the corresponding number was 6-15 per cent (IFPRI, 2009). The objective of this research is to determine the manner in which government assistance to African farmers varies taking into account factors such as rural population share, real GDP per capita, arable land share etc. The data for this research will be based on a new World Bank dataset of indicators of distortions to domestic price of agriculture and non-agriculture commodities drawn from a sample of 40 countries of which 20 are from Sub-Saharan Africa, 12 from Asian developing and 8 from Latin American developing countries. Those indicators compiled by Anderson and Valenzuela (2008) contain the nominal rates of assistance to agricultural tradables relative to non-agricultural tradables and the nominal rates of assistance to agricultural importables and agricultural exportables (Bates and Block, 2009). In addition, another indicator “cash-food bias index” shows how producers of cash crops are treated relative to producers of food crops will also be incorporated. We will examine how factors such as rural population share, real GDP per capita, arable land share, natural resource endowment, and geographical location affect the assistance farmers receive from government. We are hypothesizing that rural population share will have a negative impact on the level of assistance farmers receive. Indeed, Bates and Block (2009) argue that government policies toward agriculture will tend to be detrimental to farmers the greater “the rural dwellers share of population” depending upon the nature of the party system. When taking into account geographical location, we argue that farmers living in coastal countries will experience less support from government compared to those living in landlocked countries. In fact, Ndulu et al. (2007) conclude that landlocked countries are more likely to show least bias against agriculture trade than coastal states which tend to display the greatest bias. The evidence of natural resource endowment on government agricultural policies has been mixed. Bourguignon and Verdier (2000) suggest that governments of resource rich countries will tend to exhibit less support for agriculture since the existence of natural resources may prevent redistribution of political power towards the middle classes and thus prevent adoption of growth-promoting policies; and Isham et al (2003) to add that resource wealth worsens quality of institution because it allows governments to avoid accountability and resist modernization. However, Bates and Block (2009) contend that governments of resource rich countries have a tendency to enact policies that favor producers of both food and cash crops. They argue that Governments of resource rich countries specifically in Africa have tended to protect food crops, raising the level of domestic prices above those prevailing in world markets, while taxing cash crops (Bates and Block, 2009). When using arable land share as a proxy for the overall importance of agriculture, Bates and Block (2009) find that it is positively related to policy orientation of governments towards agriculture. This study takes a new approach by providing a cross-regional analysis of government level of assistance to farmers in Asian and Latin American developing countries, which will enable us to compare government support for agriculture in the three regions while focusing primarily on Africa. For this purpose three regressions will be used for each region. In the first regression government level of assistance to farmers will be measured by the relative rate of assistance which captures the relative support given to agriculture versus non-agricultural tradables, and it is found as follows: (Anderson et al. 2008, Bates and Block 2009) RRA=(1+〖NRA〗_(〖ag〗^t ))/(1+〖NRA〗_(〖nonag〗^t ) )-1, where 〖NRA〗_(〖ag〗^t ) is the nominal rate of assistance to agricultural tradables, and 〖NRA〗_(〖nonag〗^t ) is the nominal rate of assistance to non-agricultural tradables. The second regression will have the trade bias index as a measure of government level of assistance to farmers, it determines the relative assistance of government to exportables versus importable. It is found as follows: (Anderson et al. 2008, Bates and Block 2009) TBI=(1+〖NRAag〗_x)/(1+〖NRAag〗_m )-1, where 〖NRAag〗_x is the nominal rate of assistance to agricultural exportables and 〖NRAag〗_m is the nominal rate of assistance to agricultural importable. The third regression seeks to determine whether producers of cash crops compared to producers of food crops benefit the most from government policies. We use the “cash-food bias index as a measure of government level of assistance to farmers. It can be found as follows: (Anderson et al. 2008, Bates and Block 2009) CFBI=(1+NRAcashcrops)/(1+NRAfoodcrops)-1, where NRAcashcrops refers to the nominal rate of assistance to cash crops and NRAfoodcrops is the nominal rate of assistance to food crops. Our generic model is: y_it=α+δ_1 Resource rich+δ_2 Landlocked +δ_3 Rural population share+δ_4 (Resource rich*Rural population share)_it+X_it β+U_i+ε_it , where y_it is our dependent variable depicting government level of assistance to farmers for country i in year t through the policy indicators defined above, Resource rich is a dummy variable for resource rich-countries, Landlocked is a dummy variable for landlocked contries, Rural population share is the share of a country’s population living in rural areas, X stands for the control variables such as real GDP per capita, arable land share in country i in year t, V_i the random disturbance that captures unobserved time invariant country-specific effects, and ε_it is the error term associated with country i in year t.The parameters of our models will be estimated using the fixed effects and random effects models following Greene (2010). The fixed effect is specified as: y_it=X_it^' β+α_i+ε_it , where α_i=Z_i^' α, embodies all the observable effects and specifies an estimable conditional mean. It implies that Z_i is unobserved, but correlated withX_it. The random effects model is specified as: y_it=X_it^' β+α+U_i+ε_it , where U_i is a group-specific random element, similar to ε_it except that for each group, there is but a single draw that enters the regression identically in each period. Then, following Hausman (1978) we will perform the Hausman’s specification test. Using these outcomes as the background of their decision making process policy makers in developing countries particularly in Africa may advocate for a transformation of the agriculture sector with an emphasis on improving farmers’ wellbeing. If for instance, it is provided that farmers are worse off in regions with a high rate of rural population share, policy makers may consider taking actions that encourage farm modernization or the use of productive inputs in agriculture. References Anderson, K., and E. Valenzuela (2008), Estimates of Distortions to Agricultural Incentives, 1955 to 2007, core database at Anderson, K., M. Kurzweil, W. Martin, D. Sandri and E. Valenzuela (2008), “Measuring Distortions to Agricultural Incentives, Revisited”, World Trade Review 7(4):1-30. Bates, R., S. Block (2010), “Political Institutions and Agricultural Trade Interventions in Africa”, American Journal of Agricultural Economics 93, 317-323. Bourguignon, F., and T. Verdier (2000a), “Oligarchy, Democracy, Inequality, and Growth”, Journal of Development Economics 62: 285-313. Diao, X., P. Hazell, D. Resnick, and J. Thurlow (2007), “The Role of Agriculture in Development: Implications for Sub-Saharan Africa”, Research Report 153, Washington DC: IFPRI. Greene, W.H. (2012), Econometric Analysis, Upper Saddle River, NJ: Prentice Hall, seventh edition, 2012. Hausman, J.A. (1978), “Specification Tests in Econometrics”, Econometrica 46(6):1251-1271. International Food Policy Research Institute (2009), Media briefing on GM Crops for African Farmers, May 19, 2019, Washington DC: IFPRI. Retrieved from lopment Isham, J., L. Pritchett, M. Woolock, and G. Bushy (2003), “The Varieties of the Resource Experience: How Natural Resource Export Structures Affect the Political Economy of Economic Growth”, World Bank, Washington DC. Ndulu, B., P. Collier, R. Bates and S. O’Connell (2007), The Political Economy of Economic Growth in Africa, 1960-2000, 2 volumes, Cambridge: Cambridge University Press. Robin, J. (2011), “Bringing Finance and Innovation to Advance a Green Revolution in Africa”, This is Africa published by the Financial Times Limited, London, United Kingdom. World Bank (2007), World Development Indicators 2007, Washington DC: World Bank.
    Keywords: Agricultural and Food Policy, International Development,
    Date: 2015–06–26
  18. By: Katja Bender (Bonn-Rhein-Sieg University of Applied Sciences, International Centre for Sustainable Development (IZNE)); Sonja Keller (Bonn-Rhein-Sieg University of Applied Sciences, International Centre for Sustainable Development (IZNE)); Holger Willing (Bonn-Rhein-Sieg University of Applied Sciences, International Centre for Sustainable Development (IZNE))
    Abstract: Over the past two decades many governments of low and middle income countries have started to introduce social protection measures or to extend the coverage and improve the functioning of public social protection systems. These reforms are a "global phenomenon" and can be observed in many African, Asian and Latin American countries. This paper focuses on international determinants for policy change within social protection by assessing the state of the art of both policy diffusion and policy transfer studies. Empirical studies of policy transfer and diffusion in the field of social protection are furthermore assessed in light of the theoretical background.
    Keywords: Development Policy; Policy Change; Policy Diffusion; Policy Learning; Policy Transfer; Political Economy; Social Protection; Transgovernmental Networks; Policy networks
    Date: 2015–02
  19. By: Supehatin; Umberger, Wendy J.; Yi, Dale; Stringer, Randy; Minot, Nicholas
    Abstract: The main objective of this study is to provide insight on how Indonesian farmer preferences for crop attributes influence their adoption decisions. Results from a Latent Class (LC) cluster analysis, using the individual scores for each of the Best-Worst (BW) scaling attributes, indicate there are four clusters of farmers, each distinct in their relative preferences for crop attributes and socio-demographic characteristics. The multinomial endogenous treatment regressions show that preference cluster effect varies across models. For the binary adoption model, we find an insignificant preference cluster effect. We find a significant preference cluster effect both for the intensity of adoption and the timing of adoption models. The effects of farmers’ crop preference cluster, however, are different across those models. The findings allow more targeted programming and the development of information on specific cropping attributes that are most likely to encourage farmers to adopt new crops that have a high probability of offering benefits, including improved livelihoods for farmers.
    Keywords: Farmer Preferences, Crop Attributes, Horticultural Crop Adoption, BW Scaling, Agribusiness, Farm Management, International Development, Research and Development/Tech Change/Emerging Technologies, Q12, Q13, Q16,
    Date: 2015
  20. By: Russell Hillberry (The World Bank); Thibault Fally (University of California Berkeley)
    Abstract: International supply chains require coordination of numerous activities across multiple countries and firms. We develop a theoretical model in which the optimal organization of a supply chain involves a series of linked decisions that equate, at the margin, (domestic or international) transaction costs and the costs of coordinating more tasks within the firm. The parameters that govern the two types of costs explain variation in supply chain length as well as cross-country variation in gross output-to-value added ratios. Comparative advantage within chains depends solely on the coordination cost parameter. Conditional on participation in a chain, countries with lower coordination costs locate downstream. Within a chain, domestic transaction costs only aect countries' absolute advantage, but a country with large transaction costs tends to specialize in those chains for which its coordination costs are especially low. We provide an analytical treatment of trade and welfare responses to trade cost change in a simple two-country model. To explore the model's implications in a richer setting we calibrate the model to match key observables in East Asia, and evaluate implications of changes in model parameters for trade, welfare, the length of supply chains and countries' relative position within them.
    Date: 2015
  21. By: Denicoff, Marina R.; Prater, Marvin; Bahizi, Pierre
    Abstract: U.S. soybean farmers depend on transportation as the critical link between their fields and markets here and abroad. Since the early 1990s, U.S. soybean farmers have been responding to world demand for more protein feed for the growing meat and poultry sectors in developing economies, especially China. This report examines transportation implications of the recent trends and outlook for U.S. soybeans. Most U.S. soybeans are grown in the Upper Midwest and the Corn Belt. During the last 10 years, over 40 percent of production was exported on average each year, relying on barge and rail transportation to be shipped to port. Domestic demand by the livestock and poultry sectors is serviced by truck and rail. The United States is losing its world market share to South America which has lower cost of production, increasing the importance of U.S. transportation efficiency to competitiveness. The majority of soybean exports are shipped through the Mississippi Gulf Coast (60 percent of 2013 soybean exports), but when the spread of ocean shipping cost between the Mississippi Gulf Coast and the Pacific Northwest (PNW) exceeds $30, it generally leads to a greater proportion of Asia-bound soybeans being shipped by rail to ports in the PNW. The ocean rate is the main driver for the choice of port for export, because inland barge transportation to the Mississippi Gulf is usually more efficient and less expensive than rail.
    Keywords: soybean, rail, transportation, export, shipping, Agribusiness, Marketing,
    Date: 2014–10

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