nep-sea New Economics Papers
on South East Asia
Issue of 2018‒12‒17
24 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. ICT and Two Categories of R&D in the Innovation Process among Firms in ASEAN Countries Based on Firm-level Survey Data By Tsuji, Masatsugu; Ueki, Yasushi; Shigeno, Hidenori; Bunno, Teruyuki; Idota, Hiroki
  2. IFAD RESEARCH SERIES 27 - Asia’s rural-urban disparity in the context of growing inequality By Imai, S.K.; Malaeb, B.
  3. The Globalisation-Welfare State Nexus: Evidence from Asia By Niklas Potrafke
  4. Fiscal Constraints in the Financial System Stability Framework for Indonesian Data By Kindy R. Sjahrir
  5. The Biological Standard of Living in Indonesia during the 20th Century: Evidence from the Age at Menarche By van der Eng, Pierre; Sohn, Kitae
  6. The impact of ICT on regional economic growth: Empirical evidence from 34 provinces of Indonesia By Purnama, Yudi Adhi; Mitomo, Hitoshi
  7. Regulation for Cross-Border Privacy in Southeast Asia: An Institutional Perspective By Khumon, Prapanpong
  8. Long-term and Intergenerational Effects of Education: Evidence from School Construction in Indonesia By Richard Akresh; Daniel Halim; Marieke Kleemans
  9. IFAD RESEARCH SERIES 15 - Remittances, growth and poverty reduction in Asia By Bresciani, F.; Imai, K.S.; Malaeb, B.
  10. IFAD RESEARCH SERIES 20 - Transformation and diversification of the rural economy in Asia By Briones, M.R.
  11. IFAD RESEARCH SERIES 26 - Exploration of a methodology for assessing the impact of policy engagement: what impact and how to assess it? By McCord, A.; Heinemann, E.; Phillips, L.
  12. Institutional context and the typology of functions of national development banks. The case of Development Finance Institutions (DFIs) in Malaysia By Olga Mikheeva
  13. Mechanization Outsourcing Services in Myanmar's Dry Zone By Belton, Ben; Fang, Peixun; Reardon, Thomas
  14. Evaluating The Effect of Regional Trade Quota Policy on The Market Integration : A Case Study of The Indonesian Beef Industry By Utami, A.; Brummer, B.
  15. Lost Inflation? By Rod Tyers; Yixiao Zhou
  16. El financiamiento de la bioeconomía en países seleccionados de Europa, Asia y África Experiencias para América Latina y el Caribe By Rodríguez, Adrián G.; Aramendis, Rafael H.; Mondaini, Andrés O.
  17. Risk Preferences and Climate Smart Technology Adoption: A Duration Model Approach for India By Ray, M.; Maredia, M.; Shupp, R.
  18. IFAD RESEARCH SERIES 1 - Agricultural and rural development reconsidered: a guide to issues and debates By Wiggins, S.
  19. Inequalities in emerging economies: Informing the policy dialogue on inclusive growth By Carlotta Balestra; Ana Llena-Nozal; Fabrice Murtin; Elena Tosetto; Benoît Arnaud
  20. PISA for Development: Results in Focus By Michael Ward
  21. A Simple Model of Growth Slowdown By Katsuyuki Shibayama
  22. Small systems, big targets: power sector reforms and renewable energy development in small electricity systems By Rabindra Nepal; Lawrence Cram; Tooraj Jamasb; Anupama Sen
  23. Impact of Decentralized Electrification Projects on Sustainable Development: A Meta-Analysis By Jean-Claude Berthelemy; Arnaud Millien
  24. Strategically Simple Mechanisms By Tilman Borgers; Jiangtao Li

  1. By: Tsuji, Masatsugu; Ueki, Yasushi; Shigeno, Hidenori; Bunno, Teruyuki; Idota, Hiroki
    Abstract: This paper attempts to analyze the relationship between ICT and R&D in the innovation process. R&D is categorized into two types: R&D and non-R&D. The former is R&D conducted by specific R&D sections or units, whereas the latter is implemented without explicit or formal units. ICT use in this paper consists of two roles: (i) Internal use of ICT which includes ERP, CRM, CAD/CAM, Groupware, and Intra-SNS; and (ii) External use of ICT which consists of B2B e-commerce, B2C e-commerce, EDI, SCM, and Public-SNS. ICT total contains all of these. Research questions are as follows: (i) whether R&D and formal R&D groups have different innovation processes; (ii) what are the factors of production innovation in R&D groups; and (iii) how ICT use affects (i) and (ii). This study is based on mail surveys in five ASEAN economies, such as Vietnam (Hanoi and Ho Chi Minh City), Indonesia, Laos, the Philippines, and Thailand from 2013 to 2014. The total number of valid responses was 1,061. Ordered probit analysis was employed. The significant variables common to both groups are few. In the R&D group, "ICT total" and "Cross-functional team" was significant variables, whereas in non-R&D group, "ISO9000 series" and "HRD program for workers were significant. From the above estimation results, it is clear that ICT use is positively related to innovation in R&D group, indicating ICT more contributed to their innovation.
    Keywords: internal use,external use,ordered probit,HDR,learning,QC
    Date: 2018
  2. By: Imai, S.K.; Malaeb, B.
    Abstract: This study offers empirical evidence on the rural-urban gap in the context of growing inequality in Asia. First, China and India explain the trends in regional inequality given their large populations, signifying their importance as major contributors. Overall, China’s income inequality is characterized by rural-urban disparity, but the inequality within rural and within urban areas has worsened, although the country has experienced very high economic growth. India is mainly characterized by high inequality within urban areas, despite a sharp reduction in urban poverty. India’s rural-urban income gap has narrowed in recent years. We also find that the rural-urban income gap has narrowed in many other countries, such as Thailand and Viet Nam. Second, our econometric results on the agricultural and non-agricultural income gap suggest that a higher non-agricultural growth rate tends to widen the rural-urban gap over time, while agricultural growth is unrelated to the rural-urban gap. Third, the rural-urban human resources gap in terms of educational attainment has increased in both China and India. Policies that promote agricultural growth and rural education are deemed important not only for reducing rural poverty but also for narrowing the rural-urban human resources gap.
    Keywords: Community/Rural/Urban Development
    Date: 2018
  3. By: Niklas Potrafke
    Abstract: How globalisation influences social expenditure has been examined for industrialized countries. Globalisation has often been shown to be positively associated with social expenditure in established industrialized countries, a finding that corroborates the compensation hypothesis. Scholars have focused on industrialised countries, because social expenditure is difficult to measure in developing countries. I use new data on social expenditure for Asian non-OECD countries. Globalisation is measured by the new KOF Globalisation Index. My results do not suggest that globalisation influenced social expenditures in Asia. Neither do the results suggest that the nexus between globalisation and social expenditures varied across high-income countries, such as Hong Kong and Singapore, and lower-income Asian countries or across Asian regions. It is conceivable that Asian citizens did not demand increasing social support when globalisation proceeded rapidly because they enjoyed family and other private assistance. Asian countries also have weaker tax and labour market institutions than OECD countries and have therefore more difficulties in increasing social expenditure.
    Keywords: globalisation-welfare state nexus, compensation hypothesis, race-to-the-bottom hypothesis, social expenditure, Asia
    JEL: I38 O11 O57 C23
    Date: 2018
  4. By: Kindy R. Sjahrir (Fiscal Policy Office, Ministry of Finance. Republic of Indonesia)
    Abstract: A number of macroeconomic episodes such as the 2018 global financial crisis, the tantrum taper for 2013-2015 show that financial system stability is closely related to the real economic sector, monetary policy and public finance. The analysis of dynamic general equilibrium as a microeconomic characteristic of New Keynesian macroeconomics makes real cohesion of fiscal, monetary, financial and business cycles complex, ambiguous and complex due to the many factors that work in different directions. Literature studies show that until now there has been no consensus among mainstream economists about the criteria or standard definition of fiscal sustainability within the framework of financial system stability. This study aims to fill the gap for Indonesian quarterly data from 2005 to 2017. The research premise that fiscal sustainability is an important factor in financial stability, for Indonesian data, especially through the transmission of fiscal imbalances and the government debt crisis. The reverse effect of the shock of monetary imbalance on the fiscal crisis is the second research question in this study. The literature suggests that the growing interdependence between fiscal policy and the financial sector leads to strengthening the two-way relationship between fiscal sustainability and financial stability. Fiscal constraints in relation to financial system stability for Indonesian data are reformulated as applied economic analysis to explain (1) indicators of fiscal sustainability in Indonesia; (2) secure intertemporal dynamic limits on debt for fiscal solvency; and (3) explain fiscal transmission to the financial system and the opposite of solvent fiscal financing operations. For emerging market countries such as Indonesia, with financial markets still developing without the complications of derivative financial markets and expanding bonds between the central and regional governments - presumably inter temporal budgetary constraints can be an indication of the main criteria for fiscal sustainability. Adopting the concept of Bagnai, Alberto (2004) and Burnside, Craig (2005) conception of the transmission of fiscal sustainability and the financial system - including monetary in this study stems from the definition of twin deficits in the national accounts. Analysis of fiscal sustainability from debt solvency and its relationship vis-à-vis with the financial system is carried out through structural vector autoregression analysis of the dynamics of three research questions for endogenous public debt to the fiscal stance and primary fiscal balance. The main references to this approach are Favero and Giavazzi (2007, 2009) to analyze the effect of primary equilibrium on GDP growth using the narrative of Romer and Romer (2010) and the structure of Blanchard and Perotti (2002). Empirical studies on this working paper show that (1) the shock of fiscal risk to the financial system for Indonesia's data now is mutually reinforcing (empirical studies on this working paper show that fiscal risk from financial system risk with current Indonesian data is not mutually reinforcing), and (2) shock from the financial system does not have a permanent impact on the primary balance and debt-to-gdp ratio. Significant contagion potential from two-way feedback on fiscal risk and financial system risk with current Indonesian data, shock from primary balance and debt-to-gdp ratio have a permanent impact on loan interest rates, and the temporary impact on inflation and GDP growth. The results of the empirical analysis of the SVAR model of this study indicate that it is important to be able to conduct good supervision and governance over the development of primary balance and periodic debt-to-GDP ratio for financial system stability. Both indicators provide a portrait of fiscal balance for a certain period. While the transmission of fiscal sustainability to the real business, financial and monetary cycles can be observed from indicators of liquidity, solvency and fiscal sustainability. The effect of primary balance and debt-to-GDP ratio is derived from the identity of the flow of funds with a two-way feedback loop between the financial sector (banking and monetary) and the fiscal stance.
    Keywords: Structural Autoregressive, Fiscal Constraints in Financial System Stability Framework, Indonesian Data, Financial Sector Stability and Fiscal Policy
    JEL: G28
    Date: 2018–12
  5. By: van der Eng, Pierre; Sohn, Kitae
    Abstract: This paper analyses long-term changes in the mean age at menarche (MAM) as a biological indicator of changes in the standard of living in Indonesia. It finds that MAM was about 15.5 for birth cohorts in the late-19th century, decreasing to 14.5 by the 1930s, at which level it stagnated until the gradual decrease resumed since the early 1960s to around 12.5 in the mid-2000s. The paper considers that long-term improvements in nutrition, educational attainment and health care explain these trends. An international comparison of long-term changes finds that MAM in Indonesia was much lower than in Korea and China until respectively 1970 and 1990, but comparable to Japan until 1950 and to Malaysia until 1930. The paper presents reasons why these differences are unlikely to be related to dissimilarities in climate and ethnicity, and concludes that they are indicative of relative standards of living.
    Keywords: living standards, human growth, menarche, Indonesia, Asia
    JEL: I12 I31 N15 O15
    Date: 2018–11
  6. By: Purnama, Yudi Adhi; Mitomo, Hitoshi
    Abstract: Rapid ICT development in recent decades has attracted substantial consideration from academia. Moreover, many studies suggest the advancement of mobile technology has the substantial effect on development, especially in developing countries. Despite the massive adoption of mobile communication, there is a sparse study on emerging economy. Furthermore, Indonesia as a coastal nation has diverse social and geographical state, which affected the different impact of mobile adoption on the regional economy. In this study, we address the question on the mobile impact of the economy of 34 provinces in Indonesia by exploiting panel data for the 2009-2017 period with fixed effect model. Finding from our study present evidence the mobile adoption has positive relationships with economic growth especially in low-income per capita region. Moreover, we also found province with higher growth has benefited from more extended education level. Another interesting evidence suggests province with lower economic growth experienced higher income per capita. The government, business and society should consider the finding, especially on ICT development at the regional level.
    Keywords: Regional Development,ICT,Mobile adoption,economic growth,fixed effect model,Klassen typology
    Date: 2018
  7. By: Khumon, Prapanpong
    Abstract: Free flow of cross-border data is important for a creation of a data-driven innovation. There is a global challenge on balancing business gains from unrestricted cross-border data flows with protection of personal data. While cross-border privacy is a global subject of regulation, only few countries in Southeast Asia have implemented data privacy laws. There have been initiatives in the region to harmonize rules on cross-border data transfers such as the APEC, the RCEP, and a newly proposed ASEAN e-commerce Agreement but they have not been concrete enough to offer a harmonization. The main challenge in the region is fragmentation since countries in the region accede to different instruments that have different principles on cross-border data privacy. Each jurisdiction still employs different standards on privacy protections. The lack of harmonized practices creates hurdles for intra-regional data transfers and protection of data privacy. The paper proposes a unifying approach for the region to avoid duplication with existing mechanisms. Rather than creating a new mechanism, the new approach will need to recognize and supplement compatibility with different frameworks. The proposed ASEAN Agreement on E-Commerce, expected to be finalized by the end of 2018, should carry out this unifying function to promote interoperability. In principles, it needs to be aligned with APEC's Cross Border Privacy Rules. A regional recognition scheme should be established to verify that a given country meets a sufficient level of personal data protection. There needs to be a technical assistance to developing countries that have limited resources in enacting and implementing data protection regulation.
    Keywords: Data privacy regulation,cross-border data transfers,Southeast Asia
    Date: 2018
  8. By: Richard Akresh; Daniel Halim; Marieke Kleemans
    Abstract: In 1973, the Indonesian government began one of the largest school construction programs ever. We use 2016 nationally representative data to examine the long-term and intergenerational effects of additional schooling as a child. We use a difference-in-differences identification strategy exploiting variation across birth cohorts and regions in the number of schools built. Men and women exposed to the program attain more education, although women’s effects are concentrated in primary school. As adults, men exposed to the program are more likely to be formal workers, work outside agriculture, and migrate. Households with parents exposed to the program have improved living standards and pay more government taxes. Education benefits are transmitted to the next generation. Increased parental education has larger impacts for daughters, particularly if mothers are exposed to school construction. Intergenerational results are driven by changes in the marriage partner’s characteristics, with spouses having more education and improved labor market outcomes.
    JEL: I2 J13 J62 O15 O22
    Date: 2018–11
  9. By: Bresciani, F.; Imai, K.S.; Malaeb, B.
    Abstract: Remittances have increased in low-income and lower- middle-income countries in recent years, playing an important role as a stable source of finance at the macro-level, and in poverty reduction at the micro-level. Drawing on a critical review of the literature and econometric analyses based on cross-country panel data, this study examines the relationships among remittances, growth and poverty reduction in Asia and the Pacific and highlights policy implications to be considered by governments and policy-makers.
    Keywords: Agricultural Finance
    Date: 2017
  10. By: Briones, M.R.
    Abstract: This paper examines the transformation and diversification of the rural economy in Asia, focusing on the role and importance of the rural non-farm economy and employment in economic transformation and related diversification of employment and income opportunities for rural communities. Looking at the linkages across sectors (agriculture and others) and across regions (urban and rural), the paper stresses the role of agriculture and urban centers as key drivers of the rural non-farm economy. It considers strategic directions to be pursued to leverage diversification opportunities for rural economies to reduce rural poverty and inequality.
    Keywords: Community/Rural/Urban Development
    Date: 2018
  11. By: McCord, A.; Heinemann, E.; Phillips, L.
    Abstract: While policy engagement is increasingly considered a key dimension of development cooperation, there have been few attempts by development agencies to systematically monitor and evaluate the impact of their work in this area. In recent years, the International Fund for Agricultural Development (IFAD) has sought to strengthen its engagement in country-level policy processes, and to develop a range of tools to more effectively monitor and evaluate this work. In this context, it commissioned a piece of work to develop and test a methodology for assessing its policy impact. The exercise served to review four purposively sampled IFAD policy engagement activities, in India, Indonesia, Nepal and Viet Nam, and analyse their impact; identify the factors contributing to, or limiting, the outcomes achieved and draw out lessons for future policy work; and propose a replicable methodology that could be used for similar exercises elsewhere. The methodology was found to provide, in a relatively short period of time, an independent appraisal of IFAD’s role and effectiveness in relation to the policy issues in question, based on multiple external perspectives. The paper concludes that the methodology offers a credible, cost-effective and potentially replicable approach to appraising policy impact, both within IFAD and for other development agencies conducting policy-related activities, and it makes suggestions on strengthening the methodology and increasing its operational relevance.
    Keywords: Agricultural and Food Policy
    Date: 2018
  12. By: Olga Mikheeva
    Abstract: Conceived as policy institutions, development banks are specialized finan- cial firms that follow a dual mandate: to operate in line with developmen- tal goals and to be financially sustainable. At the same time, emerging literature on mission-oriented finance and development banks tends to focus on their policy roles while overlooking the overall institutional land- scape, which affects such specialized financial institutions. Following institutionalist approach, the study looks at how Malaysia’s development finance institutions (DFIs) evolved over time and how they have been positioned in the overall policy landscape. Following a historical descrip- tion of Malaysia’s specialized development banks, the study proposes a contextualized institutional framework and the typology of functions per- formed by national development banks, which can be further applied to other national contexts and especially in comparative studies.
    Date: 2018–12
  13. By: Belton, Ben; Fang, Peixun; Reardon, Thomas
    Abstract: EXECUTIVE SUMMARY Outsourcing enterprises that rent out agricultural machinery with operators to farm households have been vital to facilitating rapid agricultural mechanization in Myanmar over the past five years. This report presents results from the first ever study of agricultural machinery outsourcers in Myanmar. One hundred and twenty two outsourcing enterprises were surveyed in 12 Dry Zone townships in December 2017. These included 79 enterprises providing four-wheel tractor (4WT) outsourcing services, 32 providing combine harvester (CH) services, and 11 offering both CH and 4WT services. The following results stand out: Outsourcing of CH and 4WT services is a recent phenomenon, and has expanded extremely rapidly: 88% of 4WT and 94% of CH owned by surveyed outsourcers were purchased during or after 2014. However, purchases of both 4WT and CH slowed in 2017, suggesting that market maturation is beginning. The total area harvested by CH outsourcing enterprises grew 1240% from 2013 to 2017, while that serviced by 4WT outsourcers grew 900%. The average area of land harvested by each CH outsourcing enterprise annually grew from 101 ha in 2013 to 114 ha in 2015, shrinking thereafter as greater competition emerged, to reach 86 ha in 2017. The average area of land worked by 4WT outsourcers was stable from at around 150 ha from 2014 onwards. Agricultural machinery outsourcing enterprises are small businesses. The vast majority own a single machine and are also farmers. Their farms are toward the upper end of the farm size distribution, but they are not large landowners or companies. Agricultural machines were purchased mainly from private machinery supply businesses. This was the case for all CH, and three-quarters of 4WT, despite government efforts to promote tractor sales through the Department of Cooperatives. Machine purchases have been facilitated by access to formal finance. Two-thirds (64%) of CH and just over half (54%) of 4WT were purchased using financing from a bank or machinery dealership. Purchases of 4WT made using credit obtained from government sources accounted for 19% of sales. The introduction of transferrable land use rights (Form 7) has facilitated access to formal finance. Form 7 was used to guarantee almost all machinery loans provided by banks. Provision of outsourcing services is highly profitable. Most of the capital costs of CH outsourcing enterprises can be recovered within two years. Repayment periods are slightly longer for 4WT outsourcing enterprises, but almost all 4WT outsourcers were able to repay loans in full on time. Very few owners or operators of CH or 4WT received formal training on how to use them. Among individuals who had received training, nearly all were trained by machinery supply businesses. Fees charged by outsourcers have remained stable or become cheaper in real terms, indicating the existence of competitive markets. CH enterprises initially served local markets but have expanded their geographical coverage over time, from a ‘core’ of irrigated paddy cultivating areas around Shwebo to other areas of the Dry Zone, the Delta and Bago. Provision of 4WT outsourcing services is much more localized than CH outsourcing. New specialized economic actors and markets for services have emerged extremely quickly in response to opportunities created by the growth of agricultural machinery outsourcing in the areas of: (1) 3rd party transport services; (2) brokers organizing groups of clients; (3) skilled machine operators. Transport logistics from 3rd party providers have lowered entry barriers into CH outsourcing by removing the need to own or operate vehicles used to transport CH. This makes it possible for CH outsourcers to offer services in distant locations without having to visit them in person Brokers acting as intermediaries between prospective service users and CH outsourcing enterprises have largely replaced self-organized groups, conferring advantages to both CH outsourcing enterprises and their customers. CH outsourcers have replaced their own labor with that of hired machine operators, freeing up their own time to engage in activities such as farming or non-farm business.
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Food Security and Poverty, International Development
    Date: 2018–09–24
  14. By: Utami, A.; Brummer, B.
    Abstract: This paper aims at analyzing the effect of regional trade quota policy to the market integration in the Indonesian beef industry which combines both vertical and spatial analysis. A panel co-integration approach was employed using monthly data covering nine producer areas and 18 consumer areas during 2008 until 2014. The degree of market integration was analyzed by applying a panel heterogeneous model developed by Pesaran-Shin and Smith (1999) from 117 trade pairs. The results found that the quota policy has a significant effect in the adjustment process between prices along the supply chain in the whole trade pairs. The study also confirmed the significant effects of several other variables representing the trade cost, and the degree of self-sufficiency rate in explaining the transmission of prices. Acknowledgement :
    Keywords: Agricultural and Food Policy
    Date: 2018–07
  15. By: Rod Tyers (Business School, University of Western Australia and Research School of Economics, Centre for Applied Macroeconomic Analysis (CAMA), Australian National University); Yixiao Zhou (School of Economics and Finance, Curtin Business School, Curtin University)
    Abstract: Concern about “lost inflation” has been heightened recently by the apparent inability of central banks in the largest democracies, a decade beyond the GFC, to restore their “safe” CPI inflation ranges. This paper examines the deflationary forces against which monetary policy is now aligned, namely migration, the race to the bottom in capital taxation, and biased technical change, and assesses the consequences looking forward. While inflation rates have edged lower over the past two decades the most important change has been declines in long maturity yields, initially driven by strong growth in high-saving Asia and by redistribution in the advanced economies to high-saving households, and bolstered subsequently by return pessimism due to low growth in measured productivity. Ironically, today’s low rates also stem from conventional monetary policy failure, expanded central bank balance sheets and the resulting global “bond bubble”. Future monetary policy effectiveness as deflationary forces continue will depend in the advanced economies on government interventions to address underlying inequality and financial market “normalisation”.
    Keywords: Inflation, productivity, automation, income distribution, tax, transfers, general equilibrium analysis
    JEL: D33 E52 J11 O33
    Date: 2018
  16. By: Rodríguez, Adrián G.; Aramendis, Rafael H.; Mondaini, Andrés O.
    Abstract: Con el propósito de orientar el desarrollo de instrumentos para el fomento de la bioeconomía en América Latina y el Caribe, este documento revisa instrumentos de financiamiento destinados al fomento a la innovación en la bioeconomía en países europeos, africanos y asiáticos, enfatizando el desarrollo de instrumentos orientados a micro, pequeñas y medianas empresas (mipymes y pymes). Los países incluidos en el estudio disponen de estrategias relevantes para el desarrollo de la bioeconomía y en la selección se consideró que dispusieran de políticas de financiamiento a la innovación o de políticas de fomento mediante la clusterización con centros superiores de investigación.
    Date: 2018–12–07
  17. By: Ray, M.; Maredia, M.; Shupp, R.
    Abstract: This paper examines the role of individual risk preferences in the decision of a climate smart technology in two northern states of India. We conducted a household survey and a field experiment using real cash with Indian farmers to elicit their risk preferences, and used them to explain their adoption of laser land leveler. The analysis extended the measurement of risk preferences beyond the expected utility theory to incorporate prospect theory. We use duration analysis approach to model the time to adoption and find that risk averse farmers and farmers who overvalue smaller probabilities adopt his technology sooner than others. Acknowledgement : We are really thankful to strengthening Impact Assessment in the CGIAR and Michigan State University's Asian Study Center for thier generous funding for this study.
    Keywords: Research and Development/ Tech Change/Emerging Technologies
    Date: 2018–07
  18. By: Wiggins, S.
    Abstract: This paper is a guide to current debates about agricultural development. It analyses the changes in development approaches and thinking in recent decades and explores today's critical issues in agricultural and rural development policy. With the main focus on Africa, the paper also includes insights from Asia and Latin America.
    Keywords: Agricultural and Food Policy
    Date: 2016–11–30
  19. By: Carlotta Balestra (OECD); Ana Llena-Nozal (OECD); Fabrice Murtin (OECD); Elena Tosetto (OECD); Benoît Arnaud (OECD)
    Abstract: The paper describes inequality trends in selected emerging economies (Brazil, Colombia, Costa Rica, China, India, Indonesia and South Africa) in a range of monetary (i.e. income) and non-monetary dimensions of people’s life (i.e. education, health status, employment and subjective well-being). Inequalities are analysed not only in terms of overall dispersion, but also as gaps between population groups defined by specific characteristics (i.e. sex, age, educational attainment and place of living). To the extent made possible by the nature of available data, measures of income inequality for these emerging countries, as well as for 7 Latin American countries (Bolivia, Dominic Republic, Ecuador, Panama, Paraguay, Peru and Uruguay), are based on concepts and definitions similar to those used by the OECD for its member countries. All the emerging economies covered in the paper show levels of income inequality higher than in the five most unequal OECD countries, while the picture is more mixed when it comes to inequalities in other dimensions of people’s well-being. An annex complements the analysis by presenting an assessment of the quality of the available data on income distribution for the emerging countries covered in the paper.
    Keywords: database, emerging economies, inequality, poverty, well-being
    JEL: D31 D63 I14 I24 I32 J01
    Date: 2018–12–13
  20. By: Michael Ward (OECD)
    Abstract: Building on the experience of working with middle-income countries in PISA since 2000, and in an effort to respond to the emerging demand for PISA to cater to a wider range of countries, the OECD launched the PISA for Development (PISA-D) initiative in 2014. This one-off pilot project, spanning six years, aims to make the assessment more accessible and relevant to low-to-middle-income countries.A key component of PISA-D was building capacity in the participating countries for managing large-scale student learning assessments and using the results to support national policy dialogue and evidence-based decision-making.Around 37 000 students completed the school-based assessment, representing about one million 15-year-old students (in grade 7 or above) in the schools of the seven participating countries: Cambodia, Ecuador, Guatemala, Honduras, Paraguay, Senegal and Zambia. On average across PISA-D countries, only 43% of all 15-year-olds were enrolled in at least grade 7 by age 15 and were eligible to sit the PISA-D test, compared to the OECD average of 89%. The remaining 15-year-olds were either in grades below 7 or were out of school. In Cambodia, Senegal and Zambia, only around 30% of 15-year-olds were eligible to sit the PISA-D test.
    Date: 2018–12–11
  21. By: Katsuyuki Shibayama
    Abstract: This paper studies a simple endogenous growth model to explain growth slowdowns. It is designed to explain, for example, the middle income trap often observed in the south-east Asian countries, the U.K.'s productivity puzzle after the Great Recession and the lost decades of Japan in a unified framework. It is based on the Romer's (1990, JPE) variety expansion model with additional state variable, which we call the R&D environment. The R&D environment is a sort of social capital that captures the research network and culture, society's attitude towards research activities, and so on. Together with the non-negativity constraint of the labour supply, this additional state variable generates multiple steady states (balanced growth paths, BGPs). The model has three BGPs, of which the middle one is unstable (explosive) while the other two satisfy the saddle path stability with high and low R&D activities. Without stochastic shocks, the model exhibits strong initial state dependency, meaning that even only small difference in the initial state could lead to a large difference in the long-run. With stochastic shocks, occasional shifts between two stable BGPs can occur. The model offers an intuitive explanation why a financial shock is particularly important for growth slowdowns. Interestingly, before a growth slowdown, a financial malfunctioning raises the stock return. Finally, our model is fairly realistic in the sense that it allows us to do calibration exercises which are rather standard in the business cycle studies.
    Keywords: endogenous growth; growth slowdown; dynamic stochastic general equilibrium model; middle-income trap; natural resource curse; productivity puzzle; R&D; official development assistance
    JEL: E3 O3 O4
    Date: 2018–11
  22. By: Rabindra Nepal (CDU Business School, Charles Darwin University); Lawrence Cram (Charles Darwin University); Tooraj Jamasb (Durham University Business School); Anupama Sen (Oxford Institute for Energy Studies)
    Abstract: The dominant focus of much policy attention of late has been on the suitability of electricity market reform carried out under the ‘standard’ or prescriptive approach – the end point of which is market liberalization – for the integration of intermittent renewables. There is now a growing consensus around the argument that traditional energy-only electricity markets where prices are based on system marginal cost cannot function efficiently with both fossil fuels and renewables, potentially resulting in market disruptions and price volatility. Consequently, most policy discussion has focused on finding ways to successfully integrate the two through adopting advanced competitive solutions (such as the use of capacity markets in addition to energy-only markets) in larger systems. We however argue that the effectiveness of competition is limited by the size of the system – i.e., there is a minimum threshold size (and other characteristics such as tropical locations, lack of access, and the prevalence of remote consumers) under which competition will not produce expected outcomes, and require distinctive policy solutions. This paper contributes to the policy discourse by discussing the reform of small electricity systems to integrate renewable energy via the means of three case studies: Nicaragua, El Salvador, and their application to Australia’s Northern Territory. The paper draws some policy lessons that can be considered for other small electricity systems in island economies and territories across Africa, the Caribbean, and the Asia-Pacific, that are pursuing a triad of objectives including electricity sector reform, large-scale renewables development and improving energy access.
    Keywords: Electricity, reforms, renewables, island economies, territories
    JEL: D04 L94 Q48 L51
    Date: 2017
  23. By: Jean-Claude Berthelemy (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Arnaud Millien (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper is the first product of a project which aims to build a Collaborative Smart Mapping of Mini-grid Action (CoSMMA), whose principal objective is to identify best practice in decentralized electrification projects. By evaluation of 421 projects, from published research papers, we have built a pilot CoSMMA which proves its feasibility. Its relevance is demonstrated by a meta-analysis, which reveals the principal characteristics of decentralized electrification projects which have positive impacts on sustainable development. Four main characteristics were considered: technology (source or energy), system size (power), decision level (from local to country level), geographic location. When searching for best practice, technology and system size must be considered together, because the chosen technology may constrain the power, which is provided by the system. We find that the most popular projects, which are based on Solar Home Systems (SHS) are not the most effective. The problem with SHS is not the use of solar energy, but the small system size often chosen for SHS. Mini-grids, of larger size, especially those which use hybrid renewable sources of energy, have more positive impacts, because these systems combine the benefits of sustainability and flexibility. In terms of decision level, we find that both top-down and bottom-up approaches have advantages, with the observation of a U-shaped curve for the influence of the decision level on the probability of obtaining positive impacts. Geographical location matters, as it is very often the key to system feasibility. We find that DEPs are more effective in Latin America than in Asia, and more effective in Asia than in Africa. We also attempted to study the type of effects resulting from DEPs. Descriptive data suggest that for some types of effects, positive impacts are more likely than for others. Decentralized electrification projects have a more positive impact on Lifestyle & NICT or Household agenda than on Economic transformation or Community life. However, this pilot CoSMMA does not contain enough information to study precisely the types of effects, because some types of effects have not been studied frequently in the existing literature. This is the case, for instance, for environmental effects, which have been rarely measured scientifically. Finally, we attempted to broaden our information set by including expert data, which was entered into the CoSMMA meta-analysis. We define expert data as data that are not supported by statistical tests with measures of significance, whereas the evaluations based on scientific data were supported by statistical tests of significance. The expert data may be valid, but our attempt to include it in the analysis failed at this stage. The determinants of unproven effects appear to be quite different from the determinants of proven effects in our meta-analysis, and using expert data would imply merging proven and unproven effects, which would totally blur the conclusions.
    Keywords: Decentralized electrification,sustainable development,impact assessment,meta-analysis
    Date: 2018–11–15
  24. By: Tilman Borgers (Department of Economics, University of Michigan); Jiangtao Li (Dept. of Economics, National University of Singapore (NUS))
    Abstract: We de?ne and investigate a property of mechanisms that we call “strategic simplicity,” and that is meant to capture the idea that, in strategically simple mechanisms, strategic choices require limited strategic sophistication. We de?ne a mechanism to be strategically simple if choices can be based on ?rst-order beliefs about the other agents’ preferences and ?rst-order certainty about the other agents’ rationality alone, and there is no need for agents to form higher-order beliefs, because such beliefs are irrelevant to the optimal strategies. All dominant strategy mechanisms are strategically simple. But many more mechanisms are strategically simple. In particular, strategically simple mechanisms may be more flexible than dominant strategy mechanisms in the bilateral trade problem and the voting problem.
    Keywords: Mechanism design, Complexity
    JEL: D82
    Date: 2018–12

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