nep-sea New Economics Papers
on South East Asia
Issue of 2019‒05‒20
twenty-one papers chosen by
Kavita Iyengar
Asian Development Bank

  1. The Role of Electricity Prices in Structural Transformation: Evidence from the Philippines By Majah-Leah V. Ravago; Arlan Zandro I. Brucal; James Roumasset; Jan Carlo Punongbayan
  2. Pro-poor growth in Indonesia: Challenging the pessimism of Myrdal’s Asian Drama By Timmer Peter
  3. Escaping the periphery: The East Asian ‘mystery’ solved By Wade Robert
  4. IFAD IMPACT ASSESSMENT - Irrigated rice production enhancement project (IRPEP): Philippines By Aslihan, Arslan; Daniel, Higgins; Paul, Winters; Fabrizio, Bresciani
  5. Farming efficiency, cropland rental market and welfare effect: Evidence from panel data for rural Central Vietnam By Nguyen, Trung Thanh; Tran, Viet Tuan; Nguyen, Thanh-Tung; Grote, Ulrike
  6. Institutions and Asia’s development: The role of norms and organizational power By Khan Mushtaq
  7. Nationalism and development in Asia By Duara Prasenjit
  8. Local Best Practices for Business Growth By Dalton, Patricio; Rüschenpöhler, Julius; Uras, Burak; Zia, Bilal
  9. Fifty years of Asian experience in the spread of education and healthcare By Mundle Sudipto
  10. Gunnar Myrdal and Asian Drama in context By Kanbur Ravi
  11. Early life shocks and mental health: The long-term effect of war in Vietnam By Singhal Saurabh
  12. Poverty and inequality in Asia: 1965-2014 By Wan Guanghua; Wang Chen
  13. Puzzle me this? : The Vietnamese reverse gender education gap By Mergoupis Thanos; Phan Van; Sessions John
  14. Consumers’ Perception of Food Safety Risk From Vegetables: A Rural - Urban Comparison By Thanh Mai Ha; Shamim Shakur; Kim Hang Pham Do
  15. Housing Equity and Household Consumption in Retirement: Evidence from the Singapore Life Panel By Chen, Lipeng; Jiang, Liang; Phang, Sock Yong; Yu, Jun
  16. Revisiting the methodology of Myrdal in Asian Drama 50 years on By Stewart Frances
  17. A macroeconomic perspective on Asian development By Bhaduri Amit
  18. Climate change, rice production, and migration in Vietnamese households By Ricciuti Roberto; Baronchelli Adelaide
  19. China’s growth miracle in the context of Asian transformation By Lin Justin
  20. Does union membership pay off?: Evidence from Vietnamese SMEs By Torm Nina
  21. Illusion of gender parity in education: Intrahousehold resource allocation in Bangladesh By Xu, Sijia; Shonchoy, Abu S.; Fujii, Tomoki

  1. By: Majah-Leah V. Ravago (Department of Economics, Ateneo de Manila University); Arlan Zandro I. Brucal (Grantham Research Institute on Climate Change and the Environment, The London School of Economics and Political Science,); James Roumasset (University of Hawaii at Manoa); Jan Carlo Punongbayan (University of the Philippines)
    Abstract: The Philippines provides an extreme example of Rodrik’s observation that late developing countries experience deindustrialization at lower levels of per capita income than more advanced economies. Previous studies point to the role of protectionist policies, financial crises, and currency overvaluation as explanations for the shrinking share of the industry sector. We complement this literature by examining the role of electricity prices in the trajectory of industry share. We make use of data at the country level for 33 countries over the period 1980-2014 and at the Philippine regional level for 16 regions over the period 1990-2014. We find that higher electricity prices tend to amplify deindustrialization, causing industry share to turn downward at a lower peak and a lower per capita income, and to decline more steeply than otherwise. In a two-country comparison, we find that power-intensive manufacturing subsectors have expanded more rapidly in Indonesia, where electricity prices have been low, whereas Philippine manufacturing has shifted toward less power intensive and more labor-intensive subsectors in the face of high electricity prices.
    Keywords: electricity prices, structural transformation, deindustrialization
    JEL: O10 O14 Q40 Q41
    Date: 2019–02
  2. By: Timmer Peter
    Abstract: This chapter addresses the unrelenting pessimism in Asian Drama about Indonesia’s development prospects. This pessimism was based on two key realities: the poor level of governance demonstrated by the Sukarno regime (partly a heritage of Dutch colonial policies) and the extreme poverty witnessed in rural areas.Using historical and modern data on the Indonesian economy, the chapter explains the policy approach that resulted in three decades of rapid, pro-poor growth during the Suharto regime.The Asian financial crisis in 1998 caused the Suharto regime to fall and introduced democratically elected governments. After a decade of stagnation, economic growth returned to the rapid rate seen during the first three decades of the Suharto regime, but it is no longer pro-poor.Â
    Keywords: Governance,Growth,Gunnar Myrdal,Pro-poor,Poverty
    Date: 2018
  3. By: Wade Robert
    Abstract: Few non-western countries have reached the general prosperity of Western Europe and North America in the past two centuries. The core–periphery structure of the world economy created in the early decades of the Industrial Revolution has proved robust, even after seven decades of self-conscious ‘development’ following the Second World War.Just about all the countries which were in the periphery in 1960 remain in the periphery today. The clearest exceptions are in capitalist Northeast Asia, namely, Japan, Taiwan, and South Korea; to which the island states of Singapore and Hong Kong might be added. How did they escape?
    Keywords: Growth,state capacity
    Date: 2018
  4. By: Aslihan, Arslan; Daniel, Higgins; Paul, Winters; Fabrizio, Bresciani
    Abstract: Smallholder rice farming is central to poverty reduction, food security, and rural development in the Philippines. Currently, rice affordability is threatened by the country's protectionist approach to rice imports and low production efficiency. One key issue is that around 41 percent of the country's irrigable land is not irrigated. Moreover, many irrigation systems are suggested to be poorly managed with unequal water distribution. The Irrigated Rice Production Enhancement Project (IRPEP) was implemented in three regions (VI, VII and X) of the Philippines between 2010-2015. It was designed to improve rice productivity and smallholder livelihoods by strengthening canal irrigation infrastructure of Communal Irrigation Systems (CIS), improving the capacity of the Irrigators' Associations (IAs) that manage the CIS, and offering complementary marketing support, Farmer Field Schools, and emergency seed buffer stocks. As the government provides FFS and buffer stocks to farmers across the country, we focus the assessment on the irrigation and marketing activities only. We define the impact indicators based on IRPEP's theory of change, which maps the inputs and activities of the project to outcomes and impacts through various channels. The analysis is based on quantitative data from 2,104 households and 113 IAs covering beneficiary and non-beneficiary groups, along with qualitative data from project and IA staff. We estimate IRPEP's impact by comparing beneficiary and non-beneficiary households and IAs using statistical matching techniques to ensure a clean and unbaised comparison. We then use the qualitative data to try to identify the underlying factors that shaped the results. We particularly focus our analysis on regional heterogeneities in impacts because of the considerable differences between the three project regions. The main difference between regions stems from their varying levels of exposure to extreme weather events (e.g. super typhoons), as Region VIII, and to a lesser extent Region VI, experienced significant extreme weather damage during the project's implementation.
    Keywords: Community/Rural/Urban Development, Food Security and Poverty
    Date: 2018
  5. By: Nguyen, Trung Thanh; Tran, Viet Tuan; Nguyen, Thanh-Tung; Grote, Ulrike
    Abstract: Using panel data of more than 1,000 rural households from three rural provinces in Vietnam, we find that farming efficiency is a driver of cropland rental market development that enhances land use efficiency and results in an overall income gain for market participants. Our findings highlight the importance of cropland rental markets in facilitating economic transformation in rural areas of rapidly growing economies, but also indicate the need to take care of the poor to ensure that they are not left behind.
    Keywords: Land Economics/Use
    Date: 2019–04–28
  6. By: Khan Mushtaq
    Abstract: The role of institutions in Asian development has been intensely contested since Myrdal’s Asian Drama, with later contributions from institutional economics and developmental state theory.Despite much progress, the dominant approaches do not agree about the institutions that matter nor do they explain why similar institutions delivered such different results across countries.Cultural norms and informal institutions clearly matter but the appropriate norms did not already exist in successful countries; they evolved over time. The distribution of holding power across different types of organizations, the ‘political settlement’, can explain the diversity of experiences and help to develop more effective policy.
    Keywords: Norms,Organizations,Political settlements,Development,Industrial policy,Institutions
    Date: 2018
  7. By: Duara Prasenjit
    Abstract: This paper identifies historic patterns in the dialectic between nationalism and development across various East, South, and Southeast Asian nations. Nationalism as the rationale for development is used by regimes to achieve high levels of growth, but also generates exclusivism and hostilities, often in order to integrate a political core.Popular nationalism has also dialectically reshaped the goals and patterns of development during the post-Second World War period. The region is divided into zones shaped by twentieth-century historical and geo-political conditions.Colonial and Cold War conditions were as important as internal political and ethnic circumstances. Turning points in the dialectical relationship were common within a region. More recently, a common transregional pattern has emerged with neoliberal globalization being accompanied by exclusivist nationalism.
    Keywords: Colonialism,Nationalism,War
    Date: 2018
  8. By: Dalton, Patricio (Tilburg University, Center For Economic Research); Rüschenpöhler, Julius (Tilburg University, Center For Economic Research); Uras, Burak (Tilburg University, Center For Economic Research); Zia, Bilal
    Abstract: Can best practices of successful business peers influence the efficiency and growth of small-scale enterprises? Does it matter how this information is disseminated? This paper conducts a field experiment among urban retail shop owners in Indonesia to address these research questions. Through extensive baseline quantitative and qualitative assessments, we develop a handbook of local best practices that associates specific business practices with performance and provides detailed implementation guidance informed by exemplary local shop owners. The handbook is distributed to a randomly selected sample of shop owners and is complemented with three experiential learning modules: one group is invited to watch a documentary video on experiences of highly successful peers, another is offered light in-shop assistance on the implementation of the handbook, and a third group is offered both. Eighteen months after the intervention, we find no effect of offering the handbook alone, but significant impact on practice adoption when the handbook is coupled with experiential learning. On business performance we find sizable and significant improvements as well, up to a 35% increase in profits and 16.7% in revenues. The types of practices adopted map these performance improvements to efficiency gains rather than other channels. The analysis suggests these interventions are simple, scalable, and highly cost-effective.
    Keywords: business practices; small-scale enterprises; peer knowledge; efficiency gains; sicoal learning
    JEL: O12 L26 M20 O31 O33 O17 M50
    Date: 2019
  9. By: Mundle Sudipto
    Abstract: This paper analyses the dramatic spread of education and healthcare in Asia and also the large variations in that spread across and within countries over 50 years.Apart from differences in initial conditions and income levels, the nature of the state has also been an important determinant of these variations. This is because social development has typically been led by the state.But in most countries, public resource constraints and the growing dependence on private provision and private spending have generated a pattern of nested disparities in the access to education and healthcare between rich and poor regions, between rural and urban areas within regions, and between rich and poor households within these areas.However, as the better-off regions, areas, and households approach the upper limits of achievable education and health standards, a process of convergence is also underway as those left behind begin to catch up.
    Keywords: Healthcare,Inequality,State,Education
    Date: 2018
  10. By: Kanbur Ravi
    Abstract: This paper attempts to understand Asian Drama in the context of the development debates of its time, and in terms of the sensibilities that Gunnar Myrdal—the brilliant economic theorist and philosopher of knowledge, and Swedish politician—brought to the conceptualization of the problems and prospects of development.The paper covers: (1) what Gunnar Myrdal brought to the analysis of development from his long, varied, and distinguished academic and practitioner career; (2) the development terrain in the mid-twentieth century; and (3) how Asian Drama lay on that terrain and in the remaining years of Gunnar Myrdal’s continued eventful life.The two central questions posed in the paper are: (1) How did Gunnar Myrdal’s broad experience and perspective influence Asian Drama? (2) How did Asian Drama influence the development debate?
    Keywords: States and elites,Elites,Gunnar Myrdal
    Date: 2018
  11. By: Singhal Saurabh
    Abstract: This paper provides causal evidence on early-life exposure to war on mental health status in adulthood. Using an instrumental variable strategy, the evidence indicates that early-life exposure to bombing during the American war in Vietnam has long-term effects.A one percent increase in bombing intensity during 1965–75 increases the likelihood of severe mental distress in adulthood by 16 percentage points (or approximately 50 percent of the mean) and this result is robust to a variety of sensitivity checks. The negative effects of war are similar for both men and women. These findings add to the evidence on the enduring consequences of conflict and identify a critical area for policy intervention.
    Keywords: Conflict,Health outcomes,Mental health,War
    Date: 2018
  12. By: Wan Guanghua; Wang Chen
    Abstract: This paper aims to depict the post-Second World War poverty and inequality trends in Asia, its sub-regions, and individual economies.Efforts are made to explain these trends and explore the interrelationship between growth, poverty, and inequality in Asia. Analytical results confirm significant reductions in poverty across the board due to fast growth, although the benign effect of growth on poverty was offset by worsening distribution in many economies.Looking ahead, Asia is expected to eradicate poverty but likely to continue facing high inequality, particularly as major technology breakthroughs such as artificial intelligence and the internet of things replace more and more labour.
    Date: 2018
  13. By: Mergoupis Thanos; Phan Van; Sessions John
    Abstract: We investigate within the context of Viet Nam how circumstances at age 15 or 16 relate to completion of upper secondary education four years later.We exploit the longitudinal elements of the Viet Nam Access to Resources Household Survey to identify household and commune characteristics and emphasize how the effects of these characteristics vary by gender.The gender differences we find suggest that unequal treatment of girls within their households has a negative impact on their educational attainment and that in the absence of such unequal treatment the reverse gender gap would be even larger. We find nothing in terms of local labour market conditions that could explain this gap.
    Keywords: access to education,Gender,Gender gap,Education
    Date: 2018
  14. By: Thanh Mai Ha (School of Economics and Finance, Massey University, Palmerston North); Shamim Shakur (School of Economics and Finance, Massey University, Palmerston North, New Zealand); Kim Hang Pham Do (School of Economics and Finance, Massey University, Palmerston North, New Zealand)
    Abstract: Rapid urbanization brings challenges to managing food safety in Vietnam. Today, consumers pay more attention to the safety of food, particularly vegetables. This paper investigates the impact of consumer perception of food safety risk on self-reported vegetable consumption and then compares the determinants of risk perception between the rural and the urban region. We conducted a survey and observe a decline in self-reported vegetable consumption as a consequence of heightened risk perception among residents in the Hanoi area. The differences, as well as the similarities in the underlying drivers of risk perception, were identified across regions. In both regions, information about food incidents and perceived consequence of hazards associated with vegetables shaped risk perception of vegetables. Respondents’ age, education, and trust in food retailers at wet markets determined risk perception in the rural area, but not in the urban region. Personal experience with vegetable poisoning, whether the household was growing vegetables, perceived control over hazards, and trust in responsible institutions only influenced risk perception in the urban region. We suggest that these spatial disparities in behaviours should be taken into account in designing and implementing risk communication programs and food safety policies in Vietnam.
    Keywords: food safety, risk perception, rural-urban, Vietnam
    JEL: Q18 D12 Q13
    Date: 2019
  15. By: Chen, Lipeng (School of Economics, Fudan University); Jiang, Liang (Fanhai International School of Finance and School of Economics, Fudan University); Phang, Sock Yong (School of Economics, Singapore Management University); Yu, Jun (School of Economics and Lee Kong Chian School of Business, Singapore Management University)
    Abstract: We utilize data from the Singapore Life Panel© survey to empirically investigate the impact of housing equity on consumption of elderly households. Based on panel analysis, we find housing equity value has no significant impact on non-durable consumption for elderly people. The conclusion holds for a battery of robustness check. Moreover, heterogeneity analyses based on subsamples by age of household head, house type, and number of property possessed also show no significant impact of housing equity on consumption in general. Finally, we use scenario analysis to study the Lease Buyback Scheme (LBS), a novel housing equity monetization scheme which allows elderly households to unlock housing equity for retirement financing. We find LBS increases non-durable consumption by about only 0.69%, which may explain the low take-up rate for the LBS.
    Keywords: Housing wealth; elderly households; monetization; Singapore
    Date: 2019–05–08
  16. By: Stewart Frances
    Abstract: This paper reviews the main methodological innovations in Asian Drama. It considers whether Myrdal’s perspectives have been adopted by development analysts, and where fresh thinking is needed, particularly in the light of changes occurring in the half-century since he wrote Asian Drama.The paper concludes that many of his ideas have been accepted, especially among heterodox economists, some themselves putting forward similar arguments. Mainstream economics has, in general, been the least responsive, and renewed emphasis is needed—especially with regard to the effects of positionality on concepts, theories, and policies; and on the inappropriateness of some advanced country economic concepts.In Asian Drama, Myrdal fails to consider that some concepts are inappropriate for the analysis of advanced economies, too. The critical need to take into account environmental considerations in the 21st century provides an additional reason for seeking alternative frameworks for everywhere, whether North or South.
    Keywords: Gunnar Myrdal,Institutions
    Date: 2018
  17. By: Bhaduri Amit
    Abstract: Macroeconomic strategies and policies have differed significantly among Asian countries over the last fifty years, and yet some common issues recur despite their immense diversity in inherited historical initial conditions, differences in political systems, geo-political situations, location and size, and natural resource endowments.The present paper examines from a comparative perspective some of the issues like unemployment, role of the state and market, domestic versus foreign market, degree of openness in trade, investment and finance, industrial and technology policy, and economic and social inequality. We attempt to ascertain why some countries have been more successful in dealing with these issues through policy and institutional innovations.Our comparative perspective presents developmental choices and challenges as moving targets requiring flexible institutional and policy response at each stage of development, which makes uniform guidelines misleadingly over-simplistic.
    Keywords: Decentralization,Economic inequality,Labour market,Unemployment,State
    Date: 2018
  18. By: Ricciuti Roberto; Baronchelli Adelaide
    Abstract: This paper analyses the relationship between climate and migration in rural households in Viet Nam.We propose an instrumental variable approach that controls for the potential endogeneity between crop production and migration using monthly minimum temperatures in the growing season as an instrument of rice production. Results show that the rise in minimum temperature during the core month of the growing season (i.e. June) does cause a reduction in rice production which, in turn, has a positive impact on people’s propensity to migrate.This finding is robust to the use of different estimators and plausible violations to exogeneity of the instrument.
    Keywords: Food industry and trade,Migration,Climate change
    Date: 2018
  19. By: Lin Justin
    Abstract: Myrdal did not cover China in his Asian Drama. If he did, he would have been most likely pessimistic about China, as he was about other Asian countries in his book. However, China has achieved miraculous growth since the transition from a planned economy to a market economy at the end of 1978.This paper provides answers to the questions: Why was China trapped in poverty before 1978? How was it possible for China to achieve an extraordinary performance during its transition? Why did most other transition economies fail to achieve a similar performance? What price did China pay for its success? Can China continue its dynamic growth in the coming decades? What lessons can we draw from China’s development experiences in view of Asian Drama.The paper concludes on a positive note: if a developing country adopts a pragmatic approach to developing its economy along its comparative advantages in a market economy and taps into the potential of latecomer advantages with a facilitating state, the country can grow dynamically like China.
    Keywords: Transitional economies,Economic growth,Poverty
    Date: 2018
  20. By: Torm Nina
    Abstract: In the absence of adequate institutional mechanisms, trade unions can potentially promote higher wages and other worker benefits, yet limited data availability means little is known about the effect unions have on individual earnings in developing economies.Using matched employer–employee data from 2013 and 2015 surveys, this paper examines the union wage premium among Vietnamese small and medium-sized enterprises. Controlling for firm and worker characteristics, the results show that unionized workers’ wages are 9–22 per cent higher than those of non-union workers. The wage gain is substantially larger at the upper end of the wage distribution.
    Keywords: Small and medium enterprises,Labor unions,Wages
    Date: 2018
  21. By: Xu, Sijia (National University of Singapore); Shonchoy, Abu S. (Florida International University); Fujii, Tomoki (Singapore Management University)
    Abstract: A target in the Millennium Development Goals—gender parity in all levels of education—is widely considered to have been attained. However, measuring gender parity only through school enrollment is misleading, as girls may lag behind boys in other educational measures. We investigate this with four rounds of surveys from Bangladesh by decomposing households’ education decisions into enrollment, education expenditure, and share of the education expenditure allocated for the quality of education like private tutoring. We find a strong profemale bias in school enrollment but promale bias in the other two decisions. This contradirectional gender bias is unique to Bangladesh and partly explained by the presence of conditional cash transfer programs. Although these programs promoted girls’ enrollment in secondary schools, they were largely ineffective in narrowing the gender gaps in academic performance and intrahousehold allocation of education resources. Gender parity in education cannot be truly achieved without addressing these gaps.
    Keywords: Female Stipend Programs; Education; Conditional cash transfer; Private tutoring; Bangladesh
    JEL: I28 J16 O15
    Date: 2019–04–26

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