nep-tra New Economics Papers
on Transition Economics
Issue of 2016‒05‒28
25 papers chosen by
J. David Brown
United States Census Bureau

  1. China's Industrial and Trade Policies and Economic Growth (Japanese) By ZHANG Hongyong
  2. Contractions in Chinese Fertility and Savings: Long run domestic and global implications By Jane Golley; Rod Tyers; Yixiao Zhou
  3. How does firm heterogeneity information impact the estimation of embodied carbon emissions in Chinese exports? By Yu, Liu; Meng, Bo; Hubacek, Klaus; Xue, Jinjun; Feng, Kuishuang; Gao, Yuning
  4. Cointegration and Causality among the Onshore and Offshore Markets for China's Currency By Owyong, David; Wong, Wing-Keung; Horowitz, Ira
  5. Soviet and modern Russian innovative projects: the similarities and differences By GUSEV Vladimir; : MALIY Vadim
  6. Commercialization and mission drift : evidence from a large Chinese microfinance institution By Jia,Xiangping; Cull,Robert J.; Guo,Pei; Ma,Tao
  7. Reconciling China’s official statistics on state ownership and control By Paul Hubbard
  8. The Vietnamese Iron and Steel Industry in Transition to a Market Economy -Attainments and Challenges- By Nozomu Kawabata
  9. Tax Administration Reform in China; Achievements, Challenges, and Reform Priorities By John Brondolo; Zhiyong Zhang
  10. Self-Selection and Learning-by-Exporting Hypotheses: Micro Level Evidence By Rehman, Naqeeb Ur
  11. The Economics of Soil Erosion and the Choice of Land Use Systems by Upland Farmers in Central Vietnam By Bui Dung The
  12. The Imbalanced Catch-up to Rational Expectations: Capital Flows during Convergence By Cozzi, Guido; Davenport, Margaret
  13. Socio-economic Sustainability in Poland. SEM Analysis at Regional Level By Michal Bernard Pietrzak; Adam P. Balcerzak
  14. RIO Country Report 2015: Estonia By Ruttas-Küttim Ruuta; Stamenov Blagoy
  15. The Role of Financial Constraints for Different Innovation Strategies: Evidence for CESEE and FSU Countries By Sandra M. Leitner; Robert Stehrer
  16. Price Discovery in the Chinese Gold Market By Jin, Muzhao; Li, Youwei; Wang, Jianxin; Yang, Yung Chiang
  17. The Main Vectors of Cross-Border Development in the CIS Industrial and Economic Space: Convergence, Potential, Cross-Country Gaps By Shyam Upadhyaya; Liudmila Kitrar; Georgy Vladimirovich Ostapkovich; Tamara Lipkind
  18. The Greenness of Chinese Cities: Carbon Dioxide Emission and Its Determinants By Jianxin Wu; Yanrui Wu; Bing Wang
  19. Economic Sovereignty. A Militant Agenda for Russia By Silvana Malle
  20. Studying Complementarities between Modes of Innovation Strategies in Transition Economies By Berulava, George; Gogokhia, Teimuraz
  21. RIO Country Report 2015: Latvia By Gundars Kulikovskis; Diana Petraityte; Stamenov Blagoy
  22. Long-Run Effects of Public Policies: Endogenous Alcohol Preferences and Life Expectancy in Russia By Lorenz Kueng; Evgeny Yakovlev
  23. The Building Up of New Imbalances in China: The Dilemma with ‘Rebalancing’ By Wagner, Prof. Dr. Helmut
  24. The effect of means-tested social transfers on labour supply: heads versus spouses - An empirical analysis of work disincentives in the Kyrgyz Republic By Gassmann, Franziska; Zardo Trindade, Lorena
  25. Improving health in Tajikistan: remittances trump other income By Sophia Kan

  1. By: ZHANG Hongyong
    Abstract: This paper investigates the evolution and effects of China's industrial and trade policies after its reform and opening-up in 1979. Specifically, this paper focuses on the effects of various policies (including processing trade regime, accession to the World Trade Organization, special economic zones and foreign direct investment policies, reform of state-owned enterprises, and innovation policies) on trade, investment, and productivity. Using data on China's industry, firms, and trade, there is a large and growing number of studies empirically evaluating the effects of China's industrial and trade policies. By a survey of the previous literature, this paper examines the evolution of China's industrial and trade policies and the mechanism of its economic growth. Furthermore, this paper points out the problems of China's industrial policies and the tasks in the future.
    Date: 2016–05
  2. By: Jane Golley (Centre for China in the World, Australian National University); Rod Tyers (Business School, University of Western Australia, Centre for Applied Macroeconomic Analysis, Australian National University); Yixiao Zhou (Department of Economics and Property, School of Economics and Finance, Business School, Curtin University)
    Abstract: Following three decades of rapid but unbalanced economic growth, China’s reform and policy agenda are set to rebalance the economy toward consumption while maintaining a rate of GDP growth near seven per cent. Among the headwinds it faces is a demographic contraction that brings slower, and possibly negative, labour force growth and relatively rapid ageing. While the lower saving rates that result from consumption-oriented policies and rising aged dependency may contribute to a rebalancing of the economy, in the long run they will reduce both GDP growth and per capita income. Moreover, while an effective transition from the one-child policy to a two-child policy would help sustain growth and eventually mitigate the aged dependency problem, it would set real per capita income on a still lower path. These conundrums are examined using a global economic and demographic model, which embodies the main channels through which fertility and saving rates impact on economic performance. The results quantify the associated trade-offs and show that continuing demographic and saving contractions in China would alter the trajectory of the global economy as well.
    Date: 2016
  3. By: Yu, Liu; Meng, Bo; Hubacek, Klaus; Xue, Jinjun; Feng, Kuishuang; Gao, Yuning
    Abstract: Using an augmented Chinese input–output table in which information about firm ownership and type of traded goods are explicitly reported, we show that ignoring firm heterogeneity causes embodied CO2 emissions in Chinese exports to be overestimated by 20% at the national level, with huge differences at the sector level, for 2007. This is because different types of firm that are allocated to the same sector of the conventional Chinese input–output table vary greatly in terms of market share, production technology and carbon intensity. This overestimation of export-related carbon emissions would be even higher if it were not for the fact that 80% of CO2 emissions embodied in exports of foreign-owned firms are, in fact, emitted by Chinese-owned firms upstream of the supply chain. The main reason is that the largest CO2 emitter, the electricity sector located upstream in Chinese domestic supply chains, is strongly dominated by Chinese-owned firms with very high carbon intensity.
    Keywords: Environmental problems, Global warming, Input-output tables, Embodied CO2 emissions, Carbon intensity, Supply chains, Ownership, Processing trade
    JEL: C67 E01 F18 H23 F64
    Date: 2016–03
  4. By: Owyong, David; Wong, Wing-Keung; Horowitz, Ira
    Abstract: China has taken steps to develop offshore markets for renminbi trading and to liberalize exchange-rate determination in its onshore market. We examine the interaction between onshore and offshore markets with attention to how the interaction has been affected by widening of the onshore trading band first in April 2012 and further in March 2014. Ties between the onshore and offshore markets were closest before the first band widening and steadily loosened thereafter. We further study the cointegration and lead-lag effects between offshore and onshore spot and forward markets and show that there is a long-term equilibrium relationship between any pair of them. Our results suggest stronger causality running from the spot onshore rate to the spot offshore rate than vice versa. Between the spot and forward markets, there is evidence of bidirectional linear and nonlinear causality, which implies foreign impulses have had an influence on the domestic market.
    Keywords: RMB; onshore and offshore markets; spot and forward markets; liberalization; cointegration
    JEL: F31 G12
    Date: 2015–10–11
  5. By: GUSEV Vladimir; : MALIY Vadim (Russian Presidential Academy of National Economy and Public Administration- Stolypin Volga Region Institute of administration)
    Abstract: The article presents a comparative analysis of Soviet and modern Russian innovative projects on various grounds, said the reasons for the success of the strategic defense of innovations during the Soviet period and the modest achievements of modern innovative institutions of the Russian Federation and development in them. Also it addresses the issue of the loss in recent decades innovations of the Soviet period and referred to the need to revive the Soviet experience in this area. Summing up, we note that the innovative activity in the Russian Federation, contrary to all the negative factors developing, the success of this work depends largely on whether the return of modern Russia to the innovative practices of the Soviet Union, when new inventions and technical solutions will work on the domestic economy, or our country will continue to remain a raw materials appendage of the global economy, "peripheral Empire", in the words of famous sociologist Boris Kagarlitsky, and the innovative developments and the financial resources allocated for them to be stolen, to leave in more developed countries, to make a profit more enterprising business executives and return to us in the form of finished products under well-known global brands.
    Keywords: innovative project, legislation, invention, equipment, corruption, the theory of "Triple Helix"
    Date: 2016
  6. By: Jia,Xiangping; Cull,Robert J.; Guo,Pei; Ma,Tao
    Abstract: Front-line loan officers of microfinance institutions are important in acquiring information on potential borrowers and selecting them in accordance with the microfinance institution's mission. This study uses a unique data set on loan officers and their loan portfolios from China's largest nongovernmental organization microfinance institution to test whether officers'personal characteristics affect the size and quality of their loans. The analysis uses a period in which the institution shifted from reliance on government donations and subsidies to commercial sources of funding. Imposing more commercial incentives on loan officers could affect how they balance potentially competing objectives to serve the poor and pursue profitability. The paper finds that loan officers who were formerly farmers or worked in local government were better able to maintain lending to poorer borrowers, without incurring substantially lower repayment rates on their loans. In short, it appears that the career backgrounds of loan officers did play a role in preventing mission drift.
    Keywords: Debt Markets,Access to Finance,Microfinance,Emerging Markets,Bankruptcy and Resolution of Financial Distress
    Date: 2016–05–23
  7. By: Paul Hubbard (Crawford School of Public Policy)
    Abstract: China’s National Bureau of Statistics releases data for China’s industrial sector, fixed asset investment and real estate investment both according to the enterprise’s official registration status, and according to whether the controller of the enterprise is the state. For most applications data for ‘state owned and state-holding companies’ based on the control concept is appropriate, as this includes coverage of SOEs’ listed- and unlisted-subsidiaries. These data show that less than a third of Chinese industrial output, fixed asset investment, and less than twenty per cent of Chinese real estate investment is carried on by companies that are controlled by the state. A broader definition to cover all state ownership would include enterprises that are not ‘state controlled’ but nevertheless include state capital or investment from SOEs. This would capture some additional proportion of the limited liability companies, joint-ventures and shareholding corporations that are in mixed ownership.
    Keywords: China state owned Enterprises, industrial output, fixed asset investment, real estate investment, Chinese economic statistics
    JEL: E01 L32 H83 C82
    Date: 2016–05
  8. By: Nozomu Kawabata
    Abstract: The aim of this paper is to examine the attainments and challenges of the iron and steel industry in Viet Nam. The demand for steel in Viet Nam is increasing, with a focus on construction steel. While low-level industrialization is a restraining factor for the industry, the high steel intensity of the economic structure is a promotional factor. Steel production is increasing in line with domestic demand. Private and foreign-affiliated enterprises are the main players in the expansion of steel production. Market selection based on survival of the fittest is working well. In general, the transition to a market economy is showing considerable results in Viet Nam. However, the industry still faces some challenges. While the low operating ratio due to excess capacity is a by-product of market-oriented reform rather than governmental intervention, the poor performance and governmental support of state-owned enterprises show an insufficiency of reform.
    Date: 2016–05
  9. By: John Brondolo; Zhiyong Zhang
    Abstract: Tax administration improvements have contributed significantly to a doubling of China’s tax-to-GDP ratio and the substantial reduction in taxpayers’ compliance costs since the mid-1990s. This paper describes the key features of China’s tax administration and their evolution over the last 20 years. It also identifes emerging challenges to the tax system and areas where further tax administration improvements are needed to sustain tax revenue and reduce taxpayers’ compliance costs in the future.
    Keywords: Tax administration;China;Tax reforms;Risk management;Tax system reviews;Tax Administration, Tax Administration Reform, China Tax Administration
    Date: 2016–03–17
  10. By: Rehman, Naqeeb Ur
    Abstract: This aim of this empirical paper is to investigate the self-selection and learning-by-exporting hypotheses. This study addresses the reverse causality between innovation, productivity and exporting using micro level data on 29 countries from Eurasia and Central and Eastern Europe (CEE). CDM estimation results suggest that innovation and productivity positively influence the firm’s exporting and vice versa. This study has supported the self-selection and learning-by-exporting hypotheses. Previous studies provided mixed outcome on the analysis of these two major hypotheses. Similarly, innovation by exporting is examined using multiple proxies of innovation such as product/process innovation, R&D and organizational innovation. Findings imply that innovation is an important determinant of firms’ exporting and this outcome is robust across Eurasian and CEE firms. Moreover, foreign owned firms are more likely to export and innovate than domestic firms due to their technological superiority over domestic firms. Concerning policy implications, economic policies should address the firm’s innovation, productivity and exporting performance. This would result in better economic integration between Eurasian and CEE firms. By removing the firm’s barriers such as access to finance, trade regulations and taxation etc would encourage trade networks between Eurasian and CEE firms.
    Keywords: Innovation, productivity and Exporting.
    JEL: F6 O3
    Date: 2016–05–20
  11. By: Bui Dung The (Hue University)
    Abstract: Soil erosion is a significant problem in the uplands of the Central Coast of Vietnam. It affects the livelihood of farmers and could hinder the long-term economic development efforts in the uplands. Yet, trapped in poverty, upland farmers, especially the ethnic minority, are still using erosive land use systems to meet their immediate needs. This study demonstrates how the level of soil erosion varies across the typical land use systems. The fruit tree based agroforestry system is least erosive and most financially profitable. Measured by the annualized income loss, the on-site costs of soil erosion under upland ricebased and eucalyptus-based systems are VND 1,022 and 1,019 thousand/ha per year, respectively. That under the sugarcane system is VND 635 thousand/ ha per year, as compared (in all cases) to the fruit tree-based agroforestry system. The choice of land use system is influenced by farmers’ attributes, land plot characteristics, and policy-related variables. Promoting the switch to agroforestry systems and the adoption of soil conservation measures is essential in reducing soil erosion and sustaining development in the uplands. It is, however, a very challenging task.
    Keywords: Economics of Soil Erosion,Choice of Land Use Systems,Vietnam
    Date: 2016–04
  12. By: Cozzi, Guido; Davenport, Margaret
    Abstract: How long shall a country take to learn the world technological frontier? What would happen if that country found the same difficulties in learning the true model of its economy? After all, countries catching up often experience life-changing transformations during the catch-up to a balanced growth path. We show that an open economy, learning rational expectations alongside foreign technology, may be characterized by excessive saving and current account surpluses, as often observed in the data and at odds with the standard open economy theoretical predictions, and not fully explained by standard adaptations such as habit formation. Moreover, such a learning process in a large developing country can upset the savings behavior of a fully rational expectations advanced country. In a US-China calibration, we show that this effect can be so strong as to explain important current account imbalances, the savings glut hypothesis, as well as the distribution of factor income.
    Keywords: Capital flows, convergence, learning, rational expectations, productivity growth
    JEL: E03 F21 F41
    Date: 2015–08
  13. By: Michal Bernard Pietrzak (Nicolaus Copernicus University, Poland); Adam P. Balcerzak (Nicolaus Copernicus University, Poland)
    Abstract: Improving conditions for sustainable development has been a major aim of every Polish government since the beginning of transformation process. Thus, the aim of the paper is to analyse the level of sustainable development in Poland at re-gional level. The research was conducted at NUTS 3 level for the years 2010-2013. The analysis was based on the data from Central Statistical Office of Poland. It was assumed that the phenomenon of socio-economic sustainability at regional level should be considered as a multivariate latent variable. As a result, it was measured with application of Structural Equation Modeling (SEM). The proposed model was based on eight observable variables that are often pointed in the literature as measures of socio-economic development and human welfare. Application of SEM model allowed to verify the usefulness of the observable variables for analysis of the phenomenon of sustainable development in Poland at regional level. The conducted research confirmed serious disparities at regional level in the sphere of socio-economic sustainability that must be the subject of special interest and counteractions of Polish government.
    Keywords: Structural Equation Modeling (SEM), regional analysis, sustainable de-velopment, Poland
    JEL: Q01 C38
    Date: 2016–05
  14. By: Ruttas-Küttim Ruuta (Independent Consultant); Stamenov Blagoy (European Commission – JRC - IPTS)
    Abstract: The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems.
    Keywords: R&I system, R&I policy, ERA, innovation union, Semester analysis, Estonia
    JEL: I20 O30 Z18
    Date: 2016–04
  15. By: Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract Due to information asymmetries between the debtor and potential outside investors, entrepreneurs often face sizeable and insurmountable financing constraints. This is a strong deterrent to either starting new or continuing already ongoing innovation projects which not only stymies entrepreneurs’ own future innovation potentials and growth prospects but also severely harms growth potentials of whole economies, making catching-up an unnecessarily long and arduous process. Against this backdrop, the analysis sheds light on the effects of prevailing credit constraints on different innovation strategies (i.e. R&D-based make versus M&E-based buy strategies) of establishments in Central, East and Southeast Europe (CESEE) and the Former Soviet Union (FSU) during three different economic phases. The results point to the detrimental effect of credit constraints which is particularly strong and consistent for the M&E-based ‘buy innovation strategy’ which dominates in the region, but less pronounced and relevant for the less prevalent R&D-based ‘make innovation strategy’. Furthermore, the analysis identifies firm characteristics that are conducive to innovative activities and demonstrates that establishment size, age, the particular international trading status, ownership status as well as whether subsidies were received are important determinants of different innovation strategies.
    Keywords: credit constraints, R&D-based and M&E-based innovation strategies, Central, East and Southeast Europe, Former Soviet Union
    JEL: G21 O16 O31
    Date: 2016–04
  16. By: Jin, Muzhao; Li, Youwei; Wang, Jianxin; Yang, Yung Chiang
    Abstract: This study conducts price discovery analysis in the Chinese gold market. Our result indicates that the price discovery in Chinese gold market occurs predominantly in the futures market. The result is robust to the different measures of price discovery, namely information share, component share, and information leadership share. Partitioning the daily trades into three trading sessions, we find that the dominance of the futures market occurs in all trading sessions. We further investigate the sequential price discovery within the spot market or futures market. We find that the price discovery of gold spot market and gold futures market occur in the night trading session.
    Keywords: Chinese gold market; Futures; Price discovery; Information share; Component share; Information leadership share; Sequential price discovery
    JEL: G10 G14
    Date: 2016–05–06
  17. By: Shyam Upadhyaya (UNIDO); Liudmila Kitrar (National Research University Higher School of Economics); Georgy Vladimirovich Ostapkovich (National Research University Higher School of Economics); Tamara Lipkind (National Research University Higher School of Economics)
    Abstract: The main goal of the study is to identify the scope and trends in the manufacturing development of Russia and other countries of the Commonwealth of Independent States (CIS) in the context of integration effectiveness, industrial policies quality and competitiveness growth. Under current unfavorable conditions – the fall in world oil prices, devaluation of national currencies, and reduction of business activity due to uncertainty of future strategies – the essential issue is whether the favorable integration possibilities of the past periods of intensive rise in 2005-2008 and 2010-2012 in the national economies development in the CIS region to build competitive potential for reindustrialization were fully realized. The analyzed period 2005-2014 is presented by the authors as a reference period of economic dynamics, covering for Russia and the CIS countries a full business cycle from the beginning of one deep recession (2008-2009) until another recession (2014).The research object is manufacturing sectors in Russia and other CIS countries. The study results show that in the analyzed period, large-scale industrialization has not occurred in these countries, largely due to the lack of the national economies structural transformations. The impressive manufacturing growth in a number of smaller CIS countries has not led to those countries’ participation in the highly competitive international processes. By the end of the analyzed period, the need for diversification of the national economies and exports and implementation of balanced economic policies only intensified. These policies should support both structural reforms and demand and be aimed to increase productivity, eliminate barriers of the manufacturing development and enable foreign markets access.
    Keywords: industrialization, manufacturing, structural changes, industrial potential, export potential
    JEL: E32 L16 O14 O25 O47 O57
    Date: 2016
  18. By: Jianxin Wu (Business School, University of Western Australia and School of Economics, Institute of Resources, Environment and Sustainable Development Research, Jinan University, China); Yanrui Wu (Business School, University of Western Australia); Bing Wang (School of Economics, Institute of Resources, Environment and Sustainable Development Research, Jinan University, China)
    Abstract: This paper investigates carbon dioxide (CO2) emission and its determinants in 286 Chinese cities. The findings strongly support an inverted U-shaped relationship between per capita CO2 emission (PCE) and urban development. However the realization of this relationship depends on stringent governmental policy interventions. The regression analysis in this paper shows that city size is positively correlated with CO2 emission efficiency, but negatively correlated with PCE. This result suggests that population restrictions in large cities tend to increase CO2 emission. It is also shown that regional development programs are likely to encourage economic activities in regions with low CO2 emission efficiency and may have significant environmental consequences in the future.
    Date: 2016
  19. By: Silvana Malle (Department of Economics (University of Verona))
    Abstract: Russia is engaged on a process of political and economic transformation in the direction of a model of “economic sovereignty”. This process is the result of economic and political ostracism enacted in 2014 against the country by major international powers as a consequence of developments in Ukraine. The paper examines three fundamental aspects of the new security approach to development: i) import substitution of foodstuffs as an asset for security, ii) militant nationalism, and iii) increasing focus on Asia for the re-orientation of commercial flows. A pattern out of privilege relations with Europe is clearly emerging.
    Keywords: Russia, Economic systems, Security and Economic Policy, Strategies
    JEL: O52 P21 P27
    Date: 2015–11
  20. By: Berulava, George; Gogokhia, Teimuraz
    Abstract: This paper explores the existing interrelationships between the firm’s innovation activities and productivity performance as well as studies complementarities among innovation strategies in transition economies. Specifically, on the basis of BEEPS V dataset and using extended CDM model, we have investigated the existence of possible complementarities between various types of innovation modes (product, process, marketing and organizational innovations) in their impact on the firm’s productivity. The traditional CDM framework was modified through accounting for the simultaneous occurrence of different types of innovation inputs - in-house and out-house knowledge generation activities - and through the estimation of their joint effects on various modes of innovation. In compliance with the results of previous studies, we find that CDM model properly describes the existing interrelations between the firm’s innovation activity and its productivity performance in transition economies. In particular, our results show that the firm’s decisions on in-house and out-house knowledge development processes are interdependent. The study results suggest that implementation of internal R&D strategy can stimulate not only technological innovations but non-technological innovative activity as well. However, we find that external knowledge acquisition strategy has positive and statistically significant effect on innovation output only when the firm’s innovation mix incorporates non-technological novelties. Our results show that only those modes of innovation output combinations that assume all the types of innovations and/or the combination of process and non-technological innovations have positive and statistically significant impact on the firm’s productivity. Another vital point of this analysis is that conducting either product or process innovation in isolation will result in a negative productivity performance. The important contribution of this paper is that it tests for complementarity between innovation strategies of firms in transition economies. Our tests reveal complementarity between the following two combinations of innovations: product/process and process/non-technological innovations. The key policy implication of our findings is that while performing all the three innovation modes jointly has a positive impact on firm’s performance, economically preferred options are: either to choose pure technological innovation strategy (product&process mode) or to perform strategy focused on organizational restructuring (process/non-technological mode).
    Keywords: R&D, external knowledge acquisition, innovation, productivity, CDM model, complementarity, transition economies
    JEL: C12 L25 O12 O31 P31
    Date: 2016–05–13
  21. By: Gundars Kulikovskis (FIDEA (Financial and Management Consulting Company)); Diana Petraityte (FIDEA (Financial and Management Consulting Company)); Stamenov Blagoy (European Commission – JRC - IPTS)
    Abstract: The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems.
    Keywords: R&I system, R&I policy, ERA, innovation union, Semester analysis, Latvia
    JEL: I20 O30 Z18
    Date: 2016–05
  22. By: Lorenz Kueng (Northwestern University's Kellogg School of Management, and National Bureau of Economic Research); Evgeny Yakovlev (New Economic School)
    Abstract: We use two quasi-natural experiments in the 1980s and 1990s to identify how public policies affect important long-run outcomes by changing preferences. Large but short-lived shocks to product availability in Russia shifted young consumers' long-run preferences from hard to light alcohol. The resulting large cohort differences in current alcohol consumption shares decades after the interventions ended explain about 60% of the recent decrease in male mortality based on both micro-level and aggregate estimates. Mortality will continue to decrease by another 23% over the next twenty years based on our analysis. Program impact evaluations that focus only on contemporaneous effects can therefore severely underestimate the total effect of such public policies.
    Keywords: long-run policy effects, endogenous preferences, mortality
    JEL: D12 H31 I10
    Date: 2016–05
  23. By: Wagner, Prof. Dr. Helmut
    Abstract: This paper offers a theoretical basis for the concept of rebalancing and applies it to China, where it is currently a topical issue. Rebalancing here means the correction of economic and social imbalances built up during industrialization. This correction is accompanied by a structural transformation towards a more inward- and consumption-driven growth path, associated with growth slowdown. Attempts to mitigate this growth slowdown by either retarding this structural reform process or by using expansionary stimulus programmes as done over the past decade in China create new imbalances that have to be corrected (rebalanced) again. Managing these multiple rebalancing tasks together is a tremendous undertaking, as this paper shows.
    Keywords: rebalancing, China, development strategy
    JEL: F41 O10 O40 O53
    Date: 2016–05
  24. By: Gassmann, Franziska (UNU‐MERIT, Maastricht University); Zardo Trindade, Lorena (Center for Social Policy Herman Deleeck, University of Antwerp)
    Abstract: This paper empirically estimates potential work disincentives of a means-tested social transfer in the Kyrgyz Republic for adults with different household positions. Using data from the Kyrgyz Integrated Household Survey 2012, the analysis compares labour market outcomes for household heads and spouses. Binary response models and quasi-experimental methods are applied to assess the effect of the Monthly Benefit for Poor Families with Children (MBPF) on labour supply. The analysis indicates that overall beneficiaries have on average higher labour market participation rates when compared to non-beneficiaries, but they are more exposed to seasonal effects. Results differ when analysing different household members separately. Household heads in beneficiary households are less likely to be economically active than similar non-beneficiaries. Yet, spouses are more likely to be economically active. However, the effects differ depending on whether the household is located in the South or the North of the country.
    Keywords: social transfers, work disincentives, Kyrgyz Republic
    JEL: I38 J22
    Date: 2016–05–19
  25. By: Sophia Kan (Georg-August University Göttingen)
    Abstract: This paper investigates the impact of remittances on health outcomes in Tajikistan and finds a positive effect. While existing literature shows that remittances increase health care expenditure, expenditure alone is an incomplete proxy for health outcomes. Moreover, existing literature on health outcomes focuses mainly on infants and children, leaving out a significant share of the population. Our study explores the impact of remittances on proxies of health outcomes beyond expenditure for all household members (adults and children). We use an IV-approach to control for the endogeneity of remittances, and find that on average, remittances have a much larger effect than other sources of income on health expenditure and health outcomes. We also explore two possible transmission channels for how remittances affect health and find that remittances do not affect the likelihood of purchasing medicine in lieu of seeking care when ill; instead remittances have a positive and significant effect on the likelihood of seeking direct medical care.
    Keywords: health; migration; remittances; Tajikistan
    JEL: I15 F22 R23
    Date: 2016–04–27

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