nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2009‒08‒16
27 papers chosen by
Steve Ross
University of Connecticut

  1. Aging nations and the future of cities By Carl Gaigné; François Thisse
  2. Hitting Bottom? An Updated Analysis of Rents and the Price of Housing in 100 Metropolitan Areas By Danilo Pelletiere; Hye Jin Rho; Dean Baker
  3. Simulating Wages and House Prices Using the NEG By Bernard Fingleton
  4. Survival of the Fittest in Cities: Agglomeration, Selection and Polarisation By Kristian Behrens; Frédéric Robert-Nicoud
  5. Housing Capital Gains Taxes to Mitigate the Century Plus of Housing Booms and Busts By Robin Pope
  6. Assessing Agglomeration Economies in a Spatial Framework with Endogenous Regressors By Michael Artis; Ernest Miguélez; Rosina Moreno
  7. Immigration and Housing Booms: Evidence from Spain By Libertad González Luna; Francesc Ortega
  8. Valuing School Quality Using Boundary Discontinuities By Stephen Gibbons; Stephen Machin; Olmo Silva
  9. Resurgent Cities and Regional Economic Performance By Henry Overman; Patricia Rice
  10. Analysing the Impact of Public Capital Stock Using the NEG Wage Equation: A Panel Data Approach By Bernard Fingleton; Miguel Gómez-Antonio
  11. Securitized Banking and the Run on Repo By Gary B. Gorton; Andrew Metrick
  12. In Search of W By Richard Harris; Victoria Kravtsova
  13. Regulating Financial Innovations Without Apology By Pol, Eduardo
  14. Consumer price levels in Northern and Southern Italy By Luigi Cannari; Giovanni Iuzzolino
  15. A Dynamic Oligopoly Game of the US Airline Industry: Estimation and Policy Experiments By Aguirregabiria, Victor; Ho, Chun-Yu
  16. Common and Spatial Drivers in Regional Business Cycles By Michael Artis; Christian Dreger; Konstantin Kholodilin
  17. The Housing Boom and Bust in Spain: Impact of the Securitisation Model and Dynamic Provisioning By Alicia García-Herrero; Santiago Fernández de Lis
  18. Does Urbanisation Affect Rural Poverty? Evidence from Indian Districts By Massimiliano Cali; Carlo Menon
  19. What Determines the Attractiveness of the European Union to the Location of R&D Multinational Firms? By Siedschlag, Iulia; Smith, Donal; Turcu, Camelia; Zhang, Xiaoheng
  20. The Upswing of Regional Income Inequality in Spain (1860-1930) By Julio Martinez-Galarraga; Joan R. Roses; Daniel A. Tirado Fabregat
  21. Neighbourhood social capital improves individual health quality of life in a national sample from Wales By Tampubolon, Gindo
  22. Internal Migration. Challenges and Perspectives for the Research Infrastructure By Andreas Farwick
  23. School Entry, Educational Attainment and Quarter of Birth: A Cautionary Tale of LATE By Rashmi Barua; Kevin Lang
  24. The economic impacts of air transport liberalization By Grancay, Martin
  25. What policies do we need for Southern Italy? The role of national and regional policies in the last decade By Luigi Cannari; Marco Magnani; Guido pellegrini
  26. Does Decentralization Matter for Regional Disparities? A Cross-Country Analysis By Roberto Ezcurra; Andrés Rodríguez-Pose
  27. Incentives in Elementary Education - do They Make a Difference By Vimala Ramachandran

  1. By: Carl Gaigné; François Thisse
    Abstract: We investigate whether an aging population may challenge the supremacy of large working-cities. To this end, we develop an economic geography model with two types of individuals (the elderly and workers) and two sectors (consumer services and manufacturing). Individuals are geographically mobile and their agglomeration within a city generates rising urban costs through competition for land. When the elderly are immobile and equally distributed between cities, an aging population works against the agglomeration of production. When the elderly are free to choose their residence, the most likely scenario is such that the city with the lower share of old people follows a U-shaped curve. Increasing commuting costs cut short the first phase in which the employment share decreases
    Keywords: economic geography, aging population, spatial mobility, sectoral mobility, commuting costs
    JEL: F12 F16 J60 L13 R12
    Date: 2009
  2. By: Danilo Pelletiere; Hye Jin Rho; Dean Baker
    Abstract: It has been two years since the housing bubble began to deflate. In this time, home prices in major metropolitan areas have fallen more than 32.3 percent and the woes in the housing sector have spread to the broader economy. Where is the housing market today? Have we hit bottom? This paper, written by researchers from the Center for Economic and Policy Research and the National Low Income Housing Coalition, finds that while most of the nation’s metropolitan housing bubbles have deflated and many markets never had one to contend with, there is the possibility of a persistent housing slump in the years ahead. An appropriate response to this situation involves 1) stimulating demand for housing by acting to lower unemployment and raise wages, 2) recognizing a leading role for rental housing in federal foreclosure mitigation and neighborhood stabilization policy, including allowing foreclosed homeowners to remain in their homes as renters (Right to Rent), and 3) adequately funding the National Housing Trust Fund.
    Keywords: housing bubble, right to rent, affordable housing
    JEL: G G2 G21 G28 R R2 R21
    Date: 2009–08
  3. By: Bernard Fingleton
    Abstract: The paper incorporates house prices within an NEG framework leading to the spatialdistributions of wages, prices and income. The model assumes that all expenditure goes tofirms under a monopolistic competition market structure, that labour efficiency units areappropriate, and that spatial equilibrium exists. The house price model coefficients areestimated outside the NEG model, allowing an econometric analysis of the significance ofrelevant covariates. The paper illustrates the methodology by estimating wages, income andprices for small administrative areas in Great Britain, and uses the model to simulate theeffects of an exogenous employment shock.
    Keywords: new economic geography, real estate prices, spatial econometrics
    JEL: C21 C31 O18 R12 R31
    Date: 2009–04
  4. By: Kristian Behrens; Frédéric Robert-Nicoud
    Abstract: Empirical studies consistently report that labour productivity and TFP rise with city size. The reason is that cities attract the most productive agents, select the best of them, and make the selected ones even more productive via various agglomeration economies. This paper provides a microeconomically founded model of vertical city differentiation in which the latter two mechanisms (`agglomeration' and `selection') operate simultaneously. Our model is both rich and tractable enough to allow for a detailed investigation of when cities emerge, what determines their size, and how they interact through the channels of trade. We then uncover stylised facts and suggestive econometric evidence that are consistent with the most distinctive equilibrium features of our model. We show, in particular, that larger cities are both more productive and more unequal (`polarised'), that inter-city trade is associated with higher income inequalities, and that the proximity of large urban centres inhibits the development of nearby cities.
    Keywords: entrepreneur heterogeneity, firm selection, agglomeration, income inequalities,urbanization, urban systems
    JEL: F12 R12
    Date: 2008–11
  5. By: Robin Pope
    Date: 2009–07
  6. By: Michael Artis; Ernest Miguélez; Rosina Moreno
    Abstract: This paper is concerned with the influence of agglomeration economies on economicoutcomes across British regions. The concentration of economic activity in one place canfoster economic performance due to the reduction in transportation costs, the readyavailability of customers and suppliers, and knowledge spillovers. However, theconcentration of several types of intangible assets can boost productivity as well. Thus, usingan interesting dataset which proxies regional productivity, we will assess the relativeimportance of agglomeration and other assets, controlling both for endogeneity and forspatial autocorrelation at the same time. Our results suggest that agglomeration has a definitepositive influence on productivity, although our estimates of its effect are dramaticallyreduced when spatial dependence and other hitherto omitted variables proxying intangibleassets are controlled for.
    Keywords: agglomeration economies, intangible assets, endogeneity, spatial autocorrelation
    JEL: C21 J24 R10 R11 R12
    Date: 2009–06
  7. By: Libertad González Luna; Francesc Ortega
    Abstract: We estimate empirically the effect of immigration on house prices and residential construction activity in Spain over the period 1998-2008. This decade is characterized by both a spectacular housing market boom and a stunning immigration wave. We exploit the variation in immigration across Spanish provinces and construct an instrument based on the historical location patterns of immigrants by country of origin. The evidence points to a sizeable causal effect of immigration on both prices and quantities in the housing market. Between 1998 and 2008, the average Spanish province received an immigrant inflow equal to 17% of the initial working-age population. We estimate that this inflow increased house prices by about 52% and is responsible for 37% of the total construction of new housing units during the period. These figures imply that immigration can account for roughly one third of the housing boom, both in terms of prices and new construction.
    Keywords: Housing market, immigration, house prices, construction, Spain
    JEL: F22 J61 R21 R23 R31
    Date: 2009–07
  8. By: Stephen Gibbons; Stephen Machin; Olmo Silva
    Abstract: A large body of international research shows that house prices respond to local school qualityas measured by average test scores. But better test scores could signal better expectedacademic outputs or simply reflect higher ability intakes, and existing studies rarelydifferentiate between these two channels. In our research, we simultaneously estimate theresponse of prices to school 'value-added' and school composition to show more clearly whatdrives parental demand for schools. To achieve consistent estimates, we push to the limit theuse of geographical boundary discontinuities in hedonic models by matching identicalproperties across admissions authority boundaries; by allowing for a variety of boundaryeffects and spatial trends; by re-weighting our data to only consider the transactions that areclosest to education district boundaries; and by submitting the estimates to a number ofpotentially destructive falsification tests. Our results survive this battery of experiments andshow that a one-standard deviation change in either school value-added or prior achievementraises prices by around 3%.
    Keywords: House prices, school quality, boundary discontinuities
    JEL: C21 I20 H75 R21
    Date: 2009–03
  9. By: Henry Overman; Patricia Rice
    Date: 2008–06
  10. By: Bernard Fingleton; Miguel Gómez-Antonio
    Abstract: This paper examines the relationship between the level of public infrastructure and the level of productivity using panel data for the Spanish provinces over the period 1984-2004, a period which is particularly relevant due to the substantial changes occurring in the Spanish economy at that time. The underlying model used for the data analysis is based on the wage equation, which is one of a handful of simultaneous equations which when satisfied correspond to the short-run equilibrium of New Economic Geography theory. This is estimated using a spatial panel model with fixed time and province effects, so that unmodelled space and time constant sources of heterogeneity are eliminated. The model assumes that productivity depends on the level of educational attainment and the public capital stock endowment of each province. The results show that although changes in productivity are positively associated with changes in public investment within the same province, there is a negative relationship between productivity changes and changes in public investment in other regions.
    Keywords: spatial economics, public infrastructure, productivity, panel data, economic geography
    JEL: H54 R11 R15 C21
    Date: 2009–06
  11. By: Gary B. Gorton; Andrew Metrick
    Abstract: The Panic of 2007-2008 was a run on the sale and repurchase market (the “repo†market), which is a very large, short-term market that provides financing for a wide range of securitization activities and financial institutions. Repo transactions are collateralized, frequently with securitized bonds. We refer to the combination of securitization plus repo finance as “securitized bankingâ€, and argue that these activities were at the nexus of the crisis. We use a novel data set that includes credit spreads for hundreds of securitized bonds to trace the path of crisis from subprime-housing related assets into markets that had no connection to housing. We find that changes in the “LIB-OIS†spread, a proxy for counterparty risk, was strongly correlated with changes in credit spreads and repo rates for securitized bonds. These changes implied higher uncertainty about bank solvency and lower values for repo collateral. Concerns about the liquidity of markets for the bonds used as collateral led to increases in repo “haircutsâ€: the amount of collateral required for any given transaction. With declining asset values and increasing haircuts, the U.S. banking system was effectively insolvent for the first time since the Great Depression.
    JEL: G1 G19
    Date: 2009–08
  12. By: Richard Harris; Victoria Kravtsova
    Abstract: This paper provides a survey and critique of how spatial links are taken into account inempirical analysis by applied economists/regional scientists. Spatial spillovers and spatialinterrelationships between economic variables (e.g. unemployment, GDP, etc) are likely to beimportant, especially because of the role of local knowledge diffusion and how trade (interregionalexports and imports) can potentially act to diffuse technology. Since most empiricaleconomic studies ignore spatial autocorrelation they are thus potentially mis-specified. Thishas led to various approaches to taking account of spatial spillovers, including econometricmodels that dependent on specifying (correctly) the spatial weights matrix, W. The paperdiscusses the standard approaches (e.g., contiguity and distance measures) in constructing W,and the implications of using such approaches in terms of the potential mis-specification ofW. We then look at more recent attempts to measure W in the literature, including: Bayesian(searching for 'best fit'); non-parametric techniques; the use of spatial correlation to estimateW; and other iteration techniques. The paper then considers alternative approaches forincluding spatial spillovers in econometric models such as: constructing (weighted) spillovervariables which directly enter the model; allowing non-contiguous spatial variables to enterthe model; and the use of spatial VAR models. Lastly, we discuss the likely form of spatialspillovers and therefore whether the standard approach to measuring W is likely to besufficient.
    Keywords: spatial weights spatial dependence spatial models
    JEL: C31 R11
    Date: 2009–03
  13. By: Pol, Eduardo (University of Wollongong)
    Abstract: This paper views the housing and credit bubble 2001-2008 in a stylized manner, namely as a sequence starting with a financial innovation in 2001 followed by the superimposition of other financial innovations leading to the prevalence of uncertainty in Knight’s sense and ending in the last quarter of 2008 with both market failure and regulation failure. This ‘debt bubble sequence’ is just a slice of a dynamic process of stupefying complexity involving ignorance in a fundamental way. Few analysts would deny that a financial innovation, namely the sub-prime mortgage,combined with market participants’ ignorance about the size and location of the risk underlying complex financial products was a critical factor conducive to the financial meltdown 2007-2008. To the extent that financial innovation does bear the blame, the most obvious question is whether anything can be done to help reduce the degree of public’s ignorance about financial innovations and to prevent destabilizing innovations from entering the market.The main claim of this paper is that society should be involved in exercising directive intelligence through an appropriate institutional arrangement over the intricacies and technicalities inherent to financial innovations. Specifically, the paper proposes a new institutional arrangement conceived with the aim of strengthening financial system reliability and breaking the ‘government regulation-financial innovation’ vicious circle.
    Keywords: Toxic financial innovations, Knightian uncertainty, debt bubble 2001-2008, relevant regulation
    JEL: G18 G21 G28
    Date: 2009
  14. By: Luigi Cannari (Banca d'Italia); Giovanni Iuzzolino (Banca d'Italia)
    Abstract: This paper provides a detailed insight into the magnitude of price-level differentials among Italian regions, supplementing the data collected by Istat with information on house prices and rentals collected by Agenzia del Territorio and by the Bank of Italy and with estimates from other sources. Results show that prices are lower in southern Italy than in other areas. The most reliable estimate gives a differential of 16/17 per cent. This spread is due mainly (i.e. more than two-thirds) to different levels of house prices, which include imputed rentals. If only effective rentals are considered, the spread decreases to 10 per cent. Noteworthy differentials can be also found within macro-areas, although on a smaller scale, signalling the potential relevance of regional and local factors in determining the price level of some goods and services.
    Keywords: Urban economics,Regional studies
    JEL: R1 E31
    Date: 2009–07
  15. By: Aguirregabiria, Victor; Ho, Chun-Yu
    Abstract: This paper studies the contribution of demand, costs, and strategic factors to the adoption of hub-and-spoke networks in the US airline industry. Our results are based on the estimation of a dynamic oligopoly game of network competition that incorporates three groups of factors that may explain hub-and-spoke networks: (1) travelers may value the services associated with the scale of operation of an airline in the hub airport; (2) operating costs and entry costs in a route may decline with the airline's scale of operation in the origin and destination airports (e.g., economies of scale and scope); and (3) a hub-and-spoke network may be an effective strategy to deter the entry of other carriers. We estimate the model using data from the Airline Origin and Destination Survey with information on quantities, prices, and entry and exit decisions for every airline company in the routes between the 55 largest US cities. As methodological contributions, we propose and apply a method to reduce the dimension of the state space in dynamic games, and a procedure to deal with the problem of multiple equilibria when using a estimated model to make counterfactual experiments. We find that the most important factor to explain the adoption of hub-and-spoke networks is that the cost of entry in a route declines importantly with the scale of operation of the airline in the airports of the route. For some of the larger carriers, strategic entry deterrence is the second most important factor to explain hub-and-spoke networks.
    Keywords: Airline industry; Hub-and-spoke networks; Entry costs; Industry dynamics; Estimation of dynamic games; Counterfactual experiments in models with multiple equilibria.
    JEL: C10 L93 L13 C63 L10 C35 C73
    Date: 2009–08–09
  16. By: Michael Artis; Christian Dreger; Konstantin Kholodilin
    Abstract: We examine real business cycle convergence for 41 euro area regions and 48 US states.Results obtained by a panel model with spatial correlation indicate that the relevance ofcommon business cycle factors is rather stable over the past two decades in the euro area andthe US. Ongoing business cycle convergence often detected in cross-country data is notconfirmed at the regional level. The degree of synchronization across the euro area is similarto that to be found for the US states. Thus, the lack of convergence does not seem to be animpediment to a common monetary policy.
    Keywords: Business cycle convergence, spatial correlation, spatial panel model
    JEL: E32 C51 E37
    Date: 2009–04
  17. By: Alicia García-Herrero; Santiago Fernández de Lis
    Abstract: In this paper we explore some lessons from the Spanish housing boom and the incipient bust from the point of view of the usefulness of the regulatory approach, with particular regard to dynamic provisions and the regulatory treatment of securitisation. First, we describe the main features of the recent housing cycle. Secund, we summarize the Spanish securitisation model. Third, we deal with dynamic provisions and in the last section, we present some conclusions.
    Date: 2008–09
  18. By: Massimiliano Cali; Carlo Menon
    Abstract: Although the high rate of urbanization and the high incidence of rural poverty are two distinct features of many developing countries, we still do not know the effects of the former on the latter. We address this issue by exploring the mechanisms through which urbanization may alleviate rural poverty, disentangling "first round" effects, due to migration of rural poor to cities, and "second round" effects, due to positive externalities of city growth on surrounding rural areas. We test our theoretical predictions on a sample of Indian districts in the period 1981-1999, and find that urbanization has a substantial and systematic poverty reducing effect in surrounding rural areas. This effect is largely attributable to positive spillovers from urbanisation rather than to the movement of the rural poor to urban areas per se. Results using IV estimation suggest that this effect is causal in nature (from urbanisation to rural poverty).
    Keywords: Rural Poverty, Urbanization, Indian districts, India
    JEL: O12 O18 O2 I3
    Date: 2009–02
  19. By: Siedschlag, Iulia (ESRI); Smith, Donal (ESRI); Turcu, Camelia (CRIEF, University of Poitiers); Zhang, Xiaoheng (ESRI)
    Abstract: We analyse 446 location decisions of foreign affiliates in the R&D sector incorporated in the European Union over 1999-2006. Our results suggest that on average, the location probability increases with the size of demand, agglomeration economies, low production cost, R&D intensity, flexibility of labour markets, access to skilled labour and information technology infrastructure. Our evidence suggests that after controlling for the R&D intensity of regions, European Union?s regional policy and country level tax differences have had no significant effects in fostering the attractiveness of regions to R&D foreign investment. We find evidence of geographical structures relevant for the location choice of R&D multinational firms across the European Union. Further, we find that European investors have responded differently to location characteristics in comparison to North American investors.
    Date: 2009–07
  20. By: Julio Martinez-Galarraga; Joan R. Roses; Daniel A. Tirado Fabregat
    Abstract: This paper studies the evolution of Spanish regional inequality from 1860 to 1930. The results point to the coexistence of two basic forces behind changes in regional economic inequality: industrial specialization and labor productivity differentials. The initial expansion of industrialization, in a context of growing economic integration of regions, promoted the spatial concentration of manufacturing in certain regions, which also benefited from the greatest advances in terms of labor productivity. Since 1900, the diffusion of manufacturing production to a greater number of locations generated the emulation of production structures and a process of catching-up in labor productivity and wages.
    Keywords: Industrialization, Market Integration, Heckscher-Ohlin Model, New Economic Geography
    JEL: N93 N94 R11
    Date: 2009–07
  21. By: Tampubolon, Gindo
    Abstract: Neighbourhood social capital is often claimed to improve health but in Britain this claim finds little support. I examine the effects of neighbourhood social capital on the Welsh health quality of life in 2007 using instrumental variable estimator. By extending the influential Grossman health production model and borrowing from the Blume-Brock-Durlauf statistical mechanics of social interactions model, suitable instruments for identification are readily obtained. Instruments (neighbourhood ethnic diversity and residence length) were collected from separate survey. Neighbourhood social capital and deprivation measures were likewise independently gathered from measures of individual socioeconomic status and health (SF-36). In the national sample there are 13,557 respondents residing in 1,152 neighbourhoods. Neighbourhood deprivations invariably reduce individual health quality of life but neighbourhood social capital more than compensate for this. Because the instruments are strong enough to identify the effects, I show that friendly neighbourhood and friendly neighbours, sense of community in the neighbourhood, trust, ready exchange of information and goods, and sense of belonging improve residents' health. Public health practitioners have these measures as additional tools in their box when formulating policy to improve public health.
    Keywords: neighbourhood social capital; SF-36; individual quality of life; physical health
    JEL: D71 I12 I18
    Date: 2009–08–12
  22. By: Andreas Farwick
    Abstract: Research on internal migration covers a wide range of issues with regard to the reasons, distance and direction of moves as well as the process of decision-making. Given the rich field of relevant research objectives and the substantial developments in migration theory it is apparent that the availability of a broad set of data including detailed information on various aspects of life is one of the key factors for ongoing progress in the analysis of internal migration development. Available official aggregated data are useful for descriptive structural analyses. But they are very limited in explaining causal relations. The same holds for cross-sectional data. Some of the described longitudinal data sets consist of retrospective collected event history data that are not suitable for collecting essential information about attitudes and psychological states of the respondents over time. Several prospective longitudinal survey data do not represent essential aspects of internal migration. Data should at least include information on the place of residence (on the smallest possible spatial level), typologies about the characteristics of the place of residence, change of residence, reasons of a move, intentions to move, the dwelling and the neighbourhood as well as on commuting.
    Keywords: internal migration, regional migration, migration theory, official data, cross-sectional data, longitudinal data.
    Date: 2009
  23. By: Rashmi Barua; Kevin Lang
    Abstract: Partly in response to increased testing and accountability, states and districts have been raising the minimum school entry age, but existing studies show mixed results regarding the effects of entry age. These studies may be severely biased because they violate the monotonicity assumption needed for LATE. We propose an instrument not subject to this bias and show no effect on the educational attainment of children born in the fourth quarter of moving from a December 31 to an earlier cutoff. We then estimate a structural model of optimal entry age that reconciles the different IV estimates including ours. We find that one standard instrument is badly biased but that the other diverges from ours because it estimates a different LATE. We also find that an early entry age cutoff that is applied loosely (as in the 1950s) is beneficial but one that is strictly enforced is not.
    JEL: C21 I20 J24
    Date: 2009–08
  24. By: Grancay, Martin
    Abstract: Air transport liberalization constitutes a whole new level of globalization. The impacts it brings can be divided into direct, indirect, induced and catalytic. The magnitude of impacts is determined by various factors, including air transport liberalization multiplier, market saturation and the degree of liberalization of other sectors. Airlines profit from increased efficiency derived from economies of scale, economies of scope and density economies. On the demand side, the passengers enjoy better range of available destinations, higher frequency of service and new business models, such as was the entrance of low-cost carriers to the EU market in the second half of the 1990s.
    Keywords: air transport; liberalization; multiplier; elasticity
    JEL: L93 L91
    Date: 2009–07
  25. By: Luigi Cannari (Banca d'Italia); Marco Magnani (Banca d'Italia); Guido pellegrini
    Abstract: In this paper we examine the Italian regional policies launched in the second half of the 1990s and aimed at promoting the development of Southern Italy. Ten years on, the goals have not been reached, either in terms of social and economic development, or of the performance of firms receiving government aid. In evaluating the discrepancy between targets and results we argue that the failure of regional policies is a facet of the more general failure of Italian economic policies in the last fifteen years, clearly witnessed by the stagnation of growth and productivity both in the North and Centre and in the South. Two main aspects are highlighted: the effectiveness of regional policies has been affected by national legal rules that have had different effects across regions and have usually allowed a lower quality of public expenditure in the South; the effectiveness of regional policies has been diminished also by attributing importance to regional governments as control centres of public intervention.
    Keywords: regional policies, regional development, cohesion
    JEL: R58
    Date: 2009–07
  26. By: Roberto Ezcurra; Andrés Rodríguez-Pose
    Abstract: This paper looks at the relationship between fiscal and political decentralization and theevolution of regional inequalities in a panel of 26 countries - 19 developed and 7 developing- for the period between 1990 and 2006. Using an instrumental variables method, it finds thatwhereas for the whole sample decentralization is completely dissociated for the evolution ofregional disparities, the results are highly contingent on the level of development, the existinglevel of territorial inequalities, and the fiscal redistributive capacity of the countries in thesample. Decentralization in high income countries has, if anything, been associated with areduction of regional inequality. In low and medium income countries, fiscal decentralizationhas been associated with a significant rise in regional disparities, which the positive effects ofpolitical decentralization have been unable to compensate. Policy preferences by subnationalgovernments for expenditure in economic affairs, education, and social protection havecontributed to this trend.
    Keywords: Fiscal decentralization, political decentralization, regional disparities, territorialinequality, fiscal redistribution
    JEL: H11 H71 R11
    Date: 2009–07
  27. By: Vimala Ramachandran
    Abstract: This study tried to bring together the experiences of different approaches to incentives followed by six NGOs in the states of Rajasthan, Maharashtra, Orissa, Andhra Pradesh and Karnataka. Issues dealing with incentives and the hidden cost of education have been explored with a view to gaining some insights and exploring some possible ways forward in such a diverse and challenging situation.
    Keywords: Malnutrition, anaemia, education, educational programmes, DPEP, teachers, learning, school system, Dropout rates, SC, ST, boys, girls, NFHS, adult women, women, Muslim communities, marriage, illiterate, incentives, NGOs, Rajasthan, incentives, elementary education, Maharashtra, Orissa, Andhra Pradesh, Karnataka
    Date: 2009

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