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on Development |
| By: | Acemoglu, Daron; Johnson, Simon; Robinson, James A; Yared, Pierre |
| Abstract: | This paper revisits and critically re-evaluates the widely-accepted modernization hypothesis which claims that per capita income causes the creation and the consolidation of democracy. We argue that existing studies find support for this hypothesis because they fail to control for the presence of omitted variables. There are many underlying historical factors that affect both the level of income per capita and the likelihood of democracy in a country, and failing to control for these factors may introduce a spurious relationship between income and democracy. We show that controlling for these historical factors by including fixed country effects removes the correlation between income and democracy, as well as the correlation between income and the likelihood of transitions to and from democratic regimes. We argue that this evidence is consistent with another well-established approach in political science, which emphasizes how events during critical historical junctures can lead to divergent political-economic development paths, some leading to prosperity and democracy, others to relative poverty and non-democracy. We present evidence in favor of this interpretation by documenting that the fixed effects we estimate in the post-war sample are strongly associated with historical variables that have previously been used to explain diverging development paths within the former colonial world. |
| Keywords: | democracy; economic growth; institutions; political development |
| JEL: | O10 P16 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6430&r=dev |
| By: | Jonathan Eaton; Marcela Eslava; Maurice Kugler; James Tybout |
| Abstract: | Research in international trade, both theoretical and quantitative, is increasingly focussed on the role of firm heterogeneity in shaping trade flows. One strand of the literature shows how firm-specific productivity shocks affect the mix of exporting firms and their foreign sales volumes (e.g., Clerides, Lach, and Tybout, 1998; Bernard and Jensen, 1999; Melitz, 2003; Bernard, Eaton, Jensen, and Kortum, 2003; Das, Roberts, and Tybout, 2007; Bernard, Jensen, Reading, and Schott, 2007). These studies provide insight into why some producers export and others do not, and the role of market entry costs in shaping export dynamics. Another strand of the literature documents and interprets the relationship between firms’ productivity levels and the collection of foreign markets that they serve (Eaton, Kortum, and Kramarz, 2004 and 2007). These papers find that most exporting firms sell to only one foreign market, with the frequency of firms’ selling to multiple markets declining with the number of destinations. At the same time, firms selling to only a small number of markets tend to sell to the most popular ones. Less popular markets are served by firms that export very widely. These patterns are consistent with the notion that firms with relatively low marginal costs can profitably exploit relatively more foreign markets. |
| Date: | 2007–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:003957&r=dev |
| By: | Gradstein, Mark |
| Abstract: | This paper's point of departure is that low-quality institutions, concentration of political power, and underdevelopment are persistent over time. Its analytical model views an equal distribution of political power as a commitment device to enhance institutional quality thereby promoting growth. The politically powerful coalition contemplates relinquishing of its power, weighing this advantageous consequence against the limit on own appropriative ability that it entails. The possibility of two developmental paths is exhibited: with concentration of political and economic power, low-quality institutions, and slow growth; and a more equal distribution of political and economic resources, high-quality institutions, and faster growth. |
| Keywords: | growth; inequality; institutional quality; political bias |
| JEL: | D31 D72 O10 O11 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6414&r=dev |
| By: | Bruce Blonigen; Alyson Ma |
| Abstract: | Foreign-invested enterprises (FIEs) account for well over half of all Chinese exports and this share continues to grow. While the substantial presence of FIEs has contributed greatly to the recent export-led growth of China, an important objective of the Chinese government is to ultimately obtain foreign technologies and develop their own technological capabilities domestically. This paper uses detailed data on Chinese exports by sector and type of enterprise to examine the extent to which domestic enterprises are "keeping up" or even "catching up" to FIEs in the volume, composition and quality of their exports. We also use a newly-created dataset on Chinese policies encouraging or restricting FIEs across sectors to examine the extent to which such policies can affect the evolving composition of Chinese exports. |
| JEL: | F14 L11 L15 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13376&r=dev |
| By: | Ottaviano, Gianmarco I P |
| Abstract: | The effects of the quality of institutions on economic development and comparative advantage have been so far investigated separately. This paper proposes a theoretical framework in which trade patterns and growth rates are jointly determined by international differences in contract enforcement that affect firms' organizational decisions. In a two-country dynamic Ricardian model with endogenous innovation and hold-up problems, the value chain consists of two activities, innovation and production. Entry in the market happens through R&D and entrants face two decisions. The 'location decision' determines where to place R&D laboratories and production plants. Through the 'ownership decision' firms choose whether to perform innovation and production within the same vertically integrated structure or not. In this framework, the quality of contract enforcement drives the ownership decision, which affects R&D returns, research intensity and growth. Balance of payments adjustments cause movements in relative wages, which affect the location decision and, therefore, the pattern of sectoral specialization and international trade. |
| Keywords: | economic growth; incomplete contracts; innovation; theory of the firm |
| JEL: | D23 F10 L23 O30 O40 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6419&r=dev |
| By: | Bengtsson, Niklas (Department of Economics) |
| Abstract: | We use time-series of rainfall along with individual fixed effects to estimate the response of body weight to transitory changes in house-hold income and expenditure. Our data consist of a longitudinal sample of subsistence farmers in rural Tazania, representing one of the poorest populations in the world. We find that the response of body weight to transitory changes in household income is positive on average, but that the impact decreases with age and being male. For female children, a ten percent increase in household income implies an increase in body weight with about 0.4 kilo. The body weight of male adults is practically invariant to income changes. |
| Keywords: | Income variability; Consumption; Nutrition; sub-Saharan Africa |
| JEL: | D13 I12 O12 |
| Date: | 2007–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2007_020&r=dev |
| By: | Claudio Agostini (ILADES-Georgetown University, Universidad Alberto Hurtado); Phillip Brown (Colby College, Waterville, Maine, United States and International Food Policy Research Institute, Washington, D.C., United States.) |
| Abstract: | Despite rapid economic growth and poverty reduction, inequality in Chile has remained high and remarkably constant over the last 20 years,prompting academic and public interest in the subject. Due to data limitations, however, research on inequality in Chile has concentrated on the national and regional levels. The impact of cash subsidies to poor households on local inequality is thus not well understood. Using povertymapping methods to asses this impact, we find heterogeneity in the effectiveness of regional and municipal governments in reducing inequality via poverty-reduction transfers, suggesting that alternative targeting regimes may complement current practice in aiding the poor. |
| Keywords: | Inequality, poverty mapping, government cash transfers, Chile |
| JEL: | H53 I32 O15 D63 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ila:ilades:inv181&r=dev |
| By: | Claudio Agostini (ILADES-Georgetown University, Universidad Alberto Hurtado); Phillip Brown (Colby College, Waterville, Maine, United States and International Food Policy Research Institute, Washington, D.C., United States.) |
| Abstract: | Despite success in reducing poverty over the last twenty years, inequality in Chile has remained virtually unchanged, making Chile one of the least equal countries in the world. High levels of inequality have been shown to hamper further reductions in poverty as well as economic growth, and local inequality has been shown to affect such outcomes as violence and health. The study of inequality at the local level is thus crucial for understanding the economic well-being of a country. Local measures of inequality have been difficult to obtain, but recent theoretical advances have enabled the combination of survey and census data to generate estimates of inequality that are robust at disaggregated geographic levels. In this paper, we employ this methodology to produce consistent and precise estimates of inequality for every county in Chile. We find considerable heterogeneity in county-level estimates of inequality, with Gini coefficients ranging from 0.41 to 0.63. An appendix includes estimated inequality for each county so the broader research community may assess the effect of local inequality on a broad range out outcomes, as well as analyze the determinants of inequality itself. |
| Keywords: | inequality, poverty mapping, government subsidies, cash transfers, Chile |
| JEL: | O15 D63 O54 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ila:ilades:inv186&r=dev |
| By: | Claudio Agostini (ILADES-Georgetown University, Universidad Alberto Hurtado); Phillip Brown (Colby College, Waterville, Maine, United States and International Food Policy Research Institute, Washington, D.C., United States.) |
| Abstract: | By all accounts, poverty in Chile has declined dramatically over the last 20 years, with the nacional headcount ratio declining from nearly 40% in 1987 to below 14% in 2006. Due to data limitations, most research on poverty in Chile has focused on national and regional estimates, yet recent improvements in poverty mapping methodologies now enable the analysis of poverty at the sub-regional level. In this paper, we employ these methodologies to assess the impact of cash transfers on poverty rates at the county level. We find that transfers significantly reduce the incidence of poverty and that estimated headcount ratios fall by between 5% and 68%. To better understand variation in the effectiveness of transfers in reducing poverty at the local level, we also explore the interplay between transfers and geography. We find that the greatest reductions in poverty at the county level occur in rural households and that topography influences the effectiveness of transfers in some areas. Taken together, these findings suggest that targeting at low levels of aggregation can help to deliver further reductions in poverty. |
| Keywords: | inequality, poverty mapping, government subsidies, cash transfers, Chile |
| JEL: | H53 I32 O15 D63 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ila:ilades:inv187&r=dev |
| By: | Hiro Ito; Menzie Chinn |
| Abstract: | We investigate the role of budget balances, financial development and openness, in the evolution of global imbalances. Financial development -- or the lack thereof -- has received considerable attention as a possible contributing factor to the development of persistent and expanding current account imbalances. Several observers have argued that the depth and sophistication of US capital markets have caused capital to flow from relatively underdeveloped East Asian financial markets. In this paper, we extend our previous work by examining the effect of different types and aspects of financial development. Our cross-country analysis, encompassing a sample of 19 industrialized countries and 70 developing countries for the period of 1986 through 2005, yields a number of new results. First, we confirm a role for budget balances in industrial countries when bond markets are incorporated. Second, empirically both credit to the private sector and stock market capitalization appear to be equally important determinants of current account behavior. Third, while increases in the size of financial markets induce a decline in the current account balance in industrial countries, the reverse is more often the case for developing countries, especially when other measures of financial development are included. However, because of nonlinearities incorporated into the specifications, this characterization is conditional upon other factors. Fourth, a greater degree of financial openness is typically associated with a smaller current account balance in developing countries. |
| JEL: | F32 F41 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13364&r=dev |
| By: | Kraay, Aart; Geginat, Carolin |
| Abstract: | Multilateral development banks are frequently accused of " defensive lending, " the practice of extending new loans purely in order to ensure that existing loans are repaid. This paper empirically examine this hypothesis using data on lending by and repayments to the International Development Association (IDA), which is the largest provider of concessional development loans to low-income countries. The authors argue that key institutional features of IDA both (i) potentially create incentives for defensive lending, and (ii) enable particularly sharp tests of the defensive lending hypothesis. The authors find that there is a surprisingly robust partial correlation between disbursements on new IDA loans and repayments on existing loans. However, a closer look at the evidence suggests that defensive lending is unlikely to be a major explanation for this partial correlation. |
| Keywords: | Debt Markets,Bankruptcy and Resolution of Financial Distress,Access to Finance,Banks & Banking Reform,Economic Theory & Research |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4328&r=dev |
| By: | Karanja, Fredrick K; Kabubo-Mariara, Jane |
| Abstract: | This paper measures the economic impact of climate on crops in Kenya. The analysis is based on cross-sectional climate, hydrological, soil, and household level data for a sample of 816 households, and uses a seasonal Ricardian model. Estimated marginal impacts of climate variables suggest that global warming is harmful for agricultural productivity and that changes in temperature are much more important than changes in precipitation. This result is confirmed by the predicted impact of various climate change scenarios on agriculture. The results further confirm that the te mperature component of global warming is much more important than precipitation. The authors analyze farmers ' perceptions of climate variations and their adaptation to these, and also constraints on adaptation mechanisms. The results suggest that farmers in Kenya are aware of short-term climate change, that most of them have noticed an increase in temperatures, and that some have taken adaptive measures. |
| Keywords: | Climate Change,Environmental Economics & Policies,Common Property Resource Development,Global Environment Facility,Crops & Crop Management Systems |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4334&r=dev |
| By: | Grigoriou, Christopher |
| Abstract: | This paper assesses the impact of internal infrastructure and landlockedness on Central Asian trade using a panel gravity equation estimated on a large sample of countries (167 countries over 1992-2004). The panel structure of the dataset makes it possible to control for country-pair specific effects (as opposed to the usual importer and exporter effects) that would otherwise be captured by the coefficients of time-invariant variables such as distance or landlockness. Our findings highlight the need to pursue a dual policy agenda. First, transit corridors are regional public goods and should be managed as such through international cooperation. International Financial Institutions can -and do- play a key role in this regard through assistance, coordination and policy dialogue. Second, the Central Asian countries should actively seek diversification of their tran sit corridors to prevent the creation or maintenance of monopoly positions in transit and bottleneck points such as trans-shipment platforms. |
| Keywords: | Transport Economics Policy & Planning,Common Carriers Industry,Transport and Trade Logistics,Economic Theory & Research,Free Trade |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4335&r=dev |
| By: | Mengistae, Taye; Honorati, Maddalena |
| Abstract: | This paper estimates a dynamic business growth equation on a sample of small-scale manufacturers. The results suggest that excessive labor regulation, pow er shortages, and problems of access to finance are significant influences on industrial growth in India. The expected annual sales growth rate of an enterprise is lower where labor regulation is greater, power shortages are more severe, and cash flow constraints are stronger. The effects of each of the three factors on business growth seem also to depend on a fourth element, namely, corruption. Specifically, labor regulation affects the growth only of enterprises for which corruption is not a factor in business decisions. By contrast, power shortages seem to be a drag on the growth only of enterprises self-reportedly held back by corruption. Lastly, sales growth is constrained by cash flow only in businesses that are not affected by labor regulation, power shortages, or corruption. The analysis uses corruption as a proxy for the quality of " property rights institutions " and considers labor regulation and small business financing as instances of " contracting institutions. " The findings on the interaction between corruption and other aspects of business environment then seems to indicate that the quality of property rights institutions exerts more abiding influence on economic outcomes than the quality of contracting institutions. Moreover, there might also be a hierarchy among contracting institutions in their effect on manufacturing growth. |
| Keywords: | Labor Markets,Labor Policies,Economic Growth,Access to Finance,Pro-Poor Growth and Inequality |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4338&r=dev |
| By: | Javorcik, Beata Smarzynska; Harding, Torfinn |
| Abstract: | Many countries spend significant resources on investment promotion agencies in the hope of attracting inflows of foreign direct investment. Despite the importance of this question for public policy choices, little is known about the effectiveness of investment promotion efforts. This study uses newly collected data on national investment promotion agencies in 109 countries to examine the effects of investment promot ion on foreign direct investment inflows. The empirical analysis follows two approaches. First, it tests whether sectors explicitly targeted by investment promotion agencies receive more foreign direct investment in the post-targeting period relative to the pre-targeting period and non-targeted sectors. Second, it examines whether the existence of an investment promotion agency is correlated with higher foreign direct investment inflows. Results from both approaches point to the same conclusion. Investment promotion efforts appear to increase foreign direct investment inflows to developing countries. Moreover, agency characteristics, such as the agency ' s legal status and reporting structure, affect the effectiveness of investment promotion. There is also evidence of diversion of foreign direct investment due to investment incentives offered by other countries in the same geographic region. |
| Keywords: | Investment and Investment Climate,Foreign Direct Investment,Debt Markets,Emerging Markets, |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4339&r=dev |
| By: | van de Walle, Dominique; Mu, Ren |
| Abstract: | We assess impacts of rural road rehabilitatio n on market and institutional development at the commune level in rural Vietnam. Double difference and matching methods are used to address sources of selection bias in identifying impacts. We focus on impact heterogeneities and the geographic, community, and household factors that explain them. A key question from a policy standpoint is whether the impact-contingent factors are consistent and universal across project areas and outcome indicators. We find evidence of considerable impact heterogeneity, with a tendency for poorer areas to have conditions favoring higher impacts, although impacts are highly context specific. |
| Keywords: | Transport Economics Policy & Planning,Housing & Human Habitats,Poverty Monitoring & Analysis,Rural Roads & Transport,Economic Theory & Research |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4340&r=dev |
| By: | Abbas, Qaisar; Foreman-Peck, James (Cardiff Business School) |
| Abstract: | This paper estimates and interprets returns to education for three sub-sectors of labour market by gender in Pakistan, using the most recent data set of Pakistan Social and Living Standards Measurement (PSLM) Survey 2004-05. The results show two distinctive features of Pakistani education, the high apparent returns to female education outside agriculture, and the remarkable increase of returns with successive levels of education, are to be explained primarily by two departures from the basic Mincer model; generally poor quality primary schooling and family unwillingness to invest in female education because of lack of earning opportunities. There is some signaling in Pakistani education investment but mainly the education is productivity-enhancing investment in human capital, according to a comparison of self-employed and paid employed earnings equations. Returns to public spending of education are extremely high, suggesting very considerable state underinvestment. The policy challenge is in the low wages and high education in the female paid employment sector, and the low participation rate. |
| Keywords: | Rates of return; gender; occupation; Pakistan |
| JEL: | J16 J18 J24 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2007/24&r=dev |
| By: | Gustavo Anríquez (Agricultural and Development Economics Division, Food and Agriculture Organization); Kostas Stamoulis (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | This paper examines the relationship between rurality and poverty, and the role the agricultural sector can play in rural development, poverty reduction, and overall development. The historical views regarding the role of the primary sector in development are presented, and then using original data, the paper argues that there was an historical misjudgment against the primary sector that served as a foundation for anti-agricultural bias in public policy until the late 80’s. Finally, this paper explains how under certain conditions territorial/regional development strategies may prosper, but in other conditions, particularly in the least-developed countries rural space, agriculture is still necessarily the starting point for rural development. |
| Keywords: | rural development, agricultural growth, poverty reduction, production linkages. |
| JEL: | Q10 O10 O13 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0702&r=dev |
| By: | Calogero Carletto (Agricultural and Development Economics Division, Food and Agriculture Organization); Angeli Kirk (Agricultural and Development Economics Division, Food and Agriculture Organization); Paul Winters (Agricultural and Development Economics Division, Food and Agriculture Organization); Benjamin Davis (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | This paper uses a duration analysis based on adoption data spanning over 25 years from six communities in the Central Highlands of Guatemala to explore how household characteristics and external trends play into both the adoption and diffusion processes of non-traditional exports among smallholders. Adoption was initially widespread and rapid, which led NTX to be hailed as a pro-poor success, reaching all but the smallest landholders. However, over time, more than two-thirds of adopters eventually dropped out from NTX production. Based on the analysis, NTX production appeared to have delivered less prosperity to adopters than initially promised. Primarily better-endowed farmers were able to overcome the increasingly adverse conditions and, in the long-terms, institutions and policy interventions do not appear to have mitigated these difficulties for less-endowed farmers. While poor farmers may be enticed into entering into NTX markets when conditions are favorable, they may lack the capacity to overcome difficulties that inevitably arise in complex types of cultivations and in highly variable global agricultural markets. Governmental and non-governmental organizations can attempt to mitigate these difficulties, but market forces may overwhelm these efforts, with poorer adopters still unable to compete in global markets. |
| Keywords: | Non traditional exports, Guatemala, small holders, adoption, globalization. |
| JEL: | Q12 Q13 O13 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0703&r=dev |
| By: | Alan De Brauw (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | In developing countries, when markets are incomplete migration can have multiple effects on agricultural production. In this paper, I use instrumental variables techniques to explore the effects of seasonal migration on agricultural production in rural Vietnam during the 1990s. Instrumenting migration with network variables specific to Vietnam, I find that migration shapes agricultural production is several ways. Although there are no effects of migration on aggregate production, there is weak evidence that migrant households move somewhat out of rice production and into the production of other crops. Inputs used by migrant households also decrease relative to similar non-migrant households. In exploring the mechanisms by which these changes occur, I find evidence consistent with a move from labor intensive into land intensive crops, rather than productivity changes or a shift from using labor to capital as an input. |
| Keywords: | Migration, Vietnam, instrumental variables, agriculture, factor demands. |
| JEL: | O15 Q12 J62 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0704&r=dev |
| By: | J. Edward Taylor (Agricultural and Development Economics Division, Food and Agriculture Organization); Alejandro López-Feldman (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | The migration of labor out of rural areas and the flow of remittances from migrants to rural households is an increasingly important feature of less developed countries. This paper explores ways in which migration influences incomes and productivity of land and human capital in rural households over time, using new household survey data from Mexico. Our findings suggest that a massive increase in migration to the United States increased per-capita incomes via remittances and also by raising land productivity in migrant-sending households. They do not support the pessimistic view that migration discourages production in migrant-sending economies, nor the view implicit in separable agricultural household models that migration and remittances influence household incomes but not production. |
| Keywords: | Migration, income, agricultural production, Mexico. |
| JEL: | O15 O13 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0710&r=dev |
| By: | Guy Stecklov (Agricultural and Development Economics Division, Food and Agriculture Organization); Alejandro Alexander Weinreb (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | A long series of ethnographic and sociological studies on kinship systems and information flows in developing societies has portrayed networks as varying structurally, serving multiple functions, and expressing themselves in different types of interaction. Little of this earlier work has informed empirical research in demography or development-related research. In stead, the latter operationalize social networks in relatively narrow ways, allowing for little overlap between multiple networks, and focusing on a subset of potential causal mechanisms. In an effort to pull the empirical literature closer to its qualitative forbearer, we use data from the Malawi Diffusion and Ideation Change Project to test how conversation networks and transfer networks overlap. We offer some predictions regarding how these overlapping networks might individually or jointly influence distinct outcome including ownership of livestock, planning innovative crops and HIV testing. Our sample of women from Malawi, interviewed in 3 rounds across a 6-year period, also enables us to question the inter-temporal stability of network effects. Our findings highlight: (a) how networks based on different actions appear nonetheless consistent with diverse behavioral outcomes; (b) how there is relatively little overlap between conversational and transfer networks; and (c) how there is considerable instability in temporal effects of conversational networks. |
| Keywords: | Agricultural innovation, social networks, risk diversification, HIV testing. |
| JEL: | J1 O1 O3 D8 D85 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0712&r=dev |
| By: | Richard P.C. Brown (Agricultural and Development Economics Division, Food and Agriculture Organization); Gareth Leeves (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | We use original 2005 survey data from Fiji and Tonga on remittances and household income to estimate the combined impact of migration and remittances on the composition of household income. A two-stage methodology is followed. A variable for the predicted number of migrants in each household is generated to control for selectivity in migration. This variable is then used in a 3SLS remittances and income equation system. In neither country do we observe significant impacts on agricultural cash income, but, in relation to other income sources, including subsistence agriculture, wages and non-agricultural business activities, some significant and different effects are found, both positive and negative. These findings suggest that the duration and intensity of remittance-driven migration, and the structure of economic activity within a community are important in understanding the influences of migration and remittances on household resource allocation and production decisions and on the community’s economic transformation. |
| Keywords: | Migration, remittances, agricultural and non-agricultural income sources, Fiji, Tonga. |
| JEL: | O15 O13 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0713&r=dev |
| By: | Benjamin Davis (Agricultural and Development Economics Division, Food and Agriculture Organization); Paul Winters (Agricultural and Development Economics Division, Food and Agriculture Organization); Gero Carletto (Agricultural and Development Economics Division, Food and Agriculture Organization); Katia Covarrubias (Agricultural and Development Economics Division, Food and Agriculture Organization); Esteban Quinones (Agricultural and Development Economics Division, Food and Agriculture Organization); Alberto Zezza (Agricultural and Development Economics Division, Food and Agriculture Organization); Kostas Stamoulis (Agricultural and Development Economics Division, Food and Agriculture Organization); Genny Bonomi (Agricultural and Development Economics Division, Food and Agriculture Organization); Stefania DiGiuseppe (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | This paper uses a newly constructed cross country database composed of comparable variables and aggregates from household surveys to examine the full range of income generating activities carried out by rural households in order to determine: 1) the relative importance of the gamut of income generating activities in general and across wealth categories; 2), the relative importance of diversification versus specialization at the household level; 3) the relationship between key household assets and the participation in and income earned from these activities; and 4) the influence of rural income generating activities on poverty and inequality. Analysis of the RIGA cross country dataset paints a clear picture of multiple activities across rural space and diversification across rural households. This is true across countries in all four continents, though less so in the African countries included in the dataset. For most countries the largest share of income stems from off farm activities, and the largest share of households have diversified sources of income. Diversification, not specialization, is the norm, although most countries show significant levels of household specialization in non-agricultural activities as well. Nevertheless, agricultural based sources of income remain critically important for rural livelihoods in all countries, both in terms of the overall share of agriculture in rural incomes as well as the large share of households that still specialize in agricultural sources of income. |
| Keywords: | rural non farm, income diversification, household surveys. |
| JEL: | I32 O15 O57 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0716&r=dev |
| By: | Alberto Zezza (Agricultural and Development Economics Division, Food and Agriculture Organization); Paul Winters (Agricultural and Development Economics Division, Food and Agriculture Organization); Benjamin Davis (Agricultural and Development Economics Division, Food and Agriculture Organization); Gero Carletto (Agricultural and Development Economics Division, Food and Agriculture Organization); Katia Covarrubias (Agricultural and Development Economics Division, Food and Agriculture Organization); Esteban Quinones (Agricultural and Development Economics Division, Food and Agriculture Organization); Kostas Stamoulis (Agricultural and Development Economics Division, Food and Agriculture Organization); Takis Karfakis (Agricultural and Development Economics Division, Food and Agriculture Organization); Luca Tasciotti (Agricultural and Development Economics Division, Food and Agriculture Organization); Stefania DiGiuseppe (Agricultural and Development Economics Division, Food and Agriculture Organization); Genny Bonomi (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | Access to assets and agrarian institutions is of critical importance to the economic viability of rural households. Understanding the extent of this access and how it links to the ability of rural households to employ different pathways out of poverty is thus vital for designing rural development policies. This paper characterizes household access to assets and agrarian institutions through the comparative analysis of datasets from 15 nationally representative household surveys from four regions of the developing world. We find that the access of rural households to a range of assets (including education, land and livestock) and institutions is in general low, though highly heterogeneous across countries, and by categories of households within countries. A large share of rural agricultural households do not use or have access to basic productive inputs, agricultural support services or output markets, and in general it is the landless and the smallest landowners who suffer significantly more from this lack of access. |
| Keywords: | rural non farm, assets, agrarian institutions, household surveys. |
| JEL: | O13 O57 Q12 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0717&r=dev |
| By: | Bambang Sayaka (Agricultural and Development Economics Division, Food and Agriculture Organization); Sumaryanto (Agricultural and Development Economics Division, Food and Agriculture Organization); André Croppenstedt (Agricultural and Development Economics Division, Food and Agriculture Organization); Stefania DiGiuseppe (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | Rice is of key importance to Indonesia’s national and household level food security. The choice of tariff policy has important implications for consumers and producers with policy makers having to decide between the trade-offs implied for the various stakeholders. In this study we use a multi-market model to assess the impact of hypothetical rice tariff changes on household welfare and other variables of interest to rice policy-makers. A reduction in the rice tariff from 30 to 0% reduces rice supply and wheat demand and stimulates rice demand and soybean supply. Rice imports increase from 0.8 to 2 million tons. Rural households except for the Java-top income group, see incomes fall. In terms of purchasing power all households gain very significantly. Eliminating rice tariffs increases crop diversification and more so in those areas and for those income groups which started off least diversified. It is clear that the higher retail rice price resulting from a 30% ad-valorem tariff rate imposes significant cost on the 90% of Indonesian households, including most of the very poor households, who are net rice buyers. The implied income gains appear relatively modest but do accrue to middle and poorer households especially in Java. On the other hand an increase in the tariff from 30 to 50% eliminates rice imports, reduces soybean output and stimulates wheat demand. Rural households, except for the Java-top income group, see incomes rise although the effect is relatively modest. In terms of purchasing power households are all worse off. |
| Keywords: | Indonesia, multi-market model, household welfare, rice, tariffs, crop diversification. |
| JEL: | Q11 Q18 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0718&r=dev |
| By: | Gustavo Anríquez (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | This paper studies rural demographic trends at the global level with an analysis of a specially prepared database of population age/gender/rurality tables from population censuses. The focus is to identify the main demographic differences in the evolution of rural and urban populations. Among the main findings of this study, we report that with the exception of Sub- Saharan Africa there is no rural feminization. Also, rural ageing is not observed at aggregate levels in rural regions of the developing world. Perhaps the main adverse demographic trend of rural populations is the high dependency ratios brought about by higher fertility rates. This paper also carries out a census-based cross-country net-migration study identifying the main characteristics of rural out-migration in Latin America, and searches for common threads in East Africa. This analysis shows important improvements of welfare indicators and asset accumulation in rural Latin America (promoting an upward convergence of poorer and richer areas of countries), partially explained by migration. We did not find common characteristics in rural out-migration in East Africa, but report that education is the key asset that enables out-migration from poorer rural communities in East Africa. |
| Keywords: | rural feminization, ageing, dependency, rural migration. |
| JEL: | J11 J16 R23 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0719&r=dev |
| By: | Gustavo Anríquez (Agricultural and Development Economics Division, Food and Agriculture Organization); Genny Bonomi (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | This paper provides a long-term and global view at current farming trends by analyzing a specially created database of farming characteristics of 17 countries across 43 different agricultural censuses representing the different developing regions of the world. The study shows that while agricultural land appears to be a constraint in central and East Asia, it has been under expansion in Latin America, Northern Africa, and most of Sub Saharan Africa. We also estimate that 9 out of 10 farms are small (i.e. smaller than 2 ha). These farms are more specialized in staple crops than their larger counterparts, and exhibit slower productivity growth. |
| Keywords: | Small Farms, land distribution, agricultural census, productivity. |
| JEL: | Q10 Q15 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0720&r=dev |
| By: | Luca Alinovi (Agricultural and Development Economics Division, Food and Agriculture Organization); Günter Hemrich (Agricultural and Development Economics Division, Food and Agriculture Organization); Luca Russo (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | Drawing on case studies from the Democratic Republic of the Congo (DRC), Somalia and Sudan, this paper focuses on policy, programming and institutional issues related to addressing food insecurity in protracted crises and fragile states, with a focus on areas afflicted by conflicts. The case studies illustrate how dysfunctional institutions are at the root of structural food insecurity and show how local people and institutions have been able, to a certain extent, to adapt and cope with the crises. However, the protracted nature of the crises has substantially eroded people’s assets and weakened the capacities of traditional safety net systems to provide protection. Against this background, mainstream humanitarian assistance – which has been the international community’s dominant response – has not been able to address the basic determinants of food security and in particular has not sufficiently supported the positive efforts of local institutions. The case studies illustrate some innovative approaches for addressing food insecurity during protracted crises. They show that while it remains indispensable to ensure neutrality for immediate responses that protect the most vulnerable, it is also crucial to take into account institutional and policy dynamics that support processes to rebuild resilience; create opportunities for strengthening the livelihoods of affected population at the very early stages of the crisis; and develop an adequate basket of interventions to address a variety of needs. |
| Keywords: | Food security, Institutions, Protracted crisis, Fragile states, Resilience, Livelihoods, Humanitarian assistance. |
| JEL: | Q15 Q18 R20 R52 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0721&r=dev |
| By: | Christian Romer Lovendal (Agricultural and Development Economics Division, Food and Agriculture Organization) |
| Abstract: | This paper documents the main findings of the vulnerable profiling work carried out in the State of Himachal Pradesh, India, as a mean to support the planning of food security and livelihoods promoting interventions at the state level. A similar study was undertaken in Orissa, India. The paper analyses the main characteristics and causes of food insecurity and vulnerability, seeking to identify who and where the vulnerable and food insecure are, why they are at risk of becoming food insecure and what options exist to reduce this risk. Using the sustainable livelihoods framework and collecting qualitative and quantitative data collection from four selected districts, the paper looks on the vulnerability of five livelihood groups, notably subsistence farming households, marginal commercial farming households, agricultural labouring households, migratory labouring households and pastoralist tribal households. Whilst Himachal Pradesh is comparably less food insecure, the paper shows that the state do face a range of challenges related to undernourishment and malnutrition. Anthropometric measures show that close to every second child under five in HP are underweight and 41 percent of adult women are anaemic, only slightly lower than the national figure. The study finds the main causes of food insecurity and vulnerability include increased fragmentation of land, limited or no access to welfare provisions and public services related to migration, weak infrastructure and lack of accessible credit institutions. Based on the findings of the analysis, the paper identifies key interventions to address the causes of food insecurity and vulnerability in Himachal Pradesh. These include increased investment in irrigation; improved extension services; ensuring social service provision and basic human welfare; and continued assurance of high levels of investment in constructing and maintaining rural infrastructure as a prerequisite for sustainable and broad-based economic growth. Finally, the paper includes recommendations on indicators to be monitored as part of a potential Food Insecurity and Vulnerability Information and Mapping System (FIVIMS) in Himachal Pradesh, focusing on a core set of indicators to be monitored at state and district level. |
| Keywords: | Vulnerability, Food Insecurity, Vulnerable Groups, Livelihoods Profiling, Himachal Pradesh, India. |
| JEL: | Q18 Q19 O20 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0722&r=dev |
| By: | Sean Archer (University of Cape Town) |
| Abstract: | Abstract: This paper aims to introduce selected issues from the international literature on skills training into the South African policy forum. Reform of national strategies in skills production has characterised a number of industrial as well as certain developing economies in recent decades. Their experience is potentially valuable locally. The main lessons are that skills training resembles education in being partly a public good. The acquisition of skills parallels the acquisition of knowledge. Training opportunities do have to be rationed by some mechanism, either through the market or by rules internal to an organisation engaged in training, but the content of the competency learned is a form of knowledge. More competency with economic value that is acquired by one person does not mean less of it is available for acquisition by another. Nor, secondly, can non-payers be wholly excluded from the benefits of training financed by others. For example, there are separate gains for fellow workers, for employers poaching trained workers, and for investors in new technology. So certain economic decision-takers can free-ride on such investments in human capital. As classic examples of market failure they make clear that simple allocation through a market is not at all adequate for a national system of skills training. The second lesson is that problems of information, incentives and market power preclude the emergence of a training equilibrium in which individual workers and employers pursue their interests successfully and therefore efficiently. In practice most training takes place on the job, where it is difficult for an outside agency like the state to influence investment decisions directly. Sensible roles for the state are to supply needed information, to put in place positive and negative incentives where needed, to provide accreditation that is credible in the market, to set up a framework of regulation that fosters informational transparency and constrains skills poaching, and to invest in high quality prior education for trainees flowing into occupational markets. An additional state function is to provide workable policy devices like ‘temporary migration programmes’ that enable active skilled labour recruitment from source countries. International precedents exist that show the way in a number of these expedients. |
| Keywords: | skills training, on the job training, South African policy |
| JEL: | A1 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:96100&r=dev |
| By: | Renee Grawitzky |
| Abstract: | Abstract: Sector Education and Training Authorities (Setas), established in terms of the Skills Development Act, 97 of 1998, were launched amid much fanfare and expectation of delivery towards achieving a skills revolution in the country. Upon their immediate establishment in March 2000, these perceived bureaucracies – which controlled the flow of billions – came under attack and became the subject of constant criticism. Over the years, this criticism has not abated and perceptions of Seta non-delivery has been exacerbated by recent reports that a resolution to the ‘skills crisis’ is critical for the success of government’s Accelerated and Shared Growth Strategy for South Africa (Asgisa). The perception of a skills crisis has raised concerns as to whether Setas are responsive enough to the needs of employers (private and public) and the country as a whole. In view of these underlying sentiments, the University of Cape Town’s Development Policy Research Unit (DPRU) commissioned a study to evaluate the role of Setas in contributing towards addressing the country’s skills needs. This study will seek to evaluate Seta performance since their inception by exploring: • Seta functioning and distill, from a range of perceptions (and legislation), their core deliverables and responsibilities; • Whether there are underlying factors – systemic or otherwise – which are impacting on the way in which Setas are supposed to operate; and • Based on the findings of three case studies, recommend interventions to improve Seta performance. |
| Keywords: | Setas (Sector Education and Training Authorities), Skills development |
| JEL: | A1 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:96101&r=dev |
| By: | Jorge M. Agüero (University of California, Riverside); Michael R. Carter (University of Wisconsin, Madison.); Ingrid Woolard (University of Cape Town) |
| Abstract: | In light of research that has argued that the income elasticity of nutrition is low, the goal of a new generation of cash transfer programmes to boost the nutrition of poor families' children may seem surprising. This observation applies especially to South Africa's unconditional Child Support Grant (CSG), in which cash grants are made to families with no strings attached. However, in contrast to the market-generated income increases that identified low nutritional elasticities in the earlier studies, the income increases generated by the South African cash transfers are almost exclusively assigned to women. Taking advantage of a slow programme rollout that created exogenous variation in the extent of CSG treatment received by beneficiaries in the province of KwaZulu-Natal, this Working Paper utilizes the continuous treatment method of Hirano and Imbens (2004) to estimate the impact of these transfers on child nutrition as measured by child height-for-age. Large dosages of CSG treatment early in life are shown to significantly boost child height. Drawing on the best estimates in the literature, these estimated height gains in turn suggest large adult earnings increases for treated children and a discounted rate of return on CSG payments of between 160 per cent and 230 per cent. |
| Keywords: | Nutrition, cash transfers, continuous treatment estimator, South Africa, poverty |
| JEL: | I12 H53 C21 D13 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:39&r=dev |
| By: | Faheem Jehangir Khan (Pakistan Institute of Development Economics, Islamabad.); Yaser Javed (Quaid-i-Azam University, Islamabad.) |
| Abstract: | Provision of safe drinking water, adequate sanitation and personal hygiene are vital for the sustainable environmental conditions and reducing the incidence of diarrhoea, malaria, trachoma, hepatitis A & B and morbidity levels. Not having access to water and sanitation is a courteous expression for a form of deprivation that threatens life, destroys opportunity and undermines human dignity. Thus, investing in the provision of safe water supply and adequate sanitation is not only a development oriented strategy in itself, it can also yield other socio-economic benefits in terms of improved health status, quality of labour force and reduced burden-of-disease. Water and Sanitation is the neglected sector in Pakistan. Most of the households in Pakistan do not have access to safe drinking water and lack toilets and adequate sanitation systems. These poor people, mostly living in rural areas or urban slums, are not only deprived of financial resources, but they also lack admittance to basic needs such as education, health, safe water supply and environmental sanitation facilities. As of 2005, approximately 38.5 million people lacked access to safe drinking water source and approximately 50.7 million people lacked access to improved sanitation in Pakistan. By year 2015, if this trend continues, 52.8 million people will be deprived of safe drinking water and 43.2 million people will have no access to adequate sanitation facilities in Pakistan. It is not to calculate what percentages of population have access to a particular service so far and how much numbers of beneficiaries will be added by year 2015; it is to investigate that even if we meet the national and/or regional targets in Pakistan, how much population will still be deprived of these most basic human needs. |
| Keywords: | Drinking Water, Sanitation, Solid Waste, Waste Water, Public Policy, Public Expenditure, Hygiene |
| JEL: | C12 C13 C92 E61 E62 G18 H54 I18 I38 O11 O18 C82 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2007:30&r=dev |
| By: | Muhammad Akram (International Islamic University, Islamabad.); Faheem Jehangir Khan (Pakistan Institute of Development Economics, Islamabad.) |
| Abstract: | The study has been carried out to measure the incidence of government spending on health in Pakistan at provincial, both rural and urban level; using the primary data of the Pakistan Social Standard Living Measures Survey (PSLM), 2004-05, and by employing the three-step Benefit Incidence Approach (BIA) methodology. The paper reviews the national policies emphasising health services as well as the trend in access to and public sector spending on health care facilities in Pakistan. The study explores the inequalities in resource distribution and service provision against the government health expenditures. The rural areas of Pakistan are the more disadvantaged in the provision of the health care facilities. The expenditures in health sectors are overall regressive in rural Pakistan as well as at provincial and regional levels. Mother and Child subhead is regressive in Punjab and General Hospitals and Clinics are regressive in all provinces. Only the Preventive Measures and health facilities sub-sector is progressive in Pakistan. Public health expenditures are pro-rich in Pakistan. |
| Keywords: | Health, Expenditure, Public Policy, Gini, Concentration Coefficient, Mother and Child, Preventive Measures, Hospital and Clinics |
| JEL: | H51 H53 I11 I18 I38 O18 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2007:32&r=dev |
| By: | Kozo Kiyota (Yokohama National University and University of Michigan, Ann Arbor); Barbara Peitsch (University of Michigan, Dearborn); Robert M. Stern (University of Michigan, Ann Arbor) |
| Abstract: | This paper focuses on issues of financial sector liberalization in Ethiopia, with reference in particular to the Ethiopian banking sector. We identify two factors that may constrain Ethiopia’s financial development. One is the closed nature of the Ethiopian financial sector in which there are no foreign banks, a non-competitive market structure, and strong capital controls in place. The other is the dominant role of state-owned banks. Our observations suggest that the Ethiopian economy would benefit from financial sector liberalization, especially from the entry of foreign banks and the associated privatization of state-owned banks. |
| Keywords: | foreign banks, state-owned banks, financial sector liberalization, Africa, Ethiopia |
| JEL: | G21 G32 L33 O55 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:mie:wpaper:565&r=dev |
| By: | Rui Castro (Universy of Montreal, Canada); Gian Luca Clementi (New York University, USA and Rimini Centre for Economic Analysis, Rimini, Italy); Glenn McDonald (Washington University in St.Louis, USA) |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:05-07&r=dev |
| By: | Dong He (Research Department, Hong Kong Monetary Authority); Wenlang Zhang (Research Department, Hong Kong Monetary Authority); Jimmy Shek (Research Department, Hong Kong Monetary Authority) |
| Abstract: | China's investment has been growing very strongly. The share of gross capital formation in GDP in China has also been higher than in other East Asian economies during their high growth period in the 1970s-80s. Many commentators have argued that such high rates of investment growth have been driven by irrational incentives and have been largely inefficient, will cause a build up of non-performing loans in the banking system, and will also lead to over-capacity and deflation. Others, however, have argued that China is still capital scarce, returns to capital are high, and therefore high rates of investment are both desirable and sustainable. This paper attempts to shed new light on the debate. We analyse both the allocative efficiency and the dynamic efficiency of China's spending on capital. The allocative efficiency measures the extent to which resources have been invested in places where potential rates of return on capital are high. The potential rates of return can be calculated as the marginal products of capital derived from an aggregate production function. The dynamic efficiency measures the extent to which the capital-output ratio exceeds the optimal level. The optimal level of the capital stock is determined by a rate of investment, at which level the Chinese residents at the present enjoy the highest level of consumption without sacrificing the level of consumption in the future. We first construct China's total capital stock at national and provincial levels, estimate the Cobb-Douglas and CES production functions, and compute the marginal products of capital. Assuming that the Chinese economy was operating on the production frontier, the marginal products of capital at the aggregate level have been relatively high in the past two decades, and have not shown clear signs of decline in recent years. We find that China's marginal product of capital compares favourably with those observed in the major industrialised economies and in the Asia region. We also find that the marginal products of capital have been higher in the coastal areas than in the less developed areas of western and central China, but the marginal products of infrastructure capital have been higher in the inland areas than in the coastal areas. These results are robust to different assumptions made in constructing the data of capital stock. |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:hkg:wpaper:0619&r=dev |