|
on Development |
| By: | Pádraig Carmody |
| Abstract: | Uneven development and globalization are associated with problems of poverty, resource scarcity, competition and conflict. The solution to these problems often presented by donors is better national, and also global governance: the creation of a governance matrix, prescribing and proscribing sets of actions by particular actors. Matrix governance attempts to regularize social interactions to achieve poverty reduction, but ultimately manages, normalizes and thereby arguably reproduces it without substantively addressing its causes. Structurally, matrix governance represents a horizontal sharing of Northern countries’ sovereignty and power, which is then projected southwards to ensure vertical sovereignty sharing and continued resource extraction; giving sovereignty a global cruciform structure. This undemocratic structure of global governance, and the transnational contract of extroversion between corporations and state elites which underpins it, paradoxically, helps to produce conditions conducive to conflict and corruption, recreating the conditions for its own perpetuation. The paper explores these issues through case studies of the new geopolitical fracture zone in the Chadian-Sudanese borderlands, which is partly the result of competition between Western powers and China for oil, and Equatorial Guinea as a space of exception, deception and occlusion to neoliberal normalization. |
| Date: | 2008–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp267&r=dev |
| By: | Gino Gancia; Fabrizio Zilibotti |
| Abstract: | We discuss a unified theory of directed technological change and technology adoption that can shed light on the causes of persistent productivity differences across countries. In our model, new technologies are designed in advanced countries and diffuse endogenously to less developed countries. Our framework is rich enough to highlight three broad reasons for productivity differences: inappropriate technologies, policy-induced barriers to technology adoption, and within-country misallocations across sectors due to policy distortions. We also discuss the effects of two aspects of globalization, trade in goods and migration, on the wealth of nations through their impact on the direction of technical progress. By doing so, we illustrate some of the equalizing and unequalizing forces of globalization. |
| Keywords: | Barriers to Technology Adoption, Directed Technology Adoption, Endogenous Growth, Globalization, Human Capital, Inappropriate Technologies, Market Power, Political Economy, Skill-biased Technical Chan |
| JEL: | F43 O11 O31 O33 O38 O41 O43 O47 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1125&r=dev |
| By: | Blundell, Richard (University College London); Costa Dias, Monica (Institute for Fiscal Studies, London) |
| Abstract: | This paper reviews some of the most popular policy evaluation methods in empirical microeconomics: social experiments, natural experiments, matching, instrumental variables, discontinuity design, and control functions. It discusses identification of traditionally used average parameters and more complex distributional parameters. The adequacy, assumptions, and data requirements of each approach are discussed drawing on empirical evidence from the education and employment policy evaluation literature. A workhorse simulation model of education returns is used throughout the paper to discuss and illustrate each approach. The full set of STATA datasets and do-files are available free online and can be used to reproduce all estimation and simulation results. |
| Keywords: | evaluation methods |
| JEL: | C52 J24 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3800&r=dev |
| By: | Guariglia, Alessandra (University of Nottingham); Liu, Xiaoxuan (Chinese Academy of Social Sciences); Song, Lina (University of Nottingham) |
| Abstract: | Does the availability of internal finance constrain firm growth? Or does it foster it? To answer these questions, we use a panel of 407,096 Chinese firms over the period 2000−2005. We estimate dynamic assets growth equations augmented with cash flow, and find that the growth of state owned enterprises is not affected by cash flow, while that of privately owned firms is most affected. Considering that they represent 62% of the observations in our sample and that, in spite of being typically discriminated against by financial institutions, private firms have experienced sensational growth rates, our results suggest that internal finance has fostered rather than constrained their growth. |
| Keywords: | assets growth, cash flow, financial constraints |
| JEL: | D92 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3808&r=dev |
| By: | DE LA CROIX, David (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE)); DELAVALLADE, Clara |
| Abstract: | We bridge the gap between the standard theory of growth and the mostly static theory of corruption. Some public investment can be diverted from its purpose by corrupt individuals. Voters determine the level of public investment subject to an incentive constraint equalizing the returns from productive and corrupt activities. We concentrate on two exogenous institutional parameters: the "technology of corruption" is the ease with which rent-seekers can capture a proportion of public spending. The "concentration of political power" is the extent to which rent-seekers have more political influence than other people. One theoretical prediction is that the effects of the two institutional parameters on income growth and equilibrium corruption are different according to the constraints that are binding at equilibrium. In particular, the effect of judicial quality on growth should be stronger when political power is concentrated. We estimate a system of equations where both corruption and income growth are determined simultaneously and show that income growth is more affected by our proxies for legal and political institutions in countries where political rights and judicial institutions respectively are limited. |
| Keywords: | economic growth, corruption, rule of law, incentive constraint, political power |
| JEL: | O41 H50 D73 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2008035&r=dev |
| By: | de la CROIX, David (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE)) |
| Abstract: | We propose four arguments favoring the idea that medical effectiveness, adult longevity and height started to increase in Europe before the industrial revolution. This may have prompted households to increase their investment in human skills as a response to longer lives and initiated the transition from stagnation to growth. |
| Keywords: | life expectancy, height, industrial revolution, human capital, adult mortality. |
| JEL: | J11 I12 N30 I20 J24 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2008048&r=dev |
| By: | de la CROIX, David (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE)); VANDER DONCKT, Marie |
| Abstract: | We examine the pathways by which gender inequality affects fertility and hampers growth. We introduce several dimensions of gender inequality into a 2-sex OLG model with a non-unitary representation of household decision-making. We characterize a Malthusian corner regime which is characterized by strong gender inequality in education and high fertility. We find both in theory and in the data that reducing the social and institutional gender gap does not help to escape from this regime while reducing the wage gender gap lowers fertility only in countries which have already escaped from it. The key policies to ease out the countries in the Malthusian regime are to promote mother's longevity and to curb infant mortality. In the interior regime, parents consider the impact of their children education on the expected intra-household bargaining position in their future couple. Education could thus compensate against the institutional and social gender gap that still exists in developed countries. |
| Keywords: | gender gap, fertility, education, household bargaining. |
| JEL: | J13 O11 O40 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2008043&r=dev |
| By: | Prasad Pant, Laxmi (School of Environmental Design and Rural Development, University of Guelph); Hambly Odame, Helen (School of Environmental Design and Rural Development, University of Guelph); Hall, Andy (Learning, Innovation and Knowledge (LINK), UNU-MERIT); Sulaiman, Rasheed (Centre for Research on Innovation and Science Policy (CRISP), and LINK) |
| Abstract: | Globalization, urbanization and new market demands — together with ever-increasing quality and safety requirements — are putting significantly greater pressures on agrifood stakeholders in the world. The ability to respond to new challenges and opportunities is important not just for producers but also for industries in developing countries. This paper aims to present what "innovation response capacity" entails, especially for natural resourcebased industries in a developing country context. It will also provide an analytical framework that draws elements from agricultural innovation capacity and the innovation systems framework. This is provided through case study research conducted in Kenya by exploring two livestock product companies: Farmer's Choice and Kenchic. The cases show how companies had worked around the problem of weak interaction with the various livestockrelated agencies of the public sector by developing links with international sources of knowledge and technology. This allowed the sector to respond rapidly to different challenges. While the country's historical development explains this pattern of innovation response capacity, public policy appears to be failing in its role of nurturing and contributing to the capacities needed for development in emerging economies, such as that of Kenya. |
| Keywords: | Livestock, agriculture, innovation, innovation response capacity, Kenya |
| JEL: | O31 N57 Q16 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2008069&r=dev |
| By: | Dunnewijk, Theo (UNU-MERIT) |
| Abstract: | Migration in a globalising world is on the increase, especially migration of the highly skilled. It is quite natural that given certain possibilities, people look for opportunities and chances to improve their lives. Especially when the better educated leave their country in large quantities to try their chances abroad it was labelled in the 1960's as "brain drain" stressing the negative welfare impact on the countries of origin (European at that time). However not always is the impact of migration negative for the country of origin and therefore "brain drain" turned into "brain gain" when it was seen from another perspective. Indeed destination as well as origin countries may profit from migrating highly skilled people. The road in the middle is called "brain strain" emphasising that out migration can be either positive or negative for the origin countries. A synthesis has been found in perceiving migration of the highly skilled in the more neutral phrase "brain circulation". Brain circulation perceives migration of the highly skilled not as an end in itself but as the start of a circular process in which everyone might be better off: in this view the knowledge worker in the age of globalisation turns into a real cosmopolite. Despite an enormous literature on migration it is impossible to draw a systematic global quantitative picture of migration of the highly skilled. Therefore discussions in terms of brain drain, brain strain or brain circulation are either theoretical or end unresolved. Empirically only a part of the picture can be drawn with the help of data on South-North migration of the highly skilled. Data on other directions of migration like South-South and North- South is not systematically covered by the international statistical institutes. Given this situation it is the aim of this paper to include as many as possible countries in the data on migration of the highly skilled in order to illustrate the major effects related to migration for human capital in origin as well as destination regions. This is possible by using UNESCO data on international students; this source facilitates estimations of the missing migration flows. The results show that countries like Russian Federation, South Africa, Ukraine, Malaysia, Jordan and Saudi Arabia are, apart from the traditional immigration countries also important destination countries for highly skilled migrants. |
| Keywords: | Migration, Diaspora, Highly Skilled Migrants, International Mobility, Internationally Mobile Students |
| JEL: | F22 J61 O15 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2008070&r=dev |
| By: | Ziesemer, Thomas (UNU-MERIT, and Maastricht University) |
| Abstract: | The impact of migration and worker remittances on literacy, accumulation of capital and growth is analyzed for a panel of countries with per capita income below $1200 (2000). We estimate regressions for dynamic equations of migration, worker remittances, savings, investment, tax revenues, public expenditure on education, interest rates, literacy, labour force growth, development aid and GDP per capita growth, using dynamic panel data methods. The estimated equations are then integrated to a dynamic system that allows for simulations using the whole integrated system allowing conceptually for the open economy aspects aid, trade, capital movements and migration. The linear-quadratic impact of the income difference between rich and poor countries on remittances and migration generates some highly non-linear results in the baseline simulation. Then we analyze the counterfactuals "remittances send only 50%" or "no net migration". The results for the direct effects are that emigration lowers savings and labour force growth. The total effect of net migration on GDP per capita is to increase the growth rate until 2150 and the effect on levels runs up to 7% above the baseline value. Remittances enhance savings, public expenditures on education and growth, but reduce tax revenues and emigration. These latter two effects, however, are outweighed by the indirect effect of remittances on savings, which have a strongly positive impact on tax revenues and emigration, indicating that conclusions from single equation regressions maybe misleading and indirect effects may dominate for some variables or strongly reduce the direct effects. The total effect of remittances on levels and growth rates of GDP per capita, investment and literacy are positive. |
| Keywords: | migration, remittances, growth, capital accumulation |
| JEL: | F22 F24 O15 J61 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2008063&r=dev |
| By: | Joao Ricardo Faria; Andre Varella Mollick; Pedro H. Albuquerque; Miguel Leon-Ledesma |
| Abstract: | The increase in oil prices in recent years has occurred concurrently with a rapid expansion of Chinese exports in the world markets, despite China being an oil importing country. In this paper we develop a theoretical model that explains the positive correlation between Chinese exports and the oil price. The model shows that Chinese growth can lead to an increase in oil prices that has a stronger impact on its export competitors. This is due to the large labor force surplus of China. We then examine this hypothesis by estimating a reduced form equation for Chinese exports using Rodrik (2006)’s measure of export competitiveness, together with the oil price, productivity, real exchange rate, and foreign industrial production over the monthly 1992-2005 period. The results suggest a stable relationship and yields slightly positive values for the price of oil and elastic coefficients for export competitiveness, along with the expected negative elasticity for the real exchange rate. |
| Keywords: | China; Oil prices; Competitiveness; Exports; Productivity |
| JEL: | F14 F43 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:0812&r=dev |
| By: | Merwan Engineer; Ian King; Nilanjana Roy |
| Abstract: | Planning strategies that maximize the Human Development Index (HDI) tend towards minimizing consumption and maximizing non-investment expenditures on education and health. Interestingly, such strategies also tend towards equitable outcomes, even though inequality aversion is not modelled in the HDI. A problematic feature of strategies that maximize the HDI is that the income component in the index only role is to distort the allocation between health and education expenditure. Because the income component does not play its intended role of securing resources for a decent standard of living, we argue that it is better to drop income from the index in considering optimal plans. Alternatively, we consider net income, income net of education and health expenditures, as indicator of capabilities not already reflected in the education and life expectancy components of the index. When net income is used in a modified HDI index, optimal plans yield a balance between allocations for consumption, education, and health. Finally, we calculate our modified indexes for OECD countries and compare them with the HDI. |
| Keywords: | Consumption; Human development index; Income; Inequality; Planning |
| JEL: | O21 O15 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:1041&r=dev |
| By: | Lovo, Stefania |
| Abstract: | Land and market imperfections shape the organization of agricultural production and lead to different production regimes within rural farm households in South Africa. This paper presents a theoretical model to explain the presence of three main households groups (classes) determined on the basis of the labor regime adopted: small peasants (working both on and off farm), self cultivators (autarkic in labor) and hiring in households. Membership in the three categories is determined by the endogenous shadow wage and the effective market wages. A generalized ordered logit model is used to test the main predictions of the model. Market imperfections, which prevent household from accessing markets, are expected to have different impacts on heterogenous households; in this study, a Brant test on coefficient constancy helps to identify the household specific factors affecting market participation. |
| Keywords: | farm households, market imperfections, liquidity constraint, Farm Management, Industrial Organization, International Development, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa107:6675&r=dev |
| By: | Nimenya, N.; Henry de Franhan, B.; Ndimira, P.F. |
| Abstract: | Fresh food and agricultural products from sub- Saharan Africa meet few tariff barriers because of preferential market access granted to ACP countries through Lomé and Cotonou Act. However, non-tariff barriers are still serious impediments to trade. This paper focuses more specifically on technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS) on horticultural exports from Kenya and Zambia to France, Germany, the Netherlands and United-Kingdom. Using an extension of price-wedge method that takes into account imperfect substitution (on demand side) and differences in factor endowments (on supply side), we provide a tariff-equivalent of a wide range of TBT. Preliminary results show that the tariff-equivalent of TBT is very high for Kenyan green beans exports (more than 56%) while it is low for Kenya€ٳ exports of peas and avocados and Zambian exports of peas (less than 10%). However, there are no large differences between EU importing countries. |
| Keywords: | Armington elasticity of substitution, price-wedge method, tariff-equivalent, International Relations/Trade, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae08:44195&r=dev |
| By: | Van den Berg, Marrit; Burger, Kees |
| Abstract: | This paper analyses coping strategies and consumption reactions of rural households in Nicaragua to hurricane Mitch, which caused massive losses in especially the agricultural sector in 1998. A switching-regression model confirms theoretical considerations which indicate that responses to transitory incomes depend on wealth. Asset-poor households do and asset-rich households do not adjust their consumption to transitory income changes. |
| Keywords: | Natural disasters, assets, consumption smoothing, Food Consumption/Nutrition/Food Safety, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae08:44380&r=dev |
| By: | Seebens, Holger |
| Abstract: | Studies dealing with productivity in female (FHH) and male headed households (MHH) find that FHH appear to be either less, equally, or more productive compared to MHH. Lower productivity of FHH is often explained by insecure access to land, while the findings of higher productivity largely remain unexplained. This paper is an attempt to reconcile these contrasting findings by constructing a model that accounts for productivity effects arising from secure land rights and the risk of falling short of income. Both affect productivity, but they do so in opposite directions. While tenure insecurity tends to decrease labor effort, income risks increase it as subsistence farmers want to avoid falling (deeper) into poverty. Depending on which of these risks prevails in the perception of farmers, they become either more or less productive than a benchmark farmer who faces none of these constraints. The model is tested using data from Kenya where FHH are categorized by different land tenure security schemes. The results from a stochastic cost frontier model establish that FHH facing tenure insecurity are less productive compared to MHH. However, this result only obtains in case households do not face income risks. |
| Keywords: | Female headed households, tenure insecurity, income risk, Consumer/Household Economics, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae08:43609&r=dev |
| By: | Ciaian, P.; Swinnen, J. |
| Abstract: | This article shows that credit market imperfections have important implications for the distribution of policy rents. In a model with land as fixed factor and credit market imperfections, when an area payment is given, land rents go up by more than the subsidy. On aggregate farms may lose from the subsidy. The results depend on the extent to which subsidies have direct and indirect effects on the credit constraints, on whether farms rent or own land, and on farm heterogeneity. |
| Keywords: | Agricultural policy, imperfect credit markets, policy rents, Agricultural Finance, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae08:44050&r=dev |
| By: | Berhane Tesfay, G.; Gardebroek, C. |
| Abstract: | This paper investigates borrowing decisions of rural households from a microfinance in Tigray, Ethiopia using household panel data on 5 years and a dynamic panel probit model. The theoretical model takes two types of risk involved in jointliability lending explicitly into account: risk of partner failure and the risk of losing future access to credit. Empirical results show that these risks are important in explaining borrowing decisions. Another finding is that the probability of repeatborrowing is higher than the probability of new participation, with possible implications that perceived joint-liability threats deter participation and easing stringent punishments might help poor households€٠access to credit. |
| Keywords: | Microfinance, risk, dynamic panel probit, Financial Economics, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae08:44202&r=dev |
| By: | Thomas, A.-C.; Gubert, F.; de Franhan B., Henry |
| Abstract: | The aim of this paper is to evaluate the effect of rainfall and agricultural shocks on consumption growth in Madagascar. We are also interested in the impact of local endowments in infrastructures and social services on consumption growth. To achieve this goal, a micro model of household consumption growth is estimated thanks to household panel data collected by the Reseau des Observatoires Ruraux (ROR) between 1999 and 2004. Additional data sources include the 2001 communes census organized by the Ilo program of Cornell University. Altogether these different data sources make an unusually rich data set, at least when considered with developing country standards. We use panel data fixed effect estimation technique to remove unobserved household and community level time invariant heterogeneity. We find that production shocks have a substantial impact on consumption growth and we find sign of persistence of rainfall shocks. Roads and education seems to improve household€ٳ consumption growth and remotness decreases it. |
| Keywords: | risks, growth, poverty, Food Security and Poverty, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae08:43610&r=dev |
| By: | Thi Quynh Trang Do (Centre d'Economie de la Sorbonne); Gérard Duchêne (Centre d'Economie de la Sorbonne) |
| Abstract: | The determinants of self-employment are widely studied in the economic literature in recent twenty years. However, in the case of Vietnam where self-employed population takes an important proportion in workforce, it remains an under researched area. By using the data from the Vietnam Household Living Standard Survey 2004 (VHLSS2004), this paper aims to provide clearer insights into this area. We use the Heckman method to determine the level and identify the factors that affect the workers' choice between self-employment and wage employment in Vietnam. We emphasize the role of expected earnings differential in workers' decision making. Comparisons between female and male workers are made. Our empirical results show that there exist a number of determinants that permit to construct the pattern of self-employed as well a salary workers in Vietnam. Regardless of educational attainment, experiences and familial background, perspective of having higher earnings plays an important role in choice behavior of workers. |
| Keywords: | GARCH, Generalized Hyperbolic Distribution, pricing, risk neutral distribution. |
| JEL: | D21 J24 M13 O17 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:v08038&r=dev |
| By: | Nicolas Berman (Centre d'Economie de la Sorbonne - Paris School of Economics et European University Institute); Jérôme Héricourt (Centre d'Economie de la Sorbonne - Paris School of Economics et EQUIPPE - Université de Lille 1) |
| Abstract: | Using a large cross-country, firm level database containing 5,000 firms in 9 developing and emerging economies, we study how financial factors affect both firms' export decisions and the amount exported by firm. First, our results stress an important impact of firms' access to finance on their entry decision into the export market. However, a better financial health neither increases the probability of remaining and exporter once the firm has entered, not the size of exports. Second, we find that financial constraints create a disconnection between firms' productivity and their export status : productivity is a significant determinant of exporting decision only if the firm has a sufficient access to external finance. Finally, an increase in a country's financial development dampens this disconnection, thus acting positively both on the number of exporters and on the exporters' selection process. |
| Keywords: | Export decision, margins of trade, financial constraints. |
| JEL: | D24 F14 F0 D92 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:bla08050&r=dev |
| By: | Arnaud Mehl (European Central Bank); Julien Reynaud (European Central Bank et Centre d'Economie de la Sorbonne) |
| Abstract: | This paper explains why public domestic debt composition in emerging economies can be risky, namely in foreign currency, with a short maturity or indexed. It analyses empirically the determinants of these risk sources separately, developing a new large dataset compiled from national sources for 33 emerging economies over 1994-2006. The paper finds that economic size, the breadth of the domestic investor base, inflation and fiscal soundness are all associated with risky public domestic debt compositions, yet to an extent that varies considerably in terms of magnitude and significance across sources of risk. Only inflation impacts all types of risky debt, underscoring the overarching importance of monetary credibility to make domestic debt compositions in emerging economies safer. Given local bond markets' rapid development, monitoring risky public domestic debt compositions in emerging economies becomes increasingly relevant to global financial stability. |
| Keywords: | Public domestic debt, composition, risk, emerging economies. |
| JEL: | F34 F41 G15 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:bla08059&r=dev |
| By: | Asuyama, Yoko |
| Abstract: | This paper analyzes the causes of earnings inequality in urban China from 1988 to 2002. Earnings inequality in urban China continuously increased, even when adjusting for regional price differences. This paper reveals how the causes of earnings inequality changed between the periods 1988-1995 and 1995-2002 by reflecting labor-related institutional reform in China. Contrary to the situation from 1988 to 1995, between 1995 and 2002, employment status became the largest disequalizer, and the decline of inter-provincial inequality contributed to a reduction in entire earnings inequality. Individual ability, represented by education and occupation, received much greater rewards. Throughout the period from 1988 to 2002, a large part of the explained inequality increase was due to change in price (valuation of each individual's attributes) and not due to change in quantity (composition of individual attributes). |
| Keywords: | China, Income distribution, Labor market, Earnings inequality, Inequality decomposition |
| JEL: | D31 J31 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper176&r=dev |
| By: | Murayama, Mayumi; Nobuko, Yokota |
| Abstract: | The establishment of Export Processing Zones (EPZs) is a strategy for economic development that was introduced almost fifty years ago and is nowadays employed in a large number of countries. While the number of EPZs including several variants such as Special Economic Zone (SEZs) has increased continuously, general interest in EPZs has declined over the years in contrast to earlier heated debates regarding the efficacy of the strategy and its welfare effects especially on women workers. This article re-evaluates the historical trajectories and outstanding labour and gender issues of EPZs on the basis of the experiences of South Korea, Bangladesh and India. The findings suggest the necessity of enlarging our analytical scope with regard to EPZs, which are inextricably connected with external employment structures, whether outside the EPZ but within the same country, or outside the EPZ and its host country altogether. |
| Keywords: | South Korea, Bangladesh, India, Female labor, Labor problems, Export Processing Zone (EPZ), Special Economic Zone (SEZ), Gender |
| JEL: | F02 F16 J53 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper174&r=dev |
| By: | Kodama, Masahiro |
| Abstract: | In recent years, a large and expanding literature has examined the properties of developing economies with regard to the macroeconomic cycle.1 One such property that is characteristic of developing economies is large fluctuations in consumption. Meanwhile, aid for the low income countries is extremely volatile, and under certain circumstances, the volatile aid amplifies the consumption volatility. This document examines whether it is possible that the volatile aid yields high consumption volatility in African countries that constitute the majority of the low income countries. Our numerical analysis reveals that the strongly influential aid disbursements yield a considerably large fluctuation in consumption. |
| Keywords: | Africa, Consumption, Economic assistance, Econometric model, Aid, Consumption Volatility, International Macroeconomics |
| JEL: | E21 E32 F35 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper173&r=dev |
| By: | Asuyama, Yoko |
| Abstract: | This paper examines the degree to which supply and demand shift across skill groups contributed to the earnings inequality increase in urban China from 1988 to 2002. Product demand shift contributed to an equalizing of earnings distribution in urban China from 1988 to 1995 by increasing the relative product demand for the low educated. However, it contributed to enlarging inequality from 1995 to 2002 by increasing the relative product demand for the highly educated. Relative product demand was continuously higher for workers in the coastal region and contributed to a raising of interregional inequality. Supply shift contributed essentially nothing or contributed only slightly to a reduction in inequality. Remaining factors, the largest disequalizer, may contain skill-biased technological and institutional changes, and unobserved supply shift effects due to increasing numbers of migrant workers. |
| Keywords: | China, Income distribution, Labor market, Urban societies, Earnings inequality, Inequality decomposition |
| JEL: | D31 J31 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper177&r=dev |
| By: | Lehner, Maria |
| Abstract: | Microfinance is typically associated with joint liability of group members. However, a large part of microfinance institutions rather offers individual instead of group loans. We analyze the incentive mechanisms in both individual and group contracts. Moreover, we show that microfinance institutions offer group loans when the loan size is rather large, refinancing costs are high, and competition between microfinance institutions is low. Otherwise, individual loans are offered. Interestingly, our analysis predicts that individual lending in microfinance will gain in importance in the future if microfinance institutions continue to get better access to capital markets and if competition further rises. |
| JEL: | F37 G21 G34 L13 O16 |
| Date: | 2008–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:7486&r=dev |
| By: | Davis, Lewis; Owen, Ann L.; Videras, Julio |
| Abstract: | We estimate a finite mixture model in which countries are sorted into groups based on the similarity of the conditional distributions of their growth rates. We strongly reject the hypothesis that all countries follow a common growth process in favor of a model in which there are two classes of countries, each with its own distinct growth process. Group membership does not conform to the usual categories used to control for parameter heterogeneity such as region or income. However, we find strong evidence that one country characteristic that helps to sort countries into different regimes is the quality of institutions, specifically, the degree of law and order. Once institutional features of the economy are controlled for, we find no evidence that geographic characteristics play a role in determining the country groupings. |
| Keywords: | finite mixture models; multiple equilibria; institutional quality |
| JEL: | O11 O17 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11589&r=dev |
| By: | Cuberes, David; Jerzmanowski, Michal |
| Abstract: | There is much evidence that less democratic countries experience more high-frequency growth volatility. In this paper we report a similar finding about volatility in the medium term: we find evidence that reversals of trend-growth are sharper and more frequent in non-democracies. Motivated by this evidence, we construct a model in which non-democracies have high barriers of entry for new firms. This leads to less sectoral diversification and so, in an uncertain environment, to larger growth swings in less democratic countries. We present empirical evidence that confirms the positive relation between democracy and industrial diversification. |
| Keywords: | medium term growth; growth volatility; democracy; diversification |
| JEL: | O11 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11646&r=dev |
| By: | Tatom, John |
| Abstract: | China’s major imbalances include trade and capital account surpluses and a large annual build-up of international reserves. China has a capital account surplus reinforcing the accumulation of foreign exchange reserves, mainly U.S. dollar-denominated assets. Usually, a sustainable fixed or floating exchange rate system requires that a country with a large current account surplus run a capital account deficit. The U.S. is widely criticized for having a comparable trade deficit that mirrors, to a large extent, China’s surplus and for its dependence on large capital inflows including from China. There is political pressure for protectionism and for China to implement wasteful economic policies to reduce the surplus. Negative consequences of China’s imbalances include the build-up of large, low-return foreign exchange, leading to rapid growth in money and credit and to a sharp acceleration in inflation. Moreover, efforts to offset money growth and inflation have deepened inefficiencies in the financial system, which China had hoped to remedy by its efforts to recapitalize and list its banks’ equities on stock exchanges. China could eliminate these imbalances by policies that would reduce growth. One solution is to lift restrictions on capital outflows, allowing households and business to diversify their wealth holdings and realize higher returns and/or less volatility in their income and wealth. This would transform future asset growth to holdings of higher return, lower risk assets abroad and also would eliminate pressures on the People’s Bank of China, allowing for more rapid deregulation of banks, slower money and credit growth and lower inflation. The U.S. is already adjusting to these imbalances as the current account deficit began to decline in 2005 and the dollar has fallen dramatically. Unfortunately, such adverse developments are coming from political pressures to raise taxes, especially on capital resources income, and from protectionist policies, both of which are slowing growth in the U.S. |
| Keywords: | Capital account imbalance; capital controls and banking inefficiencies; capital outflows and financial development; exchange rate management; banking regulation |
| JEL: | F42 E58 G15 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11706&r=dev |
| By: | Gordon H. Hanson; Raymond Robertson |
| Abstract: | In this paper, we examine the impact of China's growth on developing countries that specialize in manufacturing. Over 2000-2005, manufacturing accounted for 32% of China's GDP and 89% of its merchandise exports, making it more specialized in the sector than any other large developing economy. Using the gravity model of trade, we decompose bilateral trade into components associated with demand conditions in importing countries, supply conditions in exporting countries, and bilateral trade costs. We identify 10 developing economies for which manufacturing represents more than 75% of merchandise exports (Hungary, Malaysia, Mexico, Pakistan, the Philippines, Poland, Romania, Sri Lanka, Thailand, and Turkey), which are in theory the countries most exposed to the adverse consequences of China's export growth. Our results suggest that had China's export supply capacity been constant over the 1995-2005 period, demand for exports would have been 0.8% to 1.6% higher in the 10 countries studied. Thus, even for the developing countries most specialized in export manufacturing, China's expansion has represented only a modest negative shock. |
| JEL: | F15 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14497&r=dev |
| By: | Angus Deaton; Alan Heston |
| Abstract: | PPP-based national accounts have become an important part of the database for macroeconomists, development economists, and economic historians. Frequently used global data come from the Penn World Table (PWT) and the World Bank's World Development Indicators; a substantial fraction of the world is also covered in the PPP accounts produced by the OECD and the European Union. This paper provides an overview of how these data are constructed, and discusses both the theory and the practical problems of implementing it. All of these data are underpinned by the International Comparison Program (ICP), which collects data on prices worldwide. The most recent round of the ICP was for 2005 with final results published in early 2008; version 7.0 of the Penn World Table will soon incorporate these results. The 2005 ICP, like earlier rounds, involved substantial revisions to previous data, most notably revising downwards the size of the Chinese (40 percent smaller) and Indian (36 percent) economies. We discuss the reasons for the revisions, and assess their plausibility. We focus on four important areas: how to handle international differences in quality, the treatment of urban and rural areas of large countries such as China, India, and Brazil, how to estimate prices for government services, health, and education, and the effects of the regional structure of the ICP. All of these affect the interpretation of previous data, as well as the current revisions. We discuss previous revisions of the PWT, and their effects on various kinds of econometric analysis. The paper concludes with health warnings that should be kept in mind when using these data, which are not always suitable for the purposes to which they are put. Some international comparisons are close to impossible, even in theory, and in others, the practical difficulties make comparison exceedingly hazardous. |
| JEL: | E01 N1 O47 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14499&r=dev |
| By: | Elisabetta Michetti, (University of Macerata); Domenica Tropeano, (University of Macerata) |
| Abstract: | <div style="line-height: normal"><span style="font-size: 9.5pt"><div style="line-height: normal"><span style="font-size: 9.5pt">In this work we are going to deal with the issue of the distribution of income in an</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">open economy within a simplified macroeconomic model with constant prices. This type</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">of model could apply to middle-income developing countries, which have succeeded in</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">fighting inflation through a policy of high interest rates. It will be assumed that the</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">implicit target of monetary policy now becomes the exchange rate and interest rates are</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">set at a high level to lower the exchange rate (defined as the price of the foreign currency</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">in terms of the domestic one). Even if this strategy may work it may produce negative</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">effects on output growth and the distribution of income. The lowering of the exchange</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">rate target would have the following effects on distribution. It would cause a reduction</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">in the growth of output, it would lower the wage rate. Domestically-produced income</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">distributed abroad should increase instead. The domestic interest rate would rise only for</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">suitable small values of the parameter, which links imports to income. The effect on the</span></div><div><span style="font-size: 9.5pt; line-height: 115%">profit share is indeed uncertain.</span></div></span></div> |
| Keywords: | Exchange rate target,Administrative incentive pricing,Income distribution |
| JEL: | O1 O11 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpdief:wpaper00044&r=dev |
| By: | Raffaella Coppier (University of Macerata) |
| Abstract: | <p> </p><p>In this paper we explore tax revenue in a regime of widespread corruption</p><div align="left">in a static and dynamic framework. We prove that the relationship between</div><div align="left">the tax rate and tax collection is not linear. In a static context, this may</div><div align="left">bring about a Laffer, like behavior of overall tax revenue; a higher tax rate,</div><div align="left">via higher corruption, may reduce revenues. In a dynamic context, this rela-</div><div align="left">tionship is inverted: tax revenues are high for low and high tax rates, while</div><div align="left">low for intermediate tax rates. Furthermore we prove that the relationship</div><div align="left">between the tax rate and growth is not linear: at low levels of the tax rate,</div><div align="left">any increase in it leads to a decreasing growth rate; after a certain threshold,</div><div align="left">increases in the tax rate lead to an increase in economic growth.</div> |
| JEL: | O1 O11 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpdief:wpaper00027&r=dev |
| By: | Michele Di Maio (Università di Macerata) |
| Abstract: | <div style="line-height: normal"><span style="font-size: 10pt"><div style="line-height: normal"><span style="font-size: 10pt">This paper presents a historical and empirical account of the role played by government</span></div><div style="line-height: normal"><span style="font-size: 10pt">intervention in the form of industrial policies in spurring development and growth in</span></div><div style="line-height: normal"><span style="font-size: 10pt">developing countries in the last fifty years. Adopting the taxonomy proposed in Cimoli et</span></div><div style="line-height: normal"><span style="font-size: 10pt">alt. (2008), it describes the set of industrial policies implemented since the end of WWII</span></div><div style="line-height: normal"><span style="font-size: 10pt">to today in a number of developing countries. Which are the characteristics of successful</span></div><div style="line-height: normal"><span style="font-size: 10pt">industrial policies? Are there industrial policies, among the ones that have worked in the</span></div><div style="line-height: normal"><span style="font-size: 10pt">past, which can be also useful in the present context? Is there a fit-all recipe, or the high</span></div><div style="line-height: normal"><span style="font-size: 10pt">degree of country heterogeneity makes impossible to identify any general effective industrial</span></div><div style="line-height: normal"><span style="font-size: 10pt">policy? These are some of the questions this papers tries to suggest some answers.</span></div></span></div> |
| Keywords: | Industrial policy,Developing Countries,East Asia,Latin America |
| JEL: | O1 O11 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpdief:wpaper00048&r=dev |
| By: | Domenica Tropeano (University of Macerata) |
| Abstract: | <div style="line-height: normal"><span style="font-size: 12pt"><div style="line-height: normal"><span style="font-size: 12pt">Neoclassical theory says that financial liberalization will make the cost of capital decrease, productivity increase and output grow. In reality this does not happen. A key to understanding why it is so is the link between financial liberalization and income distribution. After financial liberalizations both the real interest rate and the supply of credit to the non traded goods sector rise. If the monetary interest rate and the profit rate tend to be equal in the long run, a reshuffling of production favouring the non-traded goods sector will occur; for the mark-up may be higher in this sector than in the traded goods sector due to the lack of international competition. Households, no more credit constrained, will increase their demand for non traded goods; profits in this sector will increase too due to the higher capacity utilization. On the other hand the likely fall in the propensity to save of capitalists will cause a slower capital accumulation. Thus neither investment</span></div><div style="line-height: normal"><span style="font-size: 12pt">nor productivity will rise. This may not be due to the working of real forces alone, such as trade liberalization, but rather to the interplay of both monetary and real factors. A vicious circle of lower growth and rising inequality could be set in motion.</span></div></span></div> |
| Keywords: | Financial liberalization,Profit share,Distribution theory |
| JEL: | O1 O11 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpdief:wpaper00024&r=dev |
| By: | Serena Brianzoni, (University of Macerata); Cristiana Mammana, (University of Macerata); Elisabetta Michetti, (University of Macerata) |
| Abstract: | <div style="line-height: normal"><span style="font-size: 9.5pt"><div style="line-height: normal"><span style="font-size: 9.5pt">In this paper we study the dynamics of a discrete triangular system T in capital per capita and population growth representing the neoclassical growth model with CES production</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">function and differential savings, under the assumption that the labor force growth rate is</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">endogenous and described by a generic iterative scheme having a unique positive globally</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">stable equilibrium. </span><span style="font-size: 9.5pt">The study herewith presented aims at confirming the existence of a</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">compact global attractor for system T along the invariant line. </span><span style="font-size: 9.5pt">Consequently asymptotic dynamics of growth models with constant population growth rate can be related</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">to those with non-constant population growth if the steady state rate is globally stable.</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">Furthermore we prove that the system exhibits cycles or even chaotic dynamics patterns</span></div><div style="line-height: normal"><span style="font-size: 9.5pt">if shareholders save more than workers, when the elasticity of substitution between production factors drops below one (so that capital income declines). </span><span style="font-size: 9.5pt">The analytical results</span></div><div><span style="font-size: 9.5pt; line-height: 115%">are supplemented by numerical simulations.</span></div></span></div> |
| Keywords: | chaotic dynamics,,Compact global attractor,,Developing Countries,endogenic population growth. |
| JEL: | O1 O11 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpdief:wpaper00035&r=dev |
| By: | Subbarao Srinivas P. |
| Abstract: | FDI has considered a major catalyst in promoting sustainable development in developing countries. FDI has the potential to generate employment, raise productivity, transfer skills and technology, increased income, enhance exports and contribute to the long-term economic development of the world’s developing countries. The investing countries usually supply superior technologies to the host countries. At the initial stages, however, the less developed countries (LDC) lack not only the necessary skills and infrastructure to attract FDI in high technology sector but also the knowledge for proper implementation of technology. Since this requires less technical capabilities, skill building in the host LDC is less. However, such skill building, even though small, creates a platform for the LDC to develop their existing technology and capital productivity. This helps in improving the human capital of the country by facilitating education and technical training to a greater mass of people. Eventually, with the development of the economy the country moves from the subsistence level to the point where the dependence on FDI gradually shifts from mere manufacturing level to the managerial level of a company. At this point of time, the LDC should aim at attracting effective FDI. By effective FDI, we mean the FDI that is development friendly – FDI that fosters not only growth of the nation, but also growth and development of each resident of the country. In other words, effective FDI indulges in enhancement of human capital of the country. The growth of an economy can sustain only though the growth of an increasing, economically productive labor force. This paper explains importance of human capital skilling, the relation between the FDI and Human Capital development besides the experiences of these two in different regions of the world i.e., Asian and Latin American experiences. |
| Date: | 2008–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2008-02-01&r=dev |