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  • Author: Guanghua Wan
  • Publication Date: 06-2007
  • Content Type: Journal Article
  • Institution: United Nations University
  • Abstract: A large group of smallish countries totalling about a billion people have sheered off from the rest of mankind. As the world becomes more socially integrated this giant pool of poverty will be both unacceptable and explosive. It is the world's biggest economic problem and we need to do something about it. To know what to do we need to start with a diagnosis. While the common fate of the bottom billion has been stagnation and poverty there has been no single cause. In my recently published book The Bottom Billion I propose four distinct traps that between them account for the problem, each requiring a distinct remedy. I also argue that globalization, though it has been benign for the majority of the developing world, is not working for the bottom billion and is not likely to do so. On the contrary, it is liable to make them increasingly marginalized.
  • Political Geography: China, Europe
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 12-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper proposes a framework for incorporating longitudinal distributional changes into poverty decomposition. It is shown that changes in the Sen-Shorrocks-Thon index over time can be decomposed into two components—one component reflects the progressivity of income growth among the original poor, the other measures the extent of downward mobility experienced by the incumbent poor. The decomposition is applied to appraising poverty trends in China between 1988 and 1996. The results indicate that the proposed decomposition can complement the widely-used growthdistribution decomposition in providing insights into poverty dynamics.
  • Topic: Development, Poverty
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Peilei Fan
  • Publication Date: 12-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Relying on a recently developed decomposition framework, this paper explores spatial distribution of innovation capability in China. It is found that at the regional level, China's inequality in innovation capability increased from 1995 to 2004. At the provincial level, the inequality decreased from1995 to 2000, but increased from 2000 to 2004. Location, industrialization and urbanization, human capital, and openness (foreign direct investment) are significant contributors to the inequality in innovation capability. Unbalanced development in high-tech parks exerts a growing explanatory power in driving innovation disparity, which implies that institutional factor plays a direct role.
  • Topic: Civil Society, Demographics
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 12-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Applying the Shapley decomposition to unit-record household survey data, this paper investigates the trends and causes of poverty in China in the 1990s. The changes in poverty trends are attributed to two proximate causes; income growth and shifts in relative income distribution. The Foster-Greer-Thorbecke measures are computed and decomposed, with different datasets and alternative assumptions about poverty lines and equivalence. Among the robust results are: (i) both income growth and favourable distributional changes can explain China's remarkable achievement in combating poverty in rural areas in the first half of the 1990s; (2) in the second half of the 1990s, both rural and urban China suffered from rapidly rising inequality and stagnant income growth, leading to a slow-down in poverty reduction, even reversal of poverty trend.
  • Topic: Development, Economics, Poverty
  • Political Geography: China, Asia
  • Author: Fang Cai, Meiyan Wang
  • Publication Date: 11-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper describes and decomposes wage differences between female and male workers. The results indicate that females receive low wages because of unequal pay within sectors, and that the wage gap caused by the difference in sectoral attainment is small. The results also reveal that a lion's share of the wage differential between females and males is attributable to discrimination rather than to the human capital difference between the genders. Eliminating discriminations against females with a focus on intra-sectoral inequality is crucial for reducing female/male wage differentials.
  • Topic: International Relations, Development, Political Economy
  • Political Geography: China, Asia
  • Author: Ying Chu Ng
  • Publication Date: 11-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Gender earnings differentials in urban China by region and their changes during the first decade of economic reform are examined. It is found that the female–male earnings ratio increased during the early stage of reform. The male earnings premium, overall, showed an increasing trend in the later stage of reform. Decomposition of the gender earnings differential reveals that a relatively lower percentage of the differential could be explained by gender differences in productive characteristics in the fast growing regions and in regions with a rapid pace of reform. The cross-sectional results highlight the possible existence of gender discrimination, particularly in the later stages of economic reform and development. Both market competition and the effects of wage decentralization play a role in shaping the gender earnings differentials. Gender earnings differentials varied by region and over time, generally in tandem with the pace of economic reform and development. The decomposition of the overtime changes in the earnings gap indicated that improvement in females' productive characteristics during the reform period constantly enhanced the earnings of females relative to those of males. The overtime changes in the returns to females' characteristics, however, work to counter any narrowing of the gender earnings gap.
  • Topic: International Relations, Development, Gender Issues
  • Political Geography: China, Asia
  • Author: Shi Li, Ximing Yue, Terry Sicular, Björn Gustafsson
  • Publication Date: 11-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Using new household survey data for 1995 and 2002, we investigate the size of China's urban-rural income gap, the gap's contribution to overall inequality in China, and the factors underlying the gap. Our analysis improves on past estimates by using a fuller measure of income, adjusting for spatial price differences and including migrants. Our methods include inequality decomposition by population subgroup and the Oaxaca-Blinder decomposition. Several key findings emerge. First, the adjustments substantially reduce China's urban-rural income gap and its contribution to inequality. Nevertheless, the gap remains large and has increased somewhat over time. Second, after controlling for household characteristics, location of residence remains the most important factor underlying the urban-rural income gap. The only household characteristic that contributes substantially to the gap is education. Differences in the endowments of, and returns to, other household characteristics such as family size and composition, landholdings, and communist party membership are relatively unimportant.
  • Topic: International Relations, Development, Human Rights
  • Political Geography: China, Asia
  • Author: Yin Ge
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: How do foreign trade and foreign direct investment affect regional inequality? Foreign trade and investment may affect internal economic geography, and the resulting industry agglomeration may contribute to regional inequality. This paper provides empirical evidence supporting this linkage. The results indicate that the increasing regional inequality in China has been accompanied by an increase in the degree of regional specialization and industry agglomeration. Foreign trade and foreign investment are closely related to industry agglomeration in China. Industries dependent on foreign trade and FDI are more likely to locate in regions with easy access to foreign markets, and exporting industries have a higher degree of agglomeration.
  • Topic: Economics, Industrial Policy, International Trade and Finance
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Zhang-Yue Zhou
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: A comparative study of the public distribution systems of foodgrains in India and China is expected to reveal lessons and experiences that are valuable to policymakers. This is particularly important for developing countries in their endeavour to ensure food security. This paper undertakes such an exercise. The main features and developments of the two public distribution systems are first highlighted. This is followed by a comparative analysis of their similarities and differences. The role of public foodgrain distribution systems in ensuring food security is then evaluated. Finally, policy implications are drawn.
  • Topic: Human Welfare, Poverty
  • Political Geography: China, India, Asia
  • Author: Zhicheng Liang
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Financial development can exert a significant influence on the distribution of income. In this paper, using Chinese provincial data over the period of 1991-2000 and applying the generalized method of moment (GMM) techniques, we investigate the relationship between finance and inequality in rural China by testing alternative existing theories concerning the finance-inequality nexus. A negative and linear relationship between finance and inequality is found in our estimations. The empirical results show that financial development significantly reduces income inequality in post-reform rural China.
  • Topic: Demographics, Development, Economics
  • Political Geography: China, Asia