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401. A Macro Policy for Poverty Eradication through Structural Change

Author:
Rehman Sobhan
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper argues that poverty originates in the structural injustices of a social order which incapacitates the poor from participating in the growth generating sectors of the economy and leaves them captives in the so called informal sector, characterized by low productivity and low earning capacity. In such a system the poor remain individualized and hence disempowered which compels them to interface with the market economy on highly inequitable terms which relegates them to the lowest tiers of the value addition chain. The need for a macro-policy designed to eliminate poverty is premised on the argument that poverty originates in the structural features of society which can only be addressed at the macro-level. Policy interventions, to redesign the structural sources of poverty, bring into consideration issues of social, political as well as economic reform.
Topic:
Foreign Policy, Development, Economics, and Poverty

402. From Local to Global and Informal to Formal: Entering Mainstream Markets

Author:
Reema Nanavaty
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This is a brief sketch of the Self Employed Women's Association's (SEWA) three-decade-long journey from the local to global and informal to formal sector in search of finding work and income for now 720,000 women workers. Though SEWA remains a local and an informal economy workers' organization, its aim has always been to mainstream its issues, hopes, and achievements.
Topic:
International Relations, Economics, Emerging Markets, and International Trade and Finance

403. Unlocking Public Entrepreneurship and Public Economies

Author:
Elinor Ostrom
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Unlocking human potential requires a rich network of institutional arrangements in both private and public spheres. Opening the private sphere to entrepreneurship and complex market organization is well understood as a key to increasing the level and quality of private goods available to consumers. Opening the public sphere to entrepreneurship and innovation at local, regional, and international levels is also a key to increasing the level and quality of public goods – e.g., peace, safety, and health – available to citizens. This paper reviews studies of urban service delivery that have repeatedly found communities of individuals who have self-organized to provide and co-produce surprisingly good local services. In addition to unlocking individual freedom, we need to unlock the public sector from rigid, top-down, hierarchical organization.
Topic:
International Relations, Economics, Emerging Markets, and International Trade and Finance

404. Globalization and Regional Income Inequality: Evidence from within China

Author:
Guanghua Wan, Zhao Chen, and Ming Lu
Publication Date:
11-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
China's recent accession to the WTO is expected to accelerate its integration into the world economy, which aggravates concerns over the impact of globalization on the already rising inter-region income inequality in China. This paper discusses China's globalization process and estimates an income generating function, incorporating trade and FDI variables. It then applies the newly developed Shapley value decomposition technique to quantify the contributions of globalization, along with other variables, to regional inequality. It is found that (a) globalization constitutes a positive and substantial share to regional inequality and the share rises over time; (b) capital is one of the largest and increasingly important contributor to regional inequality; (c) economic reform characterized by privatization exerts a significant impact on regional inequality; and (d) the relative contributions of education, location, urbanization and dependency ratio to regional inequality have been declining.
Topic:
Economics and Globalization
Political Geography:
China and Asia

405. Development Policy: An Introduction for Students

Author:
Tony Addison
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper discusses development policy objectives, noting how these have changed over the years, with a more explicit focus on poverty reduction coming recently to the fore. It also examines the relationship between economic growth and poverty reduction. The paper then discusses how to achieve economic growth, starting with the caveat that growth must be environmentally sustainable, and moves on to the big question of the respective roles for the market mechanism and the state in allocating society's productive resources. The paper next discusses how economic reform has been implemented, and the political difficulties that arise. It concludes that getting development policy right has the potential to lift millions out of poverty.
Topic:
Development, Economics, and Politics
Political Geography:
United States

406. Income Risk and Welfare Status of Rural Households in Nigeria: Ekiti State as a Test Case

Author:
B. Oluwatayo
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of income risk on the level of well-being of rural households in Nigeria. While income risk is defined as the risks associated with variability in income well-being is defined in terms of the level of utility reached by a given individual. This level is a function of goods and services that the individual consumes. The study is based on primary data collected from a sample of 285 households in Ekiti State, Nigeria. Analysis of the data revealed that household heads' age, years of formal education, household size, size of land cultivated and total expenditure (on food and non-food items) are major determinants of income risks among households in the study area. Also, going by the indices of various social indicators of well-being considered, it was revealed that income risk impacts negatively on the well-being of households in the study area.
Topic:
Demographics, Economics, and Human Welfare
Political Geography:
Africa and Nigeria

407. A Contract Perspective on the International Finance Facility

Author:
George Mavrotas and Tun Lin
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The present paper is a first attempt to develop a theoretical model using a short-term vis-á-vis long-term contract framework within which donor countries' endorsement or rejection decision towards the recently proposed International Finance Facility (IFF) is rationalized. The current foreign aid system is portrayed as being similar to a series of short-term contracts, where donor countries are able to adjust the aid amount to reflect environmental change (broadly defined to take into account changes in public opinion, domestic situation, etc.). The benefit of this system is in its flexibility. Frontloading aid, on the other hand, as proposed by the IFF proposal, has the benefit of smoothing out the flows over time. In the model presented in this paper, donor countries balance these two contract schemes to determine the endorsement or rejection of the IFF proposal. By using historical aid data covering the period 1990-2003 for all DAC donor countries, our empirical analysis shows the payoffs and relative advantages of these two contract schemes.
Topic:
Debt, Economics, International Political Economy, and International Trade and Finance

408. Social Groups and Economic Poverty: A Problem in Measurement

Author:
S. Subramanian
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper points to some elementary conflicts between the claims of interpersonal and intergroup justice as they manifest themselves in the process of seeking a real-valued index of poverty which is required to satisfy certain seemingly desirable properties. It indicates how 'group—sensitive' poverty measures, similar to the Anand-Sen (1995) 'Gender Adjusted Human Development Index' and the Subramanian-Majumdar (2002) 'Group-Disparity Adjusted Deprivation Index', may be constructed. Some properties of a specific 'group-sensitive' poverty index are appraised, and the advantage of having a 'flexible' measure which is capable of effecting a tradeoff between the claims of interpersonal and inter-group equality is spelt out. The implications of directly incorporating group disparities into the measurement of poverty for poverty comparisons and anti-poverty policy are also discussed.
Topic:
Development, Economics, Human Welfare, Poverty, and International Affairs

409. Do Structural Reforms always Succeed? Lessons from Brazil

Author:
Jorge Saba Arbache
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In the last twenty years, Brazil has undergone several attempts of improving sustainable growth through stabilization programmes, and more recently, structural reforms in line with the Washington Consensus Agenda. The results, however, have been disappointing, as the per capita output growth has remained below its historic trend, and poverty and inequality remain at high levels. This paper investigates why marketoriented reforms such as trade and capital account liberalization, privatization, deregulation and stabilization failed to boost growth in Brazil. We conclude that structural reforms may contribute to growth if accompanied by microeconomic policies tailor-made to address the country's needs, and by appropriate macroeconomic, institutional and political environments.
Topic:
Development, Human Welfare, and Political Economy
Political Geography:
Washington, Brazil, and Latin America

410. Participatory Approaches and the Measurement of Human Well-being

Author:
Sarah White and Jethro Pettit
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper considers the use of participatory methods in international development research, and asks what contribution these can make to the definition and measurement of well-being. It draws on general lessons arising from the project level, two larger-scale policy research processes sponsored by the World Bank, and the experience of quality of life studies. It also considers emerging experiments with using participatory methods to generate quantitative data. The paper closes by assessing the future trajectory of participatory approaches in well-being research, and reflects on some dilemmas regarding the use of participatory data on well-being in the policymaking process.
Topic:
Development, Economics, Human Welfare, and International Cooperation

411. Output and Price Fluctuations in China's Reform Years: What Role did Money Play?

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The Chinese economy underwent cyclical fluctuations in growth and inflation in the reform period. Contrasting views exist on the role of money in such fluctuations. This paper assesses these views employing structural VEC models based on the exchange equation. It is found that in the long run money accommodates, rather than causes, changes in output and prices. In the short run, price fluctuations are mostly attributable to shocks that have permanent effects on prices and money but not on real output. These shocks also account for a large proportion of fluctuations in money, and strongly influence the movements of output.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
China and Asia

412. What Accounts for China's Trade Balance Dynamics?

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper proposes a structural VAR model which extends the frameworks of Hoffmaister and Roldós (2001) and Prasad (1999). The model is then used to analyse the sources of China's trade balance fluctuations in the period of 1985–2000. Efforts are made to distinguish the forces which underlie the long-run trend in trade balance from those with transitory impacts. The effects of four types of shock are examined—the foreign supply shock, the domestic supply shock, the relative demand shock, and the nominal shock. Among other findings, two emerge as important. First, the movements in China's trade are largely the result of real shocks. Second, the Renminbi is undervalued, yet changes in the exchange rate bear little on the trade balance. Therefore, monetary measures would not suffice to redress China's trade 'imbalance'.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
China and Asia

413. China's Business Cycles: Perspectives from an AD–AS Model

Author:
Guanghua Wan and Yin Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper represents a first attempt to study China's business cycles using a formal analytical framework, namely, a structural VAR model. It is found that: (a) demand shocks were the dominant source of macroeconomic fluctuations, but supply shocks had gained more importance over time; (b) the driving forces of demand shocks were consumption and fixed investment in the first cycle of 1985–90, but shifted to fixed investment and world demand in the second cycle of 1991–96 and the post-1997 deflation period; and (c) macroeconomic policies did not play an important part either in initiating or counteracting cyclical fluctuations.
Topic:
Demographics, Economics, and Emerging Markets
Political Geography:
China

414. Decomposing Spatial Differences in Poverty in India

Author:
Shatakshee Dhongde
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Over the last decade, India has been one of the fastest growing economies, and has experienced considerable decline in overall income poverty. However, in a vast country like India, poverty levels vary significantly across the different states. In this paper, we analyze the differences between poverty at the state and national level, separately for the rural and urban sector, in the year 1999-2000. Instead of following the usual practice of decomposing the changes in poverty over time, we decompose the changes in poverty across regions. Such decomposition reveals that differences in state and national poverty levels were largely explained by differences in the state and national mean income levels. Differences in the state and national distributions of income were less important in explaining spatial differences in poverty. An important policy implication of our results is that states with extremely high levels of poverty would have reduced poverty significantly by raising their mean income levels to the national mean income, instead of changing their distribution of income to match the national income distribution.
Topic:
Demographics, Economics, and Poverty
Political Geography:
India and Asia

415. Divergent Means and Convergent Inequality of Incomes among the Provinces and Cities of Urban China

Author:
John Knight, Li Shi, and Zhao Renwei
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Two precisely comparable national household surveys relating to 1988 and 1995 are used to analyse changes in the inequality of income in urban China. Over those seven years province mean income per capita grew rapidly but diverged across provinces, whereas intra-province income inequality grew rapidly but converged across provinces. The reasons for these trends are explored by means of various forms of decomposition analysis. Comparisons are also made between the coastal provinces and the inland provinces. The decompositions show the central role of wages, and within wages profitrelated bonuses, together with the immobility of labour across provinces, in explaining mean income divergence. The timing of economic reforms helps to explain the convergence of intra-province income inequality. Policy conclusions are drawn.
Topic:
Demographics, Development, and Economics
Political Geography:
China and Asia

416. Income Inequality in Rural China: Regression-based Decomposition Using Household Data

Author:
Guanghua Wan and Zhangyue Zhou
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
A considerable literature exists on the measurement of income inequality in China and its increasing trend. Much less is known, however, about the driving forces of this trend and their quantitative contributions. Conventional decompositions, by factor components or by population subgroups, only provide limited information on the determinants of income inequality. This paper represents an early attempt to apply the regression-based decomposition framework to the study of inequality accounting in rural China, using household level data. It is found that geography has been the dominant factor but is becoming less important in explaining total inequality. Capital input emerges as a most significant determinant of income inequality. Farming structure is more important than labour and other inputs in contributing to income inequality across households.
Topic:
Demographics, Development, and Economics
Political Geography:
China and Asia

417. Fifty Years of Regional Inequality in China: A Journey through Central Planning, Reform, and Openness

Author:
Ravi Kanbur and Xiaobo Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper constructs and analyses a long-run time-series for regional inequality in China from the Communist Revolution to the present. There have been three peaks of inequality in the last fifty years, coinciding with the Great Famine of the late 1950s, the Cultural Revolution of the late 1960s and 1970s, and finally the period of openness and global integration in the late 1990s. Econometric analysis establishes that regional inequality is explained in the different phases by three key policy variables; the ratio of heavy industry to gross output value, the degree of decentralization, and the degree of openness.
Topic:
Development, Economics, Industrial Policy, and Political Economy
Political Geography:
China and Asia

418. Industrial Location and Spatial Inequality: Theory and Evidence from India

Author:
Somik V. Lall and Sanjoy Chakravorty
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We argue that spatial inequality of industry location is a primary cause of spatial income inequality in developing nations. We focus on understanding the process of spatial industrial variation—identifying the spatial factors that have cost implications for firms, and the factors that influence the location decisions of new industrial units. The analysis has two parts. First we examine the contribution of economic geography factors to the cost structure of firms in eight industry sectors and show that local industrial diversity is the one factor with significant and substantial cost reducing effects. We then show that new private sector industrial investments in India are biased toward existing industrial and coastal districts, whereas state industrial investments (in deep decline after structural reforms) are far less biased toward such districts. We conclude that structural reforms lead to increased spatial inequality in industrialization, and therefore, income.
Topic:
Development, Economics, Industrial Policy, and Political Economy
Political Geography:
South Asia and India

419. Commune-Level Estimation of Poverty Measures and its Application in Cambodia

Author:
Tomoki Fujii
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this study, we combined the Cambodian socioeconomic survey for 1997 and the country's population census of 1998 to produce poverty measures at the commune-level in Cambodia using the small-area estimation technique developed by Elbers, Lanjouw and Lanjouw. While there are a number of communes for which the standard errors associated with the estimates are too high, we found that they are on average small enough to be useful. We illustrate the application of poverty maps with reference to education programmes.
Topic:
Economics, Education, and Poverty
Political Geography:
Cambodia and Southeast Asia

420. Multiactor Global Funds: New Tools to Address Urgent Global Problems

Author:
Jeremy Heimans
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Multiactor global funds (MGFs) are emerging as important new mechanisms for the financing of development and other global priorities. MGFs like the Global Fund for AIDS, Tuberculosis and Malaria are distinctive because they are administered and financed by multiactor coalitions of governments, international organizations, the private sector and civil society, they operate independently of any one institution and are tied to particular issue or policy areas. This paper considers the desirability of MGFs as instruments for international financial mobilization, resource allocation and as a form of experimentation in global governance. It is argued that MGFs hold considerable promise as focal points for generating additional public and private resources to address urgent global problems and to finance global public goods. They may be more operationally nimble than traditional mechanisms and capture some of the benefits of collaboration among different actors. However, MGFs may also result in a less coherent response to global problems, duplicate existing structures and be weakly democratically accountable.
Topic:
International Relations, Economics, International Trade and Finance, and Non-Governmental Organization

421. The Transition from Official Aid to Private Capital Flows: Implications for a Developing Country

Author:
Renu Kohli
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
India's capital account displays a sharp swing in external financing from official assistance to private capital transfers in the 1990s. This paper examines the implications of this transition for the country. An analysis of the private resource transfer reveals that unlike official flows, private capital flows are associated with real exchange rate appreciation, expansion in domestic money supply and stock market growth, liquidity and volatility. The paper concludes with a discussion on the implications of the transition for economic policy.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
South Asia and India

422. Foreign Aid Resurgent: New Spirit or Old Hangover?

Author:
Peter Burnell
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study is premised on the view that reports circulating in the 1990s, claiming foreign aid was in terminal crisis, were premature. Aid's reviving fortunes are explained in terms both of a growing awareness of the uneven implications of globalization and the after-effects of the terrorist events of 11 September 2001. However these two 'drivers' make uneasy partners. Furthermore, aid for democratization, argued in the 1990s to be an instrument for indirectly addressing socioeconomic weakness and improving development aid's effectiveness—making it a positive feature in a bleak decade—is increasingly seen as problematic. For now, aid's resurgence should target pro-poor development rather than democratic reform, although the likelihood is that old fashioned determinants of realpolitik will continue to get in the way.
Topic:
International Relations, Economics, Human Welfare, and Poverty

423. Spatial Horizontal Inequality and the Maoist Insurgency in Nepal

Author:
S. Mansoob Murshed and Scott Gates
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The Maoist insurgency in Nepal is one of the highest intensity internal conflicts in recent times. Investigation into the causes of the conflict would suggest that grievance rather than greed is the main motivating force. The concept of horizontal or inter-group inequality, with both an ethnic and caste dimension, is highly relevant in explaining the Nepalese civil war. There is also a spatial aspect to the conflict, which is most intense in the most disadvantaged areas in terms of human development indicators and land holdings. Using the intensity of conflict (fatalities) as the dependent variable and HDI indicators and landlessness as explanatory variables, we find that the intensity of conflict across the districts of Nepal is significantly explained by the degree of inequalities.
Topic:
Ethnic Conflict, Human Welfare, and Poverty
Political Geography:
South Asia and Nepal

424. Prospects for 'Pro-Poor' Growth in Africa

Author:
Abebe Shimeles and Arne Bigsten
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines trends in income distribution and its linkages to economic growth and poverty reduction in order to understand the prospects for achieving poverty reduction in Africa. We examine the levels and trends in income distribution in some African countries and calculate pro-poor growth indices. Different growth patterns are simulated for Ethiopia, Uganda, Mozambique, and South Africa. We conclude that the balance between policies aimed at growth and measures aimed at redistribution should depend on the elasticity of the growth-equity tradeoff. We also discuss what the appropriate ingredients of a pro-poor strategy would be in the African setting.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Uganda, Africa, South Africa, Mozambique, and Ethiopia

425. Longevity in Russia's Regions: Do Poverty and Low Public Health Spending Kill?

Author:
Oleksiy Ivaschenko
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of changes in poverty and public health spending on inter-temporal variations in longevity using a unique regional-level dataset that covers 77 regions of Russia over the period 1994-2000. The dynamic panel data model is used as a tool for the empirical analysis. The model is estimated using the Arellano-Bond dynamic panel data estimator. The changes in regional levels of poverty and real per capita public health expenditure are identified to be significant determinants of the variations observed in longevity over time. The empirical results indicate that while male life expectancy responds more strongly than female life expectancy to economic circumstances, the latter appears to be more predisposed to the influence of public health spending. The results support the idea that the (positive) effect of public health spending on life expectancy is larger for those regions that experience higher incidences of poverty. The paper also finds that the financial crisis which hit Russia at the end of 1998 had a significant negative effect on longevity independently of the factors directly related to poverty and public health spending.
Topic:
Human Welfare, Political Economy, and Poverty
Political Geography:
Russia, Europe, and Asia

426. Dynamics of Poverty in Ethiopia

Author:
Abebe Shimeles and Arne Bigsten
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper addresses issues related to the dynamics of income poverty using unique household panel data for urban and rural areas of Ethiopia covering the period 1994-97. The percentage of households that remained in poverty was twice as large in urban areas as in rural areas. This suggests that income variability is a serious problem in rural areas, while the persistence is a key feature of urban poverty. The paper also discusses household characteristics that are correlated with the incidence of chronic poverty as well as vulnerability to poverty. A strategy that promotes consumption smoothing through say access to credit can work well in rural areas, while income or employment generation are required for poverty alleviation in urban areas.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Africa and Ethiopia

427. On the Arbitrariness and Robustness of Multi-Dimensional Poverty Rankings

Author:
Mozaffar Qizilbash
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
It is often argued that multi-dimensional measures of well-being and poverty—such as those based on the capability approach and related views—are ad hoc. Rankings based on them are not, for this reason, robust to changes in the selection of weights used. In this paper, it is argued that the extent of potential arbitrariness and the range of issues relating to robustness have been underestimated in this context. Several issues relating to both the identification of the poor and the use of dimension-specific data are distinguished. These issues are then discussed in the context of the inter-provincial ranking of poverty in South Africa in 1995-6. It turns out that this ranking is fairly robust, and that some important policy-relevant results about the distinction between 'income'/'expenditure' and 'human' poverty for the South African context are reinforced rather than undermined by checking for robustness. In particular, while KwaZulu Natal is in the best three in terms of the standard expenditure measures for various choices of poverty line, it is third worst in terms of all the multi-dimensional rankings presented here.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Africa and South Africa

428. Spatial Inequality and Development in Central Asia

Author:
Kathryn Anderson and Richard Pomfret
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper focuses on inequality in living standards across oblasts and regions within Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan. Regional inequality is an important area of research and policy development. Inequality in income and consumption are logical outcomes in a market-based economic system. If inequality within countries exists because of barriers to competition, then inequality can foment internal tension, and economic and social development within countries is negatively affected. We examine Living Standards Measurement data from Tajikistan, Kyrgystan, and Kazakhstan and additional survey data from Uzbekistan. We find that the most important explanations for the variation in expenditures per capita in the region are household location, household composition, and education. We find large variation in per capita expenditure by location within each country, and the differences go beyond the simple rural-urban distinction. Family structure is also important, and in all countries, having a university educated household head significantly improves household welfare; expenditures are higher in these households than in households with less educated heads. We examine inequality in access to community services and find that provision of public goods reinforces regional inequality patterns in expenditures that we measure among households. The poorest households are likely to live in communities with the lowest access to public services.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Central Asia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Turkmenistan

429. Trade Liberalization and Spatial Inequality: A Methodological Innovation in Vietnamese Perspective

Author:
Henning Tarp Jensen and Finn Tarp
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we calibrate two static computable general equilibrium (CGE) models with respectively 16 and 5,999 representative households. Aggregated and disaggregated household categories are consistently embedded in a 2000 social accounting matrix for Vietnam, mapping on a one-to-one basis to each other. Distinct differences in poverty assessments emerge when the impact of trade liberalization is analyzed in the two models. This highlights the importance of modeling micro household behavior and related income and expenditure distributions endogenously within a static CGE model framework. Our simulations indicate that poverty will rise following a revenue-neutral lowering of trade taxes. This is interpreted as a worst case scenario, which suggests that government should be proactive in combining trade liberalization measures with a propoor fiscal response to avoid increasing poverty in the short to medium term.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Vietnam and Southeast Asia

430. Microsimulation, CGE and Macro Modelling for Transition and Developing Economies

Author:
James B. Davies
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Alternative approaches to modelling distributional and welfare effects of changes in policy and the economic environment in developing and transition countries are surveyed. Microsimulations range from pure accounting approaches to models with behavioural equations based on econometric estimates and various dynamic models. Microsimulation accounting models are key to analysing the impact effects of tax and benefit changes and are becoming widespread. Computable general equilibrium (CGE) modelling endogenizes price changes and changes in industry and labour market structure. An essential CGE input is a social accounting matrix (SAM), which can be used to do simple multiplier analyses. A wide range of macroeconomic models have also been used in developing countries, endogenizing variables like interest rates and exchange rates.
Topic:
Development, Economics, and Human Welfare

431. Changes in Spatial Income Inequality in the Philippines: An Exploratory Analysis

Author:
Arsenio M. Balisacan and Nobuhiko Fuwa
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The purpose of this paper is to establish some basic facts about income inequality in the Philippines, with a special focus on the importance of spatial income inequality. Despite major fluctuations in macroeconomic performances, income inequality remained relatively stable during the years 1985-2000. Spatial inequality accounts for a sizable but not overwhelming portion of the national-level income inequality, and the relative importance of spatial inequality was declining over time. We also find that mean income levels across provinces were converging at a much faster rate than those observed in currently developed countries.
Topic:
Development, Economics, and Human Welfare
Political Geography:
Philippines and Southeast Asia

432. The Medium- and Long-term Effects of an Expansion of Education on Poverty in Côte d'Ivoire: A Dynamic Microsimulation Study

Author:
Michael Grimm
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
I use a dynamic microsimulation model to analyse the distributional effects of an expansion of education in Côte d'Ivoire in the medium and long term. The simulations are performed in order to replicate several policies in force or subject to debate in this country. Various hypotheses concerning the evolution of returns to education and labour demand are tested. The direct effects between education and income as well as the different transmission channels, such as occupational choices, fertility, and household composition, are analysed. The effects of educational expansion on the growth of household incomes, their distribution and poverty depend very crucially on the hypothesis made on the evolution of returns to education and labour demand. If returns to education remain constant and the labour market segmented, the effects will be very modest.
Topic:
Economics, Education, and Human Welfare
Political Geography:
Africa

433. Economic Well-being and Non-economic Well-being: A Review of the Meaning and Measurement of Poverty

Author:
Andrew Sumner
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper discusses the measurement of poverty and well-being. A historical overview is given of the last fifty years. This is followed by discussion of three groupings of indicators: those measures based primarily on economic well-being; those based on non-economic well-being and composite indicators. It is argued that the choice of indicator should reflect its purpose and that economic measures are best when quick, rough-and-ready, short run, aggregate inferences are required. In contrast, non-economic measures are better when greater depth on medium- or longer-term trends and/or dis-aggregation are required.
Topic:
Demographics, Economics, Human Welfare, and Poverty

434. Well-being and the Complexity of Poverty: A Subjective Well-being Approach

Author:
Mariano Rojas
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This investigation studies human well-being from a subjective well-being approach. On the basis of a Mexican database the investigation shows that there is a weak relationship between subjective well-being and indicators of well-being such as income and consumption. Therefore, subjective well-being provides additional useful information to study human well-being and, in consequence, poverty.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Latin America, Central America, North America, and Mexico

435. Income-based Measures of Average Well-being

Author:
Steve Dowrick
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Internation comparisons of average national incomes omit important information about leisure, home production, health, etc. They are also bedevilled by index number problems. This paper suggests ways of combining working hours and life-expectancy with income comparisons, and shows that the fixed-price indexes of real income, such as those in the Penn World Table, substantially understate the income gaps between the poorest and richest countries.
Topic:
Demographics, Economics, Human Welfare, and Poverty

436. Subjective Measures of Well-being

Author:
Ruut Veenhoven
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper deals with three questions: (1) What are 'subjective' measures? (2) What is 'well-being'? and (3) Are subjective measures of well-being of use for policymaking, in particular in developing nations?
Topic:
Development, Human Welfare, and Poverty

437. Human Well-being: Concepts and Conceptualizations

Author:
Des Gasper
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Economic measures of income have ignored large areas of human well-being and are poor measures of well-being in the areas to which they attend. Despite increased recognition of those distortions, 'GNP per capita continues to be regarded as the quintessential indicator of a country's living standard' (Partha Dasgupta). Well-being seems to have intuitive plausibility as a concept, but in practice we encounter a bewilderingly diverse family of concepts and approaches, partly reflecting different contexts, purposes, and foci of attention. Is there a unifying framework that yet respects the complexity and diversity of well-being? This paper presents an imperfect comparative and integrative framework that builds on the contributions by Sen and others. We move toward the framework gradually, since well-being concepts are in fact complex entitities which reflect pictures of personhood and of science. Insight grows through surveying a wide range of relevant experience and views, before risking blinkering one's vision in a framework. The paper then uses the framework to examine conceptualizations of human well-being, by Dasgupta, Sen, Nussbaum, Doyal and Gough, and Alkire.
Topic:
Demographics, Development, Human Welfare, and Poverty

438. The Characteristics of Macroeconomic Shocks in the CFA Franc Zone

Author:
David Fielding, Kevin Lee, and Kalvinder Shields
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we fit a VECM in output and prices to data from ten countries of the CFA Franc Zone. This model allows for various cross-country interactions in both the short run and the long run. The VECM parameters are used to estimate persistence profiles of different kinds, in order to identify the degree of homogeneity in the way in which the countries respond to macroeconomic shocks. In this way we can shed light on questions about the likely size of the costs incurred from these countries' membership of a monetary union.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa

439. Gender-related Indicators of Well-being

Author:
Stephan Klasen
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper discusses the rationale as well as the challenges involved when constructing gender-related indicators of well-being. It argues that such indicators are critically important but that their construction involves a number of conceptual and measurement problems. Among the conceptual issues considered are the space in which gender inequality in well-being is to be measured, whether the indicators should track wellbeing of males and females separately or adjust overall measures of well-being by the gender inequality in well-being, whether gender equality in every indicator is necessarily the goal, how to assess gender inequality that is apparently desired by males and females, and what role indicators of agency or empowerment should play in genderrelated indicators of well-being. Among the most important measurement issues addressed are; the role of the household in allocating resources, the question of stocks versus flows, as well as significant data gaps when it comes to gender inequalities. Where appropriate, remedies to the conceptual and measurement issues are proposed. The paper also briefly reviews UNDP's gender-related indices to illustrate some of the challenges involved.
Topic:
Development, Gender Issues, Human Welfare, and Poverty

440. Monetary Policy in the Franc Zone: Estimating Interest Rate Rules for the BCEAO

Author:
Anja Shortland and David Stasavage
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines to what extent the central bank for the West African Economic and Monetary Union (BCEAO) has used interest rate policy in response to domestic economic developments. We show that while in the long run the BCEAO matches changes in French (Eurozone) interest rates one for one, in the short run it retains freedom to react to domestic economic variables, such as inflation, the output gap, its foreign exchange position and government borrowing.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa, France, and West Africa

441. Poverty and Growth in the WAEMU after the 1994 Devaluation

Author:
Jean-Paul Azam
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper brings out that poverty increased massively in the wake of the 1994 devaluation of the CFA franc, despite a significant recovery of economic growth. Although this increase affected all the social groups, it fell mostly on the urban poor. An analytical model is presented, which explains this puzzle by the stratification of the labour market, assuming that the formal sector workers are at the same time the investors in the informal sector. Then, capital intensity in the latter increases as the former anticipate the cut in formal sector wages that the long-awaited devaluation brings about. Ex post, they run down their assets for consumption-smoothing purposes, thus de-capitalizing the informal sector firms, with a negative impact on incomes in the (urban) informal sector.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa

442. The Impact of Monetary Union on Macroeconomic Integration: Evidence from West Africa

Author:
David Fielding and Kalvinder Shields
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we use data from 17 African nations in order to investigate the hypothesis that monetary union – represented in this case by the CFA Franc Zone – augments the extent of macroeconomic integration. The paper covers a number of dimensions of integration including the volume of bilateral trade, real exchange rate volatility and the magnitude of cross-country business cycle correlation.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa

443. Monetary Policy in the CFA Zone: Country-level Credit Policy

Author:
Anja Shortland and David Stasavage
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines whether the BCEAO has made use of the various policy instruments at its disposal for steering credit in the individual CFA zone member countries to complement interest rate policy at the zone level. We estimate whether private sector credit has responded systematically to different monetary policy variables using iterated 3-stage least squares regressions for Burkina Faso, Côte d'Ivoire, Mali, Senegal and Togo. If we constrain the coefficient estimates there is some support for the hypothesis that the BCEAO has contracted private sector credit in response to a higher inflation differential with France. However, there seems to be no policy rule to restrict private sector credit in response to increasing government borrowing from the central bank or increased foreign borrowing. If the coefficient estimates are unconstrained, there does not appear to be any systematic policy to control credit expansion at the domestic level.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa and France

444. The Costs and Benefits Analysis of CFA Membership: The Choice of an Exchange Rate Regime for the CFA Countries Zone

Author:
Mireille Linjouom
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper determines an analytical framework defining the choice of an optimal exchange rate regime for a typical CFA country. The policymakers behave strategically to decide to adopt alternative exchange rate regime by minimizing their loss function under specific constraints like economic characteristics and political consideration. One concludes a CFA economy with less inflationary propensity and greater external shocks volatility will tend to select a flexible exchange rate regime. Moreover, the model suggests that a CFA country with a more unstable political system and a higher propensity to apply inflationary policies will prefer a flexible arrangement than a fixed one.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Africa

445. Diffusion of Digital Mobile Telephony: Are Developing Countries Different?

Author:
Petri Rouvinen
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Factors determining the diffusion of digital mobile telephony across 200 developed and developing countries in the 1990s are studied with the aid of a Gompertz model. The market size and network effects are found to play more important roles in the developing countries; there is also more need for complementing innovations in, for example, financial and payment systems. Even though the developing countries have disadvantages, being late entrants in digital mobile telephony is to their advantage and promotes cross-country convergence. Overall digital technologies are best seen as equalizers, and thus the divide is rather socio-economic or analog than digital.
Topic:
Demographics, Development, Globalization, and Science and Technology

446. An Aggregate View of Macroeconomic Shocks in Sub-Saharan Africa: A Comparative Study Using Innovation Accounting

Author:
Simeon Coleman
Publication Date:
02-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper investigates the impacts and responses of macroeconomic shocks in some domestic economies in Sub-Saharan Africa over the period 1961-99; more specifically, it seeks to answer the question of whether there are any systematic differences in the responses of the CFA franc zones and the non-CFA franc zone countries to macroeconomic shocks. Based on the Blanchard-Quah methodology, we identify shocks to the changes in real exchange rate and output using a structural VAR (SVAR) model for these small open economies. Our finding that the real exchange rate innovations in the CFA franc zones are largely independent of domestic variables suggests that external influence is more important in the CFA zones. There is also some evidence that money demand shocks are more significant in the non-CFA franc zone countries.
Topic:
Economics, International Political Economy, and International Trade and Finance
Political Geography:
Africa

447. Conceptual and Measurement Issues in Poverty Analysis

Author:
Erik Thorbecke
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The objective of this paper is to review a number of issues related to poverty, while taking stock of the ongoing research. Most of the remaining unresolved issues in poverty analysis are related directly or indirectly to the dynamics of poverty. Before the development community can become more successful in designing and implementing poverty-alleviation strategies, within the context of growth, we need to understand better the conditions under which some households remain permanently (chronically) poor and how others move in and out of poverty. In what follows we review the state of the art under a number of interrelated headings: (1) Chronic vs. transient poverty; (2) Poverty and vulnerability; (3) The determination of the poverty line across time and countries; (4) The quantitative vs. qualitative approach to poverty measurement; and (5) Growth, inequality and poverty.
Topic:
Development, Economics, Human Welfare, and Poverty

448. An Inquiry into Cities and Their Role in Subnational Economic Growth in South Africa

Author:
W.F. Krugell and W.A. Naudé
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
South Africa is characterized by significant inequality in spatial economic activity. Whether future growth and development on a subnational level in South Africa will be such as to reduce this inequality may depend on the economic growth and development of South Africa's largest cities. Our local economic growth empirics show some indications of conditional convergence in output between poorer towns as well as overall between all cities and towns. Between 1990 and 2000 some limited sigma convergence was found but this was driven by declines in the standard deviation of per capita income amongst the poorest quintile of towns. An estimate of conditional beta convergence of 1.2 percent over the period 1990-2000 confirms that overall convergence has been taking place. From an estimation of the determinants of economic growth on a local level, using a dataset on 353 local areas in South Africa between 1990-2000 we found the most significant determinants to be stocks of human capital and distance from harbours and markets. The effect of human capital on economic growth was strongly associated with the presence of large cities, as one would predict from endogenous growth theory.
Topic:
Demographics, Development, and Economics
Political Geography:
Africa and South Africa

449. Return International Migration and Geographical Inequality: The Case of Egypt

Author:
Barry McCormick and Jackline Wahba
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores entrepreneurship amongst return migrants, how their business locations and characteristics differ from other businesses, and the implications for rural urban inequality. First, we examine, amongst returnees, the determinants of investment in a project/enterprise. Second, we study the impact of return migration on the characteristics and nature of non-farm small enterprises using a sample of return migrants and non-migrant owners of enterprises. Our data indicate that although the share of return migrants originating in urban areas is almost equal to those from rural areas, and that migrants tend to return to their origin region, urban areas benefit more than rural areas from international savings. The empirical evidence suggests that overseas savings, and the duration of stay overseas, have positive separate effects on the probability of investing in a project/enterprise amongst returnees. Furthermore, returnees from urban-origin are more likely than rural ones to invest in a non-farm enterprise. The findings also indicate that there is a regional bias in the location of firms and jobs created by returnees compared to non-migrants, in favour of the capital city. Thus, overall, the results support a positive impact of return migration on enterprise investment in urban areas driven by the preference of returnees to invest in urban areas.
Topic:
Demographics, Economics, and Migration
Political Geography:
Middle East and Egypt

450. Love Thy Neighbour? Evidence from Ethnic Discrimination in Information Sharing within Villages

Author:
Mattia Romani
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
There is increasing evidence to suggest that a fundamental source of information for farmers on how to access and use new agricultural technologies comes from interacting with neighbours. Economic research on adoption of innovations in a rural context has only partially addressed the issue of how the social structure of a village can affect adoption and the final impact on productivity of farmers. This paper investigates the role of proximity interpreted not only in geographical terms but also along the line of ethnic similarities among neighbours (what we define as 'social proximity'). We use a panel dataset collected in Côte d'Ivoire to define the probability of accessing the knowledge network. The main results indicate that farmers from ethnic minorities are less likely to access, and benefit less from, extension services. But they seem to try to re-equalize their condition by putting more effort than dominant ethnic group neighbours in sharing information among themselves.
Topic:
Agriculture, Demographics, Economics, and Human Welfare
Political Geography:
Africa

451. Crime, Isolation, and Law Enforcement

Author:
Marcel Fafchamps and Christine Moser
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper investigates the relationship between criminal activity and geographical isolation. Using data from Madagascar, we show that, after we control for population composition and risk factors, crime increases with distance from urban centers and, with few exceptions, decreases with population density. In Madagascar, crime and insecurity are associated with isolation, not urbanization. This relationship is not driven by placement of law enforcement personnel which is shown to track crime, but fails to reduce feelings of insecurity in the population. Other risk factors have effects similar to those discussed in the literature on developed countries. We find a positive association between crime and the presence of law enforcement personnel, probably due to reporting bias. Law enforcement personnel helps solve crime but appears unable to prevent it.
Topic:
Crime, Demographics, and Government
Political Geography:
Africa and Madagascar

452. Urban-Rural Inequality in Living Standards in Africa

Author:
David E. Sahn and David C. Stifel
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we examine the relative importance of rural versus urban areas in terms of monetary poverty and seven other related living standards indicators. We present the levels of urban-rural differences for several African countries for which we have data and find that living standards in rural areas lag far behind those in urban areas. Then we examine the relative and absolute rates of change for urban and rural areas and find no overall evidence of declining differences in the gaps between urban and rural living standards. Finally, we conduct urban-rural decompositions of inequality, examining the within versus between (urban and rural) group inequality for asset inequality, education inequality, and health (height) inequality.
Topic:
Demographics, Development, and Human Welfare
Political Geography:
Africa

453. Economic Growth, Income Distribution and Poverty: Time-series and Cross-country Evidence from the CFA-zone Countries of sub-Saharan Africa

Author:
Michael Bleaney and Akira Nishiyama
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The causes of the slow growth of CFA countries are investigated. There is little difference in this respect between the CFA and other sub-Saharan African countries. Since 1970, GDP growth in the CFA countries has shown no significant trend but one or two medium-term fluctuations (positive in 1979-83 and negative in 1989-93). Internationally, the income share of the poorest 20 per cent of the population of any country has improved most in poor countries, and there is no evidence that this does not apply to CFA countries also.
Topic:
Economics, Human Welfare, International Political Economy, and International Trade and Finance
Political Geography:
Africa

454. How Does Monetary Policy Affect the Poor? Evidence from the West African Economic and Monetary Union

Author:
David Fielding
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The West African Economic and Monetary Union (UEMOA) has a history of monetary stability and low inflation. Nevertheless, there is substantial variation in relative prices within some UEMOA countries, in particular in the price of food relative to other elements of the retail price index (IHPC). Using monthly time-series data for cities within the region, we analyze the impact of changes in monetary policy instruments on the relative prices of components of the IHPC. We are then able to explore how the burden of monetary policy innovations is likely to be shared between the rich and poor.
Topic:
Economics, Human Welfare, International Political Economy, and International Trade and Finance
Political Geography:
Africa

455. Inequality and Welfare Evaluation of Heterogeneous Income Distributions

Author:
Anthony Shorrocks
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper establishes the principles which should govern the welfare and inequality analysis of heterogeneous income distributions. Two basic criteria—the 'equity preference' condition and the 'compensation principle'—are shown to be fundamentally incompatible. The paper favours the latter, thereby vindicating the traditional method of dealing with heterogeneous samples. However, inequality and welfare comparisons will usually be well defined only if equivalent incomes are obtained using constant scale factors; and researchers will need to distinguish clearly between inequality of nominal incomes and inequality of living standards. Furthermore, household observations must always be weighted according to family size.
Topic:
Demographics, Economics, Human Welfare, and Poverty

456. A Development-focused Allocation of the Special Drawing Rights

Author:
Ernest Aryeetey
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Efforts to realize the issue of development-focused Special Drawing Rights (SDR) by the International Monetary Fund (IMF) have been on-going for many years. Recently, however, the campaign first gained a new momentum immediately after the Asian financial crises with the new liquidity problems of developing nations following the collapse of private capital markets. Currently the search for financing options towards the achievement of the Millennium Development Goals drives the interest in development-focused SDRs. Extending the uses to which SDR can be put is derived from the growing demands on the international financial system to respond to the development finance needs of poor nations. Apart from the need to provide emergency funds in times of crises and the whole area of crisis prevention, increasingly the facilitation of development in poor countries and assistance to make the best policy decisions is considered crucial.
Topic:
Development, Economics, International Political Economy, and International Trade and Finance
Political Geography:
Asia

457. The Rise or Fall of World Inequality: A Spurious Controversy?

Author:
Bart Capéau and André Decoster
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In the age of globalization, the question whether inequality in the world rose or fell down, is a hot topic. Leading scholars in the field of economic inequality measurement developed methods to estimate empirically the distribution of welfare (income) amongst world citizens. Despite their similar methodologies, they do not seem to agree about the conclusion. In the present paper we pinpoint what drives the two extreme positions apart. Sala-i-Martin (2002a, b), who claims that there can be no doubt that world inequality went down between the late 1970s and the late 1990s, has in fact calculated population weighted inequality between countries. Milanovic (2002a, b, c) does not deny this, but illustrates the empirical importance of divergent tendencies at the sub-national level (especially urban versus rural regions) for assessing true world inequality and comes to the reverse conclusion. Nevertheless, there seems to be unanimity, especially amongst the contributions quoted here, about the inequality measure(s) to be used for assessing world income distributions. We show that at least for international inequality, there is empirical evidence for rank reversals among the class of generalized entropy measures and expect the same to be true of world inequality. However, the normative debate about which inequality measure to use for assessing true world inequality has not yet begun.
Topic:
Development, Poverty, and Third World

458. Spatial Decomposition of Inequality

Author:
Guanghua Wan and Anthony Shorrocks
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper reviews the theory and application of decomposition techniques in the context of spatial inequality. It establishes some new theoretical results with potentially wide applicability, and examines empirical evidence drawn from a large number of countries.
Topic:
Development, Globalization, and Poverty

459. Regional or National Poverty Lines? The Case of Uganda in the 1990s

Author:
Simon Appleton
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Absolute poverty lines are often derived from the cost of obtaining sufficient calories. Where staples vary across regions, such poverty lines may differ depending on whether they are set using national or regional food baskets. Regional poverty lines are open to the objection that they may be contaminated by income effects. This paper explores this issue by focussing on Uganda, a country where widening spatial inequalities in the 1990s have caused concern. Conflicting results from earlier studies have suggested that the spatial pattern of poverty in Uganda is very sensitive to whether national or regional food baskets are used in setting poverty lines. We confirm this suggestion by comparing the spatial profile of poverty in 1993 using national and regional poverty lines. However, since the regions consuming the more expensive staple sources of calories are also those with higher incomes, using simple regional poverty lines is problematic. Instead, a method of setting regional poverty lines is considered that adjusts for income differentials between regions. Even with this adjustment, the use of regional food baskets implies a markedly different.
Topic:
Development, International Trade and Finance, and Poverty
Political Geography:
Uganda and Africa

460. Remittances by Emigrants: Issues and Evidence

Author:
Andrés Solimano
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Remittances, after foreign direct investment, are currently the most important source of external finance to developing countries. Remittances surpass foreign aid, and tend to be more stable than such volatile capital flows as portfolio investment and international bank credit. Remittances are also an international redistribution from low-income migrants to their families in the home country.
Topic:
Development, Economics, International Trade and Finance, and Migration

461. Innovative Sources for Development Finance: Over-Arching Issues

Author:
Anthony B. Atkinson
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In analysing proposals for new sources of development funding, there are several issues that arise across the board. What is the role of new sources in relation to existing overseas development assistance? Should we be seeking new sources that generate a double dividend? Can the key elements of a proposal be achieved by another route? What should be the fiscal architecture? Is there a modern transfer problem? It is with these general concerns that the present paper deals. Its aim is to bring to bear on global public finance the accumulated knowledge in the field of national public finance, and more generally public economics.
Topic:
Development, Economics, and International Trade and Finance

462. National Taxation, Fiscal Federalism and Global Taxation

Author:
Robin Boadway
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper considers lessons from the practice of fiscal federalism for guidance on new approaches to development finance. Despite the fact that inter-regional redistribution in a federation relies on a central government with strong fiscal powers, the form of that redistribution can be used as a benchmark for international development assistance financing. In a federation, finance for less-developed regions takes the form of equalizing transfers to sub-national governments. The objective of these transfers is to enable sub-national governments to provide comparable levels of public services at comparable tax rates, called fiscal equity, leaving them discretion to implement interpersonal redistribution schemes within their jurisdictions. This same principle of assuming that national governments rather than donor nations are responsible for vertical equity within their borders leads to the view that the ideal form of development assistance is a system of equalizing inter-nation transfers intended to enhance fiscal equity.
Topic:
Development, Economics, Government, and International Trade and Finance

463. Environmental Taxation and Revenue for Development

Author:
Agnar Sandmo
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper considers the role of global environmental taxes both as instruments for improving the global environment and as a source of revenue for funding economic development. It reviews the general case for environmental taxes and the particular issues that arise for the adoption of such taxes in an international setting without a single jurisdiction. It also discusses the possibilities for political acceptance of such taxes when tax revenue is linked to the goal of economic development. The revenue potential of global environmental taxes is evaluated with special reference to a global carbon tax. It is found that this tax alone has the potential to raise sufficient revenue to finance the United Nations' Millennium Development Goals.
Topic:
Development, Economics, Environment, and International Trade and Finance

464. Which Types of Aid Have the Most Impact?

Author:
George Mavrotas
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper uses an aid disaggregation approach to examine the impact of different types of aid on the fiscal sector of the aid-recipient country. It uses time-series data on different types of aid (project aid, programme aid, technical assistance and food aid) for Uganda, an important aid recipient in recent years, to estimate a model of fiscal response in the presence of aid which combines aid disaggregation and endogenous aid. The empirical findings clearly suggest the importance of the above approach for delving deeper into aid effectiveness issues since different aid categories have different effects on key fiscal variables—an impact that could not be revealed if a single figure for aid was employed. More precisely, project aid and food aid appear to cause a reduction in public investment whereas programme aid and technical assistance are positively related to public investment. The same applies for government consumption. A negligible impact on government tax and non-tax revenues, and a strong displacement of government borrowing are also found.
Topic:
Economics, International Trade and Finance, and Poverty
Political Geography:
Uganda and Africa

465. Loan Processing Costs and Information Asymmetries - Implications for Financial Sector Development and Economic Growth

Author:
George Mavrotas and Salvatore Capasso
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper presents a model in which credit-constrained firms might delay the adoption of new and more productive technologies because of the very high external financing costs they face. Our point of departure is that the efficiency of the banking system can have a profound impact on real resource and investment allocation not only directly, by reducing the amount of resources channelled to the credit market, but also indirectly by affecting entrepreneurs' investment decisions. Along these lines of reasoning we develop a model of information asymmetries in the credit market in which high costs of processing bank loan applications might obstruct investments in high-tech projects and favour, instead, low-return, self-financed investments in mature sectors. The result is that these kinds of costs have a negative impact on the average capital productivity and on the rate of economic growth. In specific circumstances, the combination of these costs and the dynamics of capital accumulation can be such that the economy incurs in a 'technology trap', in which new technologies, even if readily available, will never be adopted because of high frictions and inefficiencies in the credit market, a situation that seems to be relevant to many developing countries.
Topic:
Development, Economics, and International Trade and Finance

466. The Revenue and Double Dividend Potential of Taxes on International Private Capital Flows and Securities Transactions

Author:
Ilene Grabel
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores two proposals to tax financial flows in developing economies—the package of policies implemented to various degrees by Chile and Colombia during the 1990s, widely referred to today as the Chilean model—and securities transactions taxes (STTs). I find that each provides a viable mechanism to raise revenue in some developing countries. Both can be introduced unilaterally (with the prospect of multilateral coordination in the future); both are progressive in their incidence, and in the case of the STT, represents an administratively manageable form of revenue collection. I also find that each entails double dividends that manifest in greater domestic and international macroeconomic stability.
Topic:
Development, Economics, and International Trade and Finance

467. Private Donations for International Development

Author:
John Micklewright and Anna Wright
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Charitable donations by private individuals and firms can help fund the Millennium Development Goals. What are the prospects for increasing donations for international development, whether from small-scale donors, the super-rich (as in the recent gifts by Bill Gates and Ted Turner), or the corporate sector? The paper starts by reviewing how large are the sums currently given in OECD countries (including gifts of time) and the problems development has in competing with domestic causes. It then looks at possibilities for the future, including tax deductions, the new 'global funds', corporate social responsibility and 'cause-related marketing', the use of the Internet, and long-term donor education.
Topic:
Development, International Cooperation, International Trade and Finance, and Third World

468. Revenue Potential of the Currency Transaction Tax for Development Finance: A Critical Appraisal

Author:
Machiko Nissanke
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper assesses the potential of currency transaction taxes (CTT, widely known as the Tobin tax), to raise revenue for global development. Though Tobin proposed and others assessed CTTs in terms of reducing exchange rate volatility and improving macroeconomic policy environments, this paper considers the CTT first and foremost from the standpoint of revenue. With a view of establishing a 'permissible' range of tax rates to obtain realistic estimates of revenue potential, it first reviews the debate over the effects of CTT on market liquidity and the efficiency of foreign exchange markets, and assesses the Spahn proposal for a two-tier currency tax. It then moves to a discussion of the technical and political feasibility of CTT, followed by an evaluation of several new proposals, such as those advanced by Schmidt and Mendez. The paper presents revenue estimates from CTT in light of recent changes in the composition and structure of foreign exchange markets.
Topic:
Development, Economics, Globalization, and International Trade and Finance

469. A Global Lottery and a Global Premium Bond

Author:
Tony Addison and Abdur R. Chowdhury
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The world lottery market now amounts to at least US$126 billion in sales. World market sales for all gaming products (public, charitable and commercial) total some US$1 trillion, of which Internet gambling accounts for US$32 billion. This paper assesses the prospects for harnessing this large and growing market for the purposes of development finance by means of a global lottery and a global premium bond (with the successful UK scheme providing a model for the latter). Each has different strengths: the global lottery can add to the supply of grant finance for development, while the global premium bond could be an attractive savings instrument for ethical investors. The paper concludes that global versions of both a lottery and a premium bond are viable and complementary in mobilizing more development finance.
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
United Kingdom

470. The International Finance Facility: The UK HM Treasury-DFID Proposal to Increase External Finance to Developing Countries

Author:
George Mavrotas
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper discusses the International Finance Facility (IFF), a joint HM Treasury-DFID proposal to increase development aid substantially for the Millennium Development Goals to be achieved by 2015. The main conclusion of the paper is that the proposed IFF is a promising, forward-looking and creative proposal for it implies a substantial increase in fresh, predictable and stable aid as well as a robust financial structure. However, there are a number of concerns about potential shortcomings of the proposal, namely its underlying assumptions about continuous commitment on behalf of the donor community towards the implementation of the IFF during the life of the Facility and most importantly its heavy reliance on political coordination among donor countries participating in the proposed scheme. Potential absorptive capacity constraints in IFF aid-recipient countries may be also relevant. Achieving its huge political task as well as alleviating the crucial constraints regarding its successful implementation seem to be the main challenges this innovative proposal needs to deal with in the near future.
Topic:
Development, International Cooperation, and International Trade and Finance
Political Geography:
United Kingdom and Europe

471. The Economic Integration of Immigrants in the United States: Lessons for Policy

Author:
George J. Borjas
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The most important economic feature of immigration to the United States in the post-1965 period has been a significant deterioration in the economic performance of successive immigrant waves. The policy reaction to this trend would obviously differ if the entry wage disadvantage disappeared quickly, as the immigrants assimilated in the American economy and acquired skills and information valuable in the American labour market. This paper examines the determinants of economic assimilation, and discusses how the experience of earlier immigrant waves can provide valuable information about the assimilation process the new immigrants will likely experience.
Topic:
Economics and Migration
Political Geography:
United States and America

472. Convergence Club Empirics: Some Dynamics and Explanations of Unequal Growth of Unequal Growth across Indian States

Author:
Sanghamitra Bandyopadhyay
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper documents the convergence of incomes across Indian states over the period 1965 to 1998. It departs from traditional analyses of convergence by tracking the evolution of the entire income distribution, instead of standard regression and time series analyses. The findings reveal twin-peaks dynamics-the existence of two income convergence clubs, one at 50 per cent, another at 125 per cent of the national average income. Income disparities across states seem to have declined over the 1960s, only to increase over the subsequent three decades. The observed polarization is strongly explained by the disparate distribution of infrastructure, and that of education, and to an extent by a number of macroeconomic indicators; that of capital expenditure and fiscal deficits.
Topic:
Economics and Emerging Markets
Political Geography:
South Asia and India

473. Institutional Quality, Reforms and Integration in the Maghreb

Author:
Mina Baliamoune-Lutz and Tony Addison
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using panel data this paper examines the effects of institutions on the success of reforms and integration in the Maghreb. Institutional quality measures are developed using fuzzy-set based transformations of civil liberties and political rights. We posit that these transformations are quite appropriate given the nature of freedom indicators. We show that using fuzzy-set transformed measures provides useful insights regarding the quality of institutions in Algeria, Morocco and Tunisia. Furthermore, our empirical results suggest that institutions play a significant role in the success or failure of economic reforms. This conclusion is in clear contrast to views that propose a sequencing in which civil liberties and political rights should come after economic reforms are already in place and fully operational.
Topic:
Economics and Emerging Markets
Political Geography:
Algeria, North Africa, Morocco, and Tunisia

474. Bankruptcy Proceedings for Sovereign State Insolvency and their Effect on Capital Flows

Author:
Jonathan Thomas
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper examines the main issues involved in translating domestic bankruptcy procedures to the sovereign context. It considers some of the principles by which domestic bankruptcy procedures operate, and the extent to which they apply to international lending. Two recent proposals are considered in more detail, that of Krueger ('A New Approach to Sovereign Debt Restructuring') and that of Pettifor ('Resolving International Debt Crises - The Jubilee Framework for International Insolvency). The paper also considers the question of the ex ante effects of a procedure which makes default less costly, and concludes that despite a negative impact on the ability to borrow, the overall welfare effect need not be negative.
Topic:
Debt, International Political Economy, and Sovereignty

475. A Decomposition Analysis of Regional Poverty in Russia

Author:
Anthony Shorrocks and Stanislav Kolenikov
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper applies a new decomposition technique to the study of variations in poverty across the regions of Russia. The procedure, which is based on the Shapley value in cooperative game theory, allows the deviation in regional poverty levels from the all- Russia average to be attributed to three proximate sources; mean income per capita, inequality, and local prices. Contrary to expectation, regional poverty variations turn out to be due more to differences in inequality across regions than to differences in real income per capita. However, when real income per capita is split into nominal income and price components, differences in nominal incomes emerge as more important than either inequality or price effects for the majority of regions.
Topic:
Economics and Poverty
Political Geography:
Russia, Europe, and Asia

476. Adverse Geography and Differences in Welfare in Peru

Author:
Javier Escobal and Máximo Torero
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In Peru, a country with an astonishing variety of different ecological areas, with 84 different climate zones and landscapes, with rainforests, high mountain ranges and dry deserts, the geographical context may not be all that matters, but it could be very significant in explaining regional variations in income and poverty. The major question this paper tries to answer is: what role do geographic variables, both natural and man-made, play in explaining per capita expenditure differentials across regions within Peru? How have these influences changed over time, through what channels have they been transmitted, and has access to private and public assets compensated for the effects of an adverse geography?
Topic:
Human Rights and Migration
Political Geography:
Peru

477. Illegal Immigration, Human Trafficking, and Organized Crime

Author:
Raimo Väyrynen
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
It is important to make a careful distinction between illegal immigration, human smuggling, and human trafficking which are nested, but yet different concepts. This distinction is relevant because these different categories of the illegal movement of people across borders have quite different legal and political consequences. Human smuggling and trafficking have become a world-wide industry that 'employs' every year millions of people and leads to the annual turnover of billions of dollars. Many of the routes and enclaves used by the smugglers have become institutionalized; for instance, from Mexico and Central America to the United States, from West Asia through Greece and Turkey to Western Europe, and within East and Southeast Asia. More often than not flourishing smuggling routes are made possible by weak legislation, lax border controls, corrupted police officers, and the power of the organized crime. Naturally, poverty and warfare contribute to the rising tide of migration, both legal and illegal.
Topic:
Environment and Human Welfare
Political Geography:
United States, Europe, Turkey, East Asia, Greece, Asia, Latin America, Central America, North America, Mexico, Southeast Asia, Western Europe, and West Asia

478. Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations

Author:
Mark McGillivray
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper surveys recent research on aid and growth. It also provides an overview of research on inter-recipient aid allocation. The overall focus of the paper is on the relevance of these issues for poverty-efficient aid, defined as a pattern of inter-recipient aid allocation which maximises poverty reduction. It identifies a range of poverty- reducing criteria on which aid allocation or selectivity might be based, calling for a broader selectivity framework. The paper argues that this framework should be built on a recognition that the effectiveness of aid in increasing growth, and by implication in reducing poverty, is contingent on a range of factors in addition to the quality of recipient country policy regimes. These factors include political stability, democracy, post conflict reconstruction, and economic vulnerability.
Topic:
Development, Political Economy, and Poverty

479. Reforms, Remoteness and Risk in Africa: Understanding Inequality and Poverty during the 1990s

Author:
Luc Christiaensen, Lionel Demery, and Stefano Paternostro
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study traces the interactions between economic growth, income inequality and consumption poverty in a sample of African countries during the 1990s. It draws on the much-improved household data sets now available in the region. It finds that experiences have varied: some countries have seen sharp falls in income poverty; others have witnessed marked increases. Economic growth has been 'pro-poor' in that the incomes of poor households have typically grown at similar or faster rates than average income. But the aggregate numbers hide significant and systematic distributional effects which have caused some groups and regions to be left behind. The paper explores the contours of these effects, and draws three key conclusions. First, agricultural market liberalization has been conducive to reductions in rural poverty. Second, market connectedness is crucial for poor producers to take advantage of the opportunities offered by economic growth. Some regions and households by virtue of their sheer remoteness have been left behind when growth picks up. The availability of infrastructure (especially roads) and proximity to markets are crucial. And finally risks, such as rainfall variations and ill health are found to have profound effects on poverty outcomes, underscoring the significance of social protection in poverty reduction strategies in Africa.
Topic:
Economics and Poverty
Political Geography:
Africa

480. Measurement of a Multidimentional Index of Globalization and its Impact on Income Inequality

Author:
Almas Heshmati
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we present two composite indices of globalization. The first is based on the Kearney/Foreign Policy magazine and the second is obtained from principal component analysis. They indicate which countries have become most globalized and show how globalization has developed over time. The indices are composed of four components: economic integration, personal contact, technology and political engagement, each generated from a number of variables. A breakdown of the index into major components provides possibilities to identify sources of globalization and associate it with economic policy measures. The empirical results show that a low rank in the globalization process is due to political and personal factors with limited possibility for the developing countries to affect. The high ranked developed countries share similar patterns in distribution of various components. The indices were also used in a regression analysis to study the causal relationship between income inequality and globalization. Globalization indices explain only 7 to 11 per cent of the variations in income inequality among countries.
Topic:
Development, Economics, and Globalization

481. Asylum Policy in the West: Past Trends, Future Possibilities

Author:
Matthew J. Gibney and Randall Hansen
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This article examines the policy responses of Western countries in the realm of asylum. We begin by explaining the reasons why the asylum issue has made its way up the political agendas of liberal democratic countries in recent years. While applications for asylum have risen in the last two decades, we also highlight the way rights-based constraints and financial costs have contributed to controversy around the issue. We then examine in detail the major policy responses of states to asylum, grouping them into four main categories: measures aiming to prevent access to state territory, measures to deter arrivals, measures to limit stay, and measures to manage arrival. Moving then to explore the efficacy of these measures, we consider the utility of policy making from the viewpoints of states, asylum seekers and refugees, and international society. The article concludes with the presentation of four new directions in which policies could move in order better to square the professed interests of Western states with the needs of refugees for protection.
Topic:
Human Rights and Migration
Political Geography:
Europe and North America

482. Quo Vadis? Inequality and Poverty Dynamics across Russian Regions

Author:
Ruslan Yemtsov
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper analyses regional data on inequality and poverty in Russia during 1994-2000 using published series from the regionally representative Household Budget Survey. The paper finds that the share of inequality in Russia coming from the between-regions component is large (close to a third of the total inequality), growing, and accounts for most of the increase in national inequality over 1994-2000. The paper demonstrates an absence of interregional convergence in incomes across Russian regions using various techniques. On the other hand, the paper finds evidence of convergence in inequality within regions, trended towards an internationally high level. Based on these two findings, the paper projects dynamics of inequality and poverty in Russia over a ten-year time horizon. The projections show that if the observed trend continues, by 2010 the absolute majority of Russia's poor will be concentrated in a few permanently impoverished regions, while relatively more affluent regions will become virtually free of poverty. Finally, the paper relates fluctuations in inequality within regions to a set of factors classified into four broad categories: endowments and initial conditions, preferences, policies, and shocks. Among these factors short-run fluctuations of the unemployment rate are revealed as significant and strong signals of inequality.
Topic:
Demographics, Economics, and Poverty
Political Geography:
Russia, Europe, and Asia

483. Spatial Inequality for Manufacturing Wages in Five African Countries

Author:
Oliver Morrissey and Dirk Willem te Velde
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper uses data on individual earnings in manufacturing industry for five African countries in the early 1990s to test whether firms located in the capital city pay higher wages than firms located elsewhere, and whether such benefits accrue to all or only certain types of workers. Earnings equations are estimated that take into account worker characteristics (education and tenure) and relevant firm characteristics (notably size and whether foreign owned). Any location effect identified is therefore additional to appropriate control variables. There are two main findings. First, we find evidence of a 'pure capital city premium' equivalent to between 12 per cent and 28 per cent of nominal average earnings in the five countries. In some countries this location premium exceeds plausible consumer price differentials, between the capital and other urban areas. This does suggest that real (purchasing power) manufacturing wages are higher in the capital city (although this real premium is no more than ten per cent). Second, we find that skilled workers earn a higher wage premium in the capital city than those less skilled. However, this is not because of location effects on earnings per se, but rather because of other firm characteristics of firms located in the capital city, such as size and foreign ownership. This suggests that spatial inequality in itself does not directly contribute to skilled–less-skilled wage differentials.
Topic:
Economics and Industrial Policy
Political Geography:
Africa

484. Regional Poverty and Income Inequality in Central and Eastern Europe: Evidence from the Luxembourgh Income Study

Author:
Michael Förster, David Jesuit, and Timothy Smeeding
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper reports levels of income inequality and poverty in four Central and Eastern European countries: the Czech Republic, Hungary, Poland and Russia. Unlike many previous researchers who examine transition economies, we aggregate the detailed individual-level income surveys made available through the efforts of the Luxembourg Income Study at the regional level of analysis. Although national-level investigations have contributed much to our understanding of the income distribution dynamics, these studies mask intracountry variance in levels of income inequality and thus may not capture the true distribution of household income and accurately reflect individual wellbeing. Accordingly, we compute summary measures of inequality and relative poverty rates, using both local and national relative poverty lines, for the most recent waves of data available. We offer comparisons between regional and national median incomes and assess levels of inter- and intraregional income inequality. In addition, we make comparisons to regions within Western European countries and find that, contrary to what is often asserted, interregional disparities in Central and Eastern Europe countries are not as large as those found in some Western European countries.
Topic:
Development and Poverty
Political Geography:
Russia, Europe, Eastern Europe, Poland, Hungary, Czech Republic, and Luxembourg

485. Is the Brain Drain an Unmitigated Blessing?

Author:
Riccardo Faini
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Increasingly, immigration policies tend to favour the entry of skilled workers, raising substantial concerns among sending countries. The 'revisionist' approach to the analysis of the brain drain holds that such concerns are largely unwarranted. First, sustained migratory flows may be associated with an equally large flow of remittances. Second, migrants may return home after having acquired a set of productive skills. Finally, the ability to migrate abroad may boost the incentive to acquire skills by home residents.
Topic:
Development, Education, and Migration

486. Some Welfare Implications of 'Who Goes First?' in WTO Negotiations

Author:
Basudeb Guha-Khasnobis
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We envisage a logical framework to explain why some trade negotiations are delayed because parties differ on who should 'go first'. In our model, there are substantive welfare implications depending on which party sets tariff rates (or subsidies) first in a strategic optimization exercise. When knowledge about cost levels are incomplete or missing, and hence must be guessed with a probability, the chances of conflict regarding who goes first are extremely high in the situation modeled in this paper. As an institution with some power to set the rules of negotiations, the WTO should be able to anticipate such conflicts in upcoming negotiations. It can then set the rule (in this case, dictate who should go first) depending on whose interest it wants to protect. There is a wide range of choices for the WTO in this regard: OECD consumer's surplus, OECD producers' loss, net exports of developing countries, firm profits, or even, world welfare as the sum of all these components.
Topic:
Development, International Organization, International Political Economy, and International Trade and Finance

487. Who Gains from Tariff Escalation?

Author:
Basudeb Guha-Khasnobis
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
With the help of a simple model of production and trade, we examine the differential impact of tariff escalation on skilled and unskilled wages in an economy. Our findings provide a lobbying-based explanation of the prevalence of tariff escalation in developed countries. It also predicts the possible response of a developing country and shows how similar lobbying activity in that country can slow the pace of liberalization of service sector trade.
Topic:
Development, Economics, and International Trade and Finance

488. International Trade, Location and Wage Inequality in China

Author:
Songhua Lin
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Models of economic geography predict that transportation costs directly affect demand for goods and the supply of intermediate inputs. One of the reasons that international trade is concentrated in the coastal provinces of China is that they have lower transportation costs in transporting goods to other countries than do provinces in the interior. This paper examines the relationship between the provincial wage rate and each province's access to international markets, and to suppliers of intermediate inputs. A gravity equation is first estimated to construct these 'market access' and 'supplier access' variables. In the second stage, the effect of market access and supplier access on the wage rate is estimated. It is found that about one quarter of the provincial wage differences in the coastal provinces and 15 per cent of the wage differences in the interior provinces can be explained by these economic geography variables.
Topic:
Industrial Policy and International Trade and Finance
Political Geography:
China, Israel, and East Asia

489. Economic Polarization Through Trade: Trade Liberalization and Regional Growth in Mexico

Author:
Andrés Rodríguez-Pose and Javier Sánchez-Reaza
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper analyses the impact trade liberalization and economic integration have had on regional growth and regional disparities in Mexico over the last two decades. It is highlighted that the passage from an import substitution system to membership of the General Agreement on Tariffs and Trade (GATT) first, and to economic integration in the North American Free Trade Agreement (NAFTA) later, has been associated with greater concentration of economic activity and territorial polarization. The analysis also shows that these changes herald a period of transition between two growth models. Regional growth in the final stages of the import substitution period was mainly characterized by convergence and linked to the presence of oil and raw materials and proximity to Mexico City. Economic liberalization and regional integration in NAFTA has been related to regional divergence, a reduction of the importance of Mexico City as the main market and to the emergence of an economic system in which the endowment of skilled labour starts to play a more important role.
Topic:
Economics and International Trade and Finance
Political Geography:
North America and Mexico

490. Controlling Asylum Migration to the Enlarged EU

Author:
Catherine Phuong
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We examine the ways in which candidate countries which are to join the EU in 2004 are responding to increasing asylum migration from the East and assess the impact of accession on their asylum and immigration laws and policies. It will be argued that recent changes in asylum and immigration laws in candidate countries have been largely affected by current EU efforts to devise a common immigration policy and a possible common asylum system. Instead of devising their own response to asylum migration, candidate countries are merely aligning their asylum policies with EU practice and expectations.
Topic:
Migration
Political Geography:
Europe

491. Who Pays Indirect Taxes in Russia?

Author:
André Decoster and Inna Verbina
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The interplay of a differentiated indirect tax structure and the variation in expenditure patterns across households, leads to a possibly unequal distribution of indirect tax liabilities across the population. This paper uses the ninth round of the RLMS survey to assess the distributional consequences of the two major components of the indirect tax system: VAT and excise taxes. The global indirect system can be considered to be progressive overall, according to the Kakwani index. Decomposition into constituent terms shows that this is due not only to a progressive VAT structure, but also to progressive excise taxes. This surprising result is mainly explained by the progressivity of the excise tax on car fuel, but might also be sensitive to peculiarities in the data about alcohol consumption.
Topic:
Development, Economics, and Government
Political Geography:
Russia

492. Opening the Convergence Black Box: Measurement Problems and Demographic Aspects

Author:
Carlos Azzoni, Naercio Menezes-Filho, and Tatiane Menezes
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we address the issues involved with the use of microeconomic data, that is, household surveys, to compare the patterns of income growth among different regions instead of the commonly used aggregate data. In particular, we investigate the issues of aggregation of household income to regional income and the problem of demography. As returns to experience generally differ across regions, differences in the patterns of income growth across regions in the same time interval will differ across age groups, which means that convergence or divergence of aggregate income among regions will depend on the age structure of their population. We apply these concepts to the case of the states of Brazil, for which we have repeated cross sections from a rich household survey. We find that patterns of income growth vary a great deal across birth cohorts, depending on the economic returns to experience.
Topic:
Demographics, Development, and Economics
Political Geography:
Brazil

493. Regional Output Differences in International Perspective

Author:
Alan Heston and Bettina Aten
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Accurate regional estimates of output are desired as an indicator of level of development and as a variable used to explain internal migration, demand patterns, fertility and other aspects of behaviour. This chapter explores one often neglected aspect of regional income differences, namely that due to price differences or regional purchasing power parities. When nominal regional income measures are adjusted for these price level differences they are termed real regional incomes. The preferred method of estimating regional purchasing power parities by detailed price comparisons is discussed for Brazil, the United States and the European Union. The empirical thrust of the chapter is an investigation of different methods for estimating regional real incomes based on PPP data for 167 countries and nominal regional incomes and other data for about 870 administrative areas at the subnational level. Even in their present form we believe the real income estimates provided for the geographical units present opportunities for understanding the world economic structure.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
United States, Europe, and Brazil

494. How Responsive is Poverty to Growth? A Regional Analysis of Poverty, Inequality, and Growth in Indonesia, 1984-99

Author:
Jed Friedman
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper uses six nationally representative household consumption surveys to develop successive poverty profiles for Indonesia over a fifteen-year period of sustained high growth followed by rapid contraction. Adopting a 'cost-of-basic-needs' approach to poverty determination (an approach particularly suited to measures of absolute poverty), this paper develops price indices and calculates poverty lines from unit value data, an oft neglected source of information. The summary findings confirm that Indonesia has witnessed broadbased gains in poverty reduction over the period 1984-96 and then a dramatic reversal during the recent financial crisis. These summary findings, however, mask substantial diversity in growth, inequality, and poverty change across Indonesian regions and so subsequent analysis focuses on the links between growth, inequality, and changes in poverty at the regional level. As opposed to previous studies of poverty change that have used short panels of cross-national data to identify the relationship between growth and poverty, this study employs a longer panel for a single country in order to investigate how poverty change at the provincial level varies with province growth rates and province changes in inequality (while controlling for time invariant province characteristics). The results indicate that poverty change is highly responsive to overall growth. However closer analysis reveals that regional differences in poverty levels persist even after controlling for the effects of provincial income levels, particularly for rural areas. These findings suggest that local factors play an important role in poverty determination and may interact with growth to impact poverty reduction in differing ways across Indonesia. Future investigations will need to take a more careful look at these local determinants of poverty change and attempt to identify the types of growth toward which poverty measures are particularly responsive.
Topic:
Development, Economics, and Poverty
Political Geography:
Indonesia

495. Externalities in Rural Development: Evidence for China

Author:
Martin Ravallion
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper tests for external effects of local economic activity on consumption and income growth at the farm household level using panel data from four provinces of post-reform rural China. The tests allow for nonstationary fixed effects in the consumption growth process. Evidence is found of geographic externalities, stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments. The results suggest an explanation for rural underdevelopment arising from underinvestment in certain externality-generating activities, of which agricultural development emerges as the most important.
Topic:
Development and Economics
Political Geography:
China and Asia

496. Are Neighbours Equal? Estimating Local Inequality in Three Developing Countries

Author:
Chris Elbers, Peter Lanjouw, Johan Mistiaen, Berk Ozler, and Ken Simler
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Based on a statistical procedure that combines household survey data with population census data, this paper presents estimates of inequality for three developing countries at a level of disaggregation far below that allowed by household surveys alone. We show that while the share of within-community inequality in overall inequality is high, this does not necessarily imply that all communities in a given country are as unequal as the country as a whole. In fact, in all three countries there is considerable variation in inequality across communities. We also show that economic inequality is strongly correlated with geography, even after controlling for basic demographic and economic conditions.
Topic:
Development and Economics
Political Geography:
Africa and South America

497. Optimality and Overuse of Labour in Estonian Manufacturing Enterprises

Author:
Almas Heshmati and Jaan Masso
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
For transition economies labour market flexibility is necessary for successful restructuring and reallocation of labour force and for coping with the requirements of the European Monetary Union. In this paper we apply a novel approach to the issue of labour market flexibility in transition countries by studying the optimality and efficiency of labour usage among Estonian manufacturing enterprises. A dynamic model is employed where both the long run optimal level of employment and the speed at which actual employment is adjusted to the optimal are modelled as functions of several variables. Firm level panel data from 1995 to 1999 were used. The results showed that in the long run employment responds greatest to wages, followed by valueadded and capital stock. Speed of adjustment and labour use optimality and efficiency show much greater variations over firms than over time. In the course of time there occurs both labour saving technical change and an increase in the efficiency of labour usage. On average there is shortage of labour compared to firm's own optimal level, while over use of labour compared to best-practice technology. Capital seems to be a binding constraint on the development of employment in the Estonian labour market.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
Eastern Europe

498. Impact of Trade Liberalization on Returns from Land: A Regional Study of Indian Agriculture

Author:
Ghosh Nilabja
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Trade liberalization, by aligning domestic prices with world prices, is envisaged to bring welfare gains to a country. In the case of Indian agriculture, owing to the vastness and diversity of the sector, the impact is likely to be profoundly unequal across regions especially when liberalization is double-edged, acting on both output and input sides. This paper views returns from land resource as a primary determinant of farmers' economic well-being and production incentive and considers paddy both as the dominant support for the rural population and as a product with comparative advantage, as most studies have demonstrated. Working with state and sub-state level data and taking account of the differences in technologies, productivities and transport costs, the paper finds that the gains vary regionally and may not be positive in all cases when both output and input prices are globally aligned.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
South Asia and India

499. Irregular Migration and Asylum Seekers in the Caribbean

Author:
Elizabeth Thomas-Hope
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Irregular migration is increasing in the Caribbean while the opportunities for applying for asylum hardly exist. The policy regarding most Caribbean irregular migrants is based on the view of the potential destinations, namely that the migrants are economic rather than political refugees. Whatever the specific cause of a migrant's departure, the movement is rooted in a complex amalgam of political, socioeconomic and (increasingly) environmental, factors. Thus irregular movements are part of the wider Caribbean migration process. The irregular movements differ from other forms of migration in that they represent the informal sector of migration, providing an alternative to those sectors of national populations that for political or economic reasons fall outside the immigration categories for entry to the United States. Locations in the Caribbean largely provide the intended transit stops to the United States, but with the implementation of policies to interdict migrants at sea, many of these intermediary locations become final destinations and, ultimately, marginalized communities of the migrants themselves and successive generations. These centres are the nodal points of an established transnational network that sustains the ongoing process of irregular migration. The economic and emotional cost and risks faced by the migrants are high, and the economic and political cost and challenges faced by host governments are also high. Irregular migration and the issue of asylum poignantly reflect various aspects of poverty and the vast economic disparities that exist within the region. Further, irregular migration and the question of asylum greatly affect diplomatic relations between Caribbean countries of migration source and destination. Better and more thoughtful policies are needed to address the continuing issues relating to irregular migration.
Topic:
Development and Migration
Political Geography:
United States, Central America, and Caribbean

500. The EU's Everything But Arms Initiative and the Least-developed Countries

Author:
Lucian Cernat, Sam Laird, Luca Monge-Roffarello, and Alessandro Turrini
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using a computable general equilibrium simulation model and partial equilibrium simulations, based on the SMART model, the paper attempts to assess the aggregate worldwide distribution of gains and losses of the EU's Everything But Arms (EBA) initiative for both LDCs and third developing countries under different scenarios.
Topic:
Development and International Trade and Finance
Political Geography:
Europe