Showing papers by "World Bank published in 1997"
TL;DR: In this article, the authors used indicators of trust and civic norms from the World Values Surveys for a sample of 29 market economies and found that membership in formal groups is not associated with trust or with improved economic performance.
Abstract: This paper presents evidence that "social capital" matters for measurable economic performance, using indicators of trust and civic norms from the World Values Surveys for a sample of 29 market economies. Memberships in formal groups—Putnam's measure of social capital—is not associated with trust or with improved economic performance. We find trust and civic norms are stronger in nations with higher and more equal incomes, with institutions that restrain predatory actions of chief executives, and with better-educated and ethnically homogeneous populations.
6,894 citations
TL;DR: This article showed that ethnic diversity helps explain cross-country differences in public policies and other economic indicators in Sub-Saharan Africa, and that high ethnic fragmentation explains a significant part of most of these characteristics.
Abstract: Explaining cross-country differences in growth rates requires not only an understanding of the link between growth and public policies, but also an understanding of why countries choose different public policies. This paper shows that ethnic diversity helps explain cross-country differences in public policies and other economic indicators. In the case of Sub-Saharan Africa, economic growth is associated with low schooling, political instability, underdeveloped financial systems, distorted foreign exchange markets, high government deficits, and insufficient infrastructure. Africa's high ethnic fragmentation explains a significant part of most of these characteristics.
5,648 citations
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TL;DR: Burnside and Dollar as mentioned in this paper used a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth of per capita GDP and found that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies.
Abstract: Aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies. Aid appears not to affect policies systematically either for good or for ill. Any tendency for aid to reward good policies has been overwhelmed by donorse pursuit of their own strategic interests. Burnside and Dollar use a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth of per capita GDP. In panel growth regressions for 56 developing countries and six four-year periods (1970-93), they find that the policies that have a great effect on growth are those related to fiscal surplus, inflation, and trade openness. They construct an index for those three policies and have that index interact with foreign aid. They have instruments for both aid and aid interacting with policies. They find that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies. In the presence of poor policies, aid has no positive effect on growth. This result is robust in a variety of specifications, which include or exclude middle-income countries, include or exclude outliers, and treat policies as exogenous or endogenous. They examine the determinants of policy and find no evidence that aid has systematically affected policies, either for good or for ill. They estimate an aid allocation equation and show that any tendency for aid to reward good policies has been overwhelmed by donors' pursuit of their own strategic interests. In a counterfactual, they reallocate aid, reducing the role of donor interests and increasing the importance of policy. Such a reallocation would have a large positive effect on developing countries' growth rates. This paper - a product of the Macroeconomics and Growth Division, Policy Research Department - is part of a larger effort in the department to study the effectiveness of foreign aid. The study was funded by the Bank's Research Support Budget under research project Economic Policies and the Effectiveness of Foreign Aid (RPO 681-70).
3,696 citations
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TL;DR: Narayan and Pritchett as discussed by the authors matched a measure of social capital with data on household income in certain rural villages in Tanzania, and showed that social capital is indeed both capital (in that it raises incomes) and social (that household incomes depend on village, not just household, social capital).
Abstract: Matching a measure of social capital with data on household income in certain rural villages in Tanzania shows that social capital is indeed both capital (in that it raises incomes) and social (in that household incomes depend on village, not just household, social capital). Narayan and Pritchett construct a measure of social capital in rural Tanzania, using data from the Tanzania Social Capital and Poverty Survey (SCPS), a large-scale survey that asked individuals about the extent and characteristics of their associational activity and their trust in various institutions and individuals. They match this measure of social capital with data on household income in the same villages (both from the SCPS and from an earlier household survey, the Human Resources Development Survey). In doing so, they show that social capital is indeed both capital (in that it raises incomes) and social (in that household incomes depend on village, not just household, social capital). The magnitude of social capital's effect on incomes is impressive: a one standard deviation increase in village social capital increases a household proxy for income by at least 20 to 30 percent. This is as great an impact as an equivalent increase in nonfarming assets, or a tripling of the level of education. Data from the two surveys make it possible to identify some of the proximate channels through which social capital affects incomes: better publicly provided services, more community activity, greater use of modern agricultural inputs, and greater use of credit in agriculture. This paper - a joint product of Social Development, and Poverty and Human Resources, Development Research Group - is part of a larger effort in the Bank to understand the social determinants of sustainable development.
1,330 citations
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TL;DR: In the last century, incomes in the less developed countries have fallen far behind those in the "developed" countries, both proportionately and absolutely as discussed by the authors, and this divergence is the result of very different patterns in the long-run economic performance of two sets of countries.
Abstract: ivergence in relative productivity levels and living standards is the dominant feature of modern economic history. In the last century, incomes in the "less developed" (or euphemistically, the "developing") countries have fallen far behind those in the "developed" countries, both proportionately and absolutely. I estimate that from 1870 to 1990 the ratio of per capita incomes between the richest and the poorest countries increased by roughly a factor of five and that the difference in income between the richest country and all others has increased by an order of magnitude.' This divergence is the result of the very different patterns in the long-run economic performance of two sets of countries. One set of countries-call them the "developed" or the "advanced capitalist" (Maddison, 1995) or the "high income OECD" (World Bank, 1995) -is easily, if awkwardly, identified as European countries and their offshoots plus Japan. Since 1870, the long-run growth rates of these countries have been rapid (by previous historical standards), their growth rates have been remarkably similar, and the poorer members of the group grew sufficiently faster to produce considerable convergence in absolute income levels. The other set of countries, called the "developing" or "less developed" or "nonindustrialized," can be easily, if still awkwardly, defined only as "the other set of countries," as they have nothing else in common. The growth rates of this set of countries have been, on average, slower than the richer countries, producing divergence in ' To put it another way, the standard deviation of (natural log) GDP per capita across all countries has increased between 60 percent and 100 percent since 1870, in spite of the convergence amongst the richest.
1,269 citations
TL;DR: In this paper, the authors present an index of patent rights for 110 countries for the period 1960-1990 and examine what factors or characteristics of economies determine how strongly patent rights will be protected.
1,241 citations
TL;DR: The authors show that the ability of poor countries to catch up is determined in large part by the institutional environment in which economic activity in these countries takes place, including the rule of law, the pervasiveness of corruption, and the risk of expropriation and contract repudiation.
Abstract: Early neoclassical analyses predicted that poor countries would grow faster than wealthy countries, because of technological advances and diminishing returns to capital in the latter. The reverse has occurred: poor countries are falling back rather than catching up. We suggest here that deficient institutions underlie this divergence. Employing various indicators of institutional quality, including the rule of law, the pervasiveness of corruption, and the risk of expropriation and contract repudiation, we show that the ability of poor countries to catch up is determined in large part by the institutional environment in which economic activity in these countries takes place. (JEL O00, O10)
859 citations
TL;DR: In this article, a comprehensive theoretical framework for understanding consumers' information search behavior is presented, which identifies not only what factors affect consumers' search behavior but also how these factors interact with each other.
Abstract: A comprehensive theoretical framework for understanding consumers' information search behavior is presented. Unlike previous research, our model identifies not only what factors affect consumers' search behavior but also how these factors interact with each other. In particular, the model emphasizes the effect of prior brand perceptions on the search process. We argue that when consumers have brand-specific prior distributions of utility, the existence of relative uncertainty among brands is necessary for search to be useful. Thus, we explain why product class involvement or low search costs may not be sufficient to induce large amounts of search activity and why there may be an inverted-U-shaped relationship between search activity and experience. We test our theory on consumers' search behavior for new automobiles, using data collected contemporaneously with consumers' actual decision process. Our data support our theory.
800 citations
TL;DR: In this article, the authors used household surveys for 67 developing and transitional economies over 1981-94 to test the claim that the poor have lost ground, both relatively and absolutely, even when average levels of living have risen.
Abstract: It has been claimed that in recent times the poor have lost ground, both relatively and absolutely, even when average levels of living have risen. This article tests that claim using household surveys for 67 developing and transitional economies over 1981-94. It finds that changes in inequality and polarization were uncorrelated with changes in average living standards. Distribution improved as often as it worsened in growing economies, and negative growth was often more detrimental to distribution than positive growth. Overall, there was a small decrease in absolute poverty, although with diverse experiences across regions and countries. Almost always, poverty fell with growth in average living standards and rose with contraction.
774 citations
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01 Jun 1997TL;DR: The model suggests that reconstructing and improving the livelihood of those displaced require risk-reversals through explicit strategies backed up by adequate financing, and flawed approaches to reconstruction and the intrinsic limitations of cost-benefit analysis are discussed.
Abstract: Involuntary population displacements and resettlement entailed by development programs have reached a magnitude and frequency that give these phenomena worldwide relevance and require policy-guided solutions. The author extracts the general trends and common characteristics revealed by a vast body of empirical data, to construct a theoretical model of displacement and reconstruction. The model captures the socioeconomic content of both segments of the process: forced displacement and reestablishment. It identifies the key risks and impoverishment processes in displacement as: (a) landlessness; (b) joblessness; (c) homelessness; (d) marginalization: (e) food insecurity; (f) loss of access to common property resources; (g) increased morbidity; (h) community disarticulation. Conversely, the model suggests that reconstructing and improving the livelihood of those displaced require risk-reversals through explicit strategies backed up by adequate financing. Flawed approaches to reconstruction and the intrinsic limitations of cost-benefit analysis are discussed. The paper shows how the proposed model can be used by practitioners and researchers as a diagnostic tool, a predictive tool, a problem-resolution tool and a research-guidance tool.
627 citations
TL;DR: This paper found that, if inequality is high enough, countries that would have very good growth prospects at low levels of inequality may see little or no overall growth and little progress in reducing poverty -or even a worsening on both counts.
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TL;DR: Dasgupta et al. as mentioned in this paper analyzed the effects of regulation, plant-level management policies, and plant and firm characteristics on environmental performance in Mexican factories, focusing especially on management policies: the degree of effort to improve environmental performance and the type of management strategy adopted.
Abstract: Strengthened enforcement raises the price of pollution and provides an incentive to reduce it. A cost-effective complement to stricter enforcement is effective environmental management and training programs within plants. Using new survey evidence, Dasgupta, Hettige, and Wheeler analyze the effects of regulation, plant-level management policies, and plant and firm characteristics on environmental performance in Mexican factories. They focus especially on management policies: the degree of effort to improve environmental performance and the type of management strategy adopted. They index effort with two variables: adoption of ISO 14000-type procedures for pollution management and use of plant personnel for environmental inspection and control. Proxies for strategic orientation are two indices of mainstreaming: assigning environmental responsibilities to general managers instead of specialized environmental managers, and providing environmental training for all plant employees, not just specialists. Detailed survey data let them test the performance impact of such factors as ownership, scale, sector, trade and other business relationships, local regulatory enforcement, local community pressure, management education and experience, and workers` general education. Their findings: Process is important. Plants that institute ISO 14000-type internal management procedures show superior environmental performance. Mainstreaming works. Environmental training for all plant personnel is more effective than developing a cadre of environmental specialists, and assigning environmental tasks to general managers is more effective than using special environmental managers. Regulatory pressure works. Plants that have experienced regulatory inspections and enforcement are significantly cleaner than those that have not. Public scrutiny promotes stronger environmental policies. Publicly traded Mexican firms are significantly cleaner than privately held firms. Size matters. Large plants in multiplant firms are much more likely to adopt policies that improve environmental performance. OECD influences do not matter. It is generally assumed that plants linked to OECD economies show superior environmental performance, but they find no evidence that OECD links-including multinational ownership, trade, management training, or management experience-affect environmental performance. New technology is not significantly cleaner. They find no evidence that plants with newer equipment perform better environmentally (once other factors are accounted for). Education promotes clean production. Plants with more highly educated workers show significantly better environmental management efforts and performance. This paper - a product of the Development Research Group - is part of a larger effort in the group to understand the determinants of environmental performance in developing countries. The study was funded by the Bank's Research Support Budget under the research project The Economics of Industrial Pollution Control in Developing Countries (RPO 680-20).
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TL;DR: The authors showed that ethnic diversity helps explain cross-country differences in public policies and other economic indicators in Sub-Saharan Africa, and that high ethnic fragmentation explains a significant part of most of these characteristics.
Abstract: Explaining cross-country differences in growth rates requires not only an understanding of the link between growth and public policies, but also an understanding of why countries choose different public policies. This paper shows that ethnic diversity helps explain cross-country differences in public policies and other economic indicators. In the case of Sub-Saharan Africa, economic growth is associated with low schooling, political instability, underdeveloped financial systems, distorted foreign exchange markets, high government deficits, and insufficient infrastructure. Africa's high ethnic fragmentation explains a significant part of most of these characteristics.
TL;DR: It was found that labor force participation is non-trivial among those below the legal working age or supposed to be in school and the fact that a child is working reduces his or her educational attainment by about 2 years of schooling relative to the control group of non-working children.
Abstract: The paper addresses the issue of child labor in relation to the educational attainment of working children. The empirical analysis is based on household surveys in Bolivia and Venezuela. It was found that labor force participation is non-trivial among those below the legal working age or supposed to be in school. Working children contribute significantly to total household income. The fact that a child is working reduces his or her educational attainment by about 2 years of schooling relative to the control group of non-working children. Grade repetition, a common phenomenon in Latin America, is closely associated with child labor.
TL;DR: Results contradict the belief that modern semidwarf cultivars require more N than older cultivars, instead, they respond more to N, which translates into higher economic rates and higher returns when N fertilizer is available.
Abstract: The adaptation and performance of CIMMYT's bread wheat germplasm (Triticum aestivum L.) under conditions of low N fertility have been questioned because they were developed under medium-high levels of N fertility. The objectives of this research were to (i) compare the performance of a set of tall vs. semidwarf cultivars developed by CIMMYT that were widely grown by farmers in the Yaqui Valley of Mexico at low and high N fertility, (ii) measure the genetic progress in grain yield and N use efficiency (NUE), and (iii) evaluate the contribution of N uptake efficiency (UPE) and utilization efficiency (UTE) to NUE. Ten wheat cultivars, two tall and eight semidwarf, produced by CIMMYT and released in the Yaqui Valley of Sonora, by the Mexican government from 1950 to 1985 were grown with 0, 75, 150, or 300 kg N ha -1 in a 3-yr field study at Ciudad Obregon, Sonora, Mexico. Genetic gains in both grain yield and NUE during 1950 to 1985 were 1.1, 1.0, 1.2, and 1.9% yr -1 on a relative basis or 32, 43, 59, and 89 kg ha -1 yr -1 on an absolute basis, when provided 0, 75, 150, and 300 kg ha -1 N, respectively. Progress in NUE resulted in an improvement of both UPE and UTE. However, the relative importance of these two components was affected by the level of applied N. These results contradict the belief that modern semidwarf cultivars require more N than older cultivars. Instead, they respond more to N, which translates into higher economic rates and higher returns when N fertilizer is available.
TL;DR: In this article, the authors analyzed the effects of being indigenous, number of siblings, sibling activities and sibling age structure on child schooling progress and child non-school activity and found that having a greater number of younger siblings implies less schooling, more age grade distortion in the classroom and more child labor.
Abstract: This paper analyzes the effects of being indigenous, number of siblings, sibling activities and sibling age structure on child schooling progress and child non-school activity. The analysis is based on the Peru 1991 Living Standards Survey. The analysis shows that family size is important. However, the analysis also demonstrates the importance of taking into consideration the activities of siblings. The number of siblings not entrolled in school proves to be an important control variable in at least one specification of the empirical model. However, more research is needed on the interactions between siblings, their activities and their age structure. In other words, an attempt must be made to find ways of taking into account the “life cycle effects” of one‘s siblings on their schooling performance and labor force activity. The analysis also shows that the age structure of siblings is important, but in conjunction with their activities. That is, having a greater number of younger siblings implies less schooling, more age-grade distortion in the classroom and more child labor.
TL;DR: This article studied the factors associated with the emergence of systemic banking crises in a large sample of developed and developing countries in 1980-94, using a multivariate logit econometric model.
Abstract: The paper studies the factors associated with the emergence of systemic banking crises in a large sample of developed and developing countries in 1980-94, using a multivariate logit econometric model. The results suggest that crises tend to erupt when the macroeconomic environment is weak, particularly when growth is low and inflation is high. Also, high real interest rates are clearly associated with systemic banking sector problems, and there is some evidence that vulnerability to balance of payments crises has played a role. Countries with an explicit deposit insurance scheme were particularly at risk, as were countries with weak law enforcement.
TL;DR: In this paper, the effects of the Uruguay Round are quantified using a numerical general equilibrium model which incorporates increasing returns to scale, 24 regions, 22 commodities, and steady state growth effects.
Abstract: The effects of the Uruguay Round are quantified using a numerical general equilibrium model which incorporates increasing returns to scale, 24 regions, 22 commodities, and steady state growth effects. We conclude that the aggregate welfare gains from the Round are in the order of 96 billion per year in the short run, but could be as high as 171 billion per year in the long run after capital stocks have optimally adjusted. Despite these global gains, we identify some developing countries that lose from the Round in the short run. In the long run, almost all gain, and the Round will allow developing countries to gain further through their own unilateral liberalisation.
Available as the journal article at
http://www.blackwell-synergy.com/loi/ecoj
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TL;DR: Brunetti et al. as mentioned in this paper constructed an indicator of the credibility of rules from broad cross-country survey data and found that low credibility is associated with lower rates of growth and investment.
Abstract: An indicator of the credibility of rules is constructed from broad cross-country survey data and it is shown that low credibility is associated with lower rates of growth and investment. Economic theory and case study evidence have long suggested that institutional factors, such as well-defined property and contract rights, may be crucial in explaining differences in economic performance across countries. Much of the recent discussion about governance has, for example, focused on the role of corruption and its consequences for investment and growth. By comparison, the empirical literature relating institutional factors with growth has been relatively scarce and has mainly concentrated on crude proxies such as political instability and macroeconomic volatility. The problem of most of these variables in that they inadequately capture the uncertainties that are relevant for entrepreneurs. Brunetti, Kisunko, and Weder propose new measures of institutional uncertainty based on the subjective evaluations of entrepreneurs. They surveyed the private sector in a broad cross-section of countries. The survey was designed to capture institutional factors such as the predictability of rules, entrepreneurs' fears of policy surprises and reversals, their perception of safety and security of property, the reliability of the judiciary, and their problems with bureaucratic corruption. The authors construct and test a summary indicator of the credibility of rules, as well as its components in standard cross-country growth and investment regressions. The main findings: The overall indicator of credibility is significantly related with higher rates of investment and growth. The credibility indicator calculated for the subsample of small local companies is even more closely related to the growth performance. The subindicators security of persons and property and predictability of rule-making are most closely associated with growth. The indicators of corruption, perceived political instability, and predictability of judiciary enforcement are most closely associated with investment. Preliminary results for an extended sample - including transition economies - indicate that institutional factors may also help to explain differences in economic performance in these countries. This paper - a product of the Office of the Chief Economist and Senior Vice President, Development Economics- was produced as a background paper for World Development Report 1997 on the role of the state in a changing world. The study was funded in part by the Research Support Budget under the research projects Cross-Country Indicators of Institutional Uncertainty (RPO 680-51), and Indicators of Government Quality as Perceived by the Private Sector (RPO 681-52).
TL;DR: In this article, the authors examined how patent protection affects long-run economic growth and found that IPRs affect economic growth by stimulating the accumulation of factor inputs like research and development capital and physical capital.
Abstract: I. INTRODUCTION Intellectual property protection has been an international policy concern. Owners of intellectual property face risks of imitation or piracy not only in domestic markets but also in foreign, particularly in less developed, markets. Recent global negotiations have called for higher levels of intellectual property protection and for the harmonization of standards. Advocates of these measures cite potential economic benefits ranging from greater world innovation to greater trade and direct foreign investment flows (see Butler, 1990, for a survey of issues). This paper gauges the economic benefits of increased intellectual property protection. Specifically, it examines how patent protection affects long-run economic growth. Existing empirical and theoretical works study the importance of innovation and technology to growth, but few have empirically studied the effects of the institutions that motivate innovation and technological change, such as intellectual property laws. Studying the effects of intellectual property rights (IPRs) requires having a quantitative measure of the strength of intellectual property rights in a country. This paper constructs an index of the strength of patent protection in 60 countries and uses it to determine the role of IPRs in economic growth. The key finding is that IPRs affect economic growth by stimulating the accumulation of factor inputs like research and development capital and physical capital. The institution of IPRs does not have any direct role in explaining international variations in growth. That is, the existence of intellectual property laws does not appear to affect directly the technical efficiency of production. Instead, the benefits to growth are from encouraging the research sector to invest and take risk. This implies that countries not conducting innovative research or conducting a limited amount would enjoy few, if any, of the benefits of intellectual property protection because an innovation sector through which IPRs affect economic growth is absent. As an analogy, consider a town with few, if any, motor vehicles. If the town passes a law against lead emissions, the law is likely to have no appreciable effect on lowering pollution levels in the region (pollution arising instead from other sources). Similarly, countries would not experience the growth effects of IPRs unless a significant domestic research base exists or unless foreign multinationals are present that transfer research knowledge into the country. Given the costs of creating an IPR system, the low returns to providing IPRs (owing to a lack of innovation) act as a disincentive to creating such a system. Thus, countries without an innovative RD Lichtenberg, 1992; Park, 1995), none studies the importance of assigning proprietary rights to knowledge in the growth process. On the other hand, empirical analyses of intellectual property rights (Ferrantino, 1993; Mansfield, 1986, 1994) do focus on the effects of IPRs on innovation and foreign direct investment but have not linked these effects to long-run growth. …
TL;DR: The response of economic growth to reforms in Latin America has not been disappointing as discussed by the authors, and despite a global slowdown, Latin America did well to return to its historic growth rate of 2 percent per capita in 1990-93.
TL;DR: The authors empirically analyzed the geographic determinants of FDI in China and found that FDI's geographical distribution in China is determined mostly by GNP, infrastructure development, level of general education, and coastal location.
Abstract: Foreign direct investment (FDI) has played a major role in China's push toward a market-oriented economy. Recent inflows account for 40 percent of combined flows of FDI to all developing countries, making China the biggest developing country FDI recipient. This record is impressive, but certain problems must be overcome if FDI is to continue to help sustain the country's record growth rate and further its economic development. For one thing, FDI in China is highly concentrated geographically, and its sector distribution is highly uneven. The authors empirically analyze the geographic determinants of FDI in China. They find that FDI's geographical distribution in China is determined mostly by GNP, infrastructure development, level of general education, and coastal location. Although the sectoral distribution of FDI is coming into line with the rest of the world, in the past, FDI has been biased toward speculative types of investment, especially in the real estate sector.
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TL;DR: Yeats et al. as discussed by the authors examined changes in the regional orientation of exports and showed how this information can be employed in connection with the revealed comparative advantage (RCA) index to identify apparent inefficiencies in trade patterns.
Abstract: Do the discriminatory trade barriers applied in regional trade arrangements encourage high-cost imports from member countries at the expense of lower-cost goods from nonmembers? In discussions about regional trade arrangements (RTAs), one concern has been whether the discriminatory trade barriers applied in RTAs encourage high-cost imports from member countries at the expense of lower-cost goods from nonmembers. But evaluations of the impact of RTAs have been hampered by a lack of appropriate empirical procedures for assessing their influence on the level and direction of trade. Yeats employs a new index for analyzing the static trade effects of an RTA. He examines changes in the regional orientation of exports and shows how this information can be employed in connection with the revealed comparative advantage (RCA) index to identify apparent inefficiencies in trade patterns. He applies the approach to statistics on Mercosur countries' exports to determine if recent trade is evolving along lines current compatible with these countries' current comparative advantage. He does not comment on the many other possible effects of RTAs, such as benefits from political cooperation, enhancing the credibility of reform strategies, or dynamic gains from trade. Nor does he focus directly on changes in trade with nonmembers, changes that accelerated rapidly because of the 1988-91 liberalization of trade in Mercosur countries. Thus the paper does not address the net welfare effects of trade creation and diversion relative to the 1988 trade policies of member countries. The results show the most dynamic (fast-growing) products in Mercosur's intra-trade generally are capital-intensive goods in which members have not displayed a strong export performance in outside markets. Neither the RCA indices nor statistics about factor proportions indicate that Mercosur has a comparative advantage in those products. The evidence suggests that Mercosur's own trade barriers are responsible for these trade changes. Most-favored-nation tariffs on the fast-growing products are above the average for all imports and provide Mercosur members with significant preferences. These findings constitute evidence of the potential adverse effects of regional trade arrangements on members and on third countries, as judged by the variance in their trade patterns from what current comparative advantage would predict. Although there are other possible standards, the counterfactual comparison used is an equivalent degree of liberalization on a nondiscriminatory basis. Given the recent proliferation of RTAs, they highlight the need for further empirical research on the domestic and international effects of these arrangements, to better assess the pros and cons of regionalism. This paper - a product of the International Trade Division, International Economics Department - is part of a larger effort in the department to study regionalism and development.
TL;DR: WTP of Taiwanese households is compared with benefits transfer extrapolations that adjust WTP for the United States by Taiwan household income, relative to U.S. household income.
TL;DR: In this article, Dinar, Rosegrant, and Meinzen-Dick address some of the basic principles of treating water as an economic good and of allocating it among sectors.
Abstract: What does it mean to treat water as an economic good? What does it mean to allocate appropriately? From the earliest times, water resources have been allocated on the basis of social criteria - maintaining the community by ensuring that water is available for human consumption, for sanitation, and for food production. Societies have invested capital in infrastructure to maintain this allocation. Yet social change, including changes in (and more understanding of) how goods are distributed, has produced new issues in water allocation. Population growth has made water scarcity a major problem in many countries and water pollution, while by no means a recent problem, is more widespread than ever before. Traditionally the state has played a dominant role in managing water resources, but inefficient use of water, poor cost recovery for operating and maintenance expenses, the mounting cost of developing new water sources, and problems with the quality of service in agency-managed systems has led to a search for alternatives that make water allocation and management more efficient. Dinar, Rosegrant, and Meinzen-Dick address some of the basic principles of treating water as an economic good and of allocating it among sectors. After outlining the economic principles behind allocating scarce water resources, they review the actual means of various mechanisms used for allocating water, including marginal cost pricing, social planning, user-based allocation, and water markets. Giving examples from experience in several countries, they weigh the pros and cons of different approaches to water allocation, showing that no single approach is suitable for all situations. Clearly the state must play an important regulatory role, for example, but how effectively it does so depends on the relative political influence of various stakeholders and segments of society. User-based allocation is generally more flexible than state allocation, but collective action is not equally effective everywhere; it is most likely to emerge where there is strong demand for water and a history of cooperation. The outcome of market allocation depends on the economic value of water for various uses, but moving toward tradable property rights in water may ease the process of intersectoral reallocation by compensating the losers and creating incentives for efficient water use in all sectors. This paper - a joint product of the Sector Policy and Water Resources Division, Agriculture and Natural Resources Department, and the International Food Policy Research Institute - is part of a larger effort implement the 1993 World Bank`s Water Resources Management Policy.
TL;DR: The 1996 Human Development Report (UNDP, 1996) is about economic growth and human development and emphasizes the diversity of country performance in improving human development indicators at given rates of growth.
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TL;DR: Baffes, Elbadawi, and O'Connell as discussed by the authors presented an econometric methodology for estimating both the equilibrium real exchange rate and the degree of exchange-rate misalignment.
Abstract: An econometric methodology for estimating both the equilibrium real exchange rate and the degree of exchange-rate misalignment. Estimating the degree of exchange-rate misalignment remains one of the most challenging empirical problems in an open economy. The basic problem is that the value of the real exchange rate is not observable. Standard theory tells us, however, that the equilibrium real exchange rate is a function of observable macroeconomic variables and that the actual real exchange rate approaches the equilibrium rate over time. A recent strand of the empirical literature exploits these observations to develop a single-equation approach to estimating the equilibrium real exchange rate. Drawing on that earlier work, Baffes, Elbadawi, and O'Connell outline an econometric methodology for estimating both the equilibrium real exchange rate and the degree of exchange-rate misalignment. They illustrate the methodology using annual data from Cote d'Ivoire and Burkina Faso. This paper - a product of the Development Research Group - is part of a larger effort in the group to investigate the determinants of the real exchange rate.
TL;DR: In this article, the authors analyze the process of capacity development in a sample of Colombian local governments which resulted from a strategy of state decentralization initiated in the mid-1980s, concluding that competition for political office opened the door to responsible and innovative leadership that, in turn, became the driving force behind capacity building efforts.
01 Jan 1997
TL;DR: This article investigated whether firms learn from exporting, using a panel of 2105 Chinese industrial enterprises between 1988 and 1992, and found that past exports lead to significant improvements in enterprise performance and that these "learning" effects are most pronounced among established exporters.
Abstract: This paper investigates whether firms "learn" from exporting, using a panel of 2105 Chinese industrial enterprises between 1988 and 1992. I find that, controlling for past performance and unobserved firm characteristics, past exports lead to significant improvements in enterprise performance. Interestingly, these "learning" effects are most pronounced among established exporters. For new entrants to export markets, "learning" effects are insignificant and occasionally negative. There is modest evidence that some of these "learning" effects are external to the firm.
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TL;DR: The authors found that heavy polluters are affected more significantly than minor polluters by the public ranking of firms in terms of their environmental performance, and firms whose market values are hurt most by the release of this information are most likely to invest in pollution abatement.
Abstract: After weighing the costs and benefits of pollution control, profit-maximizing firms sometimes choose not to invest in pollution abatement because the penalty they expect regulators to impose for noncompliance falls short of the cost of abatement. To improve incentives for pollution control, regulators have recently embarked on a strategy to release information to communities and markets (investors and consumers) about firms'environmental performance. Drawing on evidence from American and Canadian studies, the authors report that capital markets do react to the release of such information. The evidence suggests that heavy polluters are affected more significantly than minor polluters. And firms whose market values are hurt most by the release of this information are most likely to invest in pollution abatement. The firms'greater willingness to invest in pollution abatement seems to result from the regulators'willingness to undertake strong enforcement actions combined with the possibility of capital markets reacting to public ranking of firms in terms of their environmental performance.