Showing papers by "World Institute for Development Economics Research published in 2007"
TL;DR: In this article, the authors explored the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests, and found that the lack of insurance causes inefficiency in production choices.
521 citations
TL;DR: In this paper, the authors argue that globalization leads to increases in inequality because trade increases differentials in returns to education and skills, globalization marginalizes certain groups of people or geographic regions, and liberalization is not complemented by development of adequate institutions and governance.
Abstract: How globalization affects inequality is subject to heated debate (Fischer 2003:5). Stiglitz (1998) and Hurrell and Woods (2000), among others, argue that globalization leads to increases in inequality because trade increases differentials in returns to education and skills, globalization marginalizes certain groups of people or geographic regions, and liberalization is not complemented by development of adequate institutions and governance. This view is supported by evidence from China and some transitional economies that are experiencing significant increases in inequality after their having opened up to the outside world (Birdsall 1999; Mazur 2000). In developed countries, rising inequalities are being attributed to trade growth or international specialization as well (Atkinson 2001). To the contrary, Ben-David (1993) and Srinivasan and Bhagwati (1999) conclude that globalization helps to reduce inequality. This is also supported by evidence from a number of countries where inequality decreased when they liberalized their economies (Wade 2001). In between these two opposing views, Lindert and Williamson (2001) and Sala-i-Martin (2002a, 2002b) find that a significant globalization—inequality relationship does not exist. Krugman and Venables (1995:859) deduce a U-shaped pattern between inequality and trade.
211 citations
28 Nov 2007
TL;DR: The authors found that household wealth is more concentrated than income both on an individual and national basis in North America, Europe, and the rich Asian-Pacific countries, and that these areas account for virtually all of the world's top 1 per cent of wealth holders.
Abstract: There has been much recent research on the world distribution of income, but also growing recognition of the importance of other contributions to well-being, including those of household wealth. Wealth is important in providing security and opportunity, particularly in poorer countries that lack full social safety nets and adequate facilities for borrowing and lending. We find, however, that it is precisely in the latter countries where household wealth is the lowest, both in absolute and relative terms. Globally, wealth is more concentrated than income both on an individual and national basis. Roughly thirty percent of world wealth is found in each of North America, Europe, and the rich Asian-Pacific countries. These areas account for virtually all of the world’s top 1 per cent of wealth holders. On an official exchange rate basis India accounts for about a quarter of the adults in the bottom three global wealth deciles while China provides about a third of those in the fourth to eighth deciles. If current growth trends continue, …/
96 citations
TL;DR: In this article, the authors focus on methodological and empirical issues in analyzing regional poverty and inequality trends in China and provide a time profile of China's regional inequality, outlines the latest development in inequality decomposition techniques, introduces six papers in this special issue of the Review, and finally offers suggestions for future research.
Abstract: This paper focuses on methodological and empirical issues in analyzing regional poverty and inequality trends in China. It provides a time profile of China's regional inequality, outlines the latest development in inequality decomposition techniques, introduces six papers in this special issue of the Review, and finally offers suggestions for future research.
95 citations
Posted Content•
TL;DR: In this article, a growth accounting analysis and review of the intended and unintended effects of aid at the micro-level is performed in Mozambique, in conflict and post-conflict periods.
Abstract: Specific mechanisms through which aid has influenced the developmental trajectory of the country. We undertake both a growth accounting analysis and review the intended and unintended effects of aid at the micro-level. Sustained aid flows to Mozambique, in conflict and post-conflict periods, have made an unambiguous, positive contribution to rapid growth since 1992. However, proliferation of donors and aid-supported interventions has burdened local administration, indicating a need for deeper domestic government accountability. To sustain growth, Mozambique must maximize benefits from natural resources while promoting constructive international market integration.
67 citations
TL;DR: This article used household level data from 1986 to 2000 to examine what determines whether households fall below the poverty line over this period and investigates how the impact of these determinants has changed through time.
Abstract: Food price increases and the introduction of radical social welfare and enterprise reforms during the 1990s generated significant changes in the lives of urban households in China. During this period urban poverty increased considerably. This paper uses household level data from 1986 to 2000 to examine what determines whether households fall below the poverty line over this period and investigates how the impact of these determinants has changed through time. We find that large households and
households with more nonworking members are more likely to be poor, suggesting that perhaps the change from the old implicit price subsidies, based on household size, to an explicit income subsidy, based on employment, has worsened the position of large families. Further investigation into regional poverty variation indicates that over the 1986–93 period food price increases were also a major contributing factor. Between 1994 and 2000 the worsening of the economic situation of state sector employees contributed to the poverty increase.
54 citations
Journal Article•
TL;DR: In this paper, the authors argue that the saliency of ethnic and class categories vary across elections in emerging democracies and argue that which categories are politicized has less to do with which categories that are most salient to voters and more to do about which categories which are most useful to politicians.
Abstract: Group identifications -- in particular, those based on ethnicity and class -- are central to political mobilization during elections. This dissertation asks: when and why does the salience of ethnic and class categories vary across elections in emerging democracies? It argues that which categories are politicized has less to do with which categories are most salient to voters and more to do with which are most useful to politicians. The strategies of politicians, however, are contrained in a particular ways, by opportunity, which is provided by party system crises, and by the political space, which is given by the structure of existing social identity categories, particularly their sizes and degrees of overlap with traditionally-politicized categories. Given the institutional rules, size and overlap affect which identity groups have the numbers to win and which describe similar constituencies that could be switched between for political expediency. The project nests the theory within an explanatory framework describing four key factors that drive variation in identification: voter preferences, political institutions, party institutions, and elite manipulation. The dissertation presents data from three sources: a fieldwork-based study of Bolivian party politics, focusing on the democratic period from 1982 to 2005; data from the "Constructivist Dataset on Ethnicity and Institutions (CDEI)" on political parties and elections in Latin America in the early 1990s; and four shadow cases from the Andean region (Colombia, Ecuador, Peru, and Venezuela). These data are used to map variation in identification across countries and over time; to illustrate the plausibility of the argument and to test it against predictions drawn from alternative hypotheses; and to explore the generalizability of the argument.
35 citations
TL;DR: In this paper, an appropriate measurement of financial depth is constructed and then included as a determinant of productivity growth, and a significant and positive nexus exists between financial deepening and productivity growth.
Abstract: The financial intermediation-growth nexus is a widely studied topic in the literature of development economics. Deepening financial intermediation may promote economic growth by mobilizing more investments, and lifting returns to financial resources, which raises productivity. Relying on provincial panel data from China, this paper attempts to examine if regional productivity growth is accounted for by the deepening process of financial development. Towards this end, an appropriate measurement of financial depth is constructed and then included as a determinant of productivity growth. It finds that a significant and positive nexus exists between financial deepening and productivity growth. Given the divergent pattern of financial deepening between coastal and inland provinces, this finding also helps explain the rising regional disparity in China.
28 citations
TL;DR: In this article, a structural VAR model was proposed to analyse the sources of China's trade balance fluctuations in the period of 1985-2000, and the effects of four types of shocks were examined.
23 citations
TL;DR: In this paper, the authors investigate the effects of project and program financing on the behavior of recipient governments and find that project aid flows are associated with increases in capital expenditure while financial program aid is associated with an increase in government consumption.
Abstract: We investigate the budgetary effects of project and program financing on the behavior of recipient governments. For this purpose, we developed a simple fiscal response model. The solution of the model is then tested using panel data techniques for a relatively large sample of 106 aid-recipient countries spanning the period 1970–2001. With respect to public expenditure, our results suggest that the impacts of project aid and financial program aid on total expenditure are positive and statistically significant. In terms of the composition of total expenditure, we find that project aid flows are associated with increases in capital expenditure while financial program aid is associated with an increase in government consumption. Turning to the revenue side we found no evidence that aid flows, project or financial program aid, are associated with a reduction in taxation effort. The evidence also shows that project aid flows are associated with an increase in trade tax.
18 citations
TL;DR: In this paper, the authors consider an overlapping generations model in the presence of financial intermediation and compare the results for an intermediated economy with those derived for the market economy and draw some broad conclusions regarding the crisis consequences depending on the financial sector structure.
01 Jun 2007
TL;DR: In this paper, the authors present an econometric approach which controls for endogeneity and self-selection using data from a quasi-experiment designed at the household level, and conducted in three urban settlements in the surroundings of the Metropolitan area of Mexico City.
Abstract: In recent years, an important number of impact studies have attempted to examine the effect of credit on income poverty; however, many of these studies have not paid sufficient attention to the problems of endogeneity and selection bias. The few exceptional cases have employed econometric techniques that work at the village level. The problem is that the concept of village is inappropriate in the urban context where a large percentage of microfinance organisations in the developing world actually operate. This paper presents an econometric approach which controls for endogeneity and self-selection using data from a quasi-experiment designed at the household level, and conducted in three urban settlements in the surroundings of the Metropolitan area of Mexico City. The paper provides an estimation of the impact of credit, employing different equivalence scales in order to measure the sensitivity of the poverty impact to the intra-household distribution of welfare. We find a link between poverty impacts and lending technology. Group-based lending programmes are more effective in reducing the poverty gap but in doing so, they achieve insignificant impacts on the poverty incidence. By contrast, individual lending programmes reported significant and small impacts at the upper limits of deprivation but insignificant impacts on the poverty gap.
TL;DR: Abasolo and Tsuchiya as discussed by the authors have argued for the use of non-monotonic health related social welfare function and showed that non-conotonicity may lead to paradoxical results and policies.
Posted Content•
TL;DR: The Index of African Governance as discussed by the authors is a project to measure and assess the quality of governance across the forty-eight countries of sub-Saharan Africa, focusing on performance in five areas: Safety and Security; the Rule of Law, Transparency, and Corruption; Participation and Human Rights; Sustainable Economic Opportunity; and Human Development.
Abstract: The Index of African Governance is a project to measure and assess the quality of governance across the forty-eight countries of sub-Saharan Africa. It focuses on performance in five areas: Safety and Security; the Rule of Law, Transparency, and Corruption; Participation and Human Rights; Sustainable Economic Opportunity; and Human Development. Using 57 indicators, the Index offers a report card on performance in each country. The 2008 edition of the Index assesses the years 2000, 2002, 2005, and 2006.Data are drawn from a variety of sources, including our own in-country research. The Index is updated annually and all data are back-updated to reflect the latest data available and to allow for comparisons over time.
TL;DR: The limitations of the measure proposed by Abasolo and Tsuchiya and the problems associated with their empirics are discussed and it is shown how non-monotonicity may lead to paradoxical results and policies.