Showing papers in "Journal of Development Studies in 1977"
TL;DR: This article showed that high equilibrium real interest rates are growth-promoting, even if total real savings is interest insensitive (a controversial empirical question), because they bring about an improvement in the quality of the capital stock in a well defined sense.
Abstract: In stressing the importance of financial intermediation in the development of the LDCs, neither the approach of financial deepening nor that of real interest rates has clarified the relationship between financial intermediation and real development. This paper shows—within a two‐sector model, but extendable to the n‐sector case—that high (equilibrium) real interest rates are growth‐promoting, even if total real savings is interest insensitive (a controversial empirical question), because they bring about an improvement in the quality of the capital stock in a well‐defined sense. The analysis also has implications for the theories of inflation and income distribution in the LDCs.
194 citations
TL;DR: In this paper, the intensity of interindustrial linkages is used as an indicator of a sector's ability to spread growth impulses to its economic environment, and backward and forward linkages are calculated; in addition, spread effects are computed via the inverse matrix.
Abstract: On the basis of input‐output tables from developing countries sectors are distinguished according to the degree of their interdependencies. Using 20 standard sectors for all 22 tables analysed, the paper takes the intensity of interindustrial linkages as an indicator of a sector's ability to spread growth impulses to its economic environment. Backward and forward linkages are calculated; in addition, spread effects are computed via the inverse matrix. Then the sectors are classified according to their total (direct and indirect) primary input requirements per unit of final demand. The analysis is supplemented by the determination of the sectoral employment impact, i.e. applying figures for the persons engaged sectorwise. Particularly under the linkage aspect, the obtained rankings are checked for similarity. Although some rankings are highly correlated, none of the criteria under consideration proves superior to all others.
179 citations
TL;DR: In this article, the authors compared the resource allocation patterns on owned and rented land cultivated by the same sharecropper, and found that such contracts do involve inefficiency, in the Bihar context at least.
Abstract: The recent debate concerning the efficiency of sharecropping contracts yields a number of testable hypotheses, four of which can be examined in the light of some primary data for a group of sharecroppers in northeast Bihar. The salient feature of the empirical analysis is the comparison of the resource allocation patterns on owned and rented land cultivated by the same farmer, which provides a more powerful test of inefficiency than those advocated previously. Broadly speaking, the findings support the ‘Marshallian’ position that such contracts do involve inefficiency—in the Bihar context, at least.
153 citations
TL;DR: In this paper, the exchange rate policies for developing countries are discussed and the differentiating characteristics of developing countries that may affect their preference for a particular exchange rate system are discussed, and various possible policy reactions of developing country to the current situation, where the industrial nations' currencies are floating.
Abstract: Publisher Summary This chapter discusses the exchange rate policies for developing countries. Developing countries have generally favored adjustable par values as the basis for the world exchange rate system. This has been apparent both in their attitude in negotiations on reform of the international monetary system and in their reactions to the exchange rate developments of recent years. Most developing countries have, in the management of their own exchange rates, maintained a fixed peg against a single intervention currency, though a significant minority have moved to floating exchange rates or have pegged their rates to a basket of currencies. The case for flexible or floating exchange rates versus a system of adjustable par values has usually been made abstracting from the level of development of countries. The chapter discusses the differentiating characteristics of developing countries that may affect their preference for a particular exchange rate system. It discusses various possible policy reactions of developing countries to the current situation, where the industrial nations' currencies are floating.
73 citations
TL;DR: In this article, the authors present a survey of securities markets in less-developed countries, focusing on finance in developing countries, with a focus on emerging markets, including India and China.
Abstract: (1977). Securities markets in less‐developed countries. The Journal of Development Studies: Vol. 13, Finance in Developing Countries, pp. 73-91.
36 citations
32 citations
30 citations
TL;DR: In this article, a cross-national comparison of industrial concentration is considered in terms of two hypotheses: the technology/market size hypothesis predicts greater concentration in less developed countries than in the larger markets of developed countries, and the "miniature replica" hypothesis predicts that, when the degree of foreign ownership is high, industries in less developing countries may be less concentrated than their counterparts in advanced countries.
Abstract: Cross‐national comparison of industrial concentration is considered here in terms of two hypotheses. The ‘technology/market size’ hypothesis [Merhav, 1969] predicts greater concentration in less developed countries than in the larger markets of developed countries. The ‘miniature replica’ hypothesis predicts that, when the degree of foreign ownership is high, industries in less developed countries may be less concentrated than their counterparts in advanced countries. Most cross‐national comparisons of firm size distributions support a predominance of ‘technology/market size’ effects. In this paper, data from the pharmaceutical industry in Brazil and other less developed countries are used to suggest that under certain conditions ‘miniature replica’ effects may prevail.
23 citations
TL;DR: In this article, the authors examined the effects of ownership structure on firms' performance and sources of technology and found that in terms of profitability, growth and export performance, Mexican firms were competing successfully during the period 1966-73.
Abstract: This study uses pairing of Mexican‐owned manufacturing firms and firms with direct United States investment, to examine the effects of ownership structure on firms’ performance and sources of technology. Results suggest that in terms of profitability, growth and export performance the Mexican firms were competing successfully during the period 1966–73. Furthermore, the basis for this strong posture by the Mexican manufacturers was not due to a heavy reliance on foreign technology imported through formal channels, but rather is linked with internal innovative activity and the use of domestic consultants.
15 citations
TL;DR: In this paper, the authors re-examine the problem with a wider coverage and using the price-cost margin, rather than the return on capital, as the measure of profitability.
Abstract: Industrial concentration has been an important political issue in Pakistan. White [1974] recently established a relationship between concentration and the return on capital in a sample of company accounts. This study, based on census material, re‐examines the problem with a wider coverage and using the price‐cost margin, rather than the return on capital, as the measure of profitability. Concentration and a number of other variables are related to price‐cost margins in twenty‐five industries between 1965–70. Concentration emerges as the most important explanatory variable but the level of imports and capacity utilisation are also significant.
15 citations
TL;DR: In this paper, the influence of monetary expansion on inflation in Sri Lanka during the period, 1959-74, was investigated. And the authors found that, for the entire period, from 1959 to 1974, money supply has not exerted a statistically significant influence on domestic inflation.
Abstract: This study estimates the influence of monetary expansion on inflation in Sri Lanka during the period, 1959–74. After a brief discussion of the historical background, a theoretical model is presented to show the link between money supply, inflation, and balance of payments deficits. The rest of the paper is devoted to the statistical testing of the model. One of the findings of this study is that, for the entire period, 1959–74, money supply has not exerted a statistically significant influence on domestic inflation. But for the more recent period, 1967–74, the impact of money supply on inflation appears to be statistically significant. It is also found that domestic inflation has not been strong enough to have an adverse effect on exports, although further research is obviously necessary to shed more light on this question.
TL;DR: In this paper, the authors used United States import statistics to estimate the incidence of international transport and insurance charges by product and by country and found that the overall ad valorem incidence of India's transport costs is approximately 14 percent, or more than double current MFN tariffs.
Abstract: Over the last decade, economists have conducted numerous studies concerning trade barriers posed by national tariffs. In spite of this interest, few comprehensive analyses of transport barriers have been attempted. This seems surprising since transport costs, like tariffs, influence the magnitudes of trade flows, and types of goods exchanged internationally. Recent changes in United States import statistics permit estimation of the incidence of international transport and insurance charges by product and by country. Using these records, this study shows that the overall ad valorem incidence of India's transport costs is approximately 14 per cent, or more than double current MFN tariffs. However, the spread between transport charges and tariffs is greater on some products of special export interest to India. Analysis of the transport charges by processing stages shows that these costs escalate with increased fabrication. Thus, freight costs, like “tariffs, retard the growth of processing industries in Indi...
TL;DR: In this article, the authors consider the determinants of different levels of private and social costs associated with different stocks of urban unemployed and make an attempt to quantify the major private costs of migration to determine whether they diverge significantly.
Abstract: In LDCs the level of urban wages tends to induce more people to seek employment in the towns than can be employed at this wage level. The existence of these urban unemployed causes the private costs of migration to diverge from the social costs. The individual rural resident decides to remain or migrate on the basis of perceived private costs of migration. The effect of a decision to migrate on the economy is the social cost of migration. In our study we consider the determinants of different levels of private and social costs associated with different stocks of urban unemployed. In addition, utilising survey data on Nairobi, Kenya, an attempt is made to quantify the major private and social costs of migration to determine whether they diverge significantly. On the basis of these estimates some policy options for limiting urban unemployment caused by urban in‐migration are considered.
TL;DR: In this article, the authors studied reproductive behaviour in a rural Indian area which was rapidly industrializing and found that fertility differentials among couples were related to the couples' unique socioeconomic characteristics as well as to two group level variables (caste and village).
Abstract: This paper studies reproductive behaviour (ideal family size, completed family size and family planning acceptance) in a rural Indian area which was rapidly industrialising. Two castes and eleven villages were sampled. It was found that family planning was quite common and that fertility differentials among couples were related to the couples’ unique socioeconomic characteristics as well as to two group level variables (caste and village). The latter result was shown to be statistically significant, for all three measures of reproductive behaviour, even after many unique socioeconomic characteristics and attitudes of each couple were accounted for statistically.
TL;DR: In this paper, a path model in which infant mortality acts as an intermediate variable between two composite indicators of economic and social development and the fertility rate is tested with both cross-sectional and longitudinal data.
Abstract: Data from 63 selected countries of the world at two different points in time, 1958 and 1968, are used to test a path model in which infant mortality acts as an intermediate variable between two composite indicators of economic and social development and the fertility rate. The model is tested with both cross‐sectional and longitudinal data. In order to ascertain the appropriate time dimension in which the independent variables influence the trends of fertility, the results from an instantaneous model are compared with those from a lagged effect model.
TL;DR: The rice export premium has substantially depressed the domestic prices of rice, paddy and other agricultural commodities in Thai/and as discussed by the authors, and its total incidence absorbed over 25 percent of rural income and accounted for over 57 per cent of aggregate tax burden during 1962-72.
Abstract: The rice export premium has substantially depressed the domestic prices of rice, paddy and other agricultural commodities in Thai/and. Its total incidence absorbed over 25 per cent of rural income and accounted for over 57 per cent of aggregate tax burden during 1962–72. The rice premium is an extremely inefficient way to subsidise urban rice consumers as it has effectively obstructed the modernisation of the most important agricultural activity in Thailand.
TL;DR: In this article, the authors analyzed income distribution and socioeconomic mobility within a framework that incorporates a dynamic as well as a static view of equity, including the distribution of income by households or individuals and also by socioeconomic classes, explicitly including the translation from the distribution by socioeconomic groups into the overall size distribution.
Abstract: This paper analyses income distribution and socioeconomic mobility within a framework that: (1) incorporates a dynamic as well as a static view of equity, (2) includes the distribution of income by households or individuals and also by socioeconomic classes, and (3) explicitly includes the translation from the distribution by socioeconomic groups into the overall size distribution. The dynamic analysis makes use of a mobility matrix which is similar to the transition matrix in dynamic Markov analysis. A representative mobility matrix is presented which includes ten socioeconomic groups. Four categories of mobility are identified: (1) rural‐urban migration, (2) movements within the urban labour market, (3) movement through the educational system, and (4) capital formation and asset redistribution. Some numerical examples are given analysing development strategies combining high or low socioeconomic mobility with equalising or unequalising growth.
TL;DR: In this paper, the authors evaluate the appropriateness of mining techniques by cost-benefit analysis and find that rankings by private and by social profitabilities are sensitive both to the discount rate and (rather surprisingly) to the product price.
Abstract: This paper looks at the economics of the choice of technique in a developing country (Malaysia) as between a labour‐intensive, locally developed method of production (gravel pump tin mining) and a capital intensive method (tin dredging) developed by foreign firms. The ‘appropriateness’ of each technique is evaluated by cost‐benefit analysis, which finds that rankings by private and by social profitabilities are sensitive both to the discount rate (as one might expect) and (rather surprisingly) to the product price. The paper suggests these findings constitute a new argument in favour of schemes to stabilise primary commodity prices.
TL;DR: In the case of Taiwan, it was made mandatory that transactions in government bonds were at par, in so far as the nonbank public was concerned For another, though theoretically bond prices were variable in rega
Abstract: Most of the developing countries have been observed, in recent years, to take a variety of policy measures to promote and broaden the market for government bonds, primarily as a means to mobilise savings but also as the basis for using the government bonds for open market operations as an instrument to control the money supply The general experience, however, had been that policies directed toward the development of bond markets often tended to, more often inadvertently but in some cases intentionally, interfere with the evolution of open market policy Nowhere has this been more dramatised than in the case of Taiwan Many of the measures designedboth by the monetary authorities as well as the Government, in fact, knocked out the very conditions that would have made for successful open market operations For one thing, it was made mandatory that transactions in government bonds were at par, in so far as the non‐bank public was concerned For another, though theoretically bond prices were variable in rega
TL;DR: In this article, a wide consensus among the planners on the structural determinants of the macro variables selected as plan targets was found, and the difference in targets can be explained largely by the different values assumed by these determinants in the sample countries.
Abstract: Based on the targets given in the development plans and the national income data of twenty‐two tropical Africa countries in the late 1960s, this paper finds a wide consensus among the planners on the structural determinants of the macro variables selected as plan targets, so that difference in targets can be explained largely by the different values assumed by these determinants in the sample countries. The implementation record was poor, and may be traced in part to a domino effect inherent in the recursive structure of target selection. The analysis of the causes of implementation failure shows that most of the causes lie outside of the competence of the planners. Alternative methods to calculate plan targets are not likely to meet with superior fulfilment results.
TL;DR: In this article, the authors explored the demographic evolution of an ideal less developed country over a 100 years time span under alternative assumptions concerning capital accumulation, rate of technological progress, and returns to scale.
Abstract: The purpose of this analysis is to shed some light on the issue of how much economic growth, unaided by population control policies, can bring down fertility and defuse the population explosion in the less developed countries. The paper explores the demographic evolution of an ideal less developed country over a 100 years time span under alternative assumptions concerning capital accumulation, rate of technological progress, and returns to scale. The model used incorporates (a) a population projection matrix with coefficients which are a function of time and of endogenously generated levels of income per capita, and (b) a gross reproduction rate‐GNP per capita function with parameters estimated from a time series of cross sections spanning the period 1860 to 1959. This function was designed to reflect dominant traits of the historical experience concerning the effects of economic growth on fertility in a context characterised by the absence of population control policies.
TL;DR: In this article, the authors show that capital utilisation in West Malaysian manufacturing, though higher than that in other less developed countries, still leaves capital plant idle for a considerable proportion of the total available time, which calls into question the wisdom of an industrial investment incentive programme which aims primarily at maximising the volume of capital expenditure, and which pays no attention at all to the level of utilisation of the existing stock of capital.
Abstract: This paper shows that capital utilisation in West Malaysian manufacturing, though higher than that in other less developed countries, still leaves capital plant idle for a considerable proportion of the total available time. These findings, based on a modified McGraw‐Hill measure and on the Winston time‐measure of capital utilisation, therefore calls into question the wisdom of an industrial investment incentive programme which aims primarily at maximising the volume of capital expenditure, and which pays no attention at all to the level of utilisation of the existing stock of capital.
Journal Article•
TL;DR: In this paper, it is shown that a more precise definition of the role of the state in the economy is required to make this methodology internally consistent, and in particular that the resolution of the problem of valuing non-traded output requires central planning.
Abstract: A new orthodoxy in project appraisal has been adopted by the international ‘aid’ agencies in recent years, based on the independent evaluation of public investment proposals. However, it can be shown that generally a more precise definition of the role of the state in the economy is required to make this methodology internally consistent, and in particular, that the resolution of the problem of valuing non‐traded output requires central planning. Further, for implementation in a dependent capitalist economy, a degree of state control is required that greatly exceeds that espoused by these same agencies.
TL;DR: In this article, the authors focused on projects in the rural sector and in particular on a neglected aspect of labour cost valuation, viz. valuation of individuals’ work effort expended, and proposed a methodology to quantify the effort expended for each worker.
Abstract: Most methodological work on project appraisal in developing countries have so far been primarily concerned with industrial projects and distortions in the foreign trade sector.1 In this paper interest is focused on projects in the rural sector and in particular on a neglected aspect of labour cost valuation, viz. valuation of individuals’ work effort expended.