Showing papers in "Journal of Development Studies in 1992"
TL;DR: In this article, the authors examined the determinants and effects of household income diversification in three agroecological zones in Burkina Faso, Sahelian, Sudanian, and Guinean.
Abstract: Using four years of household data from three agroecological zones in Burkina Faso ‐ Sahelian, Sudanian, and Guinean ‐ the article examines the determinants and effects of household income diversification. Harvest shortfalls and terms of trade are found to drive diversification, but land constraints do not. Income diversification is associated with higher incomes and food consumption, and more stable income and consumption over years.
448 citations
TL;DR: This paper reviewed the different theoretical perspectives of the dual gap model, savings debate, recipient fiscal response, and aid as Dutch disease, and the empirical debates on aid, savings and growth.
Abstract: The early literature explained aid's macroeconomic impact in the context of the dual gap model, showing a clear link between aid and growth. Many now believe that the empirical evidence shows there to be no such relationship. This paper critically reviews the different theoretical perspectives ‐the dual gap model, the savings debate, recipient fiscal response, and aid as Dutch disease — and the empirical debates on aid, savings and growth. The basis for denying a relationship between aid and growth is shown to be weak, though more recent areas of research offer promising directions for future work.
313 citations
TL;DR: A recursive model of exports and imports of manufactures, in which imports depend in part on exports, is estimated using data for a cross-section of 17,053 industrial firms as mentioned in this paper.
Abstract: A recursive model of exports and imports of manufactures, in which imports depend in part on exports, is estimated using data for a cross‐section of 17,053 industrial firms. In this sample, 652 firms are foreign‐owned. Explanatory variables include firm size, skill intensity, advertising and other variables in addition to foreign ownership. Foreign ownership has a large, independent effect on both export performance and import propensities, but foreign ownership in itself explains little of the relatively low export/import ratios registered by affiliates of transnationals.
152 citations
TL;DR: The authors explored the divergence in economic policy and performance between East Asia and Latin America and offered a typology of explanations from the political economy literature, focusing on the relative size of the income sacrifice entailed in the competitive export of simple manufactures.
Abstract: This essay explores the divergence in economic policy and performance between East Asia and Latin America. It offers a typology of explanations from the political economy literature. Evidence is presented for an explanation focused upon the relative size of the income sacrifice entailed in the competitive export of simple manufactures. In the 1960s, Latin American countries would have faced massive, politically unthinkable currency devaluations, had they sought to compete with East Asia. Thus Latin American dependency in the post‐war period has been more complex than often supposed. The essay ends with thoughts on export‐led industrialisation in indebted Latin America.
90 citations
TL;DR: In this paper, the authors analyse share contracts in a sector in which share contracts are dominant, namely fishing, and explain some heretofore neglected features of these share contracts, such as the way in which shares are calculated and the treatment of repair and maintenance expenditures.
Abstract: Most of the existing literature on share contracts is based explicitly or implicitly on agriculture, a sector in which share contracts are seldom dominant and apparently on the decline. Moreover, since agricultural activities have some rather special characteristics, the purpose of the present article is to analyse contractual choice and especially the choice of share contracts in a sector in which share contracts are dominant, namely fishing. In the process of explaining the dominance of share contracts in fishing, the article also explains (a) some heretofore neglected features of these share contracts, such as the way in which shares are calculated and the treatment of repair and maintenance expenditures, (b) the nature and extent of interlinked transactions, (c) the exceptional cases where share contracts are not used, and (d) the relevance of varying environmental conditions and especially those of poor developing countries to the nature of contracts in fishing, and to the differences therein between...
86 citations
TL;DR: In this paper, Sheehey et al. investigated how strong a relationship between exports and growth emerges when alternate export variables not subject to this bias are introduced, drawing on the parallel literature on government and growth.
Abstract: In a recent article in this journal [Sheehey, 1990], evidence was presented that the results of a substantial number of studies on exports and growth are biased by a built‐in correlation between exports and GDP In this note, drawing on the parallel literature on government and growth, the analysis is carried further by investigating for 1960–81 how strong a relationship between exports and growth emerges when alternate export variables not subject to this bias are introduced
65 citations
TL;DR: In this paper, the authors argue that the relevant property rights in this case are the rights of every member of the world community to share in a sustainable global atmosphere and climate, and the allocation of permits should therefore be done on a per capita basis across the world, with the result that rents generated by the process of reducing carbon emissions would accrue to non-polluters, most of whom live in the ‘South’.
Abstract: This article reiterates the case for tradeable permits as a global policy option for limiting greenhouse gas emissions, and considers the detailed design of a global tradeable‐permit regime, emphasising the importance of the initial assignment of property rights, and arguing that the relevant property rights in this case are the rights of every member of the world community to share in a sustainable global atmosphere and climate. The allocation of permits should therefore be done on a per capita basis across the world community, with the result that rents generated by the process of reducing carbon emissions would accrue to non‐polluters, most of whom live in the ‘South’. The international transfers of income and wealth implied by the proposed scheme are large but feasible. There is therefore a real prospect that an international convention on carbon dioxide emissions could end the debt crisis and finance sustainable development in the South..
63 citations
TL;DR: In this paper, the authors explore several propositions of a "virtuous circle" model of rural-urban development to determine when the model might operate within a local economy, and show that the cycle of reinforcing linkages hinges on a vigorous export base; external demand is only effective when farmers are connected to markets; small towns help raise agricultural productivity by allowing farmers to spread risk by diversifying incomes; vibrant agriculture spurs the proliferation of local non-farm activities, which in turn create demand for farm produce, though not necessarily from the same area.
Abstract: Using data from Kenya, this article explores several propositions of a ‘virtuous circle’ model of rural‐urban development, to determine when the model might operate within a local economy. It is shown that: the cycle of reinforcing linkages hinges on a vigorous export base; external demand is only effective when farmers are connected to markets; small towns help raise agricultural productivity by allowing farmers to spread risk by diversifying incomes; vibrant agriculture spurs the proliferation of local non‐farm activities, which in turn create demand for farm produce, though not necessarily from the same area; and, finally, the virtuous circle model can be undermined by inappropriate macroeconomic policies.
58 citations
TL;DR: In this paper, the authors identify five mutually exclusive trade strategies and define the underlying sectoral and market orientations of each of them, and measure empirically the strategies of six developing countries.
Abstract: There is considerable confusion in the literature as to what exactly is meant by ‘export promotion’, or ‘outward‐orientation’. This article identifies five mutually‐exclusive trade strategies, and defines the underlying sectoral and market orientations of each. It then measures empirically the strategies of six developing countries. The empirical findings indicate that some of the successful East Asian countries actually pursued an infant industry‐based, exporter‐oriented, ‘protected export promotion’ strategy, not the commonly perceived, static comparative advantage‐based ‘export promotion’ strategy; their protectionist policies are not mere exceptions, but integral elements of their export‐oriented strategy.
53 citations
TL;DR: This article applied a Granger/Sims reduced form approach to examine whether export instability generates short-run instability in domestic income in 20 trade-dependent countries and found that export instability induces macroeconomic instability.
Abstract: The conventional view concerning the impact of export instability on the domestic economies of developing countries is one of pessimism. Export instability is thought to adversely affect the short‐run stability and longer‐run growth of income. Empirical evidence on these matters is, however, inconclusive. This article applies a Granger/Sims reduced form approach to examining whether export instability generates short‐run instability in domestic income. For each of a sample of 20 trade‐dependent countries the results obtained strongly support the contention that export instability induces short‐run macroeconomic instability.
37 citations
TL;DR: In this article, the authors argue that private foreign asset accumulation is a more appropriate term and compare a great variety of definitions and measurement methods and applies these to Philippine data for 1971-88.
Abstract: External debt problems have been accompanied in many developing countries with large private capital outflows. The latter phenomenon is usually identified in the literature as ‘capital flight’. This article argues that private foreign asset accumulation is a more appropriate term and compares a great variety of definitions and measurement methods and applies these to Philippine data for 1971–88. Outcomes show striking differences in assessment of the magnitude of the phenomenon. In the preferred definition of this study applied to the Philippines, unrecorded workers remittances from abroad, a factor omitted in other studies, represent a major source of foreign exchange earnings which indirectly support private foreign asset accumulation. Other definitions appear to severely underestimate private capital outflows. Econometric evidence on the causes of private foreign asset acquisition shows a strong sensitivity to the applied definition. Regression analysis for six alternative definitions shows that the ex...
TL;DR: In this paper, the authors compare three different techniques for measuring capital flight in five countries and find that there is a limited amount of information in each measure but no obvious agreement between them.
Abstract: Economists have proposed several different techniques for measuring capital flight. Each technique differs significantly in its definition of what constitutes capital flight, principally on the limits to normal capital flows, how to capitalise investment income, and the inclusion of long term capital flight. Consequently estimates of the determinants and remedies for capital flight have been very mixed. Given that capital flight is not observable it is important to examine the information content and consistency between the different measures. This article uses three different techniques over five countries to make that comparison, and finds a limited amount of information in each measure but no obvious agreement between them. Econometric techniques which have been designed for measuring the ‘hidden economy’ of OECD countries is likely to offer a better way of measuring capital flight.
TL;DR: In this article, the authors examined the impact of major trade liberalisation that has been introduced in Mexico since the mid-1980s on efficiency in the manufacturing sector and concluded that thus far liberalisation has had a positive but relatively weak effect on performance.
Abstract: This article examines the impact of the major trade liberalisation that has been introduced in Mexico since the mid‐1980s on efficiency in the manufacturing sector. Alternative indicators of efficiency are estimated and changes in these indicators are explained by regression analysis, including various measures of the degree of liberalisation. The conclusion is that thus far liberalisation has had a positive, but relatively weak effect on performance.
TL;DR: The use of unreliable statistics is common in development economics, particularly in research on income distributional issues as mentioned in this paper, and it is argued that economists should be far more concerned about data problems in their research.
Abstract: The usage of unreliable statistics is common in development economics, particularly in research on income distributional issues. It is widely believed, for example, that the distribution of income in Taiwan equalised dramatically between the early 1950s and about 1980. Under close examination it is clear much of the evidence advanced is flawed, the treatment of data by a number of analysts is puzzling, and links between export‐orientation and inequality trends are flimsy. It is argued that economists should be far more concerned about data problems in their research.
TL;DR: The authors estimated a logit model of debt arrears including economic as well as political variables and found that both economic and political indicators affected debt repayment in Latin America during 1971-86.
Abstract: Political instability and debt problems characterise Latin America in the last two decades. This article estimated a logit model of debt arrears including economic as well as political variables. Our results suggested that both economic and political indicators affected debt repayment in Latin America during 1971–86. We also cast a shadow on the viewpoint that authoritarian and military regimes have an advantage over democratically elected governments with regard to debt related issues.
TL;DR: In this paper, the authors point out that one of the main problems in foreign aid allocation is the efficient use of these funds: as resources available for foreign aid are intrinsically scarce, their efficient use would be in the interest of donors, and especially recipient countries.
Abstract: In this article we point out that one of the main problems in foreign aid allocation is the efficient use of these funds: as resources available for foreign aid are intrinsically scarce, their efficient use would be in the interest of donors, and especially recipient countries. The aim of this paper is to show how it is possible to design incentive schemes which, by relating the allocation of aid to the way it is used, may induce the recipient country to use these resources appropriately. We discuss potential benefits and problems of different contractual forms, showing how comparing the performances of different countries may help to design optimal incentive mechanisms. Finally, we illustrate a proposal of performance conditioning of the grant element, which may help in tackling the efficiency problem.
TL;DR: In this article, the authors focused on the economic literature and discussed its importance for policies aimed at working women in the Middle East, and identified the important strands and places the discussion within the wider context of women in labour market in both developing and developed countries.
Abstract: There is now an extensive literature on the role of women in economic development and the impact of development on their lives. This article concentrates on the economic literature and discusses its importance for policies aimed at working women in the Middle East. It identifies the important strands and places the discussion within the wider context of women in the labour market in both developing and developed countries. The general conclusion is that we are very far from having sufficient knowledge to implement effective policy or even to evaluate existing policies.
TL;DR: In this paper, the observed labour contracts are also efficient and consistent with the predictions of economic theory, and they conclude that joint efforts by anthropologists and economists may be one effective way to proceed in seeking insights into a labour market that is so deeply rooted in the culture of a people.
Abstract: Social anthropologists have contributed significantly to our understanding of the consistency between observed labour contracts in the Ghana cocoa industry and the cultural historical development of the country. This article contributes to the ongoing research efforts in this area by demonstrating that the observed labour contracts are also efficient and consistent with the predictions of economic theory. It concludes that joint efforts by anthropologists and economists may be one effective way to proceed in seeking insights into a labour market that is so deeply rooted in the culture of a people.
TL;DR: In this paper, the determinants of choice of pawning contracts and the observed loan size were examined in a rice growing village in the Philippines, and the analysis showed that pawning is an informal credit instrument used by small farmers to obtain large loans to finance productive investments, such as non-farm employment.
Abstract: Land pawning contracts have increased in importance in Philippine rice growing villages, and this article examines the determinants of choice of pawning contracts and the observed loan size. The analysis shows that pawning is an informal credit instrument used by small farmers to obtain large loans to finance productive investments, such as non‐farm employment, where the returns to investment are high. The econometric results suggest that poorer farm households pawn‐out land, while wealthier farm households pawn‐in. The observed loan size is explained by reputation of pawners and rice cropping intensity in the region.
TL;DR: In this article, the authors examined the appropriate development strategies for industrially advanced and developed nations utilising the earlier research of Alfred Maizels and found that the importance of exports as a source of savings and as a catalyst for economic development for both highly developed and less developed countries.
Abstract: The present study examines the appropriate development strategies for industrially advanced and developed nations utilising the earlier research of Alfred Maizels. As before, the basic model used is the ‘ex‐ante’ model developed by Hollis Chenery and Alan Strout. The results support the ‘Export Expansion’ hypothesis which emphasises the importance of exports as a source of savings and as a catalyst for economic development for both highly developed and less developed countries. Gross Domestic Product, Non‐export Gross Domestic Product, and exports are used to explain savings in 11 less developed countries and six developed countries.
TL;DR: In this paper, the authors discuss the nature of the Indian state and the Indian bureaucracy, and sketch the outlines of a possible revised theoretical framework for the role of the state and of the public bureaucracy.
Abstract: The article discusses the nature of the Indian state and of the Indian bureaucracy. During the 1980s, it was widely believed that the Indian bureaucracy constituted a dominant class and that this dominance is the root cause of economic stagnation. When confronted with empirical evidence, this assertion seems less convincing. The complex picture that emerges of the Indian state does not totally contradict the dominant view. This complexity points to a need for a more elaborated theoretical understanding of the role of the state and of the public bureaucracy. The article concludes by sketching the outlines of such a possible revised theoretical framework.
TL;DR: The Korean heavy industry (HCI) drive has been criticised for the misallocation of capital and for negative spillover effects on growth, inflation, current account and debt as mentioned in this paper.
Abstract: The Korean heavy industry (HCI) drive has been criticised for the misallocation of capital and for negative spillover effects on growth, inflation, the current account and debt. However, such criticism places too much blame on HCI for the late ‐ 1970s' economic deterioration and gives HCI insufficient credit for the subsequent economic rebound. Korean HCI was a catch‐up exercise which attracted cheap foreign capital to accelerate structural change. Nevertheless, the mid‐1970s' decision to pursue HCI as a Big Push was flawed since it did result in project bunching that strained implementation capacity, despite the safeguards which Korea built into its HCI strategy.
TL;DR: In this article, a two-part article analyses the attempts to reform the socialist financial system in China by diversifying financial assets and introducing capital markets, and concludes that there is no evidence that this has improved allocative efficiency in the economy.
Abstract: This two‐part article analyses the attempts to reform the socialist financial system in China by diversifying financial assets and introducing capital markets. The approach used is that of political economy, in the sense of elucidating the interplay between political and economic interests, actors and issues in the reform process. Part I discusses the issue of bonds by governments and enterprises. Although the reform era has seen gradual progress towards something resembling a bond ‘market’ in terms of a diversification of bond types and growing competition between bond issues, there is no evidence that this has improved allocative efficiency in the economy. Rather, bonds have functioned as one instrument in a complex struggle for resources between political, institutional and economic actors in the context of a continuing ‘shortage economy’. This competitive system falls far short of a true ‘market'; rather it embodies powerful systemic factors reflecting the basic structural and institutional features o...
TL;DR: In this paper, the authors test the assumptions behind the anti-and pro-equality arguments using a Two Stage Least Squares procedure on household and corporate data for Korea between 1963 and 1980.
Abstract: If greater inequality results in greater saving which leads to greater investment and growth, then government policies which increase inequality promote growth; this is called the anti‐equality argument. If, however, greater equality produces more consumption which drives investment and growth, then increasing equality produces growth; this is the pro‐equality argument. This essay tests the assumptions behind the anti‐ and pro‐equality arguments. These assumptions are tested using a Two Stage Least Squares procedure on household and corporate data for Korea between 1963 and 1980.
TL;DR: The authors investigated the sensitivity of the Harberger model's explanatory power to the definition of the inflation rate variable itself, the dependent variable, using a cross-section, time-series data set of 19 developing nations.
Abstract: Previous developing country inflation studies have demonstrated that the Harberger (monetarist) model's explanatory power may be quite sensitive to the time period or explanatory variables used. In this study, the model's sensitivity to the definition of the inflation rate variable itself ‐ the dependent variable ‐ is investigated. Using a cross‐section, time‐series data set of 19 developing nations, it is shown that the Harberger model is sensitive to the manner in which inflation is defined. Then, a similar investigation is conducted for another, more recently developed, model of the inflationary process (the Hanson model). This model exhibits less sensitivity to the choice of inflation variable.
TL;DR: In this article, the authors further develop two main ideas: firms from developing countries may not have the incentive to maintain quality standards and consumers in developed countries may have a country of origin bias towards new products from developed countries.
Abstract: In a recent interesting article, Lall [1991] has noted that conventional export theories tend to neglect the role of marketing barriers to new entrants. In this comment I try to further develop two main ideas. The first is that firms from developing countries may not have the incentive to maintain quality standards. The second is that consumers in developed countries may have a country of origin bias towards new products from developing countries.
TL;DR: In this article, a cross-section regression analysis of farm-sizewise/statewise Indian data was performed to investigate the relationship between the size of operational holding and various irrigation and irrigation-related variables.
Abstract: This article analyses and describes the relationship between the size of operational holding on the one hand and various irrigation and irrigation‐related variables, on the hand, using cross‐section regression analysis of farm‐sizewise/statewise Indian data. The overall conclusion that emerges from the analysis is that irrigation development in India as a whole seems to be such that its propagation and diffusion among agricultural households seems to be somewhat in favour of larger farms. Even though the government predominantly controls the development and distribution of flow‐sources of irrigation, especially of canal irrigation, it does not seem to have produced any significant positive impact on reducing the level of inequity involved in the distribution of irrigation across farm‐size groups.
TL;DR: In this article, the authors show that these schemes subsidise significantly the use of capital and produce greater capital intensity in Malaysian manufacturing, which is not the case in most other developing countries.
Abstract: Most developing countries provide fiscal incentives to encourage domestic and foreign investment. This study shows that these schemes subsidise significantly the use of capital and produce greater capital intensity in Malaysian manufacturing. These results were obtained by conducting the analysis at the establishment level, which avoids the artificial aggregation of establishments with different production structures into an industry‐group and having to choose an appropriate weighting system in the aggregation process.
TL;DR: In this article, the authors studied the effects of debt conversion transactions in the case of Chile and showed that the conversion scheme may have negative effects regarding direct foreign investment and the balance of payments.
Abstract: The purpose of this study is to look at the effects of debt conversion transactions in the case of Chile. The decision to centre on Chile lies in the fact that Chile is nowadays considered to have the most successful programme of debt conversion among debtor countries. However, the Chilean debt conversion programme presents some shortcomings. In fact, as this study shows, the conversion scheme may have negative effects regarding direct foreign investment and the balance of payments.
TL;DR: In this article, a simple GNP model is used to estimate the elasticities that characterise the three aggregate sectors and are used to simulate the effects of taxing for debt servicing.
Abstract: The purpose of this article is to estimate the cost of taxing the export, import or domestic sectors of Sri Lanka for the purpose of reducing the national debt. A simple GNP model is used to estimate the elasticities that characterise the three aggregate sectors and are used to simulate the effects of taxing for debt servicing. The results show that a tax on the import sector generates the largest net savings on trade balance and that the savings from not importing can be substantial. However, for the period 1977–87 a 10.0 per cent tax on the import sector caused a decline in the growth of the economy by 3.0 per cent. The burden of the tax falls heavily on the domestic sector in terms of lost production and increased unemployment.