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  • Author: Jun Zhang
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper investigates the institutional reason underlying the change in the trajectory of economic growth in post-reform China, and argues that the trajectory of growth was much more normal during the period of 1978-89 than in the post-1989 era. In the former period, growth was largely induced by equality-generating institutional change in agriculture and the emergence of non-state industrial sector. In the latter period, growth was triggered by the acceleration of capital investments under authoritarian decentralized hierarchy within self-contained regions. Such a growth trajectory accelerates capital deepening, deteriorating total factor productivity and leads to rising regional imbalance. This paper further argues that the change in the trajectory of growth is the outcome of changes in political and inter-governmental fiscal institutions following the 1989 political crisis.
  • Topic: Economics, Government, Industrial Policy, Political Economy
  • Political Geography: China, Asia
  • Author: Anis Chowdhury
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Most small island economies or 'microstates' have distinctly different characteristics from larger developing economies. They are more open and vulnerable to external and environmental shocks, resulting in high output volatility. Most of them also suffer from locational disadvantages. Although a few small island economies have succeeded in generating sustained rapid growth and reducing poverty, most have dismal growth performance, resulting in high unemployment and poverty. Although macroeconomic policies play an important role in growth and poverty reduction, there has been very little work on the issue for small island economies or microstates. Most work follows the conventional framework and finds no or very little effectiveness of macroeconomic policies in stabilization. They also concentrate on short-run macroeconomic management with a focus almost entirely on either price stability or external balance. The presumption is that price stability and external balance are prerequisite for sustained rapid growth. This paper aims to provide a critical survey of the extant literature on macroeconomic policies for small island economies in light of the available evidence on their growth performance. Given the high output volatility and its impact on poverty, this paper will argue for a balance between price and output stabilization goals of macroeconomic policy mix. Drawing on the highly successful experience of Singapore, it will also outline a framework for growth promoting, pro-poor macroeconomic policies for small island economies/microstates.
  • Topic: Development, Economics, Government
  • Political Geography: Asia, Australia/Pacific, Caribbean, Singapore
  • Author: Peilei Fan
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Both China and India, the emerging giants in Asia, have achieved significant economic development in recent years. China has enjoyed a high annual GDP growth rate of 10 per cent and India has achieved an annual GDP growth rate of 6 per cent since 1981. Decomposing China and India's GDP growth from 1981 to 2004 into the three factors' contribution reveals that technology has contributed significantly to both countries' GDP growth, especially in the 1990s. R outputs (high-tech exports, service exports, and certified patents from USPTO) and inputs (R expenditure and human resources) further indicate that both countries have been very committed to R and their output is quite efficient.
  • Topic: Government
  • Political Geography: China, India, Asia
  • Author: M. Sajjad Hassan
  • Publication Date: 07-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The northeast region of India remains fraught with severe violence, poor growth and acute frustration among its youth. Success of policies to resolve the region's crisis has proved less than encouraging. What could be the way out of the violence–poor growth trap? This paper argues that a key determinant of the instability in the region is the absence of the effective role of the state: to provide security and opportunities for social and economic wellbeing equitably to all sections of society; and to uphold the rule of law. For reconstruction to work the state must act to provide key political goods to all its citizens, and restore its legitimate authority by implementing policies and enforcing laws cleanly and transparently. Political leaders can contribute to this endeavour by organizing politics inclusively.
  • Topic: Conflict Resolution, Development, Government
  • Political Geography: India, Asia
  • Author: William Lazonick
  • Publication Date: 07-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The notion that good corporate governance means maximizing shareholder value derives from the neoclassical theory of the market economy. I explain why this perspective is highly problematic for understanding the operation and performance of the business corporation and hence the institutions that, for the sake of economic development, should govern it. The main problem is that the market-economy perspective cannot comprehend the process of innovation, including the role of the business corporation. I construct a theory of the innovating firm that, when embedded in comparative-historical analysis, provides a basis for analyzing the relation between corporate governance institutions and economic development.
  • Topic: Development, Economics, Government, Markets
  • Author: Qi Zhang, Mingxing Liu, Yiu Por Chen
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Using China as a test case, this paper empirically investigates how the development of financial intermediation affects rural-urban income disparity (RUID). Using 20-year province level panel data, we find that the level of financial development is positively correlated with RUID. Examining two subperiods, 1978-88 and 1989-98, we test several competing hypotheses that may affect RUID. We find that the increase of RUID may be explained by fiscal policy during the first period and financial intermediates during the second period. In addition, we show that the direction of the Kuznets effect on RUID is sensitive to changes in government development policies. The rural development policies during the first period may have enhanced the rural development and reduced RUID. However, the financial intermediary policy during the second period focused on urban development and increased both urban growth and intra-urban inequalities, thus leading to an increase in RUID. Finally, we show that RUID is insensitive to the provincial industrial structure (the share of primary industry in GDP). These results are consistent with the traditional urban-bias hypothesis and are robust to the inclusion of controls for endogeneity issues. This study adds to the economic inequality literature by clarifying the effects of government policies on the underlying dynamics on convergent and divergent effects on rural-urban inequality.
  • Topic: Development, Economics, Government
  • Political Geography: China, Asia
  • Author: Hyun H. Son, Nanak Kakwani
  • Publication Date: 05-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper suggests how the targeting efficiency of government programmes may be better assessed. Using the 'pro-poor policy' (PPP) index developed by authors, the study investigates the pro-poorness of not only government programmes geared to the poorest segment of the population, but also basic service delivery in education, health and infrastructure. This paper also shows that the targeting efficiency for a particular socioeconomic group should be judged on the basis of a 'total-group PPP index', to capture the impact of operating a programme within the group. Using micro-unit data from household surveys, the paper presents a comparative analysis for Thailand, Russia, Vietnam and 15 African countries.
  • Topic: International Relations, Economics, Government, Poverty
  • Political Geography: Africa, Russia, Vietnam, Thailand
  • Author: Mingxing Liu, Pengfei Zhang, Shiyuan Pan, Justin Yifu Lin
  • Publication Date: 05-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper explores the politically determined development objectives and the intrinsic logic of government intervention policies in east developed countries. It is argued that the distorted institutional structure in China and in many least developed countries, after the Second World War, can be largely explained by government adoption of inappropriate development strategies. Motivated by nation building, most least-developed countries, including the socialist countries, adopted a comparative advantage defying strategy to accelerate the growth of capital-intensive, advanced sectors in their countries. In the paper we also statistically measure the evolution of government development strategies and the economic institutions in China from 1950s to 1980s to show the co-existence and coevolution of government adoption of comparative advantage defying strategy and the trinity system.
  • Topic: Development, Economics, Government
  • Political Geography: China, Asia
  • Author: Indranil Dutta
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In this paper we explore what impact, if any, government debts have on achieving the Millennium Development Goals for the Indian states. To fulfill the goals, national governments, especially in the developing world, have to undertake major investments in the social sector; but how much they will really be able to do so will depend on the conditions of their finances. For the Indian states we find that government investment in the social sector is extremely important to reduce poverty, but the government's debt burden is actually stopping several states from attaining the MDG targets. Although, in the medium term the impact of the debt on poverty is not very harmful, in the longer run it has a significant negative impact. Therefore for policy purposes reduction in debt should be given a priority.
  • Topic: Debt, Government, Poverty
  • Political Geography: India, Asia
  • Author: Eric M. Uslaner
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Economic inequality provides a fertile breeding ground for corruption and, in turn, leads to further inequalities. Most corruption models focus on the institutional determinants of government dishonesty. However, such accounts are problematic. Corruption is remarkably sticky over time. There is a very powerful correlation between crossnational measures corruption in 1980 and in 2004. In contrast, measures of democracy such as the Freedom House scores are not so strongly correlated over time, and changes in corruption are unrelated to changes in institutional design. On the other hand, inequality and trust-like corruption are also sticky over time. The connection between inequality and the quality of government is not necessarily so simple. The aggregate relationships between inequality and corruption are not strong. The path from inequality to corruption may be indirect, through generalized trust, but the connection is key to understanding why some societies are more corrupt than others. This study estimates a simultaneous equation model of trust, corruption, perceptions of inequality, confidence in government, and demands for redistribution in Romania, and shows that perceptions of rising inequality and corruption lead to lower levels of trust and demands for redistribution.
  • Topic: Corruption, Economics, Government
  • Political Geography: Europe
  • Author: Deepak Nayyar
  • Publication Date: 03-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper seeks to analyze the prospects for development in a changed international context, where globalization has diminished the policy space so essential for countries that are latecomers to development. The main theme is that, to use the available policy space for development, it is necessary to redesign strategies by introducing correctives and to rethink development by incorporating different perspectives, if development is to bring about an improvement in the well-being of people. In redesigning strategies, some obvious correctives emerge from an understanding of theory and a study of experience that recognizes not only the diversity but also the complexity of development. In rethinking development, it is imperative to recognize the importance of initial conditions, the significance of institutions, the relevance of politics in economics and the critical role of good governance. Even if difficult, there is also a clear need to create more policy space for national development, by reshaping the rules of the game in the world economy and contemplating some governance of globalization.
  • Topic: International Relations, Development, Globalization, Government
  • Author: Mihly Simai
  • Publication Date: 02-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: At the beginning of the twenty -first century there is a rare coincidence of profound transformations in a number of areas, in population dynamics, in human settlements, in science and technology, economics, social stratification, in the role and functions of the states and in the global power structure and in governance. The systemic transformation of the former socialist countries is an important component of the ongoing changes Political, economic, and social conditions vary immensely throughout the world, influenced by the size, natural endowments, development level, economic structure, political and institutional patterns, and competitiveness of the countries. The new state and non-state actors make the system of interests and values more diverse. All these have a major influence on the future of the global development process. The paper concludes that developing societies do not need old textbook models, neoliberal or other utopias. There is widespread demand for a new scientific thinking on development, with realistic and humanistic alternatives helping collaborative global and national actions.
  • Topic: Development, Economics, Globalization, Government
  • Author: Guillermo Rozenwurcel
  • Publication Date: 02-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: After the Great Depression and throughout the rest of the twentieth century, Latin American countries basically approached economic development following two successive and quite opposed strategies. The first one was import substitution industrialization. The second was the so-called Washington Consensus approach. While the two views were founded on quite opposite premises, neither the import substitution industrialization nor the Washington Consensus managed to deliver sustained economic development to Latin American countries. Two domestic elements are crucial to understand this outcome. One is the failure of the state. The second is the inability to achieve mature integration into the world economy.
  • Topic: Development, Economics, Government
  • Political Geography: Washington, South America, Latin America
  • Author: Alemayehu Geda, Abebe Shimeles
  • Publication Date: 12-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In 1991 the Ethiopian Revolution Democratic Front (EPRDF) toppled the old 'socialist' regime that had ruled the country for seventeen years. In contrast to the previous policy regime of hard control, EPRDF initiated a wide range of reforms that covered not only the tax system but also the exchange rate, interest rates, trade, domestic production and distribution. This pa per attempts to explore the contribution of the tax reform, the change s in its structure and institutional reform in order to understand its role in raising revenue.
  • Topic: Democratization, Economics, Government
  • Political Geography: Africa, Ethiopia
  • Author: Robert Osei, Oliver Morrissey, Tim Lloyd
  • Publication Date: 09-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: An important feature of aid to developing countries is that it is given to the government. As a result, aid should be expected to affect fiscal behaviour, although theory and existing evidence is ambiguous regarding the nature of these effects. This paper applies techniques developed in the 'macroeconometrics' literature to estimate the dynamic linkages between aid and fiscal aggregates. Vector autoregressive methods are applied to 34 years of annual data in Ghana to model the effect of aid on fiscal behaviour. Results suggest that aid to Ghana has been associated with reduced domestic borrowing and increased tax effort, combining to increase public spending. This constructive use of aid to maintain fiscal balance is evident since the mid-1980s, following Ghana's structural adjustment programme. The pa per provides evidence that aid has been associated with improved fiscal performance in Ghana, implying that the aid has been used sensibly (at least in fiscal terms).
  • Topic: Development, Economics, Government
  • Political Geography: Africa, Ghana
  • Author: Anne Trebilcock
  • Publication Date: 04-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The ILO was founded for social justice, a mandate expressed today in terms of decent work as a global goal, for all who work, whether in formal or informal contexts. In June 2002, the delegates to the International Labour Conference from governments, workers' and employers' organizations adopted a resolution incorporating conclusions on decent work and the informal economy. The four components of decent work – opportunities for employment and income, respect for rights at work, social protection and stronger social dialogue – form the backbone of the ILO's approach to the informal economy. These elements can also be seen through a development lens, and necessarily feature a strong gender dimension. To make the action foreseen by the ILC conclusions more easily operational in a cross-disciplinary way, the issues they address can be cast in terms of macro policy, governance, enhancement of productivity, markets and employment, social protection/addressing vulnerabilities, and representation and voice. All play key roles in poverty reduction. Moreover, recognizing the importance of measuring progress towards decent work, developments in relation to indicators are briefly described. This paper includes annexes reproducing the ILC conclusions along with two relevant resolutions adopted by the International Conference of Labour Statisticians and a list of ILO websites that address various aspects of decent work and the informal economy.
  • Topic: International Relations, Civil Society, Economics, Government
  • Author: Marcel Fafchamps, Christine Moser
  • Publication Date: 01-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper investigates the relationship between criminal activity and geographical isolation. Using data from Madagascar, we show that, after we control for population composition and risk factors, crime increases with distance from urban centers and, with few exceptions, decreases with population density. In Madagascar, crime and insecurity are associated with isolation, not urbanization. This relationship is not driven by placement of law enforcement personnel which is shown to track crime, but fails to reduce feelings of insecurity in the population. Other risk factors have effects similar to those discussed in the literature on developed countries. We find a positive association between crime and the presence of law enforcement personnel, probably due to reporting bias. Law enforcement personnel helps solve crime but appears unable to prevent it.
  • Topic: Crime, Demographics, Government
  • Political Geography: Africa, Madagascar
  • Author: Robin Boadway
  • Publication Date: 12-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper considers lessons from the practice of fiscal federalism for guidance on new approaches to development finance. Despite the fact that inter-regional redistribution in a federation relies on a central government with strong fiscal powers, the form of that redistribution can be used as a benchmark for international development assistance financing. In a federation, finance for less-developed regions takes the form of equalizing transfers to sub-national governments. The objective of these transfers is to enable sub-national governments to provide comparable levels of public services at comparable tax rates, called fiscal equity, leaving them discretion to implement interpersonal redistribution schemes within their jurisdictions. This same principle of assuming that national governments rather than donor nations are responsible for vertical equity within their borders leads to the view that the ideal form of development assistance is a system of equalizing inter-nation transfers intended to enhance fiscal equity.
  • Topic: Development, Economics, Government, International Trade and Finance
  • Author: André Decoster, Inna Verbina
  • Publication Date: 08-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The interplay of a differentiated indirect tax structure and the variation in expenditure patterns across households, leads to a possibly unequal distribution of indirect tax liabilities across the population. This paper uses the ninth round of the RLMS survey to assess the distributional consequences of the two major components of the indirect tax system: VAT and excise taxes. The global indirect system can be considered to be progressive overall, according to the Kakwani index. Decomposition into constituent terms shows that this is due not only to a progressive VAT structure, but also to progressive excise taxes. This surprising result is mainly explained by the progressivity of the excise tax on car fuel, but might also be sensitive to peculiarities in the data about alcohol consumption.
  • Topic: Development, Economics, Government
  • Political Geography: Russia
  • Author: Claudia Tazreiter
  • Publication Date: 02-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: During the last decade measures of overt and covert surveillance, information sharing and deterrence of the illegal movement of people has increased within and between states. Border security has come to dominate international relations, and increasingly to deflect the needs of asylum-seekers who search for a state that will offer them substantive protection under the Refugee Convention. Measures of internal and external deterrence diminish the reality of protection to genuine refugees as some of the most vulnerable individuals in the world today. Australia, as a country of relative geographic isolation, has not experienced the large-scale influxes of asylum-seekers seen in many parts of the world. Notwithstanding this, the Australian Government has in recent years implemented harsh policy and administrative measures directed at asylum-seekers with a substantial measure of public support. In August 2001, an incident involving 433 asylum-seekers was branded in popular discourse an 'asylum crisis'. This incident involved a Norwegian freighter, the Tampa, which picked up survivors from a sinking boat who were making their way to Australian waters in order seek protection under the Refugee Convention. The Tampa was repelled by Australian security forces from disembarking the people they had picked up in distress on Australian soil. In this article, I explore the Tampa incident against the backdrop of refugee policy development from 1999. I argue that rather than responding to a crisis, the Australian government has generated the perception of a crisis in the Australian community. Implications of the Australian response to asylum-seekers are significant not only in the Asia/Pacific region, but further afield, as policy responses toward asylum-seekers by receiving states have converged in the recent past.
  • Topic: International Relations, Government, Human Welfare, Migration
  • Political Geography: Australia/Pacific