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62. How Does Monetary Policy Affect the Poor? Evidence from the West African Economic and Monetary Union
- Author:
- David Fielding
- Publication Date:
- 01-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The West African Economic and Monetary Union (UEMOA) has a history of monetary stability and low inflation. Nevertheless, there is substantial variation in relative prices within some UEMOA countries, in particular in the price of food relative to other elements of the retail price index (IHPC). Using monthly time-series data for cities within the region, we analyze the impact of changes in monetary policy instruments on the relative prices of components of the IHPC. We are then able to explore how the burden of monetary policy innovations is likely to be shared between the rich and poor.
- Topic:
- Economics, Human Welfare, International Political Economy, and International Trade and Finance
- Political Geography:
- Africa
63. A Development-focused Allocation of the Special Drawing Rights
- Author:
- Ernest Aryeetey
- Publication Date:
- 03-2004
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Efforts to realize the issue of development-focused Special Drawing Rights (SDR) by the International Monetary Fund (IMF) have been on-going for many years. Recently, however, the campaign first gained a new momentum immediately after the Asian financial crises with the new liquidity problems of developing nations following the collapse of private capital markets. Currently the search for financing options towards the achievement of the Millennium Development Goals drives the interest in development-focused SDRs. Extending the uses to which SDR can be put is derived from the growing demands on the international financial system to respond to the development finance needs of poor nations. Apart from the need to provide emergency funds in times of crises and the whole area of crisis prevention, increasingly the facilitation of development in poor countries and assistance to make the best policy decisions is considered crucial.
- Topic:
- Development, Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- Asia
64. Regional or National Poverty Lines? The Case of Uganda in the 1990s
- Author:
- Simon Appleton
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Absolute poverty lines are often derived from the cost of obtaining sufficient calories. Where staples vary across regions, such poverty lines may differ depending on whether they are set using national or regional food baskets. Regional poverty lines are open to the objection that they may be contaminated by income effects. This paper explores this issue by focussing on Uganda, a country where widening spatial inequalities in the 1990s have caused concern. Conflicting results from earlier studies have suggested that the spatial pattern of poverty in Uganda is very sensitive to whether national or regional food baskets are used in setting poverty lines. We confirm this suggestion by comparing the spatial profile of poverty in 1993 using national and regional poverty lines. However, since the regions consuming the more expensive staple sources of calories are also those with higher incomes, using simple regional poverty lines is problematic. Instead, a method of setting regional poverty lines is considered that adjusts for income differentials between regions. Even with this adjustment, the use of regional food baskets implies a markedly different.
- Topic:
- Development, International Trade and Finance, and Poverty
- Political Geography:
- Uganda and Africa
65. Remittances by Emigrants: Issues and Evidence
- Author:
- Andrés Solimano
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Remittances, after foreign direct investment, are currently the most important source of external finance to developing countries. Remittances surpass foreign aid, and tend to be more stable than such volatile capital flows as portfolio investment and international bank credit. Remittances are also an international redistribution from low-income migrants to their families in the home country.
- Topic:
- Development, Economics, International Trade and Finance, and Migration
66. Innovative Sources for Development Finance: Over-Arching Issues
- Author:
- Anthony B. Atkinson
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- In analysing proposals for new sources of development funding, there are several issues that arise across the board. What is the role of new sources in relation to existing overseas development assistance? Should we be seeking new sources that generate a double dividend? Can the key elements of a proposal be achieved by another route? What should be the fiscal architecture? Is there a modern transfer problem? It is with these general concerns that the present paper deals. Its aim is to bring to bear on global public finance the accumulated knowledge in the field of national public finance, and more generally public economics.
- Topic:
- Development, Economics, and International Trade and Finance
67. National Taxation, Fiscal Federalism and Global Taxation
- 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, and International Trade and Finance
68. Environmental Taxation and Revenue for Development
- Author:
- Agnar Sandmo
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper considers the role of global environmental taxes both as instruments for improving the global environment and as a source of revenue for funding economic development. It reviews the general case for environmental taxes and the particular issues that arise for the adoption of such taxes in an international setting without a single jurisdiction. It also discusses the possibilities for political acceptance of such taxes when tax revenue is linked to the goal of economic development. The revenue potential of global environmental taxes is evaluated with special reference to a global carbon tax. It is found that this tax alone has the potential to raise sufficient revenue to finance the United Nations' Millennium Development Goals.
- Topic:
- Development, Economics, Environment, and International Trade and Finance
69. Which Types of Aid Have the Most Impact?
- Author:
- George Mavrotas
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The paper uses an aid disaggregation approach to examine the impact of different types of aid on the fiscal sector of the aid-recipient country. It uses time-series data on different types of aid (project aid, programme aid, technical assistance and food aid) for Uganda, an important aid recipient in recent years, to estimate a model of fiscal response in the presence of aid which combines aid disaggregation and endogenous aid. The empirical findings clearly suggest the importance of the above approach for delving deeper into aid effectiveness issues since different aid categories have different effects on key fiscal variables—an impact that could not be revealed if a single figure for aid was employed. More precisely, project aid and food aid appear to cause a reduction in public investment whereas programme aid and technical assistance are positively related to public investment. The same applies for government consumption. A negligible impact on government tax and non-tax revenues, and a strong displacement of government borrowing are also found.
- Topic:
- Economics, International Trade and Finance, and Poverty
- Political Geography:
- Uganda and Africa
70. Loan Processing Costs and Information Asymmetries - Implications for Financial Sector Development and Economic Growth
- Author:
- George Mavrotas and Salvatore Capasso
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The paper presents a model in which credit-constrained firms might delay the adoption of new and more productive technologies because of the very high external financing costs they face. Our point of departure is that the efficiency of the banking system can have a profound impact on real resource and investment allocation not only directly, by reducing the amount of resources channelled to the credit market, but also indirectly by affecting entrepreneurs' investment decisions. Along these lines of reasoning we develop a model of information asymmetries in the credit market in which high costs of processing bank loan applications might obstruct investments in high-tech projects and favour, instead, low-return, self-financed investments in mature sectors. The result is that these kinds of costs have a negative impact on the average capital productivity and on the rate of economic growth. In specific circumstances, the combination of these costs and the dynamics of capital accumulation can be such that the economy incurs in a 'technology trap', in which new technologies, even if readily available, will never be adopted because of high frictions and inefficiencies in the credit market, a situation that seems to be relevant to many developing countries.
- Topic:
- Development, Economics, and International Trade and Finance