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151. Economic Size Trumps All Else? Lessons from BRICSAM

Author:
Timothy Shaw, Andrew F. Cooper, and Agata Antkiewicz
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Continuing CIGI's BRICSAM research, this paper questions whether size (economic or population) of emerging economies alone is enough to warrant accommodation in the rules and structures of the international system. The global realignment of states following the resulting power vacuum brought on by the end of the Cold War is finally materializing, as a new triangular formation has taken shape: the 'first world' club of the OECD; the 'second world' of emerging economies; and, a heterogeneous 'third world' of the rest. The interplay between and mobility among these groups of states deserves in-depth analysis. The core of this paper observes the economic and social trends of countries in the second tier, and their upwards aspirations towards the top-tier of the global architecture. Traced through a variety of indices, the growth of the BRICSAM group of countries (Brazil, Russia, India, China, South Africa, ASEAN-4 and Mexico) is demonstrated to be a powerful force in international economics and political economy. For the inclusion of these states, a change in the key aspects of global economic governance, the international architecture and geopolitics seems inevitable, and with it, new challenges arise for decision-makers and scholars alike.
Topic:
Cold War, Development, Economics, and Globalization
Political Geography:
Russia, China, India, South Africa, Brazil, and Mexico

152. Recent Regional Agreements: Why so many, so fast, so different and where are they headed?

Author:
John Whalley
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Recent years have witnessed a sharp increase in the number of regional trade agreements (RTAs) both concluded and under negotiation. This paper attempts to document and discuss this growth focusing on the United States (US), the European Union (EU), China, India and the agreements of other countries. The form, coverage, and content of these agreements vary considerably from case to case. This paper poses the following questions: why so many, why the variation, and why the recent increase in RTAs? Implications for the trading system are discussed in a final section.
Topic:
Development, International Trade and Finance, Regional Cooperation, and Treaties and Agreements
Political Geography:
United States, China, and India

153. Trade, Development and the Doha Round: A Sure Bet or a Train Wreck?

Author:
Daniel Drache
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper explores the strategy and assumptions that are pushing the Doha Round into dangerously troubled waters, and it assesses the different agendas on the table. It summarizes how we reached the current deadlock, and examines the state of the WTO's legal dispute mechanism. It then critically assesses how divergences play out in the key policy areas of water exports, generic drugs, textile quotas, service-sector liberalization, and agricultural subsidies. Lastly, it will try to answer the question of whether Doha is 'a sure bet, or a train wreck' by looking at several of the prospects and possible scenarios that face the WTO post-Hong Kong. What is now evident is that a target deal seems more distant than ever. It would appear that evolution is not going to be kind to the WTO. The Doha Round is too complex which increases the possibility of failure; too intrusive to assuage many of global civil society's concerns and too anti-development for numerous countries in the Global South to come on board. Paradoxically, many countries are proving to be resilient and innovative when faced with the negotiating impasse and are not pushing the panic button. The global economy is not drifting towards protectionism and the core trading nations seem ready to accept a less dynamic WTO.
Topic:
Development, International Trade and Finance, and Third World
Political Geography:
China and Asia

154. Poverty, Pro-Poor Growth and Mobility: A Decomposition Framework with Application to China

Author:
Guanghua Wan and Yin Zhang
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper proposes a framework for incorporating longitudinal distributional changes into poverty decomposition. It is shown that changes in the Sen-Shorrocks-Thon index over time can be decomposed into two components—one component reflects the progressivity of income growth among the original poor, the other measures the extent of downward mobility experienced by the incumbent poor. The decomposition is applied to appraising poverty trends in China between 1988 and 1996. The results indicate that the proposed decomposition can complement the widely-used growthdistribution decomposition in providing insights into poverty dynamics.
Topic:
Development and Poverty
Political Geography:
China and Asia

155. Poverty Reduction in China: Trends and Causes

Author:
Guanghua Wan and Yin Zhang
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Applying the Shapley decomposition to unit-record household survey data, this paper investigates the trends and causes of poverty in China in the 1990s. The changes in poverty trends are attributed to two proximate causes; income growth and shifts in relative income distribution. The Foster-Greer-Thorbecke measures are computed and decomposed, with different datasets and alternative assumptions about poverty lines and equivalence. Among the robust results are: (i) both income growth and favourable distributional changes can explain China's remarkable achievement in combating poverty in rural areas in the first half of the 1990s; (2) in the second half of the 1990s, both rural and urban China suffered from rapidly rising inequality and stagnant income growth, leading to a slow-down in poverty reduction, even reversal of poverty trend.
Topic:
Development, Economics, and Poverty
Political Geography:
China and Asia

156. Gender Wage Differentials in China's Urban Labour Market

Author:
Fang Cai and Meiyan Wang
Publication Date:
11-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper describes and decomposes wage differences between female and male workers. The results indicate that females receive low wages because of unequal pay within sectors, and that the wage gap caused by the difference in sectoral attainment is small. The results also reveal that a lion's share of the wage differential between females and males is attributable to discrimination rather than to the human capital difference between the genders. Eliminating discriminations against females with a focus on intra-sectoral inequality is crucial for reducing female/male wage differentials.
Topic:
International Relations, Development, and Political Economy
Political Geography:
China and Asia

157. Gender Earnings Differentials and Regional Economic Development in Urban China, 1988-97

Author:
Ying Chu Ng
Publication Date:
11-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Gender earnings differentials in urban China by region and their changes during the first decade of economic reform are examined. It is found that the female–male earnings ratio increased during the early stage of reform. The male earnings premium, overall, showed an increasing trend in the later stage of reform. Decomposition of the gender earnings differential reveals that a relatively lower percentage of the differential could be explained by gender differences in productive characteristics in the fast growing regions and in regions with a rapid pace of reform. The cross-sectional results highlight the possible existence of gender discrimination, particularly in the later stages of economic reform and development. Both market competition and the effects of wage decentralization play a role in shaping the gender earnings differentials. Gender earnings differentials varied by region and over time, generally in tandem with the pace of economic reform and development. The decomposition of the overtime changes in the earnings gap indicated that improvement in females' productive characteristics during the reform period constantly enhanced the earnings of females relative to those of males. The overtime changes in the returns to females' characteristics, however, work to counter any narrowing of the gender earnings gap.
Topic:
International Relations, Development, and Gender Issues
Political Geography:
China and Asia

158. The Urban-Rural Income Gap and Inequality in China

Author:
Shi Li, Ximing Yue, Terry Sicular, and Björn Gustafsson
Publication Date:
11-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using new household survey data for 1995 and 2002, we investigate the size of China's urban-rural income gap, the gap's contribution to overall inequality in China, and the factors underlying the gap. Our analysis improves on past estimates by using a fuller measure of income, adjusting for spatial price differences and including migrants. Our methods include inequality decomposition by population subgroup and the Oaxaca-Blinder decomposition. Several key findings emerge. First, the adjustments substantially reduce China's urban-rural income gap and its contribution to inequality. Nevertheless, the gap remains large and has increased somewhat over time. Second, after controlling for household characteristics, location of residence remains the most important factor underlying the urban-rural income gap. The only household characteristic that contributes substantially to the gap is education. Differences in the endowments of, and returns to, other household characteristics such as family size and composition, landholdings, and communist party membership are relatively unimportant.
Topic:
International Relations, Development, and Human Rights
Political Geography:
China and Asia

159. Financial Development and Income Inequality in Rural China 1991-2000

Author:
Zhicheng Liang
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Financial development can exert a significant influence on the distribution of income. In this paper, using Chinese provincial data over the period of 1991-2000 and applying the generalized method of moment (GMM) techniques, we investigate the relationship between finance and inequality in rural China by testing alternative existing theories concerning the finance-inequality nexus. A negative and linear relationship between finance and inequality is found in our estimations. The empirical results show that financial development significantly reduces income inequality in post-reform rural China.
Topic:
Demographics, Development, and Economics
Political Geography:
China and Asia

160. Fiscal Decentralization and Political Centralization in China: Implications for Growth and Inequality

Author:
Xiaobo Zhang
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
China's current fiscal system is largely decentralized while its governance structure is rather centralized with strong top-down mandates and a homogenous governance structure. Due to large differences in initial economic structures and revenue bases, the implicit tax rate and fiscal burdens to support the functioning of local government vary significantly across jurisdictions. Regions initially endowed with a broader nonfarm tax base do not need to rely heavily on preexisting or new firms to finance public goods provision, thereby creating a healthy investment environment for the nonfarm sector to grow. In contrast, regions with agriculture as the major economic activity have little resources left for public investment after paying the expenses of bureaucracy. Consequently, differences in economic structures and fiscal burdens may translate into a widening regional gap.
Topic:
Development, Economics, and Politics
Political Geography:
China and Asia