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  • Author: Peter Warr
  • Publication Date: 01-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Thailand's development strategy has been strongly market-oriented and open to trade and investment flows with the rest of the world. Since the late 1950s, its growth performance has been outstanding. Poverty incidence has declined dramatically, but economic inequality has increased. Economic progress has been reflected in very significant improvement in non-economic indicators of well-being such as life expectancy, infant and maternal morality, and literacy. Nevertheless, the performance of the education system is chronically poor. Environmental problems and institutional failures in resource management are ongoing. Reform is needed in several areas, including political and corporate governance, regulation of industry, and in the education and health systems.
  • Topic: Development, Economics, Education, Emerging Markets, Poverty, Foreign Direct Investment
  • Political Geography: Asia, Southeast Asia
  • Author: Philip Abbott, Finn Tarp
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Vietnam has been among the most successful East Asian economies, especially in weathering the external shocks of recent globalization crises—the 1997-98 Asian financial crisis and the 2008-09 great recession, financial crisis and collapse of global trade. Its success contradicts its characterization as an example of export-led growth and highlights the role of the state, particularly in maintaining and influencing investment. Examination of economic performance and policy responses shows rising dependence on foreign finance around each crisis, and actions by the government to counteract that dependence and bolster the domestic economy while continuing to restructure the economy toward greater emphasis on the private sector. Growth, employment and poverty alleviation have been maintained at the expense of renewed inflation, larger budget deficits, and currency depreciation. The 'stop-go' nature of present …
  • Topic: Development, Economics, Globalization, International Trade and Finance
  • Political Geography: Asia
  • Author: Fang Cai
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: With the aid of an analytical framework of the Lewis model revised to reflect the experience of China, this paper examines the country's dualistic economic development and its unique characteristics. The paper outlines the major effects of China's growth as achieved during the course of economic reform and the opening-up of the country: the exploitation of the demographic dividend, the realization of comparative advantage, the improvement of total factor productivity, and participation in economic globalization. By predicting the long-term relationship between the labour force demand and supply, the paper reviews the approaching turning point in China's economic development and examines a host of challenges facing the country in sustaining growth.
  • Topic: Development, Economics
  • Political Geography: China, Asia
  • Author: Jörn Birkmann
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Current approaches of measuring vulnerability to natural hazards generally use a rather static perspective that focuses on a single point in time—often before a hazardous event occurs. In contrast, the paper argues that vulnerability assessment should also take into account the changing dynamics during and after a disaster. This paper provides a comparative analysis of the situation in Sri Lanka and Indonesia within the context of the 2004 Indian Ocean tsunami. The author presents concepts for measuring revealed vulnerabilities and methods of assessing the recovery process, and highlights the differing ways in which the tsunami affected the ongoing civil conflicts in both regions.
  • Topic: Demographics, Disaster Relief, Environment, Natural Disasters
  • Political Geography: Indonesia, Asia, Sri Lanka
  • Author: Oleksiy Ivaschenko, Cem Mete
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Tajikistan's rural sector has witnessed substantial development since the country began to emerge from civil conflict in 1999. Gross agricultural output increased 64 per cent from 1999 to 2003, and there were significant developments in the agricultural reform agenda. This paper uses the panel component of two surveys conducted in Tajikistan at one-year interval (2003 and 2004) to explore the major determinants of the transition out of/into poverty of rural households. Poverty status is measured in the asset space, thus indicating structural rather than transitory poverty movements. The empirical analysis reveals several interesting findings that are also important from a policy perspective: first, cotton farming seems to have no positive impact on poverty levels, nor on mobility out of poverty. Second, the rate of increase in the share of private farming at the district level had little impact on poverty levels and poverty mobility.
  • Topic: Demographics, Development, Poverty
  • Political Geography: Asia, Tajikistan
  • Author: Peter Sheehan
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Industrialization occupies a central place in the rich tapestry of development theory and practice. Although that place has varied over time, many have agreed with Nicholas Kaldor that the kind of economic growth that leads to high real income per capita can only occur through industrialization. This paper argues that it is becoming increasingly difficult for most developing countries to achieve rapid growth through industrialization, and especially through export oriented activities. But the key mechanisms seen as driving the industrial take-off in much of the literature (internal increasing returns, transfer of labour into higher value activities and pecuniary externalities) are alive and well, and are evident in services as well as in industry. Furthermore, China is actively trying to move from a strategy based on industrialization to one based much more on agriculture and services, as the costs of the current pattern of industrialization become prohibitive, and India has demonstrated that rapid growth based primarily on the services sector is possible. Thus more attention needs to be given to strategies based on the expansion of the agricultural and services sectors, and to the ways in which better services in rural areas and higher rural output can combine to achieve rapid growth and improved human welfare in poor countries.
  • Topic: Development
  • Political Geography: China, India, Asia
  • Author: Jeffrey Henderson
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The rise of China as an economic and political 'driver' of the global economy is likely to be one of the defining moments of world history. Its dynamism and international expansion are on the verge of creating a 'critical disruption' in the global order that has held sway for over 60 years. As such, China is beginning to reshape the world, presaging a new phase of globalization: a 'global-Asian era'. This new era is likely to be distinct from any of the earlier phases of globalization and China's global footprint, in terms of its business, economic and political actions and their geopolitical implications, is likely to be markedly different from what has gone before. This paper offers a framework by which we can begin to understand the coming global-Asian era (GAE) and some of its consequences, particularly as the latter are surfacing in the developing world. Having discussed the nature and dynamics of the GAE, the paper turns to sketch a series of vectors (trade, aid and energy security) along which the GAE is beginning to impact on developing countries. The paper argues that, at least for these vectors, the Chinese-driven GAE is providing opportunities as well as dangers for national development projects. It concludes by briefly speculating on the viability of the GAE.
  • Topic: Development, Globalization, International Political Economy, International Trade and Finance, Oil
  • Political Geography: China, Asia
  • Author: Jarko Fidrmuc, Ivana Bátorová
  • Publication Date: 01-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: We analyse the business cycles in China and in selected OECD countries between 1992 and 2006. We show that, although negative correlation dominate s for nearly all countries, we can also see large differences for various frequencies of cyclical developments. On the one hand, nearly all OE CD countries show positive correlations of the very short-run developments that may correspond to intensive supplier linkages. On the other hand, business cycle frequencies (cycles with periods between 1.5 and 8 years) are typically negative. Nevertheless, countries facing a comparably longer history of intensive trading links tend to show also slightly higher correlations of business cycles with China.
  • Topic: Economics, International Trade and Finance
  • Political Geography: China, Asia
  • Author: Haider A. Khan
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper analyses both global and regional approaches to solving problems of energy security and ecological imbalance by addressing specifically the problems of China's energy security. China's growing energy dependence has become a major concern for both economic and national security policymakers in that country. The ambitious goal of modernization of the economy along the lines of the other newly industrialized economies (NIEs) of Asia has succeeded only too well, and it is difficult to reorient economic priorities. If examined rigorously, such an economic strategic assumption can be seen to entail the goal of creating further technological capabilities. In particular, China seems to be firmly committed to the creation of a largely self-sustaining innovation system as part of a knowledge-based economy of the future. Such innovation systems, called positive feedback loop innovation systems or POLIS have been created by advanced countries, and NIEs such as South Korea and Taiwan are proceeding to create these as well. But this will add to its energy burden and further dependence on the US as the power which controls the key sea lanes. Only a strategic reorientation to building a self-sustaining POLIS and appropriate regional cooperation institutions can lead to the way out of the current dilemma for China. Fortunately, such a model of POLIS which is distributionally and ecologically sensitive can be built for China and applied strategically to lead towards a sustainable development trajectory.
  • Topic: Development, Energy Policy, Environment, Regional Cooperation
  • Political Geography: United States, China, Taiwan, Asia, South Korea
  • 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: Yuqing Xing
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper analyses China's ICT exports grow thin its two major markets Japan and the US from 1992 to 2004. It focuses on ICT products classified in SITC 75, 76 and 77. The empirical results show that Chinese exports had maintained two-digit annual growth during the period. The growth was much higher than the corresponding growth of the overall markets. By 2004, Chinese ICT exports accounted for 26 per cent of the total Japanese imports and 19 per cent of the total imports of the US in ICT products. In addition, the paper investigates whether the rapid growth of Chinese ICT exports crowded out that of other Asian countries: Indonesia, Malaysia, Philippines, Singapore, South Korea and Thailand. The empirical analysis shows that the crowding out effect differs across countries and products. The exports of Singapore and Philippines have been negatively affected by the growth of Chinese exports, but no crowding effect existed at all with Indonesia's exports.
  • Topic: International Trade and Finance, Markets
  • Political Geography: United States, Japan, China, Indonesia, Malaysia, Asia, South Korea, Philippines, Singapore, Thailand
  • Author: Yanrui Wu
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Economic growth in China and India has attracted many headlines recently. As a result, the literature comparing the two Asian giants has expanded substantially. This paper adds to the literature by comparing regional growth, disparity and convergence in the two economies. This is the first of its kind. The paper presents a detailed examination of economic growth in the regions of China and India over the past twenty years. It also provides an assessment of regional disparity in the two countries and investigates whether there is any evidence of regional convergence during the period of rapid economic growth. It attempts to identify the sources of regional disparity and hence draw policy implications for economic development in the two countries in the near future.
  • Topic: Development
  • Political Geography: China, India, Asia
  • Author: Harsha Aturupane, Anil B. Deolalikar, Dileni Gunewardena
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Reducing child malnutrition is a key goal of most developing countries. To combat child malnutrition with the right set of interventions, policymakers need to have a better understanding of its economic, social and policy determinants. While there is a large literature that investigates the determinants of child malnutrition, it focuses almost exclusively on mean effects of these determinants. However, socioeconomic background variables and policy interventions may affect child nutrition differently at different points of the conditional nutritional distribution. Using quantile regressions, this paper explores the effect s of variables such as a child's age, sex and birth order; household expenditure per capita; parental schooling; and infrastructure on child weight and height at different points of the conditional distributions of weight and height using data from Sri Lanka's Demographic and Health Survey. Results indicate that OLS estimates can be misleading in predicting the effects of determinants at the lower end of the distributions of weight and height. For example, even though on average Sri Lankan girls are not nutritionally-disadvantaged relative to boys, among children at the highest risk of malnutrition girls are disadvantaged relative to boys. Likewise, although expenditure per capita is associated with strong nutritional improvement on average, it is not a significant determinant of child height or weight at the lower end of the distribution. Similarly, parental education, electricity access, and the availability of piped water have larger effect son child weight and height at the upper quantiles than at the lower quantiles. The policy implication is that general interventions—parental schooling, infrastructure and income growth—are not as effective for children in the lower tail of the conditional weight and height distributions. These children, who are at the highest risk of malnutrition, are likely to need specialized nutritional interventions.
  • Topic: Development, Education, Health
  • Political Geography: Asia, Sri Lanka
  • Author: Yuefen Li, Bin Zhang
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The segmentation of global manufacturing and services provided China and subsequently India with a golden opportunity to make full use of their absolute advantage—low cost yet educated labour—to integrate into the world economy within a comparatively shorter period of time than some earlier industrialisers. Though international trade functioned as a vent of surplus in view of the narrowness of their domestic markets at the beginning of their economic catch-up, the label of export-led model may not reflect the real picture as imports underwent dramatic increases during their respective growth periods, in particular for China. Foreign direct investment has played a pivotal role in their economic growth and has major presence in international trade and investment in leading sectors of both countries, giving rise to certain special features and weak links for their economic expansion and sustainability of fast economic growth. To maintain more broad-based, fast and balanced growth, it seems that both countries have to redress sectoral imbalances, encourage technology upgrading and cope with future changes in demographic profiles which constituted a trigger to fast economic growth at the time of their respective economic reform.
  • Topic: Development, International Trade and Finance
  • Political Geography: China, India, Asia
  • Author: Alessandra Guariglia, Amelia U. Santos-Paulino
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Using a panel of 139 countries over the period 1992-2003, we analyse the links between export productivity, economic growth and financial development indicators. We then investigate whether the links observed in China, India and Brazil systematically differ from those observed in other countries in the sample. We find that both GDP per capita and investment generally exert a positive and significant effect on export productivity. Except for Brazil, financial development is not an important determinant of export productivity. Moreover, except for Brazil, export productivity plays a positive effect on growth, and so does financial development for both China and Brazil, but not for India. Finally, in both India and Brazil, FDI is negatively associated with growth.
  • Topic: International Trade and Finance
  • Political Geography: China, India, Asia, Brazil, South America
  • Author: Amelia U. Santos-Paulino
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper analyses the patterns of export productivity and trade specialization profiles in the China, Brazil, India and South Africa, and in other regional groupings. In doing so, the investigation calculates a time varying export productivity measure using highly disaggregated product categories. The findings indicate that export productivity is mainly determined by real income and human capital endowments. Importantly, the study reveals significant differences in the export productivity and specialization patterns of countries with comparable per capita income levels. For instance, China's export productivity and implied export sophistication is in line with that of countries with higher per capita incomes, including some OECD industrial economies.
  • Topic: Economics, International Trade and Finance
  • Political Geography: Africa, China, India, Asia, South Africa, Brazil, South America
  • Author: John Henley, Stefan Kratzsch, Tamer Tandogan, Mithat Külür
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The burgeoning literature on outward foreign direct investment from emerging markets has largely focused on analysing the motives of investors as reported by parent companies. This paper, instead, focuses on firm-level investments originating from China, India or South Africa in fifteen host countries in sub-Saharan Africa (SSA). The analysis is based on a sub-set of firms drawn from the overall sample of 1,216 foreign-owned firms participating in the UNIDO Africa Foreign Investor Survey, carried out in 2005. The sample of investments originating from China, India and South Africa is analysed in terms of firm characteristics, past and forecast performance in SSA over three years and management's perception of ongoing business conditions. Comparisons are made with foreign investors from the North. The paper concludes that while investors in SSA from the three countries are primarily using their investment to target specific markets, they are largely operating in different sub-sectors. While there appear to be specific features that firms from a given country of origin share, there are no obvious operating-level features they all share apart from market seeking.
  • Topic: International Trade and Finance
  • Political Geography: Africa, China, India, Asia, South Africa
  • Author: Anushree Sinha, Haider Khan
  • Publication Date: 06-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The main purpose of this paper is to look at the incorporation of gender and the informal sector within a general equilibrium framework for India. Moreover, we clarify some important links between a gender aware informal sector based social accounting matrix (SAM) and general equilibrium models such as the computable general equilibrium (CGE) models including as a special case the fixed price multiplier (FPM) models. In particular, economy wide modelling of gender and the informal sector is facilitated by the use of national level data and constructing the base data set as an SAM. Another important strategy is to conceptualize the economy within gender structures, entailing the recognition of gender relations as an intervening variable in all economic activities.
  • Topic: Economics, Gender Issues
  • Political Geography: India, Asia
  • Author: Dominique van der Mensbrugghe, Maurizio Bussolo, Rafael E. De Hoyos, Denis Medvedev
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Over the past 20 years, aggregate measures of global inequality have changed little even if significant structural changes have been observed. High growth rates of China and India lifted millions out of poverty, while the stagnation in many African countries caused them to fall behind. Using the World Bank's LINKAGE global general equilibrium model and the newly developed Global Income Distribution Dynamics (GIDD) tool, this paper assesses the distribution and poverty effects of a scenario where these trends continue in the future. Even by anticipating a deceleration, growth in China and India is a key force behind the expected convergence of per capita incomes at the global level. Millions of Chinese and Indian consumers will enter into a rapidly emerging global middle class—a group of people who can afford, and demand access to, the standards of living previously reserved mainly for the residents of developed countries. Notwithstanding these positive developments, fast growth is often characterized by high urbanization and growing demand for skills, both of which result in a widening of income distribution within countries. These opposing distributional effects highlight the importance of analysing global disparities by taking into account—as the GIDD does—income dynamics between and within countries.
  • Topic: Development, Economics, Poverty
  • Political Geography: Africa, China, India, 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: Sudhir K. Thakur
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This study provides an understanding of the Indian regional economy utilizing the fundamental economic structure (FES) approach. The FES construct implies that selected characteristics of an economy will vary predictably with region size, as measured by net state domestic product, population, and total gross output. The big question addressed in this study is if identifiable patterns of relations between various macro aggregates and economic transactions can be revealed via regional input-output tables. Jensen et al. (1988) discuss the tiered, partitioned, and temporal approaches to the identification of FES using input-output tables. This research addresses the following four questions: (1) Does a regional FES exist for the Indian economy during the period 1965? (2) What proportions of the cells are predictable? (3) Can the 1965 regional FES predict 1983-84 table for Punjab economy? (4) Does regional FES manifest an enhanced understanding of the Indian regional structure? Regression analyses are used to identify the FES and non-FES cells for the Indian regional economy. The regional input-output tables for 21 States and Union Territories provide data for the analysis. Analysis reveals regional FES includes primary and secondary sectors as components of FES. This research has extended the notion of FES to include: weak, moderate and strong FES cells.
  • Topic: Economics
  • Political Geography: India, Asia, Punjab
  • Author: Xuan Li
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: A comparative study is undertaken that explores Chinese and Indian pharmaceutical industries under different patent regimes. It is found that relative to India, which had implemented process patent until 2005, China with a product patent regime since 1993 suffers from both lower drug accessibility and availability (the latter is a missing parameter in the literature). Also, China lags behind in both lower R investment and patents filed by Chinese nationals. Based on these findings and associated legal interpretation, we conclude that higher patent protection in China generates negative impacts on the pharmaceutical industries. Thus, governments should utilize TRIPS flexibilities and other regimes like price control to offset the anticompetitive effect in designing patent policies.
  • Topic: Treaties and Agreements
  • Political Geography: China, India, Asia
  • Author: Ligang Song, Yu Sheng
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The study decomposes the sources of Chinese growth by first making a distinction between technological progress and technical efficiency in the growth accounting framework, and then identifying a series of reform programmes, such as urbanization, structural change, privatization, liberalization, banking and fiscal system reforms as the key components in institutional innovation which facilitate the improvement of technical efficiency and through which economic growth. These components are then incorporated into the model specification, which is estimated based on a panel dataset by applying the principal component analysis (PCA) to eliminate the multicollinearity problem. The results show that urbanization, liberalization and structural change in the form of industrialization are the most important components in contributing to the improvement of technical efficiency and hence growth, highlighting the importance of government policies aimed at enhancing further urbanization, openness to trade and industrial structural adjustments to sustain the growth momentum in China. The study also found that the potential for further enhancing growth through technical efficiency in China is considerable, which can be realized by deepening state-owned enterprises (SOEs) restructuring, and banking and fiscal system reform.
  • Topic: Economics
  • Political Geography: China, Asia
  • 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: Thomas Gries, Margarete Redlin
  • Publication Date: 07-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Concerns about the duration of China's growth and hence the question of a permanent significant contribution of China to world economic growth relate, amongst other things, to the problem of reducing regional disparity in China. While China's high average growth is driven by a small number of rapidly developing provinces, the majority of provinces have experienced more moderate development. To obtain broad continous growth it is important to identify the determinants of provincial growth. Therefore, we introduce a stylized model of regional development which is characterized by two pillars: (i) International integration indicated by FDI and/or trade lead to imitation of international technologies, technology spill overs and temporary dynamic scale economies, and (ii) domestic factors indicated by human and real capital available through interregional factor mobility. Using panel data analysis and GMM estimates our empirical analysis supports the predictions from our theoretical model of regional development. Positive and significant coefficients for FDI and trade support the importance of international integration and technology imitation. A negative and significant lagged GDP per capita indicates a catching up, non steady state process across China's provinces. Highly significant human and real capital identifies the importance of these domestic growth restricting factors. However, other potentially important factors like labor or government expenditures are (surprisingly) insignificant or even negative. Further, in contrast to implications from NEG models indicators for urbanization and agglomeration do not contribute significantly.
  • Topic: Development
  • Political Geography: China, Asia
  • Author: Rhys Jenkins
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In recent years there has been a growing literature that analyses the threat which Chinese exports pose to the exports of other developing countries. The paper provides a critique of the standard measures of export similarity which have been used to estimate the threat from China in these studies. Two alternative indices, the static and the dynamic index of competitive threat, are developed and estimated for 18 developing countries and compared with estimates for the standard measures. It is shown that the latter tend to underestimate the extent to which countries are threatened by China. They also distort both the rankings of countries according to the extent to which they face competition from China and the direction of change in the competitive threat over time.
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: China, Asia
  • Author: Raghav Gaiha, Katsushi Imai
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper measures the vulnerability of households in rural India, based upon the ICRISAT panel survey. We employ both ex ante and ex post measures of vulnerability. The latter are decomposed into aggregate and idiosyncratic risks and poverty components. Our decomposition shows that idiosyncratic risks account for the largest share, followed by poverty and aggregate risks. Despite some degree of risk-sharing, the landless or small farmers are vulnerable to idiosyncratic risks, forcing them to reduce consumption. Income-augmenting policies therefore must be combined with those that not only reduce aggregate and idiosyncratic risks but also build resilience against them.
  • Topic: Demographics, Development, Economics, Poverty
  • Political Geography: India, Asia
  • Author: Shujie Yao, Zhongwei Han, Genfu Feng
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Since China joined the WTO in 2001, the pressure for bank reforms has mounted as China ought to fully open up its financial market to foreign competition by 2006. Efficiency is key for domestic banks to survive in a liberalised environment, but it appears that the last hope for raising bank efficiency is through ownership reform. Whether ownership reform and foreign competition can solve China's banking problem remains to be tested. This paper aims to answer this question through using a non-parametric approach to analyse the efficiency changes of 15 large commercial banks during 1998-2005. We find that ownership reform and foreign competition have forced the Chinese commercial banks to improve performance, as their total factor productivity rose by 5.6 per cent per annum. This coincides with the recent bullish Chinese stock markets led by three listed state-owned commercial banks. Despite such encouraging results, we remain cautious about the future of the Chinese banks, as the good results may have been artificially created with massive government support and the fundamentals of the banks may be still weak.
  • Topic: Economics, International Trade and Finance
  • Political Geography: China, Asia
  • Author: Silvia Nenci
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The rise of the emerging southern economies – China, India, Brazil, and South Africa (CIBS) – as both economic and political actors, is having significant and far-reaching impact on the world economy. Notwithstanding the increasing amount of study and research, there are still important knowledge-gaps with respect to a range of likely consequences of the dynamism of the Southern Economies. One of these gaps concerns the implications for the WTO-multilateral trading system. The present paper proposes a review of the southern participation in the multilateral integration process and suggests a methodology to assess the impact of CIBS' rise on the future of the WTO system. Through the analysis of the trajectories of 'impact' of the trade channel, the paper draws some suggestive remarks.
  • Topic: International Organization, International Trade and Finance
  • Political Geography: Africa, China, India, Asia, South Africa, Brazil, South America
  • Author: Kavita Sethuraman
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Moderate undernutrition continues to affect 46 per cent of children under 5 years of age and 47 per cent of rural women in India. Women's lack of empowerment is believed to be an important factor in the persistent prevalence of undernutrition. In India, women's empowerment often varies by community, with tribes sometimes being the most progressive. This paper explores the relationship between women's empowerment, domestic violence, maternal nutritional status, and the nutritional status and growth over six months in children aged 6 to 24 months in a rural and tribal community. This longitudinal observational study undertaken in rural Karnataka, India included tribal and rural subjects. Structured interviews with mothers were conducted and anthropometric measurements were obtained for 820 mother-child pairs, the follow-up rate after 6 months was 82 per cent. The data were analyzed by multivariate regression. Some degree of undernutrition was seen in 83.5 per cent of children and 72.4 per cent of mothers in the sample, moreover the prevalence of undernutrition increased among children at follow up. Domestic violence was experienced by 34 per cent of mothers in the sample. In multivariate analysis, biological variables explained most of the variance in nutritional status and child growth, followed by health-care seeking and women's empowerment variables; socio-economic variables explained the least variance. Women's empowerment variables were significantly associated with child nutrition on enrolment and child growth at follow-up. At follow-up, mother's prior lifetime experience of physical violence significantly undermined child growth in terms of weight-for-age, and older age at marriage and high mobility of mothers predicted less stunting in their children. In addition to the known investments needed to reduce undernutrition, improving women's nutrition, promoting gender equality, empowering women, and ending violence against women could further reduce the prevalence of undernutrition in this segment of the Indian population.
  • Topic: Gender Issues, Health
  • Political Geography: India, Asia
  • Author: Guanghua Wan, Mahvash Saeed Qureshi
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: By exploring the export performances and specialization patterns of China and India, we assess their trade competitiveness and complementarity vis-à-vis each other as well as with the rest of the world. Our analysis indicates that (i) India faces tough competition from China in the third markets especially in clothing, textile and leather products; (ii) there is a moderate potential for expanding trade between the two countries; (iii) China poses a challenge for the East Asian economies, the US, and most of the European countries especially in medium-technology industries; (iv) India appears to be a competitor mainly for its neighbouring South Asian countries; and (v) complementarity exists between the imports of China and India, and the exports of the US, some European states and East Asian countries, especially Japan, Korea, Malaysia, Singapore and Thailand, implying opportunities for trade expansion; and finally (vi) the export structure of China is changing with the exports of skill intensive and high-technology products increasing and those of labour-intensive products decreasing gradually. This suggests that challenges created by China in traditional labour-intensive products might reduce in the long run.
  • Topic: International Trade and Finance
  • Political Geography: United States, Japan, China, Europe, South Asia, Malaysia, India, Asia, Korea, Singapore, Thailand
  • Author: Calum G. Turvey, Rong Kong
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper investigates the economic conditions of rural households in China. Historical survey data indicate that over 80 per cent of rural households earn less than 4,500 yuan in net disposable income each year, that for the vast majority of rural households disposable income is insufficient to meet food consumption needs, and that in terms of economic growth rural households are receiving an ever decreasing percentage of China's growing economy with rural household incomes being only 31 per cent of urban household income in 2004.
  • Topic: Economics, Poverty
  • Political Geography: China, Asia
  • Author: Liangzhi You
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper looks at differences in spatial and temporal variation of rice yields in China and Brazil. We find that rice yields in China have converged over time and that rice production has become more and more homogeneous. In contrast, rice yields in Brazil have diverged over time, primarily due to variations in upland rice yields. Three hypotheses are put forward to explain the different behaviour of rice yields in Brazil and China: (i) differences in production systems (i.e., irrigated in China versus upland in Brazil); (ii) changes in rainfall patterns and (iii) bias in agricultural R favouring irrigated rice. Our empirical analysis provides support to the first two hypotheses by establishing that upland rice is subjected to much greater variation in yields than irrigated rice and that changing rainfall patterns affect mostly upland rice. We also provide evidence of the bias towards irrigated systems by looking at the patterns of varietal release.
  • Topic: Agriculture
  • Political Geography: China, Asia, Brazil, South America
  • Author: Vesselin Popovski, G Shabbir Cheema, Cameron Lowry, Mark Notaras
  • Publication Date: 07-2008
  • Content Type: Policy Brief
  • Institution: United Nations University
  • Abstract: Scholars and development practitioners recognize the centrality of governance capacity to achieve sustainable peace and development objectives, including the eradication of extreme poverty, access to services and livelihoods, promotion of economic growth, environmental protection and gender equality among others. With these in view, developing countries are emphasizing the need to improve governance systems and processes to promote people-centered sustainability. The United Nations, development banks, bilateral donors and private sector foundations have been supporting these efforts through governance assistance programs.
  • Topic: Civil Society, Government, Political Theory
  • Political Geography: Asia
  • Author: Vesselin Popovski, G Shabbir Cheema, Cameron Lowry, Mark Notaras
  • Publication Date: 10-2008
  • Content Type: Policy Brief
  • Institution: United Nations University
  • Abstract: Scholars and development practitioners recognize the centrality of governance capacity to achieve sustainable peace and development objectives, including the eradication of extreme poverty, access to services and livelihoods, promotion of economic growth, environmental protection and gender equality among others. With these in view, developing countries are emphasizing the need to improve governance systems and processes to promote people-centered sustainability. The United Nations, development banks, bilateral donors and private sector foundations have been supporting these efforts through governance assistance programs.
  • Topic: Civil Society, Politics, United Nations, Non State Actors, Governance
  • Political Geography: Asia
  • Author: Renwei Zhao, Shi Li
  • Publication Date: 01-2007
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper investigates some major changes in the wealth distribution in China using the data from two national household surveys conducted in 1995 and 2002. The surveys collected rich information on household wealth and its components, enabling a detailed analysis of changes in wealth distribution among Chinese households. Our analysis indicates that the wealth distribution in China as a whole became much more unequal in 2002 than it was in 1995. The housing reform, in which public apartments were sold to urban households at extremely low prices, has accelerated the accumulation of wealth among urban households on the one hand, and widened the wealth gap between urban and rural areas on the other.
  • Topic: Demographics, Development, Economics
  • Political Geography: China, Asia
  • Author: Guanghua Wan
  • Publication Date: 01-2007
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper depicts the trend of regional inequality in rural China for the period 1985- 2002. The total inequality is decomposed into the so-called within- and between components when China is divided into three regional belts (east, central and west). A regression-based accounting framework is then used to explore root sources of the rising inequality. Policy implications are discussed.
  • Topic: Demographics, Development, Economics
  • Political Geography: China, Asia
  • Author: Basudeb Guha-Khasnobis, S. Vivek
  • Publication Date: 01-2007
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In April 2001 the People's Union for Civil Liberties (PUCL) approached the Supreme Court of India arguing that the government has a duty to provide greater relief in the context of mass hunger. The litigation has now become the best known precedent on the right to food internationally. This paper reviews the litigation with a view to understand various strategies used by the litigants to create and enforce far-reaching entitlements in a near legal vacuum on the right to food. This is followed by a discussion on the lessons from this case for a rights-based approach to development at large.
  • Topic: Development, Human Rights, Politics
  • Political Geography: India, Asia
  • Author: Guanghua Wan, 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, Poverty
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Peilei Fan
  • Publication Date: 12-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Relying on a recently developed decomposition framework, this paper explores spatial distribution of innovation capability in China. It is found that at the regional level, China's inequality in innovation capability increased from 1995 to 2004. At the provincial level, the inequality decreased from1995 to 2000, but increased from 2000 to 2004. Location, industrialization and urbanization, human capital, and openness (foreign direct investment) are significant contributors to the inequality in innovation capability. Unbalanced development in high-tech parks exerts a growing explanatory power in driving innovation disparity, which implies that institutional factor plays a direct role.
  • Topic: Civil Society, Demographics
  • Political Geography: China, Asia
  • Author: Guanghua Wan, 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, Poverty
  • Political Geography: China, Asia
  • Author: Fang Cai, 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, Political Economy
  • Political Geography: China, Asia
  • 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, Gender Issues
  • Political Geography: China, Asia
  • Author: Shi Li, Ximing Yue, Terry Sicular, 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, Human Rights
  • Political Geography: China, Asia
  • Author: George Cheriyan
  • Publication Date: 11-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Over the past decade, a series of events in India have brought the question of food security into sharp focus. Vast famine-affected areas versus surplus production and stocks of grains, the impact of globalization and World Trade Organization laws on agriculture and farmers, the media's spotlight on starvation deaths and, finally, the Supreme Court of India's strong reaction to the plight of the hungry—all make a case for recognizing the right to food.
  • Topic: International Relations, Development, Human Rights
  • Political Geography: India, Asia
  • Author: D. Jayaraj, S. Subramanian
  • Publication Date: 10-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper reviews the principal source of India's wealth distribution statistics, which is constituted by the five decennial Reserve Bank of India National Sample Survey Organization Surveys on Debt and Investment of 1961-62, 1971-72, 1981-82, 1991-92, and 2002-03. The data available are described, critically appraised, and analyzed to present some salient findings in terms of the levels of debt, the levels of asset-holdings across the states of the Indian Union and over time, wealth composition, and aspects of vertical and horizontal inequality in the distribution of wealth. The centrality of land and real estate in the wealth status of India is underlined, and some broad aspects of redistributive anti-poverty policy are spelt out.
  • Topic: International Relations, Development, International Political Economy
  • Political Geography: India, Asia
  • Author: Yin Ge
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: How do foreign trade and foreign direct investment affect regional inequality? Foreign trade and investment may affect internal economic geography, and the resulting industry agglomeration may contribute to regional inequality. This paper provides empirical evidence supporting this linkage. The results indicate that the increasing regional inequality in China has been accompanied by an increase in the degree of regional specialization and industry agglomeration. Foreign trade and foreign investment are closely related to industry agglomeration in China. Industries dependent on foreign trade and FDI are more likely to locate in regions with easy access to foreign markets, and exporting industries have a higher degree of agglomeration.
  • Topic: Economics, Industrial Policy, International Trade and Finance
  • Political Geography: China, Asia
  • Author: Xavier Giné, Stefan Klonner
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: We study the diffusion of a capital intensive technology among a fishing community in south India and analyze the dynamics of income inequality during this process. We find that lack of asset wealth is an important predictor of delayed technology adoption. During the diffusion process, inequality follows Kuznets' well-known inverted U-shaped curve. The empirical results imply that redistributive policies favouring the poor result in accelerated economic growth and a shorter duration of sharpened inequality.
  • Topic: Development, Poverty, Science and Technology
  • Political Geography: India, Asia
  • Author: Guanghua Wan, Zhang-Yue Zhou
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: A comparative study of the public distribution systems of foodgrains in India and China is expected to reveal lessons and experiences that are valuable to policymakers. This is particularly important for developing countries in their endeavour to ensure food security. This paper undertakes such an exercise. The main features and developments of the two public distribution systems are first highlighted. This is followed by a comparative analysis of their similarities and differences. The role of public foodgrain distribution systems in ensuring food security is then evaluated. Finally, policy implications are drawn.
  • Topic: Human Welfare, Poverty
  • Political Geography: China, India, Asia
  • Author: Rimjhim M. Aggarwal
  • Publication Date: 09-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: It is often argued that an important reason why globalization may lead to GDP growth but fail to reduce poverty is because the poor are unable to participate in the new market opportunities and are marginalized. In this paper we examine the experience of resource-poor farmers in south India, who participated aggressively in the new market opportunities that opened up with trade reforms. However, these expanded market opportunities failed to improve their welfare. The paper examines why and how this happened.
  • Topic: Agriculture, Globalization, Poverty
  • Political Geography: India, Asia
  • 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, Economics
  • Political Geography: China, Asia
  • 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, Politics
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper analyzes the evolution of poverty in China from the late 1980s to the late 1990s, employing a version of Shapley decomposition tailored to unit-record household survey data. The changes in poverty trends are attributed to two proximate causes— income growth and shifts in income distribution. Different datasets, poverty lines, poverty measures, and equivalence scales are used to examine the robustness of the results. Potential biases arising from ignoring differential regional prices and inflation are also investigated. Notwithstanding some ambiguities in the results, it is consistently found that rural poverty increased in the second half of the 1990s and adverse distributional changes are the main cause.
  • Topic: Demographics, Development, Poverty
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Zhao Chen, Ming Lu
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper argues that the conventional approach of data averaging is problematic for exploring the growth—inequality nexus. It introduces the polynomial inverse lag (PIL) framework so that the impacts of inequality on investment, education, and ultimately on growth can be measured at precisely defined time lags. Combining PIL with simultaneous systems of equations, we analyze the growth—inequality relationship in postreform China, finding that this relationship is nonlinear and is negative irrespective of time horizons.
  • Topic: Civil Society, Development, Education
  • Political Geography: China, Asia
  • Author: Zhicheng Liang
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Deepening financial development and rapid economic growth in China have been accompanied by widening income disparity between the coastal and inland regions. In this paper, by employing panel dataset for 29 Chinese provinces over the period of 1990-2001 and applying the generalized method of moment (GMM) techniques, we examine the impacts of financial development on China's growth performance. Our empirical results show that financial development significantly promotes economic growth in coastal regions but not in the inland regions; the weak finance-growth nexus in inland provinces may aggravate China's regional disparities.
  • Topic: Conflict Resolution, Development, Economics
  • Political Geography: China, Asia
  • Author: Geoffrey J.D. Hewings, Dong Guo, Patricio Aroca
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The purpose of this paper is to examine the convergence process in China by taking into account the spatial interaction between factors. The paper shows that there has been a dramatic increase in the spatial dependence of China's per capita GDP in the last 20 years. The consequence of space plays an important role, which is reflected in the influence of a neighbour's condition on the mobility of a province's income distribution from one category to another. The dynamics of the process showed evidence that China's distribution has gone from one of convergence to stratification, and from stratification to polarization.
  • Topic: Demographics, Development, Economics
  • Political Geography: China, Asia
  • Author: Benjamin Davis, Kathleen Beegle, Gero Caretto, Mauro Migotto
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Food security is a complex and multi-dimensional phenomenon. As such, its measurement may entail and benefit from the combination of both 'qualitative-subjective' and 'quantitative-objective' indicators. Yet, the evidence on the external validity of subjective-type information is scarce, especially using representative household surveys. The aim of this paper is to compare information on self-perceived food consumption adequacy from the subjective modules of household surveys with standard quantitative indicators, namely calorie consumption, dietary diversity and anthropometry. Datasets from four countries are analysed: Albania, Indonesia, Madagascar and Nepal. Simple descriptive statistics, correlation coefficients, contingency tables and multivariate regression show that the 'subjective' indicator is at best poorly correlated with standard quantitative indicators. The paper concludes that while subjective food adequacy indicators may provide insight on the vulnerability dimension of food insecurity, they are too blunt an indicator for food insecurity targeting. An effort towards developing improved subjective food security modules that are contextually sensitive should go hand in hand with research into how to improve household survey data for food security measurement along other dimensions of the phenomenon, particularly calorie consumption.
  • Topic: Human Welfare
  • Political Geography: Africa, Europe, Indonesia, Asia, Nepal, Albania, Madagascar
  • Author: Mingming Zhou, Iftekhar Hasan
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper documents the financial and institutional developments of China during the past two decades, when China was successfully transformed from a rigid centralplanning economy to a dynamic market economy following its unique path. We empirically examine the relationship between financial development and economic growth in China by employing a panel sample covering 31 Chinese provinces during the important transition period 1986-2002. Our evidence suggests that the development of financial markets, institutions, and instruments have been robustly associated with economic growth in China.
  • Topic: Development, Economics, International Trade and Finance
  • Political Geography: China, Asia
  • Author: Bassam A. Fattouh, Panicos O. Demetriades
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: We provide a novel empirical analysis of the South Korean credit market that reveals large volumes of excess credit since the late 1970s, indicating that a sizeable proportion of total credit was being used to refinance unprofitable projects. Our findings are consistent with theoretical literature that suggests that soft budget constraints and overborrowing were significant factors behind the Korean financial crisis of 1997-98.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: Asia, South Korea, Korea
  • Author: Bernarda Zamora, Sonia Bhalotra
  • Publication Date: 07-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper uses two large repeated cross-sections, one for the early 1990s, and one for the late 1990s, to describe growth in school enrolment and completion rates for boys and girls in India, and to explore the extent to which enrolment and completion rates have grown over time. It decomposes this growth into a component due to changes in the characteristics that determine schooling, and another associated with changes in the responsiveness of schooling to given characteristics. Our results caution against the common practice of using current data to make future projections on the assumption that the model parameters are stable. The analysis nevertheless performs illustrative simulations relevant to the question of whether India will be able to achieve the Millennium Development Goal of realising universal primary education by the year 2015. The simulations suggest that India will achieve universal attendance, but that primary school completion rates will not exhibit much progress.
  • Topic: Civil Society, Development, Education
  • Political Geography: 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: Tianbiao Zhu
  • Publication Date: 07-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Conventional explanations of Taiwan and China's economic success point to the shift from an import-substituting industrialization (ISI) strategy to an export-oriented industrialization (EOI) strategy. This paper argues that the development strategies in Taiwan and China have always been a combination of ISI and EOI strategies during their entire miracle-creating period; far from the shift from ISI to EOI strategies, export promotion was used in both cases to sustain ISI, which has always been the central focus of development. Behind this strategy there is a set of institutions in both Taiwan and China, which has played a key role in supporting ISI, in particular, the government, the bank sector, public enterprises, and their relationship.
  • Topic: Development, Industrial Policy
  • Political Geography: China, Israel, Taiwan, East Asia, Asia
  • Author: S.S. Acharya
  • Publication Date: 07-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: India accounts for 16.7 per cent of the world's food consumers. With the exception of China, India's size in terms of food consumers is many times larger than the average size of the rest of the countries. At the time of independence in 1947, India was in the grip of a serious food crisis, which was accentuated by the partition of the country. The demand for food far exceeded supply, food prices were high and more than half of the population living below the poverty line with inadequate purchasing power. With high rates of population growth, the dependence on imported food increased further. However, the situation improved considerably after the mid-1960s, when new agricultural development strategy and food policies were adopted. The production of staple cereals increased substantially, mainly contributed by productivity improvements. The dependence on food imports decreased and the country became a marginal net exporter of cereals. There was also an improvement in physical and economic access of households to cereals and other nutritive food products. The proportion of households reporting hunger went down and the incidence of economic poverty reduced. This paper reviews the Indian approach to tackling the severe problem of food insecurity, which India faced immediately after independence. It reviews the evolution of food policy, the major policy instruments deployed, intervention in food marketing system, and the current status of food security/insecurity. The paper also identifies the lessons emerging from the experience of India. In developing countries characterized by large segments of the rural population dependent on food production for livelihood and by the high incidence of poverty, food insecurity and malnutrition, the strategy to improve food security must encompass programmes to increase food production that combine improved technology transfer, price support to food producers and supply of inputs at reasonable prices to farmers, improvements in food marketing system, employment generation, direct food assistance programmes, and improvement in the access to education and primary health care.
  • Topic: Health, Human Welfare
  • Political Geography: China, India, Asia
  • Author: Vasco Molini
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Analysing the performance of ten developing countries, Hoddinot and Yohannes (2002) find a strong association between two measures of food security (calorie intake and mostly dietary diversity) and the increase in expenditures per capita. Using various indicators of food security, we describe the changes in food balances in Vietnam and find evidence of a substitution of poor micronutrients items (rice and cereals) with rich ones like fruit, vegetables fish and meat. Poor households, while increasing the amount of calories consumed, still lack vitamins, iron, calcium, etc. A preliminary assessment of the food security variation showed that improvements were, as expected, more concentrated among the richer Vietnamese households than the poor ones, although there was some improvement among poorer strata as well. We also focus on the calorie/expenditure elasticity and compare results for the years 1993 and 1998. Our findings confirm that this link is strong, and show that calorie income elasticity changed in the expected direction. We conclude that in general food security improved in Vietnam during 1990s although considerable differences still remain among expenditure deciles and among regions due to the accentuated spatial difference.
  • Topic: Security, Development, Human Welfare
  • Political Geography: Asia, Vietnam
  • Author: Min-Dong Paul Lee
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This study attempts to convey an accurate and dynamic account of educational inequality in China during the last decade. The study finds that there is clear evidence of rapid expansion of education, and younger students all over China are benefiting from the expansion. One of the most notable achievements is the virtual elimination of gender bias against girls in educational attainment. However, analysis of province-level school enrolment data over the last decade shows evidence of persistent regional inequality of educational attainment. Students from inland provinces continue to face strong structural inequality in educational opportunity, and this structural inequality becomes more pronounced as they progress to higher grades. Moreover, inter-cohort analysis reveals that the inter-provincial inequality in upper grades is increasing for younger cohort of students, meaning that educational inequality in China is deteriorating further. Lastly, a decomposition analysis shows that the causes of inter-provincial educational inequality are quite complex and cannot simply be explained by the urban-bias hypothesis that is often suggested as the main source of income inequality.
  • Topic: Education, Human Rights, Poverty
  • Political Geography: China, Asia
  • 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: Kuan Xu, Lars Osberg
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Before effective anti-poverty policy can be designed and implemented, the extent, trend and distribution of poverty must be identified. In this sense, poverty measurement is a crucial intermediate step in public policymaking and development planning. This paper asks whether the estimated proportion of the world's population with income below US$1 (adjusted according to purchasing power parity) per day is a good measure of trends in global poverty. We argue that the answer depends on two important issues in the measurement of poverty—the definition of the poverty line, and how best to summarize the level of poverty In this paper, we survey the literature on poverty measurement, demonstrate the importance of considering poverty incidence, depth and inequality jointly, present a simple but powerful graphical representation of the Sen and SST indices of poverty intensity (the poverty box) which is the FGT index of order 1 and extend our empirical work to China using the commonly accepted international poverty line definition of one half median equivalent income.
  • Topic: International Relations, Development, Poverty
  • Political Geography: China, Asia
  • Author: Guanghua Wan
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The purpose of this paper is to develop two poverty decomposition frameworks and to illustrate their applicability. A given level of poverty is broadly decomposed into an overall inequality component and an overall endowment component in terms of income or consumption determinants or input factors. These components are further decomposed into finer components associated with individual inputs. Also, a change in poverty is decomposed into components attributable to the growth and redistributions of factor inputs. An empirical illustration using Chinese data highlights the importance of factor redistributions in determining poverty levels and poverty changes in rural China.
  • Topic: Development, Economics, Poverty
  • Political Geography: China, Asia
  • Author: Margaret Vidar
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper considers to what extent the human right to food has been recognized by countries in the world, by analysing international obligations and constitutional provisions, bearing in mind that the right to food may be either explicitly or implicitly protected at the constitutional level. It considers constitutional examples from Switzerland, South Africa and India.
  • Topic: Human Rights
  • Political Geography: Africa, Europe, India, Asia, South Africa, Switzerland
  • Author: Terutomo Ozawa
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The notion of 'shared growth' was introduced by the World Bank in recognition of East Asia's rapid growth accompanied by poverty reduction. It emphasizes the criticality of pro-poor policies and institutional setups in the fast-developing East Asian economies. The efforts of these individual countries are, however, a necessary but not sufficient condition (explanation). There is a more essential, underlying region-wide mechanism that simultaneously promotes regionalized growth and specifically favours Asia's working mass of unskilled labour. Such an efficacious mechanism is posited in the 'flying-geese paradigm of comparative advantage recycling in labour-intensive goods'. The paper argues that a number of favourable factors have fortuitously coalesced to engender a considerably favourable condition for Asia's rapid catch-up growth in which unskilled labour (the poor) can participate as their countries' most vital input in labour-driven development.
  • Topic: Development, Economics, Poverty
  • Political Geography: East Asia, Asia
  • Author: Zhicheng Liang
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: China has experienced rapid integration into the global economy and achieved remarkable progress in poverty reduction over the last two decades. In this paper, by employing panel data covering twenty-five Chinese provinces over the period of 1986- 2002, and applying the endogenous threshold regression techniques, we empirically investigate the globalization-poverty nexus in China, paying particular attention to the nonlinearity of the impact of globalization on the poor. Estimation results provide strong evidence to suggest that there exists a threshold in the relationship between globalization and poverty: globalization is good for the poor only after the economy has reached a certain threshold level of globalization.
  • Topic: Economics, Globalization, Poverty
  • Political Geography: China, Asia
  • Author: Hyun H. Son, Nanak Kakwani
  • Publication Date: 06-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper looks into the interrelation between economic growth, inequality, and poverty. Using the notion of pro-poor growth, this study examines to what extent the poor benefit from economic growth. First, various approaches to defining and measuring pro-poor growth are scrutinized using a variety of criteria. It is argued that the satisfaction of a monotonicity axiom is a key criterion for measuring pro-poor growth. The monotonicity axiom sets out a condition that the proportional reduction in poverty is monotonically an increasing function of the pro-poor growth measure. This paper proposes a pro-poor growth measure that satisfies the monotonicity criterion. This measure is called the 'poverty equivalent growth rate', which takes into account both the magnitude of growth and how the benefits of the growth are distributed to the poor and the non-poor. As the new measure satisfies the criterion of monotonicity, it is indicative that to achieve a rapid poverty reduction, the poverty equivalent growth rate ought to be maximized rather than the actual growth rate. The methodology developed in the paper is then applied to Asian countries, including the Republic of Korea, Thailand, and Vietnam.
  • Topic: Development, Economics, Poverty
  • Political Geography: Asia, Vietnam, Korea, Thailand
  • Author: Basudeb Guha-Khasnobis, Saibal Kar
  • Publication Date: 05-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Traditionally, firms in India have shown a low preference towards debt financing, despite its advantages. Using panel data from 450 firms during 1992-93 and 2003-04, we attempt to identify factors which could explain the pattern of financing of manufacturing firms in India and the key determinants of their debt structure. We examine the roles of age of the firm, long term borrowing and net sales in affecting its debt structure.
  • Topic: Economics, Markets
  • Political Geography: India, Asia
  • 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: M.S. Quresh
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper revisits the pollution haven hypothesis in the context of Pakistan by offering a systematic analysis of its trade and production patterns. Using bilateral trade statistics from 1975-2003, we test the hypotheses that Pakistan's net exports of pollutionintensive products have increased to the OECD countries. We also investigate if the stringency of environmental governance in the importing countries plays a role in determining Pakistan's exports of pollution-intensive products. The results reveal that there has been a change in the composition of output and exports towards pollutionintensive manufacturing that parallels the opening of the economy. Overall, the findings appear to be in favour of the pollution haven hypothesis and call for effective environmental policy response for poverty alleviation and sustainable development.
  • Topic: Development, International Trade and Finance, Poverty
  • Political Geography: Pakistan, Asia
  • Author: Justin Yifu Lin, Peilin Liu
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper argues that both openness and poverty in a country are endogenously determined by the country's long-term economic development strategy. Development strategies can be broadly divided into two mutually exclusive groups: (i) the comparative advantage-defying (CAD) strategy, which attempts to encourage firms to deviate from the economy's existing comparative advantages in their entry into an industry or choice of technology; and (ii) the comparative advantage-following (CAF) strategy, which attempts to facilitate the firms' entry into an industry or choice of technology according to the economy's existing comparative advantages.
  • Topic: Development, Economics, Poverty
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper examines the distributional impact of globalization on the poor in urban China. Employing the kernel density estimation technique, we recovered from irregularly grouped household survey data the income distribution for 29 Chinese provinces for 1988-2001. Panels of the income shares of the poorest 20, 10 and 5 per cent of the urban residents were then compiled. In a fixed-effect model, two of the central conclusions of Dollar and Kraay (2002)—that 'the incomes of the poor rise equi-proportionately with average income' and that trade openness has little distributional effect on poverty—were revisited. Our results lend little support to either of the Dollar-Kraay conclusions, but instead indicate that average income growth is associated with worsening income distribution while globalization in general, and trade openness in particular, raises the income shares of the poor. It is also found that openness to trade and openness to FDI have differential distributional effects. The beneficial effect of trade was not restricted to the coastal provinces only, but also weakened significantly after 1992. These findings are robust to allow for nonlinearity in the effect of globalization and to control for the influence of several other variables.
  • Topic: Economics, Globalization, Poverty
  • Political Geography: China, Asia
  • Author: Arup Mirtra, N.R. Bhanumurthy
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In this paper an attempt is made to assess the impact of economic reforms on the incidence of poverty by decomposing the change in poverty ratio between two time points into growth/mean effect, inequality effect and the population shift effect. Based on the National Sample Survey data an analysis has been carried out for two time periods: (i) 1983 to 1993-94 and (ii) 1993-94 to 1999-2000, broadly representing the pre-reform and reform-period respectively, for the rural and urban areas of the fifteen major states, and also for the all-India level. The growth/mean effect, which determines the extent of fall (rise) in poverty incidence due to rise (fall) in mean per capita consumption expenditure, dominates in both the periods over the inequality effect, that estimates the rise (fall) in poverty due to rise (fall) in inequality. It also dominates over the population shift effect, which assesses the net impact on all-areas combined poverty, of a decline (rise) in rural (urban) poverty caused possibly by rural-urban migration. The growth effect, which is beneficial for poverty reduction, seems to have gone up in the reform period. The adverse inequality effect also fell in magnitude in the second period compared to the first. States with a greater beneficial growth effect in the second period relative to the first, also show a fall in the magnitude of an adverse population shift effect in the urban areas, i.e., a relatively less rise in the incidence of urban poverty caused by rural-urban migration.
  • Topic: Development, Globalization, Poverty
  • Political Geography: India, Asia
  • Author: Brinda Viswanathan, S. Kavi Kumar
  • Publication Date: 04-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The net impact of globalization on developing countries, and more specifically on the poorer sections of population in these countries, is complex and context dependent, and hence needs to be analysed empirically. This study in the context of globalization attempts to develop regional level indices of vulnerability with respect to welfare loss in India using a methodology based on fuzzy inference systems. The vulnerability of an entity is conceptualized (following the practice in global climate change literature) as a function of its exposure, sensitivity and adaptive capacity. Empirical analysis based on such multidimensional conceptualization demands use of indicator-based approach which is attempted in this study and uses fuzzy models that adequately capture vagueness inherent in such approaches.
  • Topic: Development, Economics, Globalization
  • Political Geography: India, 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: Annelies Zoomers
  • Publication Date: 03-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This article aims to contribute to the discussion about how to make development interventions more effective by analyzing the factors contributing to the success or failure of rural development projects. We made an aggregate level analysis of 46 projects in the field of agricultural research (AR), water management (WM), natural resource management (NRM), and integrated rural development (IRD), financed by the Netherlands' Directorate-General for International Cooperation (DGIS) and carried out between 1975-2005 in Asia, Africa and Latin America. Making a distinction between the successful projects and failures, we showed the possibilities and limitations of evaluating projects on the basis of the official criteria (relevance, efficiency, effectiveness, sustainability and impact and/or using criteria such as poverty, gender, institutional development, governance and environment). We learned that project performance very much depends on whether interventions 'keep track' with local priorities and trends. This is much more important than 'measuring output' (are results in line with the project goal?) which is wrongly presented as a priority in monitoring and evaluation practices.
  • Topic: Development
  • Political Geography: Africa, Asia, Central America
  • Author: Tony Addison
  • Publication Date: 02-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Much has changed in international finance in the twenty years since UNU-WIDER was founded. This paper identifies five broad contours of what we might expect in the next twenty years: the flow of capital from ageing societies to the more youthful economies of the South; the growth in the financial services industry in emerging economies and the consequences for their capital flows; the current strength in emerging market debt, and whether this represents a change in fundamentals or merely the effect of low global interest rates; the impact of globalization in goods markets in lowering inflation expectations, and therefore global bond yields; and the implications of the adjustment in global imbalances between Asia (in particular China) and the United States for emerging bond markets as a whole. The paper ends by noting the paradox that today we see ever larger amounts of capital flowing across the globe in search of superior investment returns, and yet the financing needs of the poorer countries are still largely unmet.
  • Topic: Development, Economics, International Trade and Finance
  • Political Geography: United States, China, Asia
  • Author: Matthew Smith, Alan Roe, Tony Addison
  • Publication Date: 06-2006
  • Content Type: Policy Brief
  • Institution: United Nations University
  • Abstract: An effective state is able to mobilize revenue and spend it on infrastructure, services, and public goods that both enhance human capital and the well-being of communities (especially the poor), as well as stimulating investment and employment creation by the private sector. An effective state also manages public finance to ensure that macroeconomic balance is maintained—with policy neither too restrictive to discourage private investment and growth, nor too accommodative to create high inflation and crowd out private investment. Fiscal issues are therefore at the heart of the state's role in the development process and failure in this policy area—whether it is in taxation, public expenditures, or in managing the fiscal deficit and public debt—can quickly undermine growth and poverty reduction. Fiscal weakness can also be fatal to social peace when one or more ethnic, religious, or regional groups are taxed unfairly—or receives too little in the allocation of public spending.
  • Topic: Debt, Development, Economics, Poverty
  • Political Geography: Africa, Asia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 08-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper proposes a semi-parametric method for poverty decomposition, which combines the data-generating procedure of Shorrocks and Wan (2004) with the Shapley value framework of Shorrocks (1999). Compared with the popular method of Datt and Ravallion (1992), our method is more robust to misspecification errors, does not require the predetermination of functional forms, provides better fit to the underlying Lorenz curve and incorporates the residual term in a rigorous way. The method is applied to decomposing variations of urban poverty across the Chinese provinces into three components – contributions by the differences in average nominal income, inequality and poverty line. The results foreground average income as the key determinant of poverty incidence, but also attach importance to the influence of distribution. The regional pattern of the decomposition suggests provincial groupings based not entirely on geographical locations.
  • Topic: Demographics, Economics, Poverty
  • Political Geography: China, Asia
  • Author: D. Jayaraj, S. Subramanian
  • Publication Date: 08-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper explores the hypothesis that the phenomenon of child labour is explicable in terms of poverty that compels a household to keep its children out of school and put them to work in the cause of the househol d's survival. In exploring the link between child labour and poverty in the Indian context, the paper advances the view that the nature of the connection is more readily apprehended if both the variables under study are defined more expansively and inclusively than is customarily the case. Specifically, the suggestion is that it may be realistic to include those children who are conventionally categorized as 'non-workers not attending school' within the count of child labourers. It is also suggested that poverty is meaningfully measured in terms of a multi-dimensional approach to the problem, wherein the aim is to assess generalized capability failure—arising from want of access to elementary infrastructural facilities and essential amenities—with respect to a number of basic human functionings. The core of the paper's argument is presented by means of a simple analytical model of child labour and deprivation, and the issues emerging from it are studied in the Indian context with the support of bot h primary and secondary data.
  • Topic: Education, Human Rights, Poverty
  • Political Geography: India, Asia
  • Author: Saman Kelegama
  • Publication Date: 08-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Peace can generate an economic dividend, which can be further increased by appropriate economic reform. This dividend can in turn be used to raise popular support for conflict resolution measures along the road to achieving a final political settlement, a strategy that characterizes the recent period in Sri Lanka. However, despite an increase in economic growth following the cessation of hostilities between the Liberation Tigers of Tamil Eelam (LTTE) and the government, no substantial dividend materialized for either government supporters in the South or LTTE supporters in the war-torn Northeast. The causes of this failure include delays in disbursing aid which would have eased adjustment to economic reforms—resulting in cuts to public spending that affected Southern households—and weak institutions that impeded the effective use of aid in the Northeast. The Sri Lankan experience highlights some important lessons for both government and donors on making use of an economic lever for consolidating a peace process and conflict resolution. It also highlights some of the dangers in relying too much on economic levers to consolidate a peace process when levels of mistrust are very high.
  • Topic: Conflict Resolution, Economics, Peace Studies
  • Political Geography: Asia, Sri Lanka
  • Author: Guanghua Wan, Zhao Chen, Ming Lu
  • Publication Date: 11-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: China's recent accession to the WTO is expected to accelerate its integration into the world economy, which aggravates concerns over the impact of globalization on the already rising inter-region income inequality in China. This paper discusses China's globalization process and estimates an income generating function, incorporating trade and FDI variables. It then applies the newly developed Shapley value decomposition technique to quantify the contributions of globalization, along with other variables, to regional inequality. It is found that (a) globalization constitutes a positive and substantial share to regional inequality and the share rises over time; (b) capital is one of the largest and increasingly important contributor to regional inequality; (c) economic reform characterized by privatization exerts a significant impact on regional inequality; and (d) the relative contributions of education, location, urbanization and dependency ratio to regional inequality have been declining.
  • Topic: Economics, Globalization
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 08-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The Chinese economy underwent cyclical fluctuations in growth and inflation in the reform period. Contrasting views exist on the role of money in such fluctuations. This paper assesses these views employing structural VEC models based on the exchange equation. It is found that in the long run money accommodates, rather than causes, changes in output and prices. In the short run, price fluctuations are mostly attributable to shocks that have permanent effects on prices and money but not on real output. These shocks also account for a large proportion of fluctuations in money, and strongly influence the movements of output.
  • Topic: Economics, Emerging Markets, International Trade and Finance
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Yin Zhang
  • Publication Date: 08-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper proposes a structural VAR model which extends the frameworks of Hoffmaister and Roldós (2001) and Prasad (1999). The model is then used to analyse the sources of China's trade balance fluctuations in the period of 1985–2000. Efforts are made to distinguish the forces which underlie the long-run trend in trade balance from those with transitory impacts. The effects of four types of shock are examined—the foreign supply shock, the domestic supply shock, the relative demand shock, and the nominal shock. Among other findings, two emerge as important. First, the movements in China's trade are largely the result of real shocks. Second, the Renminbi is undervalued, yet changes in the exchange rate bear little on the trade balance. Therefore, monetary measures would not suffice to redress China's trade 'imbalance'.
  • Topic: Economics, Emerging Markets, International Trade and Finance
  • Political Geography: China, Asia
  • Author: Shatakshee Dhongde
  • Publication Date: 08-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Over the last decade, India has been one of the fastest growing economies, and has experienced considerable decline in overall income poverty. However, in a vast country like India, poverty levels vary significantly across the different states. In this paper, we analyze the differences between poverty at the state and national level, separately for the rural and urban sector, in the year 1999-2000. Instead of following the usual practice of decomposing the changes in poverty over time, we decompose the changes in poverty across regions. Such decomposition reveals that differences in state and national poverty levels were largely explained by differences in the state and national mean income levels. Differences in the state and national distributions of income were less important in explaining spatial differences in poverty. An important policy implication of our results is that states with extremely high levels of poverty would have reduced poverty significantly by raising their mean income levels to the national mean income, instead of changing their distribution of income to match the national income distribution.
  • Topic: Demographics, Economics, Poverty
  • Political Geography: India, Asia
  • Author: John Knight, Li Shi, Zhao Renwei
  • Publication Date: 08-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Two precisely comparable national household surveys relating to 1988 and 1995 are used to analyse changes in the inequality of income in urban China. Over those seven years province mean income per capita grew rapidly but diverged across provinces, whereas intra-province income inequality grew rapidly but converged across provinces. The reasons for these trends are explored by means of various forms of decomposition analysis. Comparisons are also made between the coastal provinces and the inland provinces. The decompositions show the central role of wages, and within wages profitrelated bonuses, together with the immobility of labour across provinces, in explaining mean income divergence. The timing of economic reforms helps to explain the convergence of intra-province income inequality. Policy conclusions are drawn.
  • Topic: Demographics, Development, Economics
  • Political Geography: China, Asia
  • Author: Guanghua Wan, Zhangyue Zhou
  • Publication Date: 08-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: A considerable literature exists on the measurement of income inequality in China and its increasing trend. Much less is known, however, about the driving forces of this trend and their quantitative contributions. Conventional decompositions, by factor components or by population subgroups, only provide limited information on the determinants of income inequality. This paper represents an early attempt to apply the regression-based decomposition framework to the study of inequality accounting in rural China, using household level data. It is found that geography has been the dominant factor but is becoming less important in explaining total inequality. Capital input emerges as a most significant determinant of income inequality. Farming structure is more important than labour and other inputs in contributing to income inequality across households.
  • Topic: Demographics, Development, Economics
  • Political Geography: China, Asia
  • Author: Ravi Kanbur, Xiaobo Zhang
  • Publication Date: 08-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper constructs and analyses a long-run time-series for regional inequality in China from the Communist Revolution to the present. There have been three peaks of inequality in the last fifty years, coinciding with the Great Famine of the late 1950s, the Cultural Revolution of the late 1960s and 1970s, and finally the period of openness and global integration in the late 1990s. Econometric analysis establishes that regional inequality is explained in the different phases by three key policy variables; the ratio of heavy industry to gross output value, the degree of decentralization, and the degree of openness.
  • Topic: Development, Economics, Industrial Policy, Political Economy
  • Political Geography: China, Asia
  • Author: Oleksiy Ivaschenko
  • Publication Date: 06-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper examines the impact of changes in poverty and public health spending on inter-temporal variations in longevity using a unique regional-level dataset that covers 77 regions of Russia over the period 1994-2000. The dynamic panel data model is used as a tool for the empirical analysis. The model is estimated using the Arellano-Bond dynamic panel data estimator. The changes in regional levels of poverty and real per capita public health expenditure are identified to be significant determinants of the variations observed in longevity over time. The empirical results indicate that while male life expectancy responds more strongly than female life expectancy to economic circumstances, the latter appears to be more predisposed to the influence of public health spending. The results support the idea that the (positive) effect of public health spending on life expectancy is larger for those regions that experience higher incidences of poverty. The paper also finds that the financial crisis which hit Russia at the end of 1998 had a significant negative effect on longevity independently of the factors directly related to poverty and public health spending.
  • Topic: Human Welfare, Political Economy, Poverty
  • Political Geography: Russia, Europe, Asia
  • 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, International Trade and Finance
  • Political Geography: Asia
  • Author: Anthony Shorrocks, Stanislav Kolenikov
  • Publication Date: 10-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper applies a new decomposition technique to the study of variations in poverty across the regions of Russia. The procedure, which is based on the Shapley value in cooperative game theory, allows the deviation in regional poverty levels from the all- Russia average to be attributed to three proximate sources; mean income per capita, inequality, and local prices. Contrary to expectation, regional poverty variations turn out to be due more to differences in inequality across regions than to differences in real income per capita. However, when real income per capita is split into nominal income and price components, differences in nominal incomes emerge as more important than either inequality or price effects for the majority of regions.
  • Topic: Economics, Poverty
  • Political Geography: Russia, Europe, Asia
  • Author: Raimo Väyrynen
  • Publication Date: 10-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: It is important to make a careful distinction between illegal immigration, human smuggling, and human trafficking which are nested, but yet different concepts. This distinction is relevant because these different categories of the illegal movement of people across borders have quite different legal and political consequences. Human smuggling and trafficking have become a world-wide industry that 'employs' every year millions of people and leads to the annual turnover of billions of dollars. Many of the routes and enclaves used by the smugglers have become institutionalized; for instance, from Mexico and Central America to the United States, from West Asia through Greece and Turkey to Western Europe, and within East and Southeast Asia. More often than not flourishing smuggling routes are made possible by weak legislation, lax border controls, corrupted police officers, and the power of the organized crime. Naturally, poverty and warfare contribute to the rising tide of migration, both legal and illegal.
  • Topic: Environment, Human Welfare
  • Political Geography: United States, Europe, Turkey, East Asia, Greece, Asia, Latin America, Central America, North America, Mexico, Southeast Asia, Western Europe, West Asia
  • Author: Ruslan Yemtsov
  • Publication Date: 09-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper analyses regional data on inequality and poverty in Russia during 1994-2000 using published series from the regionally representative Household Budget Survey. The paper finds that the share of inequality in Russia coming from the between-regions component is large (close to a third of the total inequality), growing, and accounts for most of the increase in national inequality over 1994-2000. The paper demonstrates an absence of interregional convergence in incomes across Russian regions using various techniques. On the other hand, the paper finds evidence of convergence in inequality within regions, trended towards an internationally high level. Based on these two findings, the paper projects dynamics of inequality and poverty in Russia over a ten-year time horizon. The projections show that if the observed trend continues, by 2010 the absolute majority of Russia's poor will be concentrated in a few permanently impoverished regions, while relatively more affluent regions will become virtually free of poverty. Finally, the paper relates fluctuations in inequality within regions to a set of factors classified into four broad categories: endowments and initial conditions, preferences, policies, and shocks. Among these factors short-run fluctuations of the unemployment rate are revealed as significant and strong signals of inequality.
  • Topic: Demographics, Economics, Poverty
  • Political Geography: Russia, Europe, Asia
  • Author: Martin Ravallion
  • Publication Date: 07-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The paper tests for external effects of local economic activity on consumption and income growth at the farm household level using panel data from four provinces of post-reform rural China. The tests allow for nonstationary fixed effects in the consumption growth process. Evidence is found of geographic externalities, stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments. The results suggest an explanation for rural underdevelopment arising from underinvestment in certain externality-generating activities, of which agricultural development emerges as the most important.
  • Topic: Development, Economics
  • Political Geography: China, Asia
  • Author: Svetlana Glinkina, Dorothy Rosenberg
  • Publication Date: 02-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: We argue that the conflicts in the Caucasus are the result of the abrogation by the elite of the earlier, Soviet era, social contract. This process was accompanied by the collapse of the formal economy; evidenced by huge national income compression, falling public goods provision, and growing inequality and poverty. In the absence of state provision of basic amenities and governance, ordinary people are compelled to fall back on kinship ties. Declining standards of governance facilitate state-sponsored corruption and criminality in a setting where the shadow economic activity is increasingly important to individual survival strategies. Oil pipelines and the right to control the transit of goods both legal and illegal also underlie conflict in the region. Criminality has replaced ethnicity as the major motivation for conflict and conflict per se has become a lucrative source of income.
  • Topic: Economics, Ethnic Conflict, Poverty
  • Political Geography: Russia, Europe, Asia, Soviet Union