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301. A Holistic Perception of Foreign Financing of Developing Countries' Private Sectors: Analysis and Description of Structure and Trends

Author:
Matthew Odedokun
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The study seeks to identify donor-specific factors that cause donors to delay aid disbursement, and to apply a double standard in dealing with the non-compliance of a recipient with regard to aid conditionalities, a practice that promotes uncertainty in the receipt of aid. Annual panel data over 1970-2000 for the 22 members of OECD's DAC donor group are employed in the empirical study. Our findings suggest that the proportion of pledged aid being disbursed, which shows an increasing trend, is positively affected by the extent to which aid is procurement-tied and by the size of the donor government's expenditure in relation to GDP. On the other hand, the proportion of aid commitments being disbursed, which appears lower for the G7 countries, is negatively influenced by factors such as abundant donor generosity, the predominance of grants in total aid, the specific targeting of aid to lower-income recipients, high growth in donor economy, as well as high level of checks and balances, and polarization between the executive and legislative branches of government in the donor country.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, and Non-Governmental Organization

302. Work In Progress: The Peace and Governance Programme: At the Interface of Ideas and Policy

Publication Date:
06-2002
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
The mission of the United Nations University is to contribute, through research and capacity building, to efforts to resolve the pressing global problems that are the concern of the United Nations, its Peoples and Member States. The work of the Peace and Governance Programme is a core element of this mission, and one that is complex and demanding. The concept of peace and security is evolving and broadening considerably, both in the worlds of academia and policy. Traditionally, national and international security were mainly defined in military and territorial terms, in an international system characterized by interaction among states. The UN Charter, while ultimately working in the interests of “the peoples,” is predicated on the relationship between unitary states in the maintenance of international peace and security. Within this system, the challenge was traditionally seen as mediating between liberal internationalist and power-political “realist” forces.
Topic:
International Relations, Development, International Organization, and United Nations

303. Will HIPC Matter? The Debt Game and Donor Behaviour in Africa

Author:
Nancy Birdsall, Stijn Claessens, and Ishac Diwan
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we focus on the question: will the HIPC debt reduction programme help in the transformation of the development assistance business and change the rules of the 'debt game' in Africa? We concentrate on the donor and official creditor side, by exploring how the growing debt of African countries, over the last two decades, has affected the provision of new resources by the donor community. Our results indicate that if debt levels are reduced sufficiently in high debt countries, donors can shift from the current pattern of non-selectivity and defensive lending to a low debt regime, a regime that has in the past allowed selectivity in lending in relation to levels of poverty and quality of policy.
Topic:
Development and International Organization
Political Geography:
Africa

304. By How Much Does Conflict Reduce Financial Development?

Author:
S. Mansoob Murshed, Tony Addison, and Abdur R. Chowdhury
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Financial development is vulnerable to social conflict. Conflict reduces the demand for domestic currency as a medium of exchange and a store of value. Conflict also leads to poor quality governance, including weak regulation of the financial system, thereby undermining the sustainability of financial institutions. Conflict therefore reduces the social return to financial liberalization and other financial-sector reforms. This paper presents a theoretical model integrating the effects of conflict and financial liberalization, and then tests the model on data for 79 countries. Using an explanatory variable that measures the intensity of conflict (from low to high) the results show that conflict significantly reduces financial development, and that this negative effect increases as conflict intensifies. The paper concludes that conflict reduction is essential if financial reform is to have its full benefit for development.
Topic:
Conflict Resolution, Development, Government, and Political Economy

305. Producing an Improved Geographic Profile of Poverty: Methodology and Evidence from Three Developing Countries

Author:
Chris Elbers, Peter Lanjouw, Johan Mistiaen, Gabriel Demombynes, Jenny Lanjouw, and Berk Özler
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper implements a methodology for estimating poverty in Ecuador, Madagascar and South Africa, at levels of disaggregation that to date have not generally been available. The methodology is based on a statistical procedure to combine household survey data with population census data, imputing into the latter a measure of per capita consumption from the former. The countries are very unlike each other—with different geographies, stages of development, quality and types of data, and so on. Yet the paper demonstrates that in all three countries the poverty estimates produced from census data are both plausible (in that they match well stratum-level estimates calculated directly from the household surveys) and satisfactorily precise (at a level of disaggregation far below that allowed by household surveys).
Topic:
Development, Economics, Government, and International Trade and Finance
Political Geography:
South Africa

306. One Third of the World's Growth and Inequality

Author:
Danny Quah
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper studies growth and inequality in China and India—two economies that account for a third of the world's population. By modelling growth and inequality as components in a joint stochastic process, the paper calibrates the impact each has on different welfare indicators and on the personal income distribution across the joint population of the two countries. For personal income inequalities in a China-India universe, the forces assuming first-order importance are macroeconomic: Growing average incomes dominate all else. The relation between aggregate economic growth and within-country in- equality is insignificant for inequality dynamics.
Topic:
Development and Economics
Political Geography:
China, South Asia, India, and Asia

307. The New Basle Capital Accord and Developing Countries: Issues, Implications and Policy Proposals

Author:
Stephany Griffith-Jones and Stephen Spratt
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper argues that, if implemented in its current form, the new Basle Capital Accord will adversely effect developing sovereigns, corporates and banks wishing to borrow in international markets. This impact will result from the major banks' lending patterns being altered by the adoption of internal ratings based approaches, leading to a significant reduction of bank, and/or a sharp increase in the cost of international borrowing for many developing countries. Greater use of banks' internal risk management systems is also inherently pro-cyclical and therefore likely to amplify the economic cycle, thus increasing both the frequency and scale of crises.
Topic:
Foreign Policy, Development, and Treaties and Agreements

308. Debt Issues in Africa: Thinking beyond the HIPC Initiative to Solving Structural Problems

Author:
Alemayehu Geda
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper attempts to answer the following question: If the HIPC Initiative is fully successful and managed to write-off all debt that is owed by Africa, will the debt problem be over? The answer is 'no'. This pessimist answer is arrived at by examining the historical origin of African debt and the structural problems the continent is confronted with. The literature about the origins of the African debt crisis lists a number of factors as its cause. The oil price shocks of 1973-74 and 1978-79, the expansion of the Eurodollar, a rise in public expenditure by African governments following rising commodity prices in early 1970s, the recession in industrial countries and the subsequent commodity price fall, and a rise in real world interest rate are usually mentioned as major factors. Surprisingly, almost all the literature starts its analysis either in the early 1970s or, at best, after independence in 1960s. The main argument in this paper is that one has to go beyond this period not only to adequately explain the current debt crisis but also to propose its possible solution. The conclusion that emerges from such analysis is that the African debt problem is essentially a trade problem. Thus, long-run solution to debt points to the importance of addressing trade and trade related structural problems in the continent.
Topic:
Development and International Trade and Finance
Political Geography:
Africa

309. (Re)Distribution of Personal Incomes, Education and Economic Performance Across Countries

Author:
Günther Rehme
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In many OECD countries income inequality has risen, but surprisingly redistribution as well. The theory attributes this partly to the redistributive effect of education spending. In the model income inequality and growth depend in an inverted U-shaped way on education. To maintain a given level of human capital it is shown that a less efficient schooling technology requires more resources, which lowers pre-tax and post-tax income inequality as well as growth. Using consistently defined income data from the Luxembourg Income Study suggests that there is a negative relationship between growth and income inequality in rich countries. It is argued that using some unadjusted inequality measures in growth regressions may yield estimates that are biased upwards. The evidence suggests that a rich country would raise growth with lower pre-tax and post-tax inequality if it spent more on education.
Topic:
Development, Economics, and Education

310. Fiscal Policy, Growth and Poverty Reduction in Uganda

Author:
Steve Kayizzi-Mugerwa
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
After more than a decade of economic decline and civil war, Uganda was able to return to economic growth thanks to the policies pursued by Museveni's National Resistance Movement which elicited considerable donor support. They include macroeconomic reforms, public sector restructuring, privatisation and decentralization, all with emphasis on poverty reduction. The government recognises that fiscal policy is the key to success and much effort has, in the past decade, gone towards fiscal reforms and the improvement of institutional capacities. Still, in a country with limited finances and a thin tax base the competition for resources has been stiff. While the government has been able to embark on initiatives such as universal primary education, thanks to an improved revenue base and donor support, the decentralization drive is hindered by serious fiscal constraints at the local level.
Topic:
Development, Government, and Political Economy
Political Geography:
Uganda and Africa