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301. How Economic Growth Reduces Poverty: A General Equilibrium Analysis for Indonesia

Author:
Peter G. Warr and George Fane
Publication Date:
02-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Do changes in poverty and inequality depend directly on the rate of economic growth, or does the source of the growth also matter? This paper uses a computable general equilibrium model of the Indonesian economy to explore this question by simulating increases in GDP arising from (i) technical progress in each of seven broad sectors, and (ii) the accumulation of each of six types of physical and human capital. The more a given amount of growth raises the returns to the factors that are more important sources of income for the poor than for the non-poor, the more it reduces poverty and inequality. Different sources of growth affect poverty and inequality differently because they affect factor returns differently, and because the poor and the non-poor own factors in different proportions.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Indonesia and Southeast Asia

302. Hardening a Soft Budget Constraint Through 'Upward Devolution' to a Supranational Institution: The Case of Italian State-Owned Firms and the European Union

Author:
Elisabetta Bertero and Laura Rondi
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper contributes to the literature on the role of decentralization in hardening the budget constraint of public enterprises. Following Qian and Roland the study adopts a 'federalist' approach. However, it interprets federalism as the upward devolution of domestic economic policies to a supranational authority and examines its role in disciplining public enterprises operating in a soft budget regime. The methodology is a case study of the shift in budget regime in Italy in the late 1980s. The study shows that a determinant role in driving this shift was played by European economic policies. The discipline imposed by participation in the EMS, the Single Market Programme and, later, the requirements to enter the EMU pushed the Italian government toward a much tougher approach to its budget deficit.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
Europe

303. Privatization in sub-Saharan Africa: On Factors Affecting Implementation

Author:
Steve Kayizzi-Mugerwa
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Although privatization has been a key feature of economic policy in Africa since the early 1990s its sequencing and intensity have varied from country to country, with donor leverage being an important determinant of the pace of implementation. However, although many privatization schemes were undertaken in response to donor demands for reduced government participation in business, the process soon achieved its own dynamics. The positive view of privatization suggests that it went ahead, in spite of domestic opposition, because politicians and bureaucrats perceived real benefits to themselves and their supporters. They could influence the sales to their own benefit, while, on the other hand, a more focused public sector improved service delivery.
Topic:
Development, Economics, and Government
Political Geography:
Africa

304. Understanding the Silicon Valley Phenomena

Author:
Masahiko Aoki and Hirokazu Takizawa
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper analyzes the "Silicon Valley model" as a novel economic institution in the domain of technological product system innovation such as computers. We focus on the information structural relationship as well as governance relationships between venture capitalists and a cluster of entrepreneurial firms. The informational conditions under which the Silicon Valley model is efficient are identified, leading to understanding the significance of standardization of interfaces, modularization and information encapsulation. We then examine the governance/incentive aspect of the model by integrating the models by Aoki (2001) and Baldwin and Clark (2000) to give comparative statics results regarding the optimal number of entrepreneurial firms competing in the same component product. The analyses enable us to evaluate the applicability of the model beyond specific localities and industries.
Topic:
Economics and Industrial Policy
Political Geography:
United States

305. Household Income Dynamics in Rural China

Author:
Martin Ravallion and Jyotsna Jalan
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
It is well known in theory that certain forms of non-linear dynamics in household incomes can yield poverty traps and distribution-dependent growth. The potential implications for policy are dramatic: effective social protection from transient poverty will be an investment with lasting benefits, and pro-poor redistribution will promote aggregate economic growth. We test for non-linearity in the dynamics of household expenditures and incomes using panel data for rural south-west China. While we find evidence of non-linearity, there is no sign of a dynamic poverty trap. Existing private and social arrangements in this setting appear to protect vulnerable households from the risk of destitution. However, the concavity we find in the recursion diagram does imply that the speed of recovery from an income shock is lower for the poor, and that current inequality reduces growth in mean incomes.
Topic:
Development and Economics
Political Geography:
China and Asia

306. Institutional Investors, Corporate Ownership, and Corporate Governance: Global Perspectives

Author:
Stuart L. Gillan and Laura T. Starks
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We examine the role of institutional investors in financial markets and in corporate governance. In many countries, institutional investors have become the predominant players in financial markets and their influence worldwide is growing, chiefly due to the privatization and development of pension fund systems. Moreover, foreign institutional investors are becoming a significant presence, bringing their trading habits and corporate governance preferences to international markets. In fact, we argue that the primary actors prompting change in many corporate governance systems are institutional investors, often foreign institutional investors. In other countries the role of institutional investors is limited. Instead, large blockholders, often in the form of individuals, family groups, other corporations, or lending institutions are the dominant players. We present the theoretical arguments for the involvement of investors in shareholder monitoring and a brief history of institutional ownership and activism in the United States and other countries. We also discuss studies of the efficacy of such activism.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States

307. Inequality and Risk

Author:
Marcel Fafchamps
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
There has been a lot of interest in the risk coping strategies of the poor in the recent literature but little work on the relationship between these strategies and inequality (Fafchamps 1999). Some have begun to suspect that certain risk coping strategies further impoverish the poor (e.g. Dasgupta 1993, Sen 1981). Labor bonding and debt peonage are examples that have been discussed in the literature (e.e. Srinivasan 1989, de Janvry 1981). Patronage, that is, the protection of the poor by the rich in exchange for labor and services, is also suspected of perpetuating poverty (e.g. Platteau 1995, Platteau 1995, Fafchamps and Quisumbing 1999).
Topic:
Development, Economics, and Poverty

308. Do Public Transfers Crowd Out Private Transfers? Evidence from a Randomized Experiment in Mexico

Author:
Pedro Albarran and Orazio P. Attanasio
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper will use the data from the PROGRESA evaluation to show the extent to which such a programme crowds out private transfers. An interesting aspect of the paper is the fact that it can use the randomization (one-third of the villages in the sample were randomized in the programme for evaluation purposes).
Topic:
Development and Economics
Political Geography:
Latin America, North America, and Mexico

309. Redistribution Does Matter Growth and Redistribution for Poverty Reduction

Author:
Hulya Dagdeviren, Rolph van der Hoeven, and John Weeks
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Recent development literature has placed priority on poverty reduction, and on possible growth enhancement from a more equal distribution of assets and income. At the same time, empirical work consistently shows that economic growth is no more than distribution neutral. In that context, this paper explores the relationship among growth, inequality and poverty, and demonstrates the following general conclusions: 1) a redistributive growth path is always likely to be superior to a distribution neutral path ('trickle down') for reducing poverty; 2) a redistributive growth path is always superior if a country's per capita income and inequality are relatively high; and 3) a static redistribution from the rich to the poor is superior to a redistributive growth path in its effect on poverty for most countries, but not for all. The paper then considers policy that might be used to make growth more equitable.
Topic:
Development, Economics, Government, and Poverty

310. Proposals for Curbing the Boom-Bust Cycle in the Supply of Capital to Emerging Markets

Author:
John Williamson
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines what might be done to limit the boom-bust cycle in the flow of capital to emerging markets. Although the paper accepts that some types of capital flow (notably foreign direct investment) are much less problematic in this respect than others (notably short-term bank loans), it argues that influencing the mix would have to be done by capital controls by capital-importing countries rather than supply-side policies. Where supply-side reforms might help is in making some types of flow less unstable: for example, the Buiter/Sibert proposal for a Universal Debt Rollover Option (which needs amendment to alter the term for which rollover might apply); allowing investors with fiduciary responsibilities to hold (though not to buy) bonds of sub-investment grade; penalizing put options in bond contracts and inserting collective action clauses; requiring foreign loans to be denominated in domestic currency; and modifying the remuneration practices of portfolio managers.
Topic:
Economics, Emerging Markets, and International Trade and Finance

311. Ratings since the Asian Crisis

Author:
Helmut Reisen
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The increased importance of rating agencies for emerging-market finance has brought their work to the attention of a wider group of observers - and under criticism. This paper evaluates whether the importance of ratings for developing-country finance has changed since the Asian Crisis and whether rating agencies have modified the determinants for their rating decisions. It also provides an analysis on recent suggestions by the Basel Committee on Banking Supervision, as these are very important for gauging the future role of sovereign ratings for foreign debt finance in developing countries. While the explanatory power of conventional rating determinants has declined since the Asian crisis, recent rating performance for Argentina and Turkey can still be qualified as lagging the markets, as variables of financial-sector strength and the endogenous effects of capital flows on macroeconomic variables seem to remain underemphasized in rating assessments. The market impact of sovereign ratings is predicted to decline as agencies have started to modify their country ceiling policy and as market participants try to exploit bond trading opportunities arising from the lagged nature of ratings. The paper presents theory and evidence to suggest that the Basel II Accord will destabilise private capital flows to the developing countries, if the current proposal to link regulatory bank capital to sovereign ratings is maintained: Assigning fixed minimum capital to bank assets whose risk weights are in turn determined by market-lagging cyclically determined ratings will reinforce the tendency of the capital ratio to work in a pro-cyclical way.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Turkey, Asia, and Argentina

312. Performance of Microfinance Institutions in Burkina Faso

Author:
Youssoufou Congo
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study tests the performance of microfinance institutions (MFIs) in Burkina Faso using indicators such as the sustainable interest rate and the subsidy dependence index. The results indicate that MFIs outreach performance remains very low compared with potential demand, and the factors responsible appear to be both the refusal of most MFIs to mobilize local savings and the high costs of supply of microfinancial services. The results also show that MFIs are not viable and sustainable. Their interest rates are kept low and do not allow them to cover all the costs. In addition, the results indicate that MFIs are dependent on subsidies. However, the oldest MFIs and/or institutions providing deposit services have the lowest subsidy dependence index. It is suggested that more attention should be placed on savings mobilization and ceilings on interest rates should be removed in order to allow MFIs to charge sustainable interest rates.
Topic:
Development and Economics
Political Geography:
Africa

313. Governing Globalization: Issues and Institutions

Author:
Deepak Nayyar and Julius Court
Publication Date:
06-2002
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
It is now more than fifty years since the United Nations system and the Bretton Woods institutions were created. However, the world has changed dramatically during the second half of the twentieth century. The technological revolution in transport and communications has eroded the barriers of distance and time. National economies have become ever more closely integrated through cross-border flows of trade, investment and finance. In the political realm, communism has collapsed and capitalism has emerged triumphant. The context has obviously changed. But thinking about development is also very different. And there is now a myriad of new actors—from transnational firms to NGO—participating in the global economy and polity.
Topic:
Economics, Globalization, Migration, and United Nations

314. Inequality, Growth and Poverty in the Era of Liberalization and Globalization

Author:
Julius Court and Giovanni Andrea Cornia
Publication Date:
11-2001
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Eradicating poverty has become the international community's number one development objective. The overriding target—endorsed at the recent United Nations Millennium Summit by virtually all world leaders—is to reduce the incidence of income-poverty in developing countries from 30 percent to 15 percent between 1990 and 2015. The problem is that that further progress has stalled and the number of people living in poverty has remained at around 1.2 billion people—a fifth of the world's population.
Topic:
Economics, Globalization, International Cooperation, and Poverty

315. Access to Land and Land Policy Reforms

Author:
Alaine de Janvry and Elisabeth Sadoulet
Publication Date:
04-2001
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Who should have access to land? What is the optimum definition of property rights and use rights in each particular context? Is government intervention justified to influence who has access to land and under what conditions? These questions remain, in most developing countries, highly contentious. It is indeed the case that land is all too often misallocated among potential users and worked under conditions of property or user rights that create perverse incentives. As a consequence, investments to enhance productivity are postponed, and responses to market incentives are weakened; many poor rural households are unable to gain sufficient (or any) access to land when this could be their best option out of poverty; land remains under-used and often idle side-by-side with unsatisfied demands for access to land; land is frequently abused by current users, jeopardizing sustainability; and violence over land rights and land use is all too frequent. With population growth and increasing market integration for the products of the land, these problems tend to become more acute rather than the reverse. As a result, rising pressures to correct these situations have led many countries to reopen the question of access to land and land policy reforms. While large scale expropriative and redistributive land reforms are generally no longer compatible with current political realities, there exist many alternative forms of property and use rights that offer policy instruments to alter the conditions of access to land and land use. A rich agenda of land policy interventions thus exists to alter who has access to land and under what conditions for the purposes of increasing efficiency, reducing poverty, enhancing sustainability, and achieving political stability.Historically, the most glamorous path of access to land has been through statemanaged coercive land reform. In most situations, however, this is not the dominant way land was accessed by current users and, in the future, this will increasingly be the case. Most of the land in use has been accessed through private transfers, community membership, direct appropriation, and market transactions. There are also new types of state-managed programmes of access to land that do not rely on coercion. For governments and development agents (NGOs, bi-lateral and international development agencies), the rapid decline in opportunities to access land through coercive land reform should thus not be seen as the end of the role of the state and development agents in promoting and altering access to land. The following paths of access to land in formal or informal, and in collective or individualized ownership can, in particular, be explored (Figure 1): (1) Intra-family transfers such as inheritances, inter-vivo transfers, and allocation of plots to specific family members; (2) access through community membership and informal land markets; (3) access through land sales markets; and (4) access through specific non-coercive policy interventions such colonization schemes, decollectivization and devolution, and land market-assisted land reform. Access to land in use can also be achieved through land rental markets (informal loans, land rental contracts) originating in any of these forms of land ownership. Each of these paths of access to land has, in turn, implications for the way land is used. Each can also be the object of policy interventions to alter these implications of land use. The focus of this policy brief is to explore each of these paths and analyse how to enhance their roles in helping increase efficiency, reduce poverty, increase equality, enhance sustainability, and achieve political stability.
Topic:
Demographics, Economics, and Government
Political Geography:
United States

316. EMU Effects on International Trade and Investment

Author:
Harry Flam and Per Jansson
Publication Date:
04-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The partial effect of nominal exchange rate volatility on exports from each EMU member to the rest of the EMU is estimated on annual data for 1967-97, using modern time-series methods. The long-run relations between exchange rate volatility and exports are mostly negative and in several cases insignificantly different from zero. Thus, these estimates do not provide much support for the hypothesis that the elimination of nominal exchange rate volatility will significantly increase trade within the EMU. However, the EMU will presumably lead to geographical concentration of production and therefore indirectly to increased trade within the EMU and, during a transitional stage, to increased foreign direct investment, both within the EMU and between the EMU and the rest of the world.
Topic:
Economics, Government, International Political Economy, and International Trade and Finance
Political Geography:
Europe

317. The Impact of EMU on European Transition Economies

Author:
David Begg
Publication Date:
04-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
An interesting theory of transition must give a convincing account of structural adjustment and supply side improvement. In this paper, I discuss the incentives for government to undertake costly supply side improvement and how these relate to incentives governing the design of monetary and fiscal policy during transition. The government cares about deviations of inflation, output and government spending from their ideal levels, is subject to a budget constraint in which inflation yields some real revenue, and recognizes the distortionary effects of excess levels of taxation. Costly structural adjustment enhances future output by reducing supply side distortions.
Topic:
Economics, Government, and International Political Economy
Political Geography:
Europe

318. Information Technology and Economic Growth: A Cross-Country Analysis

Author:
Matti Pohjola
Publication Date:
01-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores the impacts of information technology investment on economic growth in a cross-section of 39 countries in the period 1980-95 by applying an explicit model of economic growth, the augmented version of the neoclassical (Solow) growth model. The results based on the full sample of 39 countries indicate that physical capital is a key factor in economic growth in both developed and developing countries. Its influence is even bigger than what is implied by the income share of capital in national income accounts. But neither human capital nor information technology seems to have a significant impact on GDP growth. However, investment in information technology has a strong influence on economic growth in the smaller sample of 23 developed (OECD) countries. Its impact is almost as large as that of the rest of the capital stock. But since the share of IT investment in GDP, although growing, is still much lower than the share of non-IT investment, the net social return to IT capital is much larger than the return to non-IT capital: 60-80 per cent versus 4 per cent, respectively. The estimated return is very high; about twice the return to equipment investment and 10-12 times the return to R obtained in similar models as the one applied here.
Topic:
Economics, Emerging Markets, and Science and Technology

319. Natural Resources and Economic Growth: A Nordic Perspective on the Dutch Disease

Author:
Thorvaldur Gylfason
Publication Date:
10-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper begins by offering a quick glance of the Nordic economies and of some aspects of their economic growth performance and natural resource dependence since 1970. Thereafter, it reviews some of the main symptoms of the Dutch disease, and then considers whether these symptoms are observable in some of the Nordic countries in view of their abundant natural resources. The experience of Iceland and its fish seems an obvious point of departure. The paper then discusses the less obvious case of Norway and its oil (and fish!) and, at last, also reviews some possible linkages between forest resources and economic growth in Finland.
Topic:
Economics, Environment, and Government
Political Geography:
Europe, Finland, Norway, and Dutch

320. Development Discontinuities: Leaders and Intermediaries in Producers' Associations

Author:
Tito Bianchi
Publication Date:
10-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The development literature considers associations an important economic development tool that allows producers to pursue their economic welfare collectively and through participatory means. This paper comparatively analyses the experience of three associations of agricultural producers in the underdeveloped regions of Brazil and Italy that were successful in this economic development task. Their experience, however, challenges a commonly held view about the participatory nature of associations.
Topic:
Development and Economics
Political Geography:
Europe, Brazil, South America, and Latin America

321. Resource-Led Growth — A Long-Term Perspective: The Relevance of the 1870-1914 Experience for Today's Developing Economies

Author:
Ronald Findlay and Mats Lundahl
Publication Date:
07-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Resource-Led Growth – A Long-Term Perspective surveys the 1870-1914 experience of growth in resource-rich economies: the so-called regions of recent settlement, some tropical countries and some mineral-based export economies. First, three contrasting stylized views of resource-led development are presented. Thereafter the picture of international trade in primary products and the migration of production factors between 1870 and 1914 is sketched. The third section presents some models that may be used to analyse trade and factor movements in the context of resource-rich (staples) economies and provides some details of the experience of fifteen countries: Canada, the United States, Australia and Argentina among the regions of recent settlement, Brazil, Costa Rica, Colombia, Ceylon, Malaya, Burma, Siam and the Gold Coast in the tropical group, and Bolivia, Chile and South Africa among the mineral exporters.
Topic:
Economics, Environment, and International Political Economy
Political Geography:
United States, Canada, South Africa, Burma, Chile, and Bolivia

322. Group Behaviour and Development

Author:
Frances Stewart, Judith Heyer, and Rosemary Thorp
Publication Date:
06-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
A very large amount of activity occurs within groups (that is within families, firms, co-operatives, communities or governments). Yet most economic analysis focuses on market transactions between these agents. The purpose of the study is to analyse within group behaviour. Evidence suggests some groups perform well from the perspective of efficiency, equity and well-being, while others perform poorly. The study aims to identify the main causes for these different outcomes, developing a preliminary analysis of modes of group behaviour, and influences on them.
Topic:
Economics, Education, and Emerging Markets

323. Economic Theories of the Household: A Critical Review

Author:
Päivi Mattila-Wiro
Publication Date:
04-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The aim of this paper is to review the principal assumptions and aspects of the unitary household model and collective models of household behaviour. Empirical studies are presented to assess whether the theories can offer adequate descriptions of household behaviour and to examine the types of policy implications that can be drawn from these. The paper concludes that the models reviewed lack the analytical tools to provide an understanding of the reality of households. Theories are unrealistic and therefore are of little use in the design of policies or projects which endeavour to help people
Topic:
Economics, Education, and Emerging Markets

324. Inequality in Income and Access to Education: A Cross-Country Analysis

Author:
Daniele Checchi
Publication Date:
04-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In the current debate on the relationship between inequality in income distribution and growth one of the possible link works through the access to education. After reviewing this debate, a formal model shows how the imperfection of financial markets makes educational choices dependent on the distribution of family incomes. This leads to two testable predictions in the analysis of aggregate data on school enrolments: a negative (linear) relation with the Gini coefficient on incomes distribution; and a positive dependence on public resources invested in education and/or on skill premium in the labour market. These predictions are then tested on a (unbalanced) panel of 102 countries for the period 1960-90. The main findings of this analysis are that, once we control for the degree of development with the (log of) per capita output, financial constraints seem mainly relevant in limiting the access to secondary education. However, when considering gender differences, there is evidence that female participation in education is more strongly conditioned by family wealth, starting from primary education. On the contrary there is no clear evidence of a relevant impact of invested resources, but at the tertiary level.
Topic:
Economics, Education, and Emerging Markets

325. Liberalization, Globalization, and Income Distribution

Author:
Giovanni Andrea Cornia
Publication Date:
03-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Recent mainstream analyses of changes in income distribution over the post World War II period have concluded that income inequality within countries tends to be stable, that there is no strong association between growth and inequality and that, therefore, poverty is best reduced through growth-oriented, rather than distributive, policies.
Topic:
Economics, Globalization, and International Political Economy

326. Wage Reform, Soft Budget Constraints and Competition

Author:
Jian Sun
Publication Date:
02-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Since the beginning of the Chinese economic reforms in 1978, there has been a series of effort to reform the labour compensation practice in state-owned enterprises to strengthen the link between pay and productivity. Despite the reforms, however, rapid increases in wage rates occurred in state-owned enterprises. Moreover, although state-owned enterprises have much lower productivity gains than non-state enterprises, they pay substantially higher wages and have faster wage growth.
Topic:
Economics, Globalization, Industrial Policy, and International Political Economy
Political Geography:
China and Asia

327. The Asian Currency Crisis: Origins, Lessons and Future Outlook

Author:
Abdur Chowdhury
Publication Date:
02-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
What started in the summer of 1997 as a regional economic and financial crisis in East and Southeast Asia had developed into a global financial crisis within the span of a year. This crisis followed the crisis in the European Monetary System in 1992–3 and the Mexican peso crisis in 1994–5. However, unlike the previous two crises, the scale and depth of the Asian crisis surprised everyone. One obvious reason for this is East and Southeast Asia's track record of economic success. Since the 1960s, no other group of countries in the world has produced more rapid economic growth or such a dramatic reduction in poverty. Given so many years of sustained economic performance the obvious question is: how could events in Asia unfold as they did?
Topic:
Economics and International Political Economy
Political Geography:
Europe, Asia, and Southeast Asia

328. The Weightless Economy in Economic Development

Author:
Danny Quah
Publication Date:
01-1999
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Can the increasing significance of knowledge-products in national income—the growing weightless economy—influence economic development? Those technologies reduce "distance" between consumers and knowledge production. This paper analyzes a model embodying such a reduction. The model shows how demand-side attributes—consumer attitudes on complex goods; training, education, and skills for consumption (rather than production)—can importantly affect patterns of economic growth and development. Evidence from the failed Industrial Revolution in 14th-century China illustrates the empirical relevance of the analysis.
Topic:
Development, Economics, and Science and Technology
Political Geography:
China

329. Social and Economic Policies to Prevent Complex Humanitarian Emergencies

Author:
Jeni Klugman
Publication Date:
01-1999
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Complex humanitarian emergencies have caused widespread death and suffering over the last two decades. While recent tragedies in Bosnia, Rwanda and Angola have made the world more aware of the terrible human toll involved, the international community has yet to develop effective policy responses to stem such crises.
Topic:
Conflict Resolution, Development, Economics, Genocide, Human Rights, Migration, and Politics
Political Geography:
Bosnia, Rwanda, and Angola

330. Information Technology and Economic Development: An Introduction to the Research Issues

Author:
Matti Pohjola
Publication Date:
11-1998
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
There is substantial evidence that new information technologies are in many ways transforming the operations of modern economies. More than half of employees use a computer at work in the most advanced industrial countries. About 10 per cent of the value of all private investment in fixed non-residential capital is devoted to computers and peripheral equipment in the United States and some other economies. This share goes up to 25 per cent when investment in information processing equipment is included. Nevertheless, all spending on information technology, including hardware, software and services, does not amount to more than 3-4 per cent of nominal GDP in these countries. The share is, however, increasing rapidly, indicating that a steady state has not yet been reached.
Topic:
Economics, Government, and Science and Technology
Political Geography:
United States

331. Computers and Labour Markets: International Evidence

Author:
Francis Kramarz
Publication Date:
10-1998
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The rapid diffusion of computers has widely changed the consequences of computer use on the labour market. While at the beginning of the eighties knowledge of computers was an obvious advantage in a career, this same knowledge is now so commonplace that the inability to use these tools is widely seen in many industries as a professional handicap. In relation to such drastic transformations, changes in the North American wage structure during the eighties in favour of the better educated have been interpreted by many analysts as evidence of skill-biased technical change. Evidence outside the US, and in particular in Europe, seems to support the idea that similar transformations affected most other labour markets.
Topic:
Economics, Government, and Science and Technology
Political Geography:
United States and Europe

332. Underdevelopment, Transition and Reconstruction in Sub-Saharan Africa

Author:
Tony Addison
Publication Date:
10-1998
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Reconstructing Africa's war damaged economies is an urgent task. This is especially so in a group of countries - Angola, Eritrea, Ethiopia, Guinea-Bissau, and Mozambique - which must also complete their economic and political transition from state socialism. Somalia, which shares their common history, must eventually be rebuilt. All of these countries must address their deep problems of underdevelopment and poverty. The challenges are therefore three-fold: to overcome underdevelopment, to make the transition from state socialism, and to reconstruct economies and societies.
Topic:
Democratization, Development, Economics, and Emerging Markets
Political Geography:
Africa, Mozambique, Ethiopia, Somalia, Angola, Eritrea, and Guinea-Bissau

333. Resource Abundance and Economic Development: Improving the Performance of Resource-Rich Countries

Author:
Richard M. Auty
Publication Date:
09-1998
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Since the 1960s the resource-rich developing economies have under-performed compared with the resource-deficient economies. This paper explains why and outlines the reforms that are required in order to achieve environmentally and socially sustainable resource-rich development. It argues that structural change in the resource-rich countries causes the tradeable sector to shrink vis-à-vis the nontradeables sector (that includes protected manufacturing) in a manner that is not sustainable. This adverse trend in the production structure is associated with policies to close the economy and create discretionary rents behind protective barriers that result in the cumulative misallocation of resources. The build-up of produced capital and skills is slower than in the successful resource-deficient countries. Overall, the inherently slower and less egalitarian economic growth trajectory of the resource-rich countries is intensified and the end result is usually a growth collapse. The collapse causes all forms of capital, including institutional, social and natural capital, to run down. Economic reform is therefore protracted and it may take in excess of one generation to restore sustainable rapid growth. The adverse features of resource-rich development tend to be more pronounced in the smaller countries. They are also heightened where the resource rents accrue mainly to the central government, as in the mineral economies and in the slow-reforming transition economies. Successful reform requires not only appropriate macro and micro policies, but also the construction of institutions to limit the scope for governments to misallocate resources. Part of the explanation for the superior performance of the resource-deficient countries is that their spartan endowment of natural capital acts as a constraint on government failure by placing a premium on the need to nurture scarce resources, including skills, institutions and social capital, and to achieve an efficient allocation of capital.
Topic:
Economics, Environment, Government, and International Political Economy

334. The Role of Knowledge and Capital in Economic Growth

Author:
Sergio Rebelo
Publication Date:
09-1998
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Starting from the celebrated neoclassical (Solow) model of economic growth, this paper discusses new ideas in growth theory focussing on how to make sustained growth feasible. It first reviews models that broadened the notion of capital to include human capital and the state of technology. These extensions of the neoclassical theory are not very satisfying at a descriptive level because productivity growth is associated with either human or physical capital accumulation in a way that does not interact with the invention of new technologies.
Topic:
Economics and Science and Technology