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551. Private Donations for International Development

Author:
John Micklewright and Anna Wright
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Charitable donations by private individuals and firms can help fund the Millennium Development Goals. What are the prospects for increasing donations for international development, whether from small-scale donors, the super-rich (as in the recent gifts by Bill Gates and Ted Turner), or the corporate sector? The paper starts by reviewing how large are the sums currently given in OECD countries (including gifts of time) and the problems development has in competing with domestic causes. It then looks at possibilities for the future, including tax deductions, the new 'global funds', corporate social responsibility and 'cause-related marketing', the use of the Internet, and long-term donor education.
Topic:
Development, International Cooperation, International Trade and Finance, and Third World

552. Revenue Potential of the Currency Transaction Tax for Development Finance: A Critical Appraisal

Author:
Machiko Nissanke
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper assesses the potential of currency transaction taxes (CTT, widely known as the Tobin tax), to raise revenue for global development. Though Tobin proposed and others assessed CTTs in terms of reducing exchange rate volatility and improving macroeconomic policy environments, this paper considers the CTT first and foremost from the standpoint of revenue. With a view of establishing a 'permissible' range of tax rates to obtain realistic estimates of revenue potential, it first reviews the debate over the effects of CTT on market liquidity and the efficiency of foreign exchange markets, and assesses the Spahn proposal for a two-tier currency tax. It then moves to a discussion of the technical and political feasibility of CTT, followed by an evaluation of several new proposals, such as those advanced by Schmidt and Mendez. The paper presents revenue estimates from CTT in light of recent changes in the composition and structure of foreign exchange markets.
Topic:
Development, Economics, Globalization, and International Trade and Finance

553. A Global Lottery and a Global Premium Bond

Author:
Tony Addison and Abdur R. Chowdhury
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The world lottery market now amounts to at least US$126 billion in sales. World market sales for all gaming products (public, charitable and commercial) total some US$1 trillion, of which Internet gambling accounts for US$32 billion. This paper assesses the prospects for harnessing this large and growing market for the purposes of development finance by means of a global lottery and a global premium bond (with the successful UK scheme providing a model for the latter). Each has different strengths: the global lottery can add to the supply of grant finance for development, while the global premium bond could be an attractive savings instrument for ethical investors. The paper concludes that global versions of both a lottery and a premium bond are viable and complementary in mobilizing more development finance.
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
United Kingdom

554. The International Finance Facility: The UK HM Treasury-DFID Proposal to Increase External Finance to Developing Countries

Author:
George Mavrotas
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper discusses the International Finance Facility (IFF), a joint HM Treasury-DFID proposal to increase development aid substantially for the Millennium Development Goals to be achieved by 2015. The main conclusion of the paper is that the proposed IFF is a promising, forward-looking and creative proposal for it implies a substantial increase in fresh, predictable and stable aid as well as a robust financial structure. However, there are a number of concerns about potential shortcomings of the proposal, namely its underlying assumptions about continuous commitment on behalf of the donor community towards the implementation of the IFF during the life of the Facility and most importantly its heavy reliance on political coordination among donor countries participating in the proposed scheme. Potential absorptive capacity constraints in IFF aid-recipient countries may be also relevant. Achieving its huge political task as well as alleviating the crucial constraints regarding its successful implementation seem to be the main challenges this innovative proposal needs to deal with in the near future.
Topic:
Development, International Cooperation, and International Trade and Finance
Political Geography:
United Kingdom and Europe

555. The Economic Integration of Immigrants in the United States: Lessons for Policy

Author:
George J. Borjas
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The most important economic feature of immigration to the United States in the post-1965 period has been a significant deterioration in the economic performance of successive immigrant waves. The policy reaction to this trend would obviously differ if the entry wage disadvantage disappeared quickly, as the immigrants assimilated in the American economy and acquired skills and information valuable in the American labour market. This paper examines the determinants of economic assimilation, and discusses how the experience of earlier immigrant waves can provide valuable information about the assimilation process the new immigrants will likely experience.
Topic:
Economics and Migration
Political Geography:
United States and America

556. Convergence Club Empirics: Some Dynamics and Explanations of Unequal Growth of Unequal Growth across Indian States

Author:
Sanghamitra Bandyopadhyay
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper documents the convergence of incomes across Indian states over the period 1965 to 1998. It departs from traditional analyses of convergence by tracking the evolution of the entire income distribution, instead of standard regression and time series analyses. The findings reveal twin-peaks dynamics-the existence of two income convergence clubs, one at 50 per cent, another at 125 per cent of the national average income. Income disparities across states seem to have declined over the 1960s, only to increase over the subsequent three decades. The observed polarization is strongly explained by the disparate distribution of infrastructure, and that of education, and to an extent by a number of macroeconomic indicators; that of capital expenditure and fiscal deficits.
Topic:
Economics and Emerging Markets
Political Geography:
South Asia and India

557. Institutional Quality, Reforms and Integration in the Maghreb

Author:
Mina Baliamoune-Lutz and Tony Addison
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using panel data this paper examines the effects of institutions on the success of reforms and integration in the Maghreb. Institutional quality measures are developed using fuzzy-set based transformations of civil liberties and political rights. We posit that these transformations are quite appropriate given the nature of freedom indicators. We show that using fuzzy-set transformed measures provides useful insights regarding the quality of institutions in Algeria, Morocco and Tunisia. Furthermore, our empirical results suggest that institutions play a significant role in the success or failure of economic reforms. This conclusion is in clear contrast to views that propose a sequencing in which civil liberties and political rights should come after economic reforms are already in place and fully operational.
Topic:
Economics and Emerging Markets
Political Geography:
Algeria, North Africa, Morocco, and Tunisia

558. Bankruptcy Proceedings for Sovereign State Insolvency and their Effect on Capital Flows

Author:
Jonathan Thomas
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper examines the main issues involved in translating domestic bankruptcy procedures to the sovereign context. It considers some of the principles by which domestic bankruptcy procedures operate, and the extent to which they apply to international lending. Two recent proposals are considered in more detail, that of Krueger ('A New Approach to Sovereign Debt Restructuring') and that of Pettifor ('Resolving International Debt Crises - The Jubilee Framework for International Insolvency). The paper also considers the question of the ex ante effects of a procedure which makes default less costly, and concludes that despite a negative impact on the ability to borrow, the overall welfare effect need not be negative.
Topic:
Debt, International Political Economy, and Sovereignty

559. A Decomposition Analysis of Regional Poverty in Russia

Author:
Anthony Shorrocks and 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 and Poverty
Political Geography:
Russia, Europe, and Asia

560. Adverse Geography and Differences in Welfare in Peru

Author:
Javier Escobal and Máximo Torero
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In Peru, a country with an astonishing variety of different ecological areas, with 84 different climate zones and landscapes, with rainforests, high mountain ranges and dry deserts, the geographical context may not be all that matters, but it could be very significant in explaining regional variations in income and poverty. The major question this paper tries to answer is: what role do geographic variables, both natural and man-made, play in explaining per capita expenditure differentials across regions within Peru? How have these influences changed over time, through what channels have they been transmitted, and has access to private and public assets compensated for the effects of an adverse geography?
Topic:
Human Rights and Migration
Political Geography:
Peru

561. Illegal Immigration, Human Trafficking, and Organized Crime

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 and Human Welfare
Political Geography:
United States, Europe, Turkey, East Asia, Greece, Asia, Latin America, Central America, North America, Mexico, Southeast Asia, Western Europe, and West Asia

562. Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations

Author:
Mark McGillivray
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper surveys recent research on aid and growth. It also provides an overview of research on inter-recipient aid allocation. The overall focus of the paper is on the relevance of these issues for poverty-efficient aid, defined as a pattern of inter-recipient aid allocation which maximises poverty reduction. It identifies a range of poverty- reducing criteria on which aid allocation or selectivity might be based, calling for a broader selectivity framework. The paper argues that this framework should be built on a recognition that the effectiveness of aid in increasing growth, and by implication in reducing poverty, is contingent on a range of factors in addition to the quality of recipient country policy regimes. These factors include political stability, democracy, post conflict reconstruction, and economic vulnerability.
Topic:
Development, Political Economy, and Poverty

563. Reforms, Remoteness and Risk in Africa: Understanding Inequality and Poverty during the 1990s

Author:
Luc Christiaensen, Lionel Demery, and Stefano Paternostro
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study traces the interactions between economic growth, income inequality and consumption poverty in a sample of African countries during the 1990s. It draws on the much-improved household data sets now available in the region. It finds that experiences have varied: some countries have seen sharp falls in income poverty; others have witnessed marked increases. Economic growth has been 'pro-poor' in that the incomes of poor households have typically grown at similar or faster rates than average income. But the aggregate numbers hide significant and systematic distributional effects which have caused some groups and regions to be left behind. The paper explores the contours of these effects, and draws three key conclusions. First, agricultural market liberalization has been conducive to reductions in rural poverty. Second, market connectedness is crucial for poor producers to take advantage of the opportunities offered by economic growth. Some regions and households by virtue of their sheer remoteness have been left behind when growth picks up. The availability of infrastructure (especially roads) and proximity to markets are crucial. And finally risks, such as rainfall variations and ill health are found to have profound effects on poverty outcomes, underscoring the significance of social protection in poverty reduction strategies in Africa.
Topic:
Economics and Poverty
Political Geography:
Africa

564. Measurement of a Multidimentional Index of Globalization and its Impact on Income Inequality

Author:
Almas Heshmati
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we present two composite indices of globalization. The first is based on the Kearney/Foreign Policy magazine and the second is obtained from principal component analysis. They indicate which countries have become most globalized and show how globalization has developed over time. The indices are composed of four components: economic integration, personal contact, technology and political engagement, each generated from a number of variables. A breakdown of the index into major components provides possibilities to identify sources of globalization and associate it with economic policy measures. The empirical results show that a low rank in the globalization process is due to political and personal factors with limited possibility for the developing countries to affect. The high ranked developed countries share similar patterns in distribution of various components. The indices were also used in a regression analysis to study the causal relationship between income inequality and globalization. Globalization indices explain only 7 to 11 per cent of the variations in income inequality among countries.
Topic:
Development, Economics, and Globalization

565. Asylum Policy in the West: Past Trends, Future Possibilities

Author:
Matthew J. Gibney and Randall Hansen
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This article examines the policy responses of Western countries in the realm of asylum. We begin by explaining the reasons why the asylum issue has made its way up the political agendas of liberal democratic countries in recent years. While applications for asylum have risen in the last two decades, we also highlight the way rights-based constraints and financial costs have contributed to controversy around the issue. We then examine in detail the major policy responses of states to asylum, grouping them into four main categories: measures aiming to prevent access to state territory, measures to deter arrivals, measures to limit stay, and measures to manage arrival. Moving then to explore the efficacy of these measures, we consider the utility of policy making from the viewpoints of states, asylum seekers and refugees, and international society. The article concludes with the presentation of four new directions in which policies could move in order better to square the professed interests of Western states with the needs of refugees for protection.
Topic:
Human Rights and Migration
Political Geography:
Europe and North America

566. Quo Vadis? Inequality and Poverty Dynamics across Russian Regions

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, and Poverty
Political Geography:
Russia, Europe, and Asia

567. Spatial Inequality for Manufacturing Wages in Five African Countries

Author:
Oliver Morrissey and Dirk Willem te Velde
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper uses data on individual earnings in manufacturing industry for five African countries in the early 1990s to test whether firms located in the capital city pay higher wages than firms located elsewhere, and whether such benefits accrue to all or only certain types of workers. Earnings equations are estimated that take into account worker characteristics (education and tenure) and relevant firm characteristics (notably size and whether foreign owned). Any location effect identified is therefore additional to appropriate control variables. There are two main findings. First, we find evidence of a 'pure capital city premium' equivalent to between 12 per cent and 28 per cent of nominal average earnings in the five countries. In some countries this location premium exceeds plausible consumer price differentials, between the capital and other urban areas. This does suggest that real (purchasing power) manufacturing wages are higher in the capital city (although this real premium is no more than ten per cent). Second, we find that skilled workers earn a higher wage premium in the capital city than those less skilled. However, this is not because of location effects on earnings per se, but rather because of other firm characteristics of firms located in the capital city, such as size and foreign ownership. This suggests that spatial inequality in itself does not directly contribute to skilled–less-skilled wage differentials.
Topic:
Economics and Industrial Policy
Political Geography:
Africa

568. Regional Poverty and Income Inequality in Central and Eastern Europe: Evidence from the Luxembourgh Income Study

Author:
Michael Förster, David Jesuit, and Timothy Smeeding
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper reports levels of income inequality and poverty in four Central and Eastern European countries: the Czech Republic, Hungary, Poland and Russia. Unlike many previous researchers who examine transition economies, we aggregate the detailed individual-level income surveys made available through the efforts of the Luxembourg Income Study at the regional level of analysis. Although national-level investigations have contributed much to our understanding of the income distribution dynamics, these studies mask intracountry variance in levels of income inequality and thus may not capture the true distribution of household income and accurately reflect individual wellbeing. Accordingly, we compute summary measures of inequality and relative poverty rates, using both local and national relative poverty lines, for the most recent waves of data available. We offer comparisons between regional and national median incomes and assess levels of inter- and intraregional income inequality. In addition, we make comparisons to regions within Western European countries and find that, contrary to what is often asserted, interregional disparities in Central and Eastern Europe countries are not as large as those found in some Western European countries.
Topic:
Development and Poverty
Political Geography:
Russia, Europe, Eastern Europe, Poland, Hungary, Czech Republic, and Luxembourg

569. Is the Brain Drain an Unmitigated Blessing?

Author:
Riccardo Faini
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Increasingly, immigration policies tend to favour the entry of skilled workers, raising substantial concerns among sending countries. The 'revisionist' approach to the analysis of the brain drain holds that such concerns are largely unwarranted. First, sustained migratory flows may be associated with an equally large flow of remittances. Second, migrants may return home after having acquired a set of productive skills. Finally, the ability to migrate abroad may boost the incentive to acquire skills by home residents.
Topic:
Development, Education, and Migration

570. Some Welfare Implications of 'Who Goes First?' in WTO Negotiations

Author:
Basudeb Guha-Khasnobis
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We envisage a logical framework to explain why some trade negotiations are delayed because parties differ on who should 'go first'. In our model, there are substantive welfare implications depending on which party sets tariff rates (or subsidies) first in a strategic optimization exercise. When knowledge about cost levels are incomplete or missing, and hence must be guessed with a probability, the chances of conflict regarding who goes first are extremely high in the situation modeled in this paper. As an institution with some power to set the rules of negotiations, the WTO should be able to anticipate such conflicts in upcoming negotiations. It can then set the rule (in this case, dictate who should go first) depending on whose interest it wants to protect. There is a wide range of choices for the WTO in this regard: OECD consumer's surplus, OECD producers' loss, net exports of developing countries, firm profits, or even, world welfare as the sum of all these components.
Topic:
Development, International Organization, International Political Economy, and International Trade and Finance

571. Who Gains from Tariff Escalation?

Author:
Basudeb Guha-Khasnobis
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
With the help of a simple model of production and trade, we examine the differential impact of tariff escalation on skilled and unskilled wages in an economy. Our findings provide a lobbying-based explanation of the prevalence of tariff escalation in developed countries. It also predicts the possible response of a developing country and shows how similar lobbying activity in that country can slow the pace of liberalization of service sector trade.
Topic:
Development, Economics, and International Trade and Finance

572. International Trade, Location and Wage Inequality in China

Author:
Songhua Lin
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Models of economic geography predict that transportation costs directly affect demand for goods and the supply of intermediate inputs. One of the reasons that international trade is concentrated in the coastal provinces of China is that they have lower transportation costs in transporting goods to other countries than do provinces in the interior. This paper examines the relationship between the provincial wage rate and each province's access to international markets, and to suppliers of intermediate inputs. A gravity equation is first estimated to construct these 'market access' and 'supplier access' variables. In the second stage, the effect of market access and supplier access on the wage rate is estimated. It is found that about one quarter of the provincial wage differences in the coastal provinces and 15 per cent of the wage differences in the interior provinces can be explained by these economic geography variables.
Topic:
Industrial Policy and International Trade and Finance
Political Geography:
China, Israel, and East Asia

573. Economic Polarization Through Trade: Trade Liberalization and Regional Growth in Mexico

Author:
Andrés Rodríguez-Pose and Javier Sánchez-Reaza
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper analyses the impact trade liberalization and economic integration have had on regional growth and regional disparities in Mexico over the last two decades. It is highlighted that the passage from an import substitution system to membership of the General Agreement on Tariffs and Trade (GATT) first, and to economic integration in the North American Free Trade Agreement (NAFTA) later, has been associated with greater concentration of economic activity and territorial polarization. The analysis also shows that these changes herald a period of transition between two growth models. Regional growth in the final stages of the import substitution period was mainly characterized by convergence and linked to the presence of oil and raw materials and proximity to Mexico City. Economic liberalization and regional integration in NAFTA has been related to regional divergence, a reduction of the importance of Mexico City as the main market and to the emergence of an economic system in which the endowment of skilled labour starts to play a more important role.
Topic:
Economics and International Trade and Finance
Political Geography:
North America and Mexico

574. Controlling Asylum Migration to the Enlarged EU

Author:
Catherine Phuong
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We examine the ways in which candidate countries which are to join the EU in 2004 are responding to increasing asylum migration from the East and assess the impact of accession on their asylum and immigration laws and policies. It will be argued that recent changes in asylum and immigration laws in candidate countries have been largely affected by current EU efforts to devise a common immigration policy and a possible common asylum system. Instead of devising their own response to asylum migration, candidate countries are merely aligning their asylum policies with EU practice and expectations.
Topic:
Migration
Political Geography:
Europe

575. Who Pays Indirect Taxes in Russia?

Author:
André Decoster and Inna Verbina
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The interplay of a differentiated indirect tax structure and the variation in expenditure patterns across households, leads to a possibly unequal distribution of indirect tax liabilities across the population. This paper uses the ninth round of the RLMS survey to assess the distributional consequences of the two major components of the indirect tax system: VAT and excise taxes. The global indirect system can be considered to be progressive overall, according to the Kakwani index. Decomposition into constituent terms shows that this is due not only to a progressive VAT structure, but also to progressive excise taxes. This surprising result is mainly explained by the progressivity of the excise tax on car fuel, but might also be sensitive to peculiarities in the data about alcohol consumption.
Topic:
Development, Economics, and Government
Political Geography:
Russia

576. Opening the Convergence Black Box: Measurement Problems and Demographic Aspects

Author:
Carlos Azzoni, Naercio Menezes-Filho, and Tatiane Menezes
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we address the issues involved with the use of microeconomic data, that is, household surveys, to compare the patterns of income growth among different regions instead of the commonly used aggregate data. In particular, we investigate the issues of aggregation of household income to regional income and the problem of demography. As returns to experience generally differ across regions, differences in the patterns of income growth across regions in the same time interval will differ across age groups, which means that convergence or divergence of aggregate income among regions will depend on the age structure of their population. We apply these concepts to the case of the states of Brazil, for which we have repeated cross sections from a rich household survey. We find that patterns of income growth vary a great deal across birth cohorts, depending on the economic returns to experience.
Topic:
Demographics, Development, and Economics
Political Geography:
Brazil

577. Regional Output Differences in International Perspective

Author:
Alan Heston and Bettina Aten
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Accurate regional estimates of output are desired as an indicator of level of development and as a variable used to explain internal migration, demand patterns, fertility and other aspects of behaviour. This chapter explores one often neglected aspect of regional income differences, namely that due to price differences or regional purchasing power parities. When nominal regional income measures are adjusted for these price level differences they are termed real regional incomes. The preferred method of estimating regional purchasing power parities by detailed price comparisons is discussed for Brazil, the United States and the European Union. The empirical thrust of the chapter is an investigation of different methods for estimating regional real incomes based on PPP data for 167 countries and nominal regional incomes and other data for about 870 administrative areas at the subnational level. Even in their present form we believe the real income estimates provided for the geographical units present opportunities for understanding the world economic structure.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
United States, Europe, and Brazil

578. How Responsive is Poverty to Growth? A Regional Analysis of Poverty, Inequality, and Growth in Indonesia, 1984-99

Author:
Jed Friedman
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper uses six nationally representative household consumption surveys to develop successive poverty profiles for Indonesia over a fifteen-year period of sustained high growth followed by rapid contraction. Adopting a 'cost-of-basic-needs' approach to poverty determination (an approach particularly suited to measures of absolute poverty), this paper develops price indices and calculates poverty lines from unit value data, an oft neglected source of information. The summary findings confirm that Indonesia has witnessed broadbased gains in poverty reduction over the period 1984-96 and then a dramatic reversal during the recent financial crisis. These summary findings, however, mask substantial diversity in growth, inequality, and poverty change across Indonesian regions and so subsequent analysis focuses on the links between growth, inequality, and changes in poverty at the regional level. As opposed to previous studies of poverty change that have used short panels of cross-national data to identify the relationship between growth and poverty, this study employs a longer panel for a single country in order to investigate how poverty change at the provincial level varies with province growth rates and province changes in inequality (while controlling for time invariant province characteristics). The results indicate that poverty change is highly responsive to overall growth. However closer analysis reveals that regional differences in poverty levels persist even after controlling for the effects of provincial income levels, particularly for rural areas. These findings suggest that local factors play an important role in poverty determination and may interact with growth to impact poverty reduction in differing ways across Indonesia. Future investigations will need to take a more careful look at these local determinants of poverty change and attempt to identify the types of growth toward which poverty measures are particularly responsive.
Topic:
Development, Economics, and Poverty
Political Geography:
Indonesia

579. Externalities in Rural Development: Evidence for China

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 and Economics
Political Geography:
China and Asia

580. Are Neighbours Equal? Estimating Local Inequality in Three Developing Countries

Author:
Chris Elbers, Peter Lanjouw, Johan Mistiaen, Berk Ozler, and Ken Simler
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Based on a statistical procedure that combines household survey data with population census data, this paper presents estimates of inequality for three developing countries at a level of disaggregation far below that allowed by household surveys alone. We show that while the share of within-community inequality in overall inequality is high, this does not necessarily imply that all communities in a given country are as unequal as the country as a whole. In fact, in all three countries there is considerable variation in inequality across communities. We also show that economic inequality is strongly correlated with geography, even after controlling for basic demographic and economic conditions.
Topic:
Development and Economics
Political Geography:
Africa and South America

581. Optimality and Overuse of Labour in Estonian Manufacturing Enterprises

Author:
Almas Heshmati and Jaan Masso
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
For transition economies labour market flexibility is necessary for successful restructuring and reallocation of labour force and for coping with the requirements of the European Monetary Union. In this paper we apply a novel approach to the issue of labour market flexibility in transition countries by studying the optimality and efficiency of labour usage among Estonian manufacturing enterprises. A dynamic model is employed where both the long run optimal level of employment and the speed at which actual employment is adjusted to the optimal are modelled as functions of several variables. Firm level panel data from 1995 to 1999 were used. The results showed that in the long run employment responds greatest to wages, followed by valueadded and capital stock. Speed of adjustment and labour use optimality and efficiency show much greater variations over firms than over time. In the course of time there occurs both labour saving technical change and an increase in the efficiency of labour usage. On average there is shortage of labour compared to firm's own optimal level, while over use of labour compared to best-practice technology. Capital seems to be a binding constraint on the development of employment in the Estonian labour market.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
Eastern Europe

582. Impact of Trade Liberalization on Returns from Land: A Regional Study of Indian Agriculture

Author:
Ghosh Nilabja
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Trade liberalization, by aligning domestic prices with world prices, is envisaged to bring welfare gains to a country. In the case of Indian agriculture, owing to the vastness and diversity of the sector, the impact is likely to be profoundly unequal across regions especially when liberalization is double-edged, acting on both output and input sides. This paper views returns from land resource as a primary determinant of farmers' economic well-being and production incentive and considers paddy both as the dominant support for the rural population and as a product with comparative advantage, as most studies have demonstrated. Working with state and sub-state level data and taking account of the differences in technologies, productivities and transport costs, the paper finds that the gains vary regionally and may not be positive in all cases when both output and input prices are globally aligned.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
South Asia and India

583. Irregular Migration and Asylum Seekers in the Caribbean

Author:
Elizabeth Thomas-Hope
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Irregular migration is increasing in the Caribbean while the opportunities for applying for asylum hardly exist. The policy regarding most Caribbean irregular migrants is based on the view of the potential destinations, namely that the migrants are economic rather than political refugees. Whatever the specific cause of a migrant's departure, the movement is rooted in a complex amalgam of political, socioeconomic and (increasingly) environmental, factors. Thus irregular movements are part of the wider Caribbean migration process. The irregular movements differ from other forms of migration in that they represent the informal sector of migration, providing an alternative to those sectors of national populations that for political or economic reasons fall outside the immigration categories for entry to the United States. Locations in the Caribbean largely provide the intended transit stops to the United States, but with the implementation of policies to interdict migrants at sea, many of these intermediary locations become final destinations and, ultimately, marginalized communities of the migrants themselves and successive generations. These centres are the nodal points of an established transnational network that sustains the ongoing process of irregular migration. The economic and emotional cost and risks faced by the migrants are high, and the economic and political cost and challenges faced by host governments are also high. Irregular migration and the issue of asylum poignantly reflect various aspects of poverty and the vast economic disparities that exist within the region. Further, irregular migration and the question of asylum greatly affect diplomatic relations between Caribbean countries of migration source and destination. Better and more thoughtful policies are needed to address the continuing issues relating to irregular migration.
Topic:
Development and Migration
Political Geography:
United States, Central America, and Caribbean

584. The EU's Everything But Arms Initiative and the Least-developed Countries

Author:
Lucian Cernat, Sam Laird, Luca Monge-Roffarello, and Alessandro Turrini
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using a computable general equilibrium simulation model and partial equilibrium simulations, based on the SMART model, the paper attempts to assess the aggregate worldwide distribution of gains and losses of the EU's Everything But Arms (EBA) initiative for both LDCs and third developing countries under different scenarios.
Topic:
Development and International Trade and Finance
Political Geography:
Europe

585. Developed Country Trade Barriers and the Least Developed Countries: The Economic Results of Freeing Trade

Author:
Jon D. Haveman and Howard J. Shatz
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The Doha Ministerial Declaration emphasized that priority should be given to improving market access for products originating in the Least Developed Countries (LDCs). In this paper, we analyze the importance of this proposition with respect to market access in the Triad economies. We first present a brief history of non-reciprocal preferences granted by the Triad. This covers Generalized System of Preference (GSP) programmes in each, and further preferences granted to African, Caribbean and Pacific countries by the EU and preferences granted to Caribbean Basin, Andean, and African countries by the US. This history is followed by an assessment of trade generated by these preferences in the year 2000, and of the extent to which LDC exports might be expected to increase should the preferences be made comprehensive. Preferences in 2000 are shown to have led to an increase of US$3.5 billion in LDC exports, while a complete duty-free treatment could expand LDC exports by as much as US$7.6 billion, 90 per cent of which will be absorbed by the US. As this represents a doubling of LDC exports to these countries, we interpret these results as an endorsement of this priority in the Doha Round of negotiations.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Africa, United States, and Caribbean

586. The New Global Determinants of FDI Flows to Developing Countries: The Importance of ICT and Democratization

Author:
Tony Addison and Almas Heshmati
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Foreign direct investment (FDI) has increased dramatically in recent years. However, the distribution of FDI is highly unequal and very poor countries face major difficulties in attracting foreign investors. This paper investigates the determinants of FDI inflows to developing countries, with a particular emphasis on the impact of the 'third wave of democratization' that started in the early 1980s and the spread of information and communication technology (ICT) that began in the late 1980s. These two global developments must now be taken into account in any explanation of what determines FDI flows. Using a large sample of countries, together with panel data techniques, the paper explores the determinants of FDI. The causal relationship between FDI, GDP growth, trade openness and ICT is investigated. The main findings are that democratization and ICT increase FDI inflows to developing countries. The paper concludes that more assistance should be given to poorer countries to help them to adopt ICT and to break out of their present 'low ICT equilibrium' trap.
Topic:
Democratization, Development, Economics, and International Trade and Finance

587. Inflation, Output and Perfectly Enforceable Price Controls in Orthodox and Heterodox Stabilization Programmes

Author:
George Mavrotas and Mario Reyna-Cerecero
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper deals with the success of price controls in stabilizing high inflation rates and their effects on the real economy under an imperfect competition setting derived by optimal maximization. Our model builds on Helpman's work of price controls and imperfect competition, and incorporates inflation inertia through adaptive expectations. The model predicts that under these circumstances price controls can be an effective method of curving inflation when they accompany an orthodox monetary restriction programme; incomes policies alone cannot curve inflation substantially. Efforts where monetary growth is decreased gradually and price controls are implemented to achieve zero inflation result in the boom-recession cycle observed in many real life programmes. When monetary growth is curved immediately and price controls are implemented to achieve zero inflation, there follows a recession and not a boom. Orthodox money-based stabilization programmes implemented on their own need more time to control inflation and always produce a recession.
Topic:
Development, Economics, and International Trade and Finance

588. The 'Pull' and 'Push' Factors in North-South Private Capital: Conceptual Issues and Empirical Estimates

Author:
Matthew Odedokun
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper is an attempt to rectify some of the problems that characterize most earlier studies that seek to explain private capital flows to developing countries or, at least, to examine the subject from a different and complementary perspective. To accomplish this, we propose a model framework that approaches the issue from the perspective of a capital-exporting developed country and which also takes cognizance of developments in other industrialized countries that could be competing with developing countries for private capital flows. The model is operationalized and estimated with annual panel data over 1970-2000 for 19 capital-exporting developed countries. Specifically, we estimate equations for total private flows, FDI, total portfolio capital flows (PCF) and various categories of PCF. We also test for the effects of a number of factors, each of which has its own 'push' and 'pull' components. The specific explanatory factors are the level of per capita income, interest rate, economic growth, the prevailing phase of economic cycle, the degree of openness of the economy in the balance-of-payment capital account, macroeconomic imbalances, and external debt burden. The empirical findings confirm the posited effects of the 'push' and/or 'pull' component of each of the above factors.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance

589. Export Dynamism and Market Access

Author:
Jörg Mayer
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Market access liberalization has influenced product-specific growth of world exports and contributed to the shift in the structure of world exports of manufactures towards electrical and electronic goods (including parts and components), goods that require high R expenditures, and labour-intensive products such as clothing. Multilateral trade liberalization has strongly improved market access conditions for manufactures and partly explains why manufactures have experienced particularly strong growth in exports. The increased importance of vertical international production sharing and the associated preferential trading arrangements between geographically close countries with significantly different wage rates have been a key determinant of differences in export-value growth across individual manufactured products, as well as of the distribution of market shares for some of these products among developing countries. Projections based on a standard trade model suggest that moving to full trade liberalization would lead to an increase in the share of agricultural products in total world trade by almost two percentage points and give greater weight to the textile, clothing and automotive sectors within manufactured exports.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance

590. If People were Money: Estimating the Potential Gains from Increased International Migration

Author:
Jonathon Moses and Bjørn Letnes
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we elaborate on the findings produced by an applied equilibrium model that is used to calculate the annual efficiency gains from free international migration. These findings suggest that we can expect significant gains from liberalizing international labour flows. In particular, we expand on two implicit aspects of the estimates: the actual number of migrants being generated by the various counter-factual scenarios, and the per-migrant cost/benefits associated with each. These estimates are then compared with contemporary migration flows and the findings of studies that analyse their economic impact. In light of these comparisons, we conclude that our original findings are not unreasonable.
Topic:
Development, Economics, International Trade and Finance, and Migration

591. E-business Model Innovation and Capability Building

Author:
Stéphane Gagnon
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
A firm's business model describes the way in which it creates, delivers, and appropriates value. In the debate about the ongoing demise of several e-commerce ventures, only a few analysts have looked at the relative sanity of innovative e-business Models, relying mostly on static environmental variables and the inherent economic logic of each industry. Our study sheds new light on this debate by concentrating on a set of more complex factors, namely the relative difficulty to build new capabilities, whether by creating or acquiring them. We interviewed 60 e-commerce ventures between 2 and 3 years old, both independent and corporate ones, in order to measure their performance, the innovativeness of their e-business model, their obstacles to capability building, and their exploitable resource base. By performing cluster, discriminant, and regression analyses, we demonstrate that a number of typical obstacles to capability building can significantly affect the relative success or failure of innovative e-business models, but that a richer resource base may alleviate this relationship. We end with a discussion of the implications for the e-business model literature, and point out to some new directions to explain how various e-commerce firms, whether 'pure-play' or 'click-and-mortar', can successfully innovate despite rampant capability building difficulties.
Topic:
Economics, Emerging Markets, and International Trade and Finance

592. Inconsistency in Savings Pattern: Is there an Endogeneity Bias?

Author:
Inna Verbina
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Traditionally, the difference between income and expenditure reported in household surveys is used for estimation of savings at the household level. However, persistent deviation in consumption–income ratios by household income brackets raises questions about both the quality of data and the estimation method employed. This paper provides statistical evidence to accentuate the endogeneity bias, which is connected with the choice of welfare proxy for ranking process, in savings estimates by income groups. Also, two different estimators for households spending behaviour are discussed and the statistical properties of their difference are derived by the delta method.
Topic:
Economics

593. 'Looking at the Other Side of the Coin': The Relationship between Classical Growth and Early Development Theories

Author:
Maiju Perälä
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper extends the history of thought narrative on Allyn Young to recognize the close relationship that the classical growth theory has with the early development theory, as Young's externalities-fuelled, cumulative growth process influenced the theoretical thought of the early development theory pioneers, Paul Rosenstein-Rodan and Ragnar Nurkse. The conditions that prevent the development of underdeveloped regions, indivisibilities and inelasticities of supplies and demands, represent the breakdown of the conditions that Young highlights as necessary for self-sustaining growth to occur. Hence, Young's cumulative growth process underlies the view of these early development theorists, though their focus is on the malfunctioning and restarting of this process.
Topic:
Development, Economics, Emerging Markets, International Trade and Finance, and Poverty

594. Persistence of Underdevelopment: Does the Type of Natural Resource Endowment Matter?

Author:
Maiju Perälä
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines growth successes and failures across countries and notes the latter's perplexing predominance among ex ante low-income economies. An explanation for this persistence of underdevelopment is proposed through an empirical investigation that brings forth evidence on the importance of natural resource endowment type on growth or, more appropriately, lack of it. The results show that, in the absence of social cohesion, the nature of natural resource abundance bears great significance as a natural resource endowment characterized by oil and/or mineral resources is more negatively correlated with growth than a resource endowment that is agricultural. The robustness of this result is tested across a number of growth regression specifications within the literature.
Topic:
Agriculture, Development, Economics, and Poverty

595. A Tale of Two Countries: Poverty among Immigrants in Denmark and Sweden since 1984

Author:
Kræn Blume, Björn Gustafsson, Peder Pedersen, and Mette Verner
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper focuses on the problems of low income among immigrants, analysed by using comparable panel datasets for two Scandinavian welfare states. After a brief survey of a few earlier studies on immigrant poverty, we present Denmark and Sweden as interesting cases for comparative research. Cyclical profiles have been very different since the 1980s and both countries have experienced considerable differences with regard to the number and composition of immigrants from the less developed countries. Poverty rates, analysed relative to different background factors, are fairly high, in particular when considering the welfare state background of Denmark and Sweden. A number of differences are found in spite of the institutional similarities between the two countries.
Topic:
Economics, Migration, Political Economy, and Poverty
Political Geography:
Denmark and Sweden

596. Economic Integration and Migration: The Mexico-US Case

Author:
Philip Martin
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explains the evolution and effects of Mexico-US migration, and highlights the NAFTA approach to economic integration, viz., free up trade and investment while stepping up efforts to prevent unauthorized migration. The European Union approach is different: provide aid first, and later free up trade and migration in the expectation that moves toward convergence will ensure minimal migration because trade has become a substitute for migration. The paper concludes that NAFTA will reduce unwanted Mexico-US migration in the medium to long term, and that different initial conditions in Europe mean that there will be relatively little east-west migration when nationals of new entrant EU members achieve freedom of movement.
Topic:
Economics and Migration
Political Geography:
United States, Europe, and Mexico

597. Iraqi Forced Migrants in Jordan: Conditions, Religious Networks, and the Smuggling Process

Author:
Geraldine Chatelard
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper describes and analyses the case of Iraqis who, in the 1990s, have arrived in Jordan as forced migrants, and have continued to Western Europe or Australia as asylum migrants. The argument put forth is that trends of asylum migration cannot be fully understood without looking at a set of interrelated issues in the countries of first reception of the forced migrants: reception standards, the migrants' poor socioeconomic conditions, further violations of their human rights, but also the functioning of the migrants' social networks and of human smuggling rings.
Topic:
Human Rights, Migration, and Religion
Political Geography:
Iraq, Middle East, Australia, Jordan, and Western Europe

598. Aid, Debt Burden and Government Fiscal Behaviour: A New Model Applied to Côte d'Ivoire

Author:
Mark McGillivray and Bazoumana Ouattara
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of foreign aid on public sector fiscal behaviour in Côte d'Ivoire. A special interest is the relationship between aid, debt servicing and debt, given that Côte d'Ivoire is a highly indebted country. The theoretical model employed differs from those of previous studies by highlighting the interaction between debt servicing and the other fiscal variables. This model is estimated using 1975–99 time series data. Key findings are that the bulk of aid is allocated to debt servicing and that aid is associated with increases in the level of public debt.
Topic:
Debt, Development, Economics, and International Trade and Finance
Political Geography:
Africa

599. OECD Domestic Support and Developing Countries

Author:
Betina Dimaranan, Thomas Hertel, and Roman Keeney
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
An AGE model with detailed farm supply and substitution relationships is used to analyze impacts of OECD domestic support reform on developing economy welfare. Stylized simulations indicate reforms best suited for reducing trade distortions with least impact on farm incomes. Comprehensive reforms result in welfare losses for LDCs and large declines in OECD farm incomes. Shifting from market price support to land-based payments designed to maintain farm incomes results in increased welfare for most developing countries. LDCs should focus on improved market access to OECD economies while permitting said economies to continue domestic support payments not linked to output/variable inputs.
Topic:
Agriculture, Development, Economics, and International Trade and Finance

600. Trends in Asylum Migration to Industrialized Countries: 1990-2001

Author:
Stephen Castles and Sean Loughna
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The purpose of this paper is to outline trends and patterns in movements of asylumseekers to Western so-called industrialized countries from 1990-2001. The paper begins by characterizing three distinct phases of asylum migration since the end of the Second World War. It then provides background material on global refugee and asylum movements, using statistics from UNHCR. The data for selected receiving countries and regions is discussed, followed by some remarks on changing routes used by asylumseekers. The selected countries and regions are Australia, Canada, the EU and the USA. Finally, we examine some of the causal factors behind asylum migration and attempt to identify their significance upon flows migration.
Topic:
Development, Diplomacy, Human Welfare, and Migration
Political Geography:
United States, Canada, and Australia