trade openness tax reform and tax revenue in developing countries this article investigates empirically whether the effect of tax reform involving the progressive replacement of trade tax revenue with domestic tax revenue in developing countries tax revenue performance measured by tax revenue to gdp ratio depends on the degree of trade openness of these countries the analysis has used an unbalanced panel data set of 95 developing countries over the period 1981 2015 and the two system gmm approach results suggest that tax reform is positively and significantly associated with tax revenue performance in developing countries with the magnitude of this positive effect increasing as countries experience a higher development level additionally and more importantly countries that further open up their economies to international trade enjoy a higher positive effect of tax reform on tax revenue than countries that experience a lower degree of trade openness therefore these findings should help dissipate the concerns of policymakers in developing countries that greater openness to international trade would further erode their tax revenue including by lowering their international trade tax revenue in fact the implementation of an appropriate tax reform in the context of greater trade openness would generate higher tax revenue while concurrently allowing countries to reap the well known benefits of international trade

economic roots of political conflict the case of sri lanka the escalation of political conflicts in many developing countries and their impact on economic development have been topical issues in recent development literature the overwhelming emphasis on ethnic conflicts in the literature has however precluded analysts from looking at political conflicts beyond their ethnic dimension in the wider context of the development process in particular because of the preoccupation with ethnic roots as the prime source of these conflicts reverse causation running from economic policy to political conflict has been virtually ignored in the debate the purpose of this paper is to fill this gap through an in depth case study of the twin political conflict in sri lanka the tamil separatist war in the north and the sinhala youth uprising in the south with emphasis on its economic roots the findings suggest that fundamental contradictions in the national development policy in the restrictive trade regime of sri lanka were at the heart of the country s twin political conflict

forest dependence and income distribution in a subsistence economy evidence from india abstract we examine an area of northern india where forestry acts to ameliorate the incidence of poverty and destitution though it does not otherwise contribute significantly to the reduction of income inequality the poor would be doubly disadvantaged without common property access to forest products conservation measures entailing curtailment in the right to common access pose a dilemma this issue is explored here

trade taxes and debt repayment in sri lanka the purpose of this article is to estimate the cost of taxing the export import or domestic sectors of sri lanka for the purpose of reducing the national debt a simple gnp model is used to estimate the elasticities that characterise the three aggregate sectors and are used to simulate the effects of taxing for debt servicing the results show that a tax on the import sector generates the largest net savings on trade balance and that the savings from not importing can be substantial however for the period 1977 87 a 10 0 per cent tax on the import sector caused a decline in the growth of the economy by 3 0 per cent the burden of the tax falls heavily on the domestic sector in terms of lost production and increased unemployment

challenges to proponents of common property recource systems despairing voices from the social forests of zimbabwe abstract there is a fair degree of misplaced optimism about common property resource cpr management in investigating common property issues for woodlands in communal areas in zimbabwe we are struck by the numerous case studies showing a breakdown of local institutions for cpr management and the lack of any emerging alternative institutions for such management there are a number of contributing economic social and ecological factors to this phenomenon we argue that the formal rule based systems that form the cornerstones of the proposed cpr systems are far removed from the current institutional systems rooted in norm based controls we suggest that advocacy of cpr systems has to be tempered with critical analysis

implications of ethnic diversity ethnically differentiated societies are often regarded as dysfunctional with poor economic performance and a high risk of violent civil conflict the author distinguishes between dominance in which one group constitutes a majority and fractionalization in which there are many small groups in terms of overall economic performance the research shows that both theoretically and empirically fractionalization is normally unproblematic in democracies although it can be damaging in dictatorships in terms of the risk of civil war the author shows that both theoretically and empirically fractionalization actually makes societies safer while dominance increases the risk of conflict a policy implication is that fractionalized societies are viable and secession should be discouraged

contract enforcement and trade liberalization in mexico s footwear industry abstract the wave of formal legal system reforms sweeping developing countries provides only a partial solution to the problem of enforcing agreements between firms informal institutions govern the majority of interfirm transactions economic reform also necessitates changes in these institutions this paper examines the evolution of contract enforcement in the mexican footwear industry as trade barriers were removed in the closed economy geographic agglomeration of manufacturing allowed the manufacturers trade associations to maintain information about the behavior of retailers and gave retailers strong incentives to maintain reputations by providing an alternative source for procurement trade liberalization weakened the power of manufacturers

trade policy making in a small island economy the wto review of the maldives the purpose of this paper is to examine trade policy regime and trade related development issues in the maldives on the basis of the trade policy review maldives 2003 of the wto the key theme of the paper is that given the narrow resource base and small domestic market openness to foreign trade and investment remains the natural policy choice for a small developing economy like the maldives since the late 1980s the maldivian government has made considerable progress in implementing policy reforms driven by this conviction however the reform process is far from complete high import tariffs maintained predominantly on revenue considerations a large direct role played by the public sector in foreign trade and some key sectors of the economy lack of transparency in duty concessions and other investment incentives failure to incorporate environmental concerns as part of the national development policy and delays in meeting reform commitments under the wto are among the key items of the unfinished reform agenda

subcontractors for tractors theory and evidence on flexible specialization supplier selection and contracting abstract buyer seller networks are pervasive in developing economies yet remain relatively understudied using primary data on contracts between the largest tractor assembler in pakistan and its suppliers we find large variations in prices and quantities across suppliers of the same product surprisingly tied suppliers those that choose higher levels of specific investments receive lower and more unstable orders and lower prices these results are explained by developing a simple model of flexible specialization under demand uncertainty a buyer faces multiple suppliers with heterogeneous types to supply customized parts specific investments raise surplus within the relationship but lower the seller s flexibility to cater to the outside market higher quality suppliers have a greater likelihood of selling outside and so this cost is greater for them therefore even if a buyer typically prefers high types some low type suppliers might be kept as marginal suppliers because of their greater willingness to invest more in buyer specific assets further empirical examination shows that the more tied suppliers are indeed of lower quality

dependence on environmental resources and implications for household welfare evidence from the kalahari drylands south africa abstract this paper examines dependence on environmental resources and impacts on household welfare among the indigenous san and mier rural communities neighbouring kgalagadi transfrontier park in south africa data on the various household income types including environmental income were collected through a structured survey of 200 households environmental income constituted 20 of the total income the poorest income quintile showed the highest relative dependence on environmental income 31 though absolute environmental income increased with total income poverty analyses showed that poverty incidence and poverty gap would increase by 13 and 7 percentage points respectively without environmental income gini coefficient analyses revealed that income inequality would increase by 6 percentage points for all households if environmental income was excluded the results generally suggest that environmental income is important for both the poor and the well off and wealth accumulation might be tied to resource use there is a case for promoting sound environmental management and sustainable and fair resource use in the kalahari drylands in order to help pull more households out of poverty our findings also point to issues of heterogeneity in resource access even among indigenous communities previously thought to be homogenous these should be key considerations for conservation interventions

adjustment trade policy and investment slumps evidence from africa abstract this paper presents a model of investment in six african economies over the 1970s and 80s paying particular attention to the impact of the policy reforms which have accompanied structural adjustment programmes a priori the impact of trade reform on investment can be positive or negative in practise there is some evidence that it might be negative

effects of wildlife resources on community welfare in southern africa abstract this paper demonstrates the importance of wildlife in the portfolio of environmental income in the livelihoods of poor rural communities living adjacent to a national park the results show that wealthier households use more wildlife resources in total than do relatively poor households however poorer households derive greater proportional benefit than wealthier households from the use of wildlife resources excluding wildlife understates the relative contribution of environmental resources while at the same time overstating the relative contribution of farm and wage income wildlife income alone accounts for about a 5 5 reduction in the proportion of people living below the poverty line furthermore wildlife income has an equalizing effect bringing about a 5 4 reduction in measured inequality regression analysis suggests that the likelihood of belonging to a wealthier category of income increases with an increase in environmental income as expected household wealth significantly and positively affects environmental income generated by households this seems to suggest that wildlife based land reform also needs to empower poor households in the area of capital accumulation while imposing restraints on the use of capital investments by well off households to harvest wildlife

local elites and popular support for economic reform in china and india this article analyzes why it is that china an authoritarian political system has managed to generate more popular support for the reform process than india a democracy the authors argue that when local politicians and bureaucrats are more supportive of the reform process there is likely to be greater popular support for economic reform local political elite may be more supportive of reform in an authoritarian than in a democratic system because the level of local elite support for the reform process is influenced by the incentives faced by local elite in china institutional reform changed the incentives faced by local elite whereas in india reforms have not been accompanied by institutional changes that would encourage local elite to support reform to the same extent as in china the argument is based on local elite and mass surveys conducted in china and india in 1990 and 1996 respectively a logit model controlling for a variety of alternative explanations provides evidence that local elite

asset specificity and economic organization abstract this paper examines the optimization problem of firm and market organization in which both production cost and transaction cost differences are expressed as a function of asset specificity in general markets enjoy advantages by aggregating the demands of many buyers thereby realizing economies of scale or scope such production cost savings need to be assessed in relation to the transaction cost advantages that internal organization sometimes enjoys over markets in adapting to changed circumstances as it turns out both production cost economies and the transaction cost differences between firm and market organization vary systematically with the characteristics of the investments this paper employs a unified framework to assess the choice of organization form the condition of asset specificity is featured

non contractible investments and vertical integration in the mexican footwear industry abstract this paper examines patterns of integration among manufacturers and retailers using data from a survey of footwear manufacturers in mexico the property rights framework developed in papers by grossman and hart 1986 j polit econ 94 691 and hart and moore 1990 j polit econ 98 1119 is differentiated from the standard empirical transactions cost framework in the context of this industry the most relevant distinction between the two frameworks is that the property rights framework addresses both the benefits and costs of integration while the transactions cost framework focuses only on variation in the benefits of integration we show that the costs of integration are highest where the retailer s non contractible investment has an important effect on the overall profits from the relationship consistent with the property rights framework the data suggest that integration is less likely in these circumstances

vertical integration and firm boundaries the evidence since ronald h coase s 1937 seminal paper a rich set of theories has been developed that deal with firm boundaries in vertical or input output structures in the last twenty five years empirical evidence that can shed light on those theories also has been accumulating we review the findings of empirical studies that have addressed two main interrelated questions first what types of transactions are best brought within the firm and second what are the consequences of vertical integration decisions for economic outcomes such as prices quantities investment and profits throughout we highlight areas of potential cross fertilization and promising areas for future work

contract duration and relationship specific investments empirical evidence from coal markets this paper examines the importance of specific relationship investments in determining the duration of coal contracts negotiated between coal suppliers and electric utilities data for 277 coal contracts are used to perform the analysis the results provide strong support for the view that buyers and sellers make longer commitments to the terms of future trade at the contract execution stage and rely less on repeated bargaining when relationship specific investments are more important

the political economy of stabilization commitment capacity and public response abstract political pressures are generally recognized as important in determining success or failure of economic stabilization and adjustment programs but there has been little comparative analysis of the politics of stabilization this study examines the factors affecting i political leaders commitment to stabilization measures often called political will ii governmental ability to implement stabilization measures and iii the responses of key interest groups and the public at large to those measures the study also discusses political implications of the design of programs and the attempted speed of stabilization and sketches the tactics available to governments to manage political risk including partial compensation persuasion diversion or obfuscation and containment of protest the discussion is based on case studies of stabilization efforts in five fairly poor small highly trade dependent countries ghana in the late 1960s and early 1970s and zambia kenya sri lanka and jamaica in the late 1970s and early 1980s a subsidiary theme within the broader discussion is the ways in which the political economy of stabilization may differ in such countries as compared to larger semi industrialized economies

cambodia rapid growth in an open post conflict economy this study provides an analytical review of world trade organization trade policy review cambodia the first such report undertaken for the country the report highlights cambodia s rapid economic growth after one of the world s worst cases of genocide in the second half of the twentieth century this growth has been underpinned by open trade and investment policies in the context of dynamic neighbourhood growth effects the trade regime is mainly tariff based with modest intersectoral variations in rates cambodia has limited trade policy space it is a signatory to the 10 nation asean free trade agreement soon to become the asean economic community moreover given its long and porous borders with the much larger dynamic economies of thailand and vietnam any major cross border price differences will quickly result in informal trade with these economies and nearby china most of the country s trade policy challenges are to do with behind the border issues a legacy of its generation of civil war and conflict these include weak bureaucratic capacity high levels of corruption poor infrastructure and limited human capital

trade policymaking in a resource rich landlocked country the wto review of mongolia the aim of this paper is to provide a comprehensive assessment of the trade policy review of mongolia tprm 2014 the tprm 2014 demonstrates that the mongolian economy is relatively open and it has very low formal trade barriers although there remain significant behind the borders barriers including poor governance and infrastructure being a landlocked country any major cross border price differences quickly results in informal trade with neighbouring china limiting mongolia s ability to pursue independent commercial policy mongolia s growth is not broad based and largely driven by the mining boom making its economy highly vulnerable to external shocks while this is not unique to mongolia and has been seen in many natural resource abundant countries experience suggests that countries with sound institutions and macroeconomic policies have overcome the so called resource curse

special section land use options in dry tropical woodland ecosystems in zimbabwe introduction overview and synthesis the articles included in this special section focus on the ecological and economic interactions of woodland use in western zimbabwe one of the aims was to investigate the use of modelling to achieve integration among disciplines the integrated model draws on the models in the different papers comprising the special section the model has five ecological sectors five sectors covering woodland use by local people and the state forestry organisation two sectors to cover agriculture one sector for population growth and land use a sector to cover carbon sequestration and a sector to calculate net present values of the various uses the state has usually attempted to keep people and their livestock out of the state forest we show that the private benefits of cropland may be greater than those related to state or local use of the woodland but further work is required to incorporate the public costs of subsidies to cropland and the public benefits of woodland services livestock production in the woodlands is compatible with woodland management both from economic and ecological perspectives expulsion of forest 1 dwellers from the state forest makes little ecological impact on the woodland and does not improve the economic value of the woodland to the state however if the forestry commission relaxes the current control on in migration it is likely that the woodland will be rapidly depleted in the face of massive in migration modelling is seen as a framework for integration of ecological and economic issues but further work is required to incorporate institutional perspectives from the sociological and anthropological disciplines 2000 elsevier science b v all rights reserved

trade policy in burundi reform without political stability this paper evaluates burundi s progress with trade policy reform by comparing earlier analyses of burundi s trade policies undertaken in the 1980s with that of the wto s recent trade policy review since the mid 1980s burundi has been trying to reform its trade and macroeconomic policies against the background of continuous socio political tensions and periodic outbreaks of violent tribal conflict a then and now comparison allows us to assess both the extent of the trade reforms and of the economic return to those reforms it is evident that there has been a significant rationalisation and simplification of trade policy burundi has eliminated most quantitative import restrictions and reduced the average level and range of its tariffs the scope for allocative distortions undesirable redistributive effects and for impediments to investment and growth has been substantially reduced however a return to reform in terms of export growth or diversification and of overall economic growth is not discernible yet this is unsurprising given the scale of the economic disruption sustained socio political stability among other things will be required to induce the investment in human and physical capital needed for a positive return to trade policy reform

vertical integration and investor protection in developing countries the industrial organization of developing countries is characterized by the pervasive use of subcontracting arrangements among small financially constrained firms this paper asks whether vertical integration relaxes those financial constraints it shows that vertical integration trades off the benefits of joint liability against the costs of rendering the supply chain more opaque to external investors in contrast to the commonly held view that pervasive input and capital market imperfections are conducive to vertical integration the model predicts that the motives for vertical integration are not necessarily higher in developing countries in particular vertical integration is more likely to arise at intermediate levels of investor protection and better contract enforcement with suppliers reduces vertical integration only if financial markets are sufficiently developed evidence supporting both predictions is discussed

method in the madness a political economy analysis of the ethnic conflicts in less developed countries this paper is an attempt from a political economist s point of view to look for some clear patterns in the horrendous complexities of the ethnic and sectarian conflicts that are raging in less developed countries we emphasize the importance of some institutional failures such as the decline of mediating institutions or of preexisting structures of credible commitment rather than mere cultural and historical animosities behind the collapse of interethnic understandings and compromises the rise in ethnic conflicts is not always associated with economic deterioration sometimes quite the contrary the effects of market expansion are also ambiguous in our discussion of policy lessons we have tried to look for various ways both political and economic of constructing institutionalized incentives for conciliatory actions

fiscal composition and aid effectiveness a political economy model summary in the long run tax effort we argue determines the effectiveness of aid and this relationship operates simultaneously with the negative link in the opposite direction observed by brautigam and knack 2004 and others tax effort and the ability of the state to diversify its taxation structure we find are significantly linked to growth and poverty indicators the key message for policy is that a broadening of the tax structure in low income countries is crucial in order to enable those countries to escape from the weak state low tax trap and to make aid effective

integration of the sales force an empirical examination this article develops and tests a model of integration of a marketing function personal selling the model derived from transaction cost analysis as developed principally by williamson is formulated as a logistic function which is estimated with data from the electronic components industry as expected integration is associated with increasing levels of asset specificity difficulty of performance evaluation and the combination of these two factors contrary to the transaction cost model neither frequency of transactions nor interaction of specificity and environmental uncertainty is significantly related to integration the transaction cost model improves significantly upon the fit of a simple model relating integration to company size alone these results suggest that for studying transactions of this kind it is fruitful to view the firm as a governance structure

tax revenue performance and vulnerability in developing countries this paper addresses vulnerability of revenue to external shocks using export composition to capture economic structure and differentiating countries according to income levels resource endowments and political regimes this gives a richer characterization than previous studies lower income countries are vulnerable to shocks especially in terms of trade associated with the greatest revenue loss democratic regimes seem to be less vulnerable to revenue losses due to shocks than non democracies whereas revenue in resource rich is more vulnerable to shocks except natural disasters than non resource rich countries we find a negative relationship between manufacturing exports and revenue in lower income countries

the link between increased trade openness and the terms of trade an empirical investigation abstract despite the fairly widespread move towards more open trade policies in developing countries relatively little attention has been paid to the effect of these policies on the terms of trade using a large sample of countries this paper tries to assess empirically the validity of the small country assumption which underlies the washington consensus on development strategies our evidence suggests that there is a sizable group of countries ldcs and non ldcs for which the assumption of exogenous traded goods prices can be rejected one implication is that terms of trade considerations should be included in the assessment of trade liberalization policies these effects might rise considerably when several countries liberalize simultaneously

asian growth and trade poles india china and east and southeast asia summary using a global general equilibrium trade model this study analyzes the impact on developing countries of 1 the dramatic expansion of trade by india china and an integrated east and southeast e se asia trade bloc and 2 productivity growth in the region china is an integral member of the e se asia bloc with strong links through value chains and trade in intermediate inputs while india is not a part of any trade bloc the analyses consider the importance of their different degrees of integration into regional and global economies focusing on potential complementarities and competition with other developing countries

ownership and control in mexico s community forestry sector abstract ownership and control are rarely synonymous this article examines the factors motivating mexican agrarian communities with forests to participate and invest in timber production activities an opportunity that has opened in the past 20 years due to changes in mexican forestry policy we propose that contractual difficulties with downstream production services and buyers led community members to forward integrate into the wood production industry to enjoy greater benefits from production an incomplete contracting model frames our analysis while original community level data from oaxaca mexico serves as the basis for empirical quantification using measures of specificity of investments uncertainty multiple uses of the forest and managerial and labor expertise it is found that communities with higher levels of human social and resource capital endowments are more likely to integrate forward into timber processing activities

links between rural poverty and the environment in developing countries asset categories and investment poverty abstract this paper presents a framework for analyzing the links between poverty and the environment in rural areas of developing countries it introduces the concept of investment poverty and relates it to other measures of poverty in analysis of these links the notion of poverty is examined in the context of categories of assets and categories of environment change with particular focus on farm household income generation and investment strategies as determinants of the links the strength and direction of the poverty environment links are shown to differ even invert depending on the composition of the assets held by the rural poor and the types of environmental problems they face policy strategies need to focus on conditioning variables that affect market development community wealth infrastructure household asset distribution and the affordability and appropriateness of natural resource conservation technologies

trade policy issues in a small african economy the trade policy review of the gambia 2004 the gambia displays many of the classic characteristics of a small open economy with the vulnerabilities that implies the sum of its imports and exports are around 100 per cent of gdp with a limited number of export commodities and a wide variety of imports including some key staple foods the trade policy review of the gambia 2004 provides a very helpful review and assessment of current trade patterns and policies the latter rely predominantly on import and export taxes while quite substantial trade reform measures have been implemented recently these have led to only a very small reduction in the average tariff rate and trade policy displays a substantial anti export bias other important issues highlighted by the trade policy review include serious capacity constraints relating to trade policy and a failure to discuss connections between trade policy and growth and poverty reduction again common characteristics of many small economies

why reputation favors joint ventures over vertical and horizontal integration a simple model abstract this paper investigates the effect of reputation in a model where two parties make noncontractable contributions to an economic undertaking it is shown that the optimal allocation of ownership between the parties is more similar in a repeated than in a one shot version of the model this implies that unified ownership and reputation are substitutes low discount rates and repeated investment decisions thus favor subcontracting and joint venture arrangements of the type commonly observed in japanese industry while full integration is more likely to be optimal when reputational forces are weak

trade and payments regime and the balance of payments in ghana abstract by 1982 the ghanaian economy was in the doldrums facing a severe foreign exchange constraint this state of the economy was attributed partly to the trade and exchange rate policies which had created distorsions and disincentives against exporting in particular and production in general since 1983 ghana has for the second time embarked on a trade and payments liberalization program this study examines the effect of the changing trade and payments regime on the balance of payments of ghana it provides some answers as to why the first liberalization episode was not sustained it also contrasts the experience of controlled and liberalized trade regime episodes the paper concludes by providing some lessons from the ghanaian experience

sri lanka s rural non farm economy removing constraints to pro poor growth summary we use a survey of rural enterprises from sri lanka to explore characteristics of the informal non farm sector and identify obstacles to its expansion and productivity value added in this sector amounts to 80 of agricultural gdp participating households incomes are significantly higher than those of households who do not participate barriers to entry are low and the impact of non farm development on inequality modest implying a large potential contribution to growth and poverty reduction infrastructure constraints negatively affect new startups investment in and productivity of existing enterprises with small enterprises being particularly affected

intimidating competitors endogenous vertical integration and downstream investment in successive oligopoly this paper examines the interplay of endogenous vertical integration and cost reducing downstream investment in successive oligopoly analyzing a linear cournot model we establish the following key results i vertical integration increases own investment and decreases competitor investment intimidation effect ii asymmetric integration is a non degenerate equilibrium outcome iii compared to a benchmark model without investment complete vertical separation is a less likely outcome we argue that these findings generalize beyond the linear cournot model under reasonable assumptions

the economic importance of non timber forest products ntfps for livelihood maintenance of rural west african communities a case study from northern benin non timber forest products ntfps contribute significantly to a rural household s livelihood in the african semi arid tropics this study examines the income from ntfps and the dependency on these of different socio economic groups in northern benin using survey data from 230 households of two villages we firstly compared incomes of five different ethnic groups being differentiated by their traditional source of livelihood and regional provenance secondly we investigated disparities between three income groups on average income from ntfps accounted for 39 of total household income and had a strong equalizing effect on it however the economic relevance of ntfps differs between households poorer households are relatively more dependent on ntfps in order to fulfill basic needs than wealthier households however the latter extract more ntfps in quantitative terms and have significantly higher cash returns than poorer ones this is mainly due to a significant greater land holding moreover our study revealed that net income from ntfps reflects traditional sources of livelihoods of different ethnic groups in conclusion both conservation and development strategies should take into consideration the socio economic context of different beneficiaries of savanna woodland resources in order to apply appropriate measures to poverty reduction

exchange rates trade liberalization and aid the sri lankan experience abstract in 1977 the sri lankan government embarked on an extensive program of liberalization an important element of which was devaluation to ensure a competitive real exchange rate the 1980s were however marked by an increasing divergence between the real and nominal exchange rates the depreciation of the latter not being matched by similar movements of the former this paper presents an econometric model of real exchange rate behavior in sri lanka among other things it is shown that increased aid inflows have made a significant contribution to the failure of the real exchange rate to match the depreciation in the nominal rate

understanding economic policy reform one of the eventual consequences of the global debt crisis was a wave of market oriented economic reforms this paper discusses the state of our knowledge on the political economy of this process why were inefficient and often unsustainable policies maintained for so long why are so many governments reforming now after decades of adherence to policies of an opposite kind have the reformers internalized the correct lessons from the east asian experience finally are there any helpful rules for reformers to follow in guiding their policies through complicated political terrain

changes in the living standards of the poor in sri lanka during a period of macroeconomic restructuring abstract beginning in 1977 sri lanka moved away from its welfare oriented economy characterized by extensive government intervention in controlling prices and expensive consumer subsidies toward a more market oriented outward looking liberalized economy investment increased due largely to dramatic increases in the inflow of foreign capital combined with greater deficit financing unemployment declined and the rate of growth of gdp increased the major increase in foreign assistance coupled with deficit spending enabled the government to undertake the ambitious infrastructure projects that stimulated demand however this policy change had deleterious consequences for the poor rapid inflation which resulted in a decline of real wages coupled with dramatic decreases in the value of the food stamp scheme brought about a decline in calorie consumption for lower expenditure groups in addition levels of malnutrition as measured by acute wasting were higher after the policy change

ecotourism and economic incentives an empirical approach within the new array of green products and services ecotourism claims to combine environmental responsibility with the generation of local economic benefits that will have both a development impact and serve as conservation incentives economic incentives are imperative for nature conservation particularly in remote and ill monitored regions where a weak presence of the state hinders the use of alternative tools of environmental regulation in the following the link between tourism local benefits and conservation is conceptualised and analysed empirically using data from the cuyabeno wildlife reserve in the ecuadorian amazon region near the border of colombia and peru three cuyabeno indigenous groups have developed different modes of tourism participation ranging from autonomous operations to pure salary employment a quantification of local cash flows from tourism allows for a comparative analysis of income structure spending and the impacts on local development and on conservation attitudes it is concluded that in the whole study area tourism has actually provided significant additional income counter to common belief the mode of participation is less decisive for local income generation than the tourist attraction of the natural site the degree of tourism specialisation and the level of local organisation however as a conservation incentive the effectiveness of tourism income depends on the incentive structure inherent in the mode of participation and on the substitution versus complementarity of other productive activities only if tourism changes labour and land allocation decisions will it have a local conservation impact it is discussed under which circumstances the conjectured link between tourism local incomes and conservation is likely to be effective this leads to some general lessons for government policies for the design of integrated conservation and development projects icdps and to a number of site specific recommendations for improving incentive structures 2000 elsevier science b v all rights reserved

trade policy adjustment in ldcs a short run view the article deals with the role of tariff protection and exchange rate policies in ldcs after a terms of trade shock has occurred and a new equilibrium is to be attained constraints concerning the domestic foreign and public sectors are specified it is shown that the optimal response to the shock depends on the domestic features of the economy as well as on its trade openness in particular protectionist attitudes may well be justified and anti trade policies may be helpful to ease adjustment

viewpoint empirical research on firms boundaries empirical research on the determinants of firms boundaries has flourished over the past 25 years this article discusses the progress that has been made to date emphasizing the intellectual advances made by researchers in this literature during this period i stress empirical researchers important role in operationalizing theoretical concepts and relate how success on this dimension brings these concepts to bear on real life make or buy decisions i also discuss shortcomings in the current literature in particular the paucity of research on how variation in firms boundaries can affect economic outcomes and point to how and where such shortcomings might be overcome la recherche empirique sur les determinants des frontieres de l entreprise a fleuri au cours des derniers 25 ans cet article discute des progres accomplis en mettant l accent sur les avancees intellectuelles faites par les chercheurs dans la litterature specialisee durant cette periode on souligne le role important des chercheurs empiriques dans l operationnalisation des concepts theoriques et on explique comment les succes dans ce registre ont contribuea faire que ces concepts ont eu un impact sur les decisions de faire ou faire faire dans la vie reelle on discute aussi des deficiences de cette litterature en particulier la pauvrete des travaux de recherche sur l impact de la variation dans les frontieres des entreprises sur les rendements economiques et on suggere comment de telles deficiences pourraient etre corrigees

liberalization and the terms of trade in turkey a causal analysis there has been extensive trade liberalization in developing countries in recent decades several liberalization episodes have been completed in turkey in this paper we evaluate the relationship between trade liberalization in turkey and the terms of trade has liberalization preceded changes in the terms of trade or vice versa using causality analysis we investigate several hypotheses and conclude that in this case trade liberalization follows a terms of trade change a finding which is consistent with the trade shocks hypothesis

assessing indirect tax reform in a tourism dependent developing country summary the paper investigates the effects of reform of the current structure of indirect taxes in mauritius a relatively tourism dependent economy it uses a computable general equilibrium model to explore the relative efficiency of changing sales tax rates on tourism and nontourism related sectors and allowing for equity considerations the efficiency of tax reforms are also distinguished for cases where tourist arrivals are exogenously set and where they endogenously adjust to changes in relative prices the simulation results show that the tourism sectors are currently undertaxed additionally taxing tourism sectors is found to be the most socially efficient means of raising tax revenue

does leadership matter in the economic reform process liberalization and governance in sri lanka 1989 1993 abstract governance assumptions of the east asian miracle may not be a sufficient or a necessary condition for effective economic reform or for solid growth to emerge in other asian economies this paper argues that in sri lanka where the state is not strong where it is not well coordinated and is neither cohesive nor disciplined in organizational terms strong political leadership proved critical in the second wave of reform from 1989 1993 even if it was essentially illiberal in the process of implementation technical and political imperatives are seen to be interrelated and parts of a single reform package

good and bad growth the human development reports abstract the 1996 human development report undp 1996 is about economic growth and human development in keeping with past reports in the series it emphasizes the diversity of country performance in improving human development indicators at given rates of growth this article reviews what the human development reports have said on this topic looking at how well the main messages have been supported by data and analysis and how compelling they are as a basis for public action

structural adjustment as a policy process the case of tanzania abstract analyses of structural adjustment in developing countries have increasingly come to emphasize the importance of grounding reforms in the political realities of the countries concerned while this approach is a step forward from the more economistic and prescriptive analyses that prevailed in the first part of the 1980s we believe that the dynamics of structural adjustment is only fully captured by an approach that treats the policy context as an explicit and independent variable on the basis of a case study of tanzania this article uses a policy process approach in which the notions of ambiguity and conflict in policy situations help us better understand the opportunities and constraints for action on structural adjustment issues

foreign trade and economic development sri lanka s experience abstract in the nearly 40 years since independence sri lanka has gone through three major trade policy phases in the first following independence the economy was relatively open in the second which commenced in 1960 a trade regime biased against exports was initiated this continued until 1977 when a strong liberalization effort was made thus sri lanka provides an interesting story of an individual country s experience relating choice of a trade regime to resource allocation and growth a number of important lessons can be drawn from this experience

fiscal dependence on trade taxes and economic development additional results and a reconciliation of the empirical evidence using brazilian data spanning the period 1910 75 new evidence is presented on the hypothesis that a country s fiscal dependence on trade taxes is inversely related to her level of economic development at least once the latter passes a certain threshold unlike previous studies this study uses methods which highlight the dynamic and temporal nature of the underlying relationships the results indicate strong support for the hypothesis and also suggest that the conflicting time serious evidence can be reconciled

does asset ownership always motivate managers outside options and the property rights theory of the firm this paper studies the grossman hart moore ghm property rights approach to the theory of the firm under alternating offers bargaining when managers can pursue other occupations while negotiating over the division of the gains from cooperation the ghm results obtain if taking the best alternative job terminates bargaining outcomes are very different sometimes an agent with an important investment decision should not own the assets he works with sometimes independent assets should be owned together sometimes strictly complementary assets should be owned separately

fiscal dependence on trade taxes and the level of economic development a comment 1993 fiscal dependence on trade taxes and the level of economic development a comment applied economics vol 25 no 11 pp 1393 1397

poverty alleviation and tropical forests what scope for synergies abstract this paper explores the state of the art of the two way causal links between poverty alleviation and natural tropical forests microimpacts of rising poverty can increase or slow forest loss at the macrolevel poverty also has an ambiguous effect but it is probable that higher income stimulates forest loss by raising demand for agricultural land the second question is what potential forest led development has to alleviate a country s poverty in terms of producer benefits consumer benefits and economy wide employment natural forests widely serve as safety nets for the rural poor but it proves difficult to raise producer benefits significantly urban consumer benefits from forest an important target for pro poor agricultural innovation are limited and seldom favor the poor absorption of poor unskilled labor is low in forestry which tends to be capital intensive natural forests may thus lack comparative advantage for poverty alleviation there are few win win synergies between natural forests and national poverty reduction which may help to explain why the loss of tropical forests is ongoing this may have important implications for our understanding of sustainable forest development and for the design of both conservation and poverty alleviation strategies

household wealth status and natural resource use in the kat river valley south africa abstract much work has demonstrated the significant role and value of non timber forest products ntfps in the livelihoods of rural people in southern africa and elsewhere the findings provide a mean or composite picture averaged across the sample households within each community yet within any given community there is significant socio economic differentiation it is important to acknowledge such differentiation when considering policy and management interventions to support rural livelihoods and promote sustainable resource use this paper reports on a study in south africa the objective of which was to explore wealth related differences and similarities in the use and value of ntfps data on ntfp consumption purchase and sale were collected from households in three rural villages households were divided into three wealth classes and patterns of ntfps use between the classes examined there was no difference in the proportions of households in each wealth class using ntfps nor the total number of ntfps used per household yet there was some supporting evidence that poorer households derive greater benefits from ntfps than do wealthy or intermediate households one clear difference was that with increasing wealth households purchased significantly more ntfps and a greater proportion of wealthy households did so conversely a greater proportion of poor households were involved in the sale of one or more ntfps and they sold a greater number per household compared to wealthy and intermediate households detailed examination of use and value of four ntfps fuelwood wild fruits edible herbs and grass hand brushes revealed that in all instances the poorest households used more of the resource per capita than the other wealth classes this was not the case for comparisons based on the total household as the unit of analysis gross annual direct use value did not differ between the wealth classes for any of the four ntfps examined at the household level but on a per capita basis a significantly higher gross annual direct use value was evident within poorer households for fuelwood and edible herbs the significance of these differences is discussed

special section land use options in dry tropical woodland ecosystem in zimbabwe household resource allocations in response to risks and returns in a communal area of western zimbabwe abstract a household production model is constructed in the context of a subsistence economy influenced by fluctuating rainfall increasing populations and relationships to the natural resource base households are modelled as attempting to optimally allocate their resources among four sectors agriculture woodlands with wood and non wood sub sectors livestock and urban simulations show that although welfare decreases over the 50 year simulation period the resource base appears to be able to sustain the increased pressure data to feed the model are limited implying further research is needed on resources expended by households by sector perceptions of risk and differentiation within and among households according to gender and wealth despite data limitations results show the importance of considering that households may allocate resources between multiple sectors as these options may buffer their welfare from rainfall shocks and increasing population pressures

trade policymaking in a land locked developing country the wto review of nepal sandwiched between india in the south east and west and the people s republic of china in the north nepal is a small landlocked developing country its trade policy autonomy is constrained by land lockedness and open border with india despite opening up the economy it has not fully benefited from openness perhaps partly due to poor governance and partly due to transit and customs related problems although these are crucial issues for trade competitive the trade policy review of nepal 2012 tprn 2012 is either very polite or lacks a comprehensive analysis on most of these since transit related costs faced by landlocked developing countries can be substantial just evaluating the progress made in liberalising tariffs and nontariff barriers can provide a distorted picture of the overall business climate the future wto review reports on these countries should have a separate section on transit related issues to contribute to policy debate on the problems of landlocked developing countries despite this the publication of tprn 2012 is very timely given the emphasis placed in the current policy debate in the wto and other international forums on the problems of landlocked developing countries

wealth differentiation in household use and trade in non timber forest products in south africa findings from southern africa and internationally indicate the local use and trade of ntfps to be significant however most present a composite picture failing to account for intra community socio economic differences these differences may have implications for policy and practice related to poverty alleviation and sustainable use this paper reports on a study in south africa which explored the relationship between household wealth and the use procurement and sale of ntfps in two villages there was no influence of wealth on the proportion of households using or purchasing most of the ntfps or the number used however wealthier households bought significantly more resources per household and poor households at one village sold significantly more these results are discussed within the context of local conditions and poverty alleviation debates

politics and the structural dependence of the state in democratic capitalist nations i explore empirically a central claim of the structural dependence thesis namely that capitalists ability to disinvest fundamentally conditions policy choices in democratic capitalist systems utilizing time series data for 16 affluent democracies from 1965 to 1984 i find that indeed low rates of business investment are associated with reductions in corporate tax burdens and that these reductions are more pronounced in periods of economic crisis moreover low rates of capital formation engender cuts in personal income taxes during periods of economic stress however i also find that the magnitude of responsiveness of taxation to low rates of investment is relatively small and that analyses of the political context of investment and taxation indicate that governments have choices the responsiveness of corporate tax burdens to capital formation may under some governments be part of a policy mix designed to maintain adequate investment and to address the demands of core constituencies

effective protection policy appraisal and trade policy reform when the effective protection concept was rst developed it was widely regarded as a key widely used especially in the context of policy reform and policy appraisal in developing countries this paper re appraises tmeasure of the structure of protection and became widely deployed it was however subject to a he concept reviews the extent of its application and discusses the factors behind its longevity as an investigative tool the theoretical critique on the grounds that it was essentially a partial equilibrium measure which could not be easily embedded ipaper concludes that the measure still has a role to play in evaluating the structure of protection n a general equilibrium framework notwithstanding this critique the concept has continued to be

sri lanka s trade policy reverting to dirigisme the paper surveys recent development in sri lankan trade policy with an emphasis on emerging protectionist tendencies using sri lanka s trade policy review 2010 by the world trade organisation as a reference point the sri lankan experience for over the three decades following the liberalisation reforms stated in 1977 has clearly demonstrated that an outward oriented policy regime can yield a superior development outcome compared to a closed economy regime even under severe strains of a protracted ethnic conflict and macroeconomic instability viewed against this backdrop recent developments in the sri lankan policy scene do not seem to augur well for the future of the sri lankan economy

does relationship specific investment depend on asset ownership evidence from a natural experiment in the housing market the classic hold up model grossman and hart 1986 predicts that allocations of asset ownership which expose a party to expropriation reduce relationship specific investments by this party in the empirical context of t he housing market i show that the hold up model predicts more relationship specific investments such as bathroom renovations in owner occupied housing than in rental housing i confirm this prediction for the german housing market to ob tain an exogenous variation of asset home ownership i use the natural experiment of the german reunification under the communist regime ownership exist ed but was economically meaningless it was a quasi random by product of dwelling choice yet after reunification ownership unexpectedly reacquired legal fo rce

the design of fiscal reforms in revenue constrained developing countries while generalisation is perilous there are many especially small developing countries for which sales taxes and turnover taxes are fairly negligible as revenue sources and for which import duties and export taxes particularly the former are leading revenue sources for evidence from the early i980s see tanzi i987 and greenaway and milner i990 this observation is unsurprising when account is taken of the administrative constraints to which many developing countries are subject sales taxes can be difficult to collect not to mention a complex tax like vat income tax is largely infeasible and often has to take a simple form such as a payroll tax confined in practice to public and large company employment some taxes which would be assumed to be eminently feasible in industrial economies may not generate as much revenue as might be supposed in a developing country for instance tax disks which the law may require heavy goods vehicles to carry may generate a flow of bribes to police and other officials if these are wise enough to set the bribe at a modest level making it cheaper to pay bribes than to buy a disk a cynic might say that the bribes are an unofficial source of revenue if their existence enables the state to get away with paying its officials absurdly low salaries one would have to hope if that argument is accepted that the officials do something socially useful apart from stopping heavy goods vehicles such considerations make it interesting to consider the design of public finance for a country severely constrained in its choice of what musgrave called tax handles that is types of tax instrument which it may practically employ the existing literature for which newbery and stern i987 provides an excellent review throws some light on this issue but the problem is seldom treated explicitly an exception would be dreze and stern i985 whose highly abstract and general treatment of cost benefit analysis theory can be seen to incorporate principles of public finance which fully cover the restricted policy choices which i have in mind because the approach of these authors is so general however it is not easy to extract conclusions for tax design in specific cases this is no criticism of the paper of course as the argument is addressed to cost benefit analysis generally speaking theory has developed in the direction of sophisticated and complex tax systems the next section discusses why this is so from the point of view of theory yet ideal tax systems would be difficult to implement in many developing countries as i shall treat tariffs as a highly feasible revenue

structural dependence of the state on capital a central claim of both marxist and neoclassical political theory is that under capitalism all governments must respect and protect the essential claims of those who own the productive wealth of society this is the theory of structural dependence of the state on capital using a formal model the internal logic and the robustness of the theory is examined we conclude that in a static sense the theory is false virtually any distribution of consumption between wage earners and owners of capital is compatible with continual private investment once an appropriate set of taxes and transfers is in place yet the state may be structurally dependent in a dynamic sense policies that once in place redistribute income without reducing investment do reduce investment during the period in which they are anticipated but not yet implemented

liberalising foreign trade through rose tinted glasses the foreign trade sector has a crucial role to play in economic development trade has variously been described as the engine or handmaiden of growth this key role has stimulated a great deal of interest in the links between trade and growth with the links between trade orientation and exports and exports and growth receiving particularly close attention alongside this time series work there have been a number of multi country studies of trade policy in developing countries those of krueger i 98 i and balassa i 982 are perhaps the best known most of this work has been directed at two questions first what does the structure of protection look like in a given developing country second are there clear links between the structure of protection trade orientation and economic performance it is widely believed in developing countries that the major lending agencies the world bank in particular perceive a clear link between trade orientation and economic performance and that this explains why around three quarters ofall conditions which attach to structural adjustment loans sals feature reform of trade policy the editors of liberalising foreign trade demetrious papageorgiou michael michaely and armeane choksi all of whom are on the world bank staff clearly believe this to be the case judging from their opening statement the benefits of open trading have by now been sufficiently demonstrated and described by economic historians and analysts in this study we take them for granted and turn our minds from the whether to the how vol i p vii in other words it is the timing phasing and sequencing involved in the design and implementation of a trade liberalisation policy that forms the subject matter of the present study vol 7 p i liberalising foreign trade is a world bank organised study which describes and evaluates 36 liberalisation episodes in i 9 countries during the period i950 i982 the study is ambitious in scale28 authors 3 editors 7 volumes and almost 3 ooo pages of text it is the most comprehensive cross country analysis of liberalisation episodes undertaken from a policy perspective a study of this scale is potentially of considerable interest given the liberalisations

after the decision implementing policy reforms in developing countries abstract implicit in many reform proposals is a model of the policy process that is roughly linear a proposed reform gets on the agenda for government action a decision is made on the proposal and the new policy or institutional arangement is implemented either successfully or unsuccessfully this article presents an alternative interactive model of implementation that focuses on the conflict and reactions that are evoked by efforts to bring about changed policy or institutional contexts for development and the resources that policy makers and managers are likely to require to sustain a reform in the face of such reactions central to the analysis is the assertion that characteristics of the reform being implemented will largely determine the kind of conflict it engenders where such reaction is likely to become manifest and what resources are needed for sustainability the analysis suggests a framework for the strategic management of reform initiatives

fiscal dependence on trade taxes and trade policy reform the article focuses on fiscal implications of structural adjustment loans sals from an a priori standpoint and by reference to the experience of five countries three of these countries have had revenue enhancement after trade policy reforms and the other two cases experienced revenue depletion the central point which emerges from the study is that it is not clear that trade liberalisation leads to fiscal enhancement or fiscal depletion both a priori the orising and country analyses demonstrate that a range of outcomes is possible depending upon initial conditions and the components of any reform package

a life s work on trade and development this paper reflects on the career contributions of professor chris milner to the literature on international trade and economic development as such it not only provides an overview of a life s work but also sets the context for the nine papers which follow all of these were specially written for this special issue of the world economy and all relate to different areas that professor milner worked in

leading the left to the right populist coalitions and economic reform abstract democratic political parties with a history of commitment to statist economic policies face internal stresses when they come to power and preside over programs of wholesale economic liberalization how do such parties and coalitions avoid splintering and manage to maintain electoral support examining the recent experiences of argentina and mexico edward gibson suggests that one can understand these achievements by treating each party as a combination of two separate components performing distinct functions a metropolitan policy component and a peripheral or rural electoral component his framework travels well beyond latin america and helps illuminate the different politics underlying three recent waves of economic liberalization in sri lanka

tax revenue instability with particular reference to sub saharan africa this article examines the temporal instability of tax revenues across a sample of developed and less developed countries it is shown that instability is especially high in ldcs and is highest in open economies with low per capita income high output variance and inflationary problems even allowing for these factors revenue instability appears to be particularly high in sub saharan africa revenue instability can be expected via the government budget constraint to be associated with expenditure instability and or instability in the sources of deficit finance cross section evidence for ldcs confirms that countries with high tax revenue instability tend also to have high expenditure instability time series evidence for six african countries however suggests that revenues and expenditures do not move together in a uniform manner and the direction of causality is generally ambiguous there is some evidence however that foreign borrowing is used more to finance expenditure increases than to counteract

do vertical mergers facilitate upstream collusion we investigate the impact of vertical mergers on upstream firms ability to collude when selling to downstream firms in a repeated game we show that vertical mergers give rise to an outlets effect the deviation profits of cheating unintegrated firms are reduced as these firms can no longer profitably sell to the downstream affiliates of their integrated rivals vertical mergers also result in an opposing punishment effect integrated firms typically make more profit in the punishment phase than unintegrated upstream firms the net result of these effects in an unintegrated industry is to facilitate upstream collusion we provide conditions under which further vertical integration also facilitates collusion

producing woodfuel for urban centers in the democratic republic of congo a path out of poverty for rural households woodfuel is a renewable energy source with good potential for climate change mitigation in the democratic republic of congo drc the sector employs over 300 000 people for the supply of kinshasa alone but the benefits to the poor are often unknown this paper analyzes the contribution of commercial woodfuel production to livelihoods and poverty reduction in the drc woodfuel revenues especially those of charcoal contribute substantially to producers household income ranging from 12 for fuelwood producers around kisangani to 75 for charcoal producers around kinshasa it supports basic needs and investments in other livelihood activities for 82 of charcoal producers and 65 of fuelwood producers which helps to reduce poverty the contribution of woodfuel commercialization to poverty reduction should be part of energy and forestry policies

empirical regularities in the poverty environment relationship of rural households evidence from zimbabwe abstract analysis of rural households and environmental resources is beset by inadequate data especially in africa using purpose collected panel data from zimbabwe we demonstrate seven empirical regularities in the rural poverty environment relationship most important environmental resources make a significant contribution to average rural incomes poorer households also depend heavily on these resources which contribute c 40 to their incomes richer households however use greater quantities of environmental resources in total finally considerable differentiation exists in the economic characteristics of environmental goods these results demonstrate the considerable economic significance of environmental resources to rural households surveys which ignore them miscalculate rural incomes and welfare

incomplete contracts and the choice between vertical integration and franchising abstract previous studies have demonstrated that geographical dispersion of outlets leads to an incentive for firms to franchise geographical dispersion alone however does not provide a full explanation of the firm s decision to franchise certain industries with highly dispersed retail outlets such as supermarkets almost never franchise this paper uses the incomplete contracting paradigm to demonstrate how the inability to contract over local outlet costs can drive the firm s decision to franchise or integrate since only owners have incentives to reduce cost ownership of the local outlet should rest with the party with the greatest ability to control cost the theory is then applied to several industries

the populist road to market reform policy and electoral coalitions in mexico and argentina governing parties face two fundamental tasks they must pursue policies effectively and they must win elections their national coalitions therefore generally include two types of constituencies those that are important for policy making and those that make it possible to win elections in effect governing parties must bring together a policy coalition and an electoral coalition this distinction sheds light on how the transitional costs of major economic policy shifts can be made sustainable in electoral terms it also provides a starting point for analysis of how two of latin america s most important labor based parties the peronist party in argentina and the partido revolucionario institucional pri in mexico maintained electoral dominance while pursuing free market reforms that adversely affected key social constituencies peronism and the pri are conceived of as having encompassed historically two distinctive and regionally based subcoalitions a metropolitan coalition that gave support to the parties development strategies and a peripheral coalition that carried the burden of generating electoral majorities this framework permits a reconceptualization of the historic coalitional dynamics of peronism and the pri and sheds light on the current process of coalitional change and economic reform