rainfall financial development and remittances evidence from sub saharan africa we use annual variations in rainfall to examine the effects that exogenous transitory income shocks have on remittances in a panel of 41 sub saharan african countries during the period 1970 2007 our main finding is that on average rainfall shocks have an insignificant contemporaneous effect on remittances however the marginal effect is significantly decreasing in the share of domestic credit to gdp so much so that at high levels of credit to gdp rainfall shocks have a significant negative effect on remittances while at low levels of credit to gdp the effect of rainfall on remittances is significantly positive

malthus living in a slum urban concentration infrastructure and economic growth abstract the link between urban concentration primacy and economic growth at country level is not straightforward as there are benefits as well as costs associated with urban primacy recent empirical evidence suggests a differential negative effect of concentration in sub saharan africa compared to the rest of the world this paper revisits the literature on urban concentration and economic growth to shed some light on these recent results the main contribution of the paper is to show how differentiated effects of urban primacy on economic growth can be accounted for by considering a role for the quality of the urban environment in terms of urban infrastructure the role of urban infrastructure is found to be robust to a long list of controls different specifications different estimation techniques and potential bias from simultaneity and measurement error

agricultural performance and development strategy retrospect and prospect abstract the slow pace and inequitable pattern of past agricultural growth have been major factors in the continuing problems of poverty hunger and unemployment especially in the poorer regions of the third world past experience shows that agriculture has an important potential in economic development given appropriate structures and policies these historical lessons are of strategic significance for poor countries as they confront severe problems of adjustment this paper examines the main payoffs and obstacles to the pursuit of an agriculture led industrialization strategy together with proposals for appropriate policies that can support such a strategy

rain and the democratic window of opportunity according to the economic approach to political transitions negative transitory economic shocks can give rise to a window of opportunity for democratic change we examine this hypothesis using yearly rainfall variation over the 1980 2004 period in 41 sub saharan african countries we find that a 25 drop in rainfall increases the probability of a transition to democracy during the following two years by around 3 percentage points a 5 fall in income due to low rainfall raises the probability of democratization by around 7 percentage points we also find that rainfall does not affect transitions from democracy to autocracy

weather variations and international trade in this paper i investigate the effect of weather variations in the exporter and importer countries separately as well as a the difference between weather variations in both countries on bilateral trade flows the analysis is done at the country sectoral and product levels worldwide and over the 1992 2014 period i find a negative effect of temperature variations in the exporter country and in the difference between exporter and importer countries on bilateral trade at the country level at the product level both negative and positive effects arise but the negative effect of temperature dominates the temperature effects are on the agricultural and manufacturing sectors especially in the textile and metals sectors i show that possible channels are the impact of temperature on output and labour productivity the negative impacts are larger in exporter countries that are closer to the equator that have lower quality of institutions and that export to more remote countries if countries are able to adapt to climate change the long term effects of temperature variations should be lower than the contemporaneous effect nevertheless my results on the long term effects analysis do not support this hypothesis suggesting no or very low adaptation moreover the negative effect of temperature is persistent and cumulative through several years after the temperature shock concerning precipitation variation effects they are found mainly at the product level with the positive effect dominating for the affected products

the impact of research led agricultural productivity growth on poverty reduction in africa asia and latin america abstract twenty percent of the world s population or 1 2 billion live on less than 1 per day 70 of these are rural and 90 are in asia and sub saharan africa research led technological change in agriculture generates sufficient productivity growth to give high rates of return in africa and asia and has a substantial impact on poverty currently reducing this number by 27 million per annum whereas productivity growth in industry and services has no impact the per capita cost of poverty reduction by means of agricultural research expenditures in africa is 144 and in asia 180 or 50 cents per day but this is covered by output growth by contrast the per capita cost for the richer countries of latin america is over 11 000

how does energy consumption affect china s urbanization new evidence from dynamic threshold panel models abstract energy consumption may play different roles at different stages of urbanization and economic growth given china s rapid economic development and urbanization process this study tries to explore the possible nonlinear relationship between energy consumption and urbanization in china against the background of promoting new type urbanization the level of china s urbanization is evaluated comprehensively using the entropy method a newly developed dynamic threshold panel model is employed to examine the nexus of energy consumption and comprehensive urbanization with full consideration of heterogeneous characteristics the panel data vector autoregression or pvar model is also used to estimate the direct effects of various energy consumption patterns on the urbanization the empirical results indicate that the nexus of energy consumption and urbanization is indeed nonlinear and that energy consumption is conducive to promote china s urbanization at the current stage of development however the positive effect decreases when there is an increase in energy consumption intensity and energy consumption scale whereas the effect increases with the promotion of energy consumption structure

relative wages wage growth and quit behavior using italian social security records for male workers from a sample of firms in turin from 1981 to 1983 we show that conditional on the worker s own wage the average wage in the establishment for similar workers is negatively related to quits we also find that this variable predicts future wage growth this is consistent with an economic model in which workers compare the longrun value of employment opportunities when making quit decisions

are workers paid their marginal products status is like coase s social costs a reciprocal phenomenon given that one person s gain in status can occur only at the expense of a loss in status for others and that workers are free to choose their coworkers it follows that the competitive wage structure within a firm must be one in which individual wage differences understate individual differences in marginal products the purpose of this paper is to examine a variety of empirical evidence that relates to this proposition about the firm s internal wage structure the paper is organized as follows section i briefly summarizes the theoretical considerations that govern competitive wage determination when status matters to people and firms are viewed as voluntary associations of workers section ii then confronts the predictions of section i by examining pay and productivity schedules for a group of sales occupations for which these schedules are relatively easily observed section ii also examines the relationship between wages and productivity for a sample of university professors an occupation in which individual productivity differences are for a variety of obvious reasons relatively more difficult to measure all of the evidence examined is consistent with the hypothesis that within firms wage rates vary substantially less than do individual productivity values section iii discusses additional observations and evidence that bear on this same hypothesis it suggests that the implicit market for status may strongly influence the ways in which firms are organized to carry out the tasks they perform section iv concludes by considering the claim that egalitarian internal wage structures arise because of equity considerations it argues that the concept of equity appears very closely linked to the concept of status and suggests a strategy for assigning monetaty value to the equity considerations that so often dominate public policy decisions

strategic public policy around population thresholds abstract political economists have long maintained that politicians respond to both re election and financial incentives this article contributes to the latter literature by analysing whether when and how local office holders respond to the economic incentives embedded in exogenously imposed population thresholds leading to an increased number and remuneration of local politicians building on insights from the urban economics and public finance literatures we argue that local politicians may strategically adjust fiscal and housing policies to stimulate in migration when approaching a population threshold where their remuneration increases using data from all 589 belgian municipalities over the period 1977 2016 our results confirm that approaching important population thresholds causes lower local tax rates and the granting of additional building permits particularly for apartments these policy changes occur early in the election cycle and at least for housing policy are restricted to incumbent mayors themselves expecting to benefit from crossing the population threshold

the role of ports in the making of major cities self agglomeration and hub effect this paper proposes an evolutionary model of spatial economic development in which agglomeration economies and the hub effect of transport nodes interplay in the making of major cities the model explains the irreversibility of spatial economic development such as the continuing prosperity of port cities even after their initial advantage of water access had become irrelevant it is also shown that in order to decentralize industries from the core region to a periphery region a temporary protection of industries in the periphery by worsening the transport connection with the core for a short period of time may be desirable

institutions and agricultural productivity in sub saharan africa agricultural productivity in 41 sub saharan africa ssa countries from 1960 to 1999 is examined by estimating a semi nonparametric fourier production frontier over the four decades the estimated rate of productivity change was 0 83 per year although the average rate from 1985 99 was a strong 1 90 per year former uk colonies exhibited significantly higher productivity gains than others while liberia and countries that had been colonies of portugal or belgium exhibited net reductions in productivity we measure a significant reduction in productivity during political conflicts and wars and a significant increase in productivity among those countries with higher levels of political rights and civil liberties

malaria suitability urbanization and persistence evidence from china over more than 2000 years abstract we show that the climatic potential for plasmodium falciparum malaria transmission constituted a locational fundamental that influenced the spatial distribution of urbanization since the early start of the southward expansion of the han chinese around 200 bce this effect is still detectable in today s distribution of urbanization and economic activity even though the risk of malaria falciparum has been successfully eliminated we do not find any indication of convergence between high and low malaria potential regions after eradication our identification strategy relies on a climate based measure of plasmodium falciparum malaria transmission intensity which is fitted to experimental data on mosquito and parasite development from laboratory studies this measure is exogenous with respect to human population densities

wages nonwage job characteristics and labor mobility this paper examines the effects of a set of nonwage job characteristics on the quit decisions of young and middle aged men the data set was constructed by merging data in the national longitudinal surveys of young and mature men with data from the dictionary of occupational titles file and the bureau of economic analysis file on fringe benefits the empirical analysis shows that some nonwage job attributes have significant influence on worker quit behavior and that there are important differences in the effects of the nonwage job characteristics across age groups young men are significantly more likely than older men to quit repetitive jobs for example whereas the presence of bad working conditions is a more important factor in the quit decisions of the older cohort the results also indicate that for the older men fringe benefits have a stronger effect on quit decisions than wages do further evidence on age differences is provided through an analysis of panel data from the quality of employment survey since the time of adam smith the theory of equalizing differences that individuals are induced to accept less attractive jobs by receiving compensating increases in their wages has been used by economists to explain the existence of wage differences in the labor market by definition the theory has important implications for understanding the mobility of labor since an individual s decision to change jobs is based on all the characteristics of a job the wage rate fringe benefits and nonpecuniary job at

evidence on the political economy of the urbanization process urbanization and economic development go hand in hand as a country moves from a rural agricultural base to an urban industrial base this paper argues that urbanization per se occurs in response to the basic sector shift out of agriculture and government policies such as price controls and trade protection of industry affect the process only indirectly through their effect on sector composition however urban concentration the extent to which a country s urban resources are concentrated in one or two large cities as opposed to more evenly spread is much more directly affected by policies and politics the paper finds specifically that investments in inter regional infrastructure facilitates urban deconcentration away from primate to hinterland cities as does increasing democratization or increasing fiscal decentralization the findings move beyond establishing basic correlations in the data to trying to quantify causal effects in a panel framework with instrumental variables estimation

transition in sub saharan africa agriculture urbanization and income growth abstract econometric analysis of some 40 years of data has provided mixed results because of the defects of the data and because there are some relatively sudden structural economic shifts an important shift is when agricultural labor ceases to grow now happening in sub saharan africa ssa a model of the interrelationship over time of the rural mainly agricultural sector and the urban mainly manufacturing and service sector is proposed each provides a market to the other growth in both requires investment but of distinctly different types their interaction results in an s shaped curve many ssa countries are in the acceleration phase and its agriculture particularly in semi arid areas is increasingly oriented to the growing home market case studies show farmers have invested and adopted new technologies but the transition to an urbanized economy has been hindered by poor policies the current need is for appropriate investments and policies to develop the productivity of the urban sectors so that they can continue to stimulate agriculture and provide jobs for those who are leaving farming

economic growth effects of alternative climate change impact channels in economic modeling despite increasing empirical evidence of strong links between climate and economic growth there is no established model to describe the dynamics of how different types of climate shocks affect growth patterns here we present the first comprehensive comparative analysis of the long term dynamics of one time temporary climate shocks on production factors and factor productivity respectively in a ramsey type growth model damages acting directly on production factors allow us to study dynamic effects on factor allocation savings and economic growth we find that the persistence of impacts on economic activity is smallest for climate shocks directly impacting output and successively increases for direct damages on capital loss of labor and productivity shocks related to different responses in savings rates and factor specific growth recurring shocks lead to large welfare effects and long term growth effects directly linked to the persistence of individual shocks endogenous savings and shock anticipation both have adaptive effects but do not eliminate differences between impact channels or significantly lower the dissipation time accounting for endogenous growth mechanisms increases the effects we also find strong effects on income shares important for distributional implications this work fosters conceptual understanding of impact dynamics in growth models opening options for links to empirics

how migration restrictions limit agglomeration and productivity in china china strongly restricts rural urban migration resulting in a well acknowledged surplus of labor in agriculture but migration is also restricted within sectors this paper argues that these intra sector restrictions lead to insufficient agglomeration of economic activity in both the rural industrial and urban sectors with resulting first order losses in gdp for urban areas the paper estimates a city productivity relationship based on city gdp numbers the effects of access educational attainment fdi and public infrastructure on productivity are estimated given these worker productivity is shown to be an inverted u shape function of city employment with the peak point shifting out as industrial composition moves from manufacturing to services as predicted by urban theory as far as we know this is the first paper to actually estimate the relationship between output per worker and city scale for any country the majority of chinese cities are shown to be potentially undersized below the lower bound on the 95 confidence interval about the size where their output per worker peaks the paper calculates the large gains from increased agglomeration in both the rural industrial and urban sectors

the shocking origins of political transitions evidence from earthquakes do earthquakes trigger political transitions using a rich panel dataset of 160 countries observed over 1950 2007 we find that earthquake shocks measured in terms of the effect of ground motion amplitude on death toll have two contradicting effects on political change on the one hand earthquakes drive transitions into democracy due to an affective shock which we interpret to be the reaction of citizens by which they hold the incumbent government responsible for earthquake damages on the other hand earthquakes indirectly hasten transitions into a less democratic regime because they increase the income level contemporaneously possibly due to short term emergency response and recovery expenditures and thus raising the opportunity cost of contesting the incumbent government overall we show that while not leading to a full fledged regime transition earthquake shocks open a new democratic window of opportunity but this window is narrowed by improved economic conditions

industrial centralization in indonesia in certain situations economic liberalization policies can increase the degree of spatial centralization of resources and spatial concentration of manufacturing in large metropolitan areas in addition historical patterns of location make it difficult to alter the degree of centralization this article explores these issues by specifying and estimating a nested logit model of industrial location of manufacturing activity in java focusing on the unincorporated sector the results indicate that plants strongly prefer locations with mature plants in related industries which offer a built up stock of local knowledge in addition the 1983 liberalization in indonesia was associated with increased centralization of the unincorporated sector although the liberalization gave unincorporated firms better access to government and other centralized services firms needed to centralize to take advantage of these opportunities because the bureaucratic process is centralized and communications are poor the relative increased growth of the corporate sector following liberalization may also have helped to further draw unincorporated plants into centralized locations

the food problem and the evolution of international income levels in most poor countries large fractions of land labor and other productive resources are devoted to producing food for subsistence needs we show that a model incorporating the food problem can provide new and useful insights into the evolution of international income levels in particular we find that the food problem can explain why some countries started to realize increases in per capita output more than 250 years later in history than others we also show that the food problem has important implications for growth miracles and the speed at which a country converges to its balanced growth path

isolated capital cities accountability and corruption evidence from us states we show that isolated capital cities are robustly associated with greater levels of corruption across us states in line with the view that this isolation reduces accountability we then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms newspapers cover state politics more when readers are closer to the capital voters who live far from the capital are less knowledgeable and interested in state politics and they turn out less in state elections we also find that isolated capitals are associated with more money in state level campaigns and worse public good provision jel d72 d73 h41 h83 k42 r23

equity in economic relationships towards a positive theory abstract a new theory of equity in economic relationships has begun to develop the theory is consistent with conventional assumptions such as rationality and self interest but it explains phenomena that have baffled orthodox microeconomics productivity variation by workers in response to perceived inequity can cause wage stickiness and the persistence of inefficient wage structures studies by economists and social psychologists provide empirical support potentially the theory is a rich one having implications for areas such a welfare economics and the microfoundations of macroeconomics

weather shocks and agricultural commercialization in colonial tropical africa did cash crops alleviate social distress a rapidly growing body of research examines the ways in which climatic variability influences economic and societal outcomes this study investigates how weather shocks triggered social distress in british colonial africa further it intervenes in a long standing and unsettled debate concerning the effects of agricultural commercialization on the abilities of rural communities to cope with exogenous shocks we collect qualitative evidence from annual administrative records to explore the mechanisms linking weather extremes to harvest failures and social distress we also conduct econometric testing on a novel panel dataset of 143 administrative districts across west south central and east africa in the interwar era 1920 39 our findings are twofold first we find robust evidence that rainfall anomalies both drought and excessive precipitation are associated with spikes in imprisonment our proxy for social distress we argue that the key causal pathway is the loss of agricultural income which results in higher imprisonment for theft unrest debt and tax default second we find that the impact of weather shocks on distress is partially mitigated by the cultivation of export crops our findings suggest that even in the british colonial context smallholder export crop cultivation led to higher private incomes as well as greater public investment our findings speak to a topic of considerable urgency today as the process of global climate change accelerates generating more severe and unpredictable climatic extremes an increased understanding and identification of adaptive and mitigating factors would assist in targeting policy interventions and designing adaptive institutions to support vulnerable rural societies

interdependent preferences and the competitive wage structure this article shows by example that when workers care about relative income and are free to choose their coworkers the equilibrium distribution of wages within firms must be less dispersed than the corresponding distribution of marginal products an implicit market for within firm status is shown to produce welfare gains by sorting workers among firms in accordance with how much they are willing to pay for high rank the resulting equilibrium pareto dominates allocations in which each worker is paid his marginal product

the economic consequences of labor mobility unlike most previous research on the relative changes in earnings of job stayers and job changers this study examines the variance in earnings changes rather than simply average changes men and women rather than only men and the five year period following job change rather than only the first year or two the author finds great variability in earnings changes both within and across race and gender groups notably men gained more from quits and except in the case of low wage workers lost less from layoffs than women also men suffered a much smaller penalty than women for repeated job changes for all groups the percentage difference between earnings before and after leaving a job generally persisted for several years

a theory of urban growth in an economy experiencing endogenous economic growth and exogenous population growth we explore two main themes how urbanization affects efficiency of the growth process and how growth affects patterns of urbanization localized information spillovers promote agglomeration and human capital accumulation fosters endogenous growth individual city sizes grow with local human capital accumulation and knowledge spillovers and city numbers generally increase which we demonstrate is consistent with empirical evidence we analyze whether local governments can successfully internalize local dynamic externalities in addition we explore how growth involves real income differences across city types and how urbanization can foster income inequality most nonagricultural production in developed countries occurs in metropolitan areas the underlying reasons why economic activity agglomerates into cities localized information and knowledge spillover also make cities the engines of economic growth in an we gratefully acknowledge support of the national science foundation grants sbr 9422440 and sbr9730142 for this research the work has benefited from conversations with harl ryder on the dynamics of the model and from comments by gilles duranton and participants in seminars at brown colorado and texas austin and a presentation at an isit seminar sponsored by the centre for economic policy research and the national bureau of economic research

the impact of global warming on agriculture a ricardian analysis reply we measure the economic impact of climate on land prices using cross sectional data on climate farmland prices and other economic and geophysical data for almost 3 000 counties in the united states we find that higher temperatures in all seasons except autumn reduce average farm values while more precipitation outside of autumn increases farm values applying the model to a global warming scenario shows a significantly lower estimated impact of global warming on u s agriculture than the traditional production function approach and in one case suggests that even without co sub 2 fertilization global warming may have economic benefits for agriculture 16 refs 5 figs 5 tabs

climate change hydro dependency and the african dam boom summary we examine africa s increasing reliance on hydropower in light of climate change induced variations in rainfall and the potential power outages that may result we use a continent wide riverflow model and ippc climate change scenarios and show that current plans for african dam building are fairly well matched with river flow predictions so that fears that international donors and national governments are making a series of expensive and environmentally damaging investments may be overstated however predictions of an increase in extreme events and reduced rainfall for certain countries mean there are still viability concerns for certain planned hydropower investments

scale externalities in korea this paper estimates the nature and magnitude of scale externalities in a developing country korea in the period 1983 1993 this is a period of rapid industry deconcentration from seoul to other metro areas providing a context where externalities are measured when local scale magnitudes are changing dramatically the data allow us to examine the emerging degree of national industrial concentration in different industries as related to their scale externality magnitudes we also examine whether individual industries agglomerate in cities which have a comparative advantage for that industry

an instrumental variables approach to estimating tax revenue elasticities evidence from sub saharan africa this paper exploits the significant response of real gdp growth of sub saharan african countries to exogenous international commodity price and rainfall shocks to construct instrumental variables estimates of the tax revenue elasticity iv estimates yield that a 1 increase in gdp increases tax revenues by up to 2 5

trade openness and economic growth panel data evidence from sub saharan africa this paper uses an instrumental variables approach to estimate the relationship between trade openness and economic growth in sub saharan africa instrumental variables estimates show that economic growth has a significant negative contemporaneous effect on trade openness while trade openness has a significant positive effect on economic growth a 1 percentage point increase in the ratio of trade over gdp is associated with a short run increase in growth of approximately 0 5 in a given year the cumulative long run effect on the level of gdp per capita is larger reaching about 2

urbanisation urban concentration and economic development the paper investigates how urban primacy affects economic growth across countries using semi parametric estimation techniques on a cross country panel for the years 1960 90 an increasing relationship is unearthed between urban primacy and growth this result holds even when limiting the sample to the developing country group thus moderating previous findings on the existence of an optimal level of urban primacy by suggesting that if such an optimal level exists the range of values of urban primacy for which it is reached is fairly wide

does rainfall matter for economic growth evidence from global sub national data 1990 2014 much micro econometric evidence suggests that precipitation has wide ranging impacts on vital economic indicators such as agricultural yields human capital and even conflict and yet paradoxically most macro econometric evidence especially in the climate economy literature finds that precipitation has no robust and significant impact on various measures of aggregate economic output this paper argues that spatial aggregation of weather at the country level explains this result the paper uses annual subnational gross domestic product data to show a concave relationship between precipitation and local gross domestic product growth between 1990 and 2014 it then demonstrates that when the data are aggregated at larger spatial scales the impact decreases and eventually vanishes the impact of precipitation on aggregate economic activity is predominantly felt in developing countries it is insignificant in developed countries agriculture is found to be the dominant pathway the results have significant consequences for measuring the economic impacts of climate change

political regimes and economic growth arguments that relate regimes to growth focus on property rights pressures for immediate consumption and the autonomy of dictators while everyone seems to agree that secure property rights foster growth it is controversial whether democracies or dictatorships better secure these rights the main mechanism by which democracy is thought to hinder growth is pressure for immediate consumption which reduces investment only states that are institutionally insulated from such pressures can resist them and democratic states are not the main argument against dictatorships is that authoritarian rulers have no interest in maximizing total output these views are summarized in turn

temperature shocks and welfare costs abstract this paper examines the welfare implications of rising temperatures using a standard var we empirically show that a temperature shock has a sizable negative and statistically significant impact on tfp output and labor productivity we rationalize these findings within a production economy featuring long run temperature risk in the model macro aggregates drop in response to a temperature shock consistent with the novel evidence in the data such adverse effects are long lasting over a 50 year horizon a one standard deviation temperature shock lowers both cumulative output and labor productivity growth by 1 4 percentage points based on the model we also show that temperature risk is associated with non negligible welfare costs which amount to 18 4 of the agent s lifetime utility and grow exponentially with the size of the impact of temperature on tfp finally we show that faster adaptation to temperature shocks results in lower welfare costs these welfare benefits become substantially higher in the presence of permanent improvements in the speed of adaptation

economic growth size of the agricultural sector and urbanization in africa this paper uses variations in international commodity prices and rainfall to construct instrumental variables estimates of the within country effect that changes in the size of the agricultural sector and gdp per capita growth have on the urbanization rate for a panel of 41 african countries during the period 1960 2007 the paper s three main findings are that i decreases in the share of agricultural value added lead to a significant increase in the urbanization rate ii conditional on changes in the share of agricultural value added gdp per capita growth does not significantly affect the urbanization rate iii increases in the urbanization rate had a significant negative average effect on gdp per capita growth

wealth weather risk and the composition and profitability of agricultural investments despite the growing evidence that farmers in low income environments are risk averse there has been little empirical evidence on the importance of risk in shaping the actual allocation of production resources among farmers differentiated by wealth the authors use panel data on investments in rural india to examine how the composition of productive and nonproductive asset holdings varies across farmers with different levels of total wealth and across farmers facing different degrees of weather risk income variability is a prominent feature of the experience of rural agents in low income countries the authors report evidence based on measures of rainfall variability that the agricultural investment portfolio behavior of farmers in such settings reflects risk aversion due evidently to limitations on consumption soothing mechanisms such as crop insurance or credit markets the authors results suggest that uninsured weather risk is a significant cause of lower efficiency and lower average incomes a one standard deviation decrease in weather risk measured by the standard deviation of the timing of the rainy season would raise average profits by up to 35 percent among farmers in the lowest wealth quartile moreover rainfall variability induces a more unequal distribution of average incomes for a given distribution of wealth wealthier farmers are willing to absorb significant risk without giving up profits to reduce production risk smaller farmers have to invest their limited wealth in ways that reduce their exposure to risk at the cost of lower profit rates the authors found that at high levels of rainfall variability differences in rates of profit per unit of agricultural assets were similar across classes of wealth but over the sample range of rainfall variability these rates of profit were always higher for the poorer farmers than for the wealthier ones suggesting that the disadvantages of small farmers in risk diffusion are more than offset by their labor cost advantage

is agricultural productivity in developing countries really shrinking new evidence using a modified nonparametric approach abstract nonparametric productivity analyses performed to date show that most developing countries are experiencing relatively rapid technical regress in agriculture we discuss the plausibility of these results and argue that they stem from the existence of biased technical change and the definition of technology used we reestimate the malmquist index for a group of developing countries using a different definition of technology and find that most developing countries in our sample are experiencing positive productivity growth with technical change being the main source of this growth

what do we learn from the weather the new climate economy literature a rapidly growing body of research applies panel methods to examine how temperature precipitation and windstorms influence economic outcomes these studies focus on changes in weather realizations over time within a given spatial area and demonstrate impacts on agricultural output industrial output labor productivity energy demand health conflict and economic growth among other outcomes by harnessing exogenous variation over time within a given spatial unit these studies help credibly identify i the breadth of channels linking weather and the economy ii heterogeneous treatment effects across different types of locations and iii nonlinear effects of weather variables this paper reviews the new literature with two purposes first we summarize recent work providing a guide to its methodologies datasets and findings second we consider applications of the new literature including insights for the damage function within models that seek to assess the potential economic effects of future climate change jel c51 d72 o13 q51 q54

relative income effects on subjective well being in the cross section abstract recent work suggests that a person s subjective well being swb depends to a large degree on relative income focusing on the underlying identification this paper makes four contributions to this literature it describes the aggregation problem with past studies implements an estimation strategy to overcome this problem finds micro level evidence in support of the hypothesis that relative income does matter in individual assessments of swb and uses cross section estimates to replicate the aggregate time series the evidence further indicates that relative income effects may be smaller at low income levels the results are obtained from ordered probit techniques and the general social survey gss

pricing weather derivatives this article presents a general method for pricing weather derivatives specification tests find that a temperature series for fresno ca follows a mean reverting brownian motion process with discrete jumps and autoregressive conditional heteroscedastic errors based on this process we define an equilibrium pricing model for cooling degree day weather options comparing option prices estimated with three methods a traditional burn rate approach a black scholes merton approximation and an equilibrium monte carlo simulation reveals significant differences equilibrium prices are preferred on theoretical grounds so are used to demonstrate the usefulness of weather derivatives as risk management tools for california specialty crop growers

job satisfaction and co worker wages status or signal we use matched employer employee panel data to show that individual job satisfaction is higher when other workers in the same establishment are better paid this runs counter to substantial existing evidence of income comparisons in subjective well being we argue that the difference hinges on the nature of the reference group we here use co workers their earnings not only induce jealousy but also provide a signal about the worker s own future earnings in our data this positive future earnings signal outweighs any negative status effect this phenomenon is stronger for men and in the private sector but weaker for those nearer retirement

international productivity patterns accounting for input quality infrastructure and research in this paper we present measures of land and labor productivity for a group of ninety eight developed and developing countries using an entirely new data set with annual observations spanning the past three decades the substantial cross country and intertemporal variation in productivity in our sample is linked to both natural and economic factors we extend previous work by dealing with multiple sources of systematic measurement error in conventional agricultural inputs the mix of conventional inputs indicators of quality of agricultural inputs and the amount of publicly provided infrastructure are all significant in explaining observed cross sectional differences in productivity patterns

exogenous volatility and the size of government in developing countries this paper presents instrumental variables estimates of the effects of gdp per capita volatility on the size of government we show that for a panel of 157 countries spanning more than half a century rainfall volatility has a significant positive effect on gdp per capita volatility in countries with above median temperatures in these countries rainfall volatility has also a significant positive reduced form effect on the gdp share of government there is no significant reduced form effect in the sample of countries with below median temperatures where rainfall volatility has no significant effect on gdp per capita volatility using rainfall volatility as an instrumental variable in the sample of countries with above median temperatures yields that greater gdp per capita volatility leads to a significantly higher gdp share of government

the contribution of weather variability to economic sectors every day people make economic decisions based on the weather affecting sales of companies in a wide range of economic sectors in many cases the impact of weather on sales is not constant from

total factor productivity growth in agriculture a malmquist index analysis of 93 countries 1980 2000 in this paper we examine levels and trends in agricultural output and productivity in 93 developed and developing countries that account for a major portion of the world population and agricultural output we make use of data drawn from the food and agriculture organization of the united nations and our study covers the period 1980 2000 due to the non availability of reliable input price data the study uses data envelopment analysis dea to derive malmquist productivity indexes the study examines trends in agricultural productivity over the period issues of catch up and convergence or in some cases possible divergence in productivity in agriculture are examined within a global framework the paper also derives the shadow prices and value shares that are implicit in the dea based malmquist productivity indices and examines the plausibility of their levels and trends over the study period

zipf s law for cities an explanation zipf s law is a very tight constraint on the class of admissible models of local growth it says that for most countries the size distribution of cities strikingly fits a power law the number of cities with populations greater than s is proportional to 1 s suppose that at least in the upper tail all cities follow some proportional growth process this appears to be verified empirically this automatically leads their distribution to converge to zipf s law

the meta production function approach to technological change in world agriculture abstract an alternative meta production function for agriculture is estimated with the cross section data for 43 countries and three years 1960 1970 and 1980 constructed and used by kawagoe hayami and ruttan and hayami and ruttan in their studies by allowing for country specific efficiency factors and using a flexible functional form the transcendental logarithmic production function strikingly different results from those of kawagoe hayami and ruttan are obtained in particular it is found that elasticity of output with respect to machinery is variable and the degree of local returns to scale is not constant and increases with the usage of machinery

climatic factors as determinants of international migration we examine environmental change as a potential determinant of international migration we distinguish between unexpected short run factors captured by natural disasters as well as long run climate change and climate variability captured by deviations and volatilities of temperatures and rainfall from and around their long run averages starting from a simple neo classical model we use a panel dataset of bilateral migration flows for the period 1960 2000 that allows us to control for numerous time varying and time invariant factors we find no direct impact of climatic change on international migration across our entire sample these results are robust when conditioning on characteristics of origin countries as well as when further considering migrants returning home and the potential endogeneity of our network variable in contrast there is evidence of indirect effects of environmental factors going through wages we further find strong evidence that natural disasters beget greater flows of migrants to urban environs

productivity growth in world agriculture sources and constraints during the last half century advances in crop production came from expansion in areas irrigated from more intensive application of fertilizers and crop protection chemicals and from crop varieties that were more responsive to technical inputs and management advances in animal production came from genetic improvements and advances in animal nutrition differences among developed and developing countries in output per hectare and per worker have widened if these gaps are to be narrowed agricultural research capacity in developing countries will have to be substantially strengthened

urbanization and economic development a bias toward large cities abstract we find that a nation s urban population percentage increases with gdp per capita industrialization export orientation and possibly foreign assistance it decreases with the importance of agriculture industrialization and agricultural importance have the same implications for the concentration of urban population in cities with 100 000 population as for the urban percentage greater export orientation reduces such concentration finally gdp per capita population and export orientation reduce primacy political factors such as whether a country s largest city is also its capital affect primacy our results do not seem to imply that developing country urbanization today differs fundamentally from urbanization in the past

the effect of ambient temperature shocks during conception and early pregnancy on later life outcomes abstract a large body of research has recently shown that early life or in utero shocks especially climatic shocks may affect long run human capital outcomes most of these effects are assumed to be biological including poor nutrition during critical windows of fetal development or through increased maternal stress however in addition to these biological effects climatic conditions at the time of conception may also cause changes in parental behavior not only affecting the mix of parents who conceive but also the characteristics of the children once born this paper explores whether increases in ambient temperature at the time of conception while in utero or after birth affect educational and health outcomes as adults using census and demographic and health survey data from sub saharan africa we show that individuals conceived during high temperatures have higher educational attainment and literacy in addition we find evidence of temperature effects at other times in utero especially during the first trimester we then explore the biological and behavioral mechanisms through which this effect may occur including heat induced changes in sexual behavior differences in parental characteristics and intensified fetal selection we conclude that fetal selection is the most likely mechanism driving our result

trends in rainfall and economic growth in africa a neglected cause of the african growth tragedy abstract we examine the role of rainfall trends in poor growth performance of sub saharan african nations relative to other developing countries using a new cross country panel climatic data set in an empirical economic growth framework our results show that rainfall has been a significant determinant of poor economic growth for african nations but not for other countries depending on the benchmark measure of potential rainfall we estimate that the direct impact under the scenario of no decline in rainfall would have resulted in a reduction of between around 15 and 40 of today s gap in african gdp per capita relative to the rest of the developing world

trade institution quality and income inequality summary we examine the effect of trade on income inequality in small developing countries we use two well accepted trade cost variables for identification one is based on baltic dry index and another is commodities price index our main finding is that trade leads to a significant reduction increase in income inequality in autocracies democracies to explain such different effects we provide supporting evidence that autocracies export more primary commodities and may follow the stolper samuelson theorem in ho framework while democracies active in manufacturing outsourcing may follow feenstra and hanson 1996 task model

the intercountry agricultural production function and productivity differences among countries abstract the sources of differences in labor productivity in agriculture between developed countries dc s and less developed countries ldc s are identified by estimating an aggregate agricultural production function based on cross county data for 1960 1970 and 1980 the production function was found to be stable over the entire period agriculture in the dc s was characterized by increasing returns and in the ldc s by constant returns to scale the results imply that unfavorable man land ratios do not represent an immediate barrier to rapid agricultural development in the low income ldc s but they may create a serious agricultural adjustment problem as those countries advance into the middle income range

carbon dioxide co2 emissions during urbanization a comparative study between china and japan as the world s largest emitter of co2 china is facing increasing domestic and international pressures on emissions mitigation considering japan s leading position in energy conservation this paper conducts a comparative study between china and japan at the urbanization stages to analyze the similarities as well as differences of influencing factors of co2 emissions results indicate that although co2 emissions in japan and china showed the similar characteristics of rigid growth during the urbanization processes significant differences exist in factors such as co2 emissions per capita energy structure and energy intensity between the two countries which are the determinants for co2 emissions growth a cointegration model is constructed to examine the long run equilibrium relationship between co2 emissions and factors including gdp urbanization level energy intensity and cement manufacture empirical results show that there is a quadratic relationship between income growth and co2 emissions granger causality test is then adopted to explore the causal relationships among the variables the future co2 emissions and emission reduction potentials in china are estimated based on scenario analysis finally japan s valuable experience of reducing energy intensity and optimizing energy structure is concluded to provide important policy implications for china s strategic low carbon planning and low carbon transition

explaining african economic performance africa has had slow growth and a massive exodus of capital in many respects it has been the most capital hostile region we review and interpret the aggregate level and microeconomic literatures to identify the key explanations for this performance there is a reasonable correspondence of the two sets of evidence pointing to four factors as being important these are a lack of openness to international trade a high risk environment a low level of social capital and poor infrastructure these problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

cross country disparity in agricultural productivity quantifying the role of modern seed adoption inequality of agricultural labour productivity across the developing world has increased substantially over the past 40 years this article asks to what extent did the diffusion of green revolution seed varieties contribute to increasing agricultural labour productivity disparity across the developing countries we find that 22 per cent of cross country variation in agricultural labour productivity can be attributed to the diffusion of high yielding seed varieties across countries and that the impact of such diffusion differed significantly across regions we discuss the implications of these findings for policy directed at increasing agricultural labour productivity in the developing world

government spending cyclicality evidence from transitory and persistent shocks in developing countries we revisit the debate of whether government spending is procyclical in developing countries our main contribution is to argue that beyond exogeneity of the income shock an empirical analysis of government spending cyclicality must be carefully tailored to the shock s persistence we first illustrate this point in a simple intertemporal model we then use instrumental variables estimation to characterize the response of government expenditures to exogenous shocks with different degrees of persistence our estimation strategy exploits that i year to year variations in rainfall have a significant positive contemporaneous effect on sub saharan african countries real gdp but this effect is transitory ii year to year variations in the gdp of sub saharan african countries oecd trading partners have a significant positive contemporaneous effect on sub saharan african countries real gdp and this effect is persistent using rainfall as an instrument for sub saharan african countries gdp yields a government consumption expenditures elasticity response of around 0 4 standard error 0 3 when the instrument is the gdp of sub saharan african countries oecd trading partners the estimated government consumption expenditures elasticity response is around 1 1 standard error 0 2 the elasticity response of government consumption expenditures to persistent income shocks is thus significantly higher relative to transitory shocks

weather derivatives structuring and pricing a sustainable agricultural approach in africa abstractthe objective of this article is to calculate the price of weather derivatives for different african countries with payout depending on temperature a new approach for computing degree day contracts is shown and gives another scale to the numerical relevance and practical implementation of the findings with historical data for each country a stochastic process based on continuous time with mean reversion representing the evolution of the temperature is determined focusing on the monte carlo simulation method the price of each contract and the potential implications to solve several aspects of the threatened african economy are presented

why has africa grown slowly we distinguish between policy and destiny explanations of africa s slow growth during the past three decades policies were poor high export taxation and inefficient public service delivery and destiny was adverse landlocked tropical locations and terms of trade deterioration during the 1990s africa s economic policies improved although with considerable variation both between countries and between policies trade and exchange rate policies improved much more than service delivery thus the differing explanations of past slow growth imply different predictions for growth in the coming decade we argue that poor public economic services are likely to be the binding constraint

agricultural productivity in developing countries abstract this paper examines changes in agricultural productivity in 18 developing countries over the period 1961 1985 we use a nonparametric output based malmquist index and a parametric variable coefficients cobb douglas production function to examine whether our estimates confirm results from other studies that have indicated declining agricultural productivity in ldcs the results confirm previous findings indicating that at least half of these countries have experienced productivity declines in agriculture

plant breeding and poverty can transgenic seeds replicate the green revolution as a source of gains for the poor 1 abstract improved farm technology helps all main groups of the poor small farmers farmworkers other low wage labour when it raises labour value productivity but raises land and or water value productivity faster and cuts staples prices but raises smallholders total factor productivity faster from 1965 the green revolution walked these two tightropes largely by luck though targeting bigger piles of rice and wheat it cut poverty through consumption nutrition smallholder income employment risk reduction and ecological sustainability yet large areas were left out and from 1985 progress slowed in the new environment for research and agriculture how can transgenics revive and spread poverty reduction what has been the evidence so far what determines whether new varieties have traits conducive to poverty reduction who owns the research or what crop science is

reform and urban bias in china income inequalities between urban and rural areas remain high in china but the gap has begun to narrow peasant incomes have increased dramatically since the post mao reforms rural areas have new power but this is a consequence not a cause of the reforms the improvement in rural conditions reflects a change in the central state s development strategy and ideology and the local response to incentives embedded in china s reforms the impetus for these changes is self preservation of the state and the chinese communist party the failure to close decisively the income disparities between the urban and rural areas similarly stems from concerns of regime stability and preservation of the party state

urban concentration agglomeration economies and the level of economic development there is a view among planners in the developing nations that the process of economic development invariably results in the concentration of population in one or two primal cities there is also however considerable disagreement over whether this apparent relationship is either necessary or desirable proponents on the one hand argue that concentrated urbanization strongly supports industrial development through the realization of scale and agglomeration economies 2 dissenters from this view feel that urban concentration creates serious social costs and results more from historical or political forces than economic ones in this case policies aimed at decentralizing growth can achieve social objectives without sacrificing economic efficiency despite these deliberations it is surprising that there has been little or no empirical study of urban concentration on either a longitudinal or cross national basis the major related work which exists is williamson s research on economic development and income inequality 3 williamson demonstrates that as economic growth begins inequality initially increases but then diminishes in the more advanced stages of development this coincides with hirschman s4 view that industrialization eventually spreads into more backward areas reduc

international comparisons of rural urban educational attainment data and determinants we study cross country differences in rural and urban educational attainment by using a data set comprising 56 countries we focus on the determinants of rural urban educational inequality which is measured by the ratio of rural to urban average years of schooling within each country we find that riskier human capital investment less credit availability a colonial heritage a legal system of french origin and landlockedness of nations are all associated with relatively lower rural educational levels and greater rural urban educational inequality conversely larger formal labor markets better infrastructure and a legal system of british origin are associated with relatively higher rural educational levels and lower rural urban educational inequality we also identify an interaction effect between economic development level and some of these factors in particular we find that as development level increases the negative positive relationship between french british legal systems and rural urban educational inequality is reversed and becomes positive negative