finance and the sources of growth at various stages of economic development this article studies the effects of financial development on the sources of growth in different groups of countries recent theoretical work shows that financial development may affect productivity and capital accumulation in different ways in industrial versus developing countries this hypothesis is tested with panel data from 74 countries using gmm dynamic panel techniques results are consistent with the hypothesis finance has a strong positive influence on productivity growth primarily in more developed economies in less developed economies the effect of finance on output growth occurs primarily through capital accumulation jel o4 g1

the state popular participation and the voluntary sector abstract a key determinant in the development contribution of nongovernment organizations ngos is the relationship between ngos and the state ngos may run parallel activities they may play oppositional roles or they may represent weaker members of society organizing them to become more influential in decision making and resource allocation this civil society function entails moving from a supply side approach concentrating on project delivery to a demand side emphasis helping communities articulate their concerns and participate in development processes donors can use the policy dialogue to encourage governments to foster a more enabling environment for ngo activities

financial development and financing constraints international evidence from the structural investment model this article provides evidence that financial development impacts growth by reducing financing constraints that would otherwise distort efficient allocation of investment the financing constraints are inferred from the investment euler equation by assuming that the firm s stochastic discount factor is a function of the firm s financial position specifically the stock of liquid assets the magnitude of the changes in the cost of capital is twice as large in a country with a low level of financial development as in a country with an average level of financial development the size effect business cycles and legal environment effects are also considered copyright 2003 oxford university press

institutional design of public agencies and coproduction a study of irrigation associations in taiwan abstract the provision and production of many public goods and services involve the joint effort of government officials and citizen users this paper examines the successful experience of irrigation governance and management in taiwan as a means of understanding how joint efforts can be established and sustained through institutional arrangements several principles for institutional design including a careful definition of the scope of farmers participation complementarity of interests between individuals reduction of asymmetries involved in the use of authority and the existence of domains of autonomy are identified as instrumental to the success in taiwan

does commercialization undermine the benefits of decentralization for local services provision evidence from mexico s urban water and sanitation sector summary decentralization has been promoted as a means to better reflect citizen preferences and improve local services many developing countries decentralized and promoted neoliberal policies such as commercialization simultaneously leaving mayors with the responsibility of improving public services through self financing reforms this study evaluates experiences in three mexican cities to assess whether decentralization and commercialization practices have resulted in improved water and sanitation services it finds that commercialization has increased social conflict surrounding urban services provision and that local institutional constraints further undermine mayor s ability to adopt politically contentious policies the result has been stalled and uneven service improvements

poverty in south asia abstract south asia faces a difficult challenge in alleviating absolute poverty besides a sustained labour intensive employment oriented strategy of economic growth a direct assault on poverty is needed in addition to redistribution of land the political feasibility of which is very limited poverty alleviating measures in south asia are classified into three types a system of subsidized food distribution creation of assets mainly through credit targeted towards the poor for self employment and public employment schemes on public works projects among the conditions governing their success are widely based public support accurate identification of the poor and strong local government capable of implementing technically sound and economically efficient projects

financial development and economic growth international evidence the importance of the relationship between financial development and economic growth has been well recognized and emphasized in the field of economic development 1 although recent writings on this subject seem to accept the hypothesis that financial development is crucial for successful economic growth 2 patrick asked the critical question which sector financial or real leads in the dynamic process of economic development patrick identified two possible patterns in the causal relationship between financial development and economic growth in the first growth induces an expansion of the financial system 3 according to this view called demand following the lack of financial growth is a manifestation of the lack of demand for financial services as the real side of the economy develops its demands for various new financial services materialize and these are met rather passively from the financial side in the second pattern the expansion of the financial system precedes the demand for its services channeling scarce resources from small savers to large investors according to relative rates of return the financial sector precedes and induces real growth the deliberate establishment and promotion of financial institutions in many less developed countries ldcs might reflect this belief in the supply leading relationship between the two developments a natural question then concerns the direction of causality between financial development and economic growth patrick asserted that the direction of causality changes over the course of development in his view financial development is able to induce real innovation type investment before sustained modern economic growth gets under way and as the process of real growth occurs the supply leading impetus gradually becomes less important and the demand following financial response

capitals and capabilities a framework for analyzing peasant viability rural livelihoods and poverty abstract on the basis of themes emerging in current debates on rural development in latin america this paper develops an analytical framework for analyzing rural livelihoods in terms of their sustainability and their implications for rural poverty the framework argues that our analyses of rural livelihoods need to understand them in terms of a people s access to five types of capital asset b the ways in which they combine and transform those assets in the building of livelihoods that as far as possible meet their material and their experiential needs c the ways in which people are able to expand their asset bases through engaging with other actors through relationships governed by the logics of the state market and civil society and d the ways in which they are able to deploy and enhance their capabilities both to make living more meaningful and to change the dominant rules and relationships governing the ways in which resources are controlled distributed and transformed in society particular attention is paid to the importance of social capital as an asset through which people are able to widen their access to resources and other actors

political competition and violence in mexico hierarchical social control in local patronage structures many countries that have recently undergone transitions to democracy have experienced increases in violent crime yet sociological theories have generally failed to consider the impact of political factors on crime the author examines the relation between greater electoral competition and homicide at the subnational level in a country undergoing an uneven transition to democracy in societies characterized by the presence of patronage networks social and political changes that undermine the source of unequal exchange between actors at different levels in the social hierarchy result in a temporary loss of social control and an increase in crime the relation between electoral competition and homicide is tested using electoral results from a sample of 1 800 mexican municipalities greater electoral competition is associated with higher homicide rates across municipalities and over time even after controlling for standard correlates of violent crime consistent with the hypothesis that the increase is due to the disruption of patronage networks this association is present only in rural areas where patron client relations are more common

a new database on the structure and development of the financial sector this article introduces a new database of indicators of financial structure and financial development across countries and over time the database is unique in that it combines a wide variety of indicators that measure the size activity and efficiency of financial intermediaries and markets it improves on previous efforts by presenting data on the public share of commercial banks introducing indicators of the size and activity of nonbank financial institutions and constructing measures of the size of bond and primary equity markets this article introduces a new database the first to provide comprehensive measures of the development structure and performance of the financial sector this database is the first to define and construct indicators of the size and activity of nonbank financial intermediaries such as insurance companies pension funds and non deposit money banks it is also the first to include indicators of the size of primary equity markets and primary and secondary bond markets in constructing the database authors carefully deflate measures and match stock and flow variables

the difficult transition from clientelism to citizenship lessons from mexico author s fox jonathan a abstract electoral competition is necessary but not sufficient for the consolidation of democratic regimes not all elections are free and fair nor do they necessarily lead to actual civilian rule or respect for human rights if there is more to democracy than elections then there is more to democratization than the transition to elections but in spite of the rich literature on the emergence of electoral competition the dynamics of political transitions toward respect for other fundamental democratic rights is still not well understood political democracy is defined here in classic procedural terms free and fair electoral contestation for governing offices based on universal suffrage guaranteed freedoms of association and expression accountability through the rule of law and civilian control of the military although analyses of democratization typically acknowledge that these are all necessary criteria most examine only electoral competition this study however develops a framework for explaining progress toward another necessary condition for democratization respect for associational autonomy which allows citizens to organize in defense of their own interests and identities without fear of external intervention or punishment

financial development growth and the distribution of income a paradigm is presented in which both the extent of financial intermediation and the rate of economic growth are endogenously determined financial intermediation promotes growth because it allows a higher rate of return to be earned on capital and growth in turn provides the means to implement costly financial structures thus financial intermediation and economic growth are inextricably linked in accord with the goldsmith mckinnon shaw view on economic development the model also generates a development cycle reminiscent of the kuznet hypothesis in particular in the transition from a primitive slow growing economy to a developed fast growing one a nation passes through a stage in which the distribution of wealth across the rich and poor widens

democracy by undemocratic means elites political pacts and regime transition in brazil why has brazil failed to develop strong democratic institutions despite widespread opposition to authoritarianism and support for civilian rule in the 1980s this article argues that the political pacts bargained by elites that made the regime transition possible limited the extension of democracy by restoring to old regime elites many sources of their political power as the price for their support for democratization political pacts left the military with a substantial degree of formal and informal power over civilians preserved clientelism and undermined the ability of political parties to transform themselves into genuine transmission belts for nonelite interests the undemocratic character of the brazilian state as embodied by military autonomy technocratic modes of policymaking and executive dominance over the legislature moreover was reinforced by the defeat of parliamentarism by the constituent assembly in 1988

political capital mexican financial policy under salinas market reform is advocated in developing countries to improve economic efficiency and prevent privileged groups from obtaining rents from the policy making process yet this prescription fails to address the complex political process that governments are likely to confront when moving toward the market this study shows how political considerations during president salinas s administration distorted economic reform in mexico during the 1990s mexican finance policy contradicted the government s declared neoliberal principles while the banks were reprivatized and deregulated they were also given a high degree of protection from competition enabling the new owners to charge excessive interest rates in addition the government artificially inflated the value of the currency through exchange rate intervention these contradictory policies are best understood as a coherent political response to the electoral vulnerability of the ruling party pri at the end of the 1980s when viable political opposition threatened the pri s ability to maintain power it responded by using financial policies to distribute economic benefits to social groups particularly business the middle class and the poor whose support was critical for electoral victory

business and children mapping impacts managing responsibilities in recent years issues of childhood obesity unsafe toys and child labor have raised the question of corporate responsibilities to children however business impacts on children are complex multi faceted and frequently overlooked by senior managers this article reports on a systematic analysis of the reputational landscape constructed by the media corporations and non government organizations around business responsibilities to children a content analysis methodology is applied to a sample of more than 350 relevant accounts during a 5 year period we identify seven core responsibilities that are then used to provide a framework for enabling businesses to map their range of impacts on children we set out guidelines for how to identify and manage the firm s strategic responsibilities in this arena and identify the constraints that corporations face in meeting such responsibilities

a content analysis of whistleblowing policies of leading european companies since the introduction of the u s sarbanes oxley act in 2002 and several other national corporate governance codes whistleblowing policies have been implemented in a growing number of companies existing research indicates that this type of governance codes has a limited direct effect on ethical or whistleblowing behaviour whereas whistleblowing policies at the corporate level seem to be more effective therefore evidence on the impact of inter national corporate governance codes on the content of corporate whistleblowing policies is important to understand their indirect impact on whistleblowing behaviour this study analyzes the contents of whistleblowing policies and parts of corporate codes of conduct and codes of ethics describing such policies of 56 leading european companies by classifying the contents in seven categories an exploratory framework was created general contents often identified were applicability to all employees a group wide scope and an authoritative tone the most common general violations to report were breaches of internal policies and external regulations or laws the more specific violations most frequently mentioned were criminal offences and dangers to health and safety or the environment contacts to report to were the direct or indirect supervisors a compliance officer or a confidential hotline facility a confidentiality guarantee was common and anonymous reporting was often possible though sometimes discouraged protection against retaliation is stated by ensuring that retaliation will not happen prohibiting it or making it punishable the requirement of good faith was frequently given finally investigation of the report was often guaranteed surprisingly little information is given on the treatment of whistleblowers reporting an unfounded complaint in good faith or reporting a violation they were involved in the study s findings are most relevant to companies without a whistleblowing policy or those that intend to benchmark their policies and to pan european standard setters

impact of state and civil institutions on the operation of rural market and nonmarket configurations abstract the approach undertaken in this study is based on the concept of configurations configurations are shaped by specific combinations of characteristics of the following elements the item transacted the actors and the underlying physical technological cultural and policy environment configurations can be either market or nonmarket configurations in turn transactions are endogenously determined within given configurations the impact of government intervention on the performance of a number of prototypical rural configurations and agrarian institutions such as the food and cash crops market configurations the farm household sharecropping and the rural official and unofficial credit markets is evaluated critically

fair trade in italy too much movement in the shop we analyse the development of fair trade in italy by examining its principles structure performance dilemmas and potential solutions and identifying its main distinctive features these lead us to develop a specifically italian model fair trade in italy is younger than its more established north european counterparts and more focussed on broad social justice issues in addition to its concern to include marginalized producers this normative difference has given rise to a social economy dominated value chain with a partial corporate involvement uniquely in the retail sphere although it has generated much lower per capita consumption of fair trade products at the same time we also observe a relatively higher specialization in handicraft products and educational activities as well as a strong capacity to attract voluntary labour and create social capital we identify clear trade offs between social goals and the economic performance of the italian model reduced economies of scale a closer focus on non economic value creating social activities and greater consideration of values such as consumption sobriety and environmental concerns which may conflict with economic performance we propose solutions which may resolve these dilemmas without abandoning the initial ambition not only to achieve the promotion of market access for marginalized producers in the south but also to pursue a broader concept of well being in the north and the south

the fruits and fallacies of neoliberalism the case of irrigation policy abstract neoliberal doctrine provides the analytic basis for a convincing explanation and critique of irrigation policy in the third world there is a strong case for subjecting capital and recurrent decisions to the discipline of scarcity pricing however it is rarely practicable to apply scarcity pricing rigorously because of the economic and technical infeasibility of volumetric water pricing in most third world irrigation schemes the taiwanese experience illustrates that political and institutional mechanisms for promoting managerial performance can be effective where the neoliberal prescription fails

managing credit for the rural poor lessons from the grameen bank abstract this paper based on a detailed study of the grameen bank in bangladesh suggests that the credit policies of the bank do not constitute a sufficient explanation for the bank s success and that its acclaimed policy of replacing individual collateral with group guarantee is in fact not practiced the paper presents an alternate explanation for the success of the grameen bank in addition it explains how the grameen bank has been able to overcome typical problems of implementing development programs by sustaining good performance from its large work force and keeping to a minimum the tendency of a few target beneficiaries to corner program benefits and flout organizational norms for their personal benefit

from local strongman to facilitator institutional incentives for participatory municipal governance in latin america efforts to engage citizens in democratic forms of governance in developing societies are complicated by deeply rooted socioeconomic and political inequalities in this article the authors analyze

government action social capital and development reviewing the evidence on synergy abstract instead of assuming a zero sum relationship between government involvement and private cooperative efforts the five preceding articles argue for the possibility of state society synergy that active government and mobilized communities can enhance each others developmental efforts this article draws on these articles to explore the forms and sources of state society synergy i argue that synergy usually combines complementarity with embeddedness and is most easily fostered in societies characterized by egalitarian social structures ard robust coherent state bureaucracies i also argue however that synergy is constructable even in the more adverse circumstances typical of third world countries

supporters or challengers the effects of nongovernmental organizations on local politics in bolivia how do nongovernmental organizations ngos affect local politics in developing democracies specifically do ngos have systematic effects on the fortunes of incumbent political parties in local elections existing work predicts starkly contradictory political effects some scholars claim that ngos most likely help incumbents by providing services for which politicians can claim credit whereas others believe that ngos most likely hurt incumbents by facilitating political opposition the authors argue that both of these effects are possible depending on the size of a jurisdiction s population in smaller populations the authors hypothesize that ngos facilitate collective action and decrease the ability of an incumbent to claim credit for projects larger jurisdictions water down the effect of ngos on collective action and permit incumbents credit claiming strong support is found for hypotheses using electoral sociodemographic and ngo data for all of 314 municipalities in bolivia

finance and the sources of growth the authors evaluate whether the level of development in the banking sector exerts a causal impact on economic growth and its sources total factor productivity growth physical capital accumulation and private saving they use 1 a pure cross country instrumental variable estimator to extract the exogenous component of banking development and 2 a new panel technique that controls for country specific effects and endogeneity they find that banks do exert a large causal impact on total factor productivity growth which feeds through to overall gdp gross domestic product growth the long run links between banking development and both capital growth and private savings are more tenuous

who gives who receives and who wins transforming capital into political change through nongovernmental organizations how does international support for nongovernmental organizations ngos lead to political change in the developing world massive amounts of domestic government spending and international aid are now distributed through ngos instead of state bureaucracies recent scholarship suggests that this decentralization of developmental aid to ngos has unintended political effects on recipient communities but the mechanisms driving political effects are unclear in this article the authors test whether ngo type affects the results of ngo aid comparing the political impact of politicized and nonpoliticized ngos they do not find any difference between politicized and nonpoliticized ngos the results imply that to create political change ideological predispositions held by individual ngos are less important than is their ability to raise the level of social capital and civil society simply providing the infrastructure necessary to develop social capital and civil society can have a measurable political impact

the finance growth link in latin america this paper analyzes the relationship between financial development and economic growth in latin america with a granger causality test and impulse response functions in a panel vector autoregression var model with annual observations from a sample of 18 countries from 1962 to 2005 it is shown that while economic growth causes financial development financial development does not cause economic growth this finding is robust to different model specifications and different financial indicators interestingly when the sample is divided according to different income levels and institutional quality there is two way causality between financial development and economic growth only for the middle income group and for countries with stronger rule of law and creditor rights the impulse response functions show that a shock to financial development has a positive impact on economic growth only for these subsamples but the net effect of financial development on growth is relatively small during the 1980s most latin american countries suffered from distorted financial systems in this decade the government kept interest rate controls allocated credit arbitrarily and deterred the expansion of security markets and the creation of new financial institutions edwards 1999 nonetheless there has been a significant improvement on the levels of financial development in the region while credit to the private sector as a share of gross domestic product gdp in the latin american region was on average 12 in the 1960s it grew to an average of 29 in the early 2000s 1 even though latin american countries experienced significant financial reforms in the 1990s that promoted financial deregulation and the growth of the stock market financial development indicators show that the region is financially underdeveloped when compared to other emerging regions 2 therefore lack of financial depth may be a barrier to better economic performance in latin america the link between financial development and economic growth is complex because the direction of causation between the two variables may run both ways theoretical and empirical analyses support causality running from financial development to economic growth supply leading hypothesis but there is also evidence that economic growth causes financial

why do corrupt governments maintain public support this article addresses an issue often neglected by the current literature on political corruption why do citizens support corrupt governments the authors argue that people in countries where gove

same financial development yet different economic growth why we re study the relationship between financial development and real gdp per capita growth in 48 countries what we find is an interesting evidence that only stock market development has positive effects on growth and that banking development has an unfavorable if not negative effect on growth we examine whether or not these impacts are a product of various financial and economic conditional variables our conditional variables consist of financial liberalization two sets of country development dummies crises in banking and currency dummies the creditor protection index as well as the anti director and corruption indices our results clearly show that the conditional variables of financial liberalization high income level and good shareholder protection mitigate the negative impacts of banking development on growth in contrast the conditional variables of middle income level regional latin american sub saharan african and east asian dummies banking and currency crises good creditor protection and higher corruption strengthen the negative impacts of banking development on growth next the conditional variables of middle income level latin american sub saharan african and east asian dummies strengthen the positive impacts of stock market development on growth whereas the conditional variables of financial liberalization mitigate the positive impacts of stock market development on growth last we find that the relationship between growth and bank development is better described as a weak inverse ushape this inverse u shape becomes stronger when additional stock market variables are squared thus financial development and growth may in fact be in a nonlinear form

financial development financial fragility and growth the authors study the apparent contradiction between two strands of the literature on the effects of financial intermediation on economic activity on the one hand the empirical growth literature finds a positive effect of financial depth as measured by for instance private domestic credit and liquid liabilities for example levine loayza and beck 2000 on the other hand the banking and currency crisis literature finds that monetary aggregates such as domestic credit are among the best predictors of crises and their related economic downturns for example kaminski and reinhart 1999 the authors account for these contrasting effects based on the distinction between the short and long run impacts of financial intermediation working with a panel of cross country and time series observations they estimate an encompassing model of short and long run effects using the pooled mean group estimator developed by pesaran shin and smith 1999 their conclusion from this analysis is that a positive long run relationship between financial intermediation and output growth coexists with a mostly negative short run relationship the authors further develop an explanation for these contrasting effects by relating them to recent theoretical models by linking the estimated short run effects to measures of financial fragility namely banking crises and financial volatility and by jointly analyzing the effects of financial depth and fragility in classic panel growth regressions

social capital as a product of class mobilization and state intervention industrial workers in kerala india abstract this paper argues that state intervention and class mobilization in the state of kerala india have produced two forms of social capital kerala s high level of social development and successful redistributive reforms are a direct result of mutually reinforcing interactions between a programmatic labor movement and a democratic state this synergy between state and labor has also created the institutional forms and political processes required for negotiating the class compromises through which redistribution and growth can be reconciled these dynamics are explored through a close examination of both the organized factory sector and the unorganized informal sector

uneasy alliances lessons learned from partnerships between businesses and ngos in the context of csr interest in corporate social responsibility csr has proliferated in academic and business circles alike in the context of csr the spotlight has traditionally focused on the role of the private sector particularly in view of its wealth and global reach other actors have recently begun to assume more visible roles in the context of csr including non governmental organizations ngos which have acquired increasing prominence on the socio economic landscape this article examines five partnerships between businesses and ngos in a developing country context that fall in the realm of csr the article starts with a literature review delineating foundational underpinnings that have to be carefully designed and crafted to promote the success of collaborative ventures an empirical study of five selected partnerships between businesses and ngos in lebanon is then presented allowing to derive interesting insights into types of existing alliances their relational characteristics as well as salient factors considered most determinant of success or failure in this regard

the direction of causality between financial development and economic growth abstract this paper employs the geweke decomposition test on pooled data of 109 developing and industrial countries from 1960 to 1994 to examine the direction of causality between financial development and economic growth the paper finds that 1 financial development generally leads to economic growth 2 the granger causality from financial development to economic growth and the granger causality from economic growth to financial development coexist 3 financial deepening contributes more to the causal relationships in the developing countries than in the industrial countries 4 the longer the sampling interval the larger the effect of financial development on economic growth 5 financial deepening propels economic growth through both a more rapid capital accumulation and productivity growth with the latter channel being the strongest

do conditional cash transfers affect electoral behavior evidence from a randomized experiment in mexico this article reexamines the argument that targeted programs increase pro incumbent voting by persuading beneficiaries to cast ballots against their first partisan choice the evidence comes from the randomized component of progresa the pioneering mexican conditional cash transfer cct program experimental data show that early enrollment in the program led to substantive increases in voter turnout and in the incumbent s vote share in the 2000 presidential election the experiment also reveals that opposition parties vote shares were unaffected by the program thus the electoral bonus generated by ccts may be best explained by a mobilizing rather than persuasive mechanism these findings are difficult to reconcile with the notion that the electoral effects of ccts are a result of prospective concerns triggered by threats of program discontinuation or endogenous program enrollment instead the evidence in this article suggests that ccts mobilizing effects are compatible with programmatic politics

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

trust in a rent seeking world health and government transformed in northeast brazil abstract this article draws lessons from a set of innovative programs carried out by a state government in brazil now widely acclaimed for excellence in public management key to the high performance was strong worker commitment to the job and what the state did to elicit a topic of little note in the development literature but of central importance in the literature of industrial performance and workplace transformation in the industrialized countries the state created an unusual sense of calling among the program s workers new prestige in the communities where they worked and an informed citizenry that both monitored the workers and trusted them

shadow prices of social capital in rural india a nonparametric approach this article studies the role of social capital on cotton production efficiency and productivity for a sample of small farms in maharashtra india using data envelopment analysis input shadow prices are computed as an indicator of the importance of social capital relative to other inputs results suggest social capital to be the input with the highest contribution to production efficiency after land the luenberger indicator is used to assess the productivity improvement associated to an investment in social capital which is found to be on the order of 12 undertaking collective production activities is found to play an important role in improving productivity this is especially relevant to agricultural households facing important economic and institutional restrictions that make it difficult to increase conventional expensive inputs

participation social capital and intersectoral problem solving african and asian cases abstract cooperation in policy program implementation between state and nongovernmental actors can sometimes solve intractable development problems but such cooperation must span gaps in culture power resources and perspective this article provides a comparative analysis of 13 cases of intersectoral cooperation among public agencies nongovernmental organizations grassroots groups and international donors the analysis reveals two successful implementation patterns nongovernment organization ngo mediated cooperation and grassroots centered cooperation different forms of social capital are central to the two patterns indigenous ngos with credibility across sectors are critical to the former while grassroots organizations are vital to the latter participatory decision making and mutual influence are essential to grassroots centered cooperation but less so for ngo mediated collaboration

creditor protection and credit response to shocks this article studies the relationship between creditor protection and credit responses to macroeconomic shocks using a data set on legal determinants of finance in a panel of data on aggregate credit growth for 79 countries during 1990 2004 it is shown that credit is more responsive to external shocks in countries with weak legal creditor protection and weak enforcement the results are statistically and economically significant and robust to alternative measures of creditor protection to the inclusion of variables that reflect different stages of economic development to the restriction of the sample to only developing economies to the controls for systemic crises to alternative shock measures and to vector autoregressive specifications

a quantitative reassessment of the finance growth nexus evidence from a multivariate var abstract the long run relationship between financial development and economic growth is examined in a multivariate vector autoregression var framework using 10 sample countries difficulties surrounding the cross country regressions and bivariate time series studies are outlined the long run financial development and output relationships are identified in a cointegrating framework through tests of over identifying restrictions we find bi directional causality between financial development and economic growth in all the sample countries conclusions that stand distinct from those in the existing empirical literature we attribute our findings to i analysis of a higher dimensional system ii a new method of identifying the long run economic relationships and iii a new approach to long run causality testing

democratic governance and sectoral policy reform tracing linkages and exploring synergies abstract effective democratic governance influences how societies and economies progress and prosper for many people in developing and post socialist countries the action and impact of democratic governance happens through sectoral reforms efforts to improve democratic governance can have strong impacts on sectoral reforms how these are implemented who participates in them at various stages and what outcomes are achieved conversely sectoral policy reforms and program interventions can serve to promote and enhance democratic governance this article discusses these linkages and provides selected examples of the synergies among them it raises the political dimension of democratic governance and offers several suggestions regarding where when and how donor agencies can intervene both to promote democratic governance and to advance sectoral policy reforms

too close for comfort the impact of official aid on nongovernmental organizations abstract in promoting a new policy agenda bilateral and multilateral donor agencies are keen to finance nongovernmental organisations ngos and grassroots organizations gros on the grounds of their economic efficiency and contribution to good governance this paper reviews the impact of this trend on ngo gro programming performance legitimacy and accountability if finds that much of the case for emphasizing the role of ngos gros rests on ideological grounds rather than empirical verification in addition though the evidence is inconclusive there are signs that greater dependence on official funding may compromise ngo gro performance in key areas distort accountability and weaken legitimacy

the effect of financial development on convergence theory and evidence we introduce imperfect creditor protection in a multicountry schumpeterian growth model the theory predicts that any country with more than some critical level of financial development will converge to the growth rate of the world technology frontier and that all other countries will have a strictly lower long run growth rate we present evidence supporting these and other implications in the form of a cross country growth regression with a significant and sizable negative coefficient on initial per capita gdp relative to the united states interacted with financial intermediation in addition we find that other variables representing schooling geography health policy politics and institutions do not affect the significance of the interaction between financial intermediation and initial per capita gdp and do not show any independent effect on convergence in the regressions our findings are robust to removal of outliers and to alternative conditioning sets estimation procedures and measures of financial development

grassroots organizations and ngos in rural development opportunities with diminishing states and expanding markets abstract this article undertakes to deal systematically with nongovernment organizations ngos and grassroots organizations gros usually treated as a residual category ten levels for development decision making and action are identified in the tradition of central place theory three of these are considered local or grassroots because of their collective action possibilities then three sectors are delineated instead of the usual two ngos are part of the collective action sector which differs from the public and private sectors in theoretically consistent ways a careful distinction is made between institutions and organizations usually conflated in the literature examples of accelerated rural development through grassroots organizations and ngos are discussed form asia africa and latin america

financial development and economic growth views and agenda this critique argues that the preponderance of theoretical reasoning and empirical evidence suggests a positive first order relationship between financial development and economic growth the body of work would push even most skeptics toward the belief that the development of financial markets and institutions is a critical and inextricable part of the growth process and away from the view that the financial system is an inconsequential sideshow responding passively to economic growth many gaps remain however and the paper highlights areas in acute need of additional research

partisan preferences and skill formation policies new evidence from turkey and argentina summary following a switch to export oriented industrialization reorganization of production in the automobile industry demanded a new worker profile in developing economies like turkey and argentina yet the process of transforming worker skills unfolded differently across industrial clusters the paper explains this variation by highlighting formal political dynamics at the sub national level it finds that when local politicians have limited fiscal capacities they are compelled to build partisan coalitions to advance industrial reform policies evidence from bursa turkey istanbul turkey and cordoba argentina shows that under these circumstances governors who mobilize partisan loyalties can resolve disputes between business and labor while others who are unable to do so cannot implement the proposed changes

opposition parties and the urban poor in african democracies africa s urban poor increasingly represent a key constituency for electoral mobilization opposition parties which are pivotal for democratic consolidation have nevertheless exhibited disparate success at obtaining votes from this constituency to explain why this study focuses on the case of zambia and draws on interviews with political elites as well as a survey of informal sector workers in lusaka instead of vote buying ethnic alignments or economic voting these data show that the urban poor s voting decisions are related to the strategies used by political parties to incorporate them into the political arena opposition parties that employ populist strategies are more likely to win support from the urban poor than parties reliant on alternative modes of mobilization the advantages of a populist strategy include greater differentiation from the myriad of purely personalistic parties in africa and greater congruence with the policy priorities of the urban poor including service delivery and jobs

public participation and poverty alleviation the experience of reform communists in india s west bengal abstract public participation is essential to making poverty alleviation programs responsive to the needs of the poor but it requires a political process that adequately represents their interests yet as long as the poor remain poor they are disadvantaged in securing equitable representation this article highlights the problems stemming from this paradox of participation it shows how implementing poverty alleviation programs through elected governing councils has simultaneously made policy more responsive to the poor while permitting the organizational interests of the ruling communist party to distort implementation the article highlights the importance of political competition among parties and nongovernment organizations for maximizing responsiveness to the poor

financial development and economic growth additional evidence this note suggests that contrary to the conclusions reached in several recent studies the empirical evidence does not support the view that financial development promotes economic growth it is first noted that the predominant pattern in the data for 95 individual countries is that of a negligible or weakly negative covariation between financial development and growth of real gdp per capita second the individual country correlational picture is a sharp contrast to the correlations based on crosscountry data that have been used in most research on the subject third individual country estimates of a basic multiple regression growth model also do not indicate a positive association between financial development and growth fourth in cross country data and models of the kind that have been used in most studies when the regression structure is permitted to vary across three subgroups a huge parametric heterogeneity is observed and the overall indication is that of a negligible or negative association

institutional development the world bank and india s new agricultural extension programme the new world bank sponsored and funded training and visit system of agricultural extension represents a major attempt by the bank to promote institutional development the very considerable investment has in fact resulted in little change or improvement in the quality of extension the reasons lie in failure to analyse the cause of the weakness of the previous extension systems inherent defects of the training and visit system and the way in which it has been introduced into india these failures in turn can be explained by the interests and the politics underlying the programme

firm productivity innovation and financial development acknowledgment we are grateful to christopher kilby saul lizondo chris papageorgiou the strategy policy and review departments low income countries group the africa department s macro modeling debt and growth network and two anonymous referees for useful comments and suggestions kersting gratefully acknowledges financial support by the center for global leadership at the villanova school of business 1 introductioneconomists still struggle to explain the large differences in output per worker across countries the view that these differences are mostly the result of variations in investment rates has now largely been abandoned as cross country evidence suggests that total factor productivity tfp rather than capital accumulation accounts for observed per capita income differences hall and jones 1999 the largely unexplained cross country differences in tfp led to prescott s 1998 call for a theory of tfp in response barriers to innovation imitation and adoption e g parente and prescott 2000 and institutions e g acemoglu and johnson 2005 have often been offered as explanations for low tfp in poorer countries the global crisis and the resulting uncertainty have reinforced concerns about growth prospects in many low income countries after a decade of almost universally solid growth performance the medium term outlook for many low income countries appears increasingly uncertain at the same time the growth potential in many countries with low tfp remains dim even beyond the full conclusion of this crisis if tfp drives growth its determinants are the key to development prospects in low income countries some country specific direct determinants of tfp geography history or institutions such as the prevalent legal system are fixed or slow moving and the degree to which policy can influence these conditions is limited others such as innovation or the level of financial development can respond to both foreign and domestic forces external shocks globalization or government policy in this view tfp is not primarily the result of the endowment of a country but instead a direct result of purposeful actions by economic agents and as such can be influenced by policy innovation activity leads to technological progress in two distinct ways purposeful research and development can result in the invention of completely new products and processes this kind of innovative activity moves the global technological frontier and still mainly occurs in developed countries however innovation also consists of the adoption and adaptation of existing technology which can close the gap between countries converging toward the global technological frontier and those on the leading edge pushing the world frontier innovation shares a strong connection with the provision of financial services invention and adoption of technology are costly and risky activities which require financing it is therefore natural to study the impact of a country s financial development on tfp via the innovation channel 1in this article we follow that agenda in two separate steps i how do firm specific actions in particular innovation affect firm productivity ii what is the role of a country s level of development both financial and general in facilitating higher productivity using firm level data taken from the enterprise surveys covering over 14 000 firms in 63 countries we first establish a connection between a firm s innovative activities and its productivity we control for country industry and firm specific factors the countries in our data include low middle and high income countries while the firms span all sizes with a focus on small and medium sized enterprises sme innovation is defined broadly as the introduction of new production processes or product lines so that it includes the adaptation of existing technology we find that other things being equal firms that have introduced a new process or product are more productive

does financial development lead economic growth a vector auto regression appraisal using a vector autoregression var approach several hypotheses are re examined suggested by the literature concerning the relationship between financial development and economic growth investment and productivity the models use quarterly time series data from ten oecd countries and china innovation accounting or variance decomposition and impulse response function analysis is applied to examine interrelationships between variables in the var system and therefore differs from the more usual granger causality approach in particular it examines the relationship between financial development proxied by total credit at best weak support is found for the hypothesis that financial development leads economic growth

making land rights accessible social movements and political legal innovation in the rural philippines abstract in recent years rule of law and legal reform has grown to be a major concern of national governments international financial institutions development agencies and donor organisations part of this concern has focused on expanding access to justice for the poor however little effort has gone into understanding the role of justice sector institutions in shaping the opportunities and limits of redistributive justice little attention has been paid to the actual workings of obstacles entrenched within the justice sector to land reform for example instead pro market scholars cite difficult legal problems as a reason to turn away from state led land reform and toward market oriented land policies yet as this paper shows a closer look at the details of dynamics around land reform in the philippines suggests that political legal problems associated with implementation of the agrarian reform law can be overcome under certain conditions it is argued that for rural poor claimants it is important

temptation in vote selling evidence from a field experiment in the philippines abstract we report the results of a randomized field experiment in the philippines on the effects of two common anti vote selling strategies involving eliciting promises from voters an invitation to promise not to vote sell is taken up by most respondents reduces vote selling and has a larger effect in races with smaller vote buying payments the treatment reduces vote selling in the smallest stakes election by 10 9 percentage points inviting voters to promise to vote your conscience despite accepting money is significantly less effective the results are consistent with a behavioral model in which voters are only partially sophisticated about their vote selling temptation

south korean and taiwanese development and the new institutional economics the publication of books by both alice amsden and robert wade provide an opportune moment to reflect on the study of east asian development after an initial surge of interest beginning in the 1970s the field has reached a plateau and scholars recently have cast a wide net in searching for ways to extend the field in assessing the state of the art regarding the economic development of the east asian newly industrialized countries nics this review will treat three themes first i will argue that the focus on states versus markets is becoming stale and that much of the scholarly interest lies in the politics behind the economics second i argue that political scientists have underexplored the historical origins of korean and taiwanese capitalism and that such attention promises to strengthen both theories and explanations of development third i argue that the international system has been more important in promoting development in east asia than accounts in the first wave have recognized the purpose of this review is to assess the field reveal

financial development and economic growth abstract this paper examines the empirical relationship between long run growth and financial development proxied by the ratio between bank credit to the private sector and gdp we find that this proxy is positively correlated with growth in a large cross country sample but its impact changes across countries and is negative in a panel data for latin america we argue that the latter findings is the result of financial liberalization in a poor regulatory environment our findings also show that the main channel of transmission from financial development to growth is the efficiency rather than the volume of investment

markets and states against minimalism abstract this paper argues against the currently fashionable case for state minimalism or laissez faire it not only argues for a strong state but also for an activist one though operating on a different basis from the many recently failed interventionist states the argument is developed via a critique of a series of overstated or one sided propositions that bolster the state minimalist position these include the notion of price distortions of inherently inefficient public enterprise of an unambiguous dividing line between the public and the private sectors and of statism as inherently rent seeking the paper seeks to rescue alternative perspectives from outside neoclassical political economy approach such as the importance of civil society and the need for a nonmaximizing theory of the state successful liberalization programs may require more intervention of a different kind at least for a transitional period a broad view of democracy is required allowing the possibility of state action guided by motives of public interest

market reform as a stimulus to particularistic politics we know little about how market reform affects political development especially citizens behavior market reform advocates prescribe that citizens should reduce their reliance on the state turn to nonstate actors for assistance and obtain limited state goods and services through their membership in certain social categories not their particular traits an analysis of three mass surveys and 232 interviews the author conducted in central asia along with additional data from 24 postcommunist countries reveals that market reform can have effects opposite from those prescribed individuals may make particularistic demands of government officials instead of relying on nonstate actors this occurs in countries where state economic intervention was substantial and where reforms reduced the state s economic role but failed to develop market enhancing institutions under these conditions individuals informally seek resources from state officials because nonstate actors do not offer substitute resources and

political parties and uncertainty in developing democracies this article lays out a theoretical framework for understanding the effects of political uncertainty on party development and strategies of mobilization and competition defining uncertainty as the imprecision with which political actors are able to predict future interactions the authors identify three types of political uncertainty regime uncertainty economic uncertainty and institutional uncertainty they argue that political uncertainty is particularly high among developing democracies contributing to puzzling empirical patterns of party development and competition in these contexts taking into account the role of uncertainty in the strategic decision making of party elites will help scholars better understand the differences between parties in advanced and developing democracies but it can also help scholars understand the less dramatic differences between parties even within advanced democracies the authors theoretical framework can be applied broadly since uncertainty informs the strategic

what ever happened to poverty alleviation abstract the failure of many programs directed toward alleviating poverty is better understood than the successes this paper identifies the traits that characterize several better performing programs funded by the ford foundation traits that are not commonly found in such programs all focused narrowly on a particular trade or activity in the beginning used credit as an entry point started by brokering loans rather than lending directly and had leadership linked to powerful institutions participants were already engaged in the economic activities supported by the programs marketing channels existed and powerful consumer groups were often in favor of production by beneficiary groups though these findings seem obvious few programs funded by donors display these characteristics suggesting that donors choose programs and organizations more carefully and not limit their funding to the nongovernmental sector

small firms and their helpers lessons on demand abstract small enterprise se programs are currently the rage because of their potential to create employment they are typically supply driven providing standardized training technical assistance credit but most cases of se based growth have involved demand driven support provided by large customers firms traders government agencies state enterprises this article argues that such inherently customized support constitutes a better way to deliver services to ses and is more likely to stimulate sustained se growth with respect to se favoring procurement by government in particular we show that this can be done without running up against the problems of similar attempts in the past and in a way that also reduces the costs of running government we draw for illustration from a successful case of se favoring procurement in the brazilian state of ceara

a subsector approach to small enterprise promotion and research abstract this paper introduces a diagnostic research methodology designed to help target small enterprise development efforts in less developed countries it argues that research should focus on commodity specific subsectors which include the competing channels and supporting input and output linkages of small firms using this approach analysts can improve their understanding of small enterprise dynamics interventions that may promote them at low cost and policies that constrain small firm growth

an approach to poverty alleviation for large international development agencies abstract this essay explores the nature of the poverty alleviation problem from the perspective of international development funding agencies these agencies have been poorly structured to promote the interests of the poor agencies such as the world bank and the us agency for international development usaid can achieve better results by creating independent units devoted exclusively to poverty alleviation these units should immerse their staff more completely in local societies with lower pay scales and longer tours of duty a revised form of cost benefit analysis around which these units should orient their work is presented previous analyses of poverty alleviation opportunities and failures have neglected funding agency influences

social capital and household welfare in south africa 1993 98 the aim in this study is to determine the nature of the causal relationship if any between social capital as measured by household membership in formal and informal groups and household welfare in south africa using a recently collected panel data set in south africa s largest province we estimate per capita expenditure functions including measures of social capital after controlling for fixed effects and simultaneity we find social capital has no effect in 1993 but a positive and significant effect in 1998

divergent cultures when public organizations perform well in developing countries abstract throughout the developing world there are organizations that perform relatively well despite dauntingly unfavorable contexts and despite overall poor public sector performance this article explores evidence from 29 organizations in six countries to suggest that the concept of organizational culture provides a useful hypothesis to explain why some of them performed relatively well while others did not organizational mystique management style and performance expectations contributed to positive organizational cultures in better performing organizations while some autonomy in personnel management provided a facilitating context for these characteristics to be developed

civil society collaboration with business bringing empowerment back in abstract strategic partnerships between civil society organizations csos and businesses are widely promoted as important new strategies to encourage corporate citizenship in the global south this study tested these claims by examining 10 cases of collaboration between csos and businesses in brazil india and south africa findings suggest a sobering view of the benefits that civil society organizations and their constituencies can expect from collaboration development impacts may be more likely in sectors clearly linked to business interests such as education and employment generation goals of organizational capacity building are more likely to be satisfied than those of citizen empowerment csos and businesses reap mutual benefits from collaboration but csos tend to shoulder more of the costs businesses can dominate collaborative decision making with negative results for sustainability the paper offers a number of propositions to guide further research and inform collaborative practice empowered civil society collaboration with business is suggested as a more appropriate model than strategic partnership for csos pursuing sustainable development

financial development investment and economic growth zhenhui xu in this article i use a multivari ate vector autoregressive var approach to examine the effects of permanent financial development on domestic investment and output in 41 countries between 1960 and 1993 the var approach permits the identification of the long term cumulative effects of financial development on the domestic variables by allowing for dynamic interactions among these variables the results reject the hypothesis that financial development simply follows economic growth and has very little effect on it instead there is strong evidence that financial development is important to growth and that investment is an important channel through which financial development affects growth jel e22 e44 e47 016 057 keywords economic growth financial development investment vector auto regression impulse response i introduction interest in the relationship between financial development and economic growth dates back to early this century and has been growing since the 1980s 1 in the literature three views have emerged concerning the potential importance of finance in economic growth the first sees finance as a critical element of growth schumpeter 19113 goldsmith 19691 mckinnon 19733 shaw 1973 fry 1978 1988 bencivenga and smith 1991 king and levine 1993a 1993b in this view services provided by the financial system are essential for growth and a repressed financial system characterized by price distortion undersaving negative or unstable returns on savings and investment and inefficient allocation of savings among competing users impedes growth 2 as the financial system develops households substitute out of unproductive tangible assets raising the total real supply of credit the quantity and quality of investment and thus the rate of economic growth in addition financial development can pro mote technological innovations and productivity growth king and levine 1993a the second view regards finance as a relatively unimportant factor in growth essentially as the handmaiden to industry and commerce robinson 19521 lucas 1988 stern 1989 in this perspective the lack of financial development is simply a manifestation of the lack of demand for financial services as the real sectors of the economy grow the demand for various financial services rises and will thus be met by the financial sector based on this view financial development simply follows economic growth and has very little effect on it like the first one the third view ascribes effects to finance but focuses on its potential negative impacts on growth van wijnbergen 1983 buffie 1984 economists holding this view contend that financial development can hinder growth by reducing available credit to domestic firms this situation arises from the presence of informal curb markets as the formal financial system develops households are seen to substitute out of curb market loans thus reducing the total real supply of domestic credit the reduction in the supply of credit can lead to a credit crunch thereby lowering investment and slowing production and growth further such a credit crunch can retard economic growth beyond the short term by lowering the steady state capital stock wijnbergen 1983 from these divergent views three testable hypotheses emerge with sharply different policy implications the first view suggests that government policies should be directed toward improving the financial system since financial development has important causal effects on growth the second view implies that government policies toward improving the financial system will have little effect on growth since financial development results from growth and has little impact on it based on the third view there is a potential danger of financial development under certain institutional arrangements government efforts toward financial development can cost an economy its long term growth by reducing total real supply of domestic credit

linking farmers to markets different approaches to human capital development abstract programs focused on developing community level management skills and human capacity can increase the opportunities for small farmers to benefit from market participation using a framework that links the concepts of collective power and agricultural development and drawing upon evidence from mali mozambique and cameroon the authors differentiate three types of approaches to capacity building contract business programs such as out grower and cash crop schemes facilitate farmer access to goods and services required for production and marketing of a target commodity project technology programs usually mediated by non governmental organizations ngos focus on the promotion of improved technology process human capacity investments also facilitate technology adoption and marketing but focus initially on the development of foundation skills and social capital including assistance for collective self help literacy programs marketing activities and decentralized development planning although the latter programs tend to be slower in producing tangible results the skills emphasized often determine the ability of a community to access inputs and market production beyond the life of a project

fiscal decentralization in indonesia a new approach to an old idea abstract the system for financing and delivering local public services in indonesia as in many developing countries is highly centralized growing awareness of the weaknesses of the present system has recently generated much interest in decentralization and numerous government policies and programs toward that end in spite of these efforts the role and capacity of local governments remain weak in this paper we outline the most critical obstacles to decentralization and examine a strategy to reduce their significance instead of centering our analysis on the definition of a normatively desirable decentralization outcome we focus on the development of a process through which genuinely feasible outcomes could be defined and implemented in this case an interministerial and intergovernmental process for evaluating local governments

neoliberalism and the transformation of populism in latin america the peruvian case latin american populism is generally associated with the developmental stage of import substitution industrialization it is thus widely presumed to have been eclipsed by the debt crisis of the 1980s and the free market reforms of the neoliberal era however the leadership of alberto fujimori in peru suggests that new forms of populism may be emerging despite the fiscal constraints of neoliberal austerity this new variant of populism thrives in a context where economic crisis and social dislocation undermine traditional representative institutions enabling personalist leaders to establish unmediated relationships with heterogeneous atomized masses political support can be cultivated through populist attacks on entrenched political elites or institutions along with targeted but highly visible poverty alleviation programs this new form of populist autocracy complements the efforts of neoliberal technocrats to circumvent the representative institutions that are integral to democratic accountability the peruvian case thus demonstrates that populism has been transformed rather than eclipsed during the neoliberal era and that it should be decoupled theoretically from any particular phase or model of economic development

sex differences in access to a small enterprise development fund in peru abstract in an attempt to ensure that the direct benefits of an urban small enterprise project were reaching women the industrial bank of peru undertook a study of the constraints to women s access to a major credit program it had initiated in the squatter settlements pueblos jo venes of lima the study found that the low proportion of women among the program s borrowers was not due to more women being rejected when they applied for loans but to the fact that few women applied high collateral requirements and complicated application procedures deterred women from applying those women who did apply received smaller loans than men and were concentrated in garment manufacture services and commerce taking these factors into account the authors make recommendations for ways to enhance women s participation in the credit scheme and similar small enterprise programs in the developing countries

the problem of transaction costs in group based microlending an institutional perspective abstract to be financially viable group based microlending needs to economize on transaction costs for both lenders and borrowers group lending programs vary in their transaction cost characteristics depending on their specific credit delivery arrangements and social contexts this article illustrates these arguments by examining the challenges faced by various group lending programs worldwide it also examines how social capital or the lack of it affects the transaction costs and operations of three typical group lending arrangements group loan with joint liability individual loan with joint liability and individual loan with individual liability

a conceptual framework for community based health insurance in low income countries social capital and economic development summary the international policy model linking community based health insurance cbhi and universal coverage for health care in low income countries is implicitly determined by the development of mutual health insurance in 19th century europe and japan the economic and health system frameworks employed in cbhi policy have not sufficiently taken into account contextual considerations social capital theories could contribute to understanding why generally cbhi does not achieve significant and sustainable levels of population coverage a framework of social capital and economic development is used to organize and interpret existing evidence on cbhi this suggests that solidarity trust extra community networks vertical civil society links and state society relations affect the success of cbhi aligning schemes to social determinants of cbhi could result in structures that differ from those proposed by current analytic frameworks

hands off my regime governments restrictions on foreign aid to non governmental organizations in poor and middle income countries many resource strapped developing country governments seek international aid but when that assistance is channeled through domestic civil society it can threaten their political control as a result in the last two decades 39 of the world s 153 low and middle income countries have adopted laws restricting the inflow of foreign aid to domestically operating nongovernmental organizations ngos governments recognize that such laws harm their international reputations for supporting democracy and may invite donor punishment in terms of aid reductions yet they perceive foreign aid to ngos as supporting political opponents and threatening their grip on power in the aftermath of competitive electoral victories governments often take new legal steps to limit these groups funding we test this argument on an original dataset of laws detailing the regulation of foreign aid inflows to domestically operating ngos in 153 low and middle income countries for the period 1993 2012 using an event history approach we find that foreign aid flows are associated with an increased risk of restrictive law adoption a log unit increase in foreign aid raises the probability of adoption by 6 7 this risk is exacerbated after the holding of competitive elections the interaction of foreign aid and competitive elections increases the probability of adoption by 11

public sector employment rent seeking and economic growth surplus labor in the public sector a characteristic of many developing countries is viewed in this paper as the consequence of rent seeking behavior a theory is presented of a segmented labor market with endogenous government hiring in response to unemployment a simple computable general equilibrium model is used to illustrate how this can give rise to dynamic social costs and to quantify them fiscal resources are diverted to support the unproductive sink the effect of surplus labor on economic growth is shown to be substantial while the government s attempt to reduce unemployment is shown to be futile copyright 1991 by royal economic society

business codes of multinational firms what do they say business codes are an oft cited management instrument but how common are codes among multinationals and what is their content in an unprecedented study the codes of the largest corporations in the world have been collected and thoroughly analyzed this paper presents the results of that study of the 200 largest companies in the world 52 5 have a code more than half f these codes describe company responsibilities regarding quality of products and services 67 adherence to local laws and regulations 57 and the protection of the natural environment 56 many codes make reference to principles governing stake holder relations e g transparency 55 honesty 50 and fairness 45 corporate core values e g teamwork 43 appropriate conduct among employees e g discrimination 44 and intimidation 43 and treatment of company property by employees e g conflict of interests 52 corruption 46 and fraud 45 monitoring compliance with the code is addressed in 52 of the codes based on this content study three types of codes are distinguished the stakeholder statute 72 the values statement 49 and the code of conduct 46 the results of this inquiry present a benchmark for the evaluation and development of both individual and international business codes

beyond the machine clientelist brokers and interest organizations in latin america organizational membership is one of the strongest yet overlooked predictors of vote buying across latin america we argue that this relationship is driven by the fact that politicians outsource some of their vote buying efforts to interest associations in contrast to the existing literature that focuses on party brokers who are loyal to a single political machine we introduce the concepts of organizational brokers who represent interest associations and renegotiate ties to political parties between election cycles and hybrid brokers who split their loyalties between an interest association and a single political party we illustrate the operation of these alternative broker types through case studies of street vending organizations in an uninstitutionalized party system colombia and peasant organizations in an institutionalized party system mexico attention to the role of brokers and the organizations that they represent has implications for political accountability collective action and the

does one size fit all a reexamination of the finance and growth relationship abstract recent research has found a strong positive effect of a country s financial development on economic growth we propose that this relationship may vary according to the level of financial development divided in three regions in the low region countries with very low levels of financial development additional improvements in financial markets have an uncertain effect on growth in the intermediate region financial development has a large positive effect on growth finally in the high region the effect is positive but smaller we examine a panel of 74 countries using generalized method of moments gmm dynamic panel techniques and find support for the different regions

women s participation in local organizations conditions and constraints abstract civic organizations have a capacity to contribute to economic growth and an equitable distribution of welfare by reducing information asymmetries and transaction costs while donors increasingly recognize that group based projects are a means to advocate organizational capacities of target groups it is not clear whether group based organizations always increase efficiency and equity this article analyses the determinants of participation in local development groups ldgs using data from two projects funded by undp in kashmir and gtz in chad a major result of the empirical analysis is the identification of a middle class effect of participation the exclusion of the majority of the poor can be explained by high opportunity costs to join the group especially for income earning women in addition it can be shown that an existing social network is a pre condition for participation finally the assumption has been confirmed that bargaining power of the members is important for their decision to participate in groups