future biodiesel policy designs and consumption patterns in latvia a system dynamics model abstract decarbonisation of transport has become central to european union policy biofuels are expected to represent a substantial part of the overall strategy towards diversifying europe s energy supplies and curbing greenhouse gas emissions in a cost effective way this research deals with the dynamic simulation modeling of a biodiesel market as a part of transportation fuel market and analyses of various policy support instruments on increasing the proportion of biofuel in total transport fuel demand the study is carried out for latvia s road transport sector after it had experienced generous financial support from the government allowing the industry to develop support was abruptly stopped creating stagnation in both biodiesel supply and demand this threatened the national transport policy goals the goal of this research is to find the most effective policy strategies for achieving the national transport policy goals by applying system dynamics modeling to the current market conditions of transport fuels specifically the primary focus of this paper is an attempt to gain insight into the long term dynamic behavior of the biodiesel market in latvia the principal policy tools and mechanisms implemented can be summarized as i state subsidies at different levels and stages i e the biodiesel production sector the agricultural sector and the end consumer sectors ii increasing the excise taxes on fossil fuels iii increasing the share of the biodiesel in the transportation fuel blend the results obtained from model simulations confirm that promoting biofuel acceptance among end users is the primary key issue

the dynamic cost and persistence of asset inequality in an agrarian economy abstract a growing literature suggests that asset inequality can be economically costly in the presence of agency costs that constrain labor and capital markets unclear in this literature is whether asset markets and optimal individual accumulation of self finance capacity suffice to eliminate costly inequality over time this paper uses numerical dynamic programming methods to explore this question with a model of an initially inegalitarian agrarian economy while an egalitarian asset distribution emerges over time the process involves sufficiently great productivity losses along the way that a redistributive policy could improve on the market s performance by both equity and efficiency criteria

status and poverty we present a model in which individuals preferences are defined over their consumption transfers to offspring and social status associated with income we show that a separating equilibrium exists where individuals expenditure on conspicuous consumption is a signal for their unobserved income in this equilibrium poor families that climb up the social ladder by the accumulation of wealth engage in conspicuous consumption that prevents them from escaping poverty our model may explain why the poor make some choices that do not appear to help them escape poverty jel d91 o11 o12 o15

the institutional causes of china s great famine 1959 1961 this paper studies the causes of china s great famine during which 16 5 to 45 million individuals perished in rural areas we document that average rural food retention during the famine was too high to generate a severe famine without rural inequality in food availability that there was significant variance in famine mortality rates across rural regions and that rural mortality rates were positively correlated with per capita food production a surprising pattern that is unique to the famine years we provide evidence that an inflexible and progressive government procurement policy where procurement could not adjust to contemporaneous production and larger shares of expected production were procured from more productive regions was necessary for generating this pattern and that this policy was a quantitatively important contributor to overall famine mortality

does rising landlessness signal success or failure for vietnam s agrarian transition in the wake of reforms to establish a free market in land use rights vietnam is experiencing a pronounced rise in rural landlessness to some observers this is a harmless by product of a more efficient economy while to others it signals the return of the pre socialist class structure with the rural landless at the bottom of the economic ladder the authors theoretical model suggests that removing restrictions on land markets will increase landlessness among the poor but that there will be both gainers and losers with uncertain impacts on aggregate poverty empirically they find that landlessness is less likely for the poor and that the observed rise in landlessness is poverty reducing on balance however there are marked regional differences notably between the north and the south

the economics of development a survey i the subject our definition of the subject will be the use of economic analysis to understand the economies of poor or developing countries this includes in particular how standards of living in the population are determined and how they change over time and further how policy can or should be used in the influence of these processes the definition contains in principle much or most of analytical methods in economics insofar as they can be put to use in the examination of the issues of interest this is as it should be but it poses a problem for a survey in a journal a comprehensive treatment is infeasible so we shall follow a different route the survey will focus on what i take to be the major themes and approaches which characterise the productive aspects of the subject there is therefore no pretence at being exhaustive the purpose is rather to highlight some of the advances many of these have been of real substance there are a number of possible purposes for a survey and it is important to be clear at the outset for whom it is intended what it is and what it is not this survey is addressed to economists and students of economics who know the tools of their trade but not necessarily how they have been applied to and fashioned for the analysis of the economics of developing countries it is a description of the ways in which problems can be productively formulated and approached in terms of examples chosen for their intrinsic importance and interest the vastness of the subject means that we have to be highly selective it does not seek to provide a summary evaluation of the current view of the appropriate response to immediate policy questions it is not a history of thought nor a research manifesto nor an attempt to adjudicate or settle the major debates where they arise naturally from the major purpose some judgements on these subjects will be offered but they do not themselves constitute the primary intent of this survey there are three lines of enquiry or sets of questions which have i suggest been distinctive of the most fruitful work in development economics they will

efficiency wage models of unemployment one view h lorne carmichael persistent wage rigidity and involuntary unemployment appear to be recurrent problems in most economies what could be preventing the wage adjustment necessary to clear the labor market many recent papers claim to have found the answer in efficiency wage models this paper surveys this literature and attempts to evaluate its accomplishments it concludes that the efficiency wage models fail to explain wage rigidity or persistent involuntary unemployment persistent involuntary unemployment of workers is a recurrent problem in labor markets all over the world unemployed workers seem unable to find work even though they are willing to accept lower wages than those being paid employed workers with similar skills what could be preventing wages from adjusting to clear these markets many recent papers known collectively as the efficiency wage literature now claim to have the answer this paper will survey the efficiency wage literature and critically evaluate some of its accomplishments efficiency wage models have already been examined by yellen 1984 katz 1986 and stiglitz 1987 and have received generally favorable reviews this paper is more critical its overall conclusion is that efficiency wage models provide some useful insights into the workings of the labor market but they do not provide a satisfactory account of wage rigidity or involuntary unemployment there are at least five separate versions of the efficiency wage model they share a common structure however and this is outlined in the first section of the paper this section also attempts to relate efficiency wage models to other recent models of unemployment section ii examines and criticizes the different approaches in detail section iii evaluates the achievements of this approach and suggests some directions for future work i a general efficiency wage model efficiency wage models as the name suggests are first of all models of wages they generate unemployment by showing that firms will sometimes want to set wages at non market clearing levels it is useful to begin therefore by reviewing how wages and employment are determined in some related models in a perfectly competitive labor market the wage for each type of labor is adjusted constantly to maintain equality of supply and demand overall employment fluctuates in response to demand changes as workers move up and down their labor supply curves unemployment is voluntary in that anyone who is not working prefers that state to employment at the going wage for people of his skills as well the value of a worker s marginal product is equal to the marginal value of his leisure so there are no unexploited wage bargains between unemployed workers and firms this model is successful in predicting the long term response of wages to shifts in demand and supply but it is clear that in the short run its depiction of voluntary unemployment and flexible wages is unrealistic a natural way to generate more realism is to assume that wages are inflexible in the short run in this case a reduction in demand away from a long run equilibrium will lead to rationing of jobs by employers as they attempt to stay on their labor demand curves the unemployment here is involuntary in that the unemployed would prefer to be working at the going wage and is inefficient in that there are lost gains from trade between these workers and firms the weakness of this model is that it is silent about the mechanism that keeps wages rigid unemployed workers who offer to work for less than the fixed wage ought to find work the early implicit contract models of azariadis 1975 baily 1974 and gordon 1974 provide one explanation for wage rigidity these models introduced the idea that wages can do more than just clear the market for labor wages in an implicit contract model are used to shift the risk generated by uncertain output market conditions from risk averse workers to the risk neutral firm

agricultural land relations in the developing world in this paper we draw on a number of methodological approaches which have been used to explain land relations tenancy sharecropping and interlinking distress sales dualistic land ownership distributions classes and land reform and their variations over space and time we indicate that the explanatory power of theories on land relations hinges on the complexity market imperfections and distortions admitted in the analysis

inequality control rights and rent seeking sugar cooperatives in maharashtra this paper presents a theory of rent seeking within farmer cooperatives in which inequality of asset ownership affects relative control rights of different groups of members the two key assumptions are constraints on lump sum transfers from poorer members and disproportionate control rights wielded by wealthier members transfers of rents to the latter are achieved by depressing prices paid for inputs supplied by members and diverting resulting retained earnings the theory predicts that increased heterogeneity of landholdings in the local area causes increased inefficiency by inducing a lower input price and a lower level of installed crushing capacity predictions concerning the effect of the distribution of local landownership on sugarcane price capacity levels and participation rates of different classes of farmers are confirmed by data from nearly 100 sugar cooperatives in the indian state of maharashtra over the period 1971 93

malnutrition and child labor in pre industrial and developing economies it is common to find i entire families including children working together in family farms or urban factories and ii a positive link between a person s consumption and her productivity this paper argues that there is a natural reason for the concurrence of i and ii as a rule households are characterized by intra household altruism an increase in the income of an individual increases the consumption of all household members hence when an employer pays an adult worker a high wage to enhance her productivity part of it ends up augmenting her children s consumption and productivity one way for the employer to prevent this leakage and internalize the externality is to employ the children as well this explains the higher incidence of family labor in poor societies where ii is more likely to be true

theories of poverty traps and anti poverty policies in this paper we provide a conceptual overview of alternative mechanisms leading to poverty traps at the individual level making a distinction between those that are due to external frictions e g market failure and those that are due to behavior under extreme scarcity in the absence of any frictions we develop a common theoretical framework to examine alternative scenarios characterizing conditions under which poverty traps in the sense of multiple stable steady states arise as opposed to possibly conditional convergence to a unique steady state we apply this framework to discuss the relative merits of alternative anti poverty policies such as unconditional and conditional cash transfers and direct interventions aimed at improving market access to the poor or improving public service delivery jel codes d13 d23 o12 o15

egalitarianism and incentives abstract a group of agents is collectively engaged in a joint productive activity each agent supplies an observable input and output is then collectively shared among the members a bergson samuelson welfare function defined on individual utilities describes the social values of the agents however individual actions are taken on a selfish basis the collective decision cannot be precommitted and is made after inputs are chosen to maximize welfare conditional on the input decisions this leads to inefficiency the aim of this paper is to show formally that contrary to popular belief the degree of inefficiencydecreasesin the extent of egalitarianism embodied in the social welfare function journal of economic literatureclassification numbers c72 d30 d63 p13

immigration and the labor market outcomes of natives in developing countries a case study of south africa abstractusing south african census data from 2001 2007 and 2011 i examine the effect that immigration had on labor market outcomes of native born black south africans using instrumental variables to control for the potential endogenous location choices of immigrants to south africa the results show that immigrant inflows decreased the employment to population ratios and total annual income of black native born south africans additionally results suggest a negative effect of immigrant inflows on the employment ratio and total annual income of black native born south africans employed in the formal sector results show that immigration caused an intersectoral employment shift for black male south africans the composition of the employed labor force shifted to the formal sector and for black female south africans the composition of the employed labor force shifted to the informal sector

do asset transfers build household resilience abstract we estimate the impact of an asset transfer program on household resilience we measure resilience as the probability that a household will sustain at least the threshold asset level required to support consumption above the poverty line using six rounds of data collected over 42 months in rural zambia we construct a measure of resilience based on households conditional welfare distributions to estimate program impacts we find that the program increased household resilience beneficiaries likelihood of being non poor in future periods increased by 44 the program both increased mean assets and decreased variance signaling an upward shift in households conditional asset distributions our method demonstrates the added value of the resilience estimation compared with a conventional impact assessment numerous households classified as non poor are unlikely to remain non poor over time and the relationship between wealth and resilience is driven by changes in both the conditional mean and the conditional variance

the economic lives of the poor in what turned out to be a rhetorical master move the 1990 world development report from the world bank defined the extremely poor people of the world as those who are currently living on no more than 1 per day per person measured at the 1985 purchasing power parity ppp exchange rate in 1993 the poverty line was updated to 1 08 per person per day at the 1993 ppp exchange rate which is the line we use in this paper poverty lines have always existed indeed 1 per day was chosen in part because of its proximity to the poverty lines used by many poor countries 1 however the 1 a day poverty line has come to dominate the conversations about poverty to a remarkable extent

rural works programs in india costs and benefits abstract a sequential applied general equilibrium model of the indian economy is used for analyzing the costs and benefits of a rural works program designed to provide employment during slack agricultural seasons through the creation of productive assets such as roads irrigation works schools etc it is shown that such a program if carried out efficiently targeted effectively and financed in a way that does not jeopardize long term growth can be a very effective instrument for alleviating rural poverty in india

traps and thresholds in pastoralist mobility this article presents a new approach to identifying poverty traps in east african pastoralist communities a flexible semiparametric estimation procedure is used to identify a bifurcation in the propensity to engage in the asset based mobile herding livelihood in comparison to the sedentary alternative as a function of herd size the identified threshold is consistent with previous evidence on poverty traps based on modeling herd stock dynamics the approach contributes to an emerging literature that seeks to identify poverty traps through testing the implications of the posited behavioral mechanism behind the trap as opposed to directly modeling asset dynamics the approach is further employed to provide complementary evidence on the relationship between ability and assets in sustaining mobile pastoralism

the economics of poverty traps and persistent poverty empirical and policy implications the moral and economic imperatives to intervene in poverty traps motivate the identification of poverty traps and their structural causes so as to inform the design of appropriate policy responses however empirical identification remains challenging because of poverty traps complexity after reviewing mechanisms that can generate poverty traps we focus on one multiple financial market failures emphasising its heretofore underappreciated testable implications including specific behaviours that are rational only in the presence of a poverty trap we therefore recommend tests for these behaviours rather than more econometrically challenged efforts to directly test for poverty traps in estimated asset dynamics

asset smoothing consumption smoothing and the reproduction of inequality under risk and subsistence constraints abstract a growing literature asks whether low wealth agents can accumulate assets over time or whether they are trapped in poverty this paper develops a stochastic dynamic programming model with endogenous asset price risk to explore savings and portfolio decisions in a resource poor environment characterized by risk and subsistence constraints optimal portfolio strategies are found to bifurcate despite divisible assets and fully rational agents wealthier agents acquire a higher yielding portfolio and pursue conventional consumption smoothing poorer agents acquire a less remunerative portfolio and pursue asset smoothing rather than consumption smoothing asset based risk coping thus results in positive correlation between initial wealth and portfolio rate of return

alcohol and self control a field experiment in india this paper studies alcohol consumption among low income workers in india in a 3 week field experiment the majority of 229 cycle rickshaw drivers were willing to forgo substantial monetary payments in order to set incentives for themselves to remain sober thus exhibiting demand for commitment to sobriety randomly receiving sobriety incentives significantly reduced daytime drinking while leaving overall drinking unchanged i find no evidence of higher daytime sobriety significantly changing labor supply productivity or earnings in contrast increasing sobriety raised savings by 50 percent an effect that does not appear to be solely explained by changes in income net of alcohol expenditures

on the microeconomics of food and malnutrition under endogenous discounting abstract this paper explores the microeconomics and dynamics of food and nutrition it examines the linkages between malnutrition and the incentive to invest and accumulate capital the analysis focuses on a dynamic model where preferences about the future depend on nutrition and health situations of malnutrition cover both ends of the spectrum from nutrient deficiency to obesity the model involves preferences that are not time additive and exhibit endogenous discounting this provides a framework to investigate the factors affecting consumption and investment behavior the adverse investment incentives of malnutrition are examined

food aid and adult nutrition in rural ethiopia insight into the role of safety nets that contribute to adult nutrition is an important component to understanding the dynamics of poverty in developing countries this article uses panel data from rural ethiopia on individual nutritional status to test for an effect of public transfers on adult body mass index bmi results show that among adult household members male members are the primary beneficiaries of food aid as male and female aid recipients tend to invest aid receipts in male household members these results are consistent with a theory in which additional resources are allocated to members of the household whose market returns are higher or those who engage in activities that expend higher levels of energy for high asset households female household members benefit if the aid recipient is a female women in low asset households appear to be adversely affected by aid receipts and evidence suggests that women with little bargaining power suffer the most the results suggest that aid receipts are useful in mitigating fluctuations in adult bmi over a short time period

the welfare economic theory of green national accounts this paper takes a critical look at the literature on green national accounts the problem studied is to find a linear index of economic variables that responds to perturbations in the same direction as social well being the thesis of a large literature that net national product which is a flow is that index in closed economies is shown in some interpretations to be simply false and in others to suffer from deep estimation problems it is argued that capital depreciation using shadow prices should certainly be included in national accounts but that the right welfare index is a comprehensive measure of wealth defined as the shadow value of an economy s stock of all capital assets it is shown that comprehensive wealth is usable as a criterion for policy evaluation as well as for determining sustainable economic development

inequality lobbying and resource allocation this paper describes how wealth inequality may distort public resource allocation a government seeks to allocate limited resources to productive sectors but sectoral productivity is privately known by agents with vested interests in those sectors they lobby the government for preferential treatment the government even if it honestly seeks to maximize economic efficiency may be confounded by the possibility that both high wealth and true economic desirability create loud lobbies broadly speaking both poorer economies and unequal economies display greater public misallocation the paper warns against the conventional wisdom that this is so because such governments are more corrupt jel d72 d78 d82 016 in this paper we propose a particular channel through which wealth inequality distorts the resource allocation process our analysis rests on four premises

inequality as a determinant of malnutrition and unemployment policy this paper explores the policy implications that are obtained once it is recognized that at low nutrition intakes a person s productivity is an increasing function of intake in the context of a fully general equilibrium model it is shown that if aggregate assets in an economy are neither large nor small certain patterns of lorenz improving asset redistributions or nutrition transfers increase aggregate output and reduce the volume of involuntary unemployment and the incidence of undernourishment copyright 1987 by royal economic society

macroeconomic models and the yield curve an assessment of the fit abstract many have questioned the empirical relevance of the calvo yun model this paper adds a term structure to three widely studied macroeconomic models calvo yun hybrid and svensson we back out from observations on the yield curve the underlying macroeconomic model that most closely matches the level slope and curvature of the yield curve with each model we trace the response of the yield curve to macroeconomic shocks we assess the fit of each model against the observed behaviour of interest rates and find limited support for the calvo yun model in terms of fit with the observed yield curve we find some support for the hybrid model but the svensson model performs best

the economics of non convex ecosystems introduction the word convexity is ubiquitous in economics but absent from economics in this paper we explain why and show what difference it makes to economic analysis if ecosystem non convexities are taken seriously a simple proof is provided of the connection between self similarity and power laws we also provide an introduction to each of the papers in the symposium and draw out the way in which they form a linked set of contributions

identifying a sustained pathway to multidimensional poverty reduction evidence from two chinese provinces poor rural households in developing countries often endure many faceted burdens including monetary poverty nutrition deficiency and energy shortage due to reliance on limited local natural resourc

the economics of poverty in poor countries this paper which examines recently studied links between 1 poverty high fertility and undernourishment and 2 environmental degradation and civic disconnection in developing countries opens by reviewing the limitations of orthodox discussions of economic institutions and property rights and the orthodox dichotomy that has located the cause of poverty in the suppression of markets the introduction also notes that much of the analysis in this paper is based on data from sub saharan africa and india the next section of the paper summarizes evidence on the magnitude and extent of world poverty section 3 exposes the connection between undernourishment and a persons capacity to work as one of the pathways to the poverty trap sections 4 and 5 consider the dependence of impoverished rural populations on common property resources and how the conventional process of economic growth can break down this system and make certain sections of the population especially vulnerable to economic shocks the next two sections explore the possibility that links between poverty high fertility and environmental degradation may constitute another pathway to the poverty trap the eighth section reviews the methodology of using net national product which includes resource depletion and environmental deterioration as an evaluation criterion and argues that mainstream development economists may have neglected environmental and population problems because they have been relying on the wrong economic indices the final section concludes that a number of policies must be used to improve options for people

reproductive externalities and fertility behaviour abstract this article studies reproductive externalities within rural communities in poor countries it is shown that such externalities create a link between household poverty household size and the local natural resource base each of which is viewed as being endogenous the models presented here offer an explanation for the fact that in recent decades large groups of people in various parts of the world have been unable to lift themselves out of acute poverty even while their national economies have on average enjoyed economic growth implications for policy and institutional changes are drawn

two tier land tenure system and sustained economic growth in post 1978 rural china abstract the two tier land tenure system has been widely blamed for the problems in land allocation and in land specific investment observed in the postreform rural china greater privatization of property rights in land has been proposed to enable productive farmers to acquire more land to promote land circulation to improve farmers access to credit and to encourage farm investment it is argued here that in the presence of multiple market distortions land privatization is unlikely to provide a solution to the agricultural problems rather an approach which refines the existing framework of the two tier ownership system offers more promise

potatoes milk and the old world population boom abstract this paper explores the role of two foods potatoes and milk in explaining the increase in economic development experienced throughout the old world in the 18th and 19th centuries nunn and qian 2011 show the introduction of the potato from the new world has a significant explanatory role for within country population and urbanization growth over this period i expand on this by considering the role of milk consumption which is hypothesized to be a complement in diet to potatoes due to a differential composition of essential nutrients using a country level measure for the suitability of milk consumption the frequency of lactase persistence i show that the marginal effect of potatoes on post 1700 population and urbanization growth is positively related to milk consumption as the frequency of milk consumption approaches unity the marginal effect of potatoes more than doubles in magnitude compared to the baseline estimate of nunn and qian

height skills and labor market outcomes in mexico abstract taller workers are paid higher wages a prominent explanation for this pattern is that physical growth and cognitive development share childhood inputs inducing a correlation between adult height and two productive skills strength and intelligence this paper explores the relative roles of strength and intelligence in explaining the labor market height premium among mexican men while cognitive test scores account for a limited share of the height premium roughly half of the premium can be attributed to the educational and occupational choices of taller workers taller workers obtain more education and sort into occupations with greater intelligence requirements and lower strength requirements suggesting a possible role for cognitive skill

nutrition non convexities and redistributive policies of the varying motivations underlying research in economics forecasting has proved to be the most discomfiting it is not so much that economists are not good at it it is more that we do not have any firm idea if we are bad at it we do not yet have a consensus on how to judge the matter what i shall therefore do in this note is avoid even trying to make a prediction of which way we will be moving in economics research instead i will outline the kind of work i would like to see come to fruition in the field in which my current research interest lies namely the economics of destitution we need a redirection in how we go about our research in this area my motivation here springs from an unease i have over methodological matters in current studies of poverty in poor countries in what follows i will first present in abstract terms how i think we are going wrong i will then exemplify this with a key example

introduction to development theory abstractthisarticle introduces the symposium on economic development theory 2007 elsevier inc all rights reserved jel classi cation o11 o12keywords development economics development economics a subject that studies institutions growth inequality and povertyin the developing world is a large lively and exciting area of research the objective of thissymposium is to put together some contributions in economic theory with a distinct focus ondevelopment questions much of early development economics as typi ed in the work of paul rosenstein rodan arthurlewis ragnarnurkse tiborscitovsky allynyoung gunnarmyrdal harveyleibenstein alberthirschman amartyasenandothers wastheoretical thoughnotnecessarilyinthesenseofformalmodel building theseauthorsallfelttheneedtobringnewconceptsintoeconomictheory ideas that would capture the essential features of underdevelopment and provide explanationsof the development process existing economic theory with its focus on competitive markets depersonalized exchange steady technical progress and balanced growth simply did not seemrightwhenmatchedwiththegroundrealitiesofunderdevelopment fragmented imperfect orjustplain missing markets highly personalized transactions in credit insurance or agrarian tenancy ambiguousornonexistentpropertyrights andwidespreadevidenceofpovertytrapsandhistoricallock ins a fair bit of modern economic theory was born in some of these early development writings young s article 40 on increasing returns was perhaps the rst systematic study of noncon vexities in economic growth rosenstein rodan s celebrated paper 32 on post war interven tion in europe provided a conceptual foundation for modern thinking on coordination failures

issues in measuring and modeling poverty economists have relied heavily on household incomes or expenditures normalized for differences in household specific prices and demographics in their research and policy advice related to poverty and inequality recognizing the conceptual and empirical problems that confound such measures does not mean that they should be ignored instead it indicates the need for supplementary measures to capture the missing items implementing a genuinely multidimensional approach will often make the welfare rankings of social states more difficult but that fact points to the nonrobustness of low dimensional rankings this may have its own policy ramifications with the possibility of correspondence between policy instruments and welfare objectives the model types used to understand the poverty and inequity determination processes will be affected not only will there be more dependent variables to consider but variables will have potentially complex relationships these relationships will often be hard to empirically disentangle despite richer integrated and longitudinal data sets such data open rich and relevant agenda for research into the dynamics of poverty along multiple dimensions a simultaneous attack on these issues from all three fronts measurement modeling and data offers hope of establishing a credible empirical foundation for public action in fighting poverty

the economics and nutritional impacts of food assistance policies and programs recent evidence on malnutrition and poverty raise important questions on the role of food assistance policies and programs in this review article we examine evidence on the economic and nutritional impacts of international food assistance programs faps and policies the returns on investments in faps are on average high but depend considerably on the targeting and cost structures as well as on food quality and role of complementary activities we disaggregate findings into four classes of recipients returns to faps are highest for children under two but faps oriented towards early childhood interventions are less well funded than are interventions aimed at school age children or at the broader largely adult population even though available evidence indicates that these latter classes of interventions offer considerably lower average returns in economic health and nutrition terms nonetheless fap effectiveness in achieving any of several objectives varies with a range of key factors including targeting additionality seasonality timeliness incentive effects social acceptability and political economy considerations

poverty and land redistribution abstract despite a theoretical literature that promises that land transfers will have large impacts on the well being of poor households well identified empirical evidence on the efficacy of land redistribution is scarce in an effort to fill this gap this paper examines south africa s land redistribution for agricultural development lrad program we exploit features of lrad program implementation to extract exogenous variation in whether and for how long applicant households enjoyed land transfers binary treatment estimates which compare treated with untreated households show that beneficiary households on average experienced a 25 increase in per capita consumption our preferred continuous treatment estimates which analyze only the subset of treated households identify the impact time path of land transfers on consumption these estimates show that living standards initially drop and then after 3 4 years rise to 150 of their pre transfer level these results are statistically significant and robust to a statistically more conservative identification strategy

risk taking behavior in the presence of nonconvex asset dynamics a growing literature on poverty traps emphasizes the links between multiple equilibria and risk avoidance however multiple equilibria may also foster risk taking behavior by some poor people we illustrate this idea with a simple analytical model in which people with different wealth and ability endowments make investment and risky activity choices in the presence of known nonconvex asset dynamics this model underscores a crucial distinction between familiar static concepts of risk aversion and forward looking dynamic risk responses to nonconvex asset dynamics even when unobservable preferences exhibit decreasing absolute risk aversion observed behavior may suggest that risk aversion actually increases with wealth near perceived dynamic asset thresholds although high ability individuals are not immune from poverty traps they can leverage their capital endowments more effectively than lower ability types and are therefore less likely to take seemingly excessive risks in general linkages between behavioral responses and wealth dynamics often seem to run in both directions both theoretical and empirical poverty trap research could benefit from making this two way linkage more explicit jel d81 o12 d90

limited attention and income distribution economists have long been interested in the idea that there is a direct circular relation between poverty and low productivity and not just one that is mediated by market failures usually in asset markets the nutrition based efficiency wage model partha dasgupta and debraj ray 1987 is the canonical example of models where this happens however it has been variously suggested see for example t n srinivasan 1994 that the link from nutrition to productivity and especially the link from productivity to nutrition is too weak to be any more than a small part of the story partha dasgupta himself acknowledges this when he writes nutrition productivity construct provides a metaphor for an economic environment harboring poverty traps partha dasgupta 1997 page 5 we propose an alternative approach to this question based on the idea that attention is a scarce resource that is important for productivity specifically people may not be able to fully attend to their jobs if they are also worrying about problems at home and being distracted in this way reduces productivity but not paying attention at home is also costly early symptoms of a child s sickness may go unnoticed water may run out at the end of the day kerosene for lighting lamps at home might run out and make it hard to do homework etc finally the extent to which home life distracts depends on the nature of home life specifically certain goods e g a good baby sitter a 24 hour piped water supply a connection to a power supply grid can reduce the extent of home life distraction these three assumptions generate an interesting relation between income and productivity that is at the core of our model the non poor in this model by virtue of owning distraction saving goods and services at home are able to focus more on their work hence they will be more productive at work and will be able to afford more distraction saving goods this simple two way relationship between in this abstract was borrowed from another version of this item

shocks and their consequences across and within households in rural zimbabwe abstract increasing attention is now being paid to poverty dynamics in developing countries this work links the extent to which households smooth consumption or smooth assets given income shocks the empirical evidence on the churning of households in and out of poverty and the possibility that temporary shocks can have permanent consequences using longitudinal data from rural zimbabwe this paper extends the discussion of these issues by disaggregating the impact of shocks by levels of asset holdings by disaggregating the impact of shocks on individual level welfare and by assessing the extent to which such shocks have permanent consequences by doing so it assesses the validity of distinguishing between asset and consumption smoothing and provides insights into whether poverty dynamics assessed at the household level provide an adequate picture of dynamics at the individual level

stochastic wealth dynamics and risk management among a poor population we use herd history data collected among pastoralists in southern ethiopia to study stochastic wealth dynamics among a poor population although covariate rainfall shocks plainly matter household specific factors including own herd size account for most observed variability in wealth dynamics we find no support for the tragedy of the commons hypothesis past studies may have conflated costly self insurance with stocking rate externalities biophysical shocks move households between multiple dynamic wealth equilibria the lowest suggesting a poverty trap according to nonconvex path dynamics these findings have broad implications for development and relief strategies among a poor population vulnerable to climatic shocks a vast economic literature on risk management rests explicitly or implicitly on the classic friedmanite permanent income hypothesis studies of portfolio management consumption smoothing social insurance and the like all depend on the canonical assumption that stochastic income realisations are drawn from a stationary income distribution leading to consumption smoothing off a stable asset base the possibility of asset accumulation connects this literature to the immense literature on the theory and empirics of economic growth

welfare dynamics in pakistan and ethiopia does the estimation method matter identifying household level welfare dynamics and associated dynamic poverty trap thresholds can have important implications for the targeting of poverty reduction policies the small existing empirical microeconomic literature has found evidence both for and against poverty traps using household panel data from rural pakistan and ethiopia this article examines whether these different results are likely driven by differences in estimation methods or whether they reflect actual differences across settings it applies the estimation methods from the existing literature to the same two datasets and also proposes a novel semiparametric panel data estimator that combines the advantages of the previous fully parametric and nonparametric approaches the results suggest that absent any dynamic poverty trap thresholds the effect of using different estimation methods is secondary having a small influence on the estimated long term level of household well being but not the identification of multiple dynamic welfar

the effects of human capital on wages and the determinants of labor supply in a developing country abstract the heckman procedure is used to correct for sample selection bias in estimating wage offer and net labor market supply equations the findings show that wages are affected by education and experience in addition the wage offer is influenced by other genetic and environmental influences captured in the wage of one s father calories as predicted by exogenous instruments are also shown to influence the wage offer suggesting that better nutrition increases labor productivity the probability of market labor participation as well as the amount of net market labor supply declined with the size of paddy landholding in addition to the net market supply elasticity increasing with the amount of land owned and being lower for urban than rural workers

middle income classes and food crises the new food feed competition famine was averted the novelty was that a 3 shortfall in grain production led to a 250 price increase this specific manifestation of the food crisis was the result of the congruence of an old force population pressure with new ones the income explosion and income inequality in a world in which the economic distance between the rich and the poor grows ever greater even minor food shortages are likely to assume major proportions the agricultural price instability that will ensue represents a major threat to the food security of less developed countries examination of the ingredients of modern food crises can help explain some of the new ramifications of the age old problem of world hunger the three elements that are reflected in the food demand situation are population incomes and prices to avoid needless complexity i will reserve my examination of prices to the end population and incomes deserve more detailed analysis

economics of development and the development of economics the purpose of this paper is to restore some historical perspective by highlighting the many contributions of development economics to the rest of economics we will point out to the younger generations how some of the glittering ideas they currently play with originally came from that now neglected field and how in some cases they have rediscovered with great fanfare insights that were well known in the development literature familiarity with which would have enriched their own work