financial development and the fdi growth nexus the malaysian experience this article examines the fdi growth nexus in the small open economy of malaysia by controlling for the level of financial development financial development is proxied by a composite index which is a summary measure of four financial development indicators using time series data from 1965 to 2004 the results show that fdi and financial development are positively related to output in the long run the impact of fdi on output is enhanced through financial development to supplement these findings we assess the causal relationships between the variables using the recent causality tests available in the literature the results indicate that economic growth causes fdi growth in the long run but no feedback relationship is observed

the choice between market failures and corruption because government intervention transfers resources from one party to another it creates room for corruption as corruption often undermines the purpose of the intervention governments will try to prevent it they may create rents for bureaucrats induce a misallocation of resources and increase the size of the bureaucracy since preventing all corruption is excessively costly second best intervention may involve a certain fraction of bureaucrats accepting bribes when corruption is harder to prevent there may be both more bureaucrats and higher public sector wages also the optimal degree of government intervention may be nonmonotonic in the level of income

some macroeconomics for the 21st century this note describes a numerical simulation of a model of economic growth a simplified version of robert tamura s 1996 model of world income dynamics based on technology diffusion the model makes predictions for trends in average world income growth and about the evolution of the relative income distribution that accord well with observation the model is used to forecast the course of world income growth and income inequality over the century to come

measuring urban economic density agglomeration economies are at the heart of urban economics driving the existence and extent of cities and are central to structural transformation and the urbanization process this paper evaluates the use of different measures of economic density in assessing urban agglomeration effects by examining how well they explain household income differences across cities and neighborhoods in six african countries the paper examines simple scale and density measures and more nuanced ones that capture the extent of clustering within cities the evidence suggests that more nuanced measures attempting to capture within city differences in the extent of clustering do no better than a simple density measure in explaining income differences across cities at least for the current degree of accuracy in measuring clustering however simple city scale measures such as total population are inferior to density measures and to some degree misleading the analysis finds large household income premiums from being in bigger and particularly denser cities over rural areas in africa indicating that migration pull forces remain very strong in the structural transformation process moreover the marginal effects of increases in urban density on household income are very large with density elasticities of 0 6 in addition to strong city level density effects the analysis finds strong neighborhood effects for household incomes overall city density and density of the neighborhood matter

regulatory discretion and the unofficial economy johnson kaufmann and shleifer 1997 find that the share of the unofficial economy in gdp is determined by the extent of control rights held by politicians and bureaucrats in post communist economies exploring in more detail the role of bribes and using a broader data set from the oecd latin america and transition economies we find that the unofficial economy accounts for a larger share of gdp when there is more corruption and when the rule of law is weaker while these findings are consistent with the earlier results for transition economies in the larger country sample we find it is not necessarily the case that more regulation or higher taxes directly increases the size of the unofficial economy the problem appears to be not regulation or taxation per se but whether the state administrative system can operate without corruption a high level of regulatory discretion helps create the potential for corruption and drive firms into the unofficial economy

fertilizing growth agricultural inputs and their effects in economic development this paper estimates the role of agronomic inputs in cereal yield improvements and the consequences for countries processes of structural change the results suggest a clear role for fertilizer modern seeds and water in boosting yields we then test for respective empirical links between agricultural yields and economic growth labor share in agriculture and non agricultural value added per worker the identification strategy includes a novel instrumental variable that exploits the unique economic geography of fertilizer production and transport costs to countries agricultural heartlands we estimate that a half ton increase in staple yields generates a 14 to 19 percent higher gdp per capita and a 4 6 to 5 6 percentage point lower labor share in agriculture five years later the results suggest a strong role for agricultural productivity as a driver of structural change

corruption a review as is increasingly recognised in academic literature and by international organisations corruption acts as a major deterrent to growth and development the aim of this survey is to organise and summarise existing theoretical and empirical work on corruption with a view to identifying opportunities for further research the paper begins with a brief overview of key definitions of corruption and then turns to a review of the factors that favour or deter the growth of corruption together with a brief look at related models this is followed by an examination of the consequences of corruption for society and the consideration of measures that might help to reduce corruption the paper ends with suggestions for future research and includes summaries of data sources and key variables for use in this research

the drivers of structural change the main goal of this paper is to provide an integrated survey of the literature devoted to identifying the drivers of structural change broadly defined as the process of reallocation of economic activity across the three broad sectors agriculture manufacturing and services using the ggdc 10 sector database this paper first presents the empirical facts associated with structural change in different regions of the world that is europe and the usa asia latin america and africa then reviews four determinants of structural change i changes in income ii changes in relative sectoral prices iii changes in input output linkages and iv changes in comparative advantage s via globalization and trade

does competition kill corruption corrupt agents officials or gangsters exact money from firms corruption affects the number of firms in a free entry equilibrium the degree of deep competition in the economy increases with lower overhead costs relative to profits and with a tendency toward similar cost structures increases in competition may not lower corruption the model explains why a rational corrupt agent may extinguish the source of his bribe income by causing a firm to exit assessing the welfare effect of corruption is complicated by the fact that exit caused by corruption does not necessarily reduce social welfare

agricultural development vs industrialization effects of trade the question addressed in this paper is how trade affects the composition of the national product thus having an effect on the overall growth rate of the economy the paper uses a dynamic general equilibrium model with three different consumption goods agriculture manufactures and services nontradable the main finding is that if the country produces only primaries and services the effects of trade on growth are mixed trade helps growth at low levels of income but at higher levels trade slows the country s growth if the country produces manufactures and services the effect of trade on growth is not substantial

agricultural productivity and the sectoral reallocation of labor in rural india abstract how do shocks to agricultural productivity affect the allocation of labor across sectors of the economy to answer this i use data from rural india to show that exogenous increases in agricultural productivity caused by abnormally high levels of precipitation lead to an increase in the labor share of the non agricultural sector i further show that the non tradable sector expands significantly when agricultural output increases this evidence is consistent with increasing agricultural output causing increased demand for local non tradables which in turn increases the non agricultural labor share

does low education delay structural transformation why do some countries industrialize later than others recent literature suggests that the prime reason is low agricultural productivity this paper argues that the initial level of human capital could also be a contributing factor we construct a neoclassical growth model which predicts that countries with a greater initial knowledge gap industrialize later we use this model as a baseline and calibrate it to historical data for the united kingdom we find that our baseline model performs well in replicating actual historical u k gross domestic product series during the postindustrialization era the same model also explains a significant fraction of past and recent cross country variations in per capita income levels

structural transformation and the deterioration of european labor market outcomes this paper examines hours worked in continental europe and the united states from 1956 to 2003 the empirical work establishes two results first hours worked in europe decline by almost 45 percent compared to the united states over this period second this decline is almost entirely accounted for by the fact that europe develops a much smaller market service sector than the united states a simple model of time allocation is used to understand these patterns i find that relative increases in taxes and technological catch up can account for most of the differences between the european and american time allocations over this period

transportation costs agricultural productivity and cross country income differences i document large difierences in domestic transport costs and transportation infrastructure across nations the richest countries have 5 times lower transport costs and 32 times more infrastructure per capita than the poorest countries of the world are these difierences a source of aggregate labor productivity difierences across nations using a three sector two region general equilibrium model i show that high transport costs can distort the allocation of resources not only across geographically dispersed production units within sectors but also between agriculture and non agriculture taking as given the observed difierences in transportation costs and transportation infrastructure per capita i quantify the role of transportation for cross country income difierences the calibrated model produces an income disparity of 7 5 between the 5 rich and 5 poor countries this corresponds to an improvement of 50 relative to the disparity predicted by a two sector model of agriculture and non agriculture furthermore the efiects of advancements in transportation are non linear the elasticity of aggregate labor productivity with respect to transport labor productivity in the poorest nations is 6 times higher than in the richest ones the efiects of transport frictions are even more pronounced when restrictions to regional migration are introduced

industrial output fluctuations in developing countries general equilibrium consequences of agricultural productivity shocks abstract this paper shows that a negative shock to agricultural productivity may increase food prices and labor and capital can move away from manufacturing into agriculture to meet the subsistence requirement for food this effect depends on income levels and openness to trade using annual manufacturing data and rainfall shocks as the instrument for crop yields proxy for agricultural productivity i find that an exogenous decline in yield decreases manufacturing output as well as employment and capital investment in manufacturing overall crop yield variation can explain up to 44 of industrial output fluctuations in developing countries rainfall shocks cause 31 of the fluctuations lastly this paper shows that such perverse phenomena in which resources move toward the sector with declining productivity can lead to a significant reduction in aggregate productivity

the invisible hand and the grabbing hand evidence from a survey of 105 shop owners in moscow and warsaw shows that the reliance on private protection as well as the burden of regulation and corruption are much greater in moscow the evidence suggests that the invisible hand model of government better fits the warsaw local government and the grabbing hand model is more appropriate for moscow the evidence implies that the singular focus on the speed of economic reforms to understand the success of transition is misplaced and that the quality of government may be as essential this abstract was borrowed from another version of this item

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

which sectors make poor countries so unproductive which sectors are most responsible for the low total factor productivities of developing countries to answer this question we develop a new framework for sectoral development accounting applying this framework to the penn world table we find that in equipment construction and food the sectoral tfp differences between developing countries and the united states are much larger than in the aggregate however in manufactured consumption the sectoral tfp differences are about equal to the aggregate tfp differences and in services they are much smaller we show that our level of disaggregation allows us to reconcile the results of existing studies of sectoral productivity differences which have focused on noncomparable two sector decompositions of the aggregate data we also show that our results help shed light on existing theories of aggregate tfp differences

foreign trade regimes and the fdi growth nexus a case study of thailand this article examines the role of trade policy regimes in conditioning the impact of foreign direct investment fdi on growth performance in investment receiving host countries through a case study of thailand the methodology involves estimating a growth equation which provides for capturing the impact of fdi interactively with economic openness on economic growth using data for the period 1970 99 the results support the bhagwati hypothesis that other things being equal the growth impact of fdi tends to be greater under an export promotion ep trade regime compared to an import substitution is regime

the impact of corruption on entry strategy evidence from telecommunication projects in emerging economies with globalization and the growth in emerging economies multinational enterprises mnes now frequently confront challenges associated with corrupt governments already a growing body of research has demonstrated that corruption significantly reduces a countrys aggregate inflows of foreign direct investment through its effects on firm performance we move the analysis of corruption from aggregate financial flows toward managerial theory and practice by examining how firms adjust their strategy for entering foreign markets in corrupt environments and how different types of corruption affect firms choices building on institutional theory we predict that mnes will respond to pervasive and arbitrary corruption in a host country by selecting particular types of equity and nonequity modes of entry using data on 220 telecommunications development projects in 64 emerging economies we find that firms adapt to the pressures of corruption via short term contracting and entry into joint ventures we also find that the arbitrariness surrounding corrupt transactions has a significant impact on firms decisions in addition to the overall level of corruption in contrast to extant research we show that mnes use nonequity entry modes or partnering as an adaptive strategy to participate in markets despite the presence of corruption

the global spatial distribution of economic activity nature history and the role of trade we explore the role of natural characteristics in determining the worldwide spatial distribution of economic activity as proxied by lights at night observed across 240 000 grid cells a parsimonious set of 24 physical geography attributes explains 47 of worldwide variation and 35 of within country variation in lights we divide geographic characteristics into two groups those primarily important for agriculture and those primarily important for trade and confront a puzzle in examining within country variation in lights among countries that developed early agricultural variables incrementally explain over 6 times as much variation in lights as do trade variables while among late developing countries the ratio is only about 1 5 even though the latter group is far more dependent on agriculture correspondingly the marginal effects of agricultural variables as a group on lights are larger in absolute value and those for trade smaller for early developers than for late developers we show that this apparent puzzle is explained by persistence and the differential timing of technological shocks in the two sets of countries for early developers structural transformation due to rising agricultural productivity began when transport costs were still high so cities were localized in agricultural regions when transport costs fell these agglomerations persisted in late developing countries transport costs fell before structural transformation to exploit urban scale economies manufacturing agglomerated in relatively few often coastal locations consistent with this explanation countries that developed earlier are more spatially equal in their distribution of education and economic activity than late developers

do neoliberal policies deter political corruption this article probes the relationship between neoliberal economic poli cies and political corruption focusing in particular on the impact of trade and invest ment policies regulatory policy and the overall size of the public sector on corruption using a large cross national data set from the mid to late 1990s we test the neolib eral hypotheses that market oriented economic policies are associated with lower lev els of political corruption and state intervention in the economy with higher levels consistent with the neoliberal argument we find that open trade and investment pol icies and low effective regulatory burdens do correlate with lower levels of political corruption however we find no consistent relationship between the aggregate size of the public sector and political corruption while the neoliberal hypothesis on polit ical corruption has initial empirical support its lessons cannot be applied wholesale market oriented states may be less corrupt but interventionist states as measured by public spending are not necessarily more corrupt

organizational isomorphism and corruption in financial institutions empirical research in emerging countries the globalizations of capital markets in the last 20 years has led to a historic degree of financial integration in the world it is clear however that globalization is not conducive to a complete homogeneity of financial markets and institutions among others one element of diversity is the importance of the impact of corruption in emerging countries corruption decreases the credibility of financial institutions and markets scandals and unethical behavior in financial institutions erode confidence in such firms relying on neoinstitutional literature this article focuses on the link between corruption and organizational isomorphism in financial institutions in emerging countries therefore our aim is to examine the institutional reasons for corruption in financial institutions in emerging countries our structural equation model is based on empirical research in financial institutions in emerging countries a questionnaire was administrated to 70 top executives of financial institutions in 18 different emerging countries

structural change and economic growth this paper presents a model in which a country s measured average propensity to save endogenously rises when its economy industrializes the model has agricultural and manufacturing sectors only agriculture uses land if at early dates income per capita is low agricultural consumption is important land is valuable and capital gains on land may constitute most wealth accumulation leaving the country s nipa aps low if exogenous technological progress raises incomes over time engel s law shifts demand to manufactured goods then land s portfolio importance relative to reproducible capital diminishes and the national income and products account saving rate can rise this paper presents a model illustrating that structural change due to the operation of engel s law can systematically affect an economy s measured saving rate according to the model a country s national income and product account average propensity to save will rise naturally if and when technological progress sufficiently lifts its income per capita this suggests a new interpretation of time series evidence while saving rates historically tend to be higher after industrialization than before one cannot automatically infer that changing wealth accumulation behaviour led to modernization rather structural change accompanying growth may have caused the rise in saving rates this paper also warns that international trade could lead to a contrasting pattern in cross sectional data highincome nations might contemporaneously have lower measured saving rates than poor countries recent work by mankiw romer and weil 1992 islam 1995 mankiw 1995 and others investigates long run patterns the analyses assume that each economy has attained or is moving toward a steady state equilibrium as in solow 1956 a country s steady state level of per capita gdp depends on its average propensity to save aps its rate of population growth the efficiency of its production sector etc regression outcomes seem consistent with the solow model s prediction that a higher aps will ceteris paribus lead to a higher level of income per capita the idea is that heterogeneity of exogenous preferences leads to international differences in aps s and in turn to long run differences

foreign direct investment and endogenous growth in vietnam foregin direct investment s fdi s contribution to growth has been a controversial topic in economic literature and appears to be country specific in this article we use time varying coefficients in an augmented production function and let fdi indirectly affect gross domestic product growth through labour productivity this approach creates built in heteroskedasticity so the feasible generalized least square estimation is employed the results show that fdi has significant and positive effect on labour productivity and economic growth in vietnam but the effect is not equally distributed among economic sectors

bureaucratic structure and bureaucratic performance in less developed countries abstract we argue that several easily identifiable structural features constitute the key ingredients of effective state bureaucracies and should help to predict ratings of bureaucratic performance competitive salaries internal promotion and career stability and meritocratic recruitment we collect a new dataset on these features for bureaucracies of 35 less developed countries controlling for country income level of education and ethnolinguistic diversity we find that our measure of meritocratic recruitment is a statistically significant determinant of ratings supplied by two of three country risk agencies the importance of competitive salaries and internal promotion and career stability could not be clearly established

rural urban interdependence structural change and development abstract this paper presents a model of development that explicitly incorporates the interaction between rural agriculture and urban non agriculture explored by murata 2002 the increase of capital stock leads to capital intensive agriculture and the reallocation of labor from agriculture to non agriculture people who migrate to urban areas create new intermediate goods and enhance non agricultural productivity which in turn causes capital accumulation and capital intensive agriculture this mechanism causes a poverty trap stagnation and unbounded growth

the role of the structural transformation in aggregate productivity we investigate the role of sectoral differences in labor productivity in explaining the process of structural transformation the secular reallocation of labor across sectors and the time path of aggregate productivity across countries using a simple model of the structural transformation that is calibrated to the growth experience of the united states we measure sectoral labor productivity differences across countries productivity differences between rich and poor countries are large in agriculture and services and smaller in manufacturing moreover over time productivity gaps have been substantially reduced in agriculture and industry but not nearly as much in services in the model these sectoral productivity patterns generate implications that are broadly consistent with the cross country evidence on the structural transformation aggregate productivity paths and relative prices we show that productivity catch up in industry explains about 50 percent of the gains in aggregate productivity across countries while low relative productivity in services and the lack of catch up explains all the experiences of slowdown stagnation and decline observed across countries

structural change accounting with labor market distortions abstract this paper quantifies the relative importance of sectoral productivity and labor market distortions for structural change in the u s india mexico and brazil between 1960 and 2005 i use census data to compute human capital by sector and infer labor market distortions as sectoral gaps in wage per unit of human capital i incorporate these distortions into a model of structural change and calibrate the model to reproduce the time paths of sectoral shares of labor and value added for each country counterfactuals reveal that 1 tfp growth in agriculture drives most of the decline in its share of labor 2 the role of labor market distortions is limited

barriers and the transition to modern growth abstract this paper argues that barriers affect both the beginning date and the subsequent pace of modern growth and taking into account this fact enriches our knowledge of cross country income differences the model matches the observed inverted u shape of cross country income differences which implies that a substantial fraction of current income differences is transitional hence the model requires smaller barriers to account for current income differences relative to models that focus only on steady states empirically i find that differences in the beginning dates of modern growth explain large differences in incomes

structural transformation and comparative advantage implications for small open economies data from the last half century show that revealed comparative advantage in agriculture manufacturing is negatively positively associated with the rate of decline in labour share in agriculture motivated by this finding the author constructs and calibrates a simple open economy model where there is learning by doing in manufacturing and industry supplied inputs to agricultural production this paper focuses on the effects of comparative advantage and learning by doing on structural transformation and calibrate the model to the us and the uk data to estimate key parameters of the model quantitative experiments show that holding constant other factors a small difference in a country s comparative advantage can account for a large variation in structural transformation for open economies which does not require nearly as much differential productivity growth as in closed economy models

endowment structures industrial dynamics and economic growth this paper develops a dynamic general equilibrium model to explore industrial evolution and economic growth in a closed developing economy the authors show that industries will endogenously upgrade toward the more capital intensive ones as the capital endowment becomes more abundant the model features a continuous inverse v shaped pattern of industrial evolution driven by capital accumulation as the capital endowment reaches a certain threshold a new industry appears prospers then declines and finally disappears while the industry is declining a more capital intensive industry appears and booms ad infinitum explicit solutions are obtained to fully characterize the whole dynamics of perpetual structural change and economic growth implications for industrial policies are discussed

productivity transport costs and subsistence agriculture abstract a defining feature of many poor economies is the large fraction of workers engaged in subsistence agriculture we develop a multi sector multi region model of a poor economy in which it is costly to transport goods across regions in order to study this outcome a key finding is that higher transport costs drive up the size of the agricultural workforce and the fraction in subsistence in a calibrated version of our model we show that the effect of transport productivity is quantitatively important in terms of both allocations and welfare

trust in large organizations several authors suggest that trust is an important determinant of cooperation between strangers in a society and therefore of performance of social institutions we argue that trust should be particularly important for the performance of large organizations in a cross section of countries evidence on government performance participation in civic and professional societies importance of large firms and the performance of social institutions more generally supports this hypothesis moreover trust is lower in countries with dominant hierarchical religions which may have deterred networks of cooperation trust hold up remarkably well on a cross section of countries this abstract was borrowed from another version of this item

beyond balanced growth balanced growth models are commonly used in macroeconomics because they are consistent with the well known kaldor facts regarding economic growth these models however are inconsistent with one of the most striking regularities of the growth process the massive reallocation of labour from agriculture into manufacturing and services this paper presents a simple model consistent with both the kaldor facts and the dynamics of sectoral labour reallocation

the impact of corruption on firm tax compliance in transition economies whom do you trust tax compliance is an important issue for gov ernments and the public alike to meet public needs and fund public mandates firms around the world are expected to comply with tax laws factors that are related to orga nizational firm tax compliance have not been sufficiently examined in the literature owing to the increasing global influence of transition economies factors associated with firm tax compliance in transition economies are particu larly of interest based on a sample of over 5 000 firms from 22 former soviet bloc transition economies we find that higher levels of corruption and higher levels of par ticularized trust reliance on friends and family are asso ciated with lower levels of tax compliance interestingly we also find that the negative relationship between cor ruption and tax compliance is weakened in situations of higher generalized trust trust in strangers overall our study s results suggest that institutional factors play an important role and are related to firm tax compliance behavior in transition economies

the long reach of cotton in the us south tenant farming mechanization and low skill manufacturing abstract this paper examines the long run impact of cotton agriculture on local development in the us south focusing on a novel aspect of structural change exploiting climate based variation in cotton production i show that cotton specialization in the late 19th century had a negative impact on local development that lasts through 2010 this negative relationship however only became evident in the second half of the 20th century i argue that the change was caused by the mechanization of cotton production which began in the 1950s after the mechanization local manufacturing absorbed displaced cotton tenants with low human capital in response to the inflow of cotton tenants labor productivity in manufacturing began to decline and the effects persisted in the long run the persistent decline in manufacturing productivity is explained by directed technical change that reduced demand for skills in manufacturing these results indicate that depending on the agricultural background structural change can negatively affect the evolution of technology and productivity in the industrial sector

changes in sectoral composition associated with economic growth in this paper the author uses dynamic general equilibrium methods to examine the interrelationship between sectoral composition and growth she shows that growth is affected by sectoral composition and vice versa the model is basically a solow model of sustained growth with multiple consumption goods and nonhomothetic preferences each consumption good is produced using different factor intensities the rate of exogenous technological change is different in each sector nonhomotheticity of preferences drives the result that sectoral composition affects growth rates copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

corruption and microenterprises in russia abstract in russia compliance with the rules and regulations that govern almost all aspects of economic life has created a hostile environment for microenterprises more serious than the regulations per se however is the potential niche they create for opportunistic behavior by regulatory authorities in russia the regulatory state has created a corrupt cadre of government bureaucrats who frequently engage in rent seeking behavior while enforcing regulations firms are not uniformly affected by corruption however this paper shows empirical evidence of differential incidence of extortion based on firm and entrepreneurial characteristics corruption in russia is similar to a regressive tax and acts as a disincentive to innovation and growth it may induce technologically inefficient production decisions and can dilute economies of scale and scope

skill complementarity and the dual economy abstract i propose a new explanation for the large productivity gaps between agriculture and nonagriculture observed in developing countries namely that the elasticity of substitution between skilled and unskilled workers is higher in agriculture than in nonagriculture i estimate the elasticities in a cross country data set and use the results to simulate a simple two sector model in which heterogeneous elasticities of substitution affect relative sectoral productivity levels through the allocation of human capital calibrated to match data from the united states the model predicts sizable agricultural productivity gaps in countries where the share of highly educated workers in the labor force is low

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

bureaucratic corruption and the rate of temptation do wages in the civil service affect corruption and by how much abstract this paper presents what is to our knowledge the first empirical estimate of the effect of pay in the civil service on corruption first we show that theory is ambiguous on the relationship between civil service pay and corruption then we examine the issue using a new data set on wages for low income countries we find evidence of a statistically and economically significant relationship between relative civil service pay and corruption in regressions based on cross country averages where we control for a wide array of variables the relationship implies that a rather large increase in wages is required to eradicate corruption solely by raising wages

how strongly can industrial structural transformation affect gdp abstractit is well known that when a country develops its leading industry shifts from agriculture to non agriculture this industrial structural transformation has recently attracted considerable attention from scholars then how strongly can this industrial structural transformation affect a country s income in this study we shed light on this research question more specifically we measure magnitudes of the industrial structural transformation s influence on gdp by examining the following counterfactual gdp we calculate a country s counterfactual gdp when the country specializes in agriculture if the counterfactual gdp is considerably small without the non agricultural sector this suggests that the industrial structural transformation from agriculture to non agriculture is considerably important in terms of gdp we use japan as our sample economy consequently we find that the counterfactual gdp is surprisingly small which suggests that the industrial structural transformation s influence o

international financial integration and economic growth abstract this paper uses new data and new econometric techniques to investigate the impact of international financial integration on economic growth and also to assess whether this relationship depends on the level of economic development financial development legal system development government corruption and macroeconomic policies using a wide array of measures of international financial integration for 57 countries and an assortment of statistical methodologies we are unable to reject the null hypothesis that international financial integration does not accelerate economic growth even when controlling for particular economic financial institutional and policy characteristics

uneven growth a framework for research in development economics the textbook paradigm of economy wide development rests on the premise of balanced growth that is on the presumption that all sectors will grow in unison over time as a country gets richer this view has served us reasonably well in some circumstances but is not particularly useful for accounts of modern under development in many developing countries economic growth has been fundamentally uneven software development the outsourcing of services sectoral technological change quick compositional shifts between agriculture and other sectors the rise of particular exports special economic zones and so on this paper will discuss both the sources of uneven growth and its implications with greater emphasis on the latter the paper will argue that much of the distributional issues or the reactions to globalization that we see in modern developing societies can be viewed as reactions to a growth process that is fundamentally uneven and is indeed perceived as such

organizational isomorphism and corruption an empirical research in russia based on neo institutional literature this article aims to show the influence of organizational isomorphism on corruption the focus is institutional explanations of corruption our model is based on empirical research in russia at the end of the 1990s a face to face questionnaire was conducted with 552 top executives in private firms across various economic sectors we used the structural equation model partial least squares pls technique to test our hypotheses the developed model provides an integrated approach to the study of the relationship between corruption and organizational isomorphism our empirical data from firms in russia allowed us to test various theoretical hypotheses concerning the influence of organizational isomorphism on corruption our emphasis is on the influence of competitive and institutional isomorphism on corruption

a model of growth and migration this paper contains a model with which the desirability of persistent urbanization can be examined there are two regions city and countryside joint restrictions on the technologies in each region and on preferences over the goods produced in each region are the driving force of migration in equilibrium there is persistent migration from the countryside to the city even though there are externalities in production the competitive equilibrium is pareto optimal summary in fre excerpt

transitional dynamics and economic growth in the neoclassical model neoclassical transitional dynamics are a central element of standard macroeconomic theory quantitative experiments with the fixed savings rate models of the 1960s showed lengthy transitions thus potentially rationalizing sustained differences in growth rates across countries the authors investigate quantitative transitional dynamics in various neoclassical models with intertemporally optimizing households lengthy transitions occur only with very low intertemporal substitution generally when one tries to explain sustained economic growth with transitional dynamics there are extremely counterfactual implications these result from the fact that implied marginal products are extraordinarily high in the early stages of development copyright 1993 by american economic association

population technology and growth from malthusian stagnation to the demographic transition and beyond this paper develops a unied growth model that captures the historical evolution of population technology and output it encompasses theendogenous transitionbetween three regimes that have characterized economic development the economy evolves from amalthusianregime wheretechnologicalprogressis slow andpopulationgrowthprevents anysustainedriseinincomepercapita intoapost malthusianregime wheretechnological progress rises and population growth absorbs only part of output growth ultimately a demographic transition reverses the positive relationship between income and population growth andtheeconomyentersamoderngrowthregimewithreducedpopulationgrowth

international validation of the corruption perceptions index implications for business ethics and entrepreneurship education international government and corporate corruption is increasingly under siege although various groups of researchers have quantified and documented world wide corruption apparently no one has validated the measures this study finds a very strong significant correlation of three measures of corruption with each other thereby indicating validity one measure was of black market activity another was of overabundance of regulation or unnecessary restriction of business activity the third measure was an index based on interview perceptions of corruption corruption perceptions index or cpi in that nation validity of the three measures was further established by finding a highly significant correlation with real gross domestic product per capita rgdp cap the cpi had by far the strongest correlation with rgdp cap explaining over three fourths of the variance corruption is increasingly argued to be a barrier to development and economic growth business students often do not see ethics courses as being as relevant as other value free disciplines or core courses the data in this study suggests otherwise sustainable economic development appears very dependent on a constant virtuous cycle that includes corruption fighting and the maintenance of trust and innovation all reinforcing each other

de agriculturalization as a result of productivity growth in agriculture abstract this paper explores the secular decline in the employment share in agriculture as a result of productivity growth in the agricultural sector i study an equation that states that employment share in agriculture is determined by the subsistence constraint and productivity in agriculture given the calibrated value for subsistence level of consumption in agriculture labor productivity in this sector implies a share of employment in agriculture in the model that turns out to be very close to the data for a variety of countries between 1963 and 2005

china s mobility barriers and employment allocations china s hukou system imposes two main barriers to population movements agricultural workers get land to cultivate but are unable to trade it in a frictionless market social transfers education health etc are conditional on holding a local hukou we show that the land policy leads to over employment in agriculture and it is the more important barrier to industrialization effective land tenure guarantees and a perfect competitive rental market would correct this inefficiency the local restrictions on social transfers favour rural enterprises over urban employment with a relatively smaller impact on industrialization

malthus to solow a unified growth theory is developed that accounts for the roughly constant living standards displayed by world economies prior to 1800 as well as the growing living standards exhibited by modern industrial economies our theory also explains the industrial revolution which is the transition from an era when per capita incomes are stagnant to one with sustained growth the authors use a standard growth model with several technologies the first denoted the malthus technology requires land labor and reproducible capital as inputs the second denoted the solow technology does not require land the authors show that in the early stages of development only the malthus technology is used and due to population growth living standards are stagnant despite technological progress eventually technological progress causes the solow technology to become profitable and both technologies are employed at this point living standards improve since population growth has less influence on per capita income growth in the limit the economy behaves like a standard solow growth model excerpt

modernization of agriculture and long term growth abstract this paper develops a two sector model that illuminates the role played by agricultural modernization in the transition from stagnation to growth when agriculture relies on traditional technology industrial development reduces the relative price of industrial products but has a limited effect on per capita income because most labor has to remain in farming growth is not sustainable until this relative price drops below a certain threshold thus inducing farmers to adopt modern technology that employs industry supplied inputs once agricultural modernization begins per capita income emerges from stasis and accelerates toward modern growth our calibrated model is largely consistent with the set of historical data we have compiled on the english economy accounting well for the growth experience of england encompassing the industrial revolution