economic freedom human rights and the returns to human capital an evaluation of the schultz hypothesis abstractin 1975 theodore w schultz suggested that the returns to human capital are highest in economic environments experiencing unexpected price productivity and technology shocks that create disequilibria in such environments the ability of firms and individuals to adapt their resource allocations to shocks becomes most valuable in the case of negative shocks government policies that mitigate the impact of the shock will also limit the returns to the skills of managing risk or adapting resources to changing market forces in the case of positive shocks government policies may restrict access to credit labor or financial markets in ways that limit reallocation of resources toward newly emerging profitable sectors this article tests the hypothesis that the returns to skills are highest in countries that allow individuals to respond to shocks using estimated returns to schooling and work experience from 122 household surveys in 86 developing countries the article demonstrates a strong positi

how important is the capacity of local governments for improvements in welfare evidence from decentralised uganda abstract decentralisation is often claimed to be effective for improvements in welfare and hence the reduction of poverty but empirical evidence is scarce this paper seeks to gain further insights into the relationship between decentralisation and welfare by investigating the role of local governments capacity for household consumption and school enrolment in uganda using household survey data it finds suggestive evidence that both household consumption and school enrolment are positively related with the level of capacity of district governments

national animosity and cross border alliances we extend the cross border strategic alliance knowledge base by introducing dyad specific antagonism animosity between nation pairs and hold that the formation and the type of firm level cross border alliances are nontrivially impacted by conflicting relations and animosity between their home nations we examine the formation of alliances between firms among nation dyads with and without a history of conflicts the frequency and magnitude of conflicts increase the perception of likelihood of opportunism and dyad specific risks materially affect the context in which firms make alliance decisions as animosity between two nations increases the number and the probability of forming alliances within the dyad the nations form decreases conditional on the expected number of alliances increased antagonistic actions of nations outside the dyad and dissimilarity in the historical conflicts that each nation has engaged in outside the dyad i increase the number of equity alliances and ii decrease the number of nonequity alliances as a proportion of total alliances we find positive main effects of learning to contract through prior experience only for equity vs nonequity alliances the reputation effects of antagonism based on relationships with nations outside of the dyad negatively moderate the positive learning effects of prior equity alliance experience abstract from author

understanding long run african growth colonial institutions or colonial education abstract long term growth in developing countries has been explained in four frameworks extractive colonial institutions acemoglu et al 2001 colonial legal origin la porta et al 2004 geography gallup et al 1998 and colonial human capital glaeser et al 2004 in this paper we test the colonial human capital explanation for sub saharan africa controlling for legal origin and geography utilising data on colonial era education we find that instrumented human capital explains long term growth better and shows greater stability over time than instrumented measures for extractive institutions we suggest that the impact of the disease environment on african long term growth runs through a human capital channel rather than an extractive institutions channel the effect of education is robust to including variables capturing legal origin and geography which have additional explanatory power

revisiting the role of education for agricultural productivity while the majority of micro studies finds that rural education increases agricultural productivity various recent cross country regressions analysing the determinants of agricultural productivity were only able to detect insignificant or even surprising negative effects of schooling in this paper we argue and show that this failure to find a positive impact of education in the international context is rather a data problem related to the use of enrolment and literacy indicators using a panel of 95 developing and middle income countries from 1961 to 2002 together with the newest version of the barro lee educational attainment dataset we show that education indeed has a highly significant positive effect on agricultural productivity which is robust to changes in the control variables and in the econometric methods applied distinguishing between different levels of education further reveals that only primary and secondary schooling have significant positive impacts while tertiary education remains insignificant finally the effect of education is estimated separately for countries with different income levels results indicate that the coefficient of the education variable remains insignificant for countries from the poorest three income quintiles while it is positive and highly significant for the richest two quintiles this finding can be interpreted as support for the prominent argument claiming that education leads to higher agricultural productivity only in the presence of rapid technical change where education will help farmers to adjust more readily to the new opportunities

the role of nonfarm income in coping with the effects of drought in southern mozambique to reduce their dependence on subsistence agriculture farm households in rural africa may diversify their income sources by participating in the nonfarm sector in years of drought nonfarm income can also be part of the coping strategies a multivariate sample selection model was used to analyze three years of data from a nationally representative household survey in mozambique the analysis was guided by the following three questions during a drought year 1 do households increase their participation in nonfarm activities 2 are poorer households as likely as others to participate in and benefit from nonfarm activities and 3 which factors are associated with higher nonfarm incomes the results suggest that households are more likely to engage in at least one nonfarm income generating activity during a drought year although poorer households are more likely to engage in nonfarm activities they are less likely to participate in nonfarm activities of high return the results suggest that policies reducing entry barriers e g improved road infrastructure micro credit schemes and livestock promotion programs and increasing education levels can facilitate income diversification thus allowing rural households to better cope with the effects of drought when designing polices care must be taken to avoid exacerbating income inequality by targeting measures toward poorer and female headed households

rational hegemons excludable goods and small groups an epitaph for hegemonic stability theory in defining international free trade as a public good hegemonic stability theory posited early in the 1970s that its reliable supply depended upon a distribution of international power analogous to that within a privileged group more recently however critics have challenged three assumptions fundamental to hegemonic theory its premises of free trade public goods and privileged groups they have concluded that hegemony is not necessary for and indeed may be antithetical to a stable world economy based on market exchange the author argues that the critics overstate their case the assumptions they attack allow hegemonic theory to represent analytically several critically important barriers to free trade among states among these are the existence of strategic interdependence among the actors and the prevalence of informational asymmetries the most significant flaw in hegemonic theory is its neglect of the essence of the domain to which it applies the politics of inter state trade in an anarchic world

a switching regression model for wage determinants in the public and private sectors of a developing country governments in less developed countries face severe budgetary constraints given that public sector employment is a large part of modern sector employment the government wage bill h as come under increased scrutiny the central question is how do gove rnment wages compare with those in the private sector in this paper the authors develop and estimate a model to answer this question an important aspect of this model is the endogenous treatment of sector choice the estimation results full information maximum likelihood sound a strong warning against the use of ordinary least squares est imates that are based on sector specific samples data are from the i vory coast copyright 1988 by mit press

health and schooling investments in africa this paper first outlines an organizing framework for considering how health and schooling affect labor productivity and growth and how household and community factors can in turn affect the demand for these human capital investments both cross country growth models and various aspects of microeconomic studies of individual productivity as related to education and health are discussed the conclusion offers some tentative leads for policy in this area based on existing research and an agenda for future research

optimal retirement with increasing longevity we develop an optimizing life cycle model of retirement with perfect capital markets we show that longer healthy life expectancy usually leads to later retirement but with an elasticity less than unity we calibrate our model using data from the us and find that over the last century the effect of rising incomes which promote early retirement has dominated the effect of rising lifespans our model predicts continuing declines in the optimal retirement age despite rising life expectancy provided the rate of real wage growth remains as high as in the last century

education and freedom of choice evidence from arranged marriages in vietnam abstractusing household data from vietnam we provide evidence on the effects of education on freedom of spouse choice we use war disruptions and spatial indicators of schooling supply as instruments the point estimates indicate that a year of additional schooling reduces the probability of an arranged marriage by about 14 percentage points for an individual with eight years of schooling we also estimate bounds on the effect of education on arranged marriage when exclusion restrictions are violated locally the lower bound is six to seven percentage points the impact of education is strong for women but significantly weaker for men

bargaining and learning while fighting much of the existing formal work on war models the decision to go to war as a game ending costly lottery this article relaxes this assumption by treating war as a costly process during which the states run the risk of military collapse the model also allows for uncertainty over either the cost of fighting or the distribution of power the analysis makes four contributions to the growing costly process literature i the present model provides a more general treatment of the learning process that occurs when states are uncertain about the distribution of power ii it explicitly compares the bargaining and learning processes for the two different sources of uncertainty iii it suggests a way to empirically distinguish wars arising from these two sources and iv it shows that the equilibrium dynamics of informational accounts of war may be quite sensitive to the underlying bargaining environment through which information is conveyed

long term changes in social metabolism and land use in czechoslovakia 1830 2000 an energy transition under changing political regimes abstract industrialisation goes along with sweeping changes in society s interrelations with its environment the transition from an agrarian to an industrial society leads to fundamentally new patterns in social metabolism a process which has been described as socio metabolic transition this paper investigates this transition for the case of the current czech and slovak republics and presents a dataset on the development of key variables related to social metabolism during the last 170 years the dataset includes time series data on the extraction of biomass and fossil fuels energy consumption and land use combining data on bohemia and moravia 1830 1915 with data on czechoslovakia 1918 1992 and the czech and slovak republics 1993 2002 the study covers a period of consecutive political and institutional changes it includes the feudal regime of the late period of the habsburg empire and its disintegration with wwi the short period of the czechoslovak republic in the interwar period the era of a planned economy under a communist regime the collapse of this regime and the subsequent turn towards a market economy and european integration in the 1990s the period was characterized by economic and physical growth it saw a doubling of population and a growth in gdp by a factor 20 domestic energy consumption dec increased by a factor 10 and the share of biomass in dec declined from more than 98 to less than 20 all in all the observed changes closely resemble the characteristic path of the socio metabolic transition as observed in other western european economies major political and economic changes did not result in fundamental alterations of the socio metabolic transition until the mid 20th century the communist era 1945 1989 was characterized by rapid physical growth and changes in the energy and land use system very similar to those of other western european economies in the same period however leading to dec values substantially higher than those of other european countries at around 300 gj cap in the mid 1980s the disturbances caused by the velvet revolution resulted in short term turbulences in social metabolism and structural adaptations and around the year 2000 the czech and slovak republics show biophysical features very similar to those of other western european countries

gulliver untied entry deterrence under unipolarity that the anarchic system generates incentives for states to balance each other s power is conventional wisdom in international relations as such the contemporary unipolar system is an anomaly observers explain its existence in several ways including the benevolence of us hegemony and the constraints international institutions impose on the exercise of us power none of them however explain what is perhaps the most puzzling outcome of the soviet collapse the decision of the united states to maintain its level of military spending to explain its choice we extend the seminal argument waltz advanced long ago to a dynamic setting using a simple model we show that the interest of the unipole in deterring a challenge to its power can induce it to continue to invest in guns rather than to shift its resources to the production of butter this strategy can enable the incumbent unipole to pre empt the balancing process that has long been thought to be central to state survival under anarchy

footprints in the cotton fields the industrial revolution as time space appropriation and environmental load displacement this paper offers a method for quantifying the global exchange of natural space and labor time underlying the economic success of the british textile industry in the late 18th and early 19th century using historical statistics on inputs of land and labor embodied in cotton and wool production respectively estimates are made of the amount of british land and labor that were saved by displacing fibre production to north america by comparing inputs of land and labor in the textile exports of england with those in some commodities imported from its colonial periphery and juxtaposing these data with exchange rates estimates are also made of unequal exchange using such methods it is possible to bring together the marxist concern with unequal exchanges of labor time on one hand with the more recent concern with ecological footprints on the other

human capital family planning and their effects on population growth statistical evidence at the household level suggests that fertility and child mortality are related to factors specified by economic models of family resource allocation and behavior several of these factors such as women s education and family planning appear to decrease both fertility and child mortality leaving in doubt what net effects these human capital and social welfare programs have had on the recent slowing of world population growth the specific factors considered here include family planning programs human capital endowments of women and men natural resource wealth other economic structural determinants of the costs and benefits of children and the availability of nutritional inputs cross sectional relationships are reported and changes within countries are analyzed with fixed effect methods using data for 68 lowincome countries for the last two decades

ecological macroeconomics in the open economy sustainability unequal exchange and policy coordination in a center periphery model abstract this article introduces a novel environmental interpretation of a keynesian coordination game and develops four potential scenarios to remaining within a global carbon emissions constraint with inspiration from research on ecologically unequal exchange eue we demonstrate the drawbacks of present green growth strategies by considering how pollution and resource intensive industries are distributed unevenly in the world economy with large and increasing negative impacts on the periphery the situation may only be exacerbated if the reduction of emissions in the center is based on shifting heavy industries and extractive enterprises to low cost producers in the periphery in this way existing research likely overemphasizes the capacity of green investment policy to achieve sustainable outcomes our scenarios show that achieving global sustainability and improving global equity will require an impressive level of coordination between the center and periphery as well as a significant reduction in the rate of growth degrowth in the center

capabilities perception and escalation the evolution of crises depends upon interpreting intentions under uncertainty we model crises as a game of two sided incomplete information players are uncertain about their own payoffs from war because of differences between observable and actual capabilities we derive four hypotheses testing them against crises in europe between 1815 and 1970 we show a nonmonotonic relationship between ex ante observable capabilities and the likelihood of violence in a crisis as well as the ex ante likelihood of a negotiated settlement we answer five questions 1 how do differences in observable capabilities between rivals influence the likelihood of a crisis and the escalation to violence 2 how do intangible capabilities alter the effects of observable capabilities on the likelihood of conflict and violence 3 what do national leaders learn from the responses of their adversaries in crises 4 under what conditions can deterrence succeed 5 under what conditions are the strong likely to give in to the weak or vice versa in a crisis

the principle of convergence in wartime negotiations if war results from disagreement about relative strength then it ends when opponents learn enough about each other learning occurs when information is revealed by strategically manipulable negotiation behavior and nonmanipulable battlefield outcomes i present a model of simultaneous bargaining and fighting where both players can make offers and asymmetric information exists about the distribution of power in the markov perfect sequential equilibrium making and rejecting offers has informational value that outweighs the one provided by the battlefield however states use both sources of information to learn and settle before military victory the principle of convergence posits that warfare ceases to be useful when it loses its informational content and that belief in defeat victory is not necessary to terminate initiate hostilities thus the standard puzzle in international relations that seeks to account for prewar optimism on both sides may not be that relevant

uncertainty shifting power and appeasement great britain faced an immensely complicated strategic problem in the 1930s and important aspects of it can be stylized as a situation in which a state that is declining in power is unsure of the aims of a rising state if those aims are limited then the declining state prefers to appease the rising state s demands rather than go to war to oppose them if however the rising state s demands are unlimited then the declining state prefers fighting and given that the declining state is becoming weaker over time it prefers fighting sooner rather than later if there is to be a war this situation creates a trade off the earlier a state stands firm the stronger it will be if war ensues but the higher the chance of fighting an unnecessary war in equilibrium the declining state generally tries to appease the rising state by making a series of concessions

war is in the error term at least since thucydides students of international relations have sought rational explanations for the advent of war rationalist explanations assume purposive action states are said to make reasoned decisions about the use of force although rationalist explanations have proven persuasive durable and offer the basis for cumulative theorizing they also imply substantial limits on what we can know about war i show that the most general rationalist explanation for war also dictates that the onset of war is theoretically indeterminate we cannot predict in individual cases whether states will go to war because war is typically the consequence of variables that are unobservable ex ante both to us as researchers and to the participants thinking probabilistically continues to offer the opportunity to assess international conflict empirically however the realization that uncertainty is necessary theoretically to motivate war is much different from recognizing that the empirical world contains a stochastic element accepting uncertainty as a necessary condition of war implies that all other variables however detailed the explanation serve to eliminate gradations of irrelevant alternatives we can progressively refine our ability to distinguish states that may use force from those that are likely to remain at peace but anticipating wars from a pool of states that appear willing to fight will remain problematic for example we may achieve considerable success in anticipating crises but our ability to predict which crises will become wars will probably prove little better than the naive predictions of random chance the need for uncertainty to account for war means that the same conditions thought to account for war must also exist among states not destined to fight otherwise states themselves will differentiate between opponents in a way that either removes the motives for war or restores uncertainty it has long been accepted that social processes possess an element of uncertainty but the centrality of uncertainty to rationalist explanations for war means that the advent of war is itself stochastic war is literally in the error term

when do power shifts lead to war we present and test a choice theoretic model of war decisions during shifts in power the model assumes a rising state that overtakes a declining state in capabilities in equilibrium the declining state yields at a critical point in the transition war can occur only before that critical time power shifts are more likely to lead to war as the challenger becomes more risk acceptant the declining state more risk averse the expected costs of war decrease the rising state s dissatisfaction with the status quo increases and during periods of equality between the two sides the rate of growth of the rising state s capabilities and the transition point do not affect the probability of war all these hypotheses are supported by an empirical analysis of all major power dyads since 1815 we also find that expected support from allies must be included in the calculation of a nation s capabilities the implications of the model for theories of hegemonic decline and war are discussed

powerful pacifists democratic states and war democracies are less likely to fight wars with each other they are also more likely to prevail in wars with autocratic states i offer an explanation of this syndrome of powerful pacifism drawn from the microeconomic theory of the state state rent seeking creates an imperialist bias in a country s foreign policy this bias is smallest in democracies where the costs to society of controlling the state are relatively low and greatest in autocracies where the costs are higher as a result of this bias autocracies will be more expansionist and in turn war prone in their relations with each other where the absence of this imperialist bias is manifest the relative pacifism of democracies appears in addition democracies constrained by their societies from earning rents will devote greater absolute resources to security enjoy greater societal support for their policies and tend to form overwhelming countercoalitions against expansionist autocracies it follows that democracies will be more likely to win wars

education returns across quantiles of the wage function alternative explanations for returns to education by race in south america private wage returns to schooling in south africa in 1993 are twice as high for nonwhites as for whites and substantially higher at advanced levels of schooling for both races to explore how these returns might be expected to change as the proportion of africans with secondary and higher education increases quantile regressions for the wage function are estimated for african males and white males if the residuals based on a standard wage function specification are interpreted as omitted ability and it is assumed that ability increases decreases returns to schooling then we expect quantile returns to increase decrease at higher quantiles this is not observed for africans at the higher and secondary school level but is evident among whites at higher educational levels the opposite pattern of differential returns favoring the least able i e lowest deciles is reported for the lower tail of the educational distribution that is for africans at the level of primary school and for whites at secondary school authors

peace war and the balance of power every possible relation between the distribution of power and the likelihood of war has been defended somewhere in the literature on international politics war is least likely if power is distributed equally war is least likely if power is distributed unequally and the distribution of power has no effect on the likelihood of war i try to settle this dispute by examining the effect of expectations about the outcome of war on the choice between war and negotiation i argue that each of these mutually contradictory propositions can be derived from some plausible set of premises and thus that which one is correct depends on which set of premises best describes a situation the most important factors affecting the relation between the distribution of power and the likelihood of war are 1 whether the terms of a compromise agreement that might be accepted in lieu of war affect the distribution of power between the antagonists and therefore the probability that the agreement will be enforced and 2 how many states interests will be affected by the outcome

central banks at war war is expensive troops must be equipped and weapons must be procured when the enormous borrowing requirements of war make the sovereigns credibility problem more difficult central banks enhance a government s ability to borrow by being the sole direct purchaser of government debt the central bank increases the effective punishment that can be imposed on the government for defaulting on the marginal lender this increases lenders confidence that the government will be punished in case of default making lenders willing to purchase the debt at a lower rate of interest the sovereign dependent on the low borrowing costs offered by the central bank has an incentive to retain the bank data covering the nineteenth and early twentieth centuries reveal that possessing a central bank lowers the sovereign s borrowing costs particularly during times of war

wage and labor supply effects of illness in cote d ivoire and ghana instrumental variable estimates for days disabled abstract sickness should make individuals less productive but there are problems in measuring this effect first how is adult morbidity measured in a household survey second how is the impact or morbidity on productivity inferred if earning is partly used to improve health self reported functional activity limitation due to illness is considered an indicator of morbidity for wage earners and self employed people to deal with both the measurement and joint determination problems an instrumental variable estimation approach is used where local food prices and health services instrument for disability days that reduce wages by at least 10 and hours by 3 or more

linking political ecology with ecological economics in tree plantation conflicts in cameroon and ecuador abstract industrial tree plantations are rapidly expanding worldwide and notably causing a growing number of conflicts between companies and local populations such conflicts the focus of the article have been neglected by ecological economists although there is a proliferation of related reports by environmental non governmental organizations this paper uses empirical evidence to show how elements of political ecology and ecological economics can be combined for understanding the languages of valuation deployed in tree plantation conflicts in southern countries combining qualitative fieldwork on a cameroonian rubber plantation and an ecuadorian eucalypt plantation with a methodological framework taken from the study of social metabolism we find that both conflicts although with different emphasis arise because of land and biomass appropriation ground clearing pollution from agrochemicals and water shortage and are expressed as conflicts on valuation the metabolism of such tree plantations through the exchanges of materials with the local environment explains the bio physical basis of such conflicts in the cameroon case resistance is mainly sporadic and individual while in ecuador a grassroots organization has been able to respond to rural demands in a structured way both patterns of resistance are found in other present day resource extraction conflicts

stability and the distribution of power the relation between stability and the distribution of power is an important and long debated problem in international relations theory the balance of power school argues that an even distribution of power is more stable while the preponderance of power school argues that a preponderance of power is more stable empirical efforts to estimate this relation have yielded contradictory results this essay examines the relation between stability and the distribution of power in an infinite horizon game theoretic model in which two states are bargaining about revising the international status quo the states make offers and counteroffers until they reach a mutually acceptable settlement or until one of them becomes so pessimistic about the prospects of reaching an agreement that it uses force to impose a new settlement the equilibrium of the game contradicts the expectations of both schools and offers an explanation for the conflicting empirical estimates in the model stability is greatest when the status quo distribution of benefits reflects the expected distribution of benefits that the use of force would impose

the influence of political distortions on economic performance alberto alesina is the nathaniel ropes professor of political economy and chairman of the department of economics at harvard university in this interview he discusses with brian snowdon his views on several important contemporary issues including politics and the business cycle budget deficits currency unions the european union the size of nations economic growth inequality democracy foreign aid ethnic fractionalisation and the welfare state in the us and europe

political economy of climate change ecological destruction and uneven development abstract the purpose of this paper is to analyze climate change and ecological destruction through the prism of the core general principles of political economy the paper starts with the principle of historical specificity and the various waves of climate change through successive cooler and warmer periods on planet earth including the most recent climate change escalation through the open circuit associated with the treadmill of production then we scrutinize the principle of contradiction associated with the disembedded economy social costs entropy and destructive creation the principle of uneven development is then explored through core periphery dynamics ecologically unequal exchange metabolic rift and asymmetric global in justice the principles of circular and cumulative causation ccc and uncertainty are then related to climate change dynamics through non linear transformations complex interaction of dominant variables and threshold effects climate change and ecological destruction are impacting on most areas especially the periphery earlier and more intensely than previously thought likely a political economy approach to climate change is able to enrich the analysis of ecological economics and put many critical themes in a broad context

the economics of early warfare over land abstract we investigate the incidence of early warfare among foragers and farmers in prehistory our focus is specifically on conflict over land food is produced using inputs of labor and land and the probability of victory in a conflict depends on relative group sizes the group sizes are determined by individual migration and malthusian population dynamics both factors result in larger populations at better sites which deters attack there are two necessary conditions for warfare high enough individual mobility costs and large enough shocks to the relative productivities of the sites together these conditions are sufficient in particular technological or environmental shocks that alter the productivities of sites can trigger warfare but only if individual agents do not change sites in response these results are consistent with evidence from archaeology and anthropology

bargaining and fighting the impact of regime type on war onset duration and outcomes recent research suggests that democracies have advantages and disadvantages in wars democracies are more likely to win the wars they initiate and the ones in which they are targeted wars initiated by democracies are also uniformly shorter and less costly than wars initiated by nondemocracies however democracies are also less likely to continue fighting and less likely to win as war drags on democracies are also particularly likely to be targeted we present a bargaining model that reconciles these divergent findings the model explains why democracies are more likely to win but are also more likely to settle and more likely to be targeted than other types of regimes the model s explanation of these facts differs in important ways from existing explanations the model also suggests several new hypotheses relating regime type to the terms of settlement and the onset of war

profits from self employment the case of cote d ivoire abstract in the past self employed workers were often viewed as less productive individuals yet recent research has indicated that the nonagricultural self employed fill a niche in the economy that large industry cannot the goods and services they produce may well be a necessary part of the infrastructure within which large scale industry can flourish this paper examines the productivity of nonagricultural family enterprises in cote d ivoire marginal returns to self employed labor are somewhat less than the wage rate of equivalent salaried workers capital yields extremely high returns in self employment possibly above 100 per month assuming limited access to credit the self employed may do well by establishing enterprises and gaining the large returns to capital that offset the somewhat lower returns to labor

geography health and the pace of demo economic development abstract this paper investigates the impact of subsistence consumption and extrinsic and intrinsic causes of child mortality on fertility and child expenditure it offers a theory for why mankind multiplies at higher rates at geographically unfavorable tropical locations placed into a macroeconomic framework this behavior creates an indirect channel through which geography shapes economic performance it is explained why it are countries of low absolute latitude where we observe exceedingly slow if not stalled economic development and demographic transition

ecological economics marxism and technological progress some explorations of the conceptual foundations of theories of ecologically unequal exchange abstract almost regardless of ideological persuasion the seemingly self evident concept of technological progress inherited from early industrialism is resorted to as an article of faith serving to dispel the specter of truncated growth the increasingly acknowledged threats of peak oil and global warming are thus generally countered with visions of a future civilization based on solar power i discuss this technological scenario as a utopia that raises serious doubts about mainstream understandings of what technology really is technological utopianism raises difficult but fundamental analytical questions about the relation between thermodynamics and theories of economic value while marxism and some ecological economics share the ambition of grounding notions of economic value in physical parameters notions of economic value and physical processes should be kept analytically distinct

power transitions and great power war from westphalia to waterloo this study extends recent research on the power transition and hegemonic stability theory to the preindustrial era it improves on the original power transition theory by relaxing an assumption and by extending the empirical domain unlike the original power transition theory the revised version is not restricted to the period after the industrial revolution and can therefore be applied to the preindustrial era this study examines the empirical record prior to the industrial revolution to see whether the power transition and hegemonic stability theory holds for that period the data for 1648 to 1815 indicate strong support for the power transition contention that a rough equality of power between rival sides increases the likelihood of war that is when the challenging great power with its allies support catches up with the dominant power great power war is most likely

sharing resources the global distribution of the ecological footprint abstract this paper examines how the human demand on bioproductive lands as measured by the ecological footprint is distributed across the globe using methods commonly used to measure the distribution of income measuring the distribution of natural resource use will be necessary to achieve an economy that is sustainable just and efficient currently different nations place different demands on the environment i e the ecological footprint is not evenly distributed across the globe calculation of the gini coefficient for total ecological footprint and its components explains the sources of inequality in overall resource use calculation of the atkinson index shows how inequality in the ecological footprint is related to the inequality of income and environmental intensity

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

investments in the schooling and health of women and men quantities and returns this paper surveys the evidence on recent trends in the growth of human capital investments in women that raised womens productivity in thus century in most countries patterns in school investments in men and women across regions and across birth cohorts within countries indicate that expected years of school enrollment is converging between low and high income countries to where the gaps have closed from about seven years in 1950 to five years in 1985 women today are receiving nearly as many years of education as men in industrially advanced high income countries latin america south east and east asia are relatively similar to the high income countries at the other extreme in most of the countries of south and west asia and north and sub saharan africa women receive about two fifths to three fourths the number of years of schooling as men do in every region however the ratio of female to male expected years of enrollment increased from 1950 to 1985 gender differences in mortality and nutritional status reveal that there has been a dramatic but largely unexplained advance in female longevity relative to male in the 20th century in most countries with the exception of certain countries in south asia this development is associated with the shift of populations from dependence on agriculture to working in urban areas these changes are a major source of decreasing inequality within and between countries in this century market failure could be responsible for families investing less than the socially efficient amount in girls than boys there are problems in measuring without bias these private and social return empirical patterns across countries in estimated returns to schooling illustrate that private returns at the primary secondary and higher education levels can vary for women and men

gender and education impacts on employment and earnings in west africa evidence from guinea this study examines the determinants of labor force participation for men and women in guinea for three sectors and for earnings employment includes self employment private wage employment and public wage employment data were obtained from a survey of 1725 households in the capital city of conakry in 1990 labor force participation lfp was 40 for women aged 15 65 years and almost 100 for men aged 30 50 years men were engaged almost equally in all three sectors while women were mostly engaged in self employment self employed women tended to come from low income households all public sector employees were well educated about 10 12 years average levels of education among the self employed were very low 2 3 years in the private wage sector men averaged 5 years and women averaged 9 years of schooling 47 of men and 59 of women in the public sector were in professional or managerial jobs in the private sector over 50 of women were in professional managerial or clerical jobs compared to only 16 of men few women in the private sector were engaged in skilled trades or unskilled work most self employed women and only 50 of men tended to work in retail trade migration during the past 5 years was positively associated with mens entry in self employment and the private sector and negatively associated with their public sector employment determinants of womens self employment included residence near commercial areas of the center city electricity in the house and work activity during the rainy season of april september fulani and malinke women were less likely to be self employed for women the benefits of education and experience declined after a certain level returns to schooling were high for both genders men earned more than women there is a need to increase educational and employment opportunities for women

towards an ecological theory of unequal exchange articulating world system theory and ecological economics abstract the focus of this paper is on how an ecological perspective might provide us with an analytically more precise way of defining unequal exchange it is only by looking at the ecological conditions of human economies that we can adequately conceptualize the mechanisms which generate inequalities in distribution considerations of market power aside neoclassical economic ideology has dispelled all possible criteria for assessing a market transaction as unequal or unfair one way to assess the occurrence of unequal exchange may be to look at the direction of net flows of energy and materials concrete productive potential but without falling into the trap of equating productive potential with economic value on the contrary it can be analytically demonstrated that unequal exchange emerges from a kind of inverse relationship between productive potential and economic value the notion of a reasonable market price conceals the fact that what is being exchanged are intact resources for products representing resources already spent if we consider longitudinally along the production process any given set of fuels and raw materials destined to be transformed into a given product plus waste its content of available energy will be inversely related to its utility or price in other words the more of its original energy that has been dissipated the higher its price this means that production i e the dissipation of resources will continuously be rewarded with ever more resources to dissipate generating ecological destruction and global core periphery inequalities as two sides of the same coin

aids treatment and intrahousehold resource allocation children s nutrition and schooling in kenya this brief summarizes the results of a gender impact evaluation study entitled acquired immunodeficiency syndrome aids treatment and intra household resource allocation children s nutrition and schooling in kenya conducted in late 2003 till present in kenya the study observed the impact of antiretroviral arv medications to human immunodeficiency virus infection hiv or aids on the time allocated to various household tasks by treated hiv positive patients and their household members on the individual level treating adult aids patients with arv treatment results in substantial improvements in the welfare of children living with the patients after nine months of treatment the increases in school attendance are maintained with no significant drop off over the time period of study for boys in particular the increase in hours of attendance is almost exactly equal to the treatment driven decrease in their hours of market labor supply the short term nutritional status of young children in adult patients households improves significantly also within six months after treatment is initiated for the patients not presented separately for boys and girls these gains in nutritional status can be expected to improve the physical and cognitive abilities of children and eventually their post school productivity levels funding for the study derived from the economic and social research council pfizer the world bank yale university s center for interdisciplinary research on aids the national institute of mental health the social science research council and the calderone program at columbia university

human capital and economic development abstract this paper develops a general equilibrium model of fertility and human capital investment with young adult mortality because young adult mortality is negatively related to average young adult human capital human capital accumulation lowers mortality inducing demographic transition and industrial revolution data confirm that young adult mortality is related negatively to schooling and the rate of return to schooling and positively to fertility the data indicate a negative relationship between tfp growth and schooling accumulation the model fits the data on country populations per capita incomes human capital total fertility rates infant mortality life expectancy and conditional life expectancy

dodging adverse selection how donor type and governance condition aid s effects on school enrollment summary we employ aiddata to test the effects of primary education aid on school enrollment we argue that the problem of adverse selection complicates both the allocation and the effectiveness of aid we hypothesize that bilateral donors ought to have greater freedom to condition aid on recipient governance quality than multilateral donors which are often bound by institutional rules to provide aid more impartially compared to their multilateral counterparts bilateral donors may have advantages in overcoming adverse selection resulting in bilateral aid s boosting enrollments to a greater degree aiddata s extensive coverage of multilateral aid enables this analysis for up to 100 low and low middle income countries from 1995 to 2008 latent growth regression analysis suggests that compared to multilateral donors bilateral donors indeed condition their primary education aid on recipient control of corruption and that bilateral aid is significantly related to improved enrollments

power alliance and the escalation of international conflict 1815 1965 a considerable amount of the internationalpolitics literature attempts to explain international conflict on the basis of the distribution of power between and among nations there are however divergent views of this linkage one view argues that wars are most likely to take place between nations of similar power while another asserts that wars are most likely when power is unequal research seeking to explore this phenomenon has not investigated the capability augmenting effects

military capabilities and escalation a correction to bueno de mesquita morrow and zorick bueno de mesquita morrow and zorick analyze the evolution of crises as a two sided incomplete information game in order to illuminate the relationship between observable military capabilities and the escalation of a dispute to armed conflict i show that an error in the derivation of the equilibria invalidates their conclusions and i offer a few suggestions on how to model the evolution of crises as incomplete information games

energy property and the industrial revolution narrative the industrial revolution ir story is the core of a mainstream economic history narrative of energy development relationships celebrating modern economic growth meg as the increase in per capita energy consumption in the last two centuries such a narrative emphasizes mineral technology and private property as the key elements of growth processes i will criticize the above narrative from a socio environmental history perspective for its inability to account for two crucial aspects of energy history 1 the role of social power as key determinant in how energy sources are used and to what ends 2 the socio ecological costs associated with the increase of energy consumption i will then review environmental history studies on energy industrialization and highlight possible future developments in the field the article makes a strong point for the need to look at energy transitions as social processes and to include the unequal distribution of environmental health and social costs of mineral energy into global history narratives

introduction unipolarity state behavior and systemic consequences the united states emerged from the 1990s as an unrivaled global unipolar state this extraordinary imbalance has triggered global debate governments and peoples around the world are struggling to understand to how an american centered unipolar system operates and to respond to it what is the character of domination in a unipolar distribution to what extent can a unipolar state translate its formidable capabilities into meaningful influence will a unipolar world be built around rules and institutions or be based more on the unilateral exercise of unipolar power scholars too are asking these basic questions about unipolarity and international relations theory the individual contributions develop hypotheses and explore the impact of unipolarity on the behavior of the dominant state on the reactions of other states and on the properties of the international system collectively they find that unipolarity does have a profound impact on international politics international relations under conditions of unipolarity force a rethinking of conventional and received understandings about the operation of the balance of power the meaning of alliance partnerships the logic of international economic cooperation the relationship between power and legitimacy and the behavior of satisfied and revisionist states

does better nutrition raise farm productivity household level data from sierra leone are used to test whether higher caloric intake enhances family farm labor productivity this is the notion behind the efficiency wages hypothesis which has found only weak empirical support a farm production function is estimated accounting for the simultaneity in input and calorie choice instruments include prices household demographic characteristics and farm assets the latter two sets of instruments are later dropped to explore the robustness of the results to different specifications of exogeneity the exercise shows a highly significant effect of caloric intake on labor productivity providing solid support for the nutrition productivity hypothesis the marginal effect on productivity falls drastically as calorie consumption rises but remains positive at moderately high levels of intake one result is a fall in the effective price of food a decline that is larger for households that consumer fewer calories

unipolarity a structural perspective to say that the world is now unipolar is neither to praise american power let alone its leadership nor to accuse the united states of having established a worldwide empire it is to state a fact but one whose meaning is far from clear as we have neither a powerful theory nor much evidence about how unipolar systems operate a central difficulty for sorting this out entails determining the extent to which behavior and outcomes we have seen stem from structure rather than from other levels of analysis such as idiosyncratic aspects of the international environment the american domestic system and the role of individual leaders how might the system function if the unipole were nazi germany stalin s ussr or brezhnev s or a traditional autocracy or if it were the united states in a different era there would surely be major differences but we should still start our analysis with structure in fact this takes us quite far and as well to some unexpected places realism indicates that the unipole is likely to be difficult to restrain no matter how benign its intentions or domestic regime furthermore it is far from clear that it should seek to maintain existing arrangements both normal ambitions and in the current context american values and beliefs may lead the superpower to seek to change the system rather than preserve it world politics and the study of world politics academic analyses are influenced both by events in the world and by scholars political outlooks and preferences the growth of realism was obviously entangled with the cold war revisionism about the origins of this conflict was sparked by the war in vietnam although this approach in fact was unable to explain the self defeating american policy the subfield of international political economy ipe developed rapidly in the wake of the american abandonment of the gold standard the growth of opec and the oil boycott following the 1973 middle east war the other side of this coin is that things that are not happening lead to subjects being ignored the role of religion in international politics for example received little attention until the emergence of political islam similarly civil wars are important and interesting analytically but were intensively studied in the us only during the vietnam conflict when the subject was considered under the topics of counter insurgency or internal war falling back into quiescence until such types of conflict returned in the 1990s

foreign trade and early industrialisation in the habsburg monarchy and the united kingdom two extremes in comparison the concept of socio ecological transitions is used to analyse the quantitative importance of physical imports and exports for the habsburg empire and the united kingdom in the 19th and early 20th centuries for the habsburg empire a new dataset of foreign trade and social metabolism is presented for the united kingdom the analysis relies on previously published data foreign trade volumes increased in both countries in the long run total trade volumes were much higher in the united kingdom throughout the entire time period on average by around a factor four physical factors explaining the disparities in structure and volume of foreign trade in the two countries are differences in 1 the temporal patterns of the socio ecological transition and 2 domestic resource endowments in both countries energy carrying materials i e fossil fuels and biomass were the dominant resources in physical foreign trade the analysis focuses on the physically most important material groups coal wood and cereals and discusses the role of imports and exports in relation to domestic resource provision and environmental pressures physical foreign trade increased at a faster pace than domestic resource extraction and consumption the socio ecological transition was thus accompanied by rising international integration of resource supply

reason and war a new specification of the expected utility model of international conflict places expected utilities within a polar coordinate system treats thirdparty choices in a manner more consistent with classical forms estimates the expected utilities derived from not challenging existing policies more fully represents the expected costs of conflict and normalizes expected utilities regardless of system size by assuming that the probability of escalation of a dispute increases monotonically with leaders expectations of gain we derive continuous functions for the probabilities of war intervention violence and peace the revised theory significantly improves our ability to discriminate between violent and nonviolent disputes and between violent disputes that escalated to warfare and those that did not in europe between 1816 and 1970 in this essay

cropland area embodied in international trade contradictory results from different approaches with rapidly increasing trade volumes resource use and environmental pressures related to traded products are high on research and policy agendas robust accounts of biophysical resources used in the production processes of traded goods are required to support sustainable consumption and to expose problem shifting related to environmental policies in this context multi region input output analysis mrio is becoming a widely applied tool to establish consumption based accounts and to analyse production consumption links along complex international supply chains using the example of china s trade in cropland products and embodied cropland we make the case for a re evaluation of its application to land and other resources while analyses based on physical trade matrices show that china is a major net importer of cropland products and embodied cropland mrio based results suggest exactly the opposite we do not find convincing arguments that could explain these large differences based on our knowledge of land systems and biomass metabolism and on the results from physical accounting we question the plausibility of mrio derived results we conclude by outlining next steps in research that are required to improve assessments of trade related resource use in order to produce more robust results a prerequisite for the formulation of policy recommendations

income productivity in china on the role of health this study provides empirical evidence regarding the income productivity of health human capital in china we appeal to concepts from human capital theory to support a basic model that treats health as a form of human capital in the income production process our model examines the economic return at the household level from the health of its individual members we estimate this with a longitudinal sample drawn from the china health and nutrition survey chns allowing us to exploit within variation in health and income to address possible unobservables biasing estimates of the impact of health on income in the simple cross sectional setting household income is strongly influenced by the health of its members particularly in rural areas these findings could have important implications for health and economic policy making aimed at reducing the long standing urban rural economic gap and more comprehensively insuring the rural population against health and economic risk

a model of spoils politics accounts of state failure in the developing world frequently highlight a logic of spoils politics in which a government and an opposing faction vie for control of the state and the accompanying spoils attempts to buy the opposition off play a key role in this logic and an informational problem often complicates these efforts because of limited transparancy the government generally has a better idea about the actual size of the spoils than the opposition does we formalize this aspect of spoils politics as a signaling game in which the government has private information about the size of the spoils and tries to co opt the opposition by offering a share of the spoils the opposition can accept the offer or reject it by fighting consistent with the strong empirical finding that the probability of civil war is higher when income is low the probability of breakdown increases as the size of the spoils decreases we also study the effects of uncertainty the opposition s military strength the cost of fighting and power sharing agreements on the probability of fighting

fertility and child mortality in cote d ivoire and ghana this article examines individual household and community characteristics that may affect fertility in contemporary cote d lvoire and ghana and the relationship between child mortality and fertility it was not possible to reject the null hypothesis that child mortality is exogenous treating child mortality as exogenous fertility responds directly to child mortality but by a smaller proportion than estimated in studies of east asia and latin america increases in female education and urbanization are likely to contribute to declines in fertility in both countries but economic growth without these structural changes is not yet strongly related to lower fertility

trading spaces calculating embodied ecological footprints in international trade using a product land use matrix plum abstract nations import and export biophysical resources with many ecosystems worldwide under mounting stress countries may be increasingly interested in knowing the extent and origin of their ecological imports and dependencies in this paper the ecological footprint is used as a tool to measure the biophysical as opposed to financial value of international trade flows this paper attempts to answer the following question how large of an ecological footprint does a given country exert inside the borders of each of its trading partners records in the un comtrade bilateral trade database are multiplied by a matrix of per product footprint yield coefficients to translate from values in dollars and tonnes to units of hectares the results show that the largest interregional flows are from latin to north america and from north america to asia pacific grouping countries by gdp high and middle income countries appear in footprint terms to trade predominantly with other high and middle income countries and much less with low income countries

data watch the world bank s living standards measurement study household surveys since 1985 the world bank has been collecting household survey data in developing countries that provide a rich source of information for assessing household welfare understanding household behavior and evaluating the impact of government policies this article describes these household surveys known as living standards measurement study lsms surveys and explains how to obtain their data lsms surveys have been implemented in over twenty developing countries and have been used to analyze poverty labor markets health and education pricing policies determinants of school performance savings and consumption smoothing health and nutrition policies and gender and fertility issues

the foreign imposition of domestic institutions international relations research has paid little attention to why states often spend precious resources building and maintaining domestic institutions in other states i identify 198 cases of forcible domestic institutional promotion the most costly form of such interventions between 1555 and 2000 i note several patterns in the data these interventions come in three historical clusters they are carried out by states of several regime types states engage in the practice repeatedly target states tend to be undergoing internal instability states tend to promote their own institutions and targets tend to be of strategic importance the most intensive periods of promotion coincide with high transnational ideological tension and high international insecurity i argue that these two conditions interact forcible promotion is most likely when great powers 1 need to expand their power and 2 find that by imposing on in smaller states those institutions most likely to keep their ideological confreres in power they can bring those states under their influence although in periods of high insecurity domestic variables alone may account for institutional impositions such impositions may nonetheless extend the promoting states influence and thereby alter the balance of international power

factor proportions and relative wages the supply side determinants of wage inequality supply side factors may contribute to rising wage inequality first certain changes in the supply of skills allegedly exacerbate wage inequality women s increased labor force participation and increased immigration are the leading candidates both allegedly reduce the wages of less skilled men however immigration s impact on wage inequality has been minor and the effects of women s participation is inconclusive second in evaluating the likelihood that human capital investment will mitigate future inequality evidence suggests that rising returns to education have increased the proportion of young people attending college limiting the growth of inequality among high wage workers

socio ecological regime transitions in austria and the united kingdom we employ the concepts of socio ecological regime and regime transition to better understand the biophysical causes and consequences of industrialization for two case studies the united kingdom and austria we describe two steps in a major transition from an agrarian to an industrial socio ecological regime and the resulting consequences for energy use land use and labour organization in a first step the coal based industrial regime co existed with an agricultural sector remaining within the bounds of the old regime in a second step the oil electricity based industrial regime agriculture was integrated into the new pattern and the socio ecological transition had been completed industrialization offers an answer to the input and growth related sustainability problems of the agrarian regime but creates new sustainability problems of a larger scale while today s industrial societies are stabilizing their resource use albeit at an unsustainable level large parts of the global society are in midst of the old industrial transition this poses severe problems for global sustainability

wood and industrialization evidence and hypotheses from the case of spain 1860 1935 abstract the aim of this paper is to study wood consumption during the industrial expansion which took place in the western world in the second half of the nineteenth and the first decades of the twentieth century through the analysis of the case of spain for this purpose we present the series of spanish wood consumption both as a raw material wrm and as firewood fw between 1860 and 1935 and we carry out two exercises with these series the first calculates the intensity of use iou which relates wood consumption in physical terms with the evolution of the gdp the second more complex exercise estimates a standard consumption function that allows us to know the elasticity of wrm with respect to the gdp the spanish price of wood and the spanish price of a substitute material like iron based on our results we discuss the lower dependence of the spanish industrial economy on wood the liberation of forest areas that may have occurred in spain as a result of industrialization and to what extent the trends observed for the spanish case can be extrapolated internationally the main conclusion is that industrialization transformed the uses of wood and though the importance of this resource per unit of gdp decreased its overall consumption increased generating greater pressure on forests at an international level

earnings schooling ability and cognitive skills conventional estimates now available for a large number of countries generally indicate that the social returns to education are positive large and competitive with returns to investment in physical capital that such estimates are good guides for public resource allocation has however been questioned the heart of the problem lies in the interpretation of the positive relationship between the education and the earnings of workers whether as the conventional estimates assume the coefficient of the education variable in the earnings function measures the effect on the productivity of workers of human capital acquired in school it has been hypothesized that education in part or instead represents screening for native ability and motivation or credentialism and that as a consequence conventional measures of the social benefit of education are substantially upward biased 2 in this paper we attempt to distinguish the influence on earnings of cognitive achievement native ability and years of education as a means of adjudicating the human capital screening and credentialist hypotheses our econometric analysis is based on two rigorously comparable micro data sets from kenya and tanzania generated by surveys of the urban wage labor force specifically for this study these data sets contain the usual variables found in earnings function estimates of the benefits of schooling individual earnings years of education and years of employment experience in addition they contain two variables measures of the worker s cognitive skills and of his or her reasoning ability not previously found in studies of developing countries and only rarely found in studies of the education earnings relationship in developed countries 3 with these variables we can estimate the direct effects on earnings of cognitive skills ability and years of schooling by using them to estimate educational production functions and educational attainment functions and linking these functions with the earnings function in a recursive framework we can also assess the various indirect effects on earnings of ability and years of schooling having data sets from two countries very similar with respect to size resource endowments structure of production and employment and level of development means that not only can we subject our results to the usual statistical tests but we can also assess their replicability both kenya and tanzania have nearly achieved the objective of universal primary education while university enrollments remain at less than 1 percent of the relevant age group the important policy issues re boissiere development research department the world bank 1818 h street washington d c 20433 knight institute of economics and statistics oxford university sabot williams college williamstown ma 01267 we are grateful to the educational testing service of princeton for the design of tests used in this study and to j armitage j behrman j hausman d hendry d jamison and an anonymous referee for their insights and advice helpful comments were also received from participants in seminars at oxford and yale universities the views presented here are our own they should not be interpreted as reflecting those of the world bank george psacharopoulos 1973 1981 contains a listing of 44 countries in which rate of return studies had been conducted and of the estimates obtained 2for instance kenneth arrow 1973 mark blaug 1976 samuel bowles and herbert gintis 1976 john riley 1979 michael spence 1976 and lester thurow 1975 3for attempts to control for ability and or for cognitive achievement in studies for the united states see jere behrman et al 1980 gary chamberlain and zvi griliches 1977 griliches and william mason 1972 michael olneck 1977 paul taubman and terence wales 1974 taubman 1975 and david wise 1975 see also the survey articles by griliches 1977 1979 in most instances the data refer to special subgroups in the population and clear distinction cannot be made between natural ability and cognitive skills acquired in school

politics at the water s edge parties voters and the use of force abroad this article examines the effects of party politics and presidential election cycles on u s recourse to force abroad i analyze a game theoretic model to generate predictions about these effects in the unique time consistent equilibrium outcome of the one shot game policy varies across political parties in a subgame perfect equilibrium outcome of the repeated game the use of force is invariant to the partisan composition of government in neither case does policy respond to the electoral cycle an empirical analysis supports the predictions of the repeated game between 1870 and 1992 u s recourse to force abroad responds neither to partisan politics nor to the domestic political calendar it responds only to changes in u s power status and to the advent of general wars

basic needs government debt and economic growth this paper investigates the relationships between basic needs and economic growth where the interactions between output health nutrition and education are explicitly simultaneous we find a unidirectional relationship that improving basic welfare contributes strongly to labour productivity change but a clear reverse causation only from growth to nutrition there are substantial differences in the patterns of simultaneous interactions at different income and welfare levels there are strong self reinforcing effects of literacy and debt service on poverty making it difficult for poor countries to rectify their situation channelling resources towards improving health education and nutrition could bring dramatic economic returns