rural urban poverty differences in transition countries summary this paper uses new poverty data based on household level surveys to analyze changes in rural poverty and rural urban poverty differences in 23 transition countries of central and eastern europe and the former soviet union the paper presents a series of hypotheses to explain differences across countries and changes over time

adaptive versus rational expectations and the fisher effect substantial controversy remains over the causes of interest rate fluctuations this controversy frequently focuses on the role of expected inflation the theoretical determinats of the nominal rate are examined usig the is lm as model and it is shown that the augmented fisher equation is sensitive to the expectations generating mechanism the model assumes that the nominal rate ceteris paribuschanges one for one with expected inflation the total impact however may take any value from zero to one the empirical analysis sequentially estimates reduced form equations based on adaptive and rational expectations the results confirm prior findings that nominal rates do not adjust one for one with inflation the results also yield some insight on the applicability of the assumption of rational versus adaptive expectations

extrinsic versus intrinsic problems of agricultural cooperation anti incentivism in tanzania and china peasant willingness to engage in collective farming and the efficiency of collective farms once established may be preconditioned on local self determination participatory control discriminating work incentives and external manoeuvrability in the absence of such preconditions whether or not there exist economies of scale sufficient to offset effectively minimised incentive problems cannot be determined anti incentivism bureaucratic controls and extractive external environments are identified as factors inhibiting successful collective farming in both tanzania and china explanations of these tendencies in the two countries are sought in their political economies and ideological structures

trade facilitation and economic development new approach to quantifying the impact this article analyzes the relationship between trade facilitation and trade flows in the asia pacific region country specific data for port efficiency customs environment regulatory environment and e business usage are used to construct indicators for measuring trade facilitation the relationship between these indicators and trade flows is estimated using a gravity model that includes tariffs and other standard variables enhanced port efficiency has a large and positive effect on trade flows regulatory barriers deter trade improvements in customs and greater e business use significantly expand trade but to a lesser degree than improvements in ports or regulations the benefits of specific trade facilitation efforts are estimated by quantifying differential improvements in these four areas among members of the asia pacific economic cooperation apec a scenario in which apec members with below average indicators improve capacity halfway to the average forall members shows that intra apec trade could increase by dollar 254 billion or 21 percent of intra apec trade flows

institutions infrastructure and economic growth abstract this paper develops a structural model of infrastructure and output growth that takes account of institutional and economic factors that mediate in the infrastructure gdp interactions cross country estimates of the model indicate that the contribution of infrastructure services to gdp is substantial and in general exceeds the cost of provision of those services the results also shed light on the factors that shape a country s response to its infrastructure needs and offer policy implications for facilitating the removal of infrastructure inadequacies

livelihoods and farm efficiency in rural georgia this study contributes to the literature on the role of livelihood strategies in rural growth and poverty reduction it distinguishes between livelihood diversity strategies that contribute to sustainable growth in household incomes and those that mainly have a coping function it suggests that typically the contribution of livelihood diversity to growing household income is through relaxing dependence on credit for access to capital in this scenario livelihood diversity would lead to higher technical efficiency in agriculture via investment and thereby to higher household incomes survey data from georgia are introduced and used to test these hypotheses using a bayesian stochastic frontier approach the findings are relevant to defining more clearly the scope and aims of policies to stimulate the rural non farm economy in developing and transition countries

resource allocation and use under collective rights and labour management in peruvian coastal agriculture a critical issue in the evaluation of labour management as a development policy is its impact on production in an effort to contribute to that evaluation and to the economics of labour management this study analyses production data collected from cooperative firms established by the peruvian agrarian reform the data present an unusual opportunity for careful microeconomic analysis of the reform itself as well as an opportunity to confront and refine existing propositions about the effects of the collective property rights of labour management on production property rights may affect production because of their effort on incentives for conventional resource allocation decisions they may also affect intrafirm principal agent decisions which determine the intensity with which given resources are utilised beginning with ward s i 958 paper a number of theoretical studies have compared labour managed and capitalist resource allocation and an approximate consensus has emerged about conditions under which differences occur in this study measures of the allocative behaviour of peruvian firms are estimated and compared with the theoretically expected behaviour of both capitalist and peasant agricultural producers the impact of collective ownership on the intensity of resource utilisation i e technical efficiency of the observable production function arouses greater theoretical dispute than the resource allocation question a collective assignment of property rights may weaken supervisory authority which can control free rider externality problems within the production process on the other hand participation of labour in management may foster cooperative attitudes and other social control devices which can fulfill the same functions as hierarchical supervision existing literature offers the competing hypotheses that labour management leads either to a breakdown in intrafirm coordination and the observable technical efficiency of production as jensen and meckling i 979 claim or to an improvement as vanek i 969 claims the results of the present paper do not unequivocably support either view instead they portray a diversity in labour managed production performance and suggest the importance of policy and institutional factors which condition the impact of labour management on production the results also provide a

export promotion agencies do they work abstract the number of national export promotion agencies epas has tripled over the last two decades while more countries made them part of their export strategy studies criticized their efficacy in developing countries epas were retooled partly in response to these critiques this paper studies the impact of today s epas and their strategies based on new survey data covering 103 developing and developed countries results suggest that on average they have a statistically significant effect on exports our identification strategies highlight the importance of epa services for overcoming foreign trade barriers and solving asymmetric information problems associated with exports of heterogeneous goods there are also strong diminishing returns suggesting that as far as epas are concerned small is beautiful

does anticipated aggregate demand policy matter further econometric results a heated debate has arisen over what modigliani has dubbed the macro rational expections mre hypothesis this hypothesis embodies two component hypotheses 1 rational expectations and 2 short run neutrality i e that anticipated changes in aggregate demand will have already been taken into account in economic agents behavior and will thus evoke no output or employment response together these component hypotheses imply that deterministic feedback policy rules will have no effect on business cycle fluctuations the irrelevance of these types of policy rules is inconsistent with much previous macro theorizing as well as with the views of policymakers it is thus an extremely controversial proposition which requires a wide range of empirical research this paper is a sequel to a previous paper by the author that paper developed a methodology for testing the mre hypothesis and found that anticipated money growth does matter to the business cycle this paper extends the analyses to cases where the rate of nominal gnp growth or the inflation rate rather than money growth is the aggregate demand variable the empirical results are also negative on the mre hypothesis and its corresponding policy ineffectiveness proposition this abstract was borrowed from another version of this item

who benefits from aid for trade comparing the effects on recipient versus donor exports recent studies offer an ambiguous picture on the effectiveness of foreign aid in strengthening the export capacity of recipient countries moreover the literature on aid for trade aft has often neglected that exporters in the donor countries may be among the main beneficiaries we hypothesize that aft is as much in the self interest of donor countries as it may have promoted the exports of recipient countries we simultaneously estimate and compare the effects of aft on trade in both directions we find that aft increases recipient exports to donors as well as recipient imports from donors the first effect tends to dominate the latter which contradicts the skeptical view that donors grant aft primarily to promote their own export interests

are trade preferences more effective than aid in supporting exports evidence from the everything but arms preference scheme this study examines the effect of the everything but arms eba trade preferences regime on exports from african caribbean and pacific countries acp to the european union eu with this aim an augmented gravity model is estimated for exports from the 79 acp countries to the eu 15 for the time period 1995 to 2005 using panel data techniques the model estimates are used to quantify the effect of the eba preferences on the acp ldcs export performance and to compare it with the impact of official development assistance in addition to their separate effects the combined impact of eba and aid flows is examined the main results do not confirm a positive effect of the eba regime on exports otherwise the combined effect of eba and aid on exports is positive supporting an eu development strategy that includes both sorts of assistance aid and trade preferences

on nonparametric supply response analysis in this paper we explore the usefulness of nonparametric methods in the investigation of production behavior and the estimation of price elasticities of output supply and input demand functions the approach can handle the situation where some data points are not consistent with production theory the method is illustrated by estimating supply demand elasticities of outputs and inputs in u s agriculture

the effects of inflation on real interest rates one of the most obvious facts of recent monetary history is that high inflation is associated with high nominal interest rates this association has been interpreted by many as supporting a superneutrality hypothesis that an increase in inflation will not affect real interest rates in the long run however the bulk of the evidence contradicts superneutrality beginning with irving fisher 1896 1930 most empirical investigations have found that fully anticipated inflation has less than a unit effect on nominal interest rates and thus reduces real interest rates even in the longest of runs this has been shown under the assumption that expectations are formed rationally douglas pearce 1979 that they take the form of an arbitrary distributed lag on past inflation rates fisher 1930 william gibson 1970 or that they are accurately represented by the livingstone expectations data pearce kajal lahiri 1976 lawrence summers 1983 attempted to measure the long run effect without an explicit theory of expectations regressing long swings in various nominal interest rates against long swings in inflation over various subintervals from 1860 to 1979 he found coefficients consistently less than unity for the post world war ii era as a whole the coefficients were in the range of 0 5 to 0 75 with standard deviations of 0 08 to 0 33 a few studies have found coefficients close to unity william yohe and denis karnosky 1969 martin feldstein and otto eckstein 1970 gibson 1972 lucas but as several authors have observed thomas sargent 1976 robert shiller 1980 john wood 1981 summers these findings are limited to a particular period of u s history approximately 1953 71 furthermore even a unitcoefficient would contradict superneutrality of the after tax real interest rate which would require a coefficient substantially greater than unity even taking into account the other inflation distortions in the tax system summers calculated that the coefficient ought to lie in the range of 1 3 to 1 5 far higher than observed these empirical findings pose a challenge to traditional monetary theory much of which implies that superneutrality should hold at least approximately for example the model of miguel sidrauski 1967 implies that the real interest rate should equal the marginal product of capital which in the long run should equal the representative household s marginal rate of time preference if this rate of time preference is a constant then in particular it will be independent of the rate of inflation if it is positively related to the household s wealth or utility then inflation can reduce the marginal product of capital somewhat through what are commonly called mundell tobin effects that is higher inflation can reduce the demand for real balances which reduces real wealth which lowers the rate of time preference and leads to further capital accumulation 2 but this real balance effect on saving is commonly recognized to be too small to make department of economics social science centre university of western ontario london canada n6a 5c2 we are grateful to charles adams norman cameron john chilton jacob frenkel david laidler ben mccallum baldev raj brad reid jack weldon john whalley ron winrck and two anonymous referees for helpful discussions and comments on earlier drafts all errors are attributable to transaction costs robert lucas 1980 finds empirical support for the hypothesis which he calls one of the central implications of the quantity theory of money it has also been adopted by a wide range of more eclectic economists as evidenced by its endorsement in two of the most popular macroeconomics textbooks rudiger dornbusch and stanley fischer 1981 pp 454 58 robert j gordon 1978 pp 289 91 2these implications of variable time preference can be drawn almost immediately from the work of hirofumi uzawa 1968 a graphical analysis is presented by david laidler 1969b who focuses on the logically equivalent question of the effects of paying interest on money

institutional quality and the effectiveness of aid for trade abstracttrade policy barriers and high transaction costs hinder developing countries from taking the full advantages of the global trading system in order to help developing countries overcome the

the impact of regulations on agricultural trade evidence from the sps and tbt agreements according to world trade organization rules countries may adopt regulations under the agreements on sanitary and phyto sanitary sps and technical barriers to trade tbt we analyze the structure of these measures in agricultural trade the inventory approach suggests that european countries have among the lowest coverage ratios of all oecd countries using a gravity equation we also estimate their stringency our results suggest that they significantly reduce developing countries exports to oecd countries but do not affect trade between oecd members furthermore european imports are more negatively influenced by sps and tbts than imports of other oecd countries

spatial allocation and the shadow pricing of product characteristics abstract the paper considers an industry transforming primary commodities farm products into processed commodities food products it focuses on the allocation of embedded characteristics carbohydrate protein etc both across space and among commodities the approach generates a spatial competitive market equilibrium of production consumption transformation and trade for both primary and processed commodities along with the spatial distribution of shadow prices for the product characteristics the model provides a basis for analyzing the allocation and pricing of agricultural products food products and characteristics in spatial markets the empirical usefulness of the model is illustrated in the context of regional resource allocation in the u s dairy sector

farm strategy self selection and productivity can small farming groups offer production benefits to farmers in post socialist romania abstract this paper addresses two questions why are romanian farmers continuing to place land in cooperative forms of farming when theory suggests that private farming is more productive and are there efficiency gains to be had from cooperative farming endeavors results from an econometric selection model suggest that smaller endogenously developed farming cooperatives such as family societies provide benefits over private farming strategies under certain conditions this paper questions the wholesale rejection of cooperation around production and challenges policy to move away from the typically dichotomized presentation of agrarian structure as being a trade off between private small scale farming and large scale collective farming

insecurity and the pattern of trade an empirical investigation corruption and imperfect contract enforcement dramatically reduce international trade this paper estimates the reduction using a structural model of import demand in which insecurity acts as a hidden tax on trade we find that inadequate institutions constrain trade as much as tariffs do we also find that omission of indices of institutional quality biases the estimates of typical gravity models obscuring a negative relationship between per capita income and the share of total expenditure devoted to traded goods finally we argue that cross country variation in the effectiveness of institutions and the consequent variation in the prices of traded goods offer a simple explanation for the stylized fact that high income capital abundant countries trade disproportionately with each other

impacts of tangible and intangible elements of aid for trade on the globalisation of developing countries the aid for trade initiative was launched by the wto in 2005 to help developing countries build their supply side capacity and trade related infrastructure to improve their capacity in the global market this study investigates the impacts of both the tangible and intangible elements of this initiative on the economic social and political globalisation of recipient countries intangible elements of aid for trade aid for trade policy and regulation may be considered as the software of aid for trade while tangible elements aid for economic infrastructure and building productive capacity are the hardware countries that receive aid for trade can use both types of elements to succeed in globalisation this research hypothesises that the tangible elements of aid for trade have a singular effect on the overall level of globalisation since they are expected to only increase the level of economic globalisation moreover we expect that the intangible elements of aid for trade will have multiple effects on the overall level of globalisation as they have an impact on not only economic aspects but also social and political aspects of it using the dataset of aid for trade from 2002 to 2015 we find that the intangible elements of aid for trade have increased the recipients level of overall globalisation

global land investments in the bio economy evidence and policy implications for countries dependent on agriculture the recent wave of investor interest in farmland could in principle help set in motion a virtuous cycle of economic growth and poverty reduction a large literature documenting failure of such investments documents the risks involved to appreciate associated opportunities and challenges we review past experience quantify country level potential for area expansion versus intensification and identify determinants of countries attractiveness for investors in the initial stages of the land rush the fact that weak land governance seems to increase rather than reduce land demand justifies an emphasis on improving institutions transparency and accountability while at the same time providing concrete suggestions for policy and research

the impact of china s economic reforms on agricultural productivity growth this paper presents a method for assessing the relative importance of price increases and strengthened individual incentives due to the introduction of the responsibility system for the post 1978 increase in china s agricultural productivity data on post 1978 chinese agricultural performance suggest that a little over three quarters of the measured productivity increase is due to payment system changes and the remainder to price increases we also use our method to calculate incentive indices giving an estimate of the fraction of their marginal product that peasants received under the pre 1978 regime

a new global index of infrastructure construction rankings and applications we construct comprehensive and comparable indices on the most relevant components of economic infrastructure an unobserved components model is employed to cover the largest possible number of developing and developed countries over the period 1990 2010 we map major findings from the new indices of infrastructure and provide country rankings which we also compare with subjective assessments of infrastructure in the world economic forum s global competitiveness report finally we exemplify possible applications related to trade and foreign aid by overcoming several data limitations our new global index can help assess the links between infrastructure and economic development more systematically

china s one belt one road initiative the impact of trade facilitation versus physical infrastructure on exports the one belt one road obor project is perhaps china s most significant international relations initiative in recent times it is based on openness harmony inclusivity mutual benefit and market operations and aims to connect the economically vibrant east asia and the developed europe by land and by sea and in the process it brings growth and development to tens of countries along the modern silk routes in this paper we compare the impact of the main initiatives of obor namely enhancements in physical infrastructure and improvements in border administration on the trade of countries that have signed on to this project especially countries along the six economic corridors we find overwhelming evidence that shows improvements in border administration has the greatest impact on exports of corridor countries although physical infrastructure is important for trade the chinese government should place equal attention to improvements in trade facilitation to ensure trade routes operate seamlessly across the various corridors

aid and the supply side public investment export performance and dutch disease in low income countries contemporary policy debates on the macroeconomics of aid often concentrate on short run dutch disease effects ignoring the possible supply side impact of aid financed public expenditure in the simple model of aid and public expenditure presented here public infrastructure generates an inter temporal productivity spillover which may exhibit a sector specific bias the model also provides for a learning by doing externality through which total factor productivity in the tradable sector is an increasing function of past export volumes an extended computable version of this model is used to simulate the effect of a step increase in net aid flows the simulations show that beyond the short run when conventional demand side dutch disease effects are present the relationship between enhanced aid flows and real exchange rates output growth and welfare is less straightforward than simple models of aid suggest public infrastructure investment that generates a productivity bias in favor of non tradable production delivers the largest aggregate return to aid but at the cost of deterioration in the income distribution income gains accrue predominantly to skilled and unskilled urban households leaving the rural poor relatively worse off under plausible parameterizations of the model the rural poor may also be worse off in absolute terms

production organization and efficiency during transition an empirical analysis of east german agriculture enterprise restructuring is expected to improve efficiency in transition economies with data from former east germany we compare the efficiency of family farms and partnerships with large scale successor organizations of the collective and state farms lsos using parametric and nonparametric techniques we show that lsos display lower technical efficiency than do family farms and partnerships but that this difference is small and declining during transition mainly as a result of structural changes in agriculture family farms are not as scale efficient as partnerships and lsos and partnerships are superior to all other organizational forms

evaluating aid for trade a survey of recent studies the demand for accountability in aid for trade is increasing but monitoring has focused on case studies and impressionistic narratives the paper reviews recent evidence from a wide range of studies recognizing that a multiplicity of approaches is needed to learn what works and what does not the review concludes that there is some support for the emphasis on reducing trade costs through investments in hard infrastructure like ports and roads and soft infrastructure like customs but failure to implement complementary reform especially the introduction of competition in transport services may erode the benefits of these investments direct support to exporters does seem to lead to diversification across products and destinations but it is not yet clear that these benefits are durable in general it is difficult to rely on cross country studies to direct aid for trade more rigorous impact evaluation is an underutilized alternative but situations of clinical interventions in trade are rare and adverse incentives because of agency problems and costs because of the small size of project are a hurdle in implementation

the performance of private and cooperative socialist organization postwar yugoslav agriculture socialist enterprises in yugoslav agriculture show higher levels of productivity than private producers the author examines the sources of these differences with total factor productivity estimates based on sectoral aggregate cobb douglas production functions which permit separation of environmental policy and organizational effects the results support the following conclusions cooperative socialist enterprises are not inherently inefficient and can even outperform private producers both types of producers were responding to their environment and their differential rates of technological change reflect the different constraints they faced and socialist enterprises exhibited technology adoption behavior similar to nonsocialist enterprises elsewhere copyright 1987 by mit press

do developing country wto members receive more aid for trade aft since the world trade organization wto doha development agenda dda negotiations started in 2001 the importance of aid for trade aft has been well recognised as a useful tool for facilitating trade economic growth and social development in developing countries at the wto hong kong ministerial conference in december 2005 the aft initiative was launched and many high income member countries pledged to increase their aft contributions particularly for the least developed member countries ldc this paper aims to assess whether and to what extent the wto s developing member countries have received more aft for this purpose a system generalised method of moments is applied to a sample of 118 recipient countries for the period 2001 10 we find evidence that while ldc wto members on average receive relatively more aft than other developing countries the difference has not increased since launch of the aft initiative among the three categories of aft the positive wto membership effect for ldc members increased for building productive capacity and for trade policy and regulation but declined for infrastructure

is private farming more efficient than socialized agriculture this paper examines the technical efficiency of state and private farms in poland for the period 1960 74 we find that the average technical efficiency of the two types of farms does not differ although the dispersion of efficiency levels is greater among state farms than among private ones we do find clear evidence of allocative inefficiency with state farms oversupplied with fertilizer and machinery

institutions infrastructure and trade we work with a panel of bilateral trade flows from 1988 to 2002 exploring the influence of infrastructure institutional quality colonial and geographic context and trade preferences on the pattern of bilateral trade we are interested in threshold effects and so emphasize those cases where bilateral country pairs do not actually trade we depart from the institutions and infrastructure literature in this respect using selection based gravity modeling of trade flows we also depart from this literature by mixing principal components to condense our institutional and infrastructure measures with a focus on deviations from expected values for given income cohorts to control for multicollinearity infrastructure and institutional quality are significant determinants not only of export levels but also of the likelihood exports will take place at all our results support the notion that export performance and the propensity to take part in the trading system at all depends on institutional quality and access to well developed transport and communications infrastructure indeed this dependence is far more important empirically than variations in tariffs in explaining sample variations in north south trade this implies that policy emphasis on developing country market access instead of support for trade facilitation may be misplaced

effort technology and the efficiency of agricultural cooperatives abstract the inefficiency of cooperative agriculture relative to private farms is often attributed to difficulties in monitoring or poor incentives we develop a model to show that in technologies with numerous sequential steps even small shortfalls in worker effort can result in large output declines using data on cooperative and private farms in el salvador we find greater shortfalls in efficiency between cooperatives and private farms as well as among cooperatives for coffee a crop requiring numerous steps in its cultivation than for maize and sugar which require fewer steps thus the undersupply of effort in cooperatives may be less than differences in productivity suggest and cooperative agriculture is most likely to be successful where production does not involve many sequential steps

aggregating capacity limiting separable inputs 1 introduction in many empirical studies on productivity researchers frequently need to use data on capital goods in their analyses unfortunately capital goods are extremely heterogeneous and data on them are difficult to capture in a single measure there are many different types and vintages of capital goods in the same firm it is very difficult to gather all information on all capital goods in practice capital goods are aggregated into one input named capital recent studies that aggregate capital goods are fare grosskopf and tyteca 1996 who used the installed generating capacity as capital acemoglu and zilibotti 2001 who applied the perpetual inventory method to recover capital from investment mathijs and swinnen 2001 who adopted the deflated book value of fixed assets as capital and taymaz and saatci 1997 who used the depreciation allowance as capital though each method has its merits there may be information loss during the process of aggregating capital goods five possible types of errors during the aggregation process are identified here they are i error of separability there is a close relation between input aggregation and separability when different capital goods are separable from other inputs it is possible to find an aggregate of capital goods without information loss in this case there is no error of separability if capital goods are not separable from other inputs however and we aggregate them then actually we are approximating the production function by a separable function mak 1988 noted that the success of approximating a nonseparable function depends on whether that function is close enough to a separable function thus when the technology is not separable the error of separability occurs when the production function is not close to a separable function the error of separability is even larger ii error of formula suppose the production function is approximated by a separable function then there is a way to aggregate capital goods if the formula we use to aggregate capital goods cannot give us an aggregation consistent with that separable function then we face the error of formula iii error of measuring opportunity costs some measures of capital require information about prices of capital goods in economic theories all prices of inputs are the opportunity costs of using those respective inputs if the prices used do not reflect opportunity costs then this error occurs iv error of the deflator when we need to add up capital goods bought in different periods by using price information we have to deflate the values if an inappropriate deflator is chosen then there is an error of the deflator v error of accounting practices information reported by firms follows bookkeeping rules the value of fixed assets for example may not be the same as the concept of capital in economics thus investment and fixed assets may be biased this problem is larger when firms in different industries or countries are compared whether or not there is the error of separability depends on the structure of the technology it is beyond the control of researchers though we must cope with the error of separability what we can do is to avoid the other four errors in this paper i link the literature on separability with that on maximum capacity in favor of using the output capacity of plants to aggregate heterogeneous capital goods we find that when some inputs are separable in the production function their maximum capacity can be used as an aggregate measure for them this aggregate measure is economically meaningful and empirically tractable this paper is organized as follows section 2 discusses the properties of capacity limiting inputs section 3 relates capacity limiting inputs to separability section 4 comments on some applications of aggregating captial goods section 5 concludes the paper

the trade reducing effects of market power in international shipping abstract developing countries pay substantially higher transportation costs than developed nations which leads to less trade and perhaps lower incomes this paper investigates price discrimination in the shipping industry and the role it plays in determining transportation costs in the presence of market power shipping prices depend on the demand characteristics of goods being traded we show theoretically and estimate empirically that ocean cargo carriers charge higher prices when transporting goods with higher product prices lower import demand elasticities and higher tariffs and when facing fewer competitors on a trade route these characteristics explain more variation in shipping prices than do conventional proxies such as distance and significantly contribute to the higher shipping prices facing the developing world a simple back of the envelope calculation suggests that eliminating market power in shipping would boost trade volumes by 5 9 for the us to 15 2 for latin america our findings are also important for evaluating the impact of tariff liberalization cargo carriers decrease shipping prices by 1 2 for every 1 reduction in tariffs

rural reforms and agricultural growth in china this paper employs province level panel data to assess the contributions of decollectivization price adjustments and other reforms to china s agricultural growth in the reform period decollectivization is found to improve total factor productivity and to account for about half of the output growth during 1978 84 the adjustment in state procurement prices also contributed positively to output growth its impact came mainly from the responses in input use the effect of other market related reforms on productivity and output growth was very small reasons for slowdown in agricultural growth after 1984 are also analyzed copyright 1992 by american economic association

a within farm efficiency comparison of silvopasture systems with conventional pasture and forestry in northeast argentina agroforestry which has multiple inputs and outputs would benefit from scrutiny of economic efficiency because levels of adoption have not met expectations previous literature estimated the efficiency of agricultural systems using data envelopment analysis however the vast variability between farms makes comparing systems difficult this study uses paired within farm comparisons of silvopasture a combination of planted trees and pasture to conventional cattle ranching and plantation forestry to evaluate the relative technical efficiency silvopasture proves to be more efficient than conventional cattle ranching forestry demonstrated increasing returns to scale cattle raising demonstrated decreasing returns to scale for large scale farmers and silvopasture was intermediate jel d24 o13

assessing the benefits of trade facilitation a global perspective this paper estimates the relationship between trade facilitation and trade flows using a panel of disaggregated manufactured goods for the 2000 2001 period for 75 countries four categories of trade facilitation are defined measured and assessed for their impact on bilateral trade flows using a gravity model the four measures of trade facilitation are port infrastructure air and maritime customs environment regulatory environments and e business infrastructure the results suggest that raising global capacity halfway to the world average in the four areas would increase trade by 377 billion most regions of the world increase exports more than imports in large part this result stems from increased exports to oecd markets that is obtained through a country s own effort to improve ports customs regulations and services infrastructures in addition the results suggest that reform and capacity building in trade facilitation in areas related to gatt articles v viii and x that are under discussion at the world trade organisation could expand trade and exports significantly many of the reform measures necessary to achieve this goal need not necessarily require large scale investment projects but rather action in legal and administrative reform to facilitate trade

has distance died evidence from a panel gravity model the estimated coefficient of distance on the volume of trade is generally found to increase rather than decrease through time using the traditional gravity model of trade this distance puzzle proved robust to several ad hoc versions of the model using data for 1962 96 for a large sample of 130 countries the introduction of an augmented barrier to trade function removes the paradox yielding a decline in the estimate of the elasticity of trade to distance of about 11 percent over the 35 year period for the whole sample however the death of distance is shown to be largely confined to bilateral trade between rich countries with poor countries becoming marginalized

fisher s paradox and the theory of interest irving fisher s theory of interest has proved to be a most durable and influential contribution to economic theory a central element of fisher s contribution is the fisher hypothesis that over the longer term the real rate of interest is approximately constant being determined largely by time preference with movements in the nominal interest rate reflecting movements in the rate of inflation one for one the paradox of the fisher hypothesis is that despite its wide acceptance as the cornerstone of interest rate theory most empirical evidence appears to be inconsistent with the hypothesis at least in its strictest form this empirical anomaly was noted by fisher himself who attributed it to money illusion in the fifty years following the publication of the theory of interest a considerable literature has evolved around this paradox the unifying theme of this literature is a common acceptance of the essence of fisher s hypothesis most of the energy in this literature has been devoted to explaining systematic movements in the real rate of interest and to providing reasons why the relationship between the nominal interest rate and inflation may only be approximate in

collectivization and china s agricultural crisis in 1959 1961 the agricultural crisis in china in 1959 61 after the initial success of the collectivization movement resulted in 30 million extra deaths in this paper a game theory hypothesis proposes the main cause of this catastrophe i argue that because of the difficulty in supervising agricultural work the success of an agricultural collective depends on a self enforcing contract in which each one promises to discipline oneself a self enforcing contract however can be sustained only in a repeated game in the fall of 1958 the right to withdraw from a collective was deprived the nature of the collectivization was thus changed from a repeated game to a one time game as a result the self enforcing contract could not be sustained and agricultural productivity collapsed the empirical evidence is consistent with this hypothesis

the economics of agricultural decollectivization in east central europe and the former soviet union 1989 include both the privatization of agricultural production assets and the restructuring of state and collective farms farm restructuring and more specifically the breakup of large scale agricultural production units into individually operated farms a process we define as decollectivization differ considerably for the various ece and fsu countries differences in decollectivization can be observed across countries between regions within a country and over time we argue that these differences are not random this article identifies the factors that affect the decollectivization process and shows how they are consistent with empirically observed differences in agricultural decollectivization in ece and fsu countries the decollectivization process is a consequence of the decision of collective farm members to leave the collective production framework and start up individual farms factors affecting this decision are the expected productivity and profitability of individual farming relative to collective farming and the costs for individuals to leave the collective farm and start up an individual farm these costs are affected by land reform privatization and decollectivization regulations the relative productivity of individual versus collective farming depends on the distribution of collective farmers productivity the prereform average collective farm productivity and the advantages and disadvantages of individual farming compared to collective farming the literature on decollectivization identifies both advantages and disadvantages in collective production some of which would not extend beyond the transition period disadvantages include high transaction costs associated with the monitoring of labor and inefficiencies due to the right of

efficiency in social versus private agricultural production the case of yugoslavia this paper extends the work of michael l boyd 1987 by examining the question of efficiency in yugoslavian agricultural production using the stochastic production frontier the authors fin d the private sector produces with higher output efficiency than the social sector next they examine regional efficiency differences the authors findings reinforce earlier analysis of the economic impact of regional development policy pursued in yugoslavia less developed republics appeared unable to utilize efficiently the large volume of investment resources allocated from the more developed republics via the central government copyright 1993 by mit press

aid infrastructure and fdi assessing the transmission channel with a new index of infrastructure official development assistance oda and foreign direct investment fdi are widely perceived to be alternative means of supplementing domestic savings and promoting economic development in low and middle income countries however possible complementarities of aid and fdi have received limited attention so far it remains open to debate whether aid could render recipient countries more attractive to fdi by removing specific bottlenecks that prevent higher fdi inflows in particular we raise the hypothesis that aid specifically targeted at economic infrastructure helps developing countries attract higher fdi inflows through improving their endowment with infrastructure in transportation communication energy and finance by performing 3sls estimations we explicitly account for dependencies between three structural equations on the allocation of sector specific aid the determinants of infrastructure and the determinants of fdi we find strong and robust evidence that aid in infrastructure is effective in improving the recipient countries endowment with infrastructure in sharp contrast other aid is not effective in improving infrastructure infrastructure consistently proves to be an important determinant of developing countries attractiveness to fdi consequently only targeted aid promotes fdi indirectly through the infrastructure channel in addition aid in infrastructure has direct effects on fdi it appears that foreign investors anticipate longer term effects of aid on the country s endowment with infrastructure and expect aid financed infrastructure to serve them particularly well

effects of aid for trade on extensive and intensive margins of greenfield fdi using a panel dataset of 105 developing countries for the period 2003 15 this paper assesses the effects of aid for trade aft on greenfield fdi flows to the aid recipient countries particularly this paper classifies the total dollar value of greenfield fdi flows to each recipient country in terms of four different layers the extensive and intensive margins of projects as well as the extensive and intensive margins of source countries applying the system gmm estimator this paper finds that aft not only increases the dollar value of fdi flows to the recipient countries but also helps diversify the greenfield projects and source countries in addition this paper finds that aft has a greater effect for greenfield fdi from donor developed countries than from non donor developing countries among the three components of aft aid for trade related infrastructure and aid for trade policy regulations are found to have positive links with greenfield fdi irrespective of source country groups yet their effects are larger for developed source countries in contrast aid for building productive capacity hinders greenfield fdi flows from non donor countries while it promotes greenfield fdi from donor countries we offer some explanations for this finding

why real interest rates were so low in the 1970 s the economic turmoil of the 1970 s resulted in record postwar increases in inflation unemployment and nominal interest rates yet it was declines that were hardest to explain the average real value of a share of common stock plummeted productivity growth evaporated real interest rates measured as the spread between nominal interest rates and the inflation rate turned negative see table 1 over the past decade an explosion has occurred in the amount of attention paid to the relationship between nominal and thus real interest rates and expected inflation rates a good deal of this effort has been directed toward empirical analysis of the fisher neutrality hypothesis that nominal rates respond one for one with expected inflation rates most empirical tests of the fisher hypothesis have been bivariate interest rates were regressed on a constant and on actual or expected inflation measures estimates of the impact of inflation on interest rates in these and even in extended models are often significantly below one are often statistically imprecise and tend to be unstable over time the middle column of table i reflects this the coefficient of inflation on nominal interest rates there drops from 0 78 to 0 59 in the latter 1970 s another branch of work on nominal interest rates has concentrated on the institutional impediments to the fisher hypothesis robert mundell and james tobin demonstrate that nominal rates change by a smaller amount than the expected inflation rate does when a real balance effect exists and money pays no interest michael darby and martin feldstein on the other hand argue that nominal rates should exhibit a greater thanunity response to expected inflation due to the nature of u s income tax laws 2 here i estimate the relation between interest rates expected inflation and real forces such estimates are required for evaluating the effects of inflation on saving investment the distribution of income and the redistribution of wealth to generate estimates of the net impact of these various factors on interest rates and to avoid the identification and simultaneity problems masked but not often remedied by instrumental variables techniques i employ only exogenous regressors to buttress the argument i examine the individual links in the chain which are summarized in the reduced form the novel aspect of the model presented in section i is its addition of aggregate supply shocks to the determination of interest rates i trace the reduction in the supply of complementary factor inputs in the 1970 s to a decline in the demand for capital and therefore in real interest rates the inclusion of this supply force along with expected inflation allows one to distinguish between two offsetting effects on interest rates the depressing effect on real rates through lower investment demand and the elevating effect on nominal rates of higher expected inflation the results in section ii not only strongly support the economic and statistical importance of supply shocks on real interest rates but also resolve some longstanding interest rate puzzles allowing for the impact of factor supply produces a significant estimated response to expected inflation for a sample that ends prior to late 1960 s the magnitude assistant professor school of business administration university of california berkeley i would like to thank george akerlof robert j gordon robert a meyer joe peek janet yellen the members of the economic analysis and policy seminar at berkeley participants at the nber conference on inflation and financial markets and anonymous referees for helpful comments data resources supplied data and computational services financial support was provided by the berkeley program in finance and nsf grant ses8109093 linda pacheco supplied able research assistance errors of omission or commission are my responsibility see william gibson david pyle john carlson and thomas cargill and robert meyer 2maurice levi and john makin derive the reducedform effect of expected inflation on nominal interest rates as a function of the structural parameters

the anarchy of numbers aid development and cross country empirics the recent literature contains many stories of how foreign aid affects economic growth aid raises growth in countries with good policies or with difficult economic environments or outside the tropics or on average but with diminishing returns the diversity of the results suggests that many are fragile seven important aid growth papers are tested for robustness using 14 minimally arbitrary tests deriving mainly from differences among the studies themselves this approach investigates the importance of potentially arbitrary specification choices while minimizing the arbitrariness in testing choices all of the results appear fragile especially to sample expansion

the importance of the logistics performance index in international trade logistics and transport increasingly play a pivotal role in international trade relations the logistics performance index lpi analyses differences between countries in terms of customs procedures logistics costs and the quality of the infrastructure for overland and maritime transport the aim of this article is to analyse the impact that each of these components has on trade in emerging economies using a gravity model furthermore the study also attempts to detect possible advances in logistics in developing countries which are grouped into five regions africa south america far east middle east and eastern europe by comparing the first lpi data published in 2007 with the most recent data released in 2012 the results obtained reveal that improvements in any of the components of the lpi can lead to significant growth in a country s trade flows specifically lpi components are becoming increasingly important for international trade in many countries in africa south america and eastern europe

does aid for trade enhance export performance investigating on the infrastructure channel today there are few empirical studies assessing the effectiveness of aid for trade on trade pe rformance furthermore existing works do not test channels by which this impact is transiting we address this question using an empirical analysis constructed in two steps following a model of export performance we first test if institutions and infrastructure our two potential channels of transmission are indeed determinants of export performance secondly we test the impact of aid for trade sectoral flows on the determinants that were highlighted in the first part we show that the infrastructure channel appears to be highly significant in the first step whereas the institutional one turns out to have limited impact on developing countries exports furthermore in our second step aid for infrastructure seems once instrumented to have a strong and positive impact on the infrastructure level our results indicate that a 10 increase in aid to infrastructure commitments per capita leads to an average increase of the exports over gdp ratio for a developing country of 2 34 it is also equivalent to a 2 71 reduction of the tariff and non tariff barriers this highlights the very high economic impact of aid for trade throughout the channel of infrastructures

does aid for trade diversify the export structure of recipient countries the importance of aid for trade as a tool for facilitating trade economic growth and social development has received attention since the concept was introduced in 2005 while one of the main targets of aid for trade is export diversification reflecting the fact that the exports of many developing countries are concentrated in a small range of items there have not been many efforts to measure the effect of aid for trade on export structure this study therefore attempts to trace the relationship between aid for trade and 133 aid recipients export structure between 1996 and 2013 using the herfindahl hirschman index to measure the degree of export concentration the findings suggest that total aid for trade has reduced the concentration level in the short run in the long run on the other hand aid for trade has had no significant effect on export structure of recipient countries only aid for building productive capacity which is one of the three categories of aid for trade contributes to lower concentration yet this change is not caused by an increase in export diversity but by the redistribution of shares of existing products of a similar sophistication level

does anticipated monetary policy matter an econometric investigation a heated debate has arisen over the policy ineffectiveness proposition associate with the work of lucas sargent and wallace it postulates that anticipated aggregate demand policy will have no effect on business cycle fluctuations so that one deterministic feedback policy rule is as good as any other from the point of view of stabilizing the economy this paper develops a methodology for empirically analyzing rational expectations models displaying this neutrality result and then applies it to the important question of whether anticipated monetary policy matters to the business cycle

the adjustment of the real interest rate to inflation this paper reports tests of carmichael and stebbing s 1983 inverted fisher hypothesis that it is the real rather than the nominal interest rate which adjusts to changes in the expected inflation rate unlike the earlier analysis the results presented here are based on a properly specified estimating equation derived from a short run open economy macro model the results support the inverted fisher hypothesis in the short run but indicate that there is some overshooting of the real interest rate so that after four quarters about 75 of the effect of an expected inflation change is reflected in real rates while the remainder leads to an increase in the nominal rate

exploring the cross country gap in patenting a stochastic frontier approach abstract this paper benchmarks the patent activities of a sample of oecd countries against the world frontier and explores the sources of the cross country differences in patenting regarded as a proxy for innovation a patent production frontier is estimated for a panel of 21 oecd countries over the 1990 2002 period using stochastic frontier analysis patenting performance for each country is decomposed into basic patenting capacity and patenting efficiency the gap between europe and the world leaders in terms of basic patenting capacity remains substantial with little sign of convergence over the sample period in terms of patenting efficiency japan germany and italy have improved their relative position in recent years the gap in patenting performance between the uk and the world frontier is due to relative underperformance in both patenting capacity and efficiency in patent production institutional factors are found to be significantly associated with the patenting efficiency of an economy

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

trade policy trade costs and developing country trade this paper briefly reviews new indices of trade restrictiveness and trade facilitation that have been developed at the world bank the paper also compares the trade impact of different types of trade restrictions applied at the border with the effects of domestic policies that affect trade costs based on a gravity regression framework the analysis suggests that tariffs and non tariff measures continue to be a significant source of trade restrictiveness for low income countries despite preferential access programs this is because the value of trade preferences is quite limited a new measure of the relative preference margin developed in the paper reveals that this is very low for most country pairs most countries with very good duty free access to a market generally have competitors that have the same degree of access the empirical analysis suggests that measures to improve logistics performance and facilitate trade are likely to have the greatest positive effects in expanding developing country trade increasing the trade impacts of lowering remaining border barriers by a factor of two or more

aid and growth what does the cross country evidence really show abstract we examine the effects of aid on growth in cross sectional and panel data after correcting for the possible bias that poorer or stronger growth may draw aid contributions to recipient co

aid for trade and greenfield investment summary the aid for trade aft initiative was launched in 2005 at the hong kong ministerial conference where high income countries pledged to increase their aft contributions to developing countries aft comprised almost entirely of aid for trade related infrastructure and building productive capacity would promote growth by easing supply side constraints and improving transportation energy and communication infrastructure by lowering costs of operating in recipient countries aft may increase both trade and investment most research on the effects of aft on international transactions focuses on trade the sparse research on investment investigates aid and net foreign direct investment flows based on the international balance of payments we contribute to the literature by assessing aft effects on new greenfield investment using bilateral data for 25 donor and 120 recipient countries for the period 2003 13 we find that bilateral aft promotes greenfield investment our preferred specification includes bilateral and country time fixed effects and employs the poisson pseudo maximum likelihood ppml estimator robust effects emerge between the top five donors and more developed recipient countries cases where aid flows are large thus we see evidence that a critical level of aid is required to encourage greenfield investment both aid for infrastructure particularly transportation and energy and building productive capacity are found to exert strong effects to the extent that greenfield investment creates jobs and generates technology transfer it appears that aft is accomplishing its development objectives at least with regard to the more advanced recipient countries

collective agricultural production a solution for transition economies abstract the paper examines theoretical reasons and provides examples for productivity differences between agricultural service cooperatives and collectives service cooperatives can utilize economies of scale enhance competitiveness and provide technical information advantages that often outweighed problems of free riding low investment and excessive political intervention agricultural collectives while not adding substantial advantages are in addition associated with problems of supervision and effort supply tendencies to substitute casual workers or mechanization for regular members and low investment incentives while collective forms of organization in transition economies respond to high risk and market imperfections they do so inefficiently policies that create conditions for service cooperatives to compete may lead to large productivity gains

determinants of technical efficiency of crop and livestock farms in poland la pologne est l un des pays d europe de l est candidats a une accession a l union europeenne qui rencontre de graves problemes de restructuration agricole l article etudie l efficacite technique en 2000 d exploitations agricoles individuelles polonaises specialisees en elevage et en grandes cultures l efficacite est estimee par la methode de frontiere stochastique et sa variabilite statistique evaluee par la construction d intervalles de confiance l article examine egalement les determinants de l efficacite les resultats obtenus pas la methode de frontiere stochastique sont compares avec ceux obtenus par la methode de data envelopment analysis dea en moyenne l efficacite technique des exploitations d elevage est superieure a celle des exploitations de grandes cultures pour les deux specialisations la relation entre l efficacite et la taille des exploitations est positive les grandes exploitations sont les plus efficaces les resultats obtenus par la methode de frontiere stochastique sont generalement confirmes par la methode dea la qualite de la terre et le degre d integration dans les marches d aval sont d importants determinants de l efficacite la faible education est un obstacle majeur a l efficacite en particulier pour les exploitations de grandes cultures de plus celles ci utilisent beaucoup les marches de facteurs terre et travail alors que les exploitations d elevage utilisent plutot leurs propres terres et le travail familial