where has all the bias gone detecting gender bias in the intrahousehold allocation of educational expenditure abstract the reliability of the household consumption based engel curve methodology in detecting gender bias has been called into question because it has generally failed to confirm bias even where it exists this article seeks to find explanations for this failure by exploiting a data set that has educational expenditure information at the individual level and also by aggregation at the household level i find that in the basic education age groups the discriminatory mechanism in education is via differential enrollment rates for boys and girls education expenditure conditional on enrollment is equal for boys and girls the engel curve method fails for two reasons first it models a single equation for the two stage process second even when we make individual and household level expenditure equations as similar as possible the household level equation still fails to pick up gender bias in about one third of the cases where the individual level equation shows significant bias this article

the hazard of moral hazard untangling the asian crisis abstract the paper critically examines the explanations of the asian crisis which emphasize the role of national policies and institutions that allegedly created moral hazard by overprotecting the investors industrial policy crony capitalism and government guarantees accorded to banks and industrial firms that are considered too important to fail we also discuss the international dimension of the moral hazard argument in the presence of international monetary fund imf bail out the paper finds these explanations theoretically ill defined and empirically weak and argues that the prescriptions for changes in policy and institutions based on them are unlikely to prevent similar kinds of crises in the future

indonesian agricultural development in comparative perspective abstract in both the late colonial and the early post independence periods most observers of the indonesian economy were pessimistic about the prospects for agricultural and especially foodcrop growth but over the last 15 years food production growth in indonesia has been among the fastest in the world this paper examines the reasons for the accelerated growth and reviews some of the literature on its distributive consequences comparisons are made with other episodes of accelerated agricultural growth in recent asian history especially that of meiji japan it is shown that there are remarkable similarities between agricultural development indicators in indonesia in the 1960s and 1970s and those in meiji japan the challenge for indonesian policy makers in the future will be to build on the agricultural successes of the past two decades in order to create a more diversified economy and ensure sustained economic development

reassessing the effectiveness of industrial policy in indonesia can the neoliberals be wrong abstract the neoliberal interpretation of the indonesian state suggests that industrial policy was incoherent subject to rent seeking and irrelevant to indonesia s post 1966 development success a more nuanced micro historical analysis of the state s interventions demonstrates that this oversimplification misses political elite objectives to overcome the ekonomi kolonial by using the power of the state and selective intervention to create a strong integrated diversified and outward oriented industrial economy ekonomi nasional empirical analysis presented here suggests that indonesia has largely achieved this objective it also suggests that industrial policy has been more important than the neoliberal argument permits

moving up the processing ladder in primary product exports sri lanka s value added tea industry governments in many developing countries influenced by the experience of the east asian newly industrialized countries have adopted policies to enhance domestic processing of primary commodities as a tool for accelerating employment growth export revenues and development sri lanka has traditionally exported tea in the form of bulk commodity teas but value added teas such as packaged teas tea bags etc have expanded in recent years this article examines factors affecting the processing of value added tea products in sri lanka by modeling export supply behavior estimates of the long run relationship and short run dynamics of export supply are presented and discussed the price of value added tea relative to bulk tea and industry capacity are identified as the main determinants of export supply while exchange rate changes have no discernible effect the policy implications of the analysis for enhancing further expansion of such value added teas are presented these are of interest for both policy makers and development analysts in particular the reasons that undermine the effectiveness of exchange rate policy as an instrument to stimulate value addition of primary products have much relevance for similar developing countries

from conventional to unconventional monetary policies the failure of the market maker of last resort this paper analyses the new role of market maker of last resort openly assumed by central banks since the 2008 financial crisis revealed the increasing impact of noninterest income activities on banks balance sheets a brief review of the distinction between conventional and unconventional monetary policies shows that the inflexion point from lender of last resort to market maker of last resort is given by the extension of central bank intervention to other markets than the bank reserves markets herein it is explained how the market maker of last resort role is as counterproductive as its predecessor in putting the economy back on track we show that the main problem of both conventional and unconventional monetary policies is that they distort price signals particularly asset prices in their attempt to reignite economic growth instead of correcting cyclical fluctuations the policies of the market maker of last resort prevent the cyclical divergences between financial and goods sectors from readjusting

household welfare effects of agricultural productivity a multidimensional perspective from ghana abstractalthough poverty reduction policies in developing countries hinge on the link between smallholder productivity and welfare micro level empirical evidence on this is limited in sub saharan africa and neglects the multidimensionality of welfare this article contributes through investigating the productivity poverty relationship using a number of welfare measures with a three period panel dataset for ghana the findings are that welfare is increasing with labour productivity irrespective of the measure used but that dramatic increases in productivity would be required to achieve meaningful poverty reduction

indonesia s industrial policy and performance orthodoxy vindicated there is hardly an economic policy whether for the levying of income tax or an urban real estate tax or for tariff protection of domestic industry or for subsidies to depressed industries or for minimal regulation of foreign investment or of road traffic or for conservation of forests or for provision of rural credit to farmers or for priorities in investment credit by state banks or for social welfare services or development projects of every kind which whatever its economic or technical merits does not need to be weighed and often ruled out almost wholly on grounds of its administrative impracticability in the face of corruption h w arndt 5

bureaucratic rationality and the developmental state there has been a resuscitation of the view that the state can play an important role in the industrialization process but for states to be successful in fostering development they need a considerable degree of internal cohesiveness which is generally supplied by the presence of a robust weberian bureaucratic corps this article argues that while internal cohesiveness is indeed critical bureaucratic rule following can produce results in the opposite direction depending on the interagency relations that obtain within the state the effect of interagency relations is demonstrated through an examination of india and korea both have worked to foster industrialization and both are endowed with relatively healthy bureaucracies however the indian state was paralyzed and fragmented while its korean counterpart did secure the requisite internal coherence not only did the culture of rule following fail to generate a cohesive state in india but it in fact worked against such an outcome

farm productivity and rural poverty in india armed with new data we return to an old question from the pages of this journal to what extent do india s rural poor share in agricultural growth combining data from 24 household sample surveys spanning 35 years with other sources we estimate a model of the joint determination of consumption poverty measures agricultural wages and food prices we find that higher farm productivity brought both absolute and relative gains to poor rural households a large share of the gains was via wages and prices though these effects took time the benefits to the poor were not confined to those near the poverty line

book reviewkorea s competitive edge managing entry into world markets yung whee rhee bruce ross larson and garry pursell johns hopkins university press baltimore md 1984 pp 163 19 95

income dynamics in tamil nadu india from 1971 to 2003 changing roles of land and human capital this article examines the changing role of physical and human capital in income dynamics in tamil nadu india using detailed daily records of farming households from 1971 to 2003 we find that income growth until the early 1990s is attributed to the rice green revolution and the associated development of nonrice farm sector further growth after the 1990s became possible due to the rapid nonfarm sector development that has been stimulated by the liberalization of indian economy since 1991 in accordance with this change in income structure the importance of physical and human capital has changed human capital was important in the early 1970s to take advantage of the rice green revolution technology once the new technology became standard among farmers human capital became an insignificant factor the importance of human capital has revived in a different manner in recent years firstly because it has increased farmers access to nonfarm job opportunities and secondly because farm management has become more knowledge intensive in the face of increasing scarcity of labor and water the contribution of physical capital increased during the green revolution period while it started declining after that the changing mechanism is characterized as the shifting importance from physical to human capital in accordance with the changing engines of income growth from the green revolution to the development of nonfarm sector

technological capabilities and industrialization abstract this paper reviews the implications for industrial strategy of recent research on technological capabilities at the firm and national levels after exploring the nature and determinants of microlevel technological development a simple framework for explaining the growth of national capabilities is set out based on the interplay of incentives capabilities and institutions each may suffer market failure and so require corrective intervention the experience of some industrializing countries is described to assess the validity of this framework it is concluded that interventions carefully and selectively applied are necessary for industrial success

poverty decline agricultural wages and non farm employment in rural india 1983 2004 the authors analyze five rounds of national sample survey data covering 1983 1987 8 1993 4 1999 0 and 2004 5 to explore the relationship between rural diversification and poverty poverty in rural india declined at a modest rate during this period the authors provide region level estimates that illustrate considerable geographic heterogeneity in this progress poverty estimates correlate well with region level data on changes in agricultural wage rates agricultural labor remains the preserve of the uneducated and also to a large extent of the scheduled castes and scheduled tribes although agricultural labor grew as a share of total economic activity over the first four rounds it had fallen back to the levels observed at the beginning of the survey period by 2004 this all india trajectory masks widely varying trends across states during this period the rural non farm sector grew modestly mainly between the last two survey rounds regular non farm employment remains largely associated with education levels and social status that are rare among the poor however casual labor and self employment in the non farm sector reveal greater involvement by disadvantaged groups in 2004 than in the preceding rounds the implication for poverty is not immediately clear the poor may be pushed into low return casual non farm activities due to lack of opportunities in the agricultural sector rather than being pulled by high returns offered by the non farm sector econometric estimates reveal that expansion of the non farm sector is associated with falling poverty via two routes a direct impact on poverty that is likely due to a pro poor marginal incidence of non farm employment expansion and an indirect impact attributable to the positive effect of non farm employment growth on agricultural wages the analysis also confirms the important contribution to rural poverty reduction from agricultural productivity availability of land and consumption levels in proximate urban areas

does industrialization build or destroy social networks abstract this article estimates the relationship between changes in industrialization and changes in social networks measures in indonesia during 1985 97 using repeated cross sections of nationally representative surveys we analyze a rich set of social interaction measures including various measures of voluntary associational activity levels of trust and informal cooperation districts that experienced rapid industrialization showed significant increases in most measures of social interaction however districts that neighbor rapidly industrializing areas exhibited high rates of out migration significantly fewer community credit cooperatives and a reduction in mutual cooperation as assessed by village elders manufacturing growth can be thought of as a proxy for income growth here the findings are contrary to several recent claims regarding the role of social capital in economic development

in the grip of a green giant how the rural sector tamed organized labor in india social scientists studying rural urban struggles have primarily focused on the issue of urban bias the issue of rural bias and its potential effects on urban dwellers has received much less attention this article demonstrates how agrarian political mobilization of rural constituents adversely affected urban workers in india agrarian mobilization led to two changes in development policy that undermined the bargaining strength of organized labor first remunerative pricing for agricultural products biased the terms of trade in favor of agriculture resulting in a rise in the product wage second incentives for rural and small scale industries led to increased product market competition in the manufacturing sector generating unemployment among urban workers under these circumstances unions could not frequently strike and when they did strike they fought longer to win their demands the author supports these arguments with a statistical analysis of strike frequency and duration in india from 1976 t

money liquidity and monetary policy in a market based financial system banking and capital market developments are inseparable and funding conditions are closely tied to fluctuations in the leverage of market based financial intermediaries offering a window on liquidity the balance sheet growth of broker dealers provides a sense of the availability of credit contractions of broker dealer balance sheets have tended to precede declines in real economic growth even before the current turmoil for this reason balance sheet quantities of market based financial intermediaries are important macroeconomic state variables for the conduct of monetary policy

competitiveness indices and developing countries an economic evaluation of the global competitiveness report developing countries policy makers worry about national competitiveness and closely watch indices ranking international competitive performance this paper analyzes from a development economics perspective if competitiveness is a legitimate concern and if the leading indices deserve the attention they get it assesses the best known index the global competitiveness report of the world economic forum and finds deficiencies at several levels its definitions are too broad the approach biased and the methodology flawed many qualitative measures are vague redundant or wrong these weak theoretical and empirical foundations reduce the value of the indices for analytical or policy purposes

distributional implications of macroeconomic policy theory and applications to el salvador abstract this article offers a theoretical framework for designing macroeconomic strategy for el salvador that will both respect stabilization and structural adjustment needs and enhance social equity after outlining the largely negative distributional implications of the orthodox policies followed by el salvador in recent years we argue that stabilization and efficiency could actually be improved by increased equity and sketch out the elements of an alternative approach that would be distributionally sensitive and thereby help consolidate the peace

does social capital promote industrialization evidence from a rapid industrializer a new stylized fact in development economics is the importance of social capital in promoting economic growth this paper examines the effect of social capital on industrialization in indonesia we analyze a rich set of social capital and social interaction measures including voluntary associational activity and levels of trust and informal cooperation the main finding is that initial social capital does not predict subsequent industrial development across 274 indonesian districts though these findings are for only a single nation and may not apply everywhere they call into question recent claims regarding social capital and economic development

the comparative politics of corruption accounting for the east asian paradox in empirical studies of corruption growth and investment abstract numerous empirical studies demonstrate that corruption reduces investment and or slows growth but how robust are these relationships this question is answered by conducting a series of crosscountry regression tests using four different corruption datasets we find that corruption slows growth and or reduces investment in most developing countries particularly small developing countries but increases growth in the large east asian newly industrializing economies the latter finding provides solid empirical support to a country case literature that explains the east asian paradox the combination of high corruption and high growth in terms of stable and mutually beneficial exchanges of government promotional privileges for bribes and kickbacks

productivity or politics the determinants of the indonesian tariff structure abstract the paper considers whether the structure of the effective rate of protection across manufacturing sectors in indonesia is better explained by variables that measure economic efficiency or those capturing the potential political influence wielded by those active in various sectors econometric estimates for 1984 indicate that tariffs were made to measure to offset the degree of low productivity in individual sectors political influence does not appear to significantly affect the granting of protection

are urban poverty and undernutrition growing some newly assembled evidence abstract the population of the developing world is becoming more urban are poverty and undernutrition beginning to relocate to urban areas as well we use survey data on poverty from eight countries and on child undernutrition from 14 countries to address this question using data from the past 15 20 years we find that in a majority of countries the absolute number of poor and undernourished individuals living in urban areas has increased as has the share of overall poverty and undernourishment coming from urban areas given these trends and the current stock of knowledge as to the levels determinants and solutions to urban poverty and undernutrition we argue for more research on these issues

income dynamics and pathways out of rural poverty in bangladesh 1988 2004 bangladesh has made considerable progress in alleviating poverty in the recent past using data from a nationally representative longitudinal survey of rural households in bangladesh conducted in three waves in 1988 2000 and 2004 this article relates the dynamics of rural poverty reduction to the structural shift in income generation mechanism from farm to nonfarm activities changing household factor endowments and the adoption of improved agricultural technologies over time 1 the findings show that the occupational shift from the farm to the nonfarm sector such as trade business and services as well as the expansion of cultivated areas through tenancy enhance income growth geographic mobility overseas migration in particular makes a significant contribution to income growth as well the reduction in poverty appears to be vitally dependent on the enhancement of the endowment of human and physical capital that augments the poor households capability to better exploit income generating opportunities and place the households on a sustainable route out of poverty

market stimulating technology policies in developing countries a framework with examples from east asia abstract this paper proposes an analytical framework for technology development based upon evolutionary approaches and drawing upon asian development strategies the analysis rests on the concept of market stimulating technology policies comprising a broad array of policies to promote industrial and technological development some market and others government determined these policies may be functional horizontal or vertical and can be analyzed at three levels national strategic and specific the paper suggests that strategic choices are involved at all stages that cannot be resolved entirely by recourse to free markets

impact of infrastructure expenses in strategic sectors for brazilian poverty abstract this paper analyzes the impact of infrastructure investments in the reduction of poverty in brazil controlled through other determinants such as economic growth income inequality average schooling years unemployment rate and state budgets from 1995 to 2011 a model for a dynamic panel data estimated by the generalized method of moments gmm in two steps as developed by arellano bond 1991 and blundell bond 1998 found among other conclusions a significant inverse relation between public investment in infrastructure and poverty the granger causality test for panel data proposed by hurlin and venet 2001 2004 and hurlin 2004 2005 reinforced results validation

growth and poverty revisited from a multidimensional perspective the actual impact of economic growth on poverty reduction is of fundamental importance to the development agenda this paper offers new empirical evidence on growth and poverty measured from a mult

the irrelevance of national strategies rural poverty dynamics in states and regions of india 1993 2005 summary examining panel data for more than 13 000 rural indian households over the 12 year period 1993 94 to 2004 05 shows that two parallel and opposite flows regularly reconfigure the national stock of poverty some formerly poor people have escaped poverty concurrently some formerly non poor people have fallen into poverty these simultaneous inward and outward flows are asymmetric in terms of reasons one set of reasons is associated with the flow into poverty but a different set of reasons is associated with the flow out of poverty both sets of reasons vary considerably across and within states no factor matters consistently across all states of india standardized national policies do not represent the best use of available resources diverse threats and different opportunities must be identified and tackled at the sub national level

industrial policy in an imperfect world theoretical analyses of industrial policy normally restrict the range of possible outcomes by abstracting from either market or government failures this paper thus studies industrial policy and its effectiveness in a model that includes both market and government imperfections we introduce a public agency responsible for industrial policy into the model of hausmann and rodrik 2003 and assume that this agency has limited information and is partly politically motivated we further extend the model to allow the public agency to communicate with entrepreneurs and the entrepreneurs to engage in rent seeking we find that industrial policies are ineffective if the public agency is poorly informed but that they are not necessarily ineffective if the public agency is highly politically motivated given a highly politically motivated public agency industrial policies are effective if and only if the institutional setting ensures that such policies are modest e g by restricting the public agency s budget moreover our model helps us to understand why the same industrial policies that have failed elsewhere have been relatively successful in south korea and taiwan

agricultural growth poverty reduction and agro ecological zones in india an ecological fallacy abstract in an article in this journal that is part of an oevre that has been widely cited shenggen fan peter hazel and t haque 2000a present evidence that government investments in india now have greater effects on poverty in rainfed than irrigated regions this note suggests that parts of the methodology on which this claim is based are unclear and possibly suffer from an ecological fallacy even after clarification of their method by the authors some doubts remain as to whether the results quoted support the original claim

the impact of structural adjustment programs on manufacturing lessons from nicaragua abstract since 1988 nicaragua has applied structural adjustment programs including stabilization and liberalization measures as of 1991 these measures succeeded in combating inflation but they did not lead to increased production nor to an improved trade balance the nicaraguan manufacturing sector was especially vulnerable because of a decade long lack of investment and the non market environment in which firms operated in the 1980s the combination of trade liberalization with an overvalued exchange rate and financial liberalization had in particular negative effects on manufacturing production and investment in addition specific industrial policies are necessary to increase manufacturing competitiveness

agricultural transformation in africa assessing the evidence in ethiopia summary despite significant efforts africa has struggled to imitate the rapid agricultural growth that took place in asia in the 1960s and 1970s as a rare but important exception ethiopia s agriculture sector recorded remarkable rapid growth during 2004 14 this paper explores this rapid change in the agriculture sector of this important country the second most populous in africa we review the evidence on agricultural growth and decompose the contributions of modern inputs to growth using an adjusted solow decomposition model we also highlight the key pathways ethiopia followed to achieve its agricultural growth we find that land and labor use expanded significantly and total factor productivity grew by about 2 3 per year over the study period moreover modern input use more than doubled explaining some of this growth the expansion in modern input use appears to have been driven by high government expenditures on the agriculture sector including agricultural extension but also by an improved road network higher rural education levels and favorable international and local price incentives

productivity growth in indian agriculture is there evidence of convergence across states this paper explores the question of convergence in total factor productivity tfp in agriculture across fourteen major agricultural states of india using a tornqvist theil index for tfp growth for the period 1973 1993 we find no evidence to support convergence to a single tfp level convergence after grouping the various states on the basis of their productivity performance we find that the high performing states show a gradual movement towards the trend whereas the low performing states generally show more volatility testing for long run convergence in levels of agricultural productivity we find evidence of conditional beta convergence after controlling for state specific factors and idiosyncratic year specific volatility the results are robust to alternative specifications of tests of unit root in panel data developed recently

prices wages and poverty in rural india what lessons do the time series data hold for policy abstract looking back over 40 years or so one finds that higher relative prices of food in india have typically been associated with higher poverty incidence and lower real agricultural wages this has not gone unnoticed by critics of agricultural policy reform in india who have argued that reform could permanently increase poverty by permanently raising food prices relative to non food prices however a number of other observations about the time series evidence cast doubt on this interpretation the correlation with poverty as it is being measured is not a distributional effect yet it is very unlikely that the rural sector as a whole could be worse off from a higher relative price of food instead the correlation with poverty can be explained by shocks to aggregate food output the correlation between food prices and real wages can be explained by changes in farm yields and inflation critics of reform appear to have misread the lessons for policy but these data cannot be used to support the view that higher food prices due to policy reform will on their own reduce rural poverty

cash crop choice and income dynamics in rural areas evidence for post crisis indonesia in this article we investigate the factors affecting levels and growth of incomes in rural indonesia following the crisis of 1997 1998 in particular we investigate the relative roles of nonfarm incomes and productivity improvements achieved via changes in crops versus improvements on the same crops on income dynamics framing the article in the context of an optimal labor allocation model relying on unique household panel data from central sulawesi and using advanced panel econometric methods we find that local innovations related to the adoption and intensification of new cash crop varieties more specifically the shift from coffee to cocoa production can explain a substantial part of the observed post crisis developments causal estimates of the effect of growing cocoa suggest that households were on average able to achieve about 14 higher income levels during the post crisis period compared to the planting of other crops most notably coffee also our results demonstrate the importance of engagement in nonfarm activities for household income growth comparative analyses using a nationally representative survey suggest that similar processes are at play in other parts of indonesia

food price policy the rationale for government intervention abstract policy makers in the most successful developing countries have not accepted either of the two major schools of thought on food price policy the neo classical school favours free trade to maximize efficiency of resource allocation the structuralist school favours interventions to satisfy goals for income distribution especially in the rapidly growing rice based economies of asia policy makers have been more concerned about stability of domestic prices than their level relative to world prices this concern traditionally dismissed by economists as purely political is justified on economic grounds because of improved macroeconomic and dynamic efficiency from stable food prices the paper identifies both the benefits from food price stability and the costs of achieving it

monetary policy in exceptional times this paper describes the way in which the european central bank ecb the federal reserve and the bank of england conducted monetary policy since the beginning of the financial crisis in august 2007 we argue that both quantitative easing and the other non standard measures introduced by central banks that changed the composition of the asset side of their balance sheets so called qualitative easing acted mainly through their effects on interest rates and in particular on money market spreads rather than solely through quantity effects in terms of the money supply we perform a quantitative exercise on the euro area which estimates the effect of the reduction of these spreads to the broader economy michele lenza huw pill and lucrezia reichlin

is india s economic growth leaving the poor behind there has been much debate about how much india s poor have shared in the economic growth unleashed by economic reforms in the 1990s the authors argue that india has probably maintained its 1980s rate of poverty reduction in the 1990s however there is considerable diversity in performance across states this holds some important clues for understanding why economic growth has not done more for india s poor india s economic growth in the 1990s has not been occurring in the states where it would have the most impact on poverty nationally if not for the sectoral and geographic imbalance of growth the national rate of growth would have generated a rate of poverty reduction that was double india s historical trend rate states with relatively low levels of initial rural development and human capital development were not well suited to reduce poverty in response to economic growth the study s results are consistent with the view that achieving higher aggregate economic growth is only one element of an effective strategy for poverty reduction in india the sectoral and geographic composition of growth is also important as is the need to redress existing inequalities in human resource development and between rural and urban areas

measuring changes in poverty a methodological case study of indonesia during an adjustment period analysis of the effects of policy changes on the poor is often hindered by the difficulties inherent in measuring poverty and comparing levels of poverty before and after policy changes this article outlines two techniques which can overcome many of these measurement problems stochastic dominance conditions which can facilitate a robust poverty ranking of distributions of living standards and a decomposable poverty index which allows measured changes in aggregate poverty to be disaggregated into their various components such as the changes among population subgroups and growth and redistributive components these techniques can be applied to a wide range of indicators of economic well being and poverty lines and to assumptions about the poor the approaches are illustrated using household survey data from indonesia before and after external shocks and the subsequent structural adjustment program in the mid 1980s the study finds that favorable initial conditions and pro poor pattern of growth enabled indonesia to maintain its momentum in poverty alleviation during the period

the east asian miracle study does the bell toll for industrial strategy the world bank s east asian miracle study1 has been anticipated with considerable interest by the development community it was intended not least by the japanese government that financed it to be an objective re examination of the role of government interventions in economic particularly industrial development it reflected a widespread unease that the bank was too strongly committed to a neoliberal view of the development process 2 this approach evolved over the 1980s drawing mainly upon evidence from east asia and fuelled by a shift in mainstream economics and political perceptions in the leading developed countries it formed the basis of the bank s subsequent lending and policy advice and was at the core of the structural adjustment programs that have shaped policy in many developing countries this review confines itself to the study s analysis of industrial policy concentrating on the approach and the analysis of the established nies the four tigers

production prices and poverty in rural india this paper challenges the view that increases in agricultural production have reduced poverty in rural india rural poverty is related directly to the consumer price index number for agricultural labourers and inversely to agricultural production the underlying time trend term indicates a residual rising trend in rural poverty after accounting for the influence of these two factors there are plausible though conjectural reasons for believing that to a significant extent the price factor as well as the variables implicit in the time trend term both derive their strength if not their existence from the nature of the growth processes which have generated the observed growth in agricultural production these results contradict ahluwalia s earlier conclusions even though they are themselves based on essentially the same data set

going beyond crosscountry averages growth inequality and poverty reduction in the philippines summary this paper analyzes the processes of growth and poverty reduction simultaneously under a neoclassical growth model framework using provincial data from the philippines we obtain a high rate of provincial income convergence and a tradeoff between equity and growth the lack of political competition inhibits growth land reform is positively associated with growth and poverty reduction while higher agricultural terms of trade facilitate poverty reduction the growth elasticity of poverty reduction is low by international standards but is sensitive to sectoral income composition and initial conditions in poverty incidence mortality rate and irrigation coverage

east asian economic performance miracle or just a pleasant surprise p ublication of the east asian miracle eam world bank 1993 appears to borrow a phrase to have generated more heat than light the eam analysed reasons for the economic success of the eight high performing asian economies hpaes hong kong indonesia japan malaysia republic of korea singapore taiwan and thailand the hope at least of neutral observers was that we would be able to derive lessons regarding effective economic policies from a study of the experiences of the successful east asian economies the general criticism of the report is that it tried to mould the hpaes experiences so that the lessons were consistent with bank policy in the process losing many distinguishing features of the eam more serious criticisms are that the report obfuscated and distorted the truth it is not our intention to reopen debate about the report fully aired in a special issue of world development april 1994 and rodrik 1994 we do wish to address three questions what were the distinguishing features of the east asian economic success that led some observers to claim a miracle what elements of economic policy contributed to their success and are such elements present in the economic policies proposed by the bank in for example adjustment programmes are there features of the hpaes that can be adapted to help design successful policies for other countries put succinctly what did they do that appears so good how did they do it and can others do it writing in 1998 it may appear irrelevant to talk of an east asian miracle as so many of the economies we consider have recently endured currency crises of varying degrees of severity current problems should not detract from the sustained and generally impressive growth achieved by these economies over the

an overview of innovation intensity in the indigenous oilfield services firms in nigeria the study examined the types and intensity of innovations in the indigenous nigeria s oil and gas servicing sub sector the study used primary and secondary data sources 100 firms were purposefully selected and sampled focusing on the period between 2001 and 2010 a total of 400 questionnaires were ad min istered of wh ich 70 were returned and found suitable for analysis the responses were aggregated such that the unit of analysis was the firm secondary data were sourced fro m the internet and other published sources the data so obtained were analy zed using descriptive and inferential statistics of the 4 types of innovation that the study examined o rganizat ional innovation was the most prevalent 46 while diffusion based innovation was least 10 product and process innovations were implemented respectively by 17 and 22 of the firms innovation intensity was lo w only two patents were granted to the firms within the period 2007 2010 level of organizat ional learning was lo w the nu mber of r d staff was low while the impact of innovation on firms performance was expressed in increase in profit process improvement and new product development in conclusion our study found out that the overall innovation capability of the firms was expressed in organizational innovations

the effects of location and sectoral components of economic growth on poverty evidence from indonesia abstract in this paper we investigate the relationship between economic growth and poverty reduction by differentiating growth and poverty into their sectoral composition and urban rural location using data from indonesia we find that rural services growth reduces poverty in all sectors and locations however urban services growth has the largest effect on poverty in most sectors finally we also find that rural agriculture growth strongly reduces poverty in rural areas the largest contributor to poverty in indonesia this implies that while agriculture growth in rural areas still plays a major role in reducing poverty policies that enable strong growth in the services sector in both urban and rural areas would expedite poverty reduction

macroeconomic performance and poverty in brazil abstract drawing on brazilian time series data this study finds an inelastic link between poverty and wages over the macroeconomic cycle that is devoid of the asymmetric effects that characterise the phenomenon s response to changes in the rate of unemployment deepening of structural reforms in the second half of the 1990s had no effect on the aforementioned relationships which also varied little by regional level of development finally the connection between poverty and long term income changes was more elastic suggesting an association between the economy s recent disappointing performance in alleviating poverty and its lacklustre growth record over the past two decades

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

firm and group dynamics in the small and medium enterprise sector in indonesia this paper discusses the role of clusters and subcontracting as factors in the evolution of small and medium firms in indonesia during the last quarter century it is argued that a number of such firms have become successful exporters of rattan furniture wood furniture and garments on the strength of subcontracting relationships with foreign investors and buyers as well as agglomeration economies achieved by clustering in selected locations examples are provided to show that clustered enterprises are more likely to be in the exports business and to adopt product and process innovations as compared to more dispersed firms public policy support for fostering subcontracting links and cluster formation is also discussed

why has economic growth been more pro poor in some states of india than others abstract we use 20 household surveys for india s 15 major states spanning 1960 1994 to study how the sectoral composition of economic growth and initial conditions interact to influence how much growth reduced consumption poverty the elasticities of measured poverty to farm yields and development spending did not differ significantly across states but the elasticities of poverty to urban and rural non farm output varied appreciably and the differences were quantitatively important to the overall rate of poverty reduction states with higher elasticities did not experience higher rates of non farm growth the non farm growth process was more pro poor in states with initially higher literacy higher farm productivity higher rural living standards relative to urban areas lower landlessness and lower infant mortality

the political economy of agricultural protection east asia in an international perspective kym anderson and yujiro hayami allen and unwin australia japan research centre australian national university london sydney boston 185 pp

finance and inequality the case of india although theory emphasizes the role of financial market frictions in explaining income inequality there is little empirical research exploring how financial development and financial sector reforms influence the evolution of income inequality this article examines how finance impacts income inequality in india using annual time series data for over half a century the results indicate that while financial development helps reduce income inequality financial liberalization seems to exacerbate it the results are robust to the use of different measures for financial development and financial liberalization although the relationship between financial development and economic growth has been extensively studied in the literature see for example king and levine 1993 demetriades and hussein 1996 arestis and demetriades 1997 levine loayza and beck 2000 bell and rousseau 2001 ang and mckibbin 2007 little is known about how finance impacts income inequality the importance of the finance inequality relationship has recently been highlighted in an insightful survey article by claessens and perotti 2007 they indicate that while financial development can help reduce income inequality financial liberalization captured by established interests may do the opposite the theoretical predictions of the effects of finance on income inequality are controversial rajan and zingales 2003b argue that improvements in the formal financial sector primarily benefit the rich greenwood and jovanovic 1990 predict a nonlinear relationship between financial development and income inequality where it is hypothesized that income inequality first increases with the degree of sophistication in the financial systems then stabilizes and eventually declines others propose that the presence of financial market imperfections deters the poor from borrowing adequately to invest in human and physical capital implying that financial development helps alleviate income inequality banerjee and newman 1993 galor and zeira 1993 aghion and bolton 1997 mookherjee and ray 2003 2006 given that theories provide ambiguous predictions regarding the effects of finance on the distribution of income it is useful to approach the issue at the empirical level this could facilitate our understanding of the relationship between finance and inequality and help us to assess the validity of each theoretical model despite the important role of financial market frictions in the theories of poverty and income inequality researchers so far have not adequately addressed whether financial

economic growth a panacea for child labor summary in this paper we test whether economic growth decreases child labor by bringing together data from the national sample survey of india and state level macrodata to estimate a bivariate probit model of schooling and labor our results lead us to conclude that contrary to popular wisdom growth actually increases rather than decreases child labor because it increases the demand for child workers the level of state ndp village wages and household incomes are seen as the conduits through which growth influences the supply side of the child labor market

the length of the infant industry period evidence from the engineering industry in south korea abstract in the literature on industrialization very little is known about the length of the infant industry period this paper argues that the paucity of knowledge in this area is a serious weakness evidence from perhaps the most successful country of the past 20 years south korea suggests that the learning time in the engineering industry is much longer than anticipated two decades does not seem to be unusual it is also argued that due to both the speed of technical change and the globalization of industries the learning time has been extended in the past decades tentative implications are drawn for industrialization models and for industrial policy

the impact of changes in human fertility on poverty household survey data for developing and transitional economies are used to estimate the effect of fertility crude birth rate net of infant deaths on private consumption poverty cross national regressions indicate that higher fertility increases poverty both by retarding economic growth and by skewing distribution against the poor our median country in 1980 had dollar a day poverty incidence of 18 9 per cent had it reduced its fertility by four per 1 000 throughout the 1980s the sample median fall it is estimated that incidence would have been reduced to 13 9 per cent the growth and distribution effects being roughly equally responsible for this reduction

output prices and the distribution of consumption in rural india this article analyzes the relation among agricultural output inflation and the distribution of consumption in rural india using both the singh maddala and dagum families to model the entire distribution parametrically employing a benchmark case in which growth is distributionally neutral and idiosyncratic shocks are completely smoothed and using a gmm estimator to deal with potential simultaneity between output and consumption we conclude that i growth was not distributionally neutral ii good harvests relative to trend yielded improvements according to first order stochastic dominance iii slow growth before 1980 went with decreasing inequality iv accelerated growth thereafter tended to increase inequality though yielding improvements according to first order stochastic dominance v consumption smoothing was incomplete

national innovation systems and the intermediary role of industry associations in building institutional capacities for innovation in developing countries a critical review of the literature abstract developed over the past three decades the national innovation system concept nis has been widely used by both scholars and policy makers to explain how interactions between a set of distinct nationally bounded institutions supports and facilitates technological change and the emergence and diffusion of new innovations this concept provides a framework by which developing countries can adopt for purposes of catching up initially conceived on structures and interactions identified in economically advanced countries the application of the nis concept to developing countries has been gradual and has coincided in the nis literature with a move away from overly macro interpretations to an emphasis on micro level interactions and processes with much of this work questioning the nation state as the most appropriate level of analysis as well as the emergence of certain intermediary actors thought to facilitate knowledge exchange between actors and institutions this paper reviews the nis literature chronologically showing how this shift in emphasis has diminished somewhat the importance of both institutions particularly governments and the political processes of institutional capacity building in doing so the paper suggests that more recent literature on intermediaries such as industry associations may offer valuable insights to how institutional capacity building occurs and how it might be directed particularly in the context of developing countries where governance capacities are often lacking contributing to less effective innovation systems stagnant economies and unequal development

estimating the relative benefits of agricultural growth on the distribution of expenditures does the sectoral composition of aggregate economic growth affect poverty we ask whether agricultural growth in developing countries increases the expenditures of poorer households more than growth in other sectors while some reduced form analyses have tackled this question using either country level time series data regional panel data for one country or cross sectional country data this paper is unusual in using panel data for many countries we improve on much of the existing literature by devising an instrumental variables strategy to correct for the endogeneity of sectoral gdp growth involving averaging over sectoral income growth rates for neighboring countries our principal finding from our instrumental variable estimator is that the estimated elasticities associated with growth in agricultural income are significantly greater than for non agricultural income for all but the extreme top and bottom deciles in the middle range of the income distribution the effect of a given gdp growth due to agriculture is 3 4 times larger than if it was due to non agricultural activities having established that on average growth in gdp originating in agriculture is more beneficial for poorer deciles we finally explore whether this is a pattern which holds across different groupings of countries a second important finding is that there is heterogeneity across some groupings most particularly we find that it is the poorest people in the poorest countries for whom agricultural income growth is the most beneficial

rural bias in the east and south east asian rice economy indonesia in comparative perspective this study analyses the rise in protection of rice farmers in east and south east asia since 1960 a statistical model of price formation is tested for japan south korea malaysia the philippines and indonesia on average about 90 per cent of variation in rice prices in these five countries relative to the world price can be an attributed to efforts at price stabilisation rather than farmer protection or discrimination in earlier periods the shift from urban bias to rural bias is more a result of price stabilisation and declining real rice prices in world markets than basic shifts in political economy

inflation and the poor using polling data for 31 869 households in 38 countries and allowing for country effects the authors show that the poor are more likely than the rich to mention inflation as a top national concern this result survives several robustness checks also direct measures of improvements in well being for the poor the change in their share of national income the percentage decline in poverty and the percentage change in the real minimum wage are negatively correlated with inflation in pooled cross country samples high inflation tends to lower the share of the bottom quintile and the real minimum wage and tends to increase poverty

a century long perspective on agricultural development this article strategically surveys the past century s literature on agricultural development we organize the discussion around three grand themes that reveal the richness of agricultural development as an intellectual endeavor first we explore the role of agriculture in the broader development process from a macroeconomic and political economy perspective we then examine the role of technological and institutional change in successful agricultural development finally the focus turns to a microeconomic perspective on agricultural household decision making and the problems of imperfect and missing markets asymmetric information and transactions costs that lead to widespread apparent inefficiency and disequilibrium

what has luck got to do with it a regional analysis of poverty and agricultural growth in rural india this article explores the role of agro ecological factors associated with agricultural growth and poverty outcomes in india using a new operationalisation of agro ecological factors and incorporating within state variations in poverty and other variables we show that agricultural growth and poverty reduction appear to depend on underlying agro ecological conditions which are favourable to the spread of irrigation and hence agricultural development which in turn in associated with poverty reduction promotion of agriculture in less favoured areas in unlikely to have similar effects on agriculture in less favoured areas is unlikely to have similar effects on agricultural growth even if the effects of agricultural growth on poverty remain similar unless conditions for irrigation are favourable or rainfall is sufficiently abundant and reliable this suggests that considerable caution may be needed in drawing policy conclusions from empirical analysis by state alone and without regard to their underlying f

why have some indian states done better than others at reducing rural poverty the unevenness of the rise in rural living standards in the various states of india since the 1950s allowed the authors to study the causes of poverty they modeled the evolution of average consumption and various poverty measures using pooled state level data for 1957 91 they found that poverty was reduced by higher agricultural yields above trend growth in nonfarm output and lower inflation rates but these factors only partly explain relative success and failure in reducing poverty initial conditions also mattered states that started the period with better infrastructure and human resources with more intense irrigation greater literacy and lower infant mortality rates had significantly greater long term rates of consumption growth and poverty reduction by and large the same variables that promoted growth in average consumption also helped reduce poverty the effects on poverty measures were partly redistributive in nature after controlling for inflation the authors found that some of the factors that helped reduce absolute poverty also improved distribution and none of the factors that reduced absolute poverty had adverse impacts on distribution in other words there was no sign of tradeoffs between growth and pro poor distribution

relationships between household consumption and inequality in the indian states current evidence on the relationships between growth and inequality is predominantly based on cross country data sets or panel data sets covering a small number of time periods but these relationships being fundamentally dynamic in nature need to be considered over a much longer time horizon available state level results from the national sample surveys in india provide such an opportunity this article uses this unique data set to examine the interrelationships between average consumption and inequality within states and test for causality distributional patterns of growth vary but there is strong evidence in many instances of a strong negative effect of initial inequality on subsequent growth

divergence in india income differentials at the state level 1970 97 abstract we examine india s regional disparities in economic performance between 1970 97 our preliminary analysis shows that in absolute terms initially poorer states grew at slower rates than initially wealthier ones and that there is also evidence of increasing dispersion of income levels across the states our econometric analysis investigates the possibility of club convergence and conditional convergence although we do not find evidence of the former we can suggest some of the factors associated in the latter our research also indicates that the onset of economic policy reform in 1991 significantly intensified growth differentials between the states

agricultural incentives in developing countries measuring the effect of sectoral and economywide policies the impact of sector specific direct and economywide indirect policies on agricultural incentives for 18 developing countries for the period 1975 84 are estimated the direct effect is measured by the proportional difference between the producer price and the border price adjusting for distribution storage transport and other marketing costs the indirect effect has two components 1 the impact of the unsustainable portion of the current account deficit and of industrial protection policies on the real exchange rate and thus on the price of agricultural commodities relative to nonagricultural nontradables and 2 the impact of industrial protection policies on the relative price of agricultural commodities to that of nonagricultural tradable goods the authors found that a in almost all cases the direct effect is equivalent to a tax on exportable goods and to a subsidy for importables b the indirect effect also taxes agriculture and dominates the direct effect and c the direct policies for both importables and exportables stabilize domestic producer prices

growth growth accelerations and the poor lessons from indonesia we study the impact of growth and growth accelerations on poverty and inequality in indonesia using a new panel dataset covering 26 provinces over the period 1977 132010 this dataset allows us to distinguish between mining and non mining in indonesia growth in non mining significantly reduces poverty and inequality in contrast overall growth and growth in mining appears to have no effect on the same growth acceleration in non mining reduces poverty and inequality whereas the same in mining increases poverty we expect that the degree of forward and backward linkages of mining and non mining sectors explains the asymmetric result

the shifting natures of development growth crisis and recovery in indonesia s forests summary this examination of indonesia argues the asian crisis marked a shift in the dominant discourse and practices of development from authoritarian state developmentalism to neoliberal globalism exacerbating the environmental destructiveness of development the analysis considers the ecological contradictions first of the miracle in indonesia and second of the imf led structural adjustment in indonesia this program included unusual forestry sector reform conditions favored by nongovernmental critics of suharto however the paper concludes that structural adjustment is part of the broader ascent of global neoliberalism a model that pays scant attention to the increasing social and environmental costs of reliance on resource based export growth

industrial policy and the wto this paper reviews the objectives and instruments of industrial policy in a changing global context and multilateral rules and discipline the authors provide an analytical review of the objective and justification for industrial policy pursued by countries the importance of having an analytical framework is that it becomes the benchmark against which objectives instruments and outcomes can be measured the use of different instruments for industrial policy is reviewed the paper assesses whether changes have been due to compliance to multilateral and or regional commitments and whether due to unilateral reform efforts the authors focus on the role of industrial policy in the post uruguay round era with a view to the next round of wto negotiations the research examines both the theoretical and applied aspects of industrial policy before surveying the extent to which existing wto rules affect a member s ability to pursue industrial policy objectives the possibilities and implications of revising rules that affect the use of industrial policy instruments in the next round are examined the paper concludes with a final section to review the implications for developing economies

how access to irrigation influences poverty and livelihoods a case study from sri lanka abstractthis study combines a livelihoods approach with a regression approach to quantify the effectiveness of irrigation infrastructure investment on improving people s livelihood strategies using a unique dataset based on households in southern sri lanka and a natural experimental setting we estimate from a two stage income regression model to show that irrigation access has a positive effect on income through livelihood choices we also show through qualitative approaches that factors not linked to irrigation infrastructure may contribute to changes in livelihood portfolios in addition we highlight factors that result in certain households being unable to move out of poverty despite access to the improved irrigation infrastructure

on endogenizing long run growth this assessment of recent theoretical work on endogenous growth identifies three different engines of long run growth i the asymptotic average product of capital is positive ii labor productivity increases as an external effect of capital accumulation iii there are feedback effects on the cost of accumulating knowledge or innovating a general model encompassing all three is considered and then used to review different proposed determinants of long run growth rates the contribution of endogenous growth theory has been to create a framework in which to explain why economic institutions and policies can have long run effects on growth rates

monetary policy vagabonding liquidity and bursting bubbles in new and emerging markets an overinvestment view credit booms have globally fuelled hikes in stock raw material and real estate markets which have culminated in the recent us subprime market crisis we explain the global asset market booms since the mid 1980s based on the overinvestment theories of hayek wicksell and schumpeter we argue that ample liquidity supply originating in the large industrialized countries has contributed to overinvestment cycles in japan east asia new markets in the industrial countries and many emerging market economies expansionary monetary policies in response to the burst of bubbles are argued to have contributed to vagabonding bubbles around the globe

does foreign direct investment lead to productivity spillovers firm level evidence from indonesia this paper examines whether spillovers from foreign direct investment fdi make any contribution to productivity growth in the indonesian chemical and pharmaceutical firms using plant level panel data the spillover effects from fdi are analyzed using a stochastic frontier approach and productivity growth is decomposed using a generalized malmquist output oriented index the results show positive productivity spillovers from fdi higher competition is associated with larger spillovers and domestic firms with r d gain more spillover benefits compared to those without r d fdi spillovers are found to be positive and significant for technological progress and positive but not significant for technical and scale efficiency change

a vicious cycle of manias crashes and asymmetric policy responses an overinvestment view the business cycles theories of wicksell 1898 schumpeter 1912 mises 1912 hayek 1929 1935 and minsky 1986 1992 explain business cycles by distorted prices on capital markets buoyant credit expansion and overinvestment the exuberance during the boom endogenously causes the subsequent slump while these theories put the emphasis on explaining the emergence of the cycle this paper focuses on the macroeconomic policy responses during and after the crisis when panic tightens credit supply the paper allows an assessment of the long term consequences of an asymmetric monetary and fiscal policy response to financial crisis

has democracy slowed growth in asia summary has democracy slowed growth in asia while there are a number of reasons to suggest that it has no one has tested this hypothesis hypotheses linking asia s democracies and autocracies to growth are tested in a within panel regression framework that controls for country fixed effects global time fixed effects the other major variables affecting growth and for endogeneity between the right hand side regressors the democracy slows growth hypothesis is tested against the toughest counterfactual the bureaucratically capable authoritarian regimes of east asia s developmentally minded governments findings reject the democracy slows growth hypothesis and show that democracy causes growth and investment to rise

quantitative easing and unconventional monetary policy an introduction this article assesses the impact of quantitative easing and other unconventional monetary policies followed by central banks in the wake of the financial crisis that began in 2007 we consider the implications of theoretical models for the effectiveness of asset purchases and look at the evidence from a range of empirical studies we also provide an overview of the contributions of the other articles in this feature

agricultural technology productivity and poverty in madagascar summary this paper uses a unique spatially explicit dataset to study the link between agricultural performance and rural poverty in madagascar we show that controlling for geographical and physical characteristics communes that have higher rates of adoption of improved agricultural technologies and consequently higher crop yields enjoy lower food prices higher real wages for unskilled workers and better welfare indicators the empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural madagascar