on unemployment inflow and outflow in urban china wu z and yao s 2006 on unemployment inflow and outflow in urban china regional studies 40 811 822 as the largest transitional economy in the world china s labour market has a number of characteristics distinctively different from that of the developed economies such as the uk or the usa this paper aims to identify the determinants of unemployment inflow and outflow in urban china with empirical data for 29 provinces over 1989 99 it is found that rural urban migration ownership diversification industrial structural change international trade international competitiveness product wages and age structure are key determinants of unemployment flows the results suggest that due to market imperfections unemployment inflow and outflow are two asymmetric processes with respect to the concerned predetermined variables wu z et yao s 2006 sur l afflux et la fuite du chomage dans la chine urbaine regional studies 40 811 822 en tant que l economie en voie de transition la plus grande du monde

democracy volatility and economic development growth stability is an important objective because development requires sustained increases in income because volatility is costly for the poor and because volatility deters growth we study the determinants of average growth and its volatility as a two equation system and find that higher levels of democracy and diversification lower volatility whereas volatility itself reduces growth muslim countries instrument for democracy and measures of diversification identify volatility in contrast to the lack of consensus on the democracy growth relationship the democracy stability link is robust rather than focus on growth this paper forges an alternative link between democracy and development through the volatility channel

rights and the private pareto principle this paper begins with a review of gibbard s paradox for rights and gibbard s proposal for avoiding the paradox this is followed by a theorem that identifies the pairs where rights are directly relevant at some profile when gibbard s proposal is adopted as the next step the paper reviews sen s paradox and the private pareto principle which has recently been proposed by hammond as a replacement for the traditional pareto principle with the argument that this will make rights and paretian comparisons compatible the remainder of the paper is devoted to an analysis of the nature of the social pairwise comparisons that the private pareto principle recommends for the pairs of alternatives where rights are directly relevant at some profile this analysis reveals that on these pairs the private pareto principle makes two important concessions to rights

aid unpredictability and economic growth summary in this paper we examine the influence of unpredictable aid on a recipient s economic growth if aid amounts vary by year and the changes are unpredictable we expect that this unpredictability decreases aid s growth enhancing effect this naturally raises the questions how large is the influence of aid unpredictability on a recipient s economic growth does unpredictability significantly damage aid s growth enhancing effect our research shows that the impact is significant in a typical case one fifth of aid is wasted due to unpredictability further it is possible that in some cases the aid may be wasted by as much as one third

the income lever and the allocation of aid the paper develops a concept and a measure of the monetary capacity of a country to reduce its own poverty and shows how these tools can be used to guide budget allocations or the allocation of aid the authors call this concept the income lever making use of tax and distributive theory the paper shows how different redistributive criteria correspond to the different normative criteria of the income lever it then constructs various income lever indexes based on these criteria and uses such indexes to rank countries according to their own capacity to reduce poverty as shown in the empirical application this methodology can provide an equitable tool to rank countries or regions when it comes to budget or aid allocations whether it is the allocation of social funds within the european union north north transfers or the allocation of aid from rich to poor countries north south transfers the findings indicate that the allocation of social funds in the european union follows closely the rank that results from the income lever indexes proposed while the allocation of aid to sub saharan african countries does not

consequences of aid volatility for macroeconomic management and aid effectiveness we conclude that individual aid sector volatility matters as well as total aid volatility easily the most important contributor to total volatility is debt aid the most volatile aid sectors per se include debt industry and humanitarian and the least include education and health in several sectors volatility appears to have peaked around 2006 within individual countries sector volatility is often corrected for in the following period there are also sometimes knock on effects on other sectors finally we examine the impact of sector aid and aid volatility on school completion rates death rates internet usage and mobile phone subscriptions

the welfare cost of business cycles revisited finite lives and cyclical variation in idiosyncratic risk abstract this paper investigates the welfare costs of business cycles in a heterogeneous agent overlapping generations economy which is distinguished by idiosyncratic labor market risk aggregate variation arises both in terms of aggregate productivity shocks and countercyclical variation in the volatility of idiosyncratic shocks based on both aggregate data and microeconomic data from the panel study on income dynamics we find the welfare benefits of eliminating aggregate variation to be large an order of magnitude larger than those originally documented by lucas 1987 the key difference is countercyclical variation in idiosycratic risk which both amplifies the welfare cost of aggregate productivity shocks and imposes a cost of its own the magnitude of these effects increases non linearly in risk aversion our results therefore are consistent with the increasingly popular notion that distributional effects are an important aspect of understanding the welfare cost of business cycles

economic growth income inequality and poverty in china under economic reforms china s gross domestic product gdp more than quadrupled between 1978 and 1996 under economic reforms per capita disposable incomes more than tripled in the cities and almost quadrupled in the rural areas however rapid economic growth brought about large income inequality which slowed down poverty reduction in 1995 there were still 70 170 million people living in poverty this article aims to assess the relationship between economic growth income inequality and poverty using both secondary and household survey data the main findings are 1 urban rural divide and spatial inequality are two major factors accounting for overall income inequality 2 non wage and non farm incomes are more unequally distributed than wage and farm incomes and 3 the incidence of poverty is very sensitive to the changes in per capita income and inequality

why there should be no political foreign aid curse summary this paper considers the causality underlying the so called political aid curse which proposes that foreign aid like oil should hinder democracy using a theoretical model which identifies repression and appeasement as the primary alternatives to democratization it argues that aid revenue should not produce a political curse because it is less fungible more conditional and less constant than state oil revenue making it difficult for recipient governments to use their aid to fund either repression or appeasement using several different measures associated with repression and appeasement the statistical results show that aid cannot be associated with any of these dependent variables

the impact of aid and public investment volatility on economic growth in sub saharan africa summary this study investigates the effects of aid inflows and the volatility of public investment on economic growth in 26 sub saharan african countries over the period from 1992 to 2011 three volatility variables comprising aid government revenue and public investment are incorporated into an aid growth model to test for their effect on economic growth using the generalized method of moments gmm technique and averaged data for five four year sub periods we show that although foreign aid has a positive impact on growth once potential endogeneity has been accounted for aid effectiveness may have been eroded by volatility in public investment

aid and taxation in ethiopia abstractthe relation between aid and taxation is largely contested in the literature on the one hand aid may act as a substitute for tax revenue and thus have a crowding out effect it can also have a detrimental effect on domestic tax institutions on the other hand it can promote and support tax mobilisation through policy advice technical assistance and conditionality in addition to more indirect channels the case of ethiopia supports the existence of a positive relation between aid and tax which occurs mainly through policy advice and technical assistance rather than conditionality this finding is grounded in both quantitative and qualitative analysis

the african political business cycle varieties of experience abstractwe seek to understand both the incidence and the impact of the african political business cycle in the light of a literature which has argued that with major extensions of democracy since the 1990s the cycle has both become more intense and has made african political systems more fragile with the help of country case studies we argue first that the african political business cycle is not homogeneous and occurs relatively infrequently in so called dominant party systems where a pre election stimulus confers little political advantage secondly we show that in those countries where a political cycle does occur it does not necessarily cause institutional damage whether it does or not depends not so much on whether there is an electoral cycle as on whether this cycle calms or exacerbates fears of an unjust allocation of resources in other words the composition of the pre election stimulus in terms of its allocation between different categories of voter is as important as its size

terms of trade uncertainty and economic growth abstract this paper examines a stochastic endogenous growth model in which terms of trade uncertainty affects savings and growth the model explains the well known positive link between growth and the mean rate of change of terms of trade and predicts also that terms of trade variability affects growth increased terms of trade variability results in faster or slower growth depending on the degree of risk aversion but in either case it reduces social welfare these growth effects imply that welfare costs of macroeconomic uncertainty are much larger than first thought cross country panel regressions provide strong support for the model s key predictions

aid policy and the macroeconomic management of aid summary this is an introduction to the unu wider special issue of world development on aid policy and the macroeconomic management of aid we provide an overview of the 10 studies grouping them under three sub themes the aid growth relationship the supply side of aid including its level volatility and coordination of donors and the macroeconomic framework around aid the studies in the special issue demonstrate the centrality of research methodology the importance of disaggregation and the need to account for country specific situations and problems this introduction concludes that the sometimes over heated debate on aid needs redirecting toward more rigorous analysis in which the advantages and disadvantages of using aid for development can be evaluated in a calmer manner

counterpart funding requirements and the foreign aid procyclicality puzzle official development assistance is a key source of external finance in many developing countries a striking feature of these aid flows is their positive correlation with business cycles in recipient countries this pattern is puzzling in that it reinforces recipients already strong and costly macroeconomic fluctuations we propose a simple model of investment financing and aid provision under asymmetric information that rationalizes such a pattern we assume that donor agencies and recipient governments value projects differently and that donors know less than recipients do about project characteristics we show that donors can make a recipient government identify high return projects by requiring that the latter contribute some of its own funds to projects providing these matching grants or counterpart funds is less affordable for recipients during economic downturns which leads to aid procyclicality our model produces aid contracts consistent with those used by aid agencies rationalizes observed aid patterns and yields a rich set of testable empirical predictions

fiscal composition and aid effectiveness a political economy model summary in the long run tax effort we argue determines the effectiveness of aid and this relationship operates simultaneously with the negative link in the opposite direction observed by brautigam and knack 2004 and others tax effort and the ability of the state to diversify its taxation structure we find are significantly linked to growth and poverty indicators the key message for policy is that a broadening of the tax structure in low income countries is crucial in order to enable those countries to escape from the weak state low tax trap and to make aid effective

budget deficits and social protection cyclical government expenditure in the oecd countercyclical government spending offers social protection to the vulnerable when economies move into recession this paper questions the extent to which governments are able to spend countercyclically and the extent to which social expenditures are likely to be countercyclical an analysis of public spending in oecd countries 1980 2005 suggests countercyclical social protection is constrained by the limits to public borrowing and the degree of political polarization

trade shocks and macroeconomic fluctuations in africa this paper examines the role of external shocks in explaining macroeconomic fluctuations in african countries we construct a quantitative stochastic dynamic multi sector equilibrium model of a small open economy calibrated to represent a typical african economy in our framework external shocks consist of trade shocks modeled as fluctuations in the prices of exported primary commodities imported capital goods and intermediate inputs and a financial shock modeled as fluctuations in the world real interest rate our results indicate that while trade shocks account for roughly 45 percent of economic fluctuations in aggregate output financial shocks play only a minor role we also find that adverse trade shocks induce prolonged recessions

how big are potential welfare gains from international risksharing abstract there is extensive evidence that risksharing across countries is far from perfect some have attributed this to small benefits from risksharing gains from riskpooling that have been reported range from negligible to enormous this paper documents to what extent the results are sensitive to the parameterization of preferences the stochastic process of the endowment and its measurement we find that gains from risksharing are quite sizable for realistic assumptions about the underlying factors for oecd countries they are equivalent to a permanent increase in tradables consumption in the range of 1 1 to 3 5 for a 50 year horizon and 2 5 to 7 4 for a 100 year horizon

the effectiveness of aid on savings and investment in sub saharan africa do volatility and institutional quality matter abstractthe effectiveness of aid is somewhat subject to its volatility this study investigates the impact of aid volatility especially on savings and investment with a particular focus on the role of institutional quality in 45 sub saharan african ssa countries over the period from 1990 to 2013 we used the generalized method of moments gmm technique combined with a measure of volatility namely an averaged data method involving six 4 year sub periods our results suggest that while aid is positively associated with savings and investment its volatility is harmful to savings and investment however when higher quality institutions exist the volatility of aid has a less negative impact on savings and investment the policy implications are diverse first donors and ssa aid dependent countries need to take into account the diversity of shocks to which aid can respond in mitigating its unpredictability secondly ssa countries should be encouraged to establish the conditions for better quality inst

evaluating risky consumption paths the role of intertemporal substitutability abstract in dynamic stochastic welfare comparisons a failure clearly to distinguish between risk aversion and intertemporal substitutability can result in misleading assessments of the impact of risk aversion on the welfare costs of consumption risk changes the problem arises in any setting in which uncertainty is propagated over time notably but not exclusively in economies with stochastic consumption trends regardless of the preference setup adopted an increase in risk aversion amplifies the per period costs of risks the weights consumers use to cumulate the per period costs of risks with persistent effects should however depend on intertemporal substitutability as well as on risk aversion under time separable expected utility preferences an increase in the period utility function s curvature therefore alters the welfare effect of risk for reasons that are in part unrelated to risk aversion to illustrate these points i reconsider lucas s estimate of the cost of consumption instability for the postwar united states

spectral welfare cost functions if preferences are not time separable economic agents care not only about the magnitude of fluctuations in consumption but also about the persistence and other temporal characteristics of those fluctuations this paper extends and develops the theory of spectral utility functions which measure utility frequency by frequency to illustrate the interaction between consumption volatility and time non separable preferences to highlight the economic implications of the interaction spectral welfare cost functions are developed to provide a quantitative measure of the importance to economic agents of the temporal delivery of consumption volatility

the dynamic implications of foreign aid and its variability abstract the paper examines the effects of aid and its volatility on consumption investment and the structure of production in the context of an intertemporal two sector general equilibrium model calibrated using data for aid dependent countries in africa a permanent flow of aid mainly finances consumption rather than investment consistent with the historical failure of aid inflows to translate into sustained growth large aid flows are associated with higher real exchange rates and smaller tradable sectors because aid is a substitute for tradable consumption aid volatility results in substantial welfare losses providing a motivation for recent discussions of aid architecture stressing the need for greater predictability of aid these results are also consistent with evidence from cross country regressions of manufactured exports presented later in the paper

economic reforms and regional segmentation in rural china yao s and l iu j 1998 economic reforms and regional segmentation in rural china reg studies 32 735 746 strong growth in agriculture industries and services in rural china over the last 18 years has been accompanied by increased spatial income inequality this paper investigates how reforms and rapid economic growth have resulted in such a regional divide it concludes that government policy and uneven development of non farm activities are major factors to blame pointing out that rather than allowing massive migration creating jobs for people is a better long term strategy to reduce regional inequality yao s et l iu j 1998 les reformes economiques et la segmentation regionale dans la chine rurale reg studies 32 735 746 au cours des dix huit dernieres annees la croissance forte de l agriculture des industries et des services dans la chine rurale est allee de pair avec des ecarts de revenu geographiques de plus en plus importants cet article examine comment les reformes et l essor eco

on measuring the welfare cost of business cycles lucas 1987 argues that the gain from eliminating aggregate fluctuations is trivial following lucas a number of researchers have altered assumptions on preferences and found that the gain from eliminating business cycles are potentially very large however in these exercises little discipline is placed on preference parameters this paper estimates the welfare cost of business cycles allowing for potential time non separabilities in preferences where discipline is placed on the choice of preference parameters by requiring that the preferences be consistent with observed fluctuations in a model of business cycles that is a theoretical real business cycle world is constructed and the representative agent is then placed in this world the agent responds optimally to exogenous shocks given the frictions in the economy the agent s preference parameters along with other structural parameters are estimated using a bayesian procedure involving markov chain monte carlo methods two main results emerge from the paper first the form for the time non separability estimated in this paper is very different than the forms suggested and used elsewhere in the literature second the welfare cost of business cycles is close to lucas s estimate

darlings and orphans interactions across donors in international aid we examine how bilateral aid flows of an individual donor to a recipient depend on aid flows from all other bilateral and multilateral donors to that recipient we thereby assess to what extent issues including donor coordination free riding selectivity specialization and common donor interests drive bilateral aid allocations we find that others bilateral flows lead to a significant increase in aid flows from a particular donor but primarily within a given year the effects are particularly pronounced for large donors and so called darling recipients overall the results suggest that herding is a dominant feature of aid inter relationships this article is protected by copyright all rights reserved

macroeconomic fluctuations in developing countries some stylized facts this paper documents the main stylized features of macroeconomic fluctuations and business cycle regularities for a group of 12 developing countries cross correlations between domestic industrial output and a large group of macroeconomic time series including government revenue and expenditure wages inflation money velocity private sector credit international trade and exchange rates are presented the effects of industrial country economic conditions on output fluctuations in these countries are also analyzed the robustness of the results is examined using three detrending procedures a modified hodrick prescott filter the baxter king band pass filter and a nonparametric technique overall the results show some similarities between macroeconomic fluctuations in developing and industrial countries e g procyclical real wages and counter cyclical variation in government expenditure but also some important differences in business cycle characteristics e g countercyclical variation in the velocity of monetary aggregates

the terms of trade the real exchange rate and economic fluctuations this paper examines the relationship between terms of trade and business cycles using a three sector intertemporal equilibrium model and a large multicountry database results show that terms of trade shocks account for nearly one half of actual gdp variability the model explains weak correlations between net exports and terms of trade the harberger laursen and metzler effect and produces large and weakly correlated deviations from purchasing power parity and real interest rate parity terms of trade shocks cause real appreciations and positive interest differentials although productivity shocks have opposite effects the puzzle that welfare gains of international asset trading are negligible is left unresolved copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

volatility of development aid from the frying pan into the fire summary the paper building on the authors previous analysis examines the relative volatility of aid flows into developing countries and their domestic revenue using new data and three alternative measures of aid instability relative volatility vis a vis fiscal revenue unpredictability of aid disbursement relative to commitments and failure of aid to smooth fluctuations in aggregate income it finds that the volatility of aid flows is still much greater than that of domestic revenue and that this difference is not decreasing especially in very poor aid dependent countries this high volatility of inflows makes the macroeconomy hard to manage further the influence of aid has been procyclical and not countercyclical aid has failed to act either as a stabilizing force or as an insurance mechanism we argue that to counter these unwelcome trends donors need to be able to respond more speedily and effectively to large adverse shocks and their conditionalities need to become more flexible possibilities explicitly discussed elsewhere in this special section

the short run macroeconomic impact of foreign aid to small states an agnostic time series analysis abstract this paper investigates the short run macroeconomic impact of aid in small developing countries sdcs by using a vector auto regression var model to study the impact of aid on net import absorption and domestic demand spending we focus on average country effects within two country sub groups and find substantial differences between aid dependent sdcs and other sdcs that are more dependent on natural resources tourism or financial services in aid dependent sdcs aid absorption more or less equals spending although only half of the aid flow is absorbed and spent in the non aid dependent group aid does not seem to be absorbed or spent in any systematic fashion

aid econometrics lessons from a stochastic growth model abstract this paper evaluates the standard empirical methods employed in the study of foreign aid when the data generating process is a calibrated stochastic growth model in which aid recipients make optimal investment and consumption decisions when recipients receive a stochastic flow of aid and wish to smooth consumption standard methods fail to distinguish between the response to transient and permanent aid shocks and hence yield misleading results concerning the object of interest to policy makers the long run impact of aid

growth trends cyclical fluctuations and welfare with non expected utility preferences abstract using standard time separable discounted expected utility eu models lucas models of business cycles 1987 and others argue that growth trends have a crucial and cyclical fluctuations a trivial effect on individuals utility these conclusions are drastically altered if instead non eu preferences are assumed

how to take into account vulnerability in aid allocation criteria and lack of human capital as well improving the performance based allocation summary this paper considers why and how the performance based allocation pba used in multilateral development banks and in particular at ida could be improved by taking the structural handicaps of eligible countries into account the pba relies on a debatable definition of performance it does not meet the equity concern raised by the existence of structural handicaps to growth it neglects the lessons of the aid effectiveness literature finally it suffers from some opacity we show how it is possible to increase the share of specific groups of countries such as sub saharan africa or post conflict states in a transparent manner

the fiscal effects of aid in ethiopia evidence from cvar applications abstractthis article explores the fiscal effects of aid in ethiopia using the cointegrated vector auto regressive cvar methodology to model complex long run and short run dynamics we use national data for 1961 2010 including a measure of aid capturing flows through the budget as measured by the recipient the data suggests three main conclusions on the long run equilibrium first government long term spending plans are based on domestic sources treating aid as an additional source of revenue second both grants and loans are positively related to tax revenue third aid is positively associated with spending with a particularly strong relation between capital expenditure and grants overall our results show that aid in ethiopia had beneficial fiscal effects

reforming aid toward more predictable performance based financing for development summary we explore ways of mitigating the costs of aid volatility in particular we show that these can be dramatically reduced by a flexible pre commitment rule which adjusts flows in the case of drastic improvements or deteriorations in country performance ratings such a system can further reduce variability with only minor efficiency costs our simulations suggest that a buffer stock of the order of 50 100 of annual aid financed spending might enable a corrective feedback loop with the necessary buffer depending on the size and variability of aid flows our proposed mechanism is similar in principle to natural resource funds which have worked well in some countries but not in others we briefly discuss some issues in design and implementation

business cycle fluctuations large macroeconomic shocks and development aid abstract we examine the cyclical properties of development aid using bilateral data for 22 donors and 113 recipients during 1970 2005 we find that bilateral aid flows are on average procyclical with respect to the business cycle in both donor and recipient countries while aid outlays contract sharply during severe downturns in donor countries they rise steeply when aid receiving countries experience large adverse shocks our findings suggest that development aid may play an important cushioning role in developing countries but only during times of severe macroeconomic stress our results are robust to alternate definitions of aid flows specifications and estimation techniques

cost of business cycles with indivisibilities and liquidity constraints it is almost universally agreed that individuals face incomplete insurance markets and cannot perfectly insure against the idiosyncratic risk in this paper simple general equilibrium models with incomplete insurance markets are examined in order to assess the impact of imperfect insurance on the magnitude of the welfare costs of business cycles two versions of incomplete insurance markets are considered and certain statistical properties of the equilibrium stochastic processes in these environments are compared with those of a perfect insurance economy

on the welfare cost of economic fluctuations in developing countries macroeconomic fluctuations are much stronger in developing countries than in the united states yet while a large literature debates the welfare cost of economic fluctuations in the united states it remains an open question how large that cost is in developing countries using several models we provide such a measure we find that the welfare cost of consumption volatility per se is far from trivial and averages a substantial multiple of the corresponding u s estimate moreover in many poor countries the welfare gain from eliminating volatility may in fact exceed the welfare gain from an additional percentage point of growth forever

aid instability as a measure of uncertainty and the positive impact of aid on growth this article contributes to the literature on aid and economic growth we posit that uncertainty measured as the instability of aid receipts will influence the relationship between aid and investment how recipient governments respond to aid and will capture the fact that some countries are especially vulnerable to shocks when we account for uncertainty which is negative and significant we find that aid has a significant positive effect on growth largely due to its effect on the volume of investment the finding that uncertainty of aid receipts reduces the effectiveness of aid is robust when the regression is estimated for the sub sample of african countries these findings hold although the effectiveness of aid appears weaker than for the full sample

aid proliferation and economic growth a cross country analysis summary we examine whether aid proliferation hinders economic growth by applying the standard aid growth regression to roodman s 2007 dataset with proper correction for possible biases arising from omitted variable and endogeneity problems specifically we include a donor concentration index to capture a low degree of donor proliferation and its interaction terms with aid variables as additional independent variables our empirical results show that the effect of aid concentration on economic growth is positive and favors the hypothesis that aid proliferation has a negative effect on the economic growth of recipient countries especially in africa

the cost of business cycles and the stabilization value of unemployment insurance this paper o ers a new perspective on why labor market policies aimed at reducing the cost of business cycles may be warranted and how such policies can be designed in order to improve welfare to this end we develop a quantitative dynamic equilibrium model to illustrate how the contractual structure of the labor market may hide signi cant undiversi ed wage risk induced by aggregate uctuations the environment analyzed is such that the only imperfectly diversi ed risk workers bear is the risk of losing their job when the market for new contracts is depressed when we t the model to replicate the amount of wage variation estimated from micro data we obtain estimates of the potential value of stabilization policies that are substantially larger than those found in the literature we use this framework to examine several policy issues and in particular to show why state contingent unemployment insurance may dominate non contingent unemployment insurance schemes 2001 elsevier science b v all rights reserved jel classixcation e32 j41

cross country evidence on the link between volatility and growth this paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations in a sample of ninety two countries as well as a sample of oecd countries the authors find that countries with higher volatility have lower growth the addition of standard control variables strengthens the negative relationship the authors also find that government spending induced volatility is negatively associated with growth even after controlling for both time and country fixed effects copyright 1995 by american economic association

aid trade and migration how do bilateral flows interact this paper takes as its point of departure the european commission s position set out in 2005 which laid clear emphasis on aid and trade as tools for controlling immigration we attempt to subject this position to empirical investigation we exploit data on bilateral aid trade and migration flows between developed and developing countries for the period 2000 10 adopting an instrumental variable approach to address the endogeneity issue due to potential simultaneity bias our results establish that increasing aid and trade with developing countries is likely to fail to contain immigration at least in the short run the pattern of results is consistent with the hypothesis that promoting development in migrant sending countries or cooperating with such countries to control migration outflows is not sufficient to lessen immigration increasing visa restrictions and controls at borders is generally controversial still the results imply that policymakers cannot attain their short term immigration goals with the so called smart solutions of aid and trade

the effect of development aid unpredictability and migrants remittances on fiscal consolidation in developing countries summary we use panel data on 74 developing countries for the period 1980 2007 to examine the effects of aid unpredictability and migrants remittances on fiscal consolidation in these countries using two definitions of fiscal adjustment and a conditional logit model to perform our analysis evidence is shown that except for the case of low income countries especially gradual fiscal retrenchment remittances increase the likelihood of fiscal consolidation be the latter gradual or rapid surprisingly we observe that aid unpredictability does not affect the adoption of fiscal consolidation measures in all the groups considered

the paretian liberal paradox and ecological economics abstract two of the most basic considerations in collective choice are the pareto principle and some minimal protection of individual rights in his impossibility theorem sen 1970 shows that there is a potential inconsistency between preference sovereignty as expressed by the pareto condition and the protection of minimal rights a liberal or liberty condition the paretian liberal paradox plp and the extensive debate surrounding it prompts serious reconsideration of the traditional welfare economics approach the critique of welfarism made by the plp is of central importance for environmental issues given pervasive externalities missing markets uncertainty and potential irreversibilities making collective choice decisions on these issues may require using explicit non utility information and restricting individual preference sovereignty we explore the implications of the plp for long term environmental policy and the transdisciplinary field of ecological economics as a simple pedagogical device relying on sparse principles the plp stimulates an increased awareness of the potential conflict between preferences and rights recognition of the plp focuses attention on what counts as admissible information in collective choice rules for example consideration of the plp illuminates differences in the informational requirements of alternative sustainability concepts

is foreign aid a vanguard of foreign direct investment a gravity equation approach summary this paper investigates whether and how foreign aid facilitates foreign direct investment fdi flows into less developed countries we employ a large data set of source recipient country pairs and conduct gravity equation type estimation our empirical methodology enables us to examine an effect through which aid from a donor country promotes fdi from the same donor in particular which we call a vanguard effect we find that foreign aid in general does not have any significant effect on fdi however when we allow for differences in the size of aid effects across donor countries we find robust evidence that foreign aid from japan in particular has a vanguard effect i e japanese aid promotes fdi from japan but does not attract fdi from other countries

fiscal inertia donor credibility and the monetary management of aid surges abstract donors cannot pre commit to support scaled up public spending programs on a continuing basis nor can governments credibly commit to curtail expenditure rapidly in the event that aid revenues contract an aid boom may therefore be accompanied by a credibility problem when this is the case the absorb and spend strategy recommended by the imf leads to capital flight higher inflation and large current account surpluses inclusive of aid the right policy package combines a critical minimum degree of fiscal restraint with reverse sterilization