modelling output growth a new approach abstract the paper proposes a new approach to modelling output growth and empirically compares the relative efficiency in terms of average mse of forecasts of alternative estimation and modelling methods applied to two well known multi equation macroeconomic models fitted to australian data for the period 1962 to 1987 the gain in relative efficiency from the new approach is found to be up to 129 percent over the ols or ml procedures

competing models of international lending activity abstract four competing models of the world bank s lending to developing countries are constructed and econometrically estimated by pooled time series and cross section data the analysis suggests that a model combining economic and political determinants performs best besides per capita income inflation balance of payment and budget deficit external debt and past growth political determinants such as the capitalist climate or political instability are also important as well as a recipient country s former status as a colony or dominion this politico economic model is successfully used to forecast the distribution of ibrd loans and ida credits among the developing countries

foreign aid an instrument for fighting communism abstract in this paper we test the argument that the sizeable reduction in aggregate aid levels in the 1990s was due to the end of the cold war we test two different models using a dynamic econometric specification on a panel of 17 donor countries spanning the years 1970 97 we find aid to be positively related to military expenditures in the former eastern bloc during the cold war but not in the 1990s suggesting that the reductions in aid disbursements are driven by the disappearance of an important motive for aid we also study the effect on aid allocation but here we do not find any robust effects of the end of the cold war

democracy and social spending in latin america 1980 92 what is the effect of regime type on public expenditures for social programs we investigate the relationship between democracy and the change in social spending controlling for gdp the debt inflation and age structure of the population through a time series cross sectional panel data set for 17 latin american countries from 1980 to 1992 the results show that especially in poor countries during economic crisis democracies increase the allocation of resources to social programs relative to authoritarian regimes this suggests that the latter are more constrained by economic forces whereas democracies are more constrained by popular demands hence calls to abandon broad categorizations of regime type appear to be premature democracy can matter in systematic and substantial ways

motivations for aid to developing countries abstract this paper attempts to identify the underlying principles of aid allocation and particularly the balance of motivations as between the needs of recipient countries and the interests of donor countries two alternative models are fitted by cross country regressions to bilateral and multilateral aid flows to some 80 developing countries in 1969 1970 and 1978 1980 the first recipient need model assumes that all aid is given to compensate for shortfalls in domestic resources this model provides a reasonable explanation for the distribution of multilateral aid but it is clearly not applicable for bilateral aid flows the second donor interest model assumes that all aid serves only donor interests defined to cover political security investment and trade interests this model gives generally good explanations of bilateral aid but is a poor fit for multilateral aid the relative importance of the various donor interests differs sharply among donors the paper ends with an analysis of the shift in the balance of aid over the 1970s towards the recipient need element and with a reference to the sharp change in policy in the 1980s towards increasing emphasis on donor interest aid

does aid availability affect effectiveness in reducing poverty a review article this paper addresses the impact of aid supply on aid effectiveness first we review theoretical literature that deals with the problem of governance in donor recipient relationships and are susceptible of highlighting effects of aggregate aid availability second we provide a conceptual framework that explicitly incorporates a trade off between considerations of needs and governance we examine the impact of aid supply on the manner in which a donor agency allocates the available money between countries differing in terms of both needs and domestic governance the central conclusion is that a donor s utility function that embodies the need governance trade off and the associated optimization mechanism yield a meaningful rule to guide inter country allocation of aid resources

effects of stabex on acps economic growth further evidence the paper deals with the economic growth of the open and small developing countries which signed the lome convention henceforth acps results showing that earnings instability damages their economic performance can be used to support the eu policy of guaranteeing financial aid to those countries suffering reductions in export proceeds the second section of the paper analysing the workings of stabex however highlights certain weaknesses in the effectiveness of stabex transfers when their impact on economic growth is considered the general conclusion is that if the current eu acp negotiations for lome v are to be successful then some aspects of the scheme eligibility criteria and use of funds will have to be radically changed

fairness in the international allocation of development aid this paper assesses the allocative performance of foreign aid donors it does so by identifying the consistency of the share of donor aid allocated to each developing country with these their shares of global poverty a given donor s allocative performance is maximised if the share of its aid to each developing country exactly equals its share of global poverty this is equated with fairness in the international allocation of aid the allocative performance of all donors all bilateral donors all multilateral agencies all non dac donor countries the eu france germany japan the united kingdom and the united states for the years 2010 15 is assessed the best performance is exhibited by all bilateral donors while that for an individual donor is exhibited by the united kingdom non dac donors exhibit the worst performance the paper also identifies which developing countries receive the most and least aid relative to their shares of global poverty

the human development index yet another redundant composite development indicator abstract in its human development report 1990 the united nations development program undp proposes yet another composite indicator of development levels the human development index hdi the hdi assesses intercountry development levels on the basis of three so called deprivation indicators life expectancy adult literacy and the logarithm of purchasing power adjusted per capita gdp using simple statistical analysis this paper questions both the composition of the hdi and its usefulness as a new index of development it concludes that the hdi is both flawed in its composition and like a number of its predecessors fails to provide insights into intercountry development level comparisons which preexisting indicators including gnp per capita alone cannot

the determinants of the geographical allocation of ec aid to the developing countries this paper examines the economic rationale of the ec s aid policy towards the ldcs a multiple linear regression is conducted on the ecs flows of aid to 62 ldcs during the 1975 80 period using two alternative models one trying to explain the ecs pattern of geographical allocation of aid using variables that assess the needs of the recipients and another using variables that asseses the interests of the ec the results show that the ec multilateral aid to the ldcs is more motivated by the needs of the recipients in terms of their current account balance of payments and their state of basic human needs as these are assessed by the physical quality of life index pqli an important consideration however is also given to community export interests and to a tendency not to allocate aid to security sensitive countries it is also demonstrated that in the second half of the 1970s an emphasis persited on francophone ldcs by comparison bilateral aid distributed by the ec member states has been motivated to a

estimating aid allocation criteria with panel data in 1990 the net amount of economic aid or official development assistance to all recipients from all multilateral and bilateral sources was about 62 billion an amount that exceeded the gdps of greece and portugal despite the size of this yearly transfer there has been no rigors modeling and estimation of the criteria by which it occurs as a result there is little agreement about the extent to which oda is allocated according to the needs of the recipient countries the purpose of this paper is to develop a rigorous theoretical model of oda allocation that can be used to provide consistent estimates of the importance of recipient needs copyright 1994 by royal economic society

re evaluating differences in poverty among central city suburban and nonmetropolitan areas of the us poverty in the united states varies greatly by location the difference in poverty intensity among locations however has only been evaluated by the official poverty measure the headcount ratio which has several drawbacks the official poverty statistics also suffer from use of a single arbitrary poverty line this paper uses a recently developed distribution sensitive measure of poverty and 1990 census data to reconsider the difference among central city suburban and nonmetropolitan poverty levels as well as differences among us regions instead of using a single arguable poverty line this paper lets the poverty line vary over an income range so that conclusions are more robust we check for significance of differences across locations by applying some recently developed methods of statistical inference

improved estimates and forecasts of error correction models in economics abstract this paper is concerned with improved estimation and better forecasting of major economic activity within the context of error correction ec models as pioneered by sargan in 1964 and extended by numerous economists over the past three decades a new and general econometric methodology with superior average mean squared errors mse for ec models is introduced and for illustration applied to the estimation and forecasting of private consumption and demand for money in australia for the period 1960 1992 the improvement in terms of historical and ex post forecasting mse of our new methodology over the conventional statistical approaches currently in use for ec models is found to be up to 15 43

formal and informal interests of donors to allocate aid spending patterns of usaid giz and eu forest development policy in bangladesh summary whether aid serves the development needs of a recipient country rather than the interests of donors has been a topic of much debate and research in the field of development studies donor agencies have interests as does any political actor and bureaucratic politics theory states that any bureaucracy has a dual interest consisting of delivering on its formal mandate as well as informally increasing its power by maximizing budgets staff and fields for political responsibility this study aims to conceptualize the formal and informal interests of bilateral foreign donor bureaucracies in allocating aid using bangladesh forest development aid by usaid giz and the eu as a case study quantitative analysis of documents on actual spending in the context of forest development projects and qualitative analysis from detailed interviews with development aid experts are employed important informal interests of donor agencies were observed as follows 1 drawing on consultants as well as products and services from the donor s country 2 expanding favorable markets for the donor s economy 3 increasing the donor s geopolitical as well as policy influence in recipient countries 4 obtaining information that is independent from the recipient government and 5 shaping good governance as a prerequisite for investment from donor countries of the three donor organizations usaid was found to have allocated extensive aid to two activities consultancy and collaboration and networking that advance usaid s informal economic and political interests giz allocated major aid to recipient developmental interventions it also advanced its informal economic and political interests albeit to a smaller extent the eu allocated the largest amount of aid to developmental interventions though its informal economic and political interests were also served even if only to a limited extent this study concludes with key points regarding informal interests of donor bureaucracies as well as on future research fields

sweetening the transition in eu sugar preferences the case of fiji the european union grants preferential market access for sugar to a group of african caribbean and pacific acp countries sugar exported under these quotas receives between two and three times the world price these trade preferences are intended as a form of aid but they tend to stifle productivity growth in the recipient countries the european union could better assist acp countries by providing direct development assistance in place of sugar subsidies for example by investing the aid transfers into infrastructure or other essential public services this paper tests this proposition for the case of fiji using a computable general equilibrium model it is found that significant gains in economic performance can be achieved by employing such alternative strategies for aid these gains are particularly strong over the medium to long term when the aid funds are diverted to infrastructure development however there are issues of equity to consider since in the case of fiji the rural poor would be the losers if trade preferences were to be removed moreover the degree of benefit in alternative strategies such as infrastructure development will be contingent on the economy s flexibility which in turn depends upon the country s regulatory regime and education performance

the allocation of aid among developing countries a comment on mcgillivray s performance index abstract mcgillivray s paper in this journal proposed an index which he claimed ranks donors by the progressiveness with which they allocate their development aid among recipients it is shown here that his index contains a small country bias so that a donor may improve its performance by taking aid from a poor large country and giving it to a small richer one

on the role of governance and health aid on child mortality a cross country analysis abstractglobally child mortality rates continue to be unacceptably high despite improvement in child health outcomes the role of macro level indicators such as governance and health aid on child mortality remains under researched the aim of this article is to analyse the influence of governance and health aid on child mortality using cross country data a negative association between governance and the mortality rate of children less than 5 years of age was found using system generalised method of moments dynamic panel the linkage also exists in the results of quantile and semi parametric regression however as in other literature the role of health aid on child mortality remains ambiguous

the allocation of aid among developing countries a multi donor analysis using a per capita aid index abstract this paper seeks to measure the relative aid giving performance of aid donors in terms of the inter recipient distribution of their aid performance is taken to be the extent to which a donor bases its aid allocation on the relative needs of recipient countries donor performance is measured by an income weighted per capita aid index formulated in this paper this index was calculated using the per capita allocations to a sample of 85 recipient countries in the years 1969 84 the performance of 17 dac members plus that of a number of multilateral agencies and that of the dac and these agencies combined is identified results indicate that the performance of four countries belgium finland denmark and norway was generally superior to that of other donors

development paradigm failures over time the international development community has advocated various development paradigms but countries following these paradigms have often performed poorly we provide an explanation for this poor performance in our model the political leader of a developing country chooses a policy and whether to implement it in an honest or corrupt manner these choices affect domestic production and aid inflows production is high when productive capacity is high and when the policy is appropriate in the country specific circumstances and implemented honestly aid inflows are high when the policy is close to the paradigm in equilibrium countries with low productive capacity and high corruption resulting from weak political institutions follow the paradigm more closely hence our model suggests that development paradigms have a tendency to fail because they are primarily followed by countries that would fail anyway we provide empirical evidence in support of the main assumptions and results

reform of foreign aid policies the issue of inter country allocation in africa abstract the aim of this paper is to assess the inter country allocation of foreign aid by selected donors to 18 recipients in eastern and southern africa esa the five country cases discussed in this paper show that the aid environment has not been supportive of recipients reform efforts during the 1980s a comparison is made between international development agency ida allocation and other donors cross section and time series regressions demonstrate a variety of considerations influencing bilateral aid lastly in discussing present aid policies and coordination efforts three options are analyzed with respect to future aid policies it is suggested that new initiatives by ida in its allocation criteria and aid coordination efforts can yield some progress

do performance measures of donors aid allocation underperform indices of donor performance abound their recent popularity has occurred within the context of pessimism over aid s impact and optimism over the effect of changes in donor behaviour rankings of donor allocative performance aim to change donor behaviour either through direct pressure on governments or indirectly through public engagement the indices themselves rely on descriptive measures and typically claim methodological superiority over positive alternatives due to their simplicity however there are two problems first measures do not seem robust to simple variations in methodology second correlation amongst competing indices is low leading to a host of contradictory judgements this offers neither clear technical guidance nor consistent political pressure the advantages and disadvantages of the approach are discussed building upon the more general critique of aggregate indices i suggest a graphical solution that embraces the advantages of the descriptive approach including ease of public communication while avoiding some of its major weaknesses which typically stem from aggregation

some determinants of foreign aid to india 1960 1985 abstract using a unique data set of aid to india from all sources 1960 1985 we discuss the magnitude and composition of aid and present a principal components analysis of aid giving we then attempt to get at the underlying patterns and causes of aid giving using factor analytic techniques and explain the level of foreign aid by employing a partial adjustment model we find that latent motivations to classify the donor countries into four convenient groups each with different political and economic motivations we also find that the latent variables capturing the motivations of the united states western european countries eastern european countries as well as last year s aid and the balance of trade but not gdp growth are significant determinants of the level of aid

us politics and world bank ida lending this paper studies the role of us political factors in the allocation of world bank concessional lending where us political interests are proxied by voting similarity in the united nations general assembly on issues identified as important by the us department of state in contrast to previous studies we find that the us exerted a significant influence on ida lending during the period 1993 2000 we demonstrate that the influence was both statistically as well as economically significant finally we demonstrate that our result is robust with respect to the omission of the ida country performance rating index

aid selectivity according to augmented criteria a dominant trend in the literature maintains that donor assistance should be targeted to poor countries with sound institutions and policies in this context donor selectivity refers to what extent aid is allocated according to the principles of this canonical model this paper shows that it is legitimate for donors to simultaneously use other selectivity criteria corresponding either to expected factors of aid effectiveness or to handicaps to development it is notably argued that vulnerability to exogenous shocks and low level of human capital should be considered as selectivity criteria taking these other criteria into account dramatically changes the assessment of donor selectivity

a welfare analysis of the ec acp sugar protocol the sugar protocol laid down in the convention of lome has been an established instrument of commodity policy for nearly 20 years its basic rule is that the ec imports at guaranteed prices specified quantities of sugar from acp countries it is the objective of the article to provide an economic evaluation of the sugar protocol impacts on prices trade export earnings and economic welfare are elaborated the sugar protocol s impacts on the level and instabilty of sugar export earnings are jointly evaluated by computing transfer and risk benefits along the lines of newbery stiglitz a major conclusion is that the policy has to be evaluated differently from the donor s and the recipient s point of view the sugar protocol induces international income transfers that are untargeted in terms of per capita income it causes however rather strong risk benefits compared with other instruments of international commodity policy and sizeable welfare gains for individual recipient countries

aid policies and growth the authors of this paper use a new database on foreign aid to examine the relationships among foreign aid economic policies and growth of per capita gdp in panel growth regressions for 56 developing countries and 6 four year periods 1970 93 they find that the policies that have a great effect on growth are those related to fiscal surplus inflation and trade openness they construct an index for those three policies and have that index interact with foreign aid they have instruments for both aid and aid interacting with policies they find that aid has a positive impact on growth in developing countries with good fiscal monetary and trade policies in the presence of poor policies aid has no positive effect on growth this result is robust in a variety of specifications which include or exclude middle income countries include or exclude outliers and treat policies as exogenous or endogenous they examine the determinants of policy and find no evidence that aid has systematically affected policies either for good or for ill they estimate an aid allocation equation and show that any tendency for aid to reward good policies has been overwhelmed by donors pursuit of their own strategic interests in a counterfactual they reallocate aid reduce the role of donor interests and increasing the importance of policy such a reallocation would have a large positive effect on developing countries growth rates

aid the public sector and the market in less developed countries a reply the article in this journal by mosley et al i987 concludes its analysis of aid effectiveness as demonstrating inability of development aid over more than twenty years to provide a net increment to overall growth in the third world p 636 this note purports to show that this conclusion which is ostensibly distressing as the authors claim is not warranted the section of the study which is the basis of the conclusion cited and the subject of this note is a cross section regression analysis full details of which are shown in mosley et al table 3 the note is concerned with the relation between the dependent variable specified as the growth rate of real gdp per cent per annum hereafter gdp and aid specified as a percentage of gdp hereafter aid the aid results with only two significant positive coefficients in one subsample certainly give no basis for claiming aid effectiveness in terms of gdp growth the intention in this note is to interpret the results which are assumed to be valid this is made possible by the fact that the authors have helpfully provided the full input set of mean values derived from the raw data from this it is possible to calculate the gdp aid relationship for each country for the second and third period the procedure for deriving these relationships is as follows for each country the mean values of the time series of gdp and aid are extracted from the data for i 960 70 and for i 970 80 using i 960 70 as the base the signs of the change in the levels of the gdp and aid mean values between periods are recorded this is repeated for i980 4 with i970 80 mean values as the base the relationship between the two signs is an indication of the effect of aid on gdp in the period in which the change in levels is effected thus in the case of an increase in aid being combined with a decrease in gdp the latter must have fallen relatively to the former and aid effectiveness is negative mutatis mutandis for the other three sign combinations thus generating the appropriate gdp aid relationship for each country in each period a frequency distribution of the four sign combinations relating to the full sample is presented in table i since the signs of the changes in the levels of gdp and aid are derived by making explicit the arithmetic relationship implicit in the data they form a valid base from which to draw conclusions without requiring any test of

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

an all encompassing consumption function the australian case abstract the paper reports some empirical findings of the davidson hendry srba and yeo 1978 consumption function fitted to australian quarterly data for the period 1969 3 to 1982 2 the evidence rejects in terms of the maximum likelihood ratio test the unitary differencing and price homogeneity restrictions and supports a simple dynamic forecasting model with unconstrained parameters

food and freedom the links between food and freedom at first appear rather remote to policymaking and far from central and practical concerns the lecture discusses important connections between the two that need to be recognized more fully as background to practical food policy although ethics specifically freedom seems far less compelling a concept than concrete demands of food the contrast is artificial the provision of food is a central issue in general social ethics since so much in human life does depend on the ability to find enough to eat in particular the freedom that people enjoy to lead a decent life including freedom from hunger from avoidable morbidity from premature mortality etc is centrally connected with the provision of food and related necessities also the compulsion to acquire enough food may force vulnerable people to do things they resent doing and may make them accept lives with little freedom thus the role of food in fostering freedom can be extremely important on the other side freedom may also causally influence the success of the pursuit of food one consideration that has received a great deal of attention relates to the role of freedom to make profits by providing incentives for the expansion of food production this consideration has often cropped up in the critical evaluation of agricultural policies pursued in many countries in africa and asia the lecturer supplements the conceptual and theoretical discussions with practical illustrations

the political economy of foreign aid a model of the market for a public good what determines the type and quantity of overseas aid given by individual donor countries answers to this question in the existing literature are polarized into two groups one of them offers a theoretical treatment based on the theory of public goods which is not consistent with the available data and the other offers empirical correlations without any explanatory theory the first group for example pincus and olson and zeckhauser treats aid like defense as an international public good small countries on this approach are free riders spending relatively little themselves while deriving benefits from the expenditures of larger countries but this approach is not consistent with even a casual scrutiny of the oecd aid community in which broadly speaking the smallest countries are the most generous donors 2 the second group for example hoadley and beenstockdiscover correlations between a country s ratio of aid to gnp and certain independent variables which may be expected to influence it e g that country s gnp its dependence on foreign trade its government s position in the ideological spectrum and the state of the domestic economy 3 however these findings are not fitted into any theoretical framework so that it is difficult to work out what they really mean 4 the approach of this paper is to treat foreign aid as a public good for which there is a market albeit a highly imperfect one because the consumers donor country taxpayers are ignorant about the very nature let alone the price of the commodity they are buying on this view factors on the demand side i e taxpayers response to their country s aid program will help to determine the quantity of aid disbursed as well as factors on the supply side such as the donor government s desire to obtain strategic or trading benefits from aid this view

judging givers equity and scale in aid allocation abstract the paper proposes a ranking index to judge both the quality and quantity of aid given by donor nations the quality of aid is restricted to a single dimension viz how well an aid giver s allocation conforms to the revealed need of aid recipients departing from previous work by mcgillivray and white aid is assumed to be additive to recipient incomes the index satisfies the twin canons of horizontal and vertical equity and provides unbiased comparisons across all allocations it also obviates the need to have separate and very likely conflicting rankings of donors by equity and scale of aid allocation

determinants of canadian bilateral aid allocations humanitarian commercial or political in this paper we examine the determinants of the allocation of canadian bilateral aid over the period 1984 2000 we draw on models of donor behaviour that allow us to incorporate humanitarian commercial and political considerations the trinity of mixed motives that affect canadian aid we find that allocations are moderately altruistic recipient country human rights and membership in the commonwealth and la francophonie also affect aid flows most strikingly our results suggest that canadian aid flows became less altruistic over this period and commercial motives became increasingly important jel classification h50 o10 les determinants des allocations de l aide humanitaire canadienne humanitaires commerciaux ou politiques ce memoire etudie les determinants de l allocation de l aide bilaterale canadienne dans la periode 1984 2000 on utilise des modeles de comportement de donateur qui permettent de prendre en considerations les motivations humanitaires commerciales et politiques la trinite de motifs mixtes qui affectent l aide canadienne on decouvre que les allocations sont moderement altruistes le fait pour un pays de defendre bien les droits de la personne et d etre membre du commonwealth et de la francophonie affecte les flux d aide plus important peut etre les resultats suggerent qu au cours de cette periode les flux d aide canadienne deviennent moins altruistes et les motifs commerciaux de plus en plus importants

empirical results of aid motivations australia s bilateral aid program abstract this paper briefly surveys the existing literature on the motivations of overseas aid the emphasis is on the two competing models of recipient need and donor interest and the paper estimates these two models using data for australian bilateral aid both the recipient need model and the donor interest model are supported by the econometric analysis this is in stark contrast to the results of other studies for large states such as the united states and the united kingdom these prior studies show no support for the recipient need model whereas the donor interest model is supported the atypical result for the australian bilateral aid program requires further analysis in terms of non nested hypotheses

effective aid how democracy allows development aid to improve the quality of life abstract research into foreign aid has mostly focused on its ability to affect economic i e gdp per capita growth conclusions have been mixed i consider aid s effectiveness differently by its ability to improve quality of life i find that though aid does not affect quality of life in the aggregate it is effective when combined with democracy and ineffective and possibly harmful in autocracies the results suggest that aid would be more effective if it were combined with efforts to encourage democratization

comparative advantage and bilateral foreign aid policy this paper formulates the problem of bilateral aid allocation in terms of the comparative advantage framework it is argued that the adaptability of this framework to foreign aid critically depends on the assumption that each donor s aid budget is spent to a large extent on its home market this assumption is not contradicted by empirical evidence an analysis of swiss foreign aid data then suggests that there is scope for considerable gains from specialization we conclude that donors should coordinate their behavior according to their comparative advantage to achieve an optimal allocation of global aid resources

a two part sample selection model of british bilateral foreign aid allocation the allocation of british bilateral foreign aid among developing countries is simultaneously modelled focusing on allocations during the period 1980 87 two aid allocation decisions are analysed using a variant of the lee maddala econometric model the first decision concerns the determination of developing country eligibility for aid while the second concerns the amount of aid eligible countries are allocated given the implied two part decision making process sample selection techniques are employed it is hypothesized that british bilateral aid eligibility and amount decisions are based on bristain s humanitarian commercial and political interests in developing countries results obtained indicate that these decisions are generally consistent with each of these interests especially those relating to the political importance of commonwealth members

on the relative weil being of the nonmetropolitan poor an examination of alternate definitions of poverty during the 1990s using foster greer thorbecke poverty indices this paper shows that although the incidence of poverty was higher in nonmetropolitan than metropolitan areas throughout the 1990s the poverty gap index was only statistically significantly higher in nonmetropolitan areas in six of the 10 years and the squared poverty gap index was worse in only three years this paper also provides design corrected standard errors for the indices which result in more than doubling the uncorrected estimates an examination of the ratio of the poverty gap to the head count index establishes that the average shortfall of the poor as a fraction of the poverty line was worse in the metropolitan areas during all 10 years of the 1990s similarly the distribution of income divided by the poverty line indicates that disproportionately more of the nonmetropolitan poor subsisted on incomes near the poverty line whereas the metropolitan poor were relatively more likely to be living in extreme poverty

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

ranking foreign donors an index combining the scale and equity of aid giving abstract the generosity of aid given and the fairness with which it is distributed among recipients are among the most important criteria for judging and comparing the aid effort of donor countries the present paper builds on a recent theoretical proposal for a complete consistent and combined index combining both these criteria to rank donor countries the index may be used not only to compare donors but also to gauge the progress of individual donors in respect to their aid effort an annual timeseries of donor rankings based on this formula is constructed employing aid data published by the oecd for 1970 1993

a new approach to the allocation of aid among developing countries is the usa different from the rest summary this paper attempts to explain the factors that determine the geographical allocation of foreign aid its novelty is that it develops a rigorous theoretical model and conducts the corresponding empirical investigations based on a large panel dataset we run regressions for different major donors united states canada france italy japan united kingdom and multilateral organizations with the explicit objective of establishing whether the united states in light of its geopolitical hegemony behaves differently from others we find that all the donors respond to recipient need in their allocation of aid but that the united states puts less emphasis on this than the other donors with the exception of japan we also find that the united states puts more emphasis on donor recipient linkages than do the other donors suggesting that the united states attaches greater importance to issues of donor interest for example geopolitical commercial and other links with specific recipients

aggregate poverty measures the way poverty is measured is important for an understanding of what has happened to poverty as well as for anti poverty policy evaluation sen s 1976 pathfinding work has motivated many researchers to focus on the way poverty should be measured a poverty measure argued by sen should satisfy certain properties or axioms and the desirability of a poverty measure should be evaluated by these axioms during the last two decades many researchers have adopted the axiomatic approach pioneered by sen to propose additional axioms and develop alternative poverty measures the objective of this survey is to provide a clarification on the extensive literature of aggregate poverty measures in this survey we first examine the desirability of each axiom the properties of each poverty measure and the interrelationships among axioms the desirability of an axiom cannot be evaluated in isolation and some combination of axioms may make it impossible to devise a satisfactory poverty measure some axioms can be implied by other axioms combined and so are not independent some others are ad hoc and are disqualified as axioms for poverty measurement based on the interactions among axioms we identify the core axioms which together have a strong implication on the functional form of a poverty measure we then review poverty measures that have appeared in the literature evaluating the interrelationships among different measures and examining the properties of each measure the axioms each measure satisfies violates are also summarized in a tabular form several good poverty measures which have not been documented by previous surveys are also included

on the measurement of poverty official statistics in the united states and the united kingdom show a rise in poverty between the 1970 s and the 1980 s but scepticism has been expressed with regard to these findings in particular the methods employed in the measurement of poverty have been the subject of criticism this paper re examines three basic issues in measuring poverty the choice of the poverty line the index of poverty and the relation between poverty and inequality one general theme running through the paper is that there is a diversity of judgments which enter the measurement of poverty and that it is necessary to recognize these explicitly in the procedures adopted there is likely to be disagreement about the choice of poverty line affecting both its level and its structure in this situation we may only be able to make comparisons and not to measure differences and the comparisons may lead only to a partial rather than a complete ordering the first section of the paper discusses the stochastic dominance conditions which allow such comparisons illustrating their application by reference to data for the united states the choice of poverty measure has been the subject of an extensive literature and a variety of measures have been proposed in the second section of the paper a different approach is suggested considering a class of measures satisfying certain general properties and seeking conditions under which all members of the class which includes many of those proposed give the same ranking those sceptical about measures of poverty often assert that poverty and inequality are being confounded the third section of the paper distinguishes four different viewpoints and relates them to theories of justice and views of social welfare

statistical tests of changes in u s poverty 1975 to 1990 since president lyndon johnson declared the war on poverty three decades ago scholars have devoted many volumes to analyzing characteristics of poverty evaluating effectiveness of antipoverty policies and measuring changes in poverty unfortunately most poverty studies have focused primarily on the incidence of poverty rather than on both the incidence of poverty and the income distribution within the poor population although a k sen s 23 seminal work on measurement of poverty demonstrated the importance of constructing and using a distribution sensitive poverty measure in evaluating poverty the u s federal government still uses the proportion of poor as virtually the only indicator of poverty with few exceptions such as bishop formby and smith 5 most recent scholarly works on poverty issues including sawhill 21 hanratty and blank 17 and slesnick 24 are also concerned exclusively with the incidence of poverty and use a single poverty line in this study we demonstrate that a more comprehensive look at poverty using distribution sensitive measures and multiple poverty lines yields a different picture of poverty changes over time compared to what official u s statistics portray practically the comparison of poverty changes can be decomposed into three parts 1 setting a poverty line an income threshold below which a person is defined as poor this step is also called the identification of the poor and is very important in poverty study 2 choosing a method to aggregate individual poverty into overall poverty different methods of aggregating may lead to different conclusions about poverty changes therefore an appropriate method is essential for poverty study and 3 statistical inference since conclusions about poverty changes are drawn from a random sample of the population it is important to know whether the estimated poverty

biases in the allocation of foreign aid some new evidence abstract the purpose of the paper is to examine the pattern of bilateral and multilateral foreign aid allocations during the 1970s cross section and pooled regressions for a set of roughly 90 countries where aid allocations have been relatively free of gross political overtones confirm the well known bias in per capita aid flows against populous countries butdo not provide evidence of a middle income bias instead regressions on 1976 1978 aid flows and per capita incomes of recipient countries seem to suggest a low income bias i e low income countries received more aid per capita than middle income countries yet there was asample of extremely poor countries which remained neglected in foreign aid allocations

international commodity agreements design and performance abstract this article traces the design and performance of the five currently or recently active international commodity agreements icas in cocoa coffee natural rubber sugar and tin following detailed discussion of each of these the author makes three observations that icas can only be successful provided that they command a consensus in their industries that existing agreements are not robust enough with regard to exchange rates and that existing agreements are poorly drafted the author argues that the collapse of the tin agreement in october 1985 may have marked the end of the postwar chapter in the commodity intervention story he finds it improbable that new icas will emerge and suggests instead that more of the existing agreements will lapse

politics and the effectiveness of foreign aid abstract critics of foreign aid programs have long argued that poverty reflects government failure in this paper i test predictions for aid effectiveness based on an analytical framework that relates aid effectiveness to political regimes i find that aid does not significantly increase investment nor benefit the poor as measured by improvements in human development indicators but it does increase the size of government the impact of aid does not vary according to whether recipient governments are liberal democratic or highly repressive but liberal political regimes and democracies ceteris paribus have on average 30 lower infant mortality than the least free regimes this may be due to greater empowerment of the poor under liberal regimes even though the political elite continues to receive the benefits of aid programs an implication is that short term aid targeted to support new liberal regimes may be a more successful means of reducing poverty than current programs

equivalence scales and housing deprivation orderings an example using lebanese data housing deprivation orderings raise challenges as far as measurement is concerned the first challenge resides in the identification of an adequate variable that characterizes housing services consumed by households another challenge may arise in the comparisons of housing services consumption between households of different sizes and composition the last challenge may arise in the choice of a deprivation threshold and of a deprivation index in this article we address those challenges theoretically an empirical illustration is offered using lebanese data

poverty prices and place how sensitive is the spatial distribution of poverty to cost of living adjustments this article examines how accounting for cost of living differences across metropolitan and nonmetropolitan areas affects measured rates of poverty the spatial price index used is based on the fair market rent data and was developed by the census bureau for use in its experimental poverty research program following u s federal definitions poverty in nonmetro areas has been consistently higher than it has been in metro areas using the fair market rent index to adjust for differences in cost of living results in a complete reversal of nonmetro metro rankings in terms of prevalence depth and severity of poverty for every year examined 1991 to 2002 jel i32 r1 c81

public policies pressure groups and dead weight costs abstract this paper presents a model of competition among special interest groups for political influence each active group exerts pressure to affect its taxes and subsidies where activities of different groups are related by the equality between total tax collections and total tax subsidies the dead weight costs and benefits of taxes and subsidies play a major role in our model an increase in the dead weight cost of taxation encourages pressure by taxpayers while an increase in the dead weight costs of subsidies discourages pressure by recipients various applications of the analysis are discussed