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171. Divergent Means and Convergent Inequality of Incomes among the Provinces and Cities of Urban China

Author:
John Knight, Li Shi, and Zhao Renwei
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Two precisely comparable national household surveys relating to 1988 and 1995 are used to analyse changes in the inequality of income in urban China. Over those seven years province mean income per capita grew rapidly but diverged across provinces, whereas intra-province income inequality grew rapidly but converged across provinces. The reasons for these trends are explored by means of various forms of decomposition analysis. Comparisons are also made between the coastal provinces and the inland provinces. The decompositions show the central role of wages, and within wages profitrelated bonuses, together with the immobility of labour across provinces, in explaining mean income divergence. The timing of economic reforms helps to explain the convergence of intra-province income inequality. Policy conclusions are drawn.
Topic:
Demographics, Development, and Economics
Political Geography:
China and Asia

172. Income Inequality in Rural China: Regression-based Decomposition Using Household Data

Author:
Guanghua Wan and Zhangyue Zhou
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
A considerable literature exists on the measurement of income inequality in China and its increasing trend. Much less is known, however, about the driving forces of this trend and their quantitative contributions. Conventional decompositions, by factor components or by population subgroups, only provide limited information on the determinants of income inequality. This paper represents an early attempt to apply the regression-based decomposition framework to the study of inequality accounting in rural China, using household level data. It is found that geography has been the dominant factor but is becoming less important in explaining total inequality. Capital input emerges as a most significant determinant of income inequality. Farming structure is more important than labour and other inputs in contributing to income inequality across households.
Topic:
Demographics, Development, and Economics
Political Geography:
China and Asia

173. Fifty Years of Regional Inequality in China: A Journey through Central Planning, Reform, and Openness

Author:
Ravi Kanbur and Xiaobo Zhang
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper constructs and analyses a long-run time-series for regional inequality in China from the Communist Revolution to the present. There have been three peaks of inequality in the last fifty years, coinciding with the Great Famine of the late 1950s, the Cultural Revolution of the late 1960s and 1970s, and finally the period of openness and global integration in the late 1990s. Econometric analysis establishes that regional inequality is explained in the different phases by three key policy variables; the ratio of heavy industry to gross output value, the degree of decentralization, and the degree of openness.
Topic:
Development, Economics, Industrial Policy, and Political Economy
Political Geography:
China and Asia

174. Industrial Location and Spatial Inequality: Theory and Evidence from India

Author:
Somik V. Lall and Sanjoy Chakravorty
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We argue that spatial inequality of industry location is a primary cause of spatial income inequality in developing nations. We focus on understanding the process of spatial industrial variation—identifying the spatial factors that have cost implications for firms, and the factors that influence the location decisions of new industrial units. The analysis has two parts. First we examine the contribution of economic geography factors to the cost structure of firms in eight industry sectors and show that local industrial diversity is the one factor with significant and substantial cost reducing effects. We then show that new private sector industrial investments in India are biased toward existing industrial and coastal districts, whereas state industrial investments (in deep decline after structural reforms) are far less biased toward such districts. We conclude that structural reforms lead to increased spatial inequality in industrialization, and therefore, income.
Topic:
Development, Economics, Industrial Policy, and Political Economy
Political Geography:
South Asia and India

175. Commune-Level Estimation of Poverty Measures and its Application in Cambodia

Author:
Tomoki Fujii
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this study, we combined the Cambodian socioeconomic survey for 1997 and the country's population census of 1998 to produce poverty measures at the commune-level in Cambodia using the small-area estimation technique developed by Elbers, Lanjouw and Lanjouw. While there are a number of communes for which the standard errors associated with the estimates are too high, we found that they are on average small enough to be useful. We illustrate the application of poverty maps with reference to education programmes.
Topic:
Economics, Education, and Poverty
Political Geography:
Cambodia and Southeast Asia

176. Multiactor Global Funds: New Tools to Address Urgent Global Problems

Author:
Jeremy Heimans
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Multiactor global funds (MGFs) are emerging as important new mechanisms for the financing of development and other global priorities. MGFs like the Global Fund for AIDS, Tuberculosis and Malaria are distinctive because they are administered and financed by multiactor coalitions of governments, international organizations, the private sector and civil society, they operate independently of any one institution and are tied to particular issue or policy areas. This paper considers the desirability of MGFs as instruments for international financial mobilization, resource allocation and as a form of experimentation in global governance. It is argued that MGFs hold considerable promise as focal points for generating additional public and private resources to address urgent global problems and to finance global public goods. They may be more operationally nimble than traditional mechanisms and capture some of the benefits of collaboration among different actors. However, MGFs may also result in a less coherent response to global problems, duplicate existing structures and be weakly democratically accountable.
Topic:
International Relations, Economics, International Trade and Finance, and Non-Governmental Organization

177. The Transition from Official Aid to Private Capital Flows: Implications for a Developing Country

Author:
Renu Kohli
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
India's capital account displays a sharp swing in external financing from official assistance to private capital transfers in the 1990s. This paper examines the implications of this transition for the country. An analysis of the private resource transfer reveals that unlike official flows, private capital flows are associated with real exchange rate appreciation, expansion in domestic money supply and stock market growth, liquidity and volatility. The paper concludes with a discussion on the implications of the transition for economic policy.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
South Asia and India

178. Foreign Aid Resurgent: New Spirit or Old Hangover?

Author:
Peter Burnell
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study is premised on the view that reports circulating in the 1990s, claiming foreign aid was in terminal crisis, were premature. Aid's reviving fortunes are explained in terms both of a growing awareness of the uneven implications of globalization and the after-effects of the terrorist events of 11 September 2001. However these two 'drivers' make uneasy partners. Furthermore, aid for democratization, argued in the 1990s to be an instrument for indirectly addressing socioeconomic weakness and improving development aid's effectiveness—making it a positive feature in a bleak decade—is increasingly seen as problematic. For now, aid's resurgence should target pro-poor development rather than democratic reform, although the likelihood is that old fashioned determinants of realpolitik will continue to get in the way.
Topic:
International Relations, Economics, Human Welfare, and Poverty

179. Prospects for 'Pro-Poor' Growth in Africa

Author:
Abebe Shimeles and Arne Bigsten
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines trends in income distribution and its linkages to economic growth and poverty reduction in order to understand the prospects for achieving poverty reduction in Africa. We examine the levels and trends in income distribution in some African countries and calculate pro-poor growth indices. Different growth patterns are simulated for Ethiopia, Uganda, Mozambique, and South Africa. We conclude that the balance between policies aimed at growth and measures aimed at redistribution should depend on the elasticity of the growth-equity tradeoff. We also discuss what the appropriate ingredients of a pro-poor strategy would be in the African setting.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Uganda, Africa, South Africa, Mozambique, and Ethiopia

180. Dynamics of Poverty in Ethiopia

Author:
Abebe Shimeles and Arne Bigsten
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper addresses issues related to the dynamics of income poverty using unique household panel data for urban and rural areas of Ethiopia covering the period 1994-97. The percentage of households that remained in poverty was twice as large in urban areas as in rural areas. This suggests that income variability is a serious problem in rural areas, while the persistence is a key feature of urban poverty. The paper also discusses household characteristics that are correlated with the incidence of chronic poverty as well as vulnerability to poverty. A strategy that promotes consumption smoothing through say access to credit can work well in rural areas, while income or employment generation are required for poverty alleviation in urban areas.
Topic:
Economics, Human Welfare, and Poverty
Political Geography:
Africa and Ethiopia