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3082. Enhancing Effective Utilization of Aid in Fragile States
- Author:
- Sanjeev Gupta
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper explores the macroeconomic implications of aid flows in countries with weak institutions. It argues that these countries should take into account their overall macroeconomic position, their capacity to absorb aid at the sectoral and subnational levels, and the strength of their fiscal institutions in deciding how much and how fast to spend aid. These considerations may warrant a gradual use of aid, except when aid is provided for humanitarian purposes. There is some basis for frontloading spending for countries emerging from a conflict, otherwise fragile states should seek to smoothen their spending against the background of aid volatility and uncertainty.
- Topic:
- Conflict Resolution and Economics
3083. Entrepreneurship and Structural Economic Transformation
- Author:
- Thomas Gries and Wim Naudé
- Publication Date:
- 06-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- A stylized fact of economic development is the structural transformation of countries from traditional, mainly agricultural societies to modern economies dominated by manufacturing and services. In this paper we provide an endogenous growth model to illuminate the role of entrepreneurial start-up firms in structural economic transformation. We follow the Lewis-model's distinction between a traditional and modern sector, and underpin this with micro-foundations. We specify mature and start- up entrepreneurs and make a distinction between survivalist self-employment activities in the traditional sector, and opportunity-driven entrepreneurship in the modern sector. The model shows how opportunity-driven entrepreneurship can drive structural transformation through innovation, provision of intermediate inputs and services (which permits greater specialization in manufacturing), and by increasing employment and productivity in both the modern and traditional sectors.
- Topic:
- Development and Economics
3084. Entrepreneurship in Economic Development
- Author:
- Wim Naudé
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- What is the role of entrepreneurship in economic development? At a minimum the answer should be able to explain the role of entrepreneurs in the structural transformation of countries from low income, primary-sector based societies into high-income service and technology based societies. More broadly though, it should also be able to explain the role of entrepreneurs in the opposite pole of stagnating development (including conflict) and in high innovation-driven growth. Although economic development lacks a 'general theory' of entrepreneurship, which could encompass a variety of development experiences, much progress has been made in extending the understanding of entrepreneurship in the process of development. This paper surveys the progress with the purpose of distilling the outlines for a more general theory of entrepreneurship in economic development. Entrepreneurship in developing countries remains a relatively under-researched phenomenon, so by surveying the current state of research, and by discussing the role of entrepreneurship in dual economy models of structural transformation and growth, a secondary objective of this paper is to identify avenues for further research. Finally, the policy implications from the economic literature suggest that a case for government support exists, and that this should focus on the quantity, the quality, and the allocation of entrepreneurial ability. Many routinely adopted policies for entrepreneurship, such as provision of credit and education, are shown to have more subtle effects, not all of which are conducive to growth-enhancing entrepreneurship.
- Topic:
- Development and Economics
3085. Export Productivity and Specialization in China, Brazil, India and South Africa
- Author:
- Amelia U. Santos-Paulino
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper analyses the patterns of export productivity and trade specialization profiles in the China, Brazil, India and South Africa, and in other regional groupings. In doing so, the investigation calculates a time varying export productivity measure using highly disaggregated product categories. The findings indicate that export productivity is mainly determined by real income and human capital endowments. Importantly, the study reveals significant differences in the export productivity and specialization patterns of countries with comparable per capita income levels. For instance, China's export productivity and implied export sophistication is in line with that of countries with higher per capita incomes, including some OECD industrial economies.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- Africa, China, India, Asia, South Africa, Brazil, and South America
3086. Foreign Aid, Infrastructure Development, and Welfare: An Intertemporal Analysis
- Author:
- Slobodan Djajić
- Publication Date:
- 06-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper examines the welfare implications of foreign aid within the framework of a two-period, two-country model of international trade. It is up to the donor country to decide what fraction of any given aid package is to be made available for the recipient's immediate, period-one consumption, and what part should be allocated for investment in infrastructure that expands the recipient's production possibilities in period two. The focus of the analysis is on the conditions under which both countries agree or disagree on the manner in which the aid funds should be divided between the two options.
- Topic:
- Economics and International Trade and Finance
3087. Foreign Direct Investment, Domestic Investment, and Economic Growth in China: A Time Series Analysis
- Author:
- Sumei Tang, E. A. Selvanathan, and S. Selvanathan
- Publication Date:
- 02-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- In this paper, we investigate the causal link between foreign direct investment (FDI), domestic investment and economic growth in China for the period 1988-2003. Towards this purpose, a multivariate VAR system with error correction model (ECM) and the innovation accounting (variance decomposition and impulse response function analysis) techniques are used. The results show that while there is a bi-directional causality between domestic investment and economic growth, there is only a single-directional causality from FDI to domestic investment and to economic growth. Rather than crowding out domestic investment, FDI is found to be complementary with domestic investment. Thus, FDI has not only assisted in overcoming shortage of capital, it has also stimulated economic growth through complementing domestic investment in China.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- China
3088. Gender and Ethnicity in Post-Conflict Kosovo
- Author:
- Ira N. Gang, Sumon Kumar Bhaumik, and Myeong-Su Yun
- Publication Date:
- 04-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The paper examines the comparative economic wellbeing of female- and male-headed households among Serbs and Albanians in post-conflict Kosovo. Evidence from the living standards measurement study (LSMS) household survey, 2001, shows that Serb households, both those headed by women and men, are worse off than Albanians households. We find that female-headed households do not generally suffer more than male-headed households, but there is substantial variation among ethnic groups. While Albanian female-headed households are marginally better-off than Albanian male-headed households, Serb female-headed households have the lowest standard of living.
- Topic:
- Demographics, Economics, and Gender Issues
- Political Geography:
- Kosovo, Balkans, and Albania
3089. Gender and Informal Sector Analysis in India: Economy Wide Approaches
- Author:
- Anushree Sinha and Haider Khan
- Publication Date:
- 06-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The main purpose of this paper is to look at the incorporation of gender and the informal sector within a general equilibrium framework for India. Moreover, we clarify some important links between a gender aware informal sector based social accounting matrix (SAM) and general equilibrium models such as the computable general equilibrium (CGE) models including as a special case the fixed price multiplier (FPM) models. In particular, economy wide modelling of gender and the informal sector is facilitated by the use of national level data and constructing the base data set as an SAM. Another important strategy is to conceptualize the economy within gender structures, entailing the recognition of gender relations as an intervening variable in all economic activities.
- Topic:
- Economics and Gender Issues
- Political Geography:
- India and Asia
3090. Global Growth and Distribution: Are China and India Reshaping the World?
- Author:
- Dominique van der Mensbrugghe, Maurizio Bussolo, Rafael E. De Hoyos, and Denis Medvedev
- Publication Date:
- 03-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Over the past 20 years, aggregate measures of global inequality have changed little even if significant structural changes have been observed. High growth rates of China and India lifted millions out of poverty, while the stagnation in many African countries caused them to fall behind. Using the World Bank's LINKAGE global general equilibrium model and the newly developed Global Income Distribution Dynamics (GIDD) tool, this paper assesses the distribution and poverty effects of a scenario where these trends continue in the future. Even by anticipating a deceleration, growth in China and India is a key force behind the expected convergence of per capita incomes at the global level. Millions of Chinese and Indian consumers will enter into a rapidly emerging global middle class—a group of people who can afford, and demand access to, the standards of living previously reserved mainly for the residents of developed countries. Notwithstanding these positive developments, fast growth is often characterized by high urbanization and growing demand for skills, both of which result in a widening of income distribution within countries. These opposing distributional effects highlight the importance of analysing global disparities by taking into account—as the GIDD does—income dynamics between and within countries.
- Topic:
- Development, Economics, and Poverty
- Political Geography:
- Africa, China, India, and Asia