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3921. Indivisibility, Fairness, Farsightedness and their Implications for Security

Author:
S. Mansoob Murshed
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper is concerned with the problems of achieving lasting peace. One dimension includes fairly sharing the post-war economic and political pie or the peace dividend. This requires post-war allocations that are envy free. Many peace agreements that end civil wars are notoriously unstable in that they are often not implemented, or break down after some time. Commitments to the peace treaty are simply not credible. One reason for that could be certain indivisibilities in perceived shares of power and income in the peace settlement, as well as the inability to correctly infer the value of path dependence when future reputation depends on present actions but the future is heavily discounted. The paper also discusses the role of another type of unfairness, namely a deep sense of humiliation, in determining acts of transnational terrorism, where force may not be the answer in attempting to deter deeply motivated persons.
Topic:
Conflict Prevention, Economics, Peace Studies, and War

3922. Innovations, High-Tech Trade and Industrial Development: Theory, Evidence and Policy

Author:
Lakhwinder Singh
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Innovations spur science-based trade and industrial development in a fast changing pace of globalization. Knowledge accumulation and diffusion have been increasingly recognised as fundamental factors that play an important role in long-run economic growth. This paper focuses on the long-term innovation strategy of industrial and technological development in developing countries. Growth theory, empirical evidence and several indicators of innovation have been pressed into service to draw important lessons from historical experience of the developed and newly industrializing countries for the industrial development of the developing economies. Technology development and public technology policy experience of the East Asian countries have been examined to reinvent the role of public technology policy that can be adopted to develop national innovation system to nurture and build innovative capabilities in the developing economies in the dynamic global economy.
Topic:
Development, Economics, Industrial Policy, and International Trade and Finance
Political Geography:
East Asia

3923. Decomposing Growth: Do Low-Income and HIPCs Differ from High-Income Countries? Growth, Technological Catch-up, Technological Change and Human and Physical Capital Deepening

Author:
Heli Virta and Pertti Haaparanta
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper studies the distribution of output per worker between the years 1980 and 2000 in different country groups. The study uses data envelopment analysis (DEA) to decompose the changes in the distribution of labour productivity into changes in productive efficiency, changes in best practice technology, accumulation of physical capital, and accumulation of human capital. The study focuses on low-income countries and within them on highly indebted poor countries (HIPCs), which has not been possible in earlier studies.
Topic:
Civil Society, Development, Economics, and Science and Technology

3924. Is Social Capital Part of the Institutions Continuum and is it a Deep Determinant of Development?

Author:
Stephen Knowles
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
There is a growing literature which analyses, using cross-country data, whether institutions or geography is the most important deep determinant of economic development. The empirical proxies for institutions used in this literature focus on the definition of institutions, formal and informal. This study argues that the concept of informal institutions is similar to social capital. However, the social capital and 'institutions as a deep determinant' literatures rarely acknowledge the existence of the other. It is argued that social capital meets the criteria for being a deep determinant of development and that both the cross-country literature on social capital, and the deep determinants of development literature, could be enriched by empirically modelling social capital as a deep determinant of development.
Topic:
Civil Society, Development, and Economics

3925. Applying Behavioural Economics to International Development Policy

Author:
Kostas Stamoulis and Leigh Anderson
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Many development policies and programmes are premised on a traditional economic model of rationality to predict how individuals will respond to changes in incentives. Despite the emphasis of these programmes on poverty reduction, economists and the development community in general are still unable to fully understand how the poor make decisions, especially under uncertainty and over time. Individuals avail themselves less than predicted in health programmes, participate less than expected in market opportunities, under or over insure themselves, and make short-run decisions that are inconsistent with their long-run welfare. The rise and fall of different descriptive models and paradigms of poor household behaviour can partly be attributed to this limited understanding. More helpful answers may lay within behavioural economics, that these insights are particularly important for poor populations, and that they can improve the future design, implementation and subsequent effectiveness of development programmes. Behavioural economics is an approach that rigorously combines the insights of psychology and economics to try to better understand and predict human decision making. Empirical evidence is helping us learn, for example, how cognitive limitations, fairness, loss aversion, framing of choices, variable discount rates, and the qualitative dimensions of risk—such as proximity and control—affect decision making. The regularity of many of these anomalies suggests that these behaviours are anomalous only to traditional models, but that they may otherwise be the norm.
Topic:
Foreign Policy, Development, Economics, and International Cooperation

3926. A Wider Approach to Aid Effectiveness: Correlated Impacts on Health, Wealth, Fertility and Education

Author:
Mark McGillivray, Sebastian Torres, and David Fielding
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we discuss the results of research into the impact of foreign aid on human development. Rather than focussing on per capita income, as is common in the existing literature, we look at how aid impacts on a range of human development indicators, including measures, of health, education and fertility, and allow for the fact that these different dimensions of wellbeing are likely to interact with each other. Overall, aid is found to have a substantial positive impact on many development outcome.
Topic:
Development, Economics, Health, and Humanitarian Aid

3927. The Human Dimensions of the Global Development Process in the Early Part of the 21st Century: Critical Trends and New Challenges

Author:
Mihly Simai
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
At the beginning of the twenty -first century there is a rare coincidence of profound transformations in a number of areas, in population dynamics, in human settlements, in science and technology, economics, social stratification, in the role and functions of the states and in the global power structure and in governance. The systemic transformation of the former socialist countries is an important component of the ongoing changes Political, economic, and social conditions vary immensely throughout the world, influenced by the size, natural endowments, development level, economic structure, political and institutional patterns, and competitiveness of the countries. The new state and non-state actors make the system of interests and values more diverse. All these have a major influence on the future of the global development process. The paper concludes that developing societies do not need old textbook models, neoliberal or other utopias. There is widespread demand for a new scientific thinking on development, with realistic and humanistic alternatives helping collaborative global and national actions.
Topic:
Development, Economics, Globalization, and Government

3928. Institutions, Policies and Economic Development

Author:
Grzegorz W. Kolodko
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Institutions are not only created and built, but al so, and especially, need to be learnt. It is a process which takes place in all economies, but acquires a special importance in less advanced countries. Not only theoretical arguments, but also the practical experience over the past 15 years demonstrates that faster economic growth, and hence also more broadly, socioeconomic development, is attained by those countries which take greater care to foster the institutional reinforcement of market economy. However, progress in market-economy institution building is not in itself sufficient to ensure sustained growth. Another indispensable component is an appropriately designed and implemented economic policy which must not confuse the means with the aims.
Topic:
Development, Economics, Globalization, and International Trade and Finance

3929. Migration in the Development Studies Literature: Has It Come Out of Its Marginality?

Author:
Arjan de Hann
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores the role migration has played in development studies, and in debates on economic growth and poverty. It argues that, despite a recent surge of interest in international migration and remittances, research on human mobility particularly for labour within poor countries does not have the place it deserves, and that it used to have in the classical development literature. Review of the empirical literature suggests that in fact much is known about the migration–development relationship, provided we are careful with definitions, and allow for context-specificity to be a key component of analyses. Against this richness of empirical detail, the paper reviews theoretical models of migration, finding significant differences in understandings of migration and its role in shaping wellbeing, but also complementarities. This highlights the importance of interdisciplinarity, and institutional understanding of processes of economic growth. In particular, it stresses that development economics need to draw more strongly on the insights by and approaches of non-economist social sciences.
Topic:
Development, Economics, Education, and Migration

3930. Credit Co-operatives in Locally Financed Economic Development: Using Energy Efficiency as a Lever

Author:
Robert J. McIntyre
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In most transitional and many developing countries institutions capable of supporting economic development with localized saving-investment cycles have not developed. This crucial gap is in no way addressed by either country-level macro programmes dealing with 'development finance' or by donor-driven 'micro credit' schemes of Grameen and other types operating at a lower (local) level. The latter seldom evolve into financial institutions able to sustain themselves on the basis of local resources, do not operate on a sufficient scale to trigger dynamic local-level economic growth, and are ultimately artificial manifestations of concessional or charitable aid. The advantages of credit co-operatives in mobilizing and financing local economic development a contrasted with the disadvantages of both conventional micro credit and the most recent neoliberal fashion of so-called 'new wave financial institutions'. Both precedent and the structural logic suggest that this is a promising space for the development of a localized financial system based on credit co-operatives, which elsewhere have overcome the SME credit famine and stimulated local saving-investment cycles. Recent Russian developments are placed in the context of earlier experience in structurally similar conditions. These lessons apply to all other former Soviet Union states, as well as other countries.
Topic:
Development, Economics, Humanitarian Aid, and Third World
Political Geography:
Russia