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102. 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
103. 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
104. 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
105. 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
106. 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
107. 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
108. 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
109. Patterns of Rent-Extraction and Deployment in Developing Countries: Implications for Governance, Economic Policy and Performance
- Author:
- Richard M. Auty
- Publication Date:
- 02-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Rents tend to be relatively high in developing countries and also very fungible, so that differences in the scale of the rent and in its distribution among economic agents profoundly affect the nature of the political state and the development trajectory. This paper identifies two basic trajectories to a high-income democracy linked to the scale and deployment of rents. Low-rent countries tend to engender developmental political states that competitively diversify the economy and sustain rapid per capita GDP (PCGDP) growth, which strengthens three key sanctions against anti-social governance (political accountability, social capital and the rule of law) to achieve endogenous democratization that is incremental. In contrast, rent-rich countries are likely to experience a slower and more erratic transition. This is because high rents tend to nurture non-developmental (predatory) politic al states whose deployment of the rent locks the economy into a staple trap, which carries a high risk of a growth collapse. The events presaging a growth collapse weaken sanctions against anti-social governance. However, a growth collapse may abruptly trigger democracy if exogenous factors are favourable, although such a change is likely to prove unstable and prone to regression. Very preliminary tests of the link between PCGDP growth and sanctions against anti- social governance suggest that social capital and law strengthen as predicted by the models for low-rent countries, but political accountability lags. Rent-rich countries exhibit the expected weaker link between PCGDP growth and democratization, an outcome consistent with a more erratic transition towards a high-income democracy.
- Topic:
- Development, Economics, Politics, and Third World
110. Development in Chile 1990-2005: Lessons from a Positive Experience
- Author:
- lvaro Garca Hurtado
- Publication Date:
- 02-2006
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Chile, in the last 15 years, has shown remarkable results in terms of growth, poverty reduction and democratic governance. This pa per reviews the structural changes that were behind these positive outcomes, as well as the pending challenges for Chile's development. Also shows that Chile did better in terms of growth than social integration and that this is related to the weak representation and participation of a wide majority in the national debate and decision making process. It also draws conclusions valid for other Latin American countries' development.
- Topic:
- International Relations, Development, and Economics
- Political Geography:
- South America and Chile