This paper models the inter-temporal allocation of foreign development aid to Papua New Guinea (PNG). A formal theoretical model of aid allocation is developed, in which aid to any one country is determined jointly with aid to all other recipient...
If uncertainty exists over the exact location of the poverty line or over which measure to use to compare poverty between distributions, one may want to check whether poverty dominance holds. We develop a consistent statistical test to test the null...
‘Globalization’ implies change, and uncertainty over future change may affect household welfare. We use data on Lorenz curves over the last fifty years for a sample of 53 (mostly developing) countries. Treating each country-quintile-year as an...
This paper proposes a semi-parametric method for poverty decomposition, which combines the data-generating procedure of Shorrocks and Wan (2004) with the Shapley value framework of Shorrocks (1999). Compared with the popular method of Datt and...
This paper explores the hypothesis that the phenomenon of child labour is explicable in terms of poverty that compels a household to keep its children out of school and put them to work in the cause of the household’s survival. In exploring the link...
This paper surveys 50 years of empirical research on the macroeconomic impact of aid, looking mainly at studies examining the link between aid and growth. It argues that studies dating until the late 1990s produced either contradictory or...
Over 1975-2003 nearly 200 new constitutions were drawn up in countries at risk of conflict, as part of peace processes and the adoption of multiparty political systems. The process of writing constitutions is considered to be very important to the...
We analyze the relation between inequality, corruption and competition in a developing economy context where markets are imperfect. We consider an economy where different types of households (efficient and inefficient) choose to undertake production...
This paper offers a substantive contribution to the debate on the role of international trade on the development of emerging countries. The aim is to detect empirically the phenomenon of vulnerability induced by trade openness. The methodology adopts...
An important channel through which globalization affects poverty is introducing new technologies to developing countries. Adoption of new technologies can be hindered by uncertainties about their efficiency. This paper studies the role of information...
This study explores the effects of macroeconomic factors on total factor productivity (TFP) in 34 sub-Saharan African countries for the period 1980-2002. The econometric analysis shows that external debt is negatively and significantly related to TFP...
This paper introduces two composite indices of globalization. The first is based on the Kearney/Foreign Policy magazine and the second is obtained from principal component analysis. They indicate the level of globalization and show how globalization...
The impact of globalization on global and local inequality is hotly debated in the recent literature. This study considers the separate issue of the impact of globalization on poverty through quantifying explicitly the responsiveness of poverty to...
The literature on the economics of happiness in the developed economies finds discrepancies between reported measures of wellbeing and income measures. The ‘Easterlin paradox’, for example, shows that average happiness levels do not increase as...
There is a widespread view that political criteria have received less emphasis in aid allocation since the end of the cold war, with a greater share of aid subsequently being based on developmental criteria. An observed increase in aid effectiveness...
Given the current focus of international development policy on pro-poor growth and poverty reduction, the role of the informal sector in the process of economic development is again at the top of the research and policy agenda. A key question is if...
The objective of the paper is to understand the transforming relationship between the formal and informal sector in a liberalizing open developing economy. There are various facets in this relationship, and we focus on three essential aspects. First...
This paper proposes a concept of inequality comparisons with ordinal multidimensional categorical data. In our model, one population is more unequal than another when they have common arithmetic median outcomes and the first can be obtained from the...
Alternative approaches to modelling distributional and welfare effects of changes in policy and the economic environment in developing and transition countries are surveyed. Microsimulations range from pure accounting approaches to models with...
Issues related to the volatility of aid flows are now becoming crucial in view of their relevance to the achievement of the Millennium Development Goals. The paper examines aid volatility using data for 66 aid recipients over the period 1973-2002. We...
Although the finance–growth nexus has become firmly entrenched in the empirical literature, studies that question the strength of the empirical results have appeared and seem to have become more frequent as well. In this paper we re-examine the core...
We investigate domestic private investment behaviour in a panel of 24 low-income and middle-income countries spanning a period of 1981-2000. The paper rigorously addresses (i) the cross-country heterogeneity in private investment behaviour, and (ii)...
This paper positions itself among the very rare microeconomic analyses on the consequences of civil war. Up to now, most analyses on this topic are based upon household surveys. The originality of the present study is that it investigates for the...
Drawing on recent literature, the paper argues that institutions and political economy factors hold the key to understanding why some countries have succeeded in developing their financial systems while others have not. The paper also reviews new...
We study whether financial openness facilitates the economic integration of formerly centrally planned economies with the EU-15. Two dimensions of economic integration are considered: cross-country convergence of per-capita incomes and bilateral...
We analyse two potential effects arising from regional (and with EU) integration—increased quality of institutions (including the quality of financial institutions) and, economic policies and reduced multilateral exchange rate volatility—in a...
Our paper investigates the unexplored impact of education on inflation and of this relationship on economic growth. By using a sample of 102 countries observed on non-overlapping five-year data spells over the period 1963-2001, we find that average...
This paper aims to investigate the relationship between financial liberalization on the one hand and saving, investment and economic growth on the other hand, using a new dataset for measuring financial liberalization for a sample of 25 developing...
Recent years have witnessed important structural changes around the world as a result of the globalization process, the creation of new economic blocks and the liberalization of financial sector in many countries. Responding to these changes many...
Sen’s influential work on human development has led economists to explore new areas that have become increasingly important for human well-being. In particular, Sen emphasizes the importance of the ‘freedom to choose’. Freedom, however, is not always...
We analyse the Granger causal relationships between foreign direct investment (FDI) and GDP in a sample of 31 developing countries covering 31 years. Using estimators for heterogeneous panel data we find bi-directional causality between the FDI-to...
There has been much debate about how much poor people in developing countries gain from trade openness, as one aspect of ‘globalization’. The paper views the issue through both ‘macro’ and ‘micro’ empirical lenses. The macro lens uses cross-country...
This paper investigates the simultaneous causal relationship between investments in information and communication technology (ICT) and flows of foreign direct investment (FDI), with reference to its implications on economic growth. For the empirical...
The paper examines the causal relationship between FDI and economic growth by using an innovative econometric methodology to study the direction of causality between the two variables. We apply our methodology, based on the Toda-Yamamoto test for...
Data from several investor surveys suggest that macroeconomic instability, investment restrictions, corruption and political instability have a negative impact on foreign direct investment (FDI) to Africa. However, the relationship between FDI and...
Determining whether well-being has improved is an important multidisciplinary task. It is important therefore to develop a multidimensional measure of well-being that reflects a wide spectrum of human needs. A new approach is presented in this paper...
This paper presents a model allowing one to analyze the joint determination of inequality, taxes, human capital and growth. We consider the political economy of redistribution between three income groups in a dynamic economy. The paper seeks to...
This study attempts to determine the extent to which human potential may be unlocked by government or other formal sector actions that induce voluntary contributions by individuals to the activities of Indonesia’s posyandus or village health posts...
One of the most notable phenomena during economic transition is the shrinkage of the public sector and expansion of the not working population, simultaneously with the expansion of both the formal and informal private sectors. We address the related...
The Millennium Development Goals (MDGs) give aid to Africa a new emphasis. Yet aid flows to Africa have trended downward over the last decade, and as a consequence more Africans now live in poverty. This is especially true of Sub-Saharan Africa. Any...
Recent evidence from an exhaustive political-economy study of growth of African economies—the Growth Project of the African Economic Research Consortium—suggests that ‘policy syndromes’ have substantially contributed to the generally poor growth in...
The rapid economic growth experienced within the past two decades in China highly correlates with childhood overweightness. The epidemic has become an issue of grave concern. A principal factor considered to be responsible for the epidemic in the...
This study focuses on growth, poverty and inequality in Rwanda. We take a broad perspective, in two respects. First, we consider a long time period so as to compare the current situation with the pre-war situation, allowing us to assess whether the...
Three major policy regimes, namely import substitution, market liberalization and export promotion have greatly influenced Kenyan industrialization since independence in 1963. Overall, import substitution strategy was successful in establishing some...
In this paper, we compare subjective and money-metric measures of poverty in South Africa using data collected in the 2008/09 Living Conditions Survey. In addition to collecting detailed information on expenditure, the survey asked respondents to...
This paper examines the relationship between trade (exports), growth, and inequality, using a panel of 100 countries over 30 years (1980 to 2010). As there is no clear theoretical relationship between trade (exports) and inequality, and as inequality...
Social capital and political connections can play an important role in developing countries where markets fail and institutions are weak. This paper explores their role in household micro-enterprise operation and success in the rural low-income...
Finn Tarp This is the first in a series of articles that Angle will be running before and after the 4th High Level Forum on Aid Effectiveness in Busan...
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