Developing Story
The Contribution of Human Capital to China's Economic Growth
John Whalley & Xiliang Zhao
NBER Working Paper, December 2010
Abstract:
This paper develops a human capital measure in the sense of Schultz (1960) and then reevaluates the contribution of human capital to China's economic growth. The results indicate that human capital plays a much more important role in China's economic growth than available literature suggests, 38.1% of economic growth over 1978-2008, and even higher for 1999-2008. In addition, because human capital formation accelerated following the major educational expansion increases after 1999 (college enrollment in China increased nearly fivefold between 1997 and 2007) while growth rates of GDP are little changed over the period after 1999, total factor productivity increases fall if human capital is used in growth accounting as we suggest. TFP, by our calculations, contributes 16.92% of growth between 1978 and 2008, but this contribution is -7.03% between 1999 and 2008. Negative TFP growth along with the high contribution of physical and human capital to economic growth seem to suggest that there have been decreased in the efficiency of inputs usage in China or worsened misallocation of physical and human capital in recent years. These results underscore the importance of efficient use of human capital, as well as the volume of human capital creation, in China's growth strategy.
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Foreign Aid Shocks as a Cause of Violent Armed Conflict
Richard Nielsen et al.
American Journal of Political Science, forthcoming
Abstract:
In this study we resolve part of the confusion over how foreign aid affects armed conflict. We argue that aid shocks-severe decreases in aid revenues-inadvertently shift the domestic balance of power and potentially induce violence. During aid shocks, potential rebels gain bargaining strength vis-à-vis the government. To appease the rebels, the government must promise future resource transfers, but the government has no incentive to continue its promised transfers if the aid shock proves to be temporary. With the government unable to credibly commit to future resource transfers, violence breaks out. Using AidData's comprehensive dataset of bilateral and multilateral aid from 1981 to 2005, we evaluate the effects of foreign aid on violent armed conflict. In addition to rare-event logit analysis, we employ matching methods to account for the possibility that aid donors anticipate conflict. The results show that negative aid shocks significantly increase the probability of armed conflict onset.
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Indra de Soysa & Krishna Chaitanya Vadlamannati
Kyklos, February 2011, Pages 20-53
Abstract:
Liberals argue that globalization, or growing interdependence among states, will transform societies towards more liberal values reflected in better respect for human rights. Skeptics of globalization, among them Marxists, critical theorists, and a large portion of the NGO community, see globalization facilitating the exploitation of the weak by the strong, exclusion of the poor from economic gain and political rights, increased inequality and economic insecurity, all of which results in social disarray - in other words, globalization is a 'race to the bottom.' Thus, resistance to globalization by ordinary people, they argue, will be met with greater state repression. Previous studies have examined the issue with single indicators, such as trade openness and the level of FDI. We make use of a unique measure of globalization, which gauges globalization along economic, political, and social dimensions, to assess the propositions. Our findings reveal a strong positive association between overall globalization and its disaggregated components on government respect for physical integrity rights between 1981 and 2005 for a large sample of countries, controlling for a host of relevant factors, including the possibility of endogeneity. The results are robust to sample size, alternative data and methods, and when assessing developing countries only. Contrary to the skeptics, our results show that increased exposure to globalization lowers state violations of basic human rights.
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Direct versus Indirect Colonial Rule in India: Long-Term Consequences
Lakshmi Iyer
Review of Economics and Statistics, November 2010, Pages 693-713
Abstract:
This paper compares economic outcomes across areas in India that were under direct British colonial rule with areas that were under indirect colonial rule. Controlling for selective annexation using a specific policy rule, I find that areas that experienced direct rule have significantly lower levels of access to schools, health centers, and roads in the postcolonial period. I find evidence that the quality of governance in the colonial period has a significant and persistent effect on postcolonial outcomes.
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Do human rights offenders oppose human rights resolutions in the United Nations?
Bernhard Boockmann & Axel Dreher
Public Choice, March 2011, Pages 443-467
Abstract:
We investigate whether countries with poor human rights records oppose human rights resolutions in the United Nations General Assembly. An instrumental account of voting would suggest that these countries aim to weaken resolutions since they could be future targets of these policies. We estimate determinants of voting using 13,000 individual voting decisions from 1980 to 2002. Our results from ordered probit estimation show that a country's human rights situation is irrelevant to voting behavior if regional dependence of voting is controlled for. The results also show that simple rules for aggregating voting choices can lead to misleading results.
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Is There a "Double Bonus" from Reducing Inequality?
Akihito Asano
Economic Inquiry, forthcoming
Abstract:
We study the effect of inequality on growth in an overlapping generations (OLG) model where inequality affects growth through accumulation of human capital and endogenous fertility. In contrast to much of the existing literature, we argue that the effect of inequality on growth might be non-monotonic. Our model suggests that the effect depends on the demographic stage of development: inequality impedes growth in low-fertility (high human capital) economies, but enhances growth in high-fertility (low human capital) economies. Our finding casts doubt on a "double bonus" from reducing inequality in developing countries which are typically characterized by high fertility.
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The ineffectiveness of development aid on growth: An update
Hristos Doucouliagos & Martin Paldam
European Journal of Political Economy, forthcoming
Abstract:
This note deals with a paradox: A literature growing exponentially even though it keeps finding the same (disappointing) results. We draw upon 1217 estimates of aid effectiveness of which 676 are reported in recent years, to examine three subjects: (S1) Has the literature finally overcome the aid ineffectiveness result? (S2) Increasingly studies try to adjust for simultaneity bias. Has the evidence shown the existence of this bias? To these two questions the answer remains "no". However, (S3) new evidence suggests that some aid components may have a positive effect on growth. This is a promising new result, but it is not yet confirmed by independent replication.
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Humanitarian Aid, Fertility and Economic Growth
Kyriakos Neanidis
Economica, forthcoming
Abstract:
This paper examines the effect of humanitarian aid on fertility and economic growth. In an overlapping generations model, where health status in adulthood depends on health in childhood, adult agents allocate their time to work, leisure and childrearing activities. Humanitarian aid influences the probability of survival to adulthood, health in childhood, and the time that adults allocate to childrearing, giving rise to an ambiguous effect on both fertility and growth. An empirical investigation for the period 1973-2007 suggests that humanitarian aid has on average a zero effect on the rates of fertility and of per capita output growth.
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Political regime change, economic liberalization and growth accelerations
Richard Jong-A-Pin & Jakob De Haan
Public Choice, January 2011, Pages 93-115
Abstract:
We examine whether the type of political regime, regime changes, and economic liberalization are related to economic growth accelerations. Our results show that growth accelerations are preceded by economic liberalizations. We also find that growth accelerations are less likely to happen the longer a political regime - be it a democracy or an autocracy - has been in place, while (a move toward) more democracy according to the Polity IV dataset reduces the likelihood of growth accelerations.
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Remittances as a social status signaling device
Claire Naiditch & Radu Vranceanu
Research in Economics, forthcoming
Abstract:
Like all human beings, migrants may have a concern about their prestige or social status in the eyes of left home family and friends. They can remit money in order to signal their economic success and increase their status. We show that, if migrants' income is private information, unsuccessful migrants might accept a worsening of their living conditions and send back home large amounts of remittances only in order to make residents believe that they are successful. In some cases, successful migrants can signal their true favorable economic situation by remitting an even larger amount. The game presents various equilibria that differ with respect to the proportion and nature of the migrants who sacrifice consumption opportunities to status revealing actions.
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Does intellectual property rights reform spur industrial development?
Lee Branstetter, Ray Fisman, Fritz Foley & Kamal Saggi
Journal of International Economics, January 2011, Pages 27-36
Abstract:
An extensive theoretical literature generates ambiguous predictions concerning the effects of intellectual property rights (IPR) reform on industrial development. The impact depends on whether multinational enterprises (MNEs) expand production in reforming countries and the extent of decline in imitative activity. We examine the responses of U.S.-based MNEs and domestic industrial production to a set of intellectual property rights reforms in the 1980s and 1990s. Following reform, MNEs expand the scale of their activities. MNEs that make extensive use of intellectual property disproportionately increase their use of inputs. There is an overall expansion of industrial activity after reform, and highly disaggregated trade data indicate higher exports of new goods. These results suggest that the expansion of multinational activity more than offsets any decline in imitative activity.
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Food Security in an Era of Economic Volatility
Rosamond Naylor & Walter Falcon
Population and Development Review, December 2010, Pages 693-723
Abstract:
This article analyzes international commodity price movements, assesses food policies in response to price fluctuations, and explores the food security implications of price volatility on low-income groups. It focuses specifically on measurements, causes, and consequences of recent food price trends, variability around those trends, and price spikes. Combining these three components of price dynamics shows that the variation in real prices post-2000 was substantially greater than that in the 1980s and 1990s, and was approximately equal to the extreme volatility in commodity prices that was experienced in the 1970s. Macro policy, exchange rates, and petroleum prices were important determinants of price variability over 2005-2010, highlighting the new linkages between the agriculture-energy and agriculture-finance markets that affect the world food economy today. These linkages contributed in large part to misguided expectations and uncertainty that drove prices to their peak in 2008. The article also argues that there is a long-lasting effect of price spikes on food policy around the world, often resulting in self-sufficiency policies that create even more volatility in international markets. The efforts by governments to stabilize prices frequently contribute to even greater food insecurity among poor households, most of which are in rural areas and survive on the margin of net consumption and net production. Events of 2008 - and more recently in 2010 - underscore the impact of price variability for food security and the need for refocused policy approaches to prevent and mitigate price spikes.
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Elizabeth Ransom & Carmen Bain
Gender & Society, February 2011, Pages 48-74
Abstract:
Gender-based inequalities constrain women's ability to participate in efforts to enhance agricultural production and reduce poverty and food insecurity. To resolve this, development organizations have targeted women and more recently "mainstreamed" gender within their agricultural aid programs. Through an analysis of agricultural-related development aid, we examine whether funded agricultural projects have increasingly targeted women and/or gender. Our results show that the number of agricultural aid projects and the dollar amounts targeting women/gender increased between 1978 and 2003. However, the increase was modest and, as a percentage of all agricultural development aid, has declined since the late 1990s. Significantly, this decline occurs at a time when there are an increasing number of women engaged in agriculture. Our findings suggest that the rhetoric of gender mainstreaming outstrips efforts to develop projects aimed at women and gender inequality and that the concept may be being used to legitimize a decline in focusing explicitly on women.
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Patterns and trends of adult height in India in 2005-06
Jessica Perkins, Kashif Khan, George Davey Smith & S.V. Subramanian
Economics & Human Biology, forthcoming
Abstract:
Differences in height by wealth, education, caste, geography, and birth years are examined for men and women born between 1961 and 1981 in India using data from the 2005-06 Indian National Family Health Survey. There is a positive association between socioeconomic position (SEP) and height with lower SEP individuals being shorter. Height varies across the 29 Indian states even after accounting for individual differences in SEP, with substantial variation in height remaining at the neighborhood and state levels. Among men, height appears to have modestly increased for all birth cohorts as compared to the 1961-65 cohort, with smaller increases for the most recent cohorts. For women, height across birth cohorts has shown little increase. These results suggest that inequalities in several health outcomes for low SEP adults are reflected in inequalities in height, which can be used to represent long-term health at the population level. Shorter stature and slower growth among some groups may indicate that they did not experience the improvements that were assumed to have occurred across the population. This study presents a comprehensive, empirical description of mean height differences and the underlying variation among adults in India across diverse socioeconomic, demographic, and geographically-oriented groups as well as birth cohorts.
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Food Aid and Agricultural Cargo Preference
Elizabeth Bageant, Christopher Barrett & Erin Lentz
Applied Economic Perspectives and Policy, Winter 2010, Pages 624-641
Abstract:
This paper uses an unprecedentedly rich data set to estimate the cost of agricultural cargo preference (ACP) restrictions on United States food aid programs, and to document some of the programs' competitiveness and national security impacts. ACP cost U.S. taxpayers $140 million in 2006, 46% more than competitive freight costs would have. This roughly equals the cost of non-emergency food aid to Africa. Furthermore, 70% of ACP vessels did not satisfy the criteria that deem them militarily useful, a large share were ultimately owned by foreign corporations, and no ACP vessel crew has been mobilized for national service.
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The Origins of Japanese Technological Modernization
Tom Nicholas
Explorations in Economic History, forthcoming
Abstract:
Explanations of Japanese technological modernization from the late nineteenth to the mid-twentieth century have increasingly focused on domestic capabilities as opposed to the traditional emphasis on knowledge transfers from the West. Yet, the literature is mostly qualitative and it lacks a comparative context. This article presents quantitative metrics derived from patent data covering Japan, the United States, Britain and Germany and it also exploits non-patent based sources. The evidence shows that Japanese domestic inventive activity exhibited a pattern of rapid modernization to the technology frontier in terms of its level, sectoral distribution and quality. Domestic capabilities were much stronger than is often supposed in accounts that stress the prevalence of Western technology diffusion. A long run expansion in indigenous development set a favorable foundation for the economic growth miracle Japan experienced after the Second World War.
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Başak Koca Özer, Mehmet Sağır & İsmail Özer
Economics & Human Biology, forthcoming
Abstract:
We use human-skeleton samples to estimate the height of adults living in Anatolia during the Neolithic period. We also report the results of surveys taken in the 20th century on the height of the Turkish population. Neolithic and the Chalcolithic (5000-3000 B.C.) male heights are estimated as 170.9 cm and 165.0 cm, respectively. Pronounced increases were observed for both sexes between the Chalcolithic and Iron (1000-580 B.C.) periods and sharp decreases among both males and females in the Hellenistic-Roman period (333 B.C.-395 A.D.). Moreover, recovery to the Iron Age levels was achieved in the Anatolian Medieval period (395-1453 A.D.) for both sexes (169.4 cm for males and 158.0 cm for females). In 1884 the mean height of men was 162.2 cm and by the beginning of the 1930s it increased to 166.3 cm. In the first nationwide survey in 1937 males mean height was 165.3 cm, and females was 152.3 cm, where today current heights are 174.0 cm and 158.9 cm, respectively.