The devil is in the shadow. Do institutions affect income and productivity or only official income and official productivity?

This paper assesses the relationship between institutions, output, and productivity when official output is corrected for the size of the shadow economy. Our results confirm the usual positive impact of institutional quality on official output and total factor productivity, and its negative impact on the size of the underground economy. However, once output is corrected for the shadow economy, the relationship between institutions and output becomes weaker. The impact of institutions on total (“corrected”) factor productivity becomes insignificant. Differences in corrected output must then be attributed to differences in factor endowments. These results survive several tests for robustness.     

Implications of EU Enlargement on the EU Greenhouse Gas 'Bubble' and Internal Burden Sharing

Currently, the EU-15 forms the only 'bubble' under the Kyoto Protocol and has negotiated an internal burden sharing. A strategic EU climate policy should include accession countries. Thus, even in the case of early ratification of the Kyoto Protocol by 2002, it would be sensible to form a bubble with all countries that are certain to be EU members during the commitment period 2008–2012. Of course due to Art. 4.4 of the Protocol the EU-15 has to stick to its own bubble. However, nothing prevents it from forming an implicit bubble including all first wave countries by inducing them to form a bubble on their own and transfer the surplus to the EU-15. Similarly, second wave countries should form a bubble of their own to co-ordinate JI and permit transfers to the EU. This would reduce the gap between business-as-usual and the target by about 50%. If ratification is delayed to a point where it is clear which second wave countries will be members by 2008, the bubble should be extended by those countries. When in 2005 target negotiations start for the second commitment period, the EU should negotiate a bubble consisting of all states being certain to be members by 2013.     

The European Union (EU) in Asian Security: Actor with a Punch or Distant Bystander?

The EU calls itself a “soft power,” making “soft power” contributions to Asian security. That is undoubtedly what the EU is and does in Asia and the track record of European contributions to Asian peace and stability through economic and financial as well as development aid and technical assistance over the decades is not unimpressive. As will be shown below, over recent years Brussels and the Union's individual member states have sought to increase their involvement and role in Asian “hard security,” attempting to get rid of its reputation of being security a “free-rider” enjoying but not sharing the burden of US regional security guarantees. While the EU will continue to be a “hard security” actor in Asian security within limits, it is advised to concentrate its security cooperation with like-minded partners such as Japan and the US as opposed to hoping that talking to Beijing on regional or global security issues produces tangible results. As will be shown below, it clearly does not as Beijing continues to conduct very assertive and at times aggressive regional foreign and security policies insisting on the “principle of non-interference” in Chinese domestic and foreign policies. Consequently, EU influence on Chinese foreign and security policies in general and its increasingly aggressive policies related to territorial claims in the East China and South China Seas will continue to exist on paper and paper only.     

Female family size ideals as population policy objectives for Latin America: Demographic and methodological considerations

This paper discusses the use of female family size ideals in the formulation of population policies in Latin America and the demographic implications of and barriers to the attainment of this objective. Using a specially developed cohort projection model that incorporates contraceptive activity and resource limitations, the authors empirically analyze El Salvador, Mexico and Venezuela.Results indicate that in the next two decades most cohorts of women now in the reproductive ages will experience completed family size at levels that far exceed stated ideal family size. Using data based on optimistic assumptions concerning the effectiveness of family planning services, the authors feel that achieving ideal family size could be possible. Despite the apparent difficulties involved in reducing the high fertility of these populations, the authors conclude that family size ideals as stated by women deserve further attention as a policy alternative.This is a revised version of a paper given at the 1975 Annual Meeting of the Population Association of America, Seattle, Washington, April 1975. Research for this paper was funded by Population Council Grant T73.54.     

IMF conditionality: theory and evidence

This article analyzes whether and to what extent reliance on conditionality is appropriate to guarantee the revolving character of the resources of the International Monetary Fund (IMF). The paper presents theoretical arguments in favor of conditionality, and those against the use of conditions. It summarizes the track record of program implementation and discusses the evidence of factors determining implementation. Whether proponents or critics of conditionality can be supported by existing data analysis is also investigated, as is the success of conditionality in terms of outcomes. The final section draws policy implications.     

Does terror increase aid?

This article investigates empirically whether, and in what ways, donors in the Development Assistance Committee respond to transnational terrorist incidents and the onset of the War on Terror by changing aid effort and aid allocation. First, an analysis of 22 donor countries shows that aid effort increased during the War on Terror period, but did not respond to the actual number of terror events. Second, using aid allocation equations, we find that countries where terror originates are not more likely to receive aid as a consequence, but if they are selected, they receive larger amounts of aid. Our results imply that politicians may still have to learn from economic research. To the extent that development aid can effectively combat terror across the world, as recent research suggests it does, politicians would be well-advised to target aid to those countries where terrorist groups exist in abundance.