Foreign aid and the economic growth of developing countries (LDCs): Further evidence

The objectives of this article are to revisit the critical role that foreign aid presently plays in the economic growth of the LDCs and to examine the nature of its utilization in those countries which heavily rely on foreign aid. Other sources of economic growth such as capital (physical and human capital), raw labor, technological changes, and the degree of political and civil liberties will also be considered. Using average cross-sectional data for eighty countries over the 1971–1990 period, the study shows that foreign aid has a statistically positive effect on economic growth in developing countries. Lack of political and civil liberties is found to have a negative, but statistically marginal impact on economic growth. A policy implication which may be drawn from the study is that foreign capital inflow can have a beneficial effect by supplementing domestic savings rather than replacing them. Bichaka Fayissa, Ph.D., is Professor of Economics at Middle Tennessee State University, Murfreesboro, TN. He has published in theInternational Journal of Social Economics, World Development, Keil World Economics, Quarterly Review of Economics and Finance, Applied Economics, Economia Internazionale, Journal of Economics and Finance, Journal of Legal Economics, and several other journals.     

Economic rights and government in developing countries: Cross-national evidence on growth and development

Most analysts assume that economic rights (especially to property and to contracts) help foster economic development, but the relationship is rarely studied empirically. Using three recently developed indexes of economic freedom, this article explores this issue for the mid-1980s to the mid-1990s. It finds that developing countries that score better in protecting economic rights also tend to grow, faster and to score higher in human development. In addition, economic rights are associated with democratic government and with higher levels of average national income. Arthur A. Goldsmith is professor of management at the University of Massachusetts, Boston. During the 1998 academic year he is a Visiting Scholar at the Harvard Institute for International Development. Professor Goldsmith has published widely on global economic and management issues, and has consulted for several international development agencies. His most recent articles have appeared inInternational Review of Administrative Sciences, World Development, Journal of Development Studies, andDevelopment and Change. Professor Goldsmith's latest bookBusiness, Government, Society: The Global Political Economy was published in 1996.     

Teenage fertility in developing countries

Perhaps one of the most pervasive phenomena among teenaged females today is “teenage fertility”. The purpose of this article is to describe teenage fertility as it relates to developing countries. The study attempts to pose the problem by considering a large number of developing nations for which data are available and by describing the levels and trends in teen fertility rates.     

Financial liberalization in developing countries

This article shows that higher interest rates increase the extent of financial intermediation while increased financial intermediation raises the rate of economic growth. Further, increases in interest rates have favorable effects on investment efficiency and on economic growth. It is noted, however, that excessively high interest rates will have unfavorable economic effects. Such a situation can be avoided if the liberalization of the banking system takes place under conditions of monetary stability accompanied by the government supervision of banks. Bela Balassa has been professor of political economy at the Johns Hopkins University and consultant at the World Bank since 1966. His recent books includeNew Directions in the World Economy (Macmillan, 1989) andComparative Advantage, Trade Policy and Economic Development (Harvester Wheatsheaf, 1989).     

Measuring tax effort in developing countries

The traditional methodology, as established by the International Monetary Fund, for measuring tax effort over time and in relation to estimated taxable capacity, is based on the tax ratio. The objects of the article are: (a) to demonstrate that government policy can not be deduced from the buoyancy of tax revenue as reflected in the observed rates of growth or relative magnitudes of the tax ratio; and (b) to propose an alternative measure based directly on policy determined discretionary changes in tax structures, with which the IMF taxable capacity measure, correctly interpreted, could be complementary.     

Privatization in developing countries: ideal and reality

In both developed and developing countries, governments finance, produce, and distribute various goods and services. In recent years, the range of goods provided by government has extended widely, covering many goods which do not meet the purist's definition of “public” goods. As the size of the public sector has increased steadily there has been a growing concern about the effectiveness of the public sector's performance as producer. Critics of this rapid growth argue that the public provision of certain goods is inefficient and have proposed that the private sector replace many current public sector activities, that is, that services be privatized. Since Ronald Reagan took office greater privatization efforts have been pursued in the United States. Paralleling this trend has been a strong endorsement by international and bilateral donor agencies for heavier reliance on the private sector in developing countries.

However, the political, institutional, and economic environments of developing nations are markedly different from those of developed countries. It is not clear that the theories and empirical evidence purported to justify privatization in developed countries are applicable to developing countries.

In this paper we present a study of privatization using the case of Honduras. We examine the policy shift from “direct administration” to “contracting out” for three construction activities: urban upgrading for housing projects, rural primary schools, and rural roads. The purpose of our study is threefold. First, we test key hypotheses pertaining to the effectiveness of privatization, focusing on three aspects: cost, time, and quality. Second, we identify major factors which affect the performance of this privatization approach. Third, we document the impact of privatization as it influences the political and institutional settings of Honduras. Our main finding is that contracting out in Honduras has not led to the common expectations of its proponents because of institutional barriers and limited competitiveness in the market. These findings suggest that privatization can not produce goods and services efficiently without substantial reform in the market and regulatory procedures. Policy makers also need to consider carefully multiple objectives at the national level in making decisions about privatization.     

Mickey Mouse numbers and inequality research in developing countries

The usage of unreliable statistics is common in development economics, particularly in research on income distributional issues. It is widely believed, for example, that the distribution of income in Taiwan equalised dramatically between the early 1950s and about 1980. Under close examination it is clear much of the evidence advanced is flawed, the treatment of data by a number of analysts is puzzling, and links between export‐orientation and inequality trends are flimsy. It is argued that economists should be far more concerned about data problems in their research.     

Review article: Urban problems in developing countries

The Urban Informal Sector: critical perspectives on employment and housing policies. Edited by Ray Bromley, Oxford: Pergamon. 1979. (First published in 1978 in World Development Vol 6 No 9 pp 1031–1200). £12.00

Casual Work and Poverty in Third World Cities. Edited by Ray Bromley & Chris Gerry, Chichester: John Wiley. 1979. 323 pp. £13.50

Urbanisation and Urban Growth in the Caribbean: an essay on social change in dependent societies. Malcolm Cross, Cambridge University Press. 1979. 174 pp. £10.50. £3.95 pb

People and Housing in Third World Cities: perspectives on the problem of spontaneous settlements. D J Dwyer, New York: Longman. 1979. (First published in 1975). 286 pp. £4.95 £4.95 pb

Urbanisation and Social Change in West Africa. Josef Gugler & William G Flanagan, Cambridge University Press. 1978. 235 pp. £10.00. £3.95 pb

Urban Development in the Third World: policy guidelines. John D Herbert, New York: Praeger. 1979. 238 pp. £12.25

Urbanisation in Papua New Guinea: a study of ambivalent townsmen. Hal B Levine & Marten Wolfzhan Levine, Cambridge University Press. 1979. 161 pp. £8.95. £3.95 pb

Networks and Marginality: life in a Mexican shantytown. Larissa Adler Lomnitz, London: Academic Press. 1977. (First published in Spanish in 1976.) 230 pp. £13.65

Million Cities of India. Edited by R P Misra, New Delhi: Vikas. 1978. 405 pp. £10.95

The Management of Squatter Upgrading: a case study of organisation, procedures and participation. David Pasteur, Farnborough, England: Saxon House. 1979. 232 pp. £11.50

Cities of Peasants: the political economy of urbanisation in the Third World. Bryan Roberts, London: Edward Arnold. 1978. 207 pp. £4.50 pb

An Urban Profile of the Middle East. Hugh Roberts, London: Croom Helm. 1979. 239 pp. £14.95

Urban Planning in Rich and Poor Countries. Hugh Stretton, Oxford University Press. 1978. 220 pp. £4.50. £2.25 pb

Manchester and Sao Paulo: problems of rapid urban growth. Edited by John D Wirth & Robert L Jones, Stanford: Stanford University Press. 1978. 234 pp. np

Housing Asia's Millions: problems, policies and prospects for low‐cost housing in Southeast Asia. Edited by Stephen H K Yeh & A A Laquian, Ottawa: International Development Research Centre. 1979. 243 pp. $12.00     

The measurement of agricultural price distortion in developing countries

The most common means of measuring agricultural price distortion in less‐developed countries has been through the estimation of variously‐defined nominal protection coefficients. The objectives of this article are: (a) to demonstrate that the coefficients which have been employed are inadequate for measuring price distortion; (b) to develop a suitable method for measuring distortion at each point on domestic marketing chains; and (c) to demonstrate, using the example of maize in Kenya, the potential magnitude and direction of the differences between the conventional coefficients and the distortion coefficients developed in the article.     

Suicide in developing countries (3): prevention efforts

Until now, suicide prevention efforts have been limited in developing countries, although there are pockets of excellent achievement. Various universal, selective, and indicated interventions have been implemented, many of which target a different pattern of risk factors to those in developed countries. In the absence of sufficient mental health services, developing countries rely heavily on nongovernment organizations (NGOs) to provide crisis interventions for suicidal individuals, as well as proactive interventions aimed at raising community awareness and building resilience. Often these NGOs work within a social and public health framework, collaborating with others to provide nested suicide prevention programs that are responsive to local community needs. There is a clear need to develop appropriate, relevant and effective national suicide prevention plans in developing countries, since, to date, only Sri Lanka has done so. These plans should focus on a range of priority areas, specify the actions necessary to achieve positive change in these priority areas, consider the range of collaborators required to implement these actions, and structure their efforts at national, regional, and local levels. The plans should also promote the collection of accurate data on completed and attempted suicide, and should foster evaluation efforts.     

Foreign patent monopolies in developing countries: An empirical analysis

This paper presents data on the patenting practice of patent holders resident in industrialized countries in Africa. It is confined to such patents taken out by Algeria, Libya, Morocco, Tanzania, and the states whose patent legislation is administered by the Office Africain et Malgache de la Propriété Indus‐trielle (OAMPI): Cameroon, Central African Republic, Chad, Congo, Dahomey, Gabon, Ivory Coast, Malagasy Republic, Mauritania, Niger, Senegal, Togo, and Upper Volta. These countries account for nearly four‐fifths of the total patents in force andlor applied for in Africa (excluding Rhodesia and South Africa).¹

In particular, the paper tries to throw some light on the importance of developing countries for foreign patenting, the motivation of foreign patent‐holders to take out patents in these countries, the actual transfer of patented technology, and the reasons for the lack of such a transfer. The paper complements the extensive work on foreign technology and foreign patents in Latin America, especially by C. V. Vaitsos [1972] and the Junta del Acuerdo de Cartagena [1971]. It also seeks to test the theoretical assumption that patents in developing countries support the transfer of technology.²