The economics of poverty traps and persistent poverty: An asset-based approach

Longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty. While a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty, this paper develops an asset-based approach to poverty analysis that makes it possible to distinguish deep-rooted, persistent structural poverty from poverty that passes naturally with time due to systemic growth processes. Drawing on the economic theory of poverty traps and bifurcated accumulation strategies, this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long-term, persistent structural poverty, as well as relevant extensions of the popular Foster-Greer-Thorbecke class of poverty measures. The paper closes with reflections on how asset-based poverty can be used to underwrite the design of persistent poverty reduction strategies.     

Fiscal incentives and direct foreign investment in less developed countries

This study found no support for the belief by the governments of most less developed countries (LDCs) that the provision of fiscal incentives is necessary to attract direct foreign investment and that the greater the generosity of these incentive programmes the greater would be the level of such investment. What mattered were the presence of natural resources and a proven record of economic performance. The provision of incentives could not compensate for the absence of either of these two factors. The study is a cross‐sectional one of 27 LDCs for the period 1965–73.     

List of Referees & End Matter

The Editors of The Journal of Development Studies wish to acknowledge the assistance of the following persons who have served as referees between August 1999 and July 2000.     

The uses of history by the Polish democratic opposition in the late 1970s

During the late 1970s, members of the Polish democratic opposition revised and reinterpreted key elements in the Polish past in support of their contemporary ideas about Polish society and opposition. The birth of the independent press in Poland in 1976 provided these debates with a medium for wide dissemination and discussion. Analysis of democratic opposition debates in the independent press on the Polish–Lithuanian Commonwealth, historic Polish–Russian relations, and the struggle for and achievement of independence in the early twentieth century shed light on the ways in which the democratic opposition perceived Polish society and the legacy of tolerance, diversity, nationalism, and socialism within it. It also reveals the major divisions within the democratic opposition and its primary tactical proposals prior to the birth of the Solidarity trade union in 1980. Forty years later, these debates continue to reverberate.     

The Presentist Bias: Ahistoricism,Equity, and International Development in the 1970s

This article examines development thinking in the 1970s, when modernisation templates stressing growth and industrialisation gave way to a direct concern for relieving poverty. Although this new direction broke with development paradigms that presented Western history as a model for universal emulation, equity advocates cultivated new forms of presentism that continued to overlook the local histories of developing nations. An increased sense of the ethical urgency of development and demands for immediate practical action hardened the technical and ahistorical biases of development practice.     

Wage determination in Brazil: The growth of union bargaining power and informal employment

This article examines wage determination in Brazilian manufacturing during the 1980s and early 1990s. It presents evidence to show that the reduction in state regulation of collective bargaining has led to the development of a system of wage determination which is increasingly characterised by rent sharing and insider trade union bargaining power. Real wages appear increasingly inflexible with respect to movements in open unemployment, with a large informal sector disciplining formal sector wage bargaining and cushioning the impact of broader labour market conditions. An important consequence of this is that the employment costs of a successful counter‐inflationary strategy may be very severe.     

Investment demand in early stages of growth: The case of Philippine manufacturing

Theories of economic growth have traditionally minimized the problem of effective demand by assuming that the only limit to investment is the volume of savings from all sources. We explore this assumption by investigating the nature of the investment demand function for a cross‐section of 160 manufacturing companies in the Philippines. We regressed investment on a number of variables suggested by theory, such as the rate of profits, lagged sales, etc. The major conclusions are as follows: (1) For small firms, investment is mainly dependent on the rate of retained earnings. (2) The dominant importance of internal fund sources for small firms is due to their view that maintenance of complete control is a primary constraint on investment policy. (3) Large firms’ investment, in contrast, depends mainly on accelerator affects, and and their investment behaviour is generally similar to firms in developed countries as described by Eisner and others. (4) Foreign firms generally exhibit behaviour similar in many respects to small firms, partly because of their reticence to share control with local residents. (5) Depreciation is not nearly as important an explanatory variable for gross investment as in developed countries, partly because of the difference in the relative sizes of capital stock and investment. (6) In numerous industry regressions we investigated the impact of tax exemption on investment, and conclude that tax exemption is not an effective policy tool for achieving significantly different investment rates. (7) A plausible general inference from our findings is that as development proceeds and the size composition of firms changes in favour of larger, possibly publicly owned enterprises, the economy‐wide investment demand function is likely to become more accelerator‐oriented in its behaviour.     

When Managerialism Meets Internationalism: Administrative Reform in the United Nations in the 1970s

This article examines whether reform ideas that gained influence in national-level bureaucracies in the 1970s were also on the United Nations’ internal agenda. The Joint Inspection Unit (Bertrand) Report of 1971 is the focus of this analysis, as it addressed personnel problems in the UN Secretariat and identified structural shortcomings. Our analysis shows that New Public Management ideas were in circulation in the UN at this time. It also demonstrates the different pressures that international bureaucracies face in regard to their personnel. This is likely to make their responses to reform pressures, such as those experienced in the 1970s, unique.     

Modern dependency: A “crucial case” study of Brazilian government policy in the minicomputer industry

Conclusion Brazil’s minicomputer industry has become dependent on government import policy, government financing and domestic private business. The growth in the domestic component of this industry between 1974 and 1981 suggests that incremental government policies (short of a transformation to socialism) can alter Brazil’s level of dependency on MNCs, concerning at least one industry–the minicomputer industry. Therefore, the Brazilian minicomputer model advances the dependency question from “what is dependency and why does it exist?” to “how can one improve its position in a dependency situation?” Relative success in the minicomputer industry cannot be construed as victory over Brazil’s dependency on MNCs, which may alter its economic and political relationship with other countries. Instead, it illustrates a viable model for improving a developing country’s dependency situation. This infant industry strategy is given more credence due to the rekindling of protectionism by all nations. A definitive evaluation of Brazil’s minicomputer policies cannot be rendered until this industry has progressed in its growth cycle. As indicated earlier, signs of both success and failure are evident. In addition, several events may restrict growth in Brazilian minicomputer firms: (1) restriction of funds due to the enormous foreign debt, (2) corrupt or inappropriate management, (3) unsuccessful transfer of technology, or (4) intrusion of smaller and less expensive microcomputers into uses now served by minicomputers. Thus, how effectively Brazil can get out of its overall dependency trap will depend not only on how well it can apply the minicomputer industry model to other industries, of course, given that the model does succeed in the long–run. But it will also depend on how well Brazil can deal with the problems listed above. 0259 0255 V 2