Offsetting the Development Costs? Brain drain and the role of training and remittances

Over recent decades global labour markets have emerged and skill shortages in particular sectors have generated an international competition for the best and brightest. The developed world is seen to ‘poach’ this talent from poorer countries, with the resultant ‘brain drain’ undermining their capacity to develop. This paper calls into question the assumption that the emigration of the highly skilled will automatically represent a loss to the country of origin. The paper positions itself between the two extremes of brain drain as constituting a pure loss or a pure gain for sending countries and calls for a more moderate approach to skilled migration and its impact on development. The paper goes beyond the simple brain drain/brain gain dichotomy by looking at the flow of the skilled within specific geographic spaces and the resultant policy dilemmas and options.     

Finance and Demand for Skill: Evidence from Uganda

We explore the empirical interaction between firm growth, financing constraints, and job creation. Using a novel small-business survey from Uganda, we find that the extent to which small businesses expand skilled employment as their sales and profits increase is significantly related to access to external funding, while the hiring of casual and family workers is not. The results are robust to the inclusion of various firm level controls, region and sector fixed effects. We support our findings by providing empirical evidence on the relationship between planned hiring and firms’ access to finance.     

Local governments and their arm’s length bodies

ABSTRACT

In this paper, we discuss the state of the art on the creation of arm’s length bodies (ALBs) by local governments. We make three main contributions. First, there are many different types of ALBs and each country has its own categories; an expert survey was held identifying three common types of body, to enable future comparative research. Second, we point out that the creation of ALBs has led to a number of new challenges for local governments, particularly regarding governing bodies at arm’s length to ensure ALBs’ good performance. A lack of capacity and information have to be countered, for example, by increased monitoring – also for democratic accountability purposes. Special attention is needed for the multiple principal problem that arises when local governments jointly create ALBs. Third, research into local ALBs is still in its early stages. We present a research agenda to develop knowledge on the topic.     

Outlook for the ‘developing country’ category: a paradox of demise and continuity

In the 2016 edition of its World Development Indicators (WDI), the World Bank introduced an important change in the way it categorises countries: it explicitly stated the intention to eliminate the distinction of countries as ‘developing’ and ‘developed’. This decision represents the first time one of the world’s most powerful and influential international organisation has overtly decided to move away from this fuzzy-yet-ubiquitous terminology for categorising countries (and not proposing to replace the division). This paper takes this shift to discuss country groupings based on development levels, particularly the ‘developed’/’developing’ dichotomy, focusing on the latter term. The paper argues for a paradoxical scenario, wherein the label ‘developing’ will increasingly become analytically useless while concurrently retaining – or even strengthening – its power in the context of foreign policy strategies. The analysis details the motives behind this paradox and provides a reasoning for when and why the term’s usage is likely to be weakened or strengthened. Simply put, the ‘developed’/’developing’ dichotomy is weakening in its analytical capacity, mostly due to the increasing heterogeneity among countries under the ‘developing’ label and concurrent porosity of ‘boundaries’ between the two categories, while showing little sign of being phased as a term for self-identification.     

‘Girls Don’t Become Craftsmen’: Determinants and Experiences of Children’s Work in Gemstone Polishing in Jaipur

This paper explores the determinants and valuations of children’s work and schooling choices drawing on primary mixed-methods research in the gemstone polishing industry of Jaipur, India. In addition to economic and demographic factors, the gendered expectations of children’s futures shapes their work and schooling outcomes. For boys, work is additionally driven by the need to acquire training for future employment and wages, and simultaneously complements, and competes with formal schooling. They can work at workshops, acquire higher skills, and can aspire to become skilled craftsmen whereas girls work at home on low-skill activities mainly to supplement household income.     

What Explains the Job Creating Potential of Industrialisation in the Developing World?

This paper examines why job creation in the manufacturing sector has differed widely across developing countries, using a modified Lewis model that captures the scale, composition and labour intensity effects of industrialisation on job creation. We show that while the scale effect has been mostly positive, labour intensity and composition effects have been mostly negative. Trade integration has a positive impact on manufacturing employment via the scale and composition effects, but a negative impact via the labour intensity effect. Human capital has a positive effect via the labour intensity effect. Labour regulations have no impact through any of the effects.     

China’s ‘New Silk Roads’: sub-national regions and networks of global political economy

This paper argues that the Chinese government’s ‘belt and road’ initiative – the Silk Roads vision of land and maritime logistics and communications networks connecting Asia, Europe and Africa – has its roots in sub-national ideas and practices, and that it reflects their elevation to the national level more than the creation of substantially new policy content. Further, the spatial paradigms inherent in the Silk Roads vision reveal the reproduction of capitalist developmental ideas expressed particularly in the form of networks, which themselves have become a feature of contemporary global political economy. In other words, the Silk Roads vision is more of a ‘spatial fix’ than a geopolitical manoeuvre.     

The tying of aid and the problem of “local costs”

Son preference has persisted in the face of sweeping economic and social changes in the countries studied here. We attribute this persistence to their similar family systems, which generate strong disincentives to raise daughters – whether or not their marriages require dowries – while valuing adult women's contributions to the household. Urbanisation, female education and employment can only slowly change these incentives without more direct efforts by the state and civil society to increase the flexibility of the kinship system such that daughters and sons can be perceived as being more equally valuable. Much can be done to accelerate this process through social movements, legislation and the mass media.     

Determinants of Income Mobility and Household Poverty Dynamics in South Africa

This article analyses household income mobility among Africans in South Africa's most populous province, KwaZulu-Natal, between 1993 and 1998. Compared to industrialised and most developing countries, mobility has been quite high, as might have been expected after the transition in South Africa. This finding is robust when measurement error is controlled for. When disaggregating the sources of mobility, it is found that demographic changes and employment changes account for most of the mobility observed which is related to rapidly shifting household boundaries and a very volatile labour market in an environment of high unemployment. Using a multivariate analysis, it can be seen that transitory incomes play a large role. Four types of poverty traps are found, associated with large initial household size, poor initial education, poor initial asset endowment and poor initial employment access that dominate the otherwise observed regression towards the mean.     

“Name the Republic that was joined to Russia in 2014:” Russia’s New Civics and History Test for Migrants

This article examines Russia’s civics and history test, which has been mandatory, since January 2015, for millions of labor migrants applying for a work permit. An analysis of the test’s content and of the context in which it was adopted provides a strong case to study how autocracies can use civics tests as instruments of control. Specifically, I argue that the test must be understood in light of Russia’s state-sponsored nationalism, latent xenophobic sentiments, and its increasingly restrictive and incoherent migration policy. Not only are many questions irrelevant or disconnected from migrants’ everyday concerns: their personal experiences of paying bribes, obtaining fake certificates, or being harassed by the police often contradict the correct answers on the exam. While it is doubtful that this test – along with several other new requirements imposed on migrants – will dissuade foreign laborers to seek employment in Russia, it is bound to make them even more vulnerable to bribes.     

The Effect of Sibling Size on Children’s Health and Education: Is there a Quantity-Quality Trade-off?

The quantity-quality trade-off is one important motivation for the family planning policies in many developing countries. In this paper, we examine the effect of number of siblings on children’s health and education in China. We find evidence of quantity-quality trade-off in children’s health but not in children’s education. Our study has three contributions. First, we focus not only on children’s education but also on children’s health, which has received rather little attention in the literature. Secondly, we use a new source of exogenous variation in fertility – variations of the strictness of the One-Child policy across localities in China – to construct instrumental variable's (IV's). Finally, we empirically explore the underlying mechanism of the quantity-quality trade-off, and find supporting evidence for the resource dilution hypothesis.     

Foreign Ownership and Employment Growth in a Developing Country

Many developing countries would like to increase employment in the formal sectors. One way to accomplish this goal may be to encourage the entrance of foreign firms. We examine employment growth in Indonesian plants taken over by foreign owners from domestic ones. We also examine the effect of FDI during different trade regimes and the timing of employment effects following an acquisition. For plants that change the nationality of ownership, we find a strong effect of shifts from domestic to foreign ownership in raising the growth rate of employment, but no significant effects of shifts from foreign to domestic ownership.     

Money and the Message: The Role of Training and Coaching in Graduation Programming

Graduation programmes are innovative because they combine regular cash transfers with livelihood promotion and – most innovatively – a combination of training and tailored coaching. The latter is sometimes considered the ‘X-factor’ in the graduation model, but little evidence exists regarding its role in affecting change. This paper presents findings from a mixed methods evaluation of a graduation programme in Burundi. We find that (i) training and coaching are important complements to cash and material support in achieving positive change, (ii) positive effects extend to the wider community, and (iii) continuous, tailored, and positively engaging modes of messaging are imperative for achieving change.     

To Elect or Not to Elect: Leaders,Alternation in Power and Social Welfare in Sub-Saharan Africa

This paper investigates whether and how multiparty elections, introduced in many African countries since the early 1990s, affect a government’s commitment to welfare policies. We hypothesise that contested multiparty elections and turnovers between different leaders and political forces in government – even when democratic standards are not met – positively impact the promotion of social welfare. We test these hypotheses through a cross-sectional and time-series research design, making use of our new, comprehensive ‘Africa Leadership Change’ (ALC) dataset. Empirical results confirm that leaders elected through multiparty elections and countries that experience political alternations in government are associated with higher levels of social welfare.     

The Effects of the Value-Added Tax on Revenue and Inequality

This paper examines the impact of the introduction of the value-added tax on inequality and government revenues using newly released macro data. We present both conventional country fixed effect regressions and instrumental variable analyses, where VAT adoption is instrumented using the previous values of neighbouring countries’ VAT systems as an instrument. The results reveal – in contrast to earlier work – that the revenue consequences of the VAT have not been positive. The results indicate that income-based inequality has increased due to the VAT adoption, whereas consumption inequality has remained unaffected.     

Enforcing labour rights of irregular migrants in Indonesia

The multi-directional nature of labour migration flows has resulted in an increasing number of countries having become both senders and receivers of regular and irregular migrants. However, some countries continue to see themselves primarily as senders and so ignore their role as a receiving country, which can have negative implications for the rights of migrants in their territory. Using the example of Indonesia, which is State Party to the 1990 UN Convention on the Rights of All Migrant Workers and Their Families, this article demonstrates that irregular migrant workers in this country have the legal right to protection against labour exploitation even when they work despite the government’s prohibition on employment. The article discusses the ‘right to work’ and how international human rights law has translated it into the ‘right to protection from labour exploitation’ for irregular migrants in Indonesia. By way of two case studies about the Indonesian government’s handling of irregular migrants, it shows how it prioritises enforcement of the employment immigration law over labour and employment laws much like countries that have not ratified the ICRMW. It also draws attention to legal protection gaps that emerge for asylum seekers when they are recognised to be genuine refugees.     

Revolutions: a twenty-first-century perspective

Abstract

We held the ‘Revolutions’ conference in 2017 to commemorate the Russian Revolution and redeem the actual record of revolutions in the Third World for the left. A quarter-century after the demise of the USSR, we found liberal capitalist triumphalism unwarranted. Two of the most important expectations to which it gave rise – that the world had become ‘unipolar’ and that it would enjoy a ‘peace dividend’ – remained unfulfilled. Instead, the world became multipolar and the West, led by the United States, engaged in unprecedented economic and military aggression against countries that contested its power. If this were not enough, social unrest and explosions in the First World as well as the Third underlined the relevance of revolutions. To trace their lineage, we recall capitalism’s intimate relation with revolution. It has needed revolutions to usher it into history and to usher it out. In addition to revolutions against developed capitalism, we also underline how important and necessary revolutions against nascent capitalism in various parts of the world have been. The contributions in this volume explore different parts of this lineage and vivify revolutions for our time.     

Who Suffers the Penalty?: A Panel Data Analysis of Earnings Gaps in Vietnam

In spite of its predominant economic weight in developing countries, little is known about the informal sector earnings structure compared to that of the formal sector. Taking advantage of the rich VHLSS dataset in Vietnam, in particular its three wave panel data (2002, 2004, 2006), we assess the magnitude of various formal–informal earnings gaps while addressing heterogeneity at three different levels: the worker, the job (wage employment vs. self-employment) and the earnings distribution. We estimate fixed effects and quantile regressions to control for unobserved individual characteristics. Our results suggest that the informal sector earnings gap highly depends on the workers’ job status and on their relative position in the earnings distribution. Penalties may in some cases turn into premiums. By comparing our results with studies in other developing countries, we draw conclusions highlighting Vietnam’s labour market specificity.     

THE ROLE OF INTERNATIONAL POLICY TRANSFER WITHIN THE MULTIPLE STREAMS APPROACH: THE CASE OF SMART ELECTRICITY METERING IN AUSTRALIA

This article draws on Kingdon's Multiple Streams Approach (MSA) to consider international, not just domestic, flows of policy. It is argued that using the MSA in conjunction with international policy transfer and mobility theories allows for a fuller explanation of the development of smart electricity metering policy in Australia. The MSA is based originally on empirical research within a single country – the USA – in the late 1970s, and all three of the ‘streams’ identified as important to policy change – problems, politics and policy – are conceptualized as domestic. While recent scholarship has broadened the application of the MSA beyond nation state boundaries, it is argued that there is scope to further develop such ideas. In particular, the notion of policy mobility is introduced to capture issues about the globalization of policy, the role of non‐state actors and the material substance of policy.     

A Retrospective Impact Evaluation of the Tamil Nadu Empowerment and Poverty Alleviation (Pudhu Vaazhvu) Project

Community based livelihood interventions, which focus directly on increasing income and employment, have become an increasingly important component of large-scale poverty reduction programmes. We evaluate the impact of a participatory livelihoods intervention – the Tamil Nadu Empowerment and Poverty Reduction (Pudhu Vaazhvu) Project (PVP) using propensity score matching methods. The paper explores the impact of PVP on its core goals of empowering women and the rural poor, improving their economic welfare, and facilitating public action. We find significant effects of PVP on reducing the incidence of high cost debt and diversifying livelihoods. We also find evidence of women’s empowerment, and increased political participation.