Growth and Poverty Revisited from a Multidimensional Perspective

The actual impact of economic growth on poverty reduction is of fundamental importance to the development agenda. This paper offers new empirical evidence on growth and poverty measured from a multidimensional perspective using the global Multidimensional Poverty Index. Results from a First Difference Estimator Model suggest that while economic growth reduces multidimensional poverty, this impact is well below a one-to-one relationship and lower than the impact of growth on income poverty. Results from a cross-section model additionally suggest that countries with higher levels of exports, higher share of industry and services and higher control of corruption have lower multidimensional poverty.     

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The article attempts to model structural adjustment patterns in a single, middle‐income oil exporter, Mexico. It explores the economy‐wide costs, in terms of economic growth, income inequality and poverty, of Mexico's economic stabilisation policies of the 1980s. On the basis of counterf actual simulation, it also explores the likely impacts of alternative adjustment strategies. This analysis utilises a modified Social Accounting Matrix (SAM) approach designed to overcome one of the major shortcomings of the conventional SAM: the assumption of unitary expenditure elasticities in household accounts. The base model is calibrated to track the overall and sectoral growth performance of the Mexican economy from 1980 to 1986 and becomes the foundation upon which our policy experiments are built. The article is part of an on‐going study of economy‐wide impacts of alternative structural adjustment policies in Mexico [Adelman and Taylor, 1990], and proceeds as follows: the SAM framework and estimated SAM are described in parts I and II; part III presents the base SAM model solution for 1980 to 1986; part IV presents the results of the policy experiments; and the conclusions are summarised in part V.     

Innovation and growth in traditional agriculture of the lower Volta,Ghana

This article addresses the important question of whether foreign direct investment enhances economic growth and labour productivity in Mexico, both from a theoretical and empirical perspective. After briefly reviewing the Mexican experience with net FDI inflows during the 1990s, the article presents a simple endogenous growth model which explicitly incorporates any positive (negative) externalities generated by additions to the foreign capital stock. Using cointegration analysis, the article estimates a dynamic labour productivity function for the 1960-95 period that includes the impact of the growth rate in the stocks of both private and foreign capital (as opposed to the flows) and the economically active population (EAP) (rather than the rate of population growth). The error correction model (ECM) estimates suggest that increases in both private ad (lagged) foreign investment spending, as well as the rate of growth in exports, have a positive and economically significant effect on the rate of labour productivity growth. In addition, the results show that increases in the EAP have a negative and statistically significant effect on the rate of labour productivity growth, while changes in the government consumption variable have a negative but marginally significant impact. The error correction terms of the estimated models are negative and statistically significant, thus suggesting that deviations of actual labour productivity growth from its long-run value are corrected in subsequent periods. Finally the article generates historical simulations from the estimated ECM's and offers some policy recommendations to enhance the positive externalities associated with FDI inflows.     

Industrialisation as a structural determinant of inflation performance in IMF stabilisation programmes in less developed countries

This article considers the impact of IMF stabilisation programmes on inflation performance in LDCs. It is argued that the success of a programme in effecting a change in the inflationary process will be influenced by the structural characteristics of the economy and in particular by the stage of industrialisation reached. The empirical analysis is based on a sample of LDCs which undertook adjustment programmes supported by Fund resources during the 1970s, and the results obtained are consistent with the hypothesis of an association between economic structure and inflation performance.     

Economic transformation through political change? Evidence from Turkey

Turkey recently initiated a political change by replacing its parliamentary model with the presidential governmental system (PGS) to achieve, inter alia, a structural transformation from an efficiency-driven to an innovation-driven model of growth. To investigate the PGS’s potential for mediating such a change, this paper uses four key concepts of institutionalist analysis: systemic governance, credible commitment, institutional fragmentation and institutional traps. In doing so, the paper concludes that the PGS’s potential to unleash a structural transformation towards an innovation-driven and high growth depends on the prospect of its mediating an imperative commitment in political and economic governance. This prospect proves to be weak due to both the PGS’s institutional pillars and the path-dependent dynamics of the country’s trap in efficiency-driven growth that have become embedded under a parliamentary model.     

Does Financial Development Contribute to Poverty Reduction?

The article examines the contribution of financial development to poverty reduction in developing countries. Building on earlier research which has established links between financial development and economic growth, and between economic growth and poverty reduction, the article tests for a causal process linking financial sector growth and poverty reduction. The empirical results indicate that, up to a threshold level of economic development, financial sector growth contributes to poverty reduction through the growth-enhancing effect. The impact of financial development on poverty reduction will be affected, however, by any change in income inequality resulting from financial development.     

The Impact of Microfinance on Factors Empowering Women: Differences in Regional and Delivery Mechanisms in India’s SHG Programme

Abstract

We examine how the impact on women’s empowerment varies with respect to the location and type of group linkage of the respondent. Using household survey data from five states in India, we correct for selection bias to estimate a structural equation model. Our results reveal that in the southern states of India empowerment of women takes place through economic factors. For the other states, we find a significant correlation between women’s empowerment and autonomy in women’s decision-making and network, communication and political participation respectively. We do not, however, find any differential causal impact of different delivery methods (linkage models).     

Foreign trade regimes and the FDI–Growth Nexus: a case study of Thailand

This article examines the role of trade policy regimes in conditioning the impact of foreign direct investment (FDI) on growth performance in investment receiving (host) countries through a case study of Thailand. The methodology involves estimating a growth equation, which provides for capturing the impact of FDI interactively with economic openness on economic growth, using data for the period 1970–99. The results support the ‘Bhagwati’ hypothesis that, other things being equal, the growth impact of FDI tends to be greater under an export promotion (EP) trade regime compared to an import-substitution (IS) regime.     

When Is Democracy Better for Economic Performance and when Is It Not: the Interaction Between Polity and Structural Factors

Is democracy or autocracy better for economic performance? Why do autocracies exhibit a greater variation in growth rate than democracies? We argue that democracy??s effects on growth are conditional on structural factors. Democracy is superior to autocracy only when structural factors, such as external threats or natural resource intensity, are not favorable to growth. Conversely, where structural factors are conducive to growth, autocracies are likely to perform better or equally well as democracies. By incorporating institutional and structural incentives into the equation, we answer the questions regarding the relative strengths and weaknesses of political regimes in pursing economic development. The empirical evidence examining postwar data significantly supports the hypotheses.     

Foreign capital inflow and the output growth rate of the recipient country: One‐sector models compared

One of the main issues in the controversy about the desirability of the inflow of foreign capital in LDCs refers to the impact which this capital might have on the output growth rate of the recipient countries. In the first part of this paper we analyze the impact of foreign capital on the growth rate in the context of a savings constrained growth model with neo‐classical technology. In the second part, we study the impact of foreign capital on the growth rate under balance‐of‐payments constrained growth. Two main conclusions are: under neoclassical conditions, foreign capital will have a positive impact on the growth rate of domestic income as long as it grows at a rate higher than the product of the domestic saving rate by the profit rate required by foreign capitalists. Under balance‐of‐payments constrained growth, the growth rate of foreign capital needs to be higher than its own profit rate in order to have a positive impact on the growth rate of territorial income, if foreign trade parameters of overseas and domestic firms are identical.     

Economic development and population

Conclusion Neo-Malthusian analysis that high and increasing population density hinders economic development and results in poverty has been demonstrated to be false. The two major structural variables negatively associated with rate of population increase are wealth and socialism, and the major determinants of economic growth are level of economic development and economic organization. If our analysis is correct the various campaigns supported by AID, the major U.S. foundations and other groups to discourage population growth in Third World countries in order to increase their rate of economic growth are misguided. Every baby born is not only a new mouth to feed, but also within a few years two more hands to work. There are great potentialities for economic growth in the Third World that await only the proper economic organization to be realized. That is, if the two hands are used efficiently, they will more than feed themselves. Attempts to reduce the birth rate by propaganda and making contraceptives readily available, ignore the structural causes of high fertility and so are not likely to succeed in reducing the birth rate. Our data suggest that only when the structural causes of high fertility—the poverty and economic insecurity associated with capitalism—are removed is the birth rate likely to fall significantly.     

Social changes under the impacts of economic transformation in Taiwan: From industrialization to modernization during the post-world war II era

This article examines the process of change in Taiwan during the past forty years under rapid industrialization and economic growth. Distinctions among the three concepts of industrialization, economic growth, and modernization are outlined. Changes in Taiwan’s economy, demography, class structure, health care, education, welfare system, and political participation are discussed. Based on Taiwan’s experience, a model of interlocking relationships between macro and micro levels of change is presented.     

Governance and land use decision-making in Russian cities and regions

Using results of an elite survey from the late 1990s, this study examines various arguments to explain the roots of the slow pace of land marketisation in Russia. These include three arguments that focus in turn on structural impediments, resource generation opportunities provided by land ownership, and domineering local governments. The study also analyses two other explanations of spatial differences: the impact of local economic and demographic structure and urban governance. Findings offer some support for each of the dominant approaches but little evidence to support the importance of local economic structure. However, an analysis of governance and social practices are found to be useful in highlighting the relationship between beliefs, practices, and land allocation.     

REGULATORY RED TAPE AND PRIVATE FIRM PERFORMANCE

Regulation may obstruct dynamic adaptation, innovative power, and entrepreneurial activity. On the other hand, regulation could be interpreted as a phenomenon which society just has to learn to live with, and which otherwise does no real economic harm. This article explores both of these hypotheses. We study the impact of three dimensions of regulatory red tape on the performance of private companies: regulation cost, regulation change, and regulation inconsistency. We analyse unique survey data from 530 Dutch private companies. The results show that regulation cost, inconsistency, and change limit sales turnover growth, and that regulation change hampers market competition performance.     

Trade,Technology and Employment in South Africa

South Africa has become increasingly integrated with the global economy since the early 1990s and particularly after the ending of apartheid. However this has not been associated with increased employment and high levels of unemployment are a major economic and social problem. The paper considers the impact of trade and technological change on both the level and skill composition of manufacturing employment. First a Chenery-type decomposition analysis of employment change is carried out and then labour demand functions are estimated econometrically. Both trade and technology are found to have had a negative impact on employment but these are only partial explanations of the low rate of employment growth.     

Political instability and economic growth: Evidence from two decades of transition in CEE

This paper examines the nexus between political instability and economic growth in 10 CEE countries in transition in the period 1990–2009. Our results support the contention that political instability defined as a propensity for government change had a negative impact on growth. On the other hand, there was no causality in the opposite direction. A sensitivity analysis based on the application of a few hundred different variants of the initial econometric model confirmed the abovementioned findings only in the case where major government changes were applied to the definition of political instability.     

The economic impact of the denver broncos football club on the denver metropolitan economy

The purpose of the study was to assess the economic impact of the Denver Broncos Football Club on the Denver Metropolitan Area economy. Primary data required to determine the economic impact was collected from three main sources. First, a two page survey questionnaire was mailed to 9,519 randomly selected season ticket holders with 4,810 returned questionnaires. The City and County of Denver provided financial management information reports for all home games as the second source of primary data. Finally, the Denver Broncos administration provided financial information pertaining to operational expenditures. The total industrial output or economic impact was calculated at $ll7,80l,500 for the economic activity associated with the Denver Broncos Football Club for the 1989-1990 season. Direct economic impact was shown to be $64,282,200 and indirect and induced effects corresponding to the multipliers generated by the model was an additional $53,519,300. Employee compensation was $47,213,300 and property income provided $16,732,000 to the Denver metropolitan economy. Indirect business taxes totaling $7,118,300 went to local, county, state and federal government. The economic activity produced 1,828 jobs directly and indirectly resulting from Broncos activity in the metropolitan area.     

Questioning Women's Solidarity: The Case of Land Rights,Santal Parganas,Jharkhand, India

This paper examines the impact of foreign aid on economic development in the context of a neoclassical growth model. Its conclusion is that foreign aid, whether in the form of capital goods or consumer goods, has a purely transitory effect on an underdeveloped country's per capita consumption (which is used as the welfare criterion) in the context of the usual neoclassical growth model; when, however, alternative assumptions (which may be more appropriate to an underdeveloped country) about the rate of population growth and the propensity to save are grafted into this model, foreign aid, in the form of capital goods or consumer goods, does have a permanent effect on an underdeveloped country's per capita consumption, if the aid exceeds a critical minimum.

Section I develops the properties of a simple neoclassical growth model that are essential to the analysis; section II analyses the impact of foreign aid in this context; in section III, appropriate modifications are made to the simple model and the impact of foreign aid is then re‐analyzed.     

Overurbanization and underdevelopment in Sub-Saharan Africa: A cross-national study

"This paper discusses both the urban bias and world-system theories of overurbanization and presents a cross-national analysis of 32 African nations to test these perspectives. The analysis is divided into three parts. First, the effects of urban bias (i.e., the disparity in welfare between rural and urban areas) and economic dependence on overurbanization are examined. Next, the association between overurbanization and (1) the structure of the labor force and (2) economic growth is tested. Finally, the relationship between the structure of the labor force and economic growth is evaluated." The results indicate that "the rural-urban disparity and foreign investment facilitate overurbanization, and that an increase in level of overurbanization has a deleterious impact on both the structure of the labor force and economic growth. Furthermore, there is strong evidence indicating that an increase in service-sector employment has a negative effect on economic growth."     

The macro impacts of Korea's Heavy industry drive re‐evaluated

The Korean heavy industry (HCI) drive has been criticised for the misallocation of capital and for negative spillover effects on growth, inflation, the current account and debt. However, such criticism places too much blame on HCI for the late ‐ 1970s' economic deterioration and gives HCI insufficient credit for the subsequent economic rebound. Korean HCI was a catch‐up exercise which attracted cheap foreign capital to accelerate structural change. Nevertheless, the mid‐1970s' decision to pursue HCI as a Big Push was flawed since it did result in project bunching that strained implementation capacity, despite the safeguards which Korea built into its HCI strategy.