Local Financial Development and Household Welfare in Vietnam: Evidence from a Panel Survey

We examine the impact of local financial development on household welfare in Vietnam. We employ household-level panel data for the periods 2007, 2008, 2010 and 2013 covering three provinces and measure local financial development at the district, sub-district and village levels. To account for potential endogeneity that could emanate from the fact that local economic development could spur local financial development, we employ a recently suggested method of identification through heteroscedasticity. Our results show that local financial development has a significantly positive effect on household annual income, consumption and consumption smoothing.     

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.     

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.     

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.     

Aggregate consumption,interest rates and inflation in LDCS: An error correction model

This article explores the relationship between the real interest rate and the consumption‐saving decisions in LDCs following the Error Correction Methodology. The model also includes an income term, the inflation rate and a term for inflation uncertainty. The main conclusion drawn from this exercise is that, for low‐inflation countries there is a positive and stronger interest rate effect on saving while this effect is less clear (and not significant) for most high‐inflation countries. Also, the results show that for at least half of the countries in the sample, an EC model with a unit elasticity restriction seems to be an adequate representation of the data.     

Labour-Intensive Jobs for Women and Development: Intra-household Welfare Effects and Its Transmission Channels

We examine the welfare impacts of poor women getting low-skilled jobs and find large positive income, consumption and poverty effects at household and individual levels. However, the women workers, their husbands and oldest daughters reduced their leisure, but the women to a much larger extent. Investigating the transmission mechanisms suggests that the impacts did not only go through income effects, but also through a bargaining effect. Getting the job improved the bargaining power of the wife through several mechanisms, which in turn added substantially to the positive impact on household consumption.     

Agricultural Production,Dietary Diversity and Climate Variability

Abstract

Nonseparable household modelsoutline the interlinkage between agricultural production and household consumption, yet empirical extensions to investigate the effect of production on dietary diversity and diet composition are limited. While a significant literature has investigated the calorie-income elasticity abstracting from production, this paper provides an empirical application of the nonseparable household model linking the effect of exogenous variation in planting season production decisions via climate variability on household dietary diversity. Using degree days, rainfall and agricultural capital stocks as instruments, the effect of production on household dietary diversity at harvest is estimated. The empirical specifications estimate production effects on dietary diversity using both agricultural revenue and crop production diversity. Significant effects of both agricultural revenue and crop production diversity on dietary diversity are estimated. The dietary diversity-production elasticities imply that a 10 per cent increase in agricultural revenue or crop diversity result in a 1.8 per cent or 2.4 per cent increase in dietary diversity respectively. These results illustrate that agricultural income growth or increased crop diversity may not be sufficient to ensure improved dietary diversity. Increases in agricultural revenue do change diet composition. Estimates of the effect of agricultural income on share of calories by food groups indicate relatively large changes in diet composition. On average, a 10 per cent increase in agricultural revenue makes households 7.2 per cent more likely to consume vegetables, 3.5 per cent more likely to consume fish, and increases the share of tubers consumed by 5.2 per cent.     

Reassessing the Effect of Economic Growth on Well-being in Less-developed Countries, 1980–2003

Development debates have been greatly influenced by the growth consensus: the conventional wisdom that economic growth should be the primary priority for less-developed countries (LDCs) because it most effectively improves the well-being of the world’s poor. We compare the impact of growth to other independent variables in an unbalanced panel analysis of up to 109 LDCs and 580 observations across six time points (1980, 1985, 1990, 1995, 2000, and 2003). Our dependent variables include caloric consumption, infant survival probability, one-to-five year survival probability, female life expectancy, and male life expectancy. First, we find that gross domestic product (GDP) has significant positive effects on caloric consumption, female life expectancy, and male life expectancy. Second, GDP does not have robust effects on infant and one-to-five survival probabilities. Third, fertility, urbanization, and secondary school enrollment have larger effects than GDP in the majority of models. The more powerful effects of fertility, urbanization, and secondary schooling cannot simply be attributed to an indirect effect of GDP. Fourth, we find that dependency variables do not have robust significant effects. Fifth, over time, GDP has become much less effective at improving caloric consumption and infant and one-to-five survival. We infer that there are serious limitations to concentrating exclusively on economic growth to improve well-being in LDCs.     

Do Relative Income and Income Inequality Affect Consumption? Evidence from the Villages of Rural China

This article examines how a household's consumption rate is affected by its relative income and income inequality within a community. Based on the theory of social status seeking in consumption, we test hypotheses related to these factors using a unique panel data set of rural households in China observed within a few hundred villages between 2003 and 2006. We find that the household's consumption rate is negatively related to the relative income position after controlling for the absolute income, and positively related to the income inequality of the village. We confirm these with different measurements of relative position.     

Long-Term Effects of Temporary Income Shocks on Food Consumption and Subjective Well-Being

A national level unconditional cash transfer programme, Bantuan Langsung Tunai (BLT), in Indonesia allows an empirical assessment on whether there are long-term benefits in terms of food consumption and overall well-being. The results show that a positive albeit temporary income shock increases the quantity of food consumed by the poorest households and the overall subjective well-being among the poorest recipients. It is also found that poor households are more likely to invest in farm and non-farm businesses, which in turn helps them sustain a higher level of food consumption and overall satisfaction months after the end of the programme.     

Testing the antecedents to e-democracy towards citizens’ happiness: a structural equation modelling approach to ‘MyGov’ initiative,India

ABSTRACT

“MyGov” is an ambitious ICT-based platform of the government of India, where citizens contribute to policy making by engaged in various ways. As the initiative is about to complete 5 years, the research is focused on to test the antecedents to e-democracy and citizens’ happiness by a structural equation modeling on responses from 413 users of “MyGov” platform. The empirical outcomes established the predictive role of transparency and value expectancy on e-democracy in addition to the impact of trust and e-democracy on citizens’ happiness. The study also supported the positive association between transparency and trust.     

Does Livestock Ownership Affect Animal Source Foods Consumption and Child Nutritional Status? Evidence from Rural Uganda

Abstract

In many developing countries consumption of animal source foods (ASF) among the poor is still at a level where increasing its share in total caloric intake may have many positive nutritional benefits. This paper explores whether ownership of different livestock species increases consumption of ASF and helps improving child nutritional status, finding some evidence that both food consumption patterns and nutritional outcomes may be affected by livestock ownership in rural Uganda. Our results are suggestive that promoting (small) livestock ownership has the potential for affecting human nutrition in rural Uganda, but further research is needed to more precisely estimate the direction and size of these effects.     

Rice Land Designation Policy in Vietnam and the Implications of Policy Reform for Food Security and Economic Welfare

With the aim of promoting national food security, the Vietnamese government enforces the designation of around 35 per cent of agricultural land strictly for paddy rice cultivation. We investigate the economic effects of adjusting this policy, using an economy-wide model of Vietnam with detailed modelling of region-specific land use, agricultural activity, poverty and food security measures. Our results show that the removal of the rice land designation policy increases real private consumption by an average of 0.35 per cent per annum over 2011–2030, while also reducing poverty, improving food security and contributing to more nutritionally balanced diets among Vietnamese households.     

Dutch disease and the Azerbaijan economy

The novelty of this study is that it empirically tests four hypotheses of the Dutch Disease in the Azerbaijan economy while systematically controls for other possible explanations of the observed processes over the period 2000–2007. The study concludes that an “absolute de-industrialization” has not taken place in Azerbaijan, rather the country suffers from a “relative de-industrialization” in the non-oil tradable sector. Additionally, the paper shows that the non-tradable sector has substantially expanded during the 2000–2007 period. Analysis also presents that the government expenditures have created a “spending effect”, which is more crucial than the “resource movement effect”. Furthermore, it was found that rapid increases in the wages and the non-tradable prices have led to appreciation of the real exchange rate in Azerbaijan. Finally, the study reveals that foreign direct investments inflow to the oil sector is harmful for non-oil exports and therefore, it contributes to deepening of resource, or oil, dependence. Findings in this paper support the view that to obtain a diversified economy with a long-term balanced growth development of the non-oil tradable sector should be of the major focus for the policymakers.     

The Effect of Food Price Changes on Child Labour: Evidence from Uganda

Most people in developing countries spend up to 60 per cent of their income on food, even though the majority of them are farmers. Hence, a change in food prices affects both their revenue as well as expenditure, and it may thereby affect their labour market decisions. Using the Uganda National Panel Survey and monthly regional food prices, this paper examines the effect of changes in food prices on child labour. The empirical evidence shows that an increase in food prices is linked to an increase in the probability and the intensity of child labour. We find the effect of food price increases to be smaller among landowning households, which is consistent with the view that landowning households can better compensate for price shocks. The empirical results suggest that periodic shocks in food prices may have longer lasting effects on economic development in developing countries through the channel of child labour.     

Remittances and Happiness of Migrants and Their Home Households: Evidence Using Matched Samples

This paper explores how remittances influence happiness among migrants and their households of origin. It is based on a novel data set of matched samples of Bangladeshi migrant households (living in the UK and Malaysia) and their origin families in Bangladesh. Empirical findings suggest that remittances play a significant role in stimulating migrants’ happiness. We also find that the households of origin’s life satisfaction not only depends on receiving remittances from the emigrants, but also other factors such as number of migrants from the household living abroad and the migrants’ country of destination.     

The Determinants of Women’s Empowerment in Bangladesh: The Role of Partner’s Attitudes and Participation in Microcredit Programmes

This paper employs data from the Bangladesh Demographic and Health Survey (2004) to explore how women’s empowerment is related to partner’s attitudes, participation in microcredit programmes and a set of other socio-economic factors. We use a structural equation model with categorical observed variables. We get that participation in microcredit programmes has a positive impact on both the empowerment’s dimensions considered, while partner’s attitudes effect is weaker, proving that gender community norms are likely to be rooted in women’s minds regardless of the partners’ perceptions of women’s status.     

The Role of Savings and Credit in Coping with Idiosyncratic Household Shocks

This study examines the effect of access to formal banking services on households’ ability to smooth consumption in response to illness of adult workers. The institutional peculiarities of Indonesia’s largest commercial bank are exploited to separately estimate the effects of access to formal credit from savings. The means by which households smooth consumption differs depending on their access to formal services. Those with access to formal credit increase borrowing from banks, while those with access only to formal savings, but not credit, draw down on savings. Households without access to formal banking services end up liquidating productive assets.     

Local revenue structure under economic hardship: reliance on alternative revenue sources in California counties

This article investigates how a worsening economy affects local revenue structure, and whether the impact is moderated by the fiscal relationship within higher levels of government. The revenue potential of nontax sources – fees/charges and fines/forfeitures – is considerable for local governments under economic hardship. With the panel data from California counties over a period of 11 years (2000–2010), this article shows that reliance on nontax revenue largely depends on the economic and fiscal factors that vary across counties, and the effect of economy is contingent on local dependence on intergovernmental transfers. Counties are likely to raise nontax revenue when the economy worsens and their transfer-dependence increases, while the marginal effect of the economic indicators changes from negative to positive as transfer dependence increases. This article illuminates the characteristics of the two types of nontax sources in terms of the mechanisms of incentivising human behaviour and concludes with policy implications for researchers and practitioners.     

The Contagious Diffusion of Worldwide Terrorism: Is It Less Common Than We Might Think?

Studies of the contagious spread of insurgency and conflict across national boundaries has generated a good deal of empirical research over time. While the contagious spread of terrorism has also been a policy concern, few empirical studies exist on the extent to which terrorism spreads contagiously. This article uses methods developed by criminologists to study the spread of crime to examine the worldwide diffusion of terrorism from 1970 to 2013. We distinguish between contagious increases (based on shared borders) and non-contagious increases (where no borders are shared). We define the “domino effect” as a particular type of contagious diffusion where high levels of terrorism spread to an adjoining country but also remain high in the host country. Our analysis shows that both contagious and non-contagious diffusion has been rare over the past 43 years, non-contagious diffusion is more common than contagious, and when contagious diffusion occurs, it is very likely to occur according to the domino effect.