Abstract: This article surveys the recent empirical literature on total factor productivity (TFP) growth in East Asia, and the debate about the sources of growth in the region. It is concluded that: (i) the main merit of this literature is that it has helped focus the attention of scholars on the growth process of East Asia; (ii) the theoretical problems underlying the notion of TFP are so significant that the whole concept should be seriously questioned; (Hi) the TFP growth estimates for the region vary significantly, even for the same country and time period; and (iv) research on growth in East Asia based on the estimation of TFP growth is an activity subject to decreasing returns. If we are to advance in understanding how East Asia grew during the last 30 years we need new avenues of research.

Abstract: This note suggests that, contrary to the conclusions reached in several recent studies, the empirical evidence does not support the view that financial development promotes economic growth. It is first noted that the predominant pattern in the data for 95 individual countries is that of a negligible or weakly negative covariation between financial development and growth of real GDP per capita. Second, the individual‐country correlational picture is a sharp contrast to the correlations based on crosscountry data that have been used in most research on the subject. Third, individual‐country estimates of a basic multiple‐regression growth model also do not indicate a positive association between financial development and growth. Fourth, in cross‐country data and models of the kind that have been used in most studies, when the regression structure is permitted to vary across three subgroups, a huge parametric heterogeneity is observed, and the overall indication is that of a negligible or negative association...

Abstract: We investigate the degree to which there is a trade‐off between child labour and human capital formation using time‐log data of children from a Tanzanian household survey. We find that a tradeoff between hours of work and study exists, and hours of work tend to be more affected by social conditions than hours of study. Hours of work are negatively correlated to reading and mathematical skills through the reduction of human capital investment activities, indicating a trade‐off between child labour and human capital. The results point up the complexity of the issue and the need for detailed time allocation data.

Abstract: This study examines China's rural‐urban segmentation and its causes in the context of economic reforms. Household survey and aggregate data indicate a V‐shaped process in which rural‐urban consumption and income differentials decreased between 1978 and 1985, but then have continually increased to historically high levels. This sectoral division is consistent with production function estimates based on provincial data that reveal higher labour productivity in urban/state‐owned industries than in rural industries and agriculture. To explain the V‐shaped change, we argue that the precedent of successful rural reforms raised farmers’ relative earnings, but the remaining obstacles to an efficient sectoral allocation of labour have prevented China from eliminating dualism. Recent financial policies consisting of urban price subsidies and increased investment credits have also had influential distribution effects that are biased against the rural sector.

Abstract: Reforms undertaken in Peru in the early 1990s might have resulted in a slight reduction of the informal sector. Costs associated with becoming and staying informal, and benefits of becoming formal might have increased. This, when a legalistic definition of informality is used. Earnings differentials between formal and informal self‐employed workers are negligible although they persist between formal and informal salaried workers. Skilled workers are more likely to be found in the formal sector and informal wage earners tend to be younger and less skilled. The earnings generating process for both the formal and the informal self‐employed workers is similar.

Abstract: China's gross domestic product (GDP) more than quadrupled between 1978 and 1996 under economic reforms. Per capita disposable incomes more than tripled in the cities and almost quadrupled in the rural areas. However, rapid economic growth brought about large income inequality which slowed down poverty reduction. In 1995, there were still 70–170 million people living in poverty. This article aims to assess the relationship between economic growth, income inequality and poverty using both secondary and household survey data. The main findings are (1) urban/rural divide and spatial inequality are two major factors accounting for overall income inequality; (2) non‐wage and non‐farm incomes are more unequally distributed than wage and farm incomes; and (3) the incidence of poverty is very sensitive to the changes in per capita income and inequality.

Abstract: Income inequality has been rising in parallel with the economic liberalisation process in the former centrally planned economies. The opportunities for non‐agricultural income associated with the market liberalisation process in former centrally planned economies would seem to be important in determining inequality within the rural sector. This article reviews the trends in inequality in Viet Nam examining differential trends and hypothesised causes. Inequality is important because of its relationship to other factors in the evolution of the agricultural economy such as the incidence of poverty and the sustainability of emerging income sources. This article analyses income inequality based on data collected by the author in two Districts in coastal northern Viet Nam. The results demonstrate that non‐agricultural income sources, specifically aquaculture and wage and remittance, contribute more to present inequality than any other income source. Simulation shows that the emergence of aquaculture since the l...

Abstract: The removal of high levels of protection combined with substantial real devaluations have changed the environment in which Ghanaian manufacturing firms have operated in the 1990s. The changes in output, composition and productivity, which have occurred over this period, are examined in this article. Survey evidence for the growth of the sector is shown to be consistent with data from sales tax returns. Analysis of the panel survey shows that, in a comparative context, the rate of job creation in Ghana's manufacturing sector is high. This rate is highest in medium‐sized firms; small firms have not grown more rapidly than larger firms. There has been no underlying growth in technical efficiency and output growth has been matched by a commensurate growth in labour and capital inputs. Labour productivity differs substantially by firm size due primarily to differences in physical, not human, capital endowments.

Abstract: This article examines the role of different data collection methods, including the data types they produce, in the analysis of social phenomena in developing countries. It points out that one of the confusing factors surrounding the quantitative‐qualitative debate in the literature is that methods and data are not clearly separated. The article retains the qualitative/quantitative distinction pertaining to data types but analyses methods according to their contextuality, that is, to what degree they attempt to understand human behaviour within the social, cultural, economic and political environment of a locality. The framework is applied to characterise information needs for health planning derived from the utilisation of health services. Each combination of method (contextual/non‐contextual) and data (quantitative/qualitative) is a primary and unique source to fulfil different information requirements. The article finds three roles contextual methods of data collection can play in generating information...

Abstract: This article uses household data from Nepal's two major populated regions (and 27 of 59 districts within those regions) to examine fuelwood consumption and production. In contrast with a purely market assessment, household analysis includes production which is consumed in the producing household. The household regressions yield coefficients and elasticities that are very different from and more reliable than a comparable assessment of market demand and supply. Household results generally support the hypotheses that expenditures on fuelwood are a small share of total household activity and that fuelwood is not sufficiently scarce to alter household behaviour. Fuelwood is sufficiently scarce, however, to alter behaviour for those households in the hill region that do not participate in market exchange. These households may be the best targets for public market interventions designed to alter fuelwood supply and deforestation.

Abstract: This article summarises the results of fieldwork carried out in 1997/8 season on post‐liberalisation changes in the Tanzanian cotton sector. Developments in primary marketing, ginning and the export trade are reviewed on the basis of survey material. Market entry by private companies has been high, leading to considerable competition and slight increases in producers’ share of the world price. But real producer price and cultivation increases have not been sustained. Following changes in the input supply system, insecticide use has fallen sharply, along with the quality and underlying international price of the cotton crop. Tanzania's place in the world market has been re‐defined as a producer for a specific time‐based ‘market window’. This places a question mark over the sustainability of the sector's future, and by inference over policy reforms whose main emphasis is to increase competition.

Abstract: This article seeks to analyse the major determinants of differences in the domestic savings ratio between countries using panel data for 62 countries over the period 1967—95. A basic distinction is made between the determinants of the capacity to save and the willingness to save. The capacity to save depends primarily on the level of per capita income (but non-linearly) and the growth of income (the life-cycle hypothesis), and the empirics strongly support these hypotheses. The willingness to save is assumed to depend on financial variables such as the rate of interest, the level of financial deepening and inflation. We find no support for a positive interest rate effect, but strong support for the level of financial deepening measured by the ratio of quasi-liquid liabilities to GDP. Inflation exerts a mild positive effect on saving but soon turns negative. Total saving may also depend on tax effort, but a surprisingly strong negative relation is found between the ratio of tax revenue to GDP and the domestic savings ratio.

Abstract: This article examines gender differences in the incidence of rural to urban migration in developing countries, particularly those of Sub‐Saharan Africa. The study distinguishes itself from current migration literature by suggesting that the gain in returns to observable attributes, as a result of migration, may differ by gender and could provide an explanation for gender differences in migration. Using data from Kenya, we estimate the urban‐to‐rural wage gap, separately for each gender, and decompose the gap into the components due to urban to rural differences in observable attributes and differences in returns to observable attributes. We find that the portion of the wage gap that is due to the gain in returns to observable attributes is larger for males, suggesting that males receive larger monetary returns as a result of migration and, consequently, have greater incentive to migrate to urban areas.

Abstract: Registration of individual title to land in order to create legal security has been the central concern in the rich literature on land and law in Africa. The problem of legal insecurity is approached here from a different angle which has received relatively less attention: dispute settlement. The article results from the observation of land disputes in local political arenas. It portrays a local legal cultural universe in which legal insecurity arises especially from legal situations stressing group consensus. It appears that people who are accused of witchcraft and groups which are said not to belong are particularly vulnerable in such a legal culture. The conclusion argues that this case material reveals connections between law, land and the creation of social order which may throw light on many other situations. It pleads for more attention to be paid to the development of jurisprudence in attempts to create legal security.

Abstract: Panel data on 788 modern sector Indian firms during 1965–78 are used to analyse the link between the size of a firm and its financial environment Exogeneity tests reveal that large firms with improved investment prospects could obtain external finance at the margin, but that small firms could not The policy of directing bank credit accordingly relaxed a binding constraint on small firms, raising investment Assuming that all of the rise in the credit‐sales ratio in small firms was policy‐induced then so was about one third of the 170 per cent rise during 1965—78 in their investment—sales ratio

Abstract: We study the effect of devaluation on output in six developing countries of Asia. In an empirical model that includes monetary, fiscal, and external variables, we examine the impact of devaluation as the effect of real exchange depreciation and alternatively as the effect of nominal devaluation and changes in the foreign‐to‐domestic price ratio. We find that with few exceptions a devaluation fails to make any effect on output over any length of time — short run, intermediate run or long run. Whatever effect on output we are able to uncover comes from the relative price level (the ratio of foreign to domestic prices) but not from nominal devaluation.

Abstract: John Humphrey and Hubert Schmitz have recently made an important contribution to the literature on trust and economic transactions between firms. Unfortunately, the evidence that high levels of societal trust contribute significantly to economic growth is far less reliable than they suggest. We need more research — but research informed by greater conceptual clarity about trust and the institutional arrangements that contribute to trust. The framework presented here for conceptualising the various sources of trust should help guide empirical research.

Abstract: Monte Carlo approaches to risk analysis in project appraisal are re‐examined. Limitations with conventional methods are identified, and refinements suggested that deal with increasing uncertainty about variables throughout the project life, along with correlations and cycles among variables. These are illustrated with an example. Emphasis is placed on a practical approach that minimises demands on the appraiser's prior knowledge. Modelling the objective function of an investment appraisal autoregressively enables complete distributional mapping of project outcome, given specification by the appraiser of ‘likely bounds’ for the value of key parameters in the first and last periods of the project life plus an approximate correlation matrix.

Abstract: This article challenges a common viewpoint that the policy choices made by state leaders are central to explanations of economic growth. It argues that there are two possible flaws in this viewpoint. First, that state leaders have a free choice in policy decisions; second, that it is policies that in large part determine growth rates. Using a set of variables designed to capture the weakness of the policy autonomy of the state and possible non‐policy influences on growth rates, the article concludes that initial conditions are a better determinant of wealth and growth than free policy choice.

Abstract: This article develops a model which tests the hypothesis that sectoral FDI flows from the United States to Mexico over a four‐year period can be explained by the ownership advantages of US multinationals. Theoretical developments in the concept of ‘ownership advantage’ are used to guide the formulation of the research. The findings suggest that direct investment into US MNEs’ affiliates in Mexico is driven by benefits derived from embedded human knowledge, technology‐embodied advantages, and possibly from scale advantages. Local R&D is negatively associated with FDI.

Abstract: Within the present multilateral trading system, the developing countries are obliged to gradually open up their agricultural sector to world markets. As a result of this, the effectiveness of conventional instruments of food price stabilisation will be greatly reduced. How then is food price stability to be maintained in a liberalised open economy? This article presents a general‐equilibrium evaluation of using variable trade levies on agricultural trade to stabilise foodgrain prices in response to exogenous shocks. This is done for the Indian economy with the help of a multi‐period computable general equilibrium (CGE) model, focused on agriculture and income distribution. The model is used to analyse the sensitivity of the economy's growth, income distribution and food security to external and internal shocks under varying degrees of trade openness. The results show that both shocks are distributionally regressive and, with external shocks, become more so, the more open the economy is. WTO‐consistent var...

Abstract: One frequently encounters the argument that trade liberalisation and deregulation of domestic markets in developing countries result in increased incentives for agriculture. This proposition is considered for the Central American countries, all of which passed through fundamental policy change either in the 1980s or 1990s. After characterising the policy regimes in each country over various periods, the analysis moves to an inspection of agricultural trade performance. The evidence indicates that liberalisation of foreign trade and deregulation of domestic markets has not been associated with improved agricultural performance. It is suggested that the failure of agriculture to respond positively to policy changes can be in part explained by an unfavourable trend in world prices of the region's major tradable commodities.

Abstract: The aim of this study is to assess the comparative advantage in rice production in the Philippines for the past three decades since 1966. We have found that the country gained sharp improvement in comparative advantage in rice production in 1979, when yield rose remarkably due to the diffusion of pest‐ and disease‐resistant modern rice. Beginning in 1986 however, the country appears to have slowly lost its comparative advantage due to the decline in rice prices, stagnation in rice yield and rising cost of domestic factors. By 1990, the country completely lost its comparative advantage in rice production.

Abstract: Over the course of the 1988–97 period, the Brazilian steel sector was subject to an unprecedented programme of trade liberalisation and privatisation while becoming far more open towards foreign investment and technology inflows. Using various indicators of competitive performance, it is established that the impact of this drive towards globalisation was broadly favourable. Productivity and the technological level of production processes improved while import penetration remained minimal despite the scale of trade liberalisation. However, these improvements have to be set beside the fact that the competitive performance of the sector still lagged behind that of major international producers and technological weaknesses persisted. The evolution of the sector's competitive behaviour can only be fully understood when pre‐existent internal factors, as well as the externally imposed forces of globalisation are taken into account.

Abstract: In a recent issue of this journal, Klasen [1996] and Svedberg [1990, 1996] have expressed diverging opinions on the nature of gender bias in sub‐Saharan Africa. The divergence arises partly out of the choice of indicators and partly out of the choice of standards. It is possible, however, to infer the existence of such bias without using referents from some external ‘standard’ population. Such an approach, using the infant and the under‐five mortality data by sex and the data on sex ratios in the 0–4 and 5–9 age groups from the Indian population census of 1981, is described below. It is suggested that this type of approach will be useful in resolving the above debate.

Abstract: This study explores the effect of China's economic reforms and growth on a critical outcome of labour market interactions: wage levels. Provincial data from 1980 to 1992 are used to analyse changes in interregional wage differentiation, and the relationship between average and real wages and a variety of economic variables. The results illuminate the increasing role of market forces, particularly labour demand variables such as economic growth and foreign investment, in determining wage levels and explaining the pattern of first declining, and then sharply rising, interregional wage differentials in the 1980s and early 1990s. At the same time, the empirical results highlight the persistence of barriers to labour mobility across regions and enterprises of different ownership types. These findings suggest that the evolution of China's urban labour market to date is marked by a combination of unprecedented flexibility as well as old and new forms of rigidity.