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This paper asks: ‘how do institutions impact household wealth?’ This question is the micro level analogue to the macro question: ‘how do institutions impact economic growth?’ Institutions are exogenous to household decisions, allowing for quasi-experimental analysis of this micro question. Results shed light on a continuing puzzle: contracting institutions have typically been found to be insignificant empirically. Estimates show a strong quadratic effect of legal formalism on household wealth. Household analysis also shows smaller impacts of property rights than found in the literature. Results are robust to inclusion of controls for other institutions, geography, economic indicators, historical factors and democracy. [ABSTRACT FROM PUBLISHER]

This paper examines the impact of remittances on economic growth in Small Island Developing States (SIDS). Results from variants of an empirical model suggest that while, on average, there is at best no association between remittances and growth in developing countries, there is a positive association between these variables in SIDS. This finding holds for SIDS in sub-Saharan Africa and the Pacific but not for those in Latin America and the Caribbean. Relationships between remittances, economic volatility, and household labour supply are offered as reasons for these findings. [ABSTRACT FROM AUTHOR]

Many have challenged the use of income per capita as the primary proxy for measuring development since Seers’s seminal works. This article continues this tradition with a more recent twist. We use cluster analysis to build a multidimensional taxonomy of developing countries using a set of indicators covering four conceptual frames on ‘development’. The value-added of the article is not to suggest that our classification is the end in itself, but – more modestly – to demonstrate that more work on taxonomies is required in light of the weakness of classifications based solely on income and the changing distribution of global poverty. [ABSTRACT FROM PUBLISHER]

Macro vulnerability of the small island developing states (SIDS) as well as of least developed countries (LDCs) has been an increasing concern for the international community. This has led to the design of an economic vulnerability index (EVI) to assess the structural economic vulnerability resulting from natural or external shocks. We first explain how vulnerability affects growth, development and poverty reduction, particularly in small developing countries. We then examine how the EVI has been designed and how it can be used to compare SIDS and LDCs. We argue that EVI is a relevant tool not only for identification of LDCs, but also for geographical aid allocation to favour vulnerable countries, including LDCs and SIDS, even though not all SIDS qualify as LDCs. [ABSTRACT FROM AUTHOR]

This article considers the potential contribution of social anthropology to understanding poverty as both social relation and category of international development practice. Despite its association with research in communities and countries now considered poor anthropology has remained disengaged from the current poverty agenda. This disengagement is partly explained by the disciplinary starting point of anthropology which explores the processes though which categories come to have salience. It is accentuated by the relationship of anthropology as a discipline to the development policy and the research commissioned to support it. An anthropological perspective on poverty and inequality can shed light on the ways in which particular social categories come to be situated as poor. It can also reveal the social processes through which poverty as policy objective becomes institutionalised in development practice and in the social institutions established to monitor, assess and address it. [ABSTRACT FROM AUTHOR]

Previous growth accounting studies suggest severe capital underutilisation and mismeasurement of the stocks of capital in some developing countries. Using the firm level data sets from the World Bank surveys, this paper estimates the economic depreciation rates of fixed capital stocks in the manufacturing industries of seven developing countries. The findings indicate that the stocks of fixed capital may depreciate at higher rates in these countries, as compared with the normal rates usually assumed for advanced industrial countries. This study also discusses the economic and social forces that may influence the incentive to maintain capital appropriately and the implications of high depreciation for the total factor productivity (TFP) growth estimates and volatility of capital accumulation. [ABSTRACT FROM AUTHOR]

Presents information on a study which examined the progress of prudential reforms made by developing countries. Relationship between financial liberalization, banking crises and prudential regulation; Description of the prudential systems; Conclusion.

Provides an introduction to the special issue of `The Journal of Development Studies' on economic mobility and poverty dynamics in developing countries. Dimensions of economic mobility and poverty analyses; Discussion on poverty dynamics in the short-term period studies; Overview on economic mobility in the long-term period studies; Factors to consider when designing anti-poverty programs.

Presents information on a study which analyzed the impact of foreign direct investment and research and development on productivity in developing countries. Background of the study; Methodology; Results and conclusion.

Examines how extended trust grows, or can grow in industrial supply chains and clusters in developing countries. Role of trust in facilitating economic growth; Reference to debates held to assess economic performance; Risks associated with trust.

Investigates the impact and relationship of fiscal decentralisation on the economic growth and development of less developed countries (LDC). Factors contributing to fiscal decentralisation; Effects of fiscal development on economic growth; Problems associated with economic growth.

Examines the development studies literature dealing with the connections between social structure, politics, and `indigenous' capitalism in developing countries. Absence or weakness of indigenous capitalism; Concept of `social barriers' to capitalism; Marxian concerns about connections between economic and political domination; Politics as an obstacle to capitalism.

Examines estimates of export demand and supply elasticities in Newly Industrialising Countries (NIEs) in Asia through aggregation, quantitative restrictions and choice of econometric methodology. Importance of normalizing export demand functions; Analytical framework of the model; Phillips-Hansen method.

Proposes that objective food price risk differs between rural and urban areas of infrastructure-poor economies characterized by spatially concentrated patterns of foodgrains storage. Adverse welfare effects for peasants who seasonally switch between net food seller and net food buyer positions.

Examines the extent to which macroeconomic adjustment and industrial restructuring policies in the 1980s succeeded in achieving their objectives in developing countries. Effect of deflation in the 1980s on manufacturing sectors; Suggestions made by the International Monetary Fund and World Bank to improve situation; Overview of trends in output, wages and employment.

Outlines common characteristics of developmental states of Third World countries. Components defining the developmental state model; Relative autonomy of the developmental state; Economic bureaucracy; Economic interests.

Investigates the relationship between the real interest rate and the consumption-saving decisions in less developed countries following the Error Correction Methodology. Mathematical model with income term, inflation rate and a term for inflation uncertainty; Interest rate effect in low- and high-inflation countries.

Investigates the debate regarding the estimates of export demand and supply elasticities for least developed countries (LDCs) and newly-industrializing economy (NIE) exports obtained by empirical studies. Choice of estimation method and normalization not affecting conclusions regarding size of price elasticity of demand for NIE exports; Asian NIEs in study.

Argues that economists should be far more concerned about data problems in their research on income distributional issues. Mickey Mouse numbers in developing economics; Income distributional numbers: general problems; Development and inequality in Taiwan; Approaches to statistics; Details.

Discusses the contribution of trade and of industrialization to the development of newly industrialized countries in Asia. Characteristics of trade; Composition of exports by areas and markets; Concentration of principal exports.

Utilizes the classification of developing countries according to their trade orientation that has been made available by the World Bank. Relationship between international trade and economic development; Composition of trade-orientation country groups from 1963 to 1985; Time series results for all the countries used for the entire given period.

This note re-examines the economic model of optimal international borrowing for LDCs proposed by Gemmell [1988]. Pursuing a rigorous methodology, this note derives alternative optimal debt functions, and discusses the sufficient conditions under which the optimal debt level is positive. Interesting implications of the analysis in this note, inter alia, rest in identifying the appropriate role of social inter-temporal consumption preferences in a more realistic setting, and in perceiving, unambiguously, the tendency of 'overborrowing' by LDCs that only service their debts over long periods. [ABSTRACT FROM AUTHOR]

The demand for foreign savings is an important feature of the economy in many LDCs, and it would be helpful to have a better understanding of its determinants. This paper considers one approach to modelling the demand for foreign savings in LDCs. If the demand for investment shifts out more buoyantly than does the supply of domestic saving in response to current macro-economic conditions, persistent demand for foreign savings will be generated as a normal feature of the development process. We test this hypothesis with elasticities computed from the parameters of investment and domestic saving equations estimated for a sample of 21 Latin American countries. The empirical results show that in approximately half of the countries in the sample (and most notably in Brazil and in Mexico), the demand for foreign savings is rooted in the parameters of the investment and domestic saving functions. [ABSTRACT FROM AUTHOR]

This article highlights economic factors determining the choice of technology and openness in an intertemporal context in the presence of institutional constraints in the labour market. It considers the case in which a 'more aggressive' development strategy involves an investment in a modern technology. This technology raises the degree to which real wages and productivity depend on external factors while at the same time it also raises the expected value of real income. In the absence of such investment, production takes place in a traditional sector, using a technology that limits exposure to external shocks. The analysis evaluates the dependence of the choice of technology on the volatility of the shocks affecting the economy, the expected productivity gains, the investment cost associated with the modern technology, and the attitude towards risk. The dependence of openness, investment, and real wages on the attitude towards risk is derived for such an economy. The analysis also discusses the interaction between the institutional structure of the labour market and the use of protective measures that attempt to reduce exposure to external shocks. [ABSTRACT FROM AUTHOR]

Prominent among the arguments comprising the pessimistic orthodoxy on the impact of export instability on the domestic economies of developing countries is the view that such instability adversely affects the capacity to import and, in turn, investment. Beginning from a conventional Harrod-Domar framework, this article develops a time-series model which is then applied to data for a sample of developing countries. The results suggest that export instability does affect both capital goods imports and, to a lesser extent, domestic investment. There is little evidence of offsetting movements in international reserves. [ABSTRACT FROM AUTHOR]

This study evaluates the effects of the multinationals' economic penetration on GDP growth rate, the industrial output growth, and domestic capital formation using, for econometric analyses, a more recent data set from LDCs. Likelihood ratio tests showed that (a) there was significant structural variation across the lowincome and the middle-income countries, and (b) there had been a significant dynamic structural shift over time, that influenced the economic relationships. Statistical tests also showed that the hypothesis of exogeneity of the multinational variable could not be rejected. The study finds little or no empirical support for the multinational variable being significantly a deterrent factor on LDCs' GDP growth rate, or on industrial output growth, or on domestic savings rate; whereas the effects of domestic variables, the national savings rate, exports and state's economic intervention policy emerge quite strongly. [ABSTRACT FROM AUTHOR]

Debt swapping has begun to be used over recent years as one means of alleviating the global debt problem. This article undertakes a preliminary investigation of the economics of debt swapping, and attempts to identify and assess the principal advantages and disadvantages of such schemes. The conclusion reached is that, while the benefits outweigh the costs, debt swapping will not do very much to tackle the fundamental issues involved in the debt problem. An appendix examines the welfare effects of governmental regulation of debt swapping. [ABSTRACT FROM AUTHOR]

This article proposes a simple macroeconomic model of optimal borrowing for LDCs. Using a two-period framework it is shown that optimal debt levels are functions of interest rates on debt, shadow exchange rates, the shares of investment in domestic output and foreign inflows, the multiplier effects of investment and borrowing on output growth, and inter-temporal consumption preferences. Empirical evidence is considered on the main observable variables and provides a basis for simulation exercises. For appropriate parameter values, optimal borrowing is found to be particularly sensitive to the interest rate, capital productivity, and the extent of foreign inflows invested. [ABSTRACT FROM AUTHOR]

In many LDCs it is not uncommon to find incentives designed to encourage import substitution activities coexisting alongside incentives aimed at encouraging export activities. This article evaluates a recent approach to evaluating commercial policy which, among other things, highlights some of the implications of simultaneously pursuing import substitution and export promotion. The study develops a model which emphasises the 'incidence' of protection and identifies the concept of true protection. Empirical results for a number of LDCs are discussed and the implications of these results evaluated. In addition, the article contrasts this approach with the effective protection approach to evaluating commercial policy. [ABSTRACT FROM AUTHOR]

Considers the impact of stabilization programs of the International Monetary Fund (IMF) on inflation performance in less developed countries (LDC). Hypotheses explaining the failure of IMF stabilization programs; Discussion on the process of industrialization in LDC; Method used in identifying systematic pattern in the behavior of the inflation rate.