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Twelve papers, resulting from a conference organized by the Centre for Economic Policy Research and held at the University of Oxford in April 1993, examine the macroeconomic linkages between the developed North and less developed South countries in the world economy. Papers focus on the export performance of newly industrialized countries; export growth and the terms of trade; economic activity and commodity prices; convergence and growth linkages between North and South; analyzing external adjustment in developing countries; dynamic response to external shocks in Classical and Keynesian economies; macroeconomic effects on developing countries of shocks in the OECD; macroeconomic linkages between the OECD and the Asia-Pacific regions; MULTIMOD simulations of the effects on developing countries of decreasing military spending; effects of a rise in G-7 real interest rates on developing countries; quantifying North-South interdependencies with Multicountry Model simulations; and the consequences of U.S. fiscal actions in a global model with alternative assumptions about the exchange regime in developing countries. Vines is at Balliol College, Oxford; the Australian University; and the Centre for Economic Policy Research. Currie is at the London Business School and the Centre for Economic Policy Research. Index.

This paper assesses the potential impacts from the introduction of high yielding and drought tolerant varieties of major food staples (wheat and maize) in Ethiopia. We develop a dynamic Computable General Equilibrium model with a micro-simulation module to examine the growth, poverty and distributional impacts of agricultural innovations. The analysis shows that introduction of improved varieties of these food staples is likely to boost the cereal sector in the country. Other agricultural sub-sectors grow due to increased labour supply. Given that these staple cereals represent an important share of food consumption for Ethiopian households, the poverty impact of the interventions is positive. Although rural households benefit from higher gains in real consumption, poverty declines more in urban areas compared to the rural. This is mainly because the rural poor are generally far from the poverty line with a higher initial poverty gap compared to urban households and the urban poor benefit from price effects. As productivity-enhancing technologies are introduced, there is a need for policy interventions in rural areas targeting non-agricultural sectors to enhance growth linkages, increase employment and stimulate inclusive growth.

India and China are two Asian emerging economies, the unprecedented growth of which have led many to argue that in the face of slowdown in growth of the North these emerging economies will act as the new growth drivers for the South. However, not much empirical evidence is available to support this argument. This article estimates the growth linkages between the developing Asia and the two Asian emerging economies in terms of co-integration and causation in their growth rates. Both short-term and long-term relationships are tested between growth of China and India with growth of the developing countries of Asia for the period 1970–2009. The issue of whether these countries can provide market for the South is also examined. The results show that whereas China has acted as a growth driver for the developing Asia, no empirical evidence of this is found for India. L’Inde et la Chine sont deux pays asiatiques emergents dont la croissance sans precedent laisse penser a beaucoup que, dans le contexte du ralentissement au Nord, ces economies emergentes agiront comme de nouveaux moteurs de croissance pour le Sud. Il existe cependant peu de preuves empiriques a l’appui de cette these. Cet article propose une estimation des liens de croissance entre l’Asie en developpement et les deux economies asiatiques emergentes, en termes de co-integration et de causalite entre leurs taux de croissance. Nous testons les liens, a court et a long terme, entre la croissance de la Chine et de l’Inde et celle des pays d’Asie en developpement sur la periode 1970–2009. La question de savoir si ces pays peuvent constituer un marche pour le Sud est egalement examinee. Les resultats montrent que la Chine joue effectivement le role de moteur de croissance pour l’Asie en developpement, mais qu’il n’existe aucune preuve empirique que l’Inde joue le meme role.

Discussions on how best to exit from global imbalances to create a more balanced world economy have ignored the impact on poor countries of proposals to redress these imbalances. This paper aims at filling that gap. It gauges the degree of renminbi (RMB) undervaluation; presents evidence on RMB undervaluation and China’s GDP growth rate; surveys the role of the real effective exchange rate – both its level and its stability over time – for underpinning growth in developing countries, especially in large dual economies such as China and India; and finally, presents new evidence on growth linkages between China and poor countries for the last two decades and surveys literature on potential displacement effects of RMB appreciation. The analysis allows broad conclusions to be drawn about the potential developing‐country beneficiaries and losers from various renminbi adjustment scenarios in the forthcoming years.

We investigate Asia's recent experience in international capital allocation through flows of foreign direct investment. A calibrated general equilibrium model with a new capital flow modelling component is applied to highlight underlying relationships between a Heckscher-Ohlin (labor and capital) endowment perspective and such considerations as human capital, productivity, endogenous growth, and institutional behavior. Our results support the argument that all these factors played a role in Asia's recent growth, to different degrees in different countries, with complex relationships to investment incentives. In addition, new directions for further research in the FDI-growth linkages policy area are identified.

This paper examines the changing nature of growth spillovers between developed economies, the North, and developing countries, the South, driven by the process of globalization—the phenomenon of rising international trade and financial flows. We use a comprehensive database of macroeconomic and sectoral variables for 106 countries over the period 1960–2005. We consider the South to be composed of two groups of countries, the Emerging South and the Developing South, based on the extent of their integration into the global economy. Using a panel regression framework, we find that the impact of the Northern economic activity on the Emerging South has declined during the globalization period (1986–2005). In contrast, the growth linkages between the North and Developing South have been rather stable over time. Our findings also suggest that the North and Emerging South economies have started to exhibit more intensive intra-group growth spillovers.

This paper longitudinally examines the relationship between the career reasons of nascent entrepreneurs, their growth preferences and subsequent growth achieved. The longitudinal design allows for examination and control of both survivorship and recall bias upon career reason and growth linkages. Substantial recall bias was observed in the career reasons of entrepreneurs, with the reported importance of self-realization and financial success, as explanations for entering venturing activity, being significantly lower when responses were obtained once the venture was operational. Consistent with economic motives, the importance that the entrepreneur places on financial success was a key determinant to explain cross-sectional differences in growth preferences of the entrepreneur, the intended size of the venture, and achieved growth. Further, the importance of financial success was robust to the use of both prospective and retrospective career reasons. While independence was the most important factor to expl...

This cumulative dissertation presents 5 contributions that deliver novel insights on development issues and investment strategies in Africa. Chapter II and IV focus on the analysis of potential impacts of public health expenditures on productivity and hence future growth. In particular, chapter II provides an empirical analysis of the impact of public health expenditures on farmer’s productivity using the Tanzania case study. Likewise, I investigate the potential impact of out-of-pocket health expenditures on agricultural productivity and poverty in Chapter III and IV, respectively. Beyond public spending, private expenditures, especially out-of-pocket health expenditures, also have an impact on productivity, although having an impoverishing effect on households and constraining the productivity generating process when they became catastrophic. The issue on the impoverishment of out-of-pocket health expenditures is largely discussed in chapter III, which additionally used a conditional mixed process to estimate their determinants. Both chapter II and IV emphasize the need for greater investment in the non-agricultural health sector in order to both meet the social demand and generate productivity growth. Chapter V provides the second major contribution to this dissertation by analyzing the policy-growth linkages in addition to the growth-poverty linkages. It provides a method that identifies the key sectors and key policy programs by considering the cost issue of generating growth that is often overlooked. This method combines empirical and expert survey data to estimate a Policy Impact Function and uses Senegal as a case study. Beyond all the identification of economic and political solutions, the implementation of the budget allocation between the different sectors and the different policy programs is a crucial point in achieving targeted growth and poverty reduction. Chapter VI analyzes the impact of a Medium-Term Expenditure Framework (MTEF) – a multi-year budget programming tool - in Africa, with a special focus in Senegal.

The study aimed to develop broader series of public expenditures and investments impacting growth of agriculture and allied sectors and explored how sectoral and regional priorities of agricultural investments had responded to the national priorities by tracing their growth linkages. The study indicated that following a period of stagnation in the 1990s, public expenditure on agriculture and allied sectors has stepped up in the mid-2000 decade. Further, the broad observations do not corroborate the idea of neglecting marginal agro-eco-regions as far as public investment in agricultural research is concerned. However, higher infrastructure and agricultural research investment priority should be given to relatively backward states of eastern India, as the region still has poor infrastructure and higher concentration of subsistence producers which make private sector hesitant to invest. Enhanced public investment is justified to strengthen infrastructure and also attract private investment leading to high pay-offs as the region is well endowed with natural resources. The other issue relates to prioritisation of public resources towards those sectors and regions where presence of market failures or core distributional concerns exists. The public resources should increasingly be deployed to produce goods and services that are not produced by market actors. The rising government spending under revenue account on agri-inputs and farm support services can also have a crowding-out effect on private investment. Studies have shown that the biggest payoffs for reducing rural poverty and increasing growth came from investments in R&D and infrastructure and that too from backward regions. These investments must, therefore, be treated as a composite strategy for rural development and a sustained step-up in investments should be maintained in order to benefit agriculture, given that the benefits from these investments tend to materialise after a considerable time lag. The policy shift towards raising capital expenditure in rural infrastructure and irrigation would translate into economic gains only, if it is backed by responsive institutions as they form part of the enabling environment for private investment.

This cumulative dissertation presents 5 contributions that deliver novel insights on development issues and investment strategies in Africa. Chapter II and IV focus on the analysis of potential impacts of public health expenditures on productivity and hence future growth. In particular, chapter II provides an empirical analysis of the impact of public health expenditures on farmer’s productivity using the Tanzania case study. Likewise, I investigate the potential impact of out-of-pocket health expenditures on agricultural productivity and poverty in Chapter III and IV, respectively. Beyond public spending, private expenditures, especially out-of-pocket health expenditures, also have an impact on productivity, although having an impoverishing effect on households and constraining the productivity generating process when they became catastrophic. The issue on the impoverishment of out-of-pocket health expenditures is largely discussed in chapter III, which additionally used a conditional mixed process to estimate their determinants. Both chapter II and IV emphasize the need for greater investment in the non-agricultural health sector in order to both meet the social demand and generate productivity growth. Chapter V provides the second major contribution to this dissertation by analyzing the policy-growth linkages in addition to the growth-poverty linkages. It provides a method that identifies the key sectors and key policy programs by considering the cost issue of generating growth that is often overlooked. This method combines empirical and expert survey data to estimate a Policy Impact Function and uses Senegal as a case study. Beyond all the identification of economic and political solutions, the implementation of the budget allocation between the different sectors and the different policy programs is a crucial point in achieving targeted growth and poverty reduction. Chapter VI analyzes the impact of a Medium-Term Expenditure Framework (MTEF) – a multi-year budget programming tool - in Africa, with a special focus in Senegal.

Pronounced disparities in income and economic opportunities exist between the coastal and the inland regions of China. This paper explores the proposition that regional disparities in China are related intimately to the structure of exports and foreign direct investment, which results in limited linkages from the growth engines. The spillover and migration effects of exports and FDI on regional income inequalities are investigated. The emphasis on FDI-driven, labor-intensive, processing-type exports in the coastal regions has attracted relatively mobile and efficient resources from the inland regions, but it has offered only limited growth linkages to those regions. This reallocation of resources has exacerbated the backwardness of the inland regions. Journal of Comparative Economics32 (1) (2004) 148–164.

In spite of substantial growth in agricultural GDP in the 1990s, rural poverty rates in Pakistan did not decline. This paper explores the reasons for this lack of correlation between increases in agricultural production and poverty reduction through an analysis of growth linkages using a 2001-02 Social Accounting Matrix (SAM)-based semi-inputoutput model. Model simulations indicate that expansion of traditional crop agriculture can significantly benefit rural poor farmers. However, because of skewed distribution of land and earnings from land, landless agricultural labourers and the rural non-farm poor (who, together, account for 61 percent of the rural poor) do not benefit directly from growth in the crop sector. In the absence of a change in the structure of rural incomes and employment, further measures will likely be needed for rapid poverty reduction in Pakistan, including greater efforts to boost the livestock sector, expansion of the rural non-farm economy (in addition to agricultural growth-induced linkage effects), and targeted interventions to the poorest rural households.

List of Tables. List of Figures. Acknowledgements. Foreign Direct Investment, Trade in Services and Economic Growth: An Introduction Shahid Ahmed Section I. FDI, Trade and Economic Growth 1. India-ASEAN Trade, FDI and Growth: Exploring Challenges and Opportunities Post-global Financial Crisis Tran Van Hoa 2. FDI in Sensitive Sectors: The Case of the Retail Sector in India Tanu M. Goyal and Arpita Mukherjee 3. FDI and Precision Agriculture in India Sarah Ahmed 4. Trade, Foreign Direct Investment and Economic Growth Linkages in Selected South Asian Countries Md. Saiful Islam and Syed Imran Ali Meerza 5. Estimating Country-specific Determinants of Foreign Direct Investment Flows in India: Evidence from VAR and the Innovation Accounting Model Bikash Ranjan Mishra 6. Causality Between Trade, Foreign Direct Investment and Economic Growth Under the Structural Adjustment Programme in India: An Application of the Toda Yamomoto Test Harish 7. Foreign Direct Investment and Efficiency: A Stochastic Frontier Analysis Suman Sharma 8. Financial Decoupling of Emerging Asset Markets from Japan and the US Peter J. Morton Section II. Trade in Services 9. India's Trade in Services with Select FTA and Non-FTA Partners: An Analysis of Comparative Advantage Nabeel A. Mancheri 10. Export Potential of India's Higher Education Sector: Identifying Opportunities and Constraints Shahid Ahmed and Sushil Kumar 11. Changing Pattern of Country Competitiveness in Trade in Computer and Information Services Jayesh N. Desai 12. Optimal Pricing Policy of Kolkata-Agartala Transit Route: Some Methodological Issues Subir Kumar Sen, Sudakshina Gupta and Ishita Mukhopadhyay Section III. Value Chains and Production Networks 13. Integration of the Indian Machinery Sector into Global Production Networks Neha Gupta 14. Value Chain in the Light Engineering Sector of Bangladesh: Challenges towards the Development of Regional Linkages Khondaker Golam Moazzem and Mehruna Islam Chowdhury. About the Editor. Notes on Contributors. Index

This paper evaluates the greenhouse gas emissions and economic impacts from producing biofuels in Tanzania. Sequentially-linked models capture natural resource constraints; emissions from land use change; economywide growth linkages; and household poverty. Results indicate that there are economic incentives to convert unused lands to sugarcane-ethanol production, but only grasslands (not forests) have a reasonable carbon payback period. There are also strong socioeconomic reasons to involve smallholders in feedstock production in order to reduce rural poverty, especially since our results indicate that biofuels have little effect on food production. Yet smallholders require more land than large-scale plantations and so face more binding natural resource and emissions constraints. Overall, environmental constraints alter the economically optimal biofuel strategy for Tanzania by limiting potential poverty reduction. Unlike previous studies, our integrated assessment suggests that a mixed farming system with greater emphasis on large-scale plantations is more appropriate for producing sugarcane-ethanol in Tanzania.

The paper is based on UGC sponsored major research project recently completed. Major finding of the project has been that the Indian financial sector has failed to assist in the growth process of the economy. Granger causality tests on quarterly data in the framework of VAR and VEC models have been used to establish the results. These results hold at the aggregate economy level and also at the sectoral level. The reasons are to be found in the working of the financial system as experienced by the demand side of loanable funds. The field study conducted under the project has brought out that not only has the system failed to contribute to economic growth but also that its functioning is highly lopsided. Primary data collected through field survey points to a biased allocation of the available funds by the banking system and a substantial presence of the informal sources of credit in the economy. While the informal real sector is the one that primarily contributes to the growth of the Indian economy the dismal reality is that its financial needs are barely served by the mainstream financial sector. This in itself explains the failure of the financial system to contribute to economic growth. Since the finance growth linkages are found to be weak/ absent, an important implication of the result is that controlling inflation in India using tight credit policies can be achieved with minimum costs to growth of the real sector., peer-reviewed

"Revised version of a paper commissioned by the International Development Research Centre (IDRC) of Canada for a World Bank Conference on "Poverty, environment, growth linkages" held in Washington, DC, March 1999"

Virtually every country in Southern Africa, with varying degrees of commitment and success, has identified food security as an important policy goal. The problem of food insecurity in the countries of the region is, however, intricately linked to the wider problem of poverty and the main source of both of these problems is rural stagnation. This paper analyzes the critical linkages between food insecurity and rural stagnation in Southern Africa. Strategies and options for incorporating rural Southern Africans into a self-sustaining process of economic growth are examined with an emphasis on promoting rural employment and incomes. These include leveraging farm/non-farm growth linkages for maximum rural employment; promoting agriculture-based income diversification; and strengthening the linkages between the rural and industrial sectors. A number of strategic and tactical preconditions that must be met to ensure success and sustainability are also addressed in the paper, including: the need for an integrate...

Regional growth linkage modellers claim that agricultural growth generates non-agricultural diversification of rural regions through the operation of production and consumption linkages. These influential claims are often legitimated in terms of a composite model of ‘Asian success’ from which neoliberal policy prescriptions are derived for other parts of the world. This article argues that diversification of local rural economies does not emerge automatically from agricultural growth and market expansion. Rather, intersectoral and spatial linkages depend crucially on the social organization of production, the conditions of access to resources, and the social logic of investment—that is, who gets the surplus and what they do with it — as well as on wider configurations of political – economic forces. The article repositions key ‘Asian successes’ within institutionally and historically specific contexts, and shows how supposedly similar instances of regional growth linkages exemplify multiple and quite divergent paths of sectoral and spatial development.

It is often argued that technological spillovers or other externalities associated with exports or trade are sector-specific, yet trade and growth linkages are typically examined at the level of macroeconomic aggregates. This paper extends the analysis another level of specificity, analyzing the commodity composition of trade. This paper addresses three interrelated sets of questions. First, have Asian countries exhibited unusually high exports in particular industries? Has their commodity composition of exports been unusually concentrated? Second, has specialization in particular sectors emerged unusually rapidly the case of Asian countries? Third, can export similarity across Asian countries be explained by economic fundamentals?

Rapid urbanization is an important characteristic of African development and yet the structural transformation debate focuses on agriculture's relative merits without also considering the benefits from urban agglomeration. As a result, African governments are often provided conflicting recommendations on the importance of rural agriculture or urban industry. We develop dynamic economy-wide models for Ethiopia and Uganda that capture both traditional aspects of the debate (growth linkages and foreign trade) and benefits from urbanization (internal migration and agglomeration effects). Simulations suggest that urban agglomeration is an important source of long-term growth and structural transformation, but that investing in cities does not greatly reduce national poverty over the short-term. In this regard, agricultural growth is more effective, albeit with slower national growth. Given these trade-offs, we conclude that the urbanization's benefits argue against an agro-fundamentalist approach to African development, but the short-term imperative of reducing poverty necessitates further agricultural investment.

We develop a model to study the macroeconomic effects of public investment surges in low-income countries, making explicit: (i) the investment-growth linkages; (ii) public external and domestic debt accumulation; (iii) the fiscal policy reactions necessary to ensure debt-sustainability; and (iv) the macroeconomic adjustment required to ensure internal and external balance. Well-executed high-yielding public investment programs can substantially raise output and consumption and be self-financing in the long run. However, even if the long run looks good, transition problems can be formidable when concessional financing does not cover the full cost of the investment program. Covering the resulting gap with tax increases or spending cuts requires sharp macroeconomic adjustments, crowding out private investment and consumption and delaying the growth benefits of public investment. Covering the gap with domestic borrowing market is not helpful either: higher domestic rates increase the financing challenge and private investment and consumption are still crowded out. Supplementing with external commercial borrowing, on the other hand, can smooth these difficult adjustments, reconciling the scaling up with feasibility constraints on increases in tax rates. But the strategy may be also risky. With poor execution, sluggish fiscal policy reactions, or persistent negative exogenous shocks, this strategy can easily lead to unsustainable public debt dynamics. Front-loaded investment programs and weak structural conditions (such as low returns to public capital and poor execution of investments) make the fiscal adjustment more challenging and the risks greater.

Hegemonic theories of Third World regional development maintain that growth in rural small-scale industries can originate in growth linkages from modernized agriculture or in entrepreneurship devel...

This article analyzes the effects of structural adjustment policies in the 1980s on growth and income distribution in the Sudan within a Social Accounting Matrix (SAM) framework. These policies were unbalanced between the productive sectors of the economy and biased toward modem irrigated agriculture, large capital-intensive and highly import-dependent industries. The SAM multiplier analysis indicates that these sectors have the weakest growth linkages in the economy and the smallest impact on household income. In contrast, traditional agriculture (including livestock and forestry) provide the strongest linkages and have the largest impact on every household income group. These results must be heavily qualified when taking into account the limitations of both the data base and the SAM multiplier model.

Discussions on how best to exit from global imbalances to create a more balanced world economy have ignored the impact on poor countries of proposals to redress these imbalances. This paper aims at filling that gap. It gauges the degree of renminbi (RMB) undervaluation; presents evidence on RMB undervaluation and China’s GDP growth rate; surveys the role of the real effective exchange rate – both its level and its stability over time – for underpinning growth in developing countries, especially in large dual economies such as China and India; finally, the paper presents new evidence on growth linkages between China and poor countries for the last two decades and surveys literature on potential displacement effects of RMB appreciation. The analysis allows broad conclusions to be drawn about the potential developing-country beneficiaries and losers from various renminbi adjustment scenarios in the forthcoming years.

Although Ethiopia's economy has grown rapidly over the past decade and urbanization is increasing, the country's economic and spatial transformation has only just begun. Ethiopia's share of agriculture in GDP in 2006 (48 percent) was the highest in the world, and more than double the average for low income countries (20 percent). Likewise, Ethiopia remains one of the least urbanized countries in the world (16 percent), compared to the Sub-Sahara Africa average of 30 percent. Nonetheless, massive changes are underway. Agricultural growth accelerated in the second half of the first decade of the 2000s so that real agricultural GDP growth averaged 6.2 percent from 1998/99 to 2007/08. At the same time, Inflows of foreign aid, workers' remittances and private transfers that funded a surge in investment and boom in the construction sector. Measuring urbanization in terms of spatial agglomerations of people in and near cities of 50,000 or more, shows that urbanization growth rates between the population census years 1984 and 2007 are much higher (between 8 and 9 percent) than estimates based on official definitions of urban (4.2 percent). A surge in public investment has also helped bring about a new era for economic development. Road investments, particular those in transportation corridors in the highlands, have greatly increased connectivity, so that the number of people residing in or within three hours of a city of 50,000 or more, rose from 6.24 million in 1984 (15.5 percent of the population) to 38.7 million in 2007 (48.5 percent of the population). Moreover, massive investments in hydro-electric power have revolutionized Ethiopia's economy and opened up the potential for significant increases in productivity and output. Electricity per capita is expected to soon reach a level nearly 9 times the level of the 1960s, though it still remains far below the sub-Saharan Africa average. Similarly, fixed telephone line infrastructure more than doubled from 2003 to 2008; and cell phone subscription catapulted to 3.16 million subscribers in 2008 from only 50,000 in 2003. Finally, improvements in education and health are making significant impacts on the country's wellbeing and productivity. As Ethiopia moves forward, it faces key development policy decisions. Since the late 1990s, the country has followed an Agriculture Development Led Industrialization (ADLI) policy emphasizing investments to increase agricultural productivity and spur growth linkages with the rest of the economy. At the same time, government policy has effectively slowed rural-urban migration through regulations prohibiting sale of land, loss of land rights for those who leave rural areas, and registration requirements for new migrants. Allocation of public investments across sectors and across rural-urban space, together with land policies and various regulations on labor mobility, will be major determinants of the growth path of Ethiopia's economy and the extent of poverty reduction in the coming decade.

The rural nonfarm economy is the backbone of the economy of numerous small towns scattered throughout the Black Belt region, as well as the primary source of income and employment. Seen in this light, the rural nonfarm economy will play a key role in determining future prospects for employment growth and poverty alleviation in the Alabama Black Belt region. The objective in this paper therefore is to examine the importance of rural-urban growth linkages with a focus on the Black Belt region and estimate agricultural growth multipliers. The analysis uses cross-section data to estimate econometrically the indirect rural employment and income generated by agricultural growth. Two major sections address the study objective. The first examines the importance, composition and location of nonfarm activity, as well as general trends over the past decades. After reviewing previous growth linkage studies, the second section explores the relationship between agriculture and changes in nonfarm activities.

In many developing countries like Pakistan, most research work on farm mechanisation has focused especially on farm labour displacement and income effects. These studies measure only the micro or direct effect of mechanisation on a specific farm unit, area or locality. They lack macro level impact of technologies that emerge from lin~ages between farm and non-farm sectors and between farm and the household: The importance of these production anq consumption linkages in agricultural growth has been emphasised [Hazel and Roell (1983); Mellor and Lele (1973); Mellor (1976); Yotopoulos and Nugent (1976)]. The growth linkages between farm and non-farm economy are primarily due to increases in household consumption expenditures. Increases in household consumption expenditure is directly related to escalation in income. Leontiefs (1951, 1966) inpu-output system provides a framework measure the overall effect of farm mechanisation employment an income. King and Byerlee (1977) measured links between changes income distribution and its effect on employment. Rangarajan (1982); Hazel an Roell (1983) showed that agricultural growth has substantial effects on other sectors economy. Ahammed and Herdt (1983 1985) also used the input-output system. The present study is basically an adoption of Ahammed and Herdt's (1983) model. A system of linear homogenous equations which permits solutions by simple matrix inversion operations hsa been used.

"Uganda has experienced rapid economic growth and poverty reduction over the past decade but has failed to significantly improve incomes in its northern regions where prolonged conflict has hindered growth. We consider three strategies to close this regional divide: (1) develop a north-south corridor to encourage regional trade, (2) accelerate growth in the southern capital city and encourage north-south migration, and (3) improve agricultural productivity in rural areas. We examine these strategies using a regionalized computable general equilibrium model, accounting for internal migration and productivity gains from urban agglomeration effects. Simulation results indicate that a north-south corridor benefits northern households, but its benefits are limited by the small size of northern urban centers and the low productivity of northern producers. Investing in the capital city accelerates economic growth but has little effect on other regions' welfare because of the city's weak growth linkages with other regions and small migration effects. Improving agricultural productivity, however, though less effective at stimulating national economic growth, generates broad-based welfare improvements in both rural and urban areas. We therefore conclude that without significant gains in agricultural productivity in the next decade, out-migration and urban-led growth centered in Kampala will be insufficient to significantly reduce poverty in northern Uganda. " from authors' abstract

As Asia's economic growth process matures, regional integration offers important opportunities to sustain and extend the achievements of the more dynamic economies. Benefits from this process will include geographic diversification, often toward superior growth rates, as well as structural differentiation and more rapid evolution from established north–south patterns of trade and specialization. Propagation of growth linkages across this diverse region will also facilitate more inclusive growth and economic convergence. Infrastructure commitments can be an essential guarantor of the entire process, and this paper examines their potential to contribute to more sustained and broadly based Asian growth.

Unexploited agricultural potential and regional trade opportunities together with the presence of South Africa and other middle-income countries, offer Southern Africa the unique opportunity to foster agricultural growth through regional linkages. In this study a global general equilibrium model that focuses on Southern Africa is used to analyze the implications that these specific characteristics of the regional economy have on growth choices of low-income countries. Three groups of growth scenarios are define to analyze the role of South Africa as a possible engine of growth, the role of own growth engines in low-income countries, and growth linkages between middle- and low-income countries. Results of the simulation scenarios show that larger benefits to low-income countries can be expected from grain and livestock productivity growth as a result of high multiplier effects and the large share of these activities in GDP. Productivity growth in grain and livestock results in higher GDP growth, higher agricultural output and food consumption, and lower agricultural imports than with productivity growth in non-traditional export crops. Unlike other regions where growth in grain production is likely constrained by domestic demand, growing middle-income economies in Southern Africa can provide additional demand to grains and livestock, slowing down the decline in grain prices in the region.

This study consists of three empirical essays that analyse the impact of corruption on foreign direct investment, institutions and growth linkages and subjective well-being in transition countries.

sequence of low market integration and low substitutability between domestic and imported foods. In addition, if the geographical area over which these multipliers are calculated increases, the share of nontradables in the economy rises and multipliers are correspondingly larger. This leads the authors to praise the potential for a demand-led approach to both agricultural and industrial development, anchored in productivity gains in traditional exports. While the general proposition is reminiscent of the development strategies advanced by Mellor (1986), Adelman (1984), and Hazell (1984), and by now well accepted, the quantification of multiplier effects is inadequate. The model used makes unrealistic assumptions that systematically bias upward the size of the growth linkages induced by technological change in farm or nonfarm tradables. Denoting by T = tradables, T, = farm tradables, NT = nontradables, E = elasticity of supply response, ,qM = elasticity of substitution in consumption between output (q) and imports (M), and m, = income multiplier of an extra $1 of income from farm tradables, the key assumptions made by the authors are T: E = 0, , qM= o; and NT: E = o, YqM = a value which does not matter as long as E = oo. This yields local m, between 1.3 and 1.8 reported in table 2 of the Delgado et al. paper. Consider now the more realistic characteriza

Preface - List of Acronyms - Notes on the Contributors - Introduction A.Parisotto & D.Campbell - Is an Integrated Regional Labour Market Emerging in East and Southeast Asia? D.E.Bloom & W.Noor - The Reorganization of Production on a World Scale: States, Markets, and Networks in the Apparel and Electronics Commodity Chains G.Gereffi - Changing International Division of Labour in the Electronics Industry J.Henderson - Regional Integration of East and Southeast Asian Economies: The Role of Japan S.Watanabe - Hong Kong and Coastal China Growth Linkages R.Skeldon - Growth Triangles in International Perspective M.Tang & M.Thant - Thailand in the Regional Division of Labour V.Charoenloet - An Employer Response N.Simakrai - A Worker Response S.Zuesongdham - The Philippines in the Regional Division of Labour A.C.Orbeta Jr & M.T.C.Sanchez - An Employer Response F.R.Floro - A Worker Response A.J.Dinglasan - Conclusion A.Verma - Index

Employing a 'factor-content' model that relates sectoral growth to regional factor endowments, we find that 1) U.S. state factor endowments are reasonably strong correlates of cross-state sectoral growth in value-added, with patterns that accord well with intuition; 2) that inter-sectoral differences in productivity change are marked -- estimates range from negative to annual rates over 10 percent; 3) little evidence of unusual growth linkages either from sector to sector or state to state, such as might be expected from recent discussions of externalities,... 4) ...nor of correlation between unusually strong sectoral growth and unusual levels of export dependence, another putative channel of externalities. Our principle data set is a 1987-89 panel of: sector-by-sector, state-by-state value added and international exports, as well as state endowments of patents, structural capital, and as many as six types of labor. 'Unusual' growth and exports are defined as the residual growth and international exports left unexplained by endowments.

Employing a 'factor-content' model that relates sectoral growth to regional factor endowments, we find that 1) U.S. state factor endowments are reasonably strong correlates of cross-state sectoral growth in value-added, with patterns that accord well with intuition; 2) that inter-sectoral differences in productivity change are marked -- estimates range from negative to annual rates over 10 percent; 3) little evidence of unusual growth linkages either from sector to sector or state to state, such as might be expected from recent discussions of externalities,... 4) ...nor of correlation between unusually strong sectoral growth and unusual levels of export dependence, another putative channel of externalities. Our principle data set is a 1987-89 panel of: sector-by-sector, state-by-state value added and international exports, as well as state endowments of patents, structural capital, and as many as six types of labor. 'Unusual' growth and exports are defined as the residual growth and international exports left unexplained by endowments.

Twelve papers, resulting from a conference organized by the Centre for Economic Policy Research and held at the University of Oxford in April 1993, examine the macroeconomic linkages between the developed North and less developed South countries in the world economy. Papers focus on the export performance of newly industrialized countries; export growth and the terms of trade; economic activity and commodity prices; convergence and growth linkages between North and South; analyzing external adjustment in developing countries; dynamic response to external shocks in Classical and Keynesian economies; macroeconomic effects on developing countries of shocks in the OECD; macroeconomic linkages between the OECD and the Asia-Pacific regions; MULTIMOD simulations of the effects on developing countries of decreasing military spending; effects of a rise in G-7 real interest rates on developing countries; quantifying North-South interdependencies with Multicountry Model simulations; and the consequences of U.S. fiscal actions in a global model with alternative assumptions about the exchange regime in developing countries. Vines is at Balliol College, Oxford; the Australian University; and the Centre for Economic Policy Research. Currie is at the London Business School and the Centre for Economic Policy Research. Index.

The size of the rural non-farm economy depends primarily on agricultural demand. As farm income grows, it generates spillover growth in the rural nonfarm economy, since rising farm income increases rural purchases of nonfarm goods and services. The well-known debates on agricultural growth linkages revolve around how powerful these demand linkages are (Mellor, 1975; Johnston and Kilby, 1975; Bell and Hazell, 1980). Yet agriculture affects the supply of non-farm goods and services as well. Operating primarily through the labour market, these supply-side linkages have been largely overlooked in the growth linkage discussions. This is unfortunate, because a focus on the labour market alters conclusions about the magnitude of farmnon- farm linkages. It also highlights how agriculture affects not only the size but also the composition of the rural non-farm economy. This paper explores the relationship between agricultural growth, the rural labour market, and the size and composition of rural non-farm activity. It begins by reviewing what is known about the rural non-farm economy in developing countries, followed by a review of empirical evidence on the relationship between agriculture, labour markets and the transformation of the rural non-farm economy. The paper then introduces a simple price-endogenous model that projects the non-farm employment, wage and income effects of alternative forms of agricultural growth. The model highlights the labour market interactions that contribute importantly to a shifting composition of rural non-farm activity.

Empirical evidence supports the proposition that national income growth is strongly affected by trade specialization and comparative advantage in eight economic sectors. Commercial policy distortions and factor intensity reversals explain why trade does not always fit the skilled labor continuum underlying sectors ranked along the ladder of development. Income elasticities with respect to openness imply that economies become less dependent on international markets as they grow. This article examines the effects of the commodity composition of trade on economic growth, going beyond previous analytical efforts investigating international trade and domestic growth linkages.

Since the mid-sixties, there has been an extensive discussion on development strategies and this ILO Mission report is probably one of the best products of this discussion. The discussions of the late sixties appear now to have led to a fairly wide consensus among economists. It began with dissatisfactions over the outcome of the strategy pursued in the 1950s, which stressed industrialization, rural to urban migration, urbanization, import substitution, capital formation, etc. Today, with the appearance of excess industrial capacity, unemployment, urban congestion, income inequalities, food shortages, rural stagnation, and widespread poverty, what may be called a new development economics has come to the fore, advocating a new strategy. We hear less and less of concepts such as the big push, takeoff, leap forward, unbalanced growth, linkages, growthinducing mechanisms, commercialization points, disguised unemployment, etc. Instead, the talk now is about integrated rural development, agricultural intensification, intermediate technology, appropriate education, labor force explosion, small industry and export promotions, employment generation, nutrition and health development, social and human resource development, income distribution, and institutional changes. This ILO report is the best textbook on the new concepts as skillfully applied to a country which was among the first in Asia to jump on the bandwagon of the old strategy, and one of the first to bog down. The political forces and processes emerging out of the heritage of the distant past and from the old strategy were unable to cope with the problems of urban unemployment, rural underemployment, excess industrial capacity, rural stagnation, sluggish growth of income, deficits in the foreign and government balances, deficient financial structure, rapid growth of population and labor force, food shortages, infrastructure building, inappropriate educational and

This paper jointly evaluates the greenhouse gas emissions and economic impacts from producing biofuels in Tanzania. Sequentially-linked models capture natural resource constraints; emissions from land use change; economywide growth linkages; and household poverty. Results indicate that there are economic incentives to convert unused lands to sugarcane-ethanol production, but only grasslands (not forests) have a reasonable carbon payback period. There are also strong socioeconomic reasons to involve smallholders in feedstock production in order to reduce rural poverty, especially since our results indicate that biofuels have little effect on food production. Yet smallholders require more land than large-scale plantations and so face more binding natural resource and emissions constraints. Overall, environmental constraints alter the socioeconomically optimal biofuel strategy for Tanzania by limiting potential poverty reduction. Unlike previous studies, our integrated assessment suggests that a mixed farming system with greater emphasis on large-scale plantations is more appropriate for producing sugarcane-ethanol in Tanzania.

This paper is an accumulation, over the past 25 years, of a body of detailed work examining the structure of Africa's rural, nonfarm economy. First, it systematically reviews empirical evidence on the nature and magnitude of the African rural, nonfarm economy. It then explores differences across locality and size, across countries and over time, in an effort to assess likely patterns of growth. A subsequent review of key production and consumption parameters allows an estimate of the magnitude of the agricultural growth multipliers in Africa. The paper concludes with a brief discussion of policies and programs that will be necessary if farm-nonfarm growth linkages are to achieve their full potential.

A robust empirical determinant of long-term economic growth in many developing countries has been the expansion and diversification of the export sector. The latter, in turn, has been influenced by capital accumulation and economic growth. The growth model developed here explores this interdependence in the context of the 'new growth theory'. The analytical results are consistent with empirical regularities observed in the exports-economic growth linkages. The paper also derives a formula for the optimal rate of return to capital in the presence of learning effects and improvement of human resources brought about by export expansion and its interaction with saving and investment. Several important policy implications are drawn from the analysis.

This paper examines targeting issues that emerge from FISP evaluations undertaken since 2006/07, and puts forward various options for improving targeting. Targeting objectives depend upon programme objectives. In the FISP targeting occurs at area and beneficiary levels – the former targeting subsidies to different zones or districts, the latter targeting beneficiaries within already targeted areas.\ud \ud Targeting is important because it affects achievement of programme objectives through its impacts on displacement (the extent to which purchases of subsidised inputs replace purchases of unsubsidised inputs that farmers would have bought anyway without the subsidy), productivity of input use, the direct benefits to beneficiaries, and wider economic, social and environmental benefits. Achievement of these benefits is generally supported by pro-poor targeting (with lower displacement and stronger growth linkages) but the effects of pro-poor targeting on the productivity of input use are not known and are an important (but difficult) field of further research. Relations of targeting with area and beneficiary graduation and with environmental benefits are complex, and also require further research.