Determinants of structural change in food exports from developing countries

Over the past three decades, there has been a rapid expansion of processed food exports, replacing traditional agriculture exports such as coffee and tea. However, this development and its policy implications have received little attention in the literature. This paper provides an overview of key characteristics and growth patterns of processed food exports in developing countries. The determinants of structural change towards processed food exports in developing countries are examined using panel data econometric analysis. The results suggest that trade policy openness, large domestic markets, good macroeconomic management—especially in terms of price stability—adequate financial support and infrastructure are the key factors influencing the shift towards processed food exports.     

Socioeconomic equity and fertility in developing countries: A block-recursive model

Summary This paper explores the interrelationships among fertility and three measurable aspects of socioeconomic equity: life expectancy, schooling, and income distribution. A block-recursive model of interaction among these variables is tested on cross-sectional data for developing countries. The structural results validate the initial hypotheses, with an important exception: income distribution does not act directly on fertility. Taking indirect effects into account, by deriving the reduced form of the system, shows life expectancy and schooling as major determinants of fertility, and income distribution as a lesser influence. The feedback from fertility to income equity considerably exceeds the net effect in the other direction.This paper was completed while the author was a visiting scholar at The Carolina Population Center and Department of Economics, University of North Carolina at Chapel Hill. Richard Bilsborrow, Boone Turchi, and 7. Richard Udry provided helpful comments on an earlier version. Sang E. Lee and V. Panoutsopoulos kindly made available unpublished data from World Bank files.     

Determinants of pollution abatement in developing countries: Evidence from South and Southeast Asia

Developing countries, pa?ticularly those in Asia, are fast adopting industrial pollution control standards similar to those in developed countries. Formal regulation has been greatly hampered, however, by the absence of clear and legally binding regulations; limited institutional capacity; lack of appropriate equipment and trained personnel; and inadequate information on emissions. One would predict highly pollution-intensive production under such conditions. Our research, however, has uncovered strongly contradictory evidence. Despite weak or nonexistent formal regulation, there are many clean plants in the developing countries of South and Southeast Asia. Of course, there are also many plants which are among the world's most serious polluters. What explains such extreme interplant variation? This paper reviews evidence drawn from three empirical studies of plant-level abatement practices conducted 1992–1994.The analyses test the importance of plant characteristics, economic considerations and external pressure in determining environmental performance. The results consistently show that pollution intensity is negatively associated with scale, productive efficiency, and the use of new process technology. It is strongly and positively associated with public ownership, but foreign ownership has no significant effect once other plant characteristics are taken into account. Among external sources of pressure, community action, or informal regulation, emerges as a clear source of interplant differences in all three studies. The results suggest that local income and education are powerful predictors of the effectiveness of informal regulation. They also show that existing formal regulation has measurably beneficial effects, even when it is quite weakly developed.     

Determinants of exchange-rate regimes for currencies of developing countries: Some preliminary results

The breakdown of the Bretton Woods system gave the LDCs an opportunity to move away from exchange-rate regimes based on pegging to a single currency. Relatively few chose to do so, thus providing some evidence that, from their point of view, the recognized advantages of more flexible exchange-rate arrangements are more than outweighed by the recognized drawbacks.The aim of this article is to set up a suitable econometric model and use it for a preliminary assessment of the quantitative significance of various factors affecting the choice of exchange-rate regimes by the LDCs.     

Construction industry in developing countries

This paper provides a review of the construction capability available in the developing countries to meet the demand for shelter. It discusses the role of construction in the process of development and its importance to economic growth. It considers the issues facing the growth of a viable indigenous construction industry in the developing world within the context of the activities involved in the creation of constructed facilities – planning, design, construction and maintenance; it also examines the environment within which the industry has developed. For each construction activity the paper reviews available capabilities, the various resources needed for the development of an indigenous industry, and some possible means of accommodating these needs.     

Chinese contractors in developing countries

This paper uses turnover data from Chinese contracted projects in as many as 87 low and lower middle income countries from 1998 to 2009. Economic fundamentals motivate Chinese contractor presence in developing countries as their revenues are positively associated with countries’ per capita income and expected growth. All else equal, contractor project revenues are higher in countries with stronger political rights regimes. Moreover, the estimated positive effect of improvements in political freedom is largest among countries with high fuel endowment, but lowest among countries with high ores and metals endowments. Conclusions relating Chinese contractor activities, perceptions on the level corruption, and resource endowment among sub-Saharan African countries must remain tentative as the estimated relationships are sensitive to the corruption indices used.     

Foreign trademarks in developing countries

Foreign trademarks are used in some cases to cover imported goods and generally products made in the host countries by foreign manufacturing subsidiaries and licensees. This industrial property right is a major source of market power for those subsidiaries making consumer goods. Domestic enterprises making similar goods must either accept a reduced share of the market or must enter into trademark license agreements. But even in those cases, although licensees of foreign-owned trademarks receive a current profit out of the licence, they cannot enjoy the result of the goodwill development.Although the advertising expenditures are borne by the consumers of the developing countries, the accrual in goodwill is for the benefit of non-resident owners of this intangible asset. These private benefits — mostly appropriated by the foreign trademark owner — can be considered as net social costs to the recipient country.     

Fiscal disequilibrium in developing countries

Fiscal equilibrium necessitates that ‘permanent’ government expenditures be covered by ‘permanent’ government revenues. The concept of ‘permanent’ goverment expenditures and revenues takes into account future revenue from capital investments as well as temporary windfalls. Hence, equilibrium may exist despite temporary imbalance between revenue and expenditure. The causes of disequilibrium can be classified into five categories: export boom; price-inelastic tax system; public enterprise performance; increased expenditure produced by political exigencies or administrative weaknesses; and worsening terms of trade. In practice, unrealistic customs valuations, specific as opposed to ad valorem taxes and administrative difficulties have been the most common sources of declining government revenue as a percentage of gross domestic product. Increased subsidies both to consumer goods and to public enterprises as well as inadequate control mechanisms have been the most frequent causes of rising government expenditure.     

Infrastructure policy in Asian developing countries

The urgent need for very large increases in investment in infrastructure in most developing countries in Asia is very clear. This paper surveys the challenges facing policymakers in the region. Nearly all of the main concerns for policymakers in Asia in addressing the global infrastructure imbalance are on the supply side. In particular, there are seven related supply-side issues that are of high priority for policymakers: selection and preparation of appropriate projects, finance, pricing, access, governance and management, policy and regulatory policies, and climate change. Governments and utilities need to improve their policies and performance to build confidence among stakeholders. Access to infrastructure services needs to be improved so that consumers will support realistic pricing policies, and investors will be encouraged to provide finance for infrastructure sectors.     

External debt-servicing capacity in developing countries

Conclusion The debt-servicing problem of the nonoil developing countries, and the black African countries in particular, has been of heightened concern to the world financial and economic community. The balance of payments bottlenecks in the developing countries that have resulted have slowed down the rate of economic growth in these countries. In turn, the slower rate of growth in these economies tends to reduce their ability to demand the industrial outputs of the industrial countries.     

Analysing disequilibrium exchange-rate systems in developing countries

Many developing economies have imposed quantitative restrictions on their international trade and tight control on capital movements. Disequilibrium balance-of-payments models developed to capture this restrictive trade regime demonstrate that the effects of a devaluation from an initial situation of disequilibrium with rationing can differ substantially from those predicted by traditional balance-of-payments models. Recent extensions to such models show that the effects of any policy measures depend critically on the initial disequilibrium conditions. Attempts at liberalizing trade and payments regimes have stimulated further analysis on the process of ‘opening up’ a developing economy. This work highlights the interaction between balance-of-payments current and capital accounts.     

Openness and economic growth in developing countries

Openness and Economic Growth in Developing Countries. — Openness appears to have a strong impact on economic growth especially in DCs which typically exhibit a high share of physical capital in factor income and a low share of labor. In the neoclassical growth model with partial capital mobility, physical capital’s share in factor income determines the difference in the predicted convergence rates for open and closed economies. With a 60 percent share as in many DCs, the convergence rates should differ by a factor of 2.5. The regression results for a sample of open and closed DCs roughly confirm this hypothesis.