A World Bank Intervention in the Sri Lankan Welfare Sector: The National Development Trust Fund

In 1991 the World Bank moved to streamline the Sri Lankan welfare sector by funding a poverty alleviation project which promoted the role of non-government organization (NGOs) and decentralized government agencies and replaced traditional consumption-oriented transfers with an emphasis on household self-reliance through productive activity. The project's design was based on a model which depends for its success on key conditions—guaranteed political independence and a well-developed NGO sector—which did not exist in Sri Lanka in the early 1990s. Additional problems included management deficiencies and failure to provide key supports for production-related poverty reduction.     

Promoting Private Entrepreneurship for Deepening Market Reform in China: A Resource Allocation Perspective

After more than three decades of rapid growth, China's economy is going through an important turning point, where structural imbalances in both supply and demand sides must be addressed for a more moderate and sustainable growth path. By focusing on the structural changes to its ownership, a central element in China's economic transformation under market reform, the present paper highlights the importance of private entrepreneurship in deepening market reform and, thereby, in driving economic growth in a more efficient and sustainable way. Based on a perspective of resource allocation and a conceptual framework of entrepreneurship, the paper elaborates on the evolution of the private sector and its performance in the context of ownership reform, making comparisons with the performance of the state sector. The analysis suggests that there is further room for more productive use of economic resources, especially capital, land and natural resources, by increasing the participation of private entrepreneurs in industries with high entry barriers in favor of state‐owned enterprises. Moreover, more competitive and equal access to productive resources through reform is needed to promote more productive entrepreneurship and to reduce rent‐seeking activities.     

Unlocking Productive Entrepreneurship in Africa's Least Developed Countries*

Abstract: In Africa's least developed countries (LDCs), escape from poverty and convergence to living standards of more advanced economies depends critically on structural transformation and the emergence of productive entrepreneurship that would accelerate growth and job creation. So far, however, subsistence agriculture has been the main source of employment in these countries, while a dynamic private sector in industry or high value‐added services has remained elusive. Utilizing the flow approach to labor markets, this paper complements the empirical literature and numerous surveys on small and medium enterprise (SME) constraints and develops a theoretical framework that examines the main obstacles to entrepreneurship in Africa's LDCs. The paper posits that given the persistent frictions in product and labor markets as well as skill shortages that characterize these economies, development of productive entrepreneurship cannot be left to markets alone. The policy analysis suggests that the state has an important role to play. Well‐targeted government interventions including training of potential entrepreneurs and workers can help to establish more modern and highly productive SME clusters that Africa's LDCs need.     

A Guide to Graduate Study in Economics: Ranking Economics Departments by Fields of Expertise

Ph.D. programs in economics are ranked overall and by subject field. The results provide insight to students researching graduate programs in economics in specific subject fields. Results indicate that (i) differences in overall research productivity measures diminish as a university's rank declines; (ii) a university ranked highly in a particular subject field may be the result of a single, extremely productive faculty member; and (iii) many programs outside the traditional top 20 programs are ranked high in specific subject fields.     

Competitiveness of China's Manufacturing Industry and its Impacts on the Neighbouring Countries

This paper investigates the rapid growth of China's share in the international commodity market and the structural changes of China's commodity exports. It demonstrates a significant improvement of international competitiveness in China's manufacturing sector. The panel data analysis, based on a Solow–Swan type growth model on China's 37 manufacturing industries from 1991 to 2002, reveals that the main sources of the strengthened competitiveness of China's manufacturing sector have been mainly from Total Factor Productivity (TFP), while labour productivity has been increasing and capital productivity has been falling. A preliminary empirical analysis on the impacts of China's increasing competitiveness finds that there are negative correlations between China and most of its neighbouring countries, both newly industrialised economies and other Southeast Asian developing economies. However, there is no evidence of negative impacts of China's increasing competitiveness on developed countries such as the United States and Japan.     

Nature and Determinants of the Linkages between Informal and Formal Sector Enterprises in Nigeria

This paper provides a quantitative analysis of the nature of the informal sector's linkages with the formal sector in Nigeria. The informal sector has both backward and forward linkages with the formal sector. The backward linkages involve the flow of raw materials, equipment, finance and consumer goods from the formal sector to informal sector enterprises. Two types of forward linkages are identified. These are subcontracting agreements with large domestic companies, government agencies and foreign companies on the one hand, as well as the supply of consumer goods from informal sector enterprises to the formal sector on the other. The empirical analysis based on a logit regression model reveals that key variables accounting for the extent of backward linkages with the formal sector pertain to registration of the informal sector enterprise, level of investment, annual income of the entrepreneur, number of employees, entrepre‐neur's previous work experience and the education of employees. In the case of forward linkages with the formal sector, the most important variables are registration on the part of the informal sector enterprise, investment expended to date, annual income of the entrepreneur, level of profitability of the enterprise, vocational training and education of employees. Le présent document fait une analyse quantitative de la nature des liaisons existant entre le secteur informel et le secteur formel au Nigeria. Le secteur informel a des liaisons aussi bien en amont qu'en aval avec le secteur formel. Les liaisons en amont impliquent l'existence d'un flux de matières premières, d'équipe‐ments, de finances et de biens de consommation, du secteur formel vers les entreprises du secteur informel. On a identifié deux types de liaisons en aval: il s'agit, d'une part, des accords de sous‐traitance avec les grandes sociétés nationales, les agences gouvernementales et les sociétés étrangères, et, d'autre part, de la fourniture de biens de consommation par les entreprises du secteur informel au secteur formel. L'analyse empirique faisant appel à un modèle de régression avec variables logit montre que les variables clés représentant le rôle que jouent les liaisons en amont dans le secteur formel de l'économie concernent l'enregistrement des entreprises du secteur informel, du niveau des investissements, du revenu annuel de l'entrepreneur, du nombre des employés, de l'expérience professionnelle antérieure des entrepreneurs et du niveau d'instruction des employés. Dans le cas des liaisons en aval avec le secteur formel, les variables les plus importantes sont l'enregistrement pour le compte des entreprises du secteur informel, les investissements dépensés jusque‐là, le revenu annuel de l'entrepreneur, le niveau des bénéfices de l'entreprise, la formation professionnelle et l'instruction des employés.     

The Market Shares of Small and Medium Scale Enterprises in Taiwan Manufacturing*

Small and medium-sized enterprises (SEM s) have played an important role in many countries’industrial development. Among these countries, Taiwan is well known for the outstanding performance of its SME s. Limited knowledge about the causes of such performance has been revealed gradually. The main purpose of this study is to explore the determinants of SME s’market shares in Taiwan's manufacturing sector. According to economics literature, economies of scale determine the market share of SME s. The usual explanation given is that economies of scale create barriers against SME s entering the market and competing efficiently with larger firms. It is also said that the strong entrepreneurial drive to have a self-owned business is a crucial explanation for the creation of new businesses, usually as offshoots from a small one. Finally, such factors such as an even-handed policy scheme, the availability of technology in relation to R&D, transaction costs, and so forth, are also important for creating a favourable environment for SME s. Applying cross-industry pooling data from 1976 to 1986, the market shares of SME s in Taiwan's manufacturing sector were found to be affected by the following factors: (1) SME s’performance related to labour productivity and their willingness to set up new enterprises; (2) institutional factors including low entry barriers, suitable technology, the adoption of a subcontract system, and prosperous export markets. The empirical findings are compared with those from studies of the US and Germany.     

Indonesia's Trade and Price Interventions: Pro-Java and Pro-Urban

In 1987 and 1995 Indonesia's price and trade policies (intervention regime) increased the income of Java's urban centres and reduced that of people living in rural Java and the other islands. This happened because the regime protected manufacturing activities, most of them located in Jakarta, Bandung and Surabaya, and taxed primary sector based activities, located outside urban Java. It protected some primary sector based activities directly, but the entire intervention regime, with manufacturing protection included, taxed them. As a result, regions deriving income from primary sector based activities lost. Indonesia's intervention regime is regressive: it transfers income from poorer to richer regions. This regime and its effects on regional incomes continue. Governments have designed programs to raise the income of Eastern Indonesia, but have omitted the most effective instrument: opening the economy to international competition. A serious attempt to reduce regional income disparities should begin by eliminating barriers to international trade.     

Recognizing the Best: The Productive and Counterproductive Effects of Relative Performance Recognition

I use a laboratory experiment to examine the productive and counterproductive effects of providing employees nonpecuniary recognition based on measures of relative performance. I find that, on average, recognition programs increase both productive efforts (those intended to increase one's own performance) and counterproductive efforts (those intended to decrease peer performance) in a setting where it is salient to employees that they can exert both productive and counterproductive efforts. Interestingly, I also find that these effects are moderated by the Dark Triad of personalities, a group of three personality traits. My study reveals that recognition programs mainly lead individuals who score lower on the Dark Triad to increase counterproductive efforts and those who score higher on the Dark Triad to increase productive efforts. These results contribute to the literature on relative performance information by demonstrating that recognition programs can have both productive and counterproductive effects. However, whether these programs produce mainly a productive or counterproductive effect depends on important personality characteristics of the employees.     

Contribution of external aid agencies to the social sector: Lessons for South Africa

The contribution of a major aid agency, UNICEF, to the social sector in three African countries is reviewed and important lessons are drawn for developing the social sector in South Africa. UNICEF's commitment to children and women and its substantial development expertise bestow many advantages on developing bilateral relations with UNICEF. It is equally important to develop sound social policies and adequate community‐based programmes in which UNICEF's expertise and resources can be incorporated. Guidelines are formulated for reducing dependence and vulnerability to donor assistance in the social sector.     

Beyond privatization: Institutional innovation and growth in China's large state-owned enterprises

This article demonstrates that China's large state-owned enterprises (SOEs) are not stagnant fossils waiting to die. Under economic reform policies this sector has undergone large change due to enhanced enterprise autonomy, the impact of market forces, rapid growth of domestic demand for upstream products, strategic integration with the world economy and the state's policy to promote large businesses. China's large SOEs are developing new institutional forms that do not neatly fit into existing patterns. China is experimentally changing its institutions through a combination of central policy, local initiative and interaction with international investment. This presents a challenge to the “transitional orthodoxy” and to ideas concerning property rights in development economics. There is not a universal model of property rights and government action that works best in all circumstances. China's experience with the reform of large SOEs shows the diverse possibilities for effective industrial institutions.     

Comments on “interpreting Chinese contributions to development policy from aspects of Chang'e 4”

This article is a comment on The Fallacy of Washington Consensus and the Role of the Government: Interpreting Some Chinese Contributions to Development Policy from Aspects of Chang'e 4 by Jinghai Zheng.The comparison between how equilibrium concepts are used in economics and natural sciences is extended to areas such as biology, chemistry and convex optimization in mathematics and is discussed on the basis of the state's role in economics and general equilibrium theory.     

The Tourism Boom in Indonesia

A major development in the Indonesian economy during the latter pan of the 1980s has been the growth in non-oil exports, particularly from the manufacturing sector. However a development less remarked upon over the same period has been the expansion of the Indonesian tourist industry. This paper explores the reasons for this growth and examines whether the government's ambitious targets for further expansion of the sector can be realised. It also looks at the potential of the tourist sector for generating productive employment opportunities and increased foreign exchange earnings over the Repelita V period and beyond.     

Indonesian universities in transition: catching up and opening up

Indonesia's higher education system is changing rapidly: in 2010 there were about 5 million students, up from 2,000 in 1945. Effectively the tertiary system has four tiers, three of which are within the public sector. However, the system is increasingly private sector driven. The key themes of this paper on universities are rapid growth; overcoming the historical backlog; and the need for further fundamental reform. The quality of Indonesia's tertiary institutions is highly variable. Governance structures and incentives regimes within the state universities are complex and obscure. The government both over-regulates and under-regulates. Major reforms are under way and increasing financial resources are available.     

Mentality,motivation, and economic decision-making in Ancient Rome: Cicero and Tullia's shrine

Cicero's letters to his friend Atticus are an invaluable source for the study of the financial and economic activities pursued by Late Republican upper-class Romans. Beyond the information concerning the diversity, scale, and impact of their businesses, these extraordinary documents give enlightening testimonies to the psychological factors that affected economic behaviour and the process of decision-making. The case of Tullia's shrine, a complex operation that concerned the search for and purchase of a garden-estate in one of the most exclusive areas of the Roman suburbs, became Cicero's most personal challenge and obsession. An accurate study of this affair through the orator's own voice allows us to explore the concept of ancient rationality, as well as the psychological and environmental mechanisms that led to economic strategies and performances. The study also tests the applicability of ideas and methodologies from the field of behavioural economics in the context of the first-century BC real estate market, a fluctuating and speculative business sector highly informed by credit culture, social status, and unstable politics.     

Monitoring and evaluation of women's rural development extension services in South Africa

In South Africa, rural women's extension services are frequently based on the Western, middle-class ideology of a woman's place being in the private or domestic sphere of the home. Consequently, almost all extension services have a home economics feature which advocates the teaching of Western-type domestic skills, such as sewing, crocheting, knitting, cookery and child care, to name a few. The home economics extension services offered to rural women are inappropriate and ineffective in relation to women's triple role pertaining to reproductive, economic and community managing activities. Furthermore, most of the extension services are irrelevant to the real conditions of poverty prevailing in rural areas. Much of the planning of extension services is based on the needs of rural communities as decided by policy planners. Even where participatory approaches have been adopted, the monitoring and evaluation of progress made in achieving the objectives are often neglected. This article defines the concepts of monitoring and evaluation, explains their purposes in rural extension services, identifies suitable indicators for measuring sustainability of programmes, and highlights appropriate methods for collecting, handling and analysing data. In recognition of the inadequacies of and confusion in women's rural extension programmes, the article encourages reorientation of the processes used in monitoring and evaluating agricultural and rural development extension services in South Africa.     

Fifteen Theses on Classroom Teaching

The Southern Economic Association initiated a lecture series on teaching to be presented at its annual meeting. This paper, given on November 24, 2000, was the first such lecture. The editor invited the author to publish the lecture in Southern Economic Journal. Portions of the paper are the fruits of the author's more than 30 years of experience teaching economics. Parts of the paper are based on writings regarding pedagogy outside the discipline of economics. The paper puts forward 15 theses about teaching economics in the classroom. The theses range from propositions about why economics is a particularly difficult subject to teach to suggestions about how the classroom teaching of economics can be improved.     

Debt Relief and Credit to the Private Sector in African Countries

Abstract: The purpose of the paper is to empirically investigate the link between debt relief and credit to the private sector in African countries using a panel method over the period 1988–2004. The motivation for investigating the relationship between debt relief and credit to the private sector follows Christensen's (2004) hypothesis that domestic debt has a negative impact on the credit to private sector; therefore debt relief is expected to alleviate domestic debt and thereby create space for domestic credit, which if it is mostly constituted of public sector credit, crowds out credit to the private sector. The main results of the paper are as follows: (1) debt relief has a significant and positive effect on credit to the private sector in the short term; (2) in the long term, debt relief has positive effects on domestic credit to the private sector only when associated with good initial institutional quality.     

Public Company Audits and City‐Specific Labor Characteristics

Prior research emphasizes the centrality of audit offices in understanding auditing practices, and documents significant interoffice variation in audit outcomes based on industry expertise and office size. Our study examines how two city‐specific labor characteristics also affect audit offices and local audit markets: the city's average educational attainment, and the number of accountants in a city, which proxy for a city's human capital. Our argument draws on the urban economics literature and predicts that the level of human capital in a city is positively associated with an audit office's ability to conduct high‐quality audits. As expected, there is a positive association between audit quality (quality of audited earnings and accuracy of going‐concern reports) and average education level in the city in which the lead engagement office is located. This association is generally significant for both Big 4 and non‐Big 4 offices, but is relatively stronger for non‐Big 4 firms that are more tied to local labor markets. A company is also more likely to choose a non‐Big 4 auditor in cities with higher educational levels and relatively more accountants, and there is evidence of higher non‐Big 4 audit fees as a city's education level increases. Collectively, these results suggest that local labor characteristics affect audit offices, audit quality, and the ability of non‐Big 4 auditors to compete with Big 4 auditors in the audits of public companies.     

Problem-oriented approach to political economy

The research paradigm of economics in China is facing great changes. In this article, we analyzed that dilemma of China's current major economics paradigms was inability to analyze and solve the economic problems for the neglect the importance of problem-oriented. The analysis on the two great flourishes of economics shows that theoretical innovation based on the problem-oriented approach in these two periods provide economic explanation for China's historical transformation. Chinese economists should adhere to the problem-oriented approach by generalizing typical facts, analyzing system characteristics, using modern economic analysis tools and producing original economic theories formed with uniqueness refined from major issues.