Biosafety management and pesticide use in China's Bt cotton production

As the rapid development of Genetically Modified crops, Chinese government has been increasing its efforts in GM crop biosafety management. However, the rapid expansion of Bacillus thuringiensis (Bt) cotton varieties and less regulated seed industry also resulted in a large amount of Bt cotton varieties that bypassed China's biosafety regulations. This study shows that the Bt cotton varieties without biosafety certificates (BC) have been widely used by farmers in practice. Econometric analysis further shows that the Bt cotton varieties with BC outperform the varieties without BC in terms of pesticide use. The paper concludes with policy implications.     

Impact of Bt Cotton in China

A sample of 283 cotton farmers in Northern China was surveyed in December 1999. Farmers that used cotton engineered to produce the Bacillus thuringiensis (Bt) toxin substantially reduced the use of pesticide without reducing the output/ha or quality of cotton. This resulted in substantial economic benefits for small farmers. Consumers did not benefit directly. Farmers obtained the major share of benefits and because of weak intellectual property rights very little went back to government research institutes or foreign firms that developed these varieties. Farmers using Bt cotton reported fewer pesticide poisonings than those using conventional cotton.     

The Political Economy of Interwar Egyptian Cotton Policy

The optimal tariff was a central concern to economists and policymakers in interwar Egypt. The government took the position that Egypt conformed to the small-country assumption in world cotton markets. Using time-series and panel data for the period 1895–1939, this article demonstrates that Egyptian long-staple cotton commanded significant market power in international markets. An optimal export tariff would have encouraged economic diversification and generated huge government revenues, making it possible to finance industrialization plans. However, the burden of taxation would have been shared by Egyptian landlords and British interests. Thus, an optimal export tariff was incompatible with the goals of Egypt's ruling elite, who dictated the orientation of trade policy until the 1950s.     

Dynamic Adjustment to Regional Integration: Europe 1992 and NAFTA

Recent research on the gains to trade liberalization, especially in a number of papers by Richard Baldwin, suggests that the static gains to trade liberalization that many economists attempt to measure may be dwarfed by the dynamic gains. One source of these dynamic gains is through capital accumulation. A similar argument can be made regarding the consequences of regional integration. As distortions are removed the effects of aggregate output through dynamic adjustments are likely to be larger than simple static calculations suggest. This paper focuses on the issue of the dynamic gains to regional integration for two recent episodes, European integration known as Europe 1992, and the North American Free Trade Agreement (NAFTA). The paper provides empirical results on the size and nature of global and regional adjustments to these two examples of regional integration. J. Japan. Int. Econ., December 1994, 8(4), pp. 422–453. Research School of Pacific and Asian Studies, Australian National University, Canberra ACT 0200, Australia; and Brookings Institution, Washington, DC 20036.     

Manufacturing productivity in China and India: The role of institutional changes

In this paper we undertake a comparative study of productivity in the manufacturing sector for China and India using data from survey of manufacturing industries for the two countries. We find that productivity of manufacturing industries in China relative to that in India improved substantially over the 1998–2003 period. Specifically, the average total factor productivity (TFP) growth for the manufacturing sector over this period was about 11% higher in China than in India. We document two substantial changes in government policies in China that were not witnessed in India. First, the late 1990s saw an enormous wave of ownership restructuring due to the formal endorsement of private property rights by the Chinese central government. Second, in 1997 a large scale labour retrenchment program was launched to address the long standing problem of labour redundancy in the public sector. Using data from the Chinese survey of manufacturing industries, we quantify the impact of these large scale institutional changes on TFP of Chinese manufacturing industries. We find that these policy changes can explain about 30% of the growth in TFP of manufacturing industries. Hence we conclude that these institutional changes in China can account for a significant part of the gains in productivity of manufacturing industries in China relative to that in India over the 1998–2003 period.     

Past inflation variability and the stability of the demand-for-money function in Nigeria

Conclusions The view that the demand-for-money function is characterized by a stable relationship is subjected to four objective statistical tests. The results suggest that for the period 1961–62 through 1981–82, the demand-for-money function became unstable around 1970–71. The past variability of the rate of inflation was found to be an important variable in the money-demand function of Nigeria.     

Estimating the Impact of Transgenic Bt Cotton on West and Central Africa: A General Equilibrium Approach

West and Central Africa (WCA)’s cotton sector is experiencing rising production costs and lower yields, reversing decades of growth. Declining input use, soil fertility and inefficient chemical pest controls are contributing factors. We evaluate the potential impact of Bt cotton on WCA using a multiregion general equilibrium model and multicountry estimates of Bt-induced productivity. We find that Bt cotton raises growers’ returns, land value and welfare. Released labor from cotton is shifted to food crops hence reducing labor shortage constraints. Overall, results indicate that potential gross benefits from Bt cotton are substantial for WCA cotton sector, and that the economic costs of nonadoption are equally significant.     

Bondholder gains from the annexation of Texas and implications of the US bailout

The fate of distressed Republic of Texas debt offers a rare example of bondholder gains associated with state annexation. While soaring in hopes of a US bailout, Texas debt prices remained well below par and never seemed to presume full repayment, however. The fluctuations of the Texas debt on the Philadelphia Stock Exchange over the 1845–1855 period between annexation and final settlement feature structural breaks typically connected with either actual legislation or rumors of pending action. Negative turning points follow when US legislative initiatives in 1845 and 1850 failed to yield a quick resolution of the Texas debt.     

The effects of governance changes on bank efficiency in China: A stochastic distance function approach

China has accelerated banking reform since joining the Word Trade Organisation (WTO) in 2001. Employing a stochastic distance function approach, this paper examines bank technical efficiency and differentiates the static, selection and dynamic governance effects on bank efficiency for the 11-year period 1995–2005. The results show that bank efficiency has improved. Joint-stock ownership is associated with better performance in terms of profitability than state ownership (static effect). Strong selection effects are found for both foreign acquisition and going public reform strategies. Foreign acquisition may benefit domestic banks by efficiency gains in the long run, but privatization via initial public offerings (IPOs) appears to have only some short-term effects.     

Foreign exchange regimes and industrial growth in Bangladesh

Foreign exchange regimes have been found to play an important role in implementing trade and industrial development strategies in many developing countries. The economic incentives provided to export-oriented and import-substituting industries can be measured by the real effective exchange rate (REER) for imports and exports. Such measures are developed for Bangladesh. The REER for exports and imports increased by around 72 and 82%, respectively, over the period 1973–1974 to 1976–1977. From 1976–1977 to 1984–1985, the REER for imports fell by nearly 10% while the REER for exports declined by 6%, although the exchange rate for non-traditional exports fared somewhat better. The REER for both imports and exports appears to have recovered somewhat since 1984–1985, but the paper concludes that while trade and industry policies in Bangladesh have become less “inward-looking,” the exchange regime is still biased in favor of import-substituting industrialization. Substantially stronger export incentives than exist at present would be necessary to remove this bias.     

Employment adjustment in two countries with poor reputations: Analysis of aggregate, firm, and flow data for Portugal and Germany

This paper supplements aggregate time-series analysis of the speed of employment adjustment with evidence from firm panel and flow data for two countries – Portugal and Germany – sharing unenviable labor market reputations. The Portuguese labor market is often portrayed as terminally inert, while that of Germany as badly ailing. We report broad consistency in the results across data sets in favor of Portugal. In benchmarking Portugal against Germany, the adverse reputation of the former – if not necessarily that of the latter country – may have been exaggerated in contemporary policy debate.We thank, without implicating, two anonymous reviewers of this journal for their helpful remarks on an earlier version of the paper.     

Treatment Value of Residual Functional Capacity Improvement among Disabled Workers: Accounting for Hedonic Psychological Biases

We propose to use the theoretical Mincer-Ofek (1982) model of career interruptions for the evaluation of a health producing treatment that improves residual functional capacity of workers with peripheral nerve injuries who developed chronic pain (Reflex Sympathetic Dystrophy). The revalued potential to – partially – continue to accumulate productive human capital is linked to increased lifetime earnings capacity restoring – missed out – accumulated productivity. We assume that a worker's psychological well-being directly influences earnings, but also affects the cognitive mechanism to experience pain. Randomized clinical trial data and individual medical records from impaired workers are compared with a control group of randomly selected healthy workers. The estimate of the treatment's average net present value is 49.500 euros per person (in 1995 Dutch guilders constant terms).     

The Increasing Selectivity of Foreign Aid, 1984–2003

The Monterrey Consensus includes the idea that foreign aid is more effective when targeted to countries with sound institutions. We examine the extent to which foreign aid, bilateral and multilateral, is “selective” in terms of democracy and property rights/rule of law. We find that multilateral assistance is more selective than bilateral aid in targeting countries with good rule of law. “Selectivity” is a new phenomenon. During 1984–89, both bilateral and multilateral aid had significant negative relationships with rule of law; by 2000–03 this had shifted to a significant positive relationship for multilateral aid, and a positive but statistically insignificant relationship for bilateral aid.     

Assessing the regulatory process in an international context: Mixed currency SDRS and U.S. bank equity returns

Conclusions This study used the cumulative prediction error methodology to determine if the equity returns of major U.S. banks were affected by the 1974 SDR change. This change by the IMF was viewed as an opportunity to study the adjustment process in international regulation as well as to focus on the policy's net impact. The results strongly support the contention that banks were adversely affected by the change from a dollar-based SDR to a mixed-currency SDR due to the expected increase in lending by the IMF and due to the expectation of inflation and increased exchange volatility.The results also show an expected regulatory pattern of reaction. The primary effect was on the announcement date which had reaction of –0.042 with a test statistic of –14.68. There was a negative drift from day –34 (the announcement day) to day 0 (the implementation day) with the primary decline between days –10 to 0. The implementation date had a smaller, but significant, negative return. These results support those of Davidson [1984] regarding reaction to regulatory change.A key implication of this research is the importance for international monetary agencies to exercise care in implementing policy changes. International repercussions on a country's banking system could occur as a result of a policy change. Evidence from this study indicates that one particular change, namely the recomposition of the SDR, adversely affected the stock values of U.S. banks.     

How Elastic is the Demand for Labour in Belgian Enterprises?Results from Firm Level Accounts Data, 1987–1994

This paper analyzes wage elasticities using a panel dataset of 2800 large Belgian firms over the period 1987–1994. We explore various functional forms and find that the short-run wage elasticity varies between –0.37 and –0.65, while the long-run elasticity is robustly estimated to be larger than 1 in absolute value. These results are striking for they are much higher than those reported in previous studies using macroeconomic time-series data. This suggests that labour costs are more important in determining the demand for labour than initially was believed.     

Updating Poverty Maps with Panel Data

This paper extends the methodology of Elbers, C., Lanjouw, J. O., & Lanjouw, P. (2003). Micro level estimation of poverty and inequality. Econometrica 71(1), 355–364 and presents a low cost approach to arriving at small area welfare estimates for non-census years. The approach requires panel data and the estimation of a relation between per capita consumption from the year of interest and household characteristics from the census year. The method is illustrated for Uganda. It is shown that with the exception of the North progress in rural poverty reduction was broadly shared during 1992–99. Areas with high initial levels of poverty appear to have benefited less from growth.     

China's vulnerability to currency crisis: A KLR signals approach

In this paper we use the Kaminsky–Lizondo–Reinhart (KLR) [Kaminsky, G., Lizondo, S., Reinhart, C., 1998. Leading Indicators of Currency Crises. International Monetary Fund Staff Papers 45, 1–48.] approach to conduct an ex-post study of the probabilities of China suffering a currency crisis during the period of January 1991 to December 2004. Two high-probability periods are identified: July 1992–July 1993 and August 1998–May 1999. The first period correctly predicts China's 1994 devaluation. The second period predicts currency devaluation in the aftermath of the Asian crisis, which did not occur. The results of the model indicate that the fundamentals were weak enough for China to experience contagion of the Asian crisis, and raise the question of the possible role of China's institutional arrangements in preventing the crisis. The paper further analyzes the economic fundamentals of China that drive the high probability of crises, and provides some suggestions for further reform.     

Price variability and price convergence: Evidence from Indonesia

This paper evaluates price variability and price convergence in Indonesia. Using price indices of 35 products in 45 cities from January 2002 to April 2008, this study shows that, during the observed period, prices in Indonesia converged to the ‘relative’ law of one price. The price variability of one product across cities is found to be smaller than the price variability of all products within a city. Transportation costs and the level of development matter to price variability. This study also reveals that the average speed of convergence, which is measured by the half-life, for perishable goods is about 9 months, non-perishable goods 32–36 months, and services 18–19 months, while the median of the half-life of all products is about 16–17 months. The speed of convergence depends on the initial price difference, but not the distance between cities.     

Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe

The paper studies the labor markets of 23 transition countries from eastern and central Europe—Albania, Armenia, Belarus, Bulgaria, Croatia, Czech Republic, East Germany, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania Macedonia, Moldova, Poland, Romania, Russia, Slovakia, Slovenia, Ukraine, and Yugoslavia. It uses new micro-data from a large number of surveys on over 200,000 randomly sampled individuals from these countries for the years 1990–1997. The microeconometric structure of unemployment regression equations in the nations of eastern Europe appears to be similar to the industrialised west. Estimation of east European wage curves produces a local unemployment elasticity of between –0.1 and –0.3. This is somewhat larger in absolute terms than has been found elsewhere. On a variety of attitudinal measures, eastern Europeans said they were less contented than their western European counterparts. The strongest support for the changes that have occurred in eastern Europe is to be found among men, the young, the most educated, students, and the employed and particularly the self-employed. Support for market reforms is particularly low amongst the unemployed who were found to be particularly unhappy on two well-being measures. J. Japan. Int. Econ., December 2001, 15(4), pp. 364–402. Department of Economics, Dartmouth College, New Hampshire 03755; and NBER.     

External influences in Nordic business cycles, 1870–1988

This paper considers the relationship of the Nordic business cycle to the world business cycle using annual output data spanning 1870–1988. The paper studies the Nordic and a set of non-Nordic countries separately and finds evidence for both a Nordic and a world business cycle. Output movements in the individual Nordic countries are connected through the Nordic business cycle and are less affected by the world business cycle. There is no significant change in the behavior of the business cycle in the Nordic countries between 1873–1913 and 1948–1988.