Struggling with Sustainability—A Comparative Framework for Evaluating Sustainable Development Programs

“Sustainability” is an inherently dynamic, indefinite and contested concept. “Sustainable development” must, therefore, be seen as an unending process—defined not by fixed goals or the specific means of achieving them, but by an approach to creating change through continuous learning and adaptation. How, then, do we evaluate a development program’s contribution to such a process? This paper constructs a framework for evaluating sustainable rural development programs using both process- and outcome-oriented criteria, and demonstrates its application. The SANREM CRSP/SEA research and development program in The Philippines—including ICRAFs efforts to organize communities around agroforestry and environmental conservation—is assessed.     

Which Way is “Up” in Upgrading? Trajectories of Change in the Value Chain for South African Wine

Global Value Chain (GVC) analysis uses the concept of upgrading to highlight paths for developing country firms to “move up the value chain,” usually through the lenses of four categories—product, process, functional, and inter-sectoral upgrading. The implicit normative expectation is that these firms move toward producing higher value-added products and/or take on more sophisticated functions along a value chain. In this article, upgrading is approached more broadly as “reaching a better deal,” including a balance between rewards and risk. The case study of South African wine shows that better product quality, improved processes, and some functional upgrading have co-existed with processes of “downgrading,” higher risks, and limited rewards, especially in traditional export markets. A reflection on further conceptual development and directions for empirical research is also provided.     

Health system reform in China: What role for private insurance?

The purpose of the present paper is to show that much of the literature on health economics and on the international experience with different forms of health system organization can be interpreted as supporting the idea that reliance on an unregulated market mechanism for organizing the production and financing of health services is likely to result in major problems both with respect to efficiency and equity. However, reliance on a centralized “command-and-control” model managed by government has also been shown to entail problems in practice. For this reason I argue that the best option at China's current state of development may be a compromise model in which competing private providers are given an important role, both for the production of health services and in the provision of health insurance, but in which the government intervenes (through regulation and direct provision) in such a way as to attain both a high degree of equity of access to health care, and to avoid the most significant forms of “market failure” that would arise in an unregulated private system.     

Quantitative easing and Japanese bank equity values

One of the primary motivations offered by the Bank of Japan (BOJ) for its quantitative easing program—whereby it maintained a current account balance target in excess of required reserves, effectively pegging short-term interest rates at zero—was to maintain credit extension by the troubled Japanese financial sector. We conduct an event study concerning the anticipated impact of quantitative easing on the Japanese banking sector by examining the impact of the introduction and expansion of the policy on Japanese bank equity values. We find that excess returns of Japanese banks were greater when increases in the BOJ current account balance target were accompanied by “non-standard” expansionary policies, such as raising the ceiling on BOJ purchases of long-term Japanese government bonds. We also provide cross-sectional evidence that suggests that the market perceived that the quantitative easing program would disproportionately benefit financially weaker Japanese banks. J. Japanese Int. Economies 20 (4) (2006) 699–721.     

The Euro and International Equity Flows

We use a new panel data set on bilateral gross cross-border equity flows between 14 countries. We fit a “gravity model” to these data and a strictly comparable set of data for manufactures trade between these countries. The results are strikingly similar, although the coefficient on the distance variable is lower for equity than for trade flows (but still highly significant). We use the results to throw some light on the likely consequences of unifying the European equity markets.J. Japan. Int. Econ.December 1998,12(4), pp. 406–423. London Business School and CEPR, Sussex Place, Regent's Park, London NW1 4SA, United Kingdom and London School of Economics, London WC2 2AE, United Kingdom.Copyright 1998 Academic Press.Journal of Economic LiteratureClassification Numbers F21, F3.     

Pay differences between teachers and other occupations: Some empirical evidence from Bangladesh

This paper addresses a popular debate on teacher pay in a developing country context, namely whether teachers are under-paid or over-paid. Using national level household survey data from Bangladesh, we find that teachers are significantly under-paid in comparison to non-teachers who possess similar human capital and other observed characteristics. A decomposition exercise of the teacher non-teacher wage gap reveals that the teacher non-teacher salary difference is driven mostly by differential returns to observed characteristics. Our results suggest that there is some equity justification for allowing an “across-the-board” increase in teacher pay particularly for female, rural and aided school teachers in Bangladesh.     

Why People Pay Taxes: The Case of the Development Levy in Tanzania

This paper examines factors determining tax compliance behavior in local authorities in Tanzania. The case study is the poll tax—locally named “development levy.” The study finds support for the hypothesis that tax compliance is positively related to factors such as ability to pay, the (perceived) probability of being prosecuted, and the number of tax evaders known personally by the respondent. Oppressive tax enforcement, harassment of taxpayers, and discontent with public service delivery seem to increase tax resistance and may explain widespread tax evasion.     

IMF conditionality: Conceptual problems and policy alternatives

This paper argues that the main issue damaging relations between developing countries and the International Monetary Fund is the latter's position that external disequilibria are always a consequence of excess aggregate domestic demand, caused by excessive credit expansion. As a result, Fund sponsored stabilization programs center on demand contraction through a credit crunch and may establish stricter domestic performance criteria than necessary to attain the balance-of-payments objectives. The author suggests that the IMF establish a two-tier conditionality system, which he calls the “hands-off” approach, with one tier composed exclusively of balance-of-payments or foreign exchange denominated variables, and the other of domestic currency denominated variables. The two-tier system would allow more flexibility in compliance assessment and might reduce substantially the number of breakdowns of Fund programs.A revised “hands-on” approach for the Fund is also suggested. The author critiques the recessive biases of the currently used financial analytical exercises and makes specific proposals to introduce “growth exercises” to establish the foreign credit requirements of a growth-oriented stabilization program and thus to introduce performance criteria for creditor countries and banks — a form of “reciprocal conditionality.”     

Towards a sustainable growth path

For Japan’s economy, there were two tasks I embraced myself for: “how to return to a sustainable growth path” and “how to rebuild the financial system.” And for the Bank of Japan, there was also the important challenge of navigating our way on a new voyage in line with the principles of the new Bank of Japan Law, which came into effect at almost the same time as I became Governor.     

Big is ugly? How large-scale institutions prevent famines in Western India

For centuries, recurrent droughts have caused severe famines in the Deccan region of western India. By 1920, large-scale institutions integrated this region into an industrial and globalizing world—ending famines and causing a rapid decline in mortality rates, hence a rise in human welfare. These results are contrary to the “small is beautiful” discourse of some anti-globalization theorists. Yet, as these theorists suggest, big institutions also often make inefficient use of vital resources. Institutions such as the Deccan irrigation canals can be essential to survival yet require careful redesign to ensure future food security.     

A new institutional approach to pro-poor agricultural development: Lessons from Asia

Dr. Naya has been one of only two instructors of a course unique to the University of Hawaii called, “The Economics of Cooperation.” He was an early observer of deliberation councils and other institutions whereby the investment coordination problem was partly solved by extra-market cooperation in the East Asian “miracle” countries. These insights contributed to The Economics of Cooperation (1992), which featured the role of government as facilitator—a theme of Hawaii State Development Planning when Dr. Naya served on the Governor’s cabinet.Reconsidering government as a facilitator, and not as a replacement for markets, is one of the primary contributions of the New Institutional Economics (NIE). This paper extends and applies the facilitation perspective to the problem of agricultural development. Policy failures are detailed and sourced to the fallacy of misplaced exogeneity. In contrast, the method of fundamental explanation, inherent in NIE, acts as a corrective to misguided interventionism that has prevented pro-poor rural development from taking place.     

Questioning the Relationship between Participation and Development: A case study of the Vale do Ribeira, Brazil

Through the analysis of two participatory forums active in the Vale do Ribeira (Brazil)—the Committee for the Management of Water Resources (CGRH) and the Consortium of Food Safety and Local Development (Consad)—this article discusses the argument that “well designed” institutions enable the inclusion of a broader spectrum of actors in political debates, as well as reduce the asymmetries between them thereby facilitating the negotiation and agreement of politically and economically viable projects that would help to encourage development in the region. The two forums were observed in terms of how they dealt with two polemical regional issues: the proposal to build a big dam, a process which has been going on for more than a decade and the definition of a program of sustainable development capable of reconciling environmental conservation and growth in the local economy. The analysis suggests that during the period of research, these forums recreated in the participatory sphere coalitions that were already present in the regional political scene, thereby acting as an extension of the party political game rather than as arenas where new arrangements of actors could agree on alternative projects. From a theoretical perspective, this result raises again the question of the origin and the change of institutions, in that it questions the mechanisms necessary for the creation of institutions explicitly designed to alter the status quo.     

The economics of market coordination for the pre-Fed check-clearing system: A peek into the Bloomington (IL) node

On the basis of anecdotes centered on the alleged “circuitous routing of checks,” researchers focusing on the pre-Fed check-clearing system have usually argued that it was inefficient. In this paper we study a 1910 check remittance register from the State National Bank of Bloomington, Illinois—we dissect the way the bank forwarded checks to various destinations for clearing and collection. We find that the bank followed an orderly process of check remittance according to which checks tended to move in the “right direction.” This casts doubts on the alleged pervasiveness of cycling and circuitous routing of an extreme nature in the pre-Fed check-clearing process.     

From Linear Fuel Switching to Multiple Cooking Strategies: A Critique and Alternative to the Energy Ladder Model

Promoting sustainable development requires evaluating the technical and policy options that will facilitate the adoption and use of energy efficient and less polluting cooking stoves and practices. The transition from traditional to modern fuels and devices has been explained by the “energy ladder” model that suggests that with increasing affluence, a progression is expected from traditional biomass fuels to more advanced and less polluting fuels. In this paper we evaluate the energy ladder model utilizing data from a four-year (1992–96) case study of a village in Mexico and from a large-scale survey from four states of Mexico. We show that an alternate “multiple fuel” model of stove and fuel management based on the observed pattern of household accumulation of energy options, rather than the simple progression depicted in the traditional energy ladder scenario, more accurately depicts cooking fuel use patterns in rural households. The “multiple fuel” model integrates four factors demonstrated to be essential in household decision making under conditions of resource scarcity or uncertainty: (a) economics of fuel and stove type and access conditions to fuels, (b) technical characteristics of cookstoves and cooking practices; (c) cultural preferences; and (d) health impacts. This model also allows better estimates of the expected fuelwood demand and indoor air pollution in rural households.     

Thinking About the Liquidity Trap

The phenomenon of the liquidity trap—defined as a situation in which even a zero interest rate is insufficiently low to produce full employment—has taken on new importance with the persistent slump in Japan. This paper restates recent theoretical work on liquidity traps, drawing a link between “intertemporal” models that are mainly concerned with demonstrating the underlying logic, and more ad hoc models that bear directly on policy; it then reexamines policy alternatives, including fiscal stimulus and inflation targeting. J. Japan. Int. Econ., December 2000, 14(4), pp. 221–237. Woodrow Wilson School, Princeton University, Princeton, New Jersey 08544-1013 Copyright 2000 Academic Press.Journal of Economic Literature Classification Numbers: E52, E58, E31, F31.     

A theory of the pre-modern British aristocracy

Between c. 1550 –c. 1880, a small group of individuals ruled England and oversaw her transformation from a small country to the British Empire—and in the process they became exceedingly wealthy. Known as aristocrats, their unusual lifestyles were the antithesis of modern secular values. Today aristocrats are often viewed as a hindrance to pre-modern growth and development because they appeared to operate so inefficiently. This paper argues that the aristocrats efficiently provided the valuable service of “trustworthy servant”, by investing their wealth in hostage capital. This theory explains terms of entry and exit out of the aristocracy, the strict family settlement, their education patterns, extravagant lifestyle, and their ultimate voluntary retreat from power.     

Adjustment with a human face: A UNICEF record and perspective on the 1980s

In the early 1980s UNICEF became increasingly concerned with the setbacks in health, education and child nutrition arising in many developing countries. This article records the developments of UNICEF's concerns with international and national policy to offset these setbacks, the development of its policy of “adjustment with a human face” and the major steps taken to encourage the IMF and the World Bank to give more attention to poverty and human concerns in the making of adjustment policy.     

Patterns of industrialization and the flying geese model: the case of electronics in East Asia

We use the “flying geese” framework to study the change in the geography of comparative advantages in the electronics sector in East Asia, China and the USA. Doubts have been raised about the capacity of the “flying geese” model to interpret the most recent phases of Asian development, in particular as far as progress in the electronics sector is concerned. This paper takes issue against these negative conclusions on both theoretical and empirical grounds. On the theoretical side, the paper takes up the formulation proposed by Kaname Akamatsu, arguing that some of the critical observations raised against the model look to a distorted and simplified version of Akamatsu's original theory. Analyzing the behavior of the “revealed comparative advantage index” per products and area, it is concluded that the “flying geese model” is compatible with manifold industrial development models, increasing interdependence in an integrated area which crucially also includes the US, and that asymmetries and hierarchical order persist across the countries.     

Outsourcing the State? Public–Private Partnerships and Information Technologies in India

This paper examines public–private partnerships (PPPs) for development through the example of telecenters in two Indian states. How might a developmental state position itself with respect to civil society under a PPP model of service delivery? We find that each state’s political economy is reflected in its PPP strategy, but that in both states the emerging middle classes rather than the poor benefit most from ongoing telecenter projects. Outsourcing development services to private entities need not “privatize” the state but does alter the way in which citizens “see” the state. Service delivery through telecenters becomes a symbol of government efficiency and responsiveness.     

Wage comparison by gender and the effect of job segregation: The case of Taiwan

This paper examines the wage differential between the genders in a newly industrialized economy-Taiwan. The objective is to verify the existence and magnitude of the Taiwanese wage differential (or discrimination as some would term it) and contrast it with findings in the United States.The gender gap was estimated for the private sector and the public sector respectively. It was found that wage discrimination against females does exist. The magnitude of the “discrimination” falls within the same range as the empirical estimates for the U.S. In Taiwan, however, the wage discrimination appeared to be slightly more severe in the public sector.A measure for the discriminatory effects of the “occupational segregation” was proposed and implemented. Contrary to common belief, the “occupational segregation” was not an important factor in wage discrimination. Nor did the disparity of jobs distribution in terms of “industry” generate any significant level of wage discrimination. The main source of gender discrimination (in terms of wage rates) came from the lower returns to the “productivity” characteristics (experience, education, tenure, etc.) and not from seemingly popular hypotheses of occupational segregation (or, in more general terms, job segregation). This is in sharp contrast to previous studies.