Can Social Capital Reduce Poverty? A Study of Rural Households in Eastern Bhutan

This study examines the impact of social capital on the poverty of rural households in eastern Bhutan, with a particular focus on households' participation in community groups, which can be a proxy for the structural aspect of social capital. Using a two‐stage probit least squares simultaneous equation model, the present study reveals that social capital positively contributes to poverty reduction in Bhutan. This study also finds that non‐farm income is important for poverty reduction in rural areas. Our results, however, indicate that poor households in remote areas are discouraged from participating in community groups.     

Giving to the Poor? Targeting of Food Aid in Rural Ethiopia

This study determines the factors underlying the allocations of food aid in Ethiopia. We focus on regional differences in targeting criteria, and targeting accuracy according to per capita income. Data are drawn from two linked rural household surveys in 1995–96. We find large differences in food aid allocations across regions that cannot be explained by observable regional characteristics such as per capita income and rainfall. These differences are consistent with speculation that food aid is being used by the Ethiopian government to transfer resources to favored regions. We also find wide variations in the criteria used to identify recipient households across regions. We identify measurable indicators that could be used by food aid authorities to improve targeting effectiveness in the future, both across and within regions. Finally, we present simulation results on targeting accuracy under various targeting strategies and discuss potential benefits and shortcomings of those strategies.     

Sustainable rural livelihoods? Evaluating the potential of small‐scale aquaculture in the Western Cape

Rural unemployment is exacerbated by the decrease in demand for farm labour on commercial farms; therefore, alternative livelihood opportunities for rural dwellers require investigation. The production of fish inform dams offers such an opportunity. A research project was undertaken to evaluate the potential of small‐scale aquaculture to create sustainable rural livelihoods. An existing aquaculture project in De Dooms in the Western Cape was evaluated in terms of its ability to provide an alternative source of income and a cheap animal protein source. A needs assessment of the local community and an evaluation of the pilot project in terms of its potential to meet the identified needs were carried out. The results indicated that, subject to the implementation of the recommendations, the project has the potential to create sustainable livelihoods, but that sociopolitical issues should be accorded equal consideration to biotechnical and economic feasibility.     

Invasive plants – friends or foes? Contribution of prickly pear (Opuntia ficus-indica) to livelihoods in Makana Municipality,Eastern Cape,South Africa

The negative impacts of invasive alien species on the environment are well documented. However, despite the predominantly negative perceptions associated with invasive species, it is evident that a number of these plants have been part of the landscape for generations and have numerous commercial and non-market uses. Consequently, there is a need for research that considers the impact of invasive species on the livelihoods and well-being of local communities. The authors investigated the contribution that the trade in prickly pear (Opuntia ficus-indica), an invasive alien species, makes to the household income streams of poor trading households. The research highlights the apparent conflict of interests and trade-offs that exists between local traders, for whom the sale of the prickly pear provides a livelihood source, and the South African Government, who are actively seeking to remove the plant from the landscape.     

Maquiladoras: Exploitation or Emancipation? An Overview of the Situation of Maquiladora Workers in Honduras

Are offshore assembly workers being exploited or emancipated? The answer depends largely on what factors are being considered and with whom the workers are being compared. This paper presents data on 12 indicators, including both economic and social factors, which together provide an overview of the situation of maquiladora workers in Honduras. Second, it uses an alternative control group, first time applicants to the maquiladoras. Finally, this paper presents data collected in Honduras in 1998—providing insights into the industry as it is operating post-NAFTA and in a non-Mexican setting.     

On the Coordinated Development of Urbanization and Rural Economy in China

Urbanization is one of important missions in china＇s modemization. The most vital task in the advancement of urbanization is to increase peasants＇ income and appropriately solve the issues concerning agriculture, rural areas and peasants, thus ensuring the accelerated development of rural economy. This paper mainly discusses five issues that urgently need solving in the development of rural economy and urbanization. They include peasant＇s qualification and right of the real management entity in the market, financial support, circulation and transference of agricultural land, welfare and social security of peasants and fairness of taxes on peasants.     

Fiscal policy in central and Eastern Europe: what happened in the run-up to EU accession?

This paper analyses the evolution of fiscal policy in central and eastern European countries during the EU accession process, testing for country and time specific effects. This is done by constructing Taylor-type policy rules and by calculating three measures of fiscal stance. A key finding is that the differences across countries are more significant than those across time. Baltic countries tended to have had tighter fiscal policy which responded to the output gap, larger central European countries had more lax (and increasingly lax) fiscal policies which were unresponsive to the output gap. These differences correlate closely with cross-country differences in exchange rate regimes and no link is found to either spending composition or political variables. Taken together the results suggest that the exchange rate regime is by far the most significant determinant of fiscal performance. These results suggest that the “soft power” of the prospect of EU entry did not act as a spur to greater fiscal discipline and that higher budget deficits in recent years cannot be blamed on costs of accession.

Was the expansion of housing credit in Japan good or bad?

This paper shows, using data from the Family Income and Expenditure Survey, that housing credit has become increasingly available over time in Japan, especially since 2000, and that this has made it easier for Japanese households to purchase housing and enabled them to do so at an earlier age. However, it also shows that the greater availability of housing credit has increased households’ housing loan repayment burden, which has resulted in their cutting back on their other consumption expenditures and created the potential for retirement insecurity. Another concern is that the increasing availability of housing credit has been accompanied by a pronounced shift from fixed-rate to variable-rate housing loans. This is cause for concern given the low level of financial literacy that prevails among the Japanese population and the likelihood that interest rates on variable-rate housing loans will be raised sooner or later as monetary policy is tightened.     

Causes of the Long Stagnation of Japan during the 1990s: Financial or Real?

Corporate investment is the most important factor to explain the long stagnation of Japan during the 1990s. Using the Bank of Japan diffusion indices of “real profitability” and “banks' willingness to lend,” we estimate investment functions for four groups of firms: large/small and manufacturing/non-manufacturing. Our results suggest that for large firms, financing constraints are not significant whereas the converse is true for small firms. A fall of investment during 1992–94 is largely explained by real factors. However, the credit crunch occurred beginning 1997 and it lowered the growth rate of GDP by 1.6%. J. Japan. Int. Econ., September 1999, 13,(3), pp. 181–200. Faculty of Economics, Nagasaki University, 4-2-1 Katafuchi, Nagasaki 850-8506, Japan; and Faculty of Economics, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan. Copyright 1999 Academic Press.Journal of Economic Literature Classification Numbers: E22, E30, G21, N15.     

The Local Transfer of the Rural Surplus Labor Under the Government Guidace——Take Sichuan Province as an Example

农村剩余劳动力的稳定转移,是解决我国“三农”问题的关键之一.“三农”问题具有较强的外部效应性,在市场经济体制下,政府应提供市场不能满足的具有外部效应的公共物品和服务,因此,农村剩余劳动力转移中政府投入极其重要.受各种因素影响,目前,我国农村剩余劳动力转移的盲目性和不稳定性非常突出,亟需政府引导.     

Why do parents make their children work? A test of the poverty hypothesis in rural areas of Burkina Faso

It is often argued that child labour is caused by poverty. However,much child labour takes place in rural areas characterized bysubstantial labour market imperfections. A model of rural householdlabour supply is developed that provides testable implicationsfor two versions of the poverty hypothesis: that child labouris due to a binding subsistence constraint and that child leisureis a luxury good. We find that in rural Burkina Faso childrendo not provide labour to meet households' subsistence needsand that child leisure is a normal good. The evidence suggeststhat labour market imperfections are a main reason for usingchild labour.     

False Promise or False Premise? The Experience of Food and Input Market Reform in Eastern and Southern Africa

The literature on the effects of agricultural market reform in Africa is sharply divided and inconsistent. This article attempts to reconcile opposing viewpoints on the effects of food and input market policy reform in eastern and southern Africa. Drawing from studies of Ethiopia, Kenya, Malawi, Zambia, and Zimbabwe, we argue that a major source of the controversy stems from assumptions that countries have actually moved to a liberalized market environment. We find that many of the most fundamental elements of the reform programs either remain unimplemented, were reversed within several years, or were implemented in such a way as to negate private sector investment incentives. A framework is developed for explaining why some countries have been able to liberalize their food and fertilizer markets while others have not. These findings have implications for how donor assistance and policy-oriented research can more constructively contribute to an improved policy environment.     

Rural crisis and rural exodus? Local migration dynamics during the crisis of the 1840s in Flanders (Belgium)

This article analyses the migration dynamics in the wake of the 1845–1847 subsistence crisis in Flanders by means of a quantitative analysis of key demographic and economic data at municipal level. The data are unique in that they allow to directly measure in-migration and out-migration at the level of individual villages and towns. The results show that contrary to the powerful image of a push-driven rural exodus, it was not the villages hardest hit by the crisis that recorded the highest levels of migration. Rather, in-migration and out-migration rates often moved in tandem, and were determined primarily by existing migration traditions.     

Institutions for the taking: property rights and the settlement of the Cape Colony, 1652–1750

We examine the formation of property rights in land during the early settlement by the Dutch of the Cape Colony at the southern tip of Africa. After its founding in 1652 as a provisioning outpost for ships of the Dutch East India Company (VOC), the colonial government promoted settlement initially by granting land with well-specified and enforced property rights in restricted zones near Cape Town. By 1714 it transitioned to accommodate rapidly expanding settlement by creating a weaker form of property rights, the loan farm, which was imprecisely defined and had limited government enforcement. We develop a profit-maximizing monopsony model to explain the VOC's choice to transition from the better-specified land grant to the less well-specified loan farm. We conclude that the decline in the population size and ability of the Khoikhoi, the Cape's original inhabitants, to organize effective resistance to the Dutch invasion was critical to the transition, as it lowered the costs of private enforcement of settlers’ territorial claims. The choice of property rights thus enabled and encouraged the rapid taking by European settlers of the western Cape of Africa for the expansion of the Dutch colony's pastoral economy.