market reforms in developing countries

How can the trickle of market reforms be turned into a flood? Paul Reynolds, of the Adam Smith Institute, explains why privatisation in developing countries is still difficult to achieve.     

IMF and economic reform in developing countries

In this paper we assess the IMF approach to economic reform in developing countries. The impact of IMF program participation on economic growth has been evaluated empirically in a cross-country literature, with little evidence of IMF programs having been successful. This suggests that a fresh approach is in order. However, the cross-country approach is unlikely to provide a sound basis for drawing clear conclusions, so we review IMF programs from a different perspective, involving a broader literature on development strategy. In particular, it is widely accepted that a common characteristic of IMF programs is a high degree of policy rigidity. This is in contrast with studies which hold that unleashing an economy's growth potential hinges on a set of well-targeted policy interventions aimed at removing country-specific binding constraints. The process of locating constraints that bind involves growth diagnostics and policy trialing. This approach maintains that not all distortions are equally important and, by extension, not all policy reforms. From this point of view, IMF programs based on a list of standard conditionalities will not accomplish much. But policy trialing is more relevant to actors and entities with a broader, and more microeconomic, focus such as national policymakers and the World Bank. It is in choices among competing projects and programs that trial and error is most likely to be necessary. Nevertheless, reforms of the IMF such as the “streamlining initiative” should start from a good understanding of the reasons for adherence to policy orthodoxy. We discuss underlying institutional and organizational reasons for policy rigidity and consider some suggested reforms.     

Poverty volatility and poverty in developing countries

This article examines the effect of poverty volatility on poverty in developing countries. Poverty volatility refers to the amplitude of the change in poverty rates over a given period of time. Variations in poverty rates can potentially arise from countries' vulnerability to a variety of shocks that induce greater macroeconomic volatility, including economic growth volatility. The empirical analysis shows that poverty volatility consistently induces a rise in poverty rates, and this positive poverty effect of poverty volatility increases as the degree of poverty volatility rises. Policies that help reduce poverty volatility (including by dampening economic growth volatility) would contribute to poverty reduction.     

Market attractiveness of developing countries

Companies operating in international markets must be able to evaluate the potential market attractiveness of developing countries with which they may wish to do business. To make decisions about where to go for business, they have access to much information from specialized sources and from statistical data supplied by international institutions. Such vast and diverse information is rarely used in a systematic way in the management decision processes. When it is used, the process is often inadequately formalized. The available information generally deals with economic factors, while in the present international arena, judgments about politics must also be taken into account. This paper investigates the applicability and advantages of the Analytical Hierarchy Process (AHP) to this decision process, using it to create maps of joint economic progress and political stability in a number of countries for two time periods, 1990–1991 and 1995–1997.     

Appropriate pharmaceutical policies in developing countries

There are several peculiar features of the pharmaceutical industry which invite government intervention in developed as well as developing countries. In poor countries in particular, the pressure to economise on drug purchases leads to policies to bypass the system of innovation and marketing which has grown in the rich countries: thus, the large drug multinationals are subjected to a large battery of controls. The main factors which lead poor countries to permit MNCs are their superior operational efficiency and their transfer of technology. A more liberal set of policies is advocated to promote growth and innovation.     

The effect of corruption on entrepreneurship in the presence of weak regulatory quality: Evidence from developing countries

Efforts to improve currently low entrepreneurship in developing countries could be necessary but likely hampered by the high corruption. With poor regulatory quality in most developing countries, the effect of corruption on entrepreneurship could be unique. By using the Generalized Method of Moments (GMM) estimator, utilizing 48 developing countries as the sample for the period from 2008 to 2016, this study finds that there is a conditional effect of corruption on entrepreneurship, implying that poor regulatory quality has forced and opened up the door for individuals to offer bribes in order to start a new business. Nonetheless, as corruption could add to the high cost of business start-ups, to enhance entrepreneurship, policymakers need to give priority to improving regulatory quality and, subsequently, force corruption to fade away.     

Economics of residential crowding in developing countries

In an attempt to eliminate residential crowding, most countries pursue the policy objective of providing one dwelling unit per household. However, we know little about the demand for various dimensions of housing space which affects the levels of crowding. This paper analyzes the nature of demand for residential space and multiple occupancy in order to identify the major determinants of crowding. The result indicates that to a great extent crowding is explained by economic factors and that the current policy approach to elimination of crowding, which emphasizes one dwelling per household, is not likely to be effective.     

Corruption and distribution of public spending in developing countries

This paper empirically examines the impact of corruption on the structure of government spending by sector. Using the three-stage least squares method on 64 countries between 1996 and 2001, we show that public corruption distorts the structure of public spending by reducing the portion of social expenditure (education, health and social protection) and increasing the part dedicated to public services and order, fuel and energy, culture, and defense. However, civil and political rights seem to be a stronger determinant of expense on defense than corruption. Our results are robust to instrumentation by the latitude of the country.     

The process of entrepreneurial action at the base of the pyramid in developing countries: a case of vegetable farmers in Benin

The assumption that entrepreneurship is a critical factor in expanding employment, creating wealth and contributing to poverty alleviation at the base of the pyramid (BoP) in developing countries has led to the development of many initiatives to strengthen the entrepreneurial activities of poor people. Despite the fact that entrepreneurship is seen as a strategy in combatting poverty, the process that leads to entrepreneurial action in a BoP context is still unclear. In this paper, we illustrate the possibilities a multi-layered perspective offers to understand the complexity of entrepreneurship in poverty settings. Based on five focus group discussions and 36 in-depth interviews with vegetable farmers in Benin, we examined the entrepreneurship of poor people. We learned that entrepreneurial action is the nexus of individual and exogenous factors in complex relationships. Based on this, we elaborate on the characteristics of the process model of entrepreneurial action. We provide a process-based view of entrepreneurship at the BoP, suggesting a need for consistency between individual, behavioural strategies and contextual elements. We discuss the implications of our findings for BoP practice and provide a framing perspective that we hope will encourage a greater focus on the complexity of entrepreneurship phenomenon.     

Assessing the accuracy of electricity production forecasts in developing countries

This study assesses the accuracy of time series econometric methods for forecasting electricity production in developing countries. An analysis of the historical time series for 106 developing countries over the period 1960–2012 demonstrates that econometric forecasts are highly accurate for the majority of these countries. These forecasts have much smaller errors than the predictions of simple heuristic models, which assume that electricity production grows at an exogenous rate or is proportional to the real GDP growth. However, the quality of the forecasts diminishes for the countries and regions, where rapid economic and structural transformation makes it difficult to establish stable historical production trends.     

发达国家发展"绿色包装"的亮点

介绍了美国、德国、法国、英国、日本、瑞典等发达国家发展“绿色包装”的成功经验，以供我国发展绿色包装而借鉴。     

Enterprise clusters in developing countries: mechanisms of transition and stagnation

This paper analyses the dynamics of clustered enterprise development in developing countries. It is focused on the different types of clusters that can be identified in these contexts. After a brief introduction, the cluster concept is explained and the need to understand clusters as an expression of social connectivity rather than mere spatial agglomerations is established. Next, a typology of clusters is presented. This typology is discussed on the basis of recent research on small and medium-sized enterprise clusters in different countries and continents. The types of linkages prevailing in different types of clusters are analysed, as well as their implications for technological change. It is argued that the mechanisms of enterprise growth and innovative activity are different in each type of cluster and hence the opportunity structures that entrepreneurs face are variable across cluster types. Therefore, the mechanisms of transition from one type to another are different, and these are discussed next, as well as mechanisms of stagnation and continuity. In conclusion, the implications for development research and policy are outlined and it is emphasized that support must be tailored to the actual state of existing clusters and cannot be deduced from general theory.     

Bank failure prediction models: for the developing and developed countries

Banks make good use of capital and have characteristics different from profit businesses. Mismanagement causes collapse, which negatively affects investors, depositors, and employees, and disrupts economic order. Consequences may also affect other industries, triggering financial distress. Therefore, evaluating operational risks in banks and developing an early warning system are critical. This study evaluates data from 858 international banks (including banking holding companies) from 2005 to 2008 and applies a logistic model to analyze critical factors. Results show that equity-to-assets (ETA) and interest income – interest expense/income (NIN) had negative relationships with financial distress. Banks accept deposits and make loans. A higher proportion of NIN shows stable business volume, which could avert financial distress. Therefore, ETA and NIN were indicative of banking financial distress and best predicted trends in Association of Southeast Asian Nations (ASEAN) and European Union (EU) banks.     

Slums in developing countries: New evidence for Indonesia

This paper uses Indonesian data to provide new evidence on the links between household and dwelling characteristics in a developing country. The results show that higher income and education lead to occupancy of dwellings with better structural characteristics, an effect that is reinforced if the household is large and contains few children. Religion also matters, with non-Buddhist households occupying dwellings with worse structural characteristics. The directions of these effects are mostly consistent with separate estimates of household bid-rent functions, which show that willingness-to-pay for better housing attributes rises with income and education.     

发展中国家对外直接投资的新趋势

文章在系统总结发展中国家对外直接投资历程的基础上,结合发展中国家FDI出现的新特点,认为发展中国家的对外直接投资除已出现学习型FDI、竞争策略型FDI以外,极少数发展中国家的跨国公司已开始进入更为高级的市场势力型FDI阶段。     

Austerity and military expenditures in developing countries: The case of Venezuela

In times of economic austerity, governments faced with declining revenues and political restraints on increasing taxes, must resort to major budgetary cutbacks. However, relatively little is known about how the governments of developing countries make expenditure decisions, or perhaps more importantly, how they trade off between consumption and investment or between functional categories of expenditures. Some sectors are often thought to be more vulnerable than others to reductions; social sectors are usually considered more and defense sectors less susceptible. An analysis of Venezuelan military expenditures over the 1950–1983 period confirms the fact that a high level of stability exists in the country's pattern of defense expenditures and that during the country's current period of austerity, defense expenditures are likely to be cutback less than other functional expenditures such as health, education and economic development.