Food aid to developing countries: A survey

Food aid currently constitutes nearly 15% of official development assistance and hence has considerable potential as a stimulant to growth in LDCs. This paper reviews the evidence on the impact of food aid on growth and its associated factors. While recognizing that the use of food aid is influenced by a constellation of interests in recipient and donor countries, it identifies a set of guiding principles for maximizing the effectiveness of food aid. These include the need for food (relative to other development needs), its level of substitutability with commercial imports, its incorporation in a poverty-oriented development plan, its guaranteed availability and its complementarity with financial aid. Current food aid programmes recognize the relevance of some of these principles - e.g. the criteria of necessity - but ignore others — notably the need to situate food aid in a comprehensive plan for improving patterns of income distribution in LDCs.     

Optimal monetary reserves for developing countries

Zusammenfassung Optimale monet?re Reserven für Entwicklungsl?nder. — In dem vorliegenden Aufsatz wird ein Modell zur Bestimmung der optimalen Hóhe der monet?ren Reserven für ein Entwicklungsland vorgelegt. Ein optimaler Bestand an W?hrungsreserven wird als der Betrag definiert, der es einem Entwicklungsland ermóglicht, seine bei einem gegebenen festen Wechselkurs entstchenden, tempor?ren und unvorhergeschenen Zahlungsbilanzdefizite zu finanzieren, die sich in einer Planungsperiode ergeben, und gleichzeitig dem Lande einen Vorteil zu verschaffen, der den Alternativkosten der Haltung dieser Reserven entspricht. Das Modell wird auf folgende ausgew?hlte asiatische Entwicklungsl?nder angewendet, für die hinreichende Daten verfügbar sind: Ceylon, Indien, Republik Korea, Pakistan, Philippinen, Taiwan und Thailand.

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Résumé Réserves monétaires optimales pour pays à développer. — Dans cet article on présente un modèle pour déterminer le montant optimal des réserves monétaires d’un pays à développer. On considère comme montant optimal celui qui permet à un pays à développer de financer, à un cours du change fixe donné, les déficits temporaires et imprévus de sa balance des paiements, qui surviennent pendant une période de planification, et qui lui permet en même temps de procurer à ce pays un avantage égal aux co?ts alternatifs de l’entretien de ces réserves. On a choisi, pour l’application de ce modèle, les pays asiatiques de développement pour lesquels on avait les données nécaissaires. Ce sont: Ceylan, Inde, République Coréenne, Pakistan, Philippines, Taiwan et Tha?lande.

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Resumen La reserva monetaria óptima para paises en desarrollo. — En el presente articulo se presenta un modelo para determinar el volumen óptimo de las reservas monetarias de un país en desarrollo. Este volumen óptimo se define como la reserva que, con tipos de cambios fijos, permita al pais financiar aquellos déficit en la balanza de pagos, temporales e imprevistos, que surjan durante un período de planificación, y que le proporcione a este país un beneficio que equivalga a los ?opportunity costs? engendrados por la mantención de reservas monetarias. Este modelo se aplica a varios países asiáticos, para los cuales existen los datos necesarios, a saber: Ceilán, India, Rep?blica de Corea, Paquistán, Filipinas, Formosa y Tailandia.

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Riassunto Ottimali riserve monetarie per Paesi in via di sviluppo. — Nel presente articolo viene presentato un modello per la determinazione dell’ammontare ottimale delie riserve monetarie per un Paese in via di sviluppo. Un ottimale fondo di riserve valutarie è definita la somma che renda possibile ad un Paese in via di sviluppo di finanziare i suoi deficit temporanei ed imprevisti della bilancia dei pagamenti che si formano in un cambio fisso dato e che risultano in un periodo di pianificazione, e contemporaneamente di procurare al Paese un vantaggio che corrisponda ai costi alternativi del comportamento di queste riserve. Il modello è applicato ai seguenti prescelti Paesi asiatici in via di sviluppo, per i quali sono disponibili sufficienti dati: Ceylon, India, Repubblica di Corea, Pakistan, Filippine, Formosa e Tailandia.

     

Alternative fiscal regimes for mining in developing countries

The government revenue from foreign-owned mineral projects in developing countries can be extracted through a variety of alternative tools. This paper scrutinizes the implications for the government and for the private investor, respectively, of fiscal regimes relying mainly on royalties, income taxes and government equity participation. The conclusion of the analysis is that an income tax biased regime offers greater advantages to governments of mineral rich developing countries interested in an efficient and development-promoting expansion of the mineral sector with foreign investor involvement, than do regimes biased in favor of royalties and government equity take.     

Lessons from the great recession for developing countries

Many lessons can be taken from the Great Recession and the Euro crisis with respect to both pre‐crisis and post‐crisis policies. Appropriate measures can reduce the risk of crisis in individual countries, the severity of crises, and the magnitude of needed adjustments. These include an appropriate exchange rate policy (flexibility is highly desirable), ensuring the soundness of the financial system, not allowing expansion of credit at too high a rate, adopting structural fiscal budgeting policies, and avoiding dangerous sovereign debt build‐up. On the crisis resolution side, the lesson that stands out is the desirability of decisive and credible action to address the causes of the crisis. The issues that arise when the banking and financial system is weakened in the run‐up to crisis are extremely difficult, especially when sovereign debt is unsustainable. Therefore, while the important lesson is to avoid overly expansive credit build‐up during good times, in the event of a crisis, it is important that the health of the banks be restored as quickly as possible and that a viable supervision and resolution framework be put in place.     

The international environment for adjustment in developing countries

The international disequilibrium of the 1970s imposed on developing countries a burden of adjustment out of all proportion to their degree of responsibility for the imbalances incurred. The application of traditional stabilization programmes resulted, in a number of cases, in severe disruption of development. There was, moreover, a perverse distribution of the burden of adjustment, the poorest countries suffering most. A number of changes in international policy and practice are required to avoid a repetition of this experience. In particular, special provision is needed for cases in which deficits are largely of external origin, involving more adequate IMF financing at low conditionality so as to permit a stretching out of the period of adjustment.     

The relevance of Chinese developmental experience to developing countries

The Chinese experience and success in economic development during the past 30 years are seen as a model by many underdeveloped countries. Since 1952 China has followed 2 different strategies: 1) the radical approach, emphasizing self-reliance, autarchy, and very limited foreign trade and bureaucracy, and, 2) the pragmatic approach, giving priority to heavy industry, sophisticated technology, and centralized control. Since Chinese politics became deeply intermingled with these 2 lines of thought, there is a certain degree of uncertainty about the final direction that will emerge with a degree of continuity. Obviously, evaluating China's developmental experiences for other countries' purposes is not the same as evaluating them for China's purposes. However, in its totality China has been able to demonstrate the validity of certain goals; the transplanting of Chinese strategies in foreign countries, or the mechnical imitation of Chinese innovations would not work every time; but the adoption of certain innovations, if the proper environment is available, would have a positive impact on developing societies.     

Commercial bank lending to developing countries: Supply constraints

Middle-income developing countries rely heavily on commercial bank borrowing for the bulk of their financing requirements, but borrowing from this source cannot be projected with confidence. Privately owned financial institutions are subject to a number of capital and regulatory constraints which can adversely affect (will heavily influence) the level and direction of future lending to developing countries. Moreover, the volatility and short-term character of commercial bank lending suggests an urgent need to reduce the role of commercial banks in recycling the OECD and OPEC surplus, and to create new mechanisms designed to ensure more stable and longer term sources of capital to developing countries.     

Construction industry in developing countries

This paper provides a review of the construction capability available in the developing countries to meet the demand for shelter. It discusses the role of construction in the process of development and its importance to economic growth. It considers the issues facing the growth of a viable indigenous construction industry in the developing world within the context of the activities involved in the creation of constructed facilities – planning, design, construction and maintenance; it also examines the environment within which the industry has developed. For each construction activity the paper reviews available capabilities, the various resources needed for the development of an indigenous industry, and some possible means of accommodating these needs.     

Chinese contractors in developing countries

This paper uses turnover data from Chinese contracted projects in as many as 87 low and lower middle income countries from 1998 to 2009. Economic fundamentals motivate Chinese contractor presence in developing countries as their revenues are positively associated with countries’ per capita income and expected growth. All else equal, contractor project revenues are higher in countries with stronger political rights regimes. Moreover, the estimated positive effect of improvements in political freedom is largest among countries with high fuel endowment, but lowest among countries with high ores and metals endowments. Conclusions relating Chinese contractor activities, perceptions on the level corruption, and resource endowment among sub-Saharan African countries must remain tentative as the estimated relationships are sensitive to the corruption indices used.