Can mining countries take advantage of their mining rents? A question of abundance,concentration and institutions

ABSTRACT

A common puzzle in economics is whether natural resources are a ‘curse’ or a ‘blessing’ for economic development. Previous studies have suggested that resource booms can promote growth, but private rent-seeking can turn these booms into a curse if institutions are weak. We argue that private incentives differ depending on whether rents are diversified across different commodities or concentrated in a few of them, because greater diversification implies higher appropriation costs. By using SITC-4 level of export disaggregation to measure within-sector concentration in 131 countries during 1991–2015, we show that the effect of mining rents on economic growth is conditional on the level of concentration within the mining sector. Mining rents enhance growth for economies with low concentration and strong institutions but reduce growth for economies with high-concentration and extremely weak institutions.     

Management problems of urban land development in Nigeria: A case of the Kano State Urban Development Board

Summary

This paper presents the major findings of an empirical investigation on the shortcomings of the Kano State Urban Development Board in managing the development and use of new urban land. From generalizations on the factors which have hamstrung the Board's effectiveness in three separate cases it appears that the major issues centre around long‐standing contradictions in legislation. These may be difficult to remove at the moment but in the interest of effective land development management something has to be done.     

‘Paradigms of development: The East Asian debate’: A comment

Abstract

Sanjaya Lall's contribution to the debate on the role of industrial policy in economic development (Oxford Development Studies, 24, pp. 111–131,1996) is criticized. Part of the argument concerns the nature of development experience in Hong Kong, where deindustrialization is not regarded as a sign of lack of industrial policy, as argued by Lall. More generally, the article contends that selective intervention is not necessarily the key to capturing the benefits of dynamic comparative advantage, that intervention costs can be large, and that governments can have difficulty in devising and implementing plans for the development of technological capability.     

Technical and Organizational Change and Economies of Scale and Scope in Developing Countries

This article examines the impact of flexible automation (FA) and associated organizational techniques on scale and scope economies and optimal scale. It is based on an in-depth survey of 62 engineering firms in Brazil, India, Mexico, Thailand, Turkey and Venezuela. The paper finds that the replacement of old, mainly conventional, machine tools and transfer lines by new computer-numerically-controlled machine tools and related FA has resulted in lower economical batch sizes and the manufacturing of growing variety, making it possible to reap economies of scope. Scale and scope economies at product level have, however, reinforced scale economies at plant level, resulting in higher levels of optimal output. The main factors accounting for such impact are the reduction in the number of operations required, the improved efficiency and accuracy of the new technologies and the much higher capital fixed costs vis-a ¤ -vis the technologies that were replaced. Higher plant scales could limit the potential for industrialization in developing countries.     

The political economy of manufacturing protection in LDCs: An Indonesian case study

Abstract

There are significant inter‐industry variations in protection in all but the most open of economies. This invites the obvious question, why? Are these variations simply random in nature, or are they systematic, and therefore amenable to explanation? Most of the literature on this subject pertains to industrialized economies. Few studies have been undertaken of developing countries, where political institutions are less developed, policy‐making processes often less transparent, protection generally higher and more dispersed and the data base usually poorer. In this paper, we examine these issues with reference to Indonesia, a large, rapidly industrializing economy with high (albeit decreasing) levels of manufacturing protection. We find that the standard theory purporting to explain inter‐industry variations in protection performs quite well in some cases, although a substantial unexplained residual exists. We give examples of how the theory developed for industrialized economies might be modified for developing economies.     

Expert systems and land development expertise

Summary

Expert systems are a product of the new technology. They provide the means for computerizing human expertise. This necessitates a more explicit understanding of the latter, provides an additional source of it and presents the possibility of enhancing the competence of that expertise. The paper argues that in the face of increased competition for investment funds the development industry needs to adopt a more sophisticated approach to project assessment. Two examples, with respect to planning law and retail investment appraisal, are developed to indicate the potential of the expert system approach. Ultimately expert systems challenge appeals to ‘feel’, ‘experience’ and judgement’ in human decision‐making; if successful, however, they promise improved profitability.     

Incorporating Trade into the Investment Development Path: A Case Study of Korea and Taiwan

We suggest that there is some interface between the investment development path (IDP) and the trade development path (TDP)-with both trade and foreign direct investment (FDI) of created asset-intensive products increasing their significance relative to gross national product (GNP) of countries. The proportion of intra-industry trade and FDI to total trade and FDI also increases as an economy develops, particularly so for created asset-intensive products. We have taken the FDI intensity of manufacturing sectors as a proxy for a created asset intensity, and classified it into three categories, viz. above, average and below created asset intensities. Trade and FDI data from the Korean and Taiwan economies between 1968 and 1997 generally support the idea of an integrated TDP and IDP. The growth of trade and FDI tends to be positively correlated with GNP per capita and with the created asset intensity of products.     

Evaluating development projects

Summary

Using a case study, it is shown that the competent assessment of real estate development projects entails the use of a broad range of skills and information input ranging from macro‐economic forecasting, assessment of inflation and interest rates; product design to ensure marketability, a review of competing projects and a command of techniques of financial appraisal. The analyses need to be keyed into a corporate framework which takes cognizance of the cost of capital, project specific risk, the management of working capital and an assessment of the effect a proposed project will have on corporate financial performance.     

The effect of income on formation of tenants capital estimated from residual variation (part i)

Abstract

This paper contrasts the ruling neo‐classical “paradigm” on industrial policy with a more structuralist view of the need for government interventions to promote industrial development. It traces the evolution of the debate on industrial policy from the early days of planning to the current consensus for “market friendly” policies, and notes the deficiencies in the latter approach. It develops a casefor selective interventions basedon the nature of the technological learning process and adduces evidence from the East Asian newly industrializing economies to show that the nature and extent of selective interventions were critical to their patterns of industrial development. It closes with an acknowledgement of government failure but argues that this does not amount to an absolute and permanent case against industrial policy.     

Sectoral gender wage gap in Vietnam

Abstract

Price forecasting systems are of considerable importance to food security management by governments’ and non‐governmental organizations. Sparse data availability in low‐income economies, however, generally necessitates reliance on reduced form forecasting methods. Relatively recent innovations in heteroscedasticity‐consistent time series techniques offer price forecasting tools that are feasible given available data and analysis technologies in low‐income economies. Moreover, extended GARCH models exhibit superior out‐of‐sample forecast accuracy using monthly food price data from Madagascar. These techniques also permit cost reduction in food security operations by more precise estimation of the risk of hitting a critical price level.     

International capital markets and open‐economy macroeconomics

Abstract

The standard open‐economy model on which the Bretton Woods macroeconomics is based takes into account neither the systemically fragmented nature of international capital markets nor the institutional relationship between savings and investment in semi‐industrial economies. This paper suggests that a more realistic approach to these structural features, possibly along the lines suggested by recent “new‐Keynesian” theories of market failure, would yield a model of macroeconomic behaviour which emphasizes investor uncertainty and vulnerability to external shock. The policy implications have interesting parallels with Keynes's own views on stabilization.     

The Moral Setting for Governance in Keonjhar: The Cultural Framing of Public Episodes and Development Processes in Northern Orissa,India

A discussion of the theory of technology and economic growth suggests potentially negative implications for the impact of the Internet on developing countries. Technology in general is undoubtedly central to the growth process, but economists define technology in very broad terms. The impact of any particular, invented, technology is likely to be small. This theoretical perspective is supported by the empirical evidence on the limited impact of past "information revolutions" on less-developed countries (LDCs) and the present impact of the Internet on advanced economies. Furthermore, LDCs appear ill-prepared to benefit from the opportunities that the Internet does present--they lack the physical and human capital, along with the institutions required, to exploit the e-economy. Finally, even optimistic forecasts of the Internet's global economic impact are small in scale compared with the challenge of development. This has significant implications for development policy.     

The implementation and the future of development plans

Summary

Once again the planning system of England and Wales is being reviewed. This paper considers criticisms of development plans, and proposals for changes, including those of the Department of the Environment (DoE) and Welsh Office in the consultation paper, "The Future of Development Plans: a Consultation Paper”, September 1986, with some of the reactions to it, and also The Nuffield Foundation report, "Town and Country Planning”, 1986. A focus of this critique is the effectiveness of development plans, in particular regarding the questions of implementation and resources. It is concluded that it is the co‐ordination of the provision of public resources, which are needed to implement plans and policies, that requires the attention of the Government, with adequate national and regional planning guidelines, rather than the abolition of Structure Plans.     

Book reviews

Development and the landowner: Analysis of the British experience. R. Goodchild and R. Munton, George Allen and Unwin, London, 1985. 224 pp., ISBN 0043 33021 5, £22.00

Affordable housing: new policies and the housing and mortgage markets. Kenneth T. Rosen. A Twentieth Century Fund Report, Ballinger Publishing Co., Cambridge, Massachusetts (distributed in UK by Harper & Row). 181 pp., £27.50     

Book review

Property Development Library Vol. 1. Edited by Brian Jolly, College of Estate Management, Reading (distributed by E. & F.N. Spon, London) ISBN 09021 32865, £39.50     

An innovative means of urban land development: A case study of Trichur in India

Summary

For more than seven decades, several Indian states have used the plot reconstitution technique in managing urban land development. Recently, Kerala, a small southern state, has experimented with this technique for the first time in a scheme in Trichur. The Trichur experience is unique in that it incorporates significant innovations over a somewhat similar method of land readjustment which is widely practiced in the Asian‐Pacific region. Formulated for complete cost‐recovery, the Trichur project incorporates the active cooperation of the landowners and officials, and is a time‐bound programme to complete all land development and building construction works within six years of the finalization of the scheme proposals.

This paper attempts to explore the use of this innovative means of land development in Trichur with a view to assessing the potentiality and constraints in its use, and identifying critical areas where further refinements would be desirable. Based on fieldwork in the state and intensive interviews, the paper finds the Trichur experience to be of great importance as a viable strategy of urban land development and management. The paper concludes with some recommendations on legal and institutional aspects, and stresses the need for refinements in the scheme preparation and information dissemination for transferability and wider application of the technique.     

Towards an Integration of R & D and Marketing in Production Development

Abstract

In this paper, two approaches which are characteristic for Research & Development and Marketing departments are compared. First, R&D versus Marketing orientations are explained, then the major differences between them are presented. The integration of both approaches may improve competitive advantage of the food industry. Factors stimulating such integration are presented on the basis of data from real business circumstances. Innovation is regarded as a major source of competitive advantage of company. Therefore, integration in sensory methodology, that is commonly but differently used by R & D and Marketing departments, may contribute to the improvement of innovation practices and successful business performance. Finally, the role of consumer tests, oriented for marketing and product development, is illustrated.     

Innovation in Asian Industrialization: A Gerschenkronian Perspective

This paper interprets the experience of the East and South East Asian electronics industry from a "Gerschenkronian" perspective in order to draw lessons for other developing countries. Following Gerschenkron, the paper argues that it is diversity, rather than unifor mity, in the institutional, technological and development policy arenas (called here "strategic innovation") that characterizes the experience of the Asian newly industrializing economies (NIEs). The experience of the leading export industry shows that the progress of the NIEs can be interpreted as a pattern of substitution of missing prerequisites, in line with Gerschenkron's view of European latecomer industrialization. More broadly, the progress of the NIEs should not be viewed as repetitions of earlier industrialization experiences as they involve significant deviations from the latter, usually entailing distinctive strategic innovations. This interpret ation presents a difficult challenge for those wishing to draw lessons from the Asian NIEs. There are few direct lessons from East and South East Asia for other countries and certainly no transferable or standardized "model" of development. Other paths and patterns of develop ment need to be identified and created that build upon the distinctive resources of individual developing countries. Strategic innovation, trial-and-error learning and variety are likely to continue to characterize successful industrial development in the future.     

The role of local estate agents in the residential development process

Summary

The estate agent is usually seen and theorized as a gatekeeper responsible for directing certain people to certain parts of the city (Williams, 1976). However, estate agents are capable of performing many more functions other than simple house agency. This paper presents results from a series of structured interviews with housebuilders and estate agents carried out in Hertfordshire by a recent research project (Elson, 1982) which reveals the extent to which certain estate agents are involved with organizing land purchases for builders and negotiating development proposals through the planning system.     

A Pro-Poor Development Project in Rural Pakistan: An Academic Analysis and a Non-Intervention

The Asian Development Bank is an important source of external development assistance. In the course of a Bank project in rural Sindh (Pakistan), it was revealed at the project identification stage that sharecropping continued to be the basis of the agrarian system and that many of the sharecroppers were kept in a bonded relationship. The material conditions of the majority of the people in the area, despite past development projects, may have deteriorated in the last two decades and, it was suggested, would continue to do so unless the conditions of the sharecroppers were given primary attention. The research commissioned by the Bank revealed that deprivation, indebtedness and bondedness are widespread and co-exist with a tendency among the big landlords to turn part of their land to mechanized farming, thereby further marginalizing and disempowering tenant families. The team commissioned to study the conditions and propose the modalities of a rural development project proposed a bottom-up approach that confronted the sharecropping system head-on. The Asian Development Bank has been silent thereafter.