On the Impact of Foreign Aid in Education on Growth: How Relevant Is the Heterogeneity of Aid Flows and the Heterogeneity of Aid Recipients?

This paper examines whether foreign aid in education has a significant effect on growth. We take into consideration the heterogeneous nature of aid as well as the heterogeneity of aid recipients—we disaggregate the aid data into primary, secondary, and higher education, and run separate regressions for low income and middle income countries. We find that the effect of aid varies by income as well as by the type of aid. Thus our results underscore the importance of the heterogeneity of aid flows as well as the heterogeneity of recipient countries when analyzing the effect of aid on growth. JEL no. F34, F35, I20, O19     

What Drives Price Differentials of Consumables in Europe? Size? Affluence? Or Both?

Prices of many consumables differ substantially across the European Union (EU) due to natural segmentation and to the survival of residual man-made barriers. However, we do not know much about the direction and the cause of deviations among countries differing mainly in size and income of their citizens. Here, we wish to fill this gap. We go through some simple theoretical analysis and show that, in the presence of mild barriers to trade, as those persisting among EU countries, prices should be lower in large countries. On the contrary, prices will be higher where people enjoy better standards of living which translate into higher marginal willingness to pay by consumers. We perform a parallel empirical investigation to assess the relative weight of the two main forces driving prices apart across countries and we test our theoretical proposition through a simple econometric analysis of prices of consumables across the EU. Country size and affluence explain price differentials in a convincing manner. However, the relative importance of the two variables changes as we consider the EU after the establishment of the Single Market or when we analyse a subsample of fast growing EU members.

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.     

The Exchange Rate Policy of the Euro: A Matter of Size?

This paper analyzes how country size affects exchange rate policy and volatility. A hump shaped relation between exchange rate variability and the size of countries is generated in the theoretical model: exchange rate variability increases with country size for small countries but then decreases for large countries. The paper finds that this theoretical prediction holds well for bilateral exchange rates of the OECD countries in the period between 1980 and 1995 as well as for a subsample of European exchange rates with respect to the dollar. The results suggest that the dollar/euro volability may be lower than the present dollar/DM volatility.J. Japan. Int. Econ., Dec. 1998,12(4), pp. 455–482. CERAS-ENPC, Graduate Institute of International Studies, and CEPR, 28 rue des Saints Pères, Paris 75007, France.Copyright 1998 Academic Press.Journal of Economic LiteratureClassification Numbers F33, F41, F42.     

What Futures for the People of the Tropical Forests?

The importance of forest products to households living in or near forests has been increasingly recognized. Estimates of numbers of people who in some way rely on forests, for survival or livelihoods, vary widely. Yet numbers alone do not reveal the forests' importance to diverse users. A typology that recognizes the varied relationships of people to forests and forest products permits assessment of the impacts of economic, cultural, and social changes. Understanding these relationships is crucial for institutions to adapt to changing patterns of demand, use, and supply, and to support both “forest-dependent” and “forest-related” peoples.     

What Are the Determinants of Public Spending? An Overview of the Literature

Atlantic Economic Journal - The purpose of this paper is to present and assess the literature about the determinants of public spending. Its originality is the adoption of a methodological...     

What explains the performance of Chinese exporting firms?

Drawing on the entry mode (EM) literature and the strategic tripod framework, we examine whether firm performance is influenced by its outward foreign direct investment (OFDI) mode, controlling other firm-, industry- and institution-specific factors. It is found that employing OFDI does not improve an exporting firm’s performance. This is not surprising as anecdotal evidence shows that many Chinese firms with OFDI have been making loss in the host country. This may indicate exporting firms employ OFDI to seek complementary and strategic resources/assets, not to improve immediate firm performance. Furthermore, firm performance is influenced by strategic assets, including technology-based capabilities and brands, at the firm level, industry entry barriers at the industry level and the home and host country institutional support at the country level.     

Financial Globalization and the Increase in the Size of Government: Are They Related?

Open Economies Review - We employ a stochastic growth model to study the impact of international financial liberalization and changes in volatility on the share of government consumption in GDP....     

The Research of the Construction Time on City Infrastructure Projects

The project construction time is not sufficiently considered in the decision-making procedure of the extant city infrastructure project all over the world. From the principle to increase benefit from the investment, the paper discusses the influence of construction time on benefit from investment, the condition of the optimal construction time, the method to confirm the optimal construction time, etc., under the increases of market demand, the paper establishes mathematics model between the construction time and the project benefit, and the model involves the project age, the construction time, the capital cost, the market demand, the discount rate and so on. Finally, the paper quantitatively analyzes the influence characteristics and degrees of construction time to the project profits, and the method to determine the optimal construction time of a project under different market demand .To emphasize that, the paper researches on Chinese cases, but, the conclusion put forward has the widespread significance to the time choice on city infrastructure project of other countries.     

25 Years of Aid Allocation Practice: Whither Selectivity?

The 4P framework (Poverty, Population, Policy, and Proximity) is introduced as a way of understanding a donor’s aid allocation. We use the two-part model and examine the period 1982–2006. The results indicate that recent conclusions of increasing selectivity are misplaced for the seven major donors analyzed, who together represent the majority of development aid. Indeed, the effect of each of the commonly mentioned time-trends (selectivity, the end of the Cold War, and the commencement of the Global War on Terror) is much smaller than the role of donor heterogeneity, which appears sizeable and entrenched.     

What has determined the rapid post-war growth of intra-EU trade?

Based on the gravity model by Baier and Bergstrand (2001), we use a static and dynamic panel approach to estimate the determinants of the growth of intra-EU trade from 1960 to 2000. The results suggest that income growth was the major force, accounting for approximately two-thirds of total growth. Trade liberalization still had a sizeable effect, while other factors had only a little impact (income convergence, real effective exchange rate changes) or played no role (trade costs). Our estimation results for intra-EU trade, using a variety of extensions, underline the robustness of the Baier-Bergstrand cross-section findings for world trade. JEL no. C23, F12, F14, F15