Agricultural innovation in less developed countries

We identify and elaborate some critical factors and mechanisms that foster the emergence of cooperative behavioral patterns. Through institutionalization, which solves social dilemmas through habituation, these factors and mechanisms provide the foundation of contingent cooperation and contextual trust in specific interaction ‘arenas’ and ‘meso’-sized ‘platforms’ (and related carrier groups) in these. This, then, may in turn support the emergence of general trust in the whole population, i.e., across all specific arenas and platforms. The emergence of institutions of cooperation may gain traction more easily in smaller arenas. This, and the transfer, spillover, or generalization to other arenas and platforms, is by no means determined, and the analytical foundation we offer permits to account for the different levels of cooperation, general trust, and socioeconomic performance observable in real-world economies (varieties of capitalisms). Directions of future research, as well as a policy focus, are provided as well.     

Financing development in less developed countries

Defining development and measuring growth is not an easy task. Countries without adequate internal capital seek financial aid from external sources. Private, direct investment from foreign sources has been inadequate for financing growth. Debt and development assistance in the form of grants has been necessary for financing less developed country growth. Foreign debt and foreign equity have contributed to growth and development unequally. This paper examines the relationship between development and financing in 15 less developed countries.     

Children and savings in less developed countries

"A commonly cited motive for childbearing in LDCs is the support in old age provided by one's children. Alternative means of retirement support become available as a country develops. This paper presents a simple two period model in which financial institutions are allowed to substitute for children in the provision of this service. The 'quality' of financial institutions is given an operational definition and the hypotheses of the model are tested on a cross-section sample of countries."     

Determinants of wage and price changes in less developed countries: An intertemporal cross-country analysis

A theoretical hypothesis of wage determination, conveying the arguments of the dual economy model as well as some elements of ‘traditional’ theory, and three alternative theoretical approaches to price changes are built and statistically tested. Pooled data, with missing observations, of 36 LDCs from Asia, Africa and Latin America for 1960, 1965 and 1968 are used, while additive and multiplicative dummy variables test the behavior of regressions between alternative country groups. Price changes are found to be explained by both monetary and nonmonetary variables with relatively more weight on the latter. The empirical wage change determination conforms to the dual model, while the existence of an international Phillips curve is questionable.     

Political credibility and economic growth in less developed countries

While the mainstream of economic development theory focuses on the efficiency of policy measures, the role of the credibility of these measures is rarely analyzed. In this paper we argue that in less developed countries the problem of establishing the credibility of policy measures is at least as important as the problem of choosing the efficient policy solution. We claim that many of the difficulties less developed countries face can be understood in terms of lack of effective control on the discretionary power of governments, which ultimately leads to policies that are not credible. The private sector anticipates large swings in policies and reacts by withholding its resources. Symptoms of these credibility problems in less developed countries include the size of the informal sector, capital flight, and the reluctance of investors to commit capital. All of these reactions contribute to the slow economic growth in these countries. This paper concludes that establishing strategies for the control of state discretionary power is a crucial precondition for overcoming these problems and generating long term economic growth.     

Labor migration and risk aversion in less developed countries

"In this paper we question the pioneering work of Todaro, which states that rural-to-urban labor migration in less developed countries (LDCs) is an individual response to a higher urban expected income. We demonstrate that rural-to-urban labor migration is perfectly rational even if urban expected income is lower than rural income. We achieve this under a set of fairly stringent conditions: an individual decision-making entity, a one-period planning horizon, and global risk aversion. We obtain the result that a small chance of reaping a high reward is sufficient to trigger rural-to-urban labor migration."     

Export instability,expansion and market concentration: A methodological interpretation

An analysis of the interrelationships among export instability, expansion and market concentration exhibited by fourteen Western Pacific countries yields three important and meaningful results. There exists a positive and significant association firstly, between export instability and export growth, secondly between the latter and geographical concentration, and hence thirdly between export fluctuations and market concentration but not in any direct causal manner as has been postulated by the general ‘concensus’. There is also evidence that the United States and Japan tend to provide the best growth potential, as demand sources for exports from Western Pacific area, at least in the near future.     

Technological choice in the less developed countries: An analytic hierarchy approach

A novel and practical approach is proposed for the assessment and selection of imported technology by the less developed countries. Technological choice is conceptualized as a multiobjective, multicriterion problem wherein subjective judgments and political processes play key roles. A new planning and evaluation technique known as the analytic hierarchy process (AHP) is introduced as a potent methodology for dealing with the economic, social, and political realities confronting technological change in the less developed countries.     

Determinants of capacity utilization by firms in less developed countries

The factors which influenced the capacity utilization decision of two hundred firms in the light manufacturing sector in Thailand during the period 1962–1974 were analyzed. The profit-maximizing capacity utilization rate for each firm was calculated using the projected balance sheets and income statements the firms prepared at the time of their initial investment. This ‘optimal’ rate was roughly twice the rates chosen by the firms. The extent of nonoptimal capacity underutilization of a firm was a function of the nationality of the firm's owner, entry date, number of firms in the industry, projected profits, and the manager's perceived risk of multishift operations.     

Foreign direct investment,growth and income inequality in less developed countries

How does foreign direct investment (FDI) affect economic growth in less developed countries (LDCs)? What is its association with changes in the income distribution? This paper empirically examines these issues within a cross section of less developed countries between 1970 and 1989. FDI is positively associated with economic growth within this sample of countries. However, there is no strong association between FDI and changes in income inequality within these same countries and over this same time period. Hence, there is no evidence that FDI is increasing income inequality within this group of LDCs.     

Consequences of a tax on the brain drain for unemployment and income inequality in less developed countries

Welfare implications of an income tax paid by emigrant skilled workers are analyzed in a model which assumes international capital mobility and allows for unemployed labor in the modern sector of a developing country. The tax discourages overinvestment in education and also contributes to the welfare of those remaining through the direct revenue effect. However, expected earnings of unskilled workers decline as a result of the tax, while those of non-migrant skilled workers rise. The tax may thus exacerbate domestic income inequality. In addition, modern sector employment, output, and capital stock may fall.     

Consumption and credit in a less developed country:-An econometric analysis of Egypt-

A well-known aspect of underdevelopment is whatMcKinnon termed ’financial repression’. Curiously, this aspect was overlooked by development theorists, who transplanted to their models consumption functions designed for advanced market economies where financial repression is virtually absent. 2 The main object of this study is to explore its effect on Egypt's private consumption. In addition, the author examines the relevance to Egypt of the ”permanent-income” and ”life-cycle” hypotheses, the effect of changes in both the functional and size distributions of income (caused by the drastic egalitarian measures undertaken by Egypt's revolutionary regime), and provides time-series estimates of income and price elasticities of food and non-food consumption (for the period 1957 – 1973). In the process, cross-section estimates from Egypt were briefly surveyed, for critical comparison with the paper's estimates.