A note on pro-poor social expenditures

This study extended the concept of ‘pro-poor growth’ in terms of social expenditures that measure whether social expenditures are pro-poor or not pro-poor. Using the idea of pro-poor growth, this study examines as to what extent the poor benefited from the growth of social expenditures i.e., human development, rural development, safety nets and community services. The monotonicity axiom sets out a condition that the proportional reduction in poverty is a monotonically increasing function of the pro-poor growth. This study satisfies the monotonicity criterion relative with social expenditures and proposes a ‘poverty equivalent social expenditure rate’, which takes into account both the magnitude of social expenditures growth and how the benefits of these expenditures are distributed to the poors and the non-poors. This methodology is applied to Pakistan’s unit record household surveys during the periods of 1964–2011 (21 household surveys) and examines the interrelationship between social expenditures, inequality, and poverty. It is argued that the satisfaction of a monotonicity axiom is a key criterion for measuring pro-poor growth. The results found that the social expenditures in Pakistan are not intrinsically pro poor. Although it was strongly pro poor in the 1980s and pro poor in the 1990s, growth in the 1970s and 2000s was anti poor, if the poverty related social expenditures still remains anti-poor in the subsequent years as reflected in the years 2008–2011, there is a likelihood that these expenditures may not trickle down to the poor but instead to the non-poor. It is indicative that to achieve rapid poverty reduction, the poverty equivalent growth rate ought to be maximized rather than the actual growth rate of social expenditures in Pakistan.     

Welfare Spending and Poverty: Cutting Back Produces More Poverty, Not Less

The "New Consensus " on welfare expresses the idea that the major problem in social welfare is dependency , not poverty Much of the evidence for this perspective has come from trend line data indicating that over time poverty did not evaporate in the face of increases in social welfare spending Using various measures of the "dependent" poor, the empirical analysis presented suggests that reducing welfare expenditures relative to need does not produce less poverty and dependency     

SEARCH AND VACANCY COSTS IN THE TOKYO HOUSING MARKET: ATTEMPT TO MEASURE SOCIAL COSTS OF IMPERFECT INFORMATION

The social cost of imperfect information, in terms of buyers' search costs and sellers' opportunity costs of vacancy, is estimated in the real estate market of resale condominiums in central Tokyo by using a new, comprehensive dataset of resale condominium transactions. The results suggest a substantial social cost. Specifically, if housing information were perfectly available and marketing time were null, sellers would get benefits of 22.59% of imputed net rents of their property. In addition, buyers would save 1,042,000 yen spent on search activities for one transaction, if information were perfect. This is equivalent to 13.2% of buyers' average annual income.     

Macroeconomic Adjustment and the Poor: Analytical Issues and Cross‐Country Evidence

Abstract.  This paper studies the links between macroeconomic adjustment and poverty. The first part summarizes some of the recent evidence on poverty in the developing world. The second reviews the various channels through which macroeconomic policies affect the poor, whereas the third is devoted to the specific role of the labor market. It presents an analytical framework that captures some of the main features of the urban labor market in developing countries and studies the effects of fiscal adjustment on wages, employment, and poverty. The fourth part presents cross‐country regressions linking various macroeconomic and structural variables to poverty. Higher levels and growth rates of per capita income, higher rates of real exchange rate depreciation, better health conditions, and a greater degree of commercial openness lower poverty, whereas inflation, greater income inequality, and macroeconomic volatility tend to increase it. Moreover, the impact of growth on poverty appears to be asymmetric; it seems to result from a significant relationship between episodes of increasing poverty and negative growth rates.     

Capital Is Not Enough: Innovation in Developing Economies

Economic development and social entrepreneurship often conceive of poverty as a resource allocation problem in which a lack of capital prevents the poor from increasing their income through entrepreneurship. This allocative view, however, represents only one possible approach to conceptualizing entrepreneurial opportunity. The alternative discovery‐ and creativity‐based views place a greater emphasis on innovation which implies that superior ideas are also needed if poverty is to be reduced through firm performance. Drawing from a survey of 201 small business owners involved in a microcredit programme in Nairobi, Kenya, we find that the financial, social, human capital–performance relationships are mediated in part by innovation. Further, we find that differentiation‐related innovations lead to better firm performance than novelty‐related innovations.     

The private costs and benefits of environmental self‐regulation: which firms have most to gain?

A (correctly designed) voluntary self‐regulatory scheme can – in theory – improve social welfare if the benefits to society outweigh the costs. However, businesses may not choose to participate in a voluntary scheme if their private benefits do not outweigh their costs; external benefits are irrelevant to the profit maximizing firm. This paper reviews literature on self‐regulation, primarily focusing on factors that influence the net private benefits of environmental programmes. The literature is summarized in a manner that allows one to identify characteristics of firms that are most likely to accrue positive net benefit from environmental programmes, and to determine ways in which self‐regulatory bodies might raise those benefits, thereby increasing participation rates. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment.     

ESTIMATING, EXPLAINING, AND TARGETING POVERTY IN BELIZE: IMPLICATIONS FOR POLICY

This paper focuses on estimating, explaining, and targeting poverty in Belize. The analysis is based on household-level data derived from a national income and expenditure survey conducted in 1990. The paper estimates that the incidence of poverty was about 23 percent at that time nationwide, although there were significant differences in the incidence of poverty across rural and urban areas and across districts and subdistricts of the country. The analysis shows that the household head's age and education level and the household's size, number of children, and location appear to be significant explanators of the incidence of poverty; and, on the other hand, the investigation demonstrates that the head's gender, migration status, worker type, and sector of employment do not seem to explain, to any significant degree, the existence of poverty. The paper also illustrates the importance of sound targeting procedures in keeping poverty reduction costs low as a greater number of beneficiaries are included in such anti-poverty programs. In addition, the analysis shows the clear tradeoff between undercoverage and leakage errors in program implementation. Finally, the paper suggests that poverty program geographic targeting errors would probably not be reduced substantially if subdistricts were used as targets instead of districts in Belize.     

AIRLINE TICKET TAXES: INNOVATION OR IDIOCY?

The French President Jacques Chirac has proposed an airline ticket tax to finance international efforts to reduce poverty. This article describes how the proposal came about and examines the benefits and drawbacks of this method of helping the poor. It is concluded that the tax is more of a stunt to ensure Mr Chirac's place in the history books than a genuinely innovative method of financing the elimination of poverty.     

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.     

Social Security, Poverty and Economic Transition: An Analysis for Bulgaria 1992–96

The paper addresses the issues of poverty and social security in a transitional environment on the basis of recent economic developments in Bulgaria. Special emphasis is placed on the need for a new type of social safety net stemming from the radical changes in the political and economic system. The evolution of the social security system in Bulgaria during the transition is analysed focusing on such elements as the pension system, unemployment benefits, child allowances, etc. The empirical analysis is based on extensive use of data from the Bulgarian Household Budget Surveys during the period 1992–1996. Poverty in Bulgaria is measured using different poverty measurements and some quantitative results showing the changing dimensions of poverty in the transition period are presented and discussed in the paper.EES or e-mail at Corresponding author. E-mail:     

Understanding Business Improvement District formation: An analysis of neighborhoods and boundaries

Business Improvement Districts (BIDs) provide supplemental services to urban commercial corridors using funds from member assessments. They have become a very popular urban revitalization tool, but their formation is still largely unexplained. Theory implies that BIDs will form if they add to aggregate welfare and if the marginal net benefit of membership is positive. I test this for the neighborhood overall and at the BID boundary. Using unique, micro-level and longitudinal data from New York City, I employ survival analysis methods to estimate the likelihood of a neighborhood forming a BID. I then estimate the likelihood of the marginal property’s BID membership by comparing the characteristics of properties located immediately inside and outside of the BID boundaries. I find that BIDs are more likely to form when there is more commercial space over which the BID benefits can be capitalized and when there is homogeneity in service and spending preferences across properties. BIDs also tend to form in neighborhoods that possess signs of appreciation and growth. Generally, BIDs are more likely to form in neighborhoods with higher valued properties with the exception of very wealthy areas. The BID boundary, however, is comprised of relatively less valuable properties.     

Perceptions of poverty attributions in Europe: a multilevel mixture model approach

The perception of the causes of poverty has long been recognized as a very important factor in the broader study of this social phenomenon. This study covers 15 European Union countries and considers three types of poverty attributions: individualistic, societal, and fatalistic. The individualistic view perception believes the poor are responsible for their situation, the societal perspective blames society for poverty and the fatalistic view considers poverty to be the result of bad luck or fate. A multilevel mixture model with three clusters of countries and six clusters of individuals was identified. Despite the generalization of the social explanations of poverty at the individual or micro level, there are also groups that emphasize more individualistic explanations, blaming the poor for their condition. At the country or macro level, the most developed cluster believes in the individualistic and fatalistic causes of poverty, whereas the least developed clusters explain poverty based on the injustices of society. There is diversity in the way these countries perceive poverty.     

Using Jane Jacobs and Henry George to Tame Gentrification

The solutions that Jane Jacobs proposed to improve neighborhoods created a paradoxical problem: improvement increased demand for the amenities of the area, which caused land prices to rise. The net result was at least partial displacement of the old residents of the neighborhood with new ones. Jane Jacobs has been criticized for ignoring gentrification, but she was clearly aware of this process and tried to find means to counter it. By combining the ideas of Henry George about land taxation with the ideals of Jane Jacobs about neighborhood diversity, we can mitigate the negative effects of gentrification and direct the energy of market forces into producing a greater supply of desirable neighborhoods.     

Measuring the external benefits of homeownership

The subsidization of homeownership is justified on efficiency grounds only to the extent that it provides benefits to people other than the homeowner. We use the clustered neighborhoods subsample in the American Housing Survey to measure that benefit in the form of higher housing prices in neighborhoods with higher ownership rates (and lower vacancies). We attempt to account for unobservable neighborhood and house attributes that may be correlated with occupancy and ownership through instrumental variables, switching regressions and panel methods. Estimates indicate that a housing transition from renting to owning creates approximately $1300 in measured benefits.     

Women and poverty: Beyond earnings and welfare

Women’s poverty rates are higher than men’s, with single mothers having extremely high poverty rates. This article first briefly examines poverty measures and U.S. poverty rates among men and women. The author then describes and evaluates three categories of economic research on poverty: the lack or inadequacy of employment and earnings; family structure and welfare; and earnings capacities, care-giving responsibilities and employment. Finally the author assesses the policies to alleviate women’s poverty derived from these explanations.     

Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries

This study extended the concept of ‘growth–inequality–poverty (GIP) triangle’ by using the principle component approach which allows us to composite different poverty and inequality indicators into one single index that contains most of the useful information from the original dataset. Using the idea of GIP triangle, this study examines the long-run relationship among weighted poverty index (which comprises headcount ratio, poverty gap and squared poverty gap); weighted inequality index (i.e., Watts Index, Gini Index and MLD Index) and average monthly per capita income in the designated 138 countries according to World Bank’s classification over a period of 2005–2010. The data set mainly contain countries’ unit record household survey at least one which is conducted between the countries during the sample period. The regression model encompassing the impact of economic growth and income inequality on poverty reflects that income inequality increases poverty while economic growth decreases poverty. It indicates that the impact of inequality in increasing poverty is a somewhat greater than that of growth in average income in reducing overall poverty in a sample countries. The other regression model encompassing the impact of economic growth and poverty on income inequality showed that the poverty itself is also likely to be a barrier for poverty reduction; and inequality seems to predict lower future growth rates. The final regression model depicting the impact of poverty and income inequality on mean income of the household suggests that poverty itself reduces mean income of the household while income inequality increases economic growth. The results are interesting and simply suggest that whenever social institutions malfunction, the incidence of damage would usually be distributed unevenly over the society’s members.     

Evidence on the financial characteristics of banks that do and do not use derivatives

While the use of derivatives by U.S. commercial banks has exploded in recent years, the growth has not been evenly distributed. At present, only about five percent of banks are involved in the market for derivatives. Although the concentration of derivatives activities in the largest banks is well known, we know less about other factors underlying a bank’s decision to use derivatives. This article investigates the financial characteristics of banks that use derivatives and those that do not. We find that user banks, compared to nonusers, are associated with riskier capital structures (more notes and debentures and less equity capital), larger maturity mismatches between assets and liabilities, greater net loan charge-offs, and lower net interest margins. We also find that banks, especially smaller ones, benefit from being associated with bank-holding companies. Finally, our evidence does not support a regulatory hypothesis in which banks must have stronger capital positions to engage in derivative activities.JEL Classification: G21, G28, G32     

``Three Can Keep a Secret if Two are Dead' (Lavigne, 1996): Weak Ties as Infiltration Routes

Among several ways of trying to suppress terrorist conspiracies,infiltration has probably received the least attention.Impressionistic evidence suggests that conspiracies that carry outviolent attacks usually have a small number of participants, and thatlarge conspiracies either fail to materialize, fail to organize actualattacks, or are substantially less difficult to uncover. Due to theprevalence of weak social ties in larger groups there may be anintermediate group size, around 7–10 members, that is highly subjectto infiltration. Building on work by Freeman, Granovetter, and others,this study examines a few features of the social ecology ofinteraction ties. We introduce a procedure for counting,within groups of size $n$, all interacting pairs {P, Q},where P and Q are disjoint or nonoverlapping subsets(Freeman, 1992: 153) of a given group; these subsets usually contain more than one person, i.e., the interacting units do not invariably consist of individuals. This procedure generates interaction configurations having unique patterns of strong, weak, and ``weakest' ties – i.e., three levels of tie strength corresponding to core, primary, and secondary ties inFreeman's terminology – such that relatively weak ties predominatewithin larger conspiracies. We speculate about ways in which theseconfigurations may evolve through time.We then use a combinatorial analysisof group structure to develop arough calculation of the probability of infiltrating conspiracies ofsize $n$, and we show that relatively large conspiracies,having 7 or more members, tend to have interaction structures that make them highly vulnerable to infiltration. Finally, Collins' (1985: 170–172) approach to interaction-chain analysis suggests that, while in real situations it would be hard to anticipate departures from our probability model, attempts to ``turn around' conspirators with weak ties appear tohave a fairly high prospect of success.– But the child's sob in the silence– Curses deeper than the strong man in his wrath.– Elizabeth Barrett Browning, ``Cry of the children'     

Henry George, Emile de Laveleye, and the Issue of Peasant Proprietorship

A bstract .   In Emile de Laveleye's demonstration that communal landholding was universally a characteristic of primitive societies, Henry George saw evidence of a golden age before the development of private ownership of land. Though he agreed with George that unequal access to land was a major cause of the social evil of poverty, de Laveleye did not consider it the sole cause of poverty. Where George would nationalize land rent, de Laveleye would make private ownership more widespread; and he faulted George for giving too little attention to the question of how government would use the revenue from a land tax, and for failing to consider the concentration of capital as a cause of poverty.     

Tax-benefit systems and differences in aggregate labour force participation: Comparative evidence from the Czech Republic and Hungary

This paper investigates the extent to which cross-country differences in aggregate participation rates can be explained by differences in tax-benefit systems. We take the example of two countries, the Czech Republic and Hungary, which – despite a lot of similarities – differ markedly in labour force participation rates. Using comparable individual-level labour supply estimates, we simulate how the aggregate participation rate would change in one country if the other country’s tax and social welfare system were adopted. The estimation results for the two countries are quite similar, suggesting that individual preferences are essentially identical in the two countries. The simulation results show that about one-third of the difference in the participation rates of the 15–74 year-old population and more than two-thirds of the participation of the prime-age population can be explained by differences in the tax-benefit systems.