Sites and Services--and Subsidies: The Economics of Low-Cost Housing in Developing Countries

Sites and services projects represent a major innovation inshelter policy in developing countries and have been sponsoredby international aid agencies for somewhat more than a decade.Such government projects deliver a package of shelter-relatedservices, the standards of which depend on the ability and willingnessto pay of intended beneficiaries. Typically, such projects representa sharp break with preexisting government shelter policies inthat they attempt, in principle, to focus directly on lower-incomegroups and to deliver shelter and services with small or nosubsidies. This article describes the background of the sitesand services concept; reviews recent evaluations of sites andservices projects; presents an analytical model of the sitesand services paradigm (which is used to examine how major projectoutcomes are influenced by project design); summarizes recentresearch on housing demand in developing countries (which isrelevant to designing appropriate sites and services projects);reviews planning assumptions used in World Bank sites and servicesprojects; compares these assumptions with empirical evidenceon willingness to pay for housing; and examines project experiencein light of contrasts between actual planning assumptions andempirical research on demand for shelter. The article concludeswith suggestions for ways to improve the project design processand reform housing sector policies to increase the efficacyof the sites and services paradigm.     

Exchange Rate Policy and Sovereign Bond Spreads in Developing Countries

This paper analyzes how exchange rate policy affects the issuance and pricing of sovereign bonds for developing countries. We find that countries with less flexible exchange rate regimes pay higher spreads and are less likely to issue bonds. Changing a free‐floating regime to a fixed regime decreases the likelihood of bond issuance by 5.5% and increases the spread by 88 basis points on average. Countries with real overvaluation have higher spreads and higher bond issuance probabilities. The effects of real overvaluation on sovereign bonds tend to be magnified for countries with fixed exchange rate regimes.     

Housing Segmentation in Developing Countries in Transition: A Recent Case Study of Residential Development in Bangkok

This article utilizes case study research of the residential market in Bangkok to investigate residential development and market segmentation in developing countries with emerging market economies. The article first considers the process of economic reform and transformation before examining the entrepreneurial, legal, and institutional environments in Thailand and evaluating the pattern of urban growth in Bangkok. Segmentation studies are then presented by product type, price level, and spatial distribution before conclusions from the case study are generalized to developing countries in transition.     

发达国家发展低碳经济的财政政策及其经验借鉴

随着资源环境与人类社会发展的矛盾日益突出,强调以减少温室气体排放为主的低碳经济迅速成为发达国家应对全球气候变化而提出的新的经济发展模式。中国作为世界上二氧化碳排放最多的国家,研究发达国家发展低碳经济的各种财政政策,并据此来指导我国的低碳经济发展,显得尤为重要。     

Housing and Tax Policy

This paper investigates the effects of housing‐related tax policy measures on macroeconomic aggregates using a dynamic general‐equilibrium model featuring borrowing and lending across heterogeneous households, financial frictions in the form of collateral constraints tied to house prices, and a rental housing market alongside owner‐occupied housing. We analyze the effects of various tax policies and find that they all lead to significant output losses, with large long‐run tax multipliers of around 2. Among them, reducing the mortgage interest deduction is the most effective in raising tax revenue per unit of output lost, whereas reducing the depreciation allowance for rental income is the least effective.     

Saving in Developing Countries: An Overview

This article reviews the current state of knowledge on the determinantsof saving rates, presenting the main findings and contributionsof the recently completed World Bank research project, ‘SavingAcross the World.’ The article discusses the basic designof the research project and its core database, the World SavingDatabase. It then summarizes the main project results and placesthem in the context of the literature on saving, identifyingthe key policy and nonpolicy determinants of private savingrates. Special attention is paid to the relationship betweengrowth and saving and the impact of specific policies on savingrates. The article concludes by introducing the studies includedin this special issue.     

Urbanization in Developing Countries

The rapid urbanization in many developing countries over thepast half century seems to have been accompanied by excessivelyhigh levels of concentration of the urban population in verylarge cities. Some degree of urban concentration may be desirableinitially to reduce inter- and intraregional infrastructureexpenditures. But in a mature system of cities, economic activityis more spread out. Standardized manufacturing production tendsto be deconcentrated into smaller and medium-size metropolitanareas, whereas production in large metropolitan areas focuseson services, research and development, and nonstandardized manufacturing.The costs of excessive concentration (traffic accidents, healthcosts from exposure to high levels of air and water pollution,and time lost to long commutes) stem from the large size ofmegacities and underdeveloped institutions and human resourcesfor urban planning and management. Alleviating excessively highurban concentration requires investments in interregional transportand telecommunications to facilitate deconcentration of industry.It also requires fiscal deconcentration, so that interior citiescan raise the fiscal resources and provide the services neededto compete with primate cities for industry and population.      

Capital Structures in Developing Countries

This study uses a new data set to assess whether capital structure theory is portable across countries with different institutional structures. We analyze capital structure choices of firms in 10 developing countries, and provide evidence that these decisions are affected by the same variables as in developed countries. However, there are persistent differences across countries, indicating that specific country factors are at work. Our findings suggest that although some of the insights from modern finance theory are portable across countries, much remains to be done to understand the impact of different institutional features on capital structure choices.     

Brain Drain in Developing Countries

An original data set on international migration by educationalattainment for 1990 and 2000 is used to analyze the determinantsof brain drain from developing countries. The analysis startswith a simple decomposition of the brain drain in two multiplicativecomponents, the degree of openness of sending countries (measuredby the average emigration rate) and the schooling gap (measuredby the education level of emigrants compared with natives).Regression models are used to identify the determinants of thesecomponents and explain cross-country differences in the migrationof skilled workers. Unsurprisingly, the brain drain is strongin small countries that are close to major Organisation forEconomic Co-operation and Development (OECD) regions, that sharecolonial links with OECD countries, and that send most of theirmigrants to countries with quality-selective immigration programs.Interestingly, the brain drain increases with political instabilityand the degree of fractionalization at origin and decreaseswith natives' human capital.     

Macroeconomic Volatility and Welfare in Developing Countries: An Introduction

Macroeconomic volatility, both a source and a reflection ofunderdevelopment, is a fundamental concern for developing countries.Their high aggregate instability results from a combinationof large external shocks, volatile macroeconomic policies, microeconomicrigidities, and weak institutions. Volatility entails a directwelfare cost for risk-averse individuals, as well as an indirectone through its adverse effect on income growth and development.This article provides a brief overview of the recent literatureon macroeconomic volatility in developing countries, highlightingits causes, consequences, and possible remedies. It then introducesthe contributions of a recent conference on the subject, sponsoredby the World Bank and Pompeu Fabra University, Barcelona.     

我国住房市场的发展状况和政策建议

2004年以来,商品住宅市场发展中的各种问题引起了社会各界的广泛关注。住宅产业是国民经济的主导性支柱产业,它的发展状况,影响着几十个产业部门、上万种产品的发展,因此,正确认识我国住房市场发展状况、选择合适的政策,对于保障经济的可持续发展、创建和谐社会都具有至关重要的意义。作者从我国住宅市场发展的基本状况入手,揭示了住宅市场发展中的金融风险,最后对发展我国商品住宅市场提出了一系列的政策建议。     

Household Saving in Developing Countries: First Cross-Country Evidence

Although most studies have relied on domestic or private sectorsaving data, this article uses household data available fromthe U.N. System of National Accounts for a sample of 10 countries.Household saving functions are estimated using combined time-seriesand cross-country observations in order to test households'responses to income and growth, rates of return, monetary wealth,foreign saving, and demographic variables. The results showthat income and wealth variables affect saving strongly andin ways consistent with standard theories. Inflation and theinterest rate do not show clear effects on saving, which isalso consistent with their theoretical ambiguity. Foreign savingand monetary assets have strong negative effects on householdsaving, which suggests the importance of liquidity constraintsand monetary wealth in developing countries.     

Macroeconomic Fluctuations in Developing Countries: Some Stylized Facts

This article documents the main stylized features of macroeconomicfluctuations for 12 developing countries. It presents cross-correlationsbetween domestic industrial output and a large group of macroeconomicvariables, including fiscal variables, wages, inflation, money,credit, trade, and exchange rates. Also analyzed are the effectsof economic conditions in industrial countries on output fluctuationsin the sample developing countries. The results point to manysimilarities between macroeconomic fluctuations in developingand industrial countries (procyclical real wages, countercyclicalvariation in government expenditures) and some important differences(countercyclical variation in the velocity of monetary aggregates).Their robustness is examined using different detrending procedures.     

Small Manufacturing Enterprises in Developing Countries

Emphasis is often placed on the promotion of small enterprisesin developing countries, particularly as a means of improvingthe lot of unskilled workers. This focus raises questions aboutthe relationship between establishment size and the patternand efficiency of factor use, and about the nature and effectsof price differentials in factor markets. This article goessome way toward answering these questions with data from surveysof small manufacturing enterprises in India and Colombia sponsoredby the World Bank and relevant material from other countries.The article also examines India's long-standing policy, unusualamong developing countries, of providing special support andprotection for small enterprises. Analyses based on disaggregateddata found that small firms are not reliably more labor-intensivethan their larger counter-parts; nor are they consistently moretechnically efficient in their use of resources. In light ofthese findings and an analysis of factor markets, this articlediscusses the general implications of the research results forindustrial policy in developing countries.     

发展中国家的国有经济改革

伴随发达国家国有经济改革,发展中国家针对本国国有经济存在的弊端也掀起了改革浪潮。改革的核心是产权的私有化。实践表明,私有化不是万能的,政府在经济发展中的干预作用不可削弱。国有经济改革的出路不只是私有化,更重要的是理顺产权关系,改革治理结构,提高管理水平。     

Personal Income Taxes in Developing Countries

Comparative work on income taxes in developing countries hascommonly looked at average tax rates. These rates are oftenconstructed by dividing revenue collections by some measureof private or personal income. Recent controversies have, however,focused on the incentive effects of marginal tax rates. Thisarticle develops and applies a simple methodology to comparemarginal official tax rates across a sample of fifty developingcountries. As would be expected given differences in fiscalcapacity, the poorest and the lower-middle-income countriesimpose relatively low marginal rates, and the rates for theupper-middle-income and developed countries are higher. Conversely,several low-and lower-middle-income countries' tax thresholdsstart at income levels which are low relative to their meanincome when compared with those of developed countries. Theresults warn against trying to derive information on the disincentiveeffect of a country's tax schedule from the highest marginalrate; our data show that this is not an accurate indicator ofoverall disincentive effects.     

Genuine Savings Rates in Developing Countries

Augmented measures of savings and wealth in the national accountsare critical to conceptualizing and achieving sustainable development.After developing the theory of genuine savings—traditionalnet savings less the value of resource depletion and environmentaldegradation plus the value of investment in human capital—thisarticle presents empirical estimates for developing countries.These calculations account for resource depletion and carbondioxide emissions, using consistent time series data for 1970–93.The empirical evidence shows that levels of genuine savingsare negative in a wide range of countries, particularly in Sub-SaharanAfrica, and that these countries are being progressively impoverished.Increasing the coverage of natural resources and pollutantsin our calculations would reduce the estimated levels of genuinesavings overall. The use of genuine savings measures suggestsa series of policy questions that are key to sustaining development.These are also explored, specifically the extent to which monetaryand fiscal policies, exports of exhaustible resources, strongerresource policies, and pollution abatement measures boost genuinesavings rates. For policymakers, linking sustainable developmentto genuine savings rates means that there are many possibleinterventions to increase sustainability, from the macroeconomicto the purely environmental.     

Regulation in Housing Finance: Bringing Theory to Policy*

The Journal of Real Estate Finance and Economics -     

Infrastructure and Public Utilities Privatization in Developing Countries

Should governments in developing countries promote private ownershipand deregulated prices in noncompetitive sectors? Or shouldthey run publicly owned firms and regulate prices at the expenseof rents to insiders? A theoretical model is used to answerthese normative questions. The analysis focuses on the tradeoffbetween fiscal benefits and consumer surplus during privatizationof noncompetitive sectors. Privatization transfers control rightsto private interests and eliminates public subsidies, yieldingbenefits to taxpayers at the cost of increased prices for consumers.In developing countries, where budget constraints are tight,privatization and price liberalization may be optimal for lowprofitability industries but suboptimal for more profitableindustries. And once a market has room for more than one firm,governments may prefer to regulate the industry. Without a credibleregulatory agency, regulation is achieved through public ownership.