Technology assessment and developing countries

The assessment of technologies may be of great importance to developing countries in their present process of industrialization in the framework of the New International Economic Order. The main criteria for the assessment of the technologies most relevant to the needs of developing countries are reviewed from the point of view of employment, scarce capital, and energy resources. The design of appropriate technologies should take into account the tastes, culture, needs, purchasing power, and raw materials available in developing countries. A systems approach should therefore be used to assess technologies. The programs undertaken by several agencies of the United Nations System are described which may contribute to build up technology assessment capability in developing countries.     

Purchasing Power Parity during Currency Crises: A Panel Unit Root Test under Structural Breaks

We investigate the stationarity of real exchange rates using a panel of Asian and South and Latin American countries by applying a new panel unit root test that is robust to structural breaks due to currency crises. It turns out that the long-run PPP relationship is relevant for the Asian countries, which experienced a flexible exchange rate, whereas for the South and Latin American countries, for which the exchange rate has been pegged to the U.S. dollar for a long time, the PPP relationship breaks down. In Asian countries PPP appears to hold before the 1997 crisis, which is not the case for the South and Latin American countries. This suggests that the Asian flu corresponds to a second-generation type of crises, whereas the 1995 Mexican tequila fits the first-generation models better. JEL no. C13, C33, E41     

Public Policy and Extended Families: Evidence from Pensions in South Africa

How are resources allocated within extended families in developingeconomies? This question is investigated using a unique socialexperiment: the South African pension program. Under that programthe elderly receive a cash transfer equal to roughly twice theper capita income of Africans in South Africa. The study examineshow this transfer affects the labor supply of prime-age individualsliving with these elderly in extended families. It finds a sharpdrop in the working hours of prime-age individuals in thesehouseholds when women turn 60 years old or men turn 65, theages at which they become eligible for pensions. It also findsthat the drop in labor supply is much larger when the pensioneris a woman, suggesting an imperfect pooling of resources. Theallocation of resources among prime-age individuals dependsstrongly on their absolute age and gender as well as on theirrelative age. The oldest son in the household reduces his workinghours more than any other prime-age household member.     

The task ahead for the cities of the developing countries

Between 1975 and the year 2000 the cities of the developing countries will be expected to absorb 70% of the projected population increases — 1.3 billion people — most of them poor. By any measures this is a gargantuan task. This paper examines the causes for the unprecedented growth of urban areas, the magnitude of this growth, and where it is occuring. Although cities are absorbing large numbers of people, they are doing so in a manner that is both inefficient and inequitable. Few cities are prepared for the vast increases that are clearly foreseeable in the next two decades. Unless there are changes in national, regional, and urban policies, the growth of urban areas will not make its maximum possible contribution to social well-being.     

Insurance contracts with imprecise probabilities and adverse selection

Summary. This article deals with optimal insurance contracts in the framework of imprecise probabilities and adverse selection. Agents differ not only in the objective risk they face but also in the perception of risk. In monopoly, a range of configurations that VNM preferences preclude appears: a pooling contract may be optimal, incomplete coverage may be offered to high risks, low risks may be better covered.Received: 1 November 2001, Revised: 15 April 2003, JEL Classification Numbers: D81, D82, G22.Useful suggestions by Emmanuelle Auriol, Bernard Bensaïd, Michéle Cohen, Isaac Meilijson and the anonymous referee are acknowledged. Correspondence to: M. Jeleva     

A cautious note on the use of panel models to predict financial crises

Panel data framework has often been used to build Early Warning Systems for financial crises. This paper questions the implicit assumption that crises are homogenously caused by identical factors. It suggests a preliminary step aiming at forming optimal country clusters.     

Organizational Isomorphism and Corruption in Financial Institutions: Empirical Research in Emerging Countries

The globalizations of capital markets in the last 20 years has led to a historic degree of financial integration in the world. It is clear, however, that globalization is not conducive to a complete homogeneity of financial markets and institutions. Among others, one element of diversity is the importance of the impact of corruption in emerging countries. Corruption decreases the credibility of financial institutions and markets. Scandals and unethical behavior in financial institutions erode confidence in such firms. Relying on neoinstitutional literature, this article focuses on the link between corruption and organizational isomorphism in financial institutions in emerging countries. Therefore, our aim is to examine the institutional reasons for corruption in financial institutions in emerging countries. Our structural equation model is based on empirical research in financial institutions in emerging countries. A questionnaire was administrated to 70 top executives of financial institutions in 18 different emerging countries.     

Parametric and semi-parametric modelling of vacation expenditures

We analyse several limited dependent variable models explaining the budget share that Dutch families spend on vacations. To take account of the substantial number of zero shares, two types of models are used. The first is the single-equation censored regression model. We estimate and test several parametric and semi-parametric extensions of the Tobit model. Second, we consider two-equation models, in which the participation decision and the decision on the amount to spend are treated separately. The first decision is modelled as a binary choice model; the second as a conditional regression. We estimate and test parametric and semi-parametric specifications.