The assessment: contracts and competition

A significant recent development has been the extension of marketprocesses to activities which were previously provided by thepublic sector. A central feature of newly privatised marketsis the emergence of widespread forms of contracting. Explicitcontracting is used where in the past transactions had takenplace internally within a public enterprise of a governmentdepartment. The design of efficient forms of contracting hasbeen an essential component of the development of new marketsand quasi-markets such as those in defence and health. Thispaper examines evidence of the structure of contracts and theextent to which they contribute to or detract from the efficientoperation of markets, discusses the role of contracts in somenewly emerging markets, and evaluates contracts in utilitieswhere regulation rather than competition policy is widespread.     

Fertility and child mortality in Cote d'Ivoire and Ghana.

This article summarizes a 1994 World Bank working paper on methodological issues and a study of the determinants of child mortality and fertility in Ghana and the Cote d'Ivoire. Data were obtained from the 1985, 1986, and 1987 Cote d'Ivoire Living Standards Survey and the 1987-88 and 1988-89 Ghana Living Standards Survey. Both surveys entailed two-stage, self-weighted stratified samples. The study sample included women who had at least one birth 5 or more years before the survey. The conceptual framework distinguishes between endogenous and exogenous variables affecting fertility. The statistical approach relies on parallel reduced-form techniques. Model I assumes that all explanatory variables are exogenous. Model II excludes husbands' characteristics and household composition. Model III assumes that excluded model II factors are exogenous and likely to affect child mortality and fertility. Findings indicate that economic resources of households, maternal education, access to markets, and food prices were associated with child mortality in Ghana. Sanitation in both countries affected child survival only for less educated mothers. Urban residence in Ghana particularly benefitted uneducated mothers. In Cote d'Ivoire, household assets were not a significant predictor of child mortality. When child mortality is treated as exogenous in fertility model I, only 4-15 fewer child deaths were associated with a reduction of only one birth. Local health programs and environment explained little of the variation in child mortality in both countries. Women's education was strongly related to fertility declines in both countries. Assets and maternal health were positively related to fertility in Cote d'Ivoire and negatively related in Ghana. Findings suggest that the negative effects of household assets on fertility apply in urban subsamples among older women in each country. The authors conclude that economic growth must occur simultaneously with increased levels of female education and urbanization.     

Privatisation: Let the Market Decide

Is the Government privatising efficiently? Is it floating the shares in nationalised industry economically? Will British Telecom be under-priced? Professor Davis and Roger Buckland have studied the privatisation issues of shares over five years and found large but avoidable losses. They argue that the Government's marketing technique could be improved by making less use of the large financial institutions and more use of competitive tenders.     

THE RELATIONSHIP BETWEEN FINANCIAL PERFORMANCE AND STOCK MARKET BASED MEASURES OF CORPORATE DIVERSIFICATION

This study examines the relationship between corporate diversification and financial performance. The use of a stock market based measure of diversification allowed a much larger database than in previous studies and overcame the subjective nature of measuring internal diversification. Because previous researchers found that firm size affected performance, size was controlled in this analysis. The authors conclude that there is no statistically significant relationship between the degree of internal diversification and financial performance.     

Falling Behind and Catching Up in a Model of North-South Trade

This paper analyzes a formal, dynamic model of the center-periphery problem. The model features falling relative demand for agricultural goods, a higher rate of technical change in manufacturing, and a quality-differentiated manufactured good. Income differences imply a potential for intra-industry trade, while technical change generates product cycle type results. The main insight is that a closing of the North-South technology gap does not necessarily imply catching up, because of the falling relative demand for agricultural goods. The South catches up only if it exports lower-quality varieties of the manufactured good and closes the technology gap.