SOCIAL SECURITY AND WELL‐BEING IN A LOW‐INCOME ECONOMY: AN APPRAISAL OF THE KERALA EXPERIENCE

The State of Kerala, which is considered to have attained a level of social well‐being comparable to that of advanced countries despite its relatively low income standard, is widely known as an example of “welfare by public intervention” in developing economies. This paper, focusing on the four areas of food provision, health services, elementary education, and pension schemes, and paying attention to the participation of the private sector as well as the activities of political parties and labor unions, points out that in Kerala, the private sector and organized activities have played a vital role, in addition to “public intervention,” in the betterment of public welfare.     

Structural Variations of Agriculture in the Pacific

Agricultural shares of output and employment in thirteen Pacific basin countries are analyzed with reference to a global baseline for 1980. Per-capita output parity ratios are lower in the ASEAN, ANICs, and Japan as compared to their trading partners in North America and Oceania. Wide differences in land-labor ratios influence the directions of technological change, economies of scale, and dynamic comparative advantage. Differential changes in the partial productivities of land and labor between the high and middle income economies suggest that there has been a narrowing of the gap in land productivities and a widening of the gap in labor productivities across the Pacific. The implication is that there has been a regressive international impact on wages for farm labor. Further, since agriculture's share of land resources does not tend to fall as fast as its share of output and labor, increasing structural imbalance in terms of differential land rents to agriculture vis-à-vis non-agriculture results in greater adjustment pressures on the property and derived institutional systems that control natural resource allocation decisions. The results are consistent with the heavy adjustment burdens that agriculture and developing economies have been bearing as a result of expanding trade and capital flows, and the need to focus more attention on the structure, functioning, and performance of the different institutional systems that control resource allocation decisions in these countries.     

权势的价值:党员身份与社会网络的回报在不同所有制企业是否不同?

在市场化改革的进程中,党员身份和社会关系网络作为两种非市场因素,它们对于收入的作用在不同所有制企业有所不同吗?通过对中国家庭收入调查(CHIPS)数据的分析,本文发现:(1)党员身份能显著地提高收入,但党员身份在不同所有制部门的作用并不存在显著差异,并且通过1995年与2002年的数据比较,党员的回报也并未发生显著变化; (2)社会网络在国有单位对收入没有显著影响,但在非国有单位对收入有显著的正影响。     

Effects of Multilateral Trade Liberalization on Prices*

To analyze the effects of simultaneous tariff reductions by multiple importing countries on prices, we construct a simple three‐country model where a good is produced by a monopolist with nonconstant marginal cost and imported by two countries. We compare two representative tariff‐reduction formulas: the “fixed‐amount” and the “uniform percentage” reductions. The uniform percentage reductions may increase the consumer price in the importing country, whose initial tariff is lower. Thus, importing countries with relatively low tariffs may prefer a bilateral trade agreement to a multilateral one to ensure consumer gains.     

Agricultural policy adjustments in the Korean rice economy

A political preference function is used to endogenize government actions in a simultaneous equation model for South Korean rice policy. The effects of economic changes on rice pricing decisions through estimated political weights are tested to improve our understanding of policy adjustments in that country and open the way for further research in East Asia.     

ECONOMIC INTEGRATION AND RULES OF ORIGIN UNDER INTERNATIONAL OLIGOPOLY*

Free trade agreements (FTAs) have rules of origin (ROOs) to prevent tariff circumvention by firms of nonmember countries. This article points out that in imperfectly competitive markets, ROOs have another role overlooked in the existing literature. Instead of focusing on the impacts of ROOs in the intermediate‐good markets, we draw our attention to the final‐good markets to examine the effects of ROOs. We find that under some conditions, ROOs benefit both firms at the expense of consumers. Under some other conditions, ROOs benefit the firm producing outside the FTA and hurt the firm producing inside the FTA.     

An Interest Rate Model with Upper and Lower Bounds

We propose a new interest rate dynamicsmodel where the interest rates fluctuate in a bounded region. The model ischaracterised by five parameters which are sufficiently flexible to reflect theprediction of the future interest rates distribution. The interest rate convergesin law to a Beta distribution and has transition probabilities which arerepresented by a series of Jacobi polynomials. We derive the moment evaluationformula of the interest rate. We also derive the arbitrage free pure discountbond price formula by a weighted series of Jacobi polynomials. Furthermore wegive simple lower and upper bounds for the arbitrage free discount bond pricewhich are tight for the narrow interest rates region case. Finally we show thatthe numerical evaluation procedure converges to the exact value in the limitand evaluate the accuracy of the approximation formulas for the discount bondprices.     

Strategic investments in Japanese corporations: do foreign portfolio owners foster underinvestment or appropriate investment?

This paper investigates the effect of foreign ownership on strategic investments in Japanese corporations. Foreign owners are typically portfolio investors who frequently buy and sell shares and hold diversified portfolios of small stakes in many firms. Prior research has presented two conflicting perspectives on the role of such investors: (a) their frequent trading leads to pressure for short‐term returns that fosters underinvestment; (b) their active trading fosters appropriate investments. We investigated the relationship between foreign ownership and strategic investments using dynamic panel data analysis of a sample of 146 Japanese manufacturing firms from 1991 to 1997. We found that foreign ownership enhances strategic investments (in R&D and capital intensity) to a greater extent when firms have growth opportunities than when they lack such opportunities. We conclude that foreign ownership fosters appropriate investment. Copyright © 2006 John Wiley & Sons, Ltd.     

Anticipatory effects of voluntary export restraints: a study of home video cassette recorders market, 1978-86

This paper investigates the impact of voluntary export restraints (VERs) at the pre-implementation stage when exporters have a good prospect for the VERs. Distinctive features of the VCR market in 1978-86 provide a testable hypothesis to analyze the effect of the EC-Japan VERs, which were implemented in the fiscal years of 1983-85. The paper finds consistent evidence that the VERs affected firms’ pricing behavior in the U.S. market prior to the VER period, as a result of Japanese exporters’ anticipation of the VERs.