The origins of structuralism

Starting out from I. M. D. Little's recent categorization of development economics as ‘neo-classical versus structuralist’, this article makes three points. First, it traces the origins of structuralism in this broad sense in the emergence of the doctrine of market failure in England during the 1930s and 1940s. Secondly, it indicates the links between this line of thought and the Latin American structuralist theory of inflation. Finally, it takes up W. A. Lewis's suggestion that the severity of the inflation problem in Chile was due not so much to structural factors which it had in common with much less inflation-prone LDCs but rather to the strength of organized interest groups making competing income claims.     

Book Reviews

Stephan Haggard (2000), The Political Economy of the Asian Financial Crisis, Institute for International Economics, Washington DC, pp. xvii + 272.

Colin Barlow (ed.) (1999), Institutions and Economic Change in Southeast Asia: The Context of Development from the 1960s to the 1990s, Edward Elgar, Cheltenham, pp. xi + 204.

Asian Policy Forum, Asian Development Bank Institute (Forum Secretariat) (2000), Policy Recommendations for Preventing Another Capital Account Crisis, Asian Development Bank Institute, Tokyo, pp. ii + 16.

Masaru Yoshitomi and Sayuri Shirai (2000), Technical Background Paper for Policy Recommendations for Preventing Another Capital Account Crisis, Asian Development Bank Institute, Tokyo, pp. ii + 85.     

Globalization and economic development

A feature of the continuing integration of the world economy is the globalization of production and the consequent rise of trade in parts and components. Products are more internationalized and less identified with any particular country. Non-trivial shares of the value-added of many exports consist of imports and vice versa. Extension of the international division of labour beyond finished products offers developing countries a broader range of choices for industrialization. This paper explores the implications of these developments in the context of a standard trade model. Component specialization in a developing country's import sector is shown to be superior in overall welfare terms to specialization in the integrated product. Output and employment are higher in the sector, but the wage-rental ratio is lower.     

Poverty Reduction and Economic Structure: Comparative Path Analysis for Mozambique and Vietnam

While economic growth generally reduces income poverty, there are pronounced differences in the strength of this relationship across countries. Typical explanations for this variation include measurement errors in growth–poverty accounting and different compositions of economic growth. We explore the additional influence of economic structure in determining a country's growth–poverty relationship and performance. Using structural path analysis, we compare the experiences of Mozambique and Vietnam—two countries with similar levels and compositions of economic growth but divergent poverty outcomes. We find that the structure of the Vietnamese economy more naturally lends itself to generating broad‐based growth. A given agricultural demand expansion in Mozambique will, ceteris paribus, achieve much less rural income growth than in Vietnam. Inadequate education, trade and transport systems are found to be more severe structural constraints to poverty reduction in Mozambique than in Vietnam. Investing in these areas can significantly enhance the effectiveness of Mozambican growth to reduce poverty.     

The ��Teachability Dilemma�� of entrepreneurship

Important factors that determine the emergence of new start-ups are the existence of the individuals’ entrepreneurial motivation, knowledge and skills. Entrepreneurship education (EE) seems to play an important role in developing these attributes. However, a fundamental question still remains: is entrepreneurship really teachable? The article, conceptual in nature, offers a survey about the scientific discussion on the teachability of entrepreneurship and comes out with a phenomenon, which we call ‘Teachability Dilemma’. The insights lead us to claim that future EE should desist from simply teaching knowledge on business creation and rather focus on experiencing entrepreneurship.     

Grain transport and rural credit in Mozambique: solving the space–time problem

This paper shows how credit market failures can lead to large welfare losses in grain markets by inducing increased transport for seasonal storage in locations with low credit costs. The burden of these welfare losses falls primarily on rural households. These conclusions are obtained from a spatial/temporal model solved using a mixed complementarity formulation that easily handles interest rate differentials across space. Efforts to address credit market failures and to improve the efficiency of rural storage should be given priority as opposed to the creation of large, formal sector grain collection centers.     

Bridging the Gap between Partial and Total Factor Productivity Measures Using Directional Distance Functions

Technical dependencies as well as data constraints limit our ability to allocate inputs across sectors and hence our ability to measure sectoral productivity. We adapt a directional measure of efficiency to the measurement of sector-specific productivity that does not require allocating all inputs across sectors. Applied to the agricultural sector of a group of countries, the results show important differences in livestock and crops productivity growth. Commonly used partial factor productivity measures for livestock and crops tend to overestimate productivity growth in most developing countries while underestimating it in European countries.