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GDN FUNDED PAPERS
Diffusion of BITs vs. policy space: A comparison between Latin America and Asian countries
Project : Awards and Medals Competition (AMC)
Author : Leonardo Stanley
Date : 2006
Description : From a development perspective, the signature of bilateral investment treaties (BITs) always limits the degrees of freedom for national policy. In spite of the generalization of the bilateral scheme, the governments’ attitudes towards them are far from homogeneous, suggesting that a strategic stance toward BITs signature may be crucial. If the room for differentiation and strategic decisions before signing BITs is substantial, then we would expect a large variability in terms of commitments included in the clauses of the BITs signed and ratified. This is tested by comparing the BITs signed by Latin American and Asian countries.
Does public health insurance secure access to care? economic and non-economic barriers to prenatal care among Peruvian mothers: race, geography and power relations within the household
Project : Awards and Medals Competition (AMC)
Author : Miguel Jaramillo
Date : 2006
Description : This study whether non economic barriers may be limiting access to basic health services by Peruvian mothers, particularly those in poverty. Specifically, it investigates geographic, race, and within-household gender relations barriers. The implementation of the Mother Infant public insurance (SMI) provides this study with a natural experiment, whereby the economic barrier to health care utilization is significantly reduced. Within this setting we can assess: (1) whether economic factors other than user-fees are associated with lack of access, and (2) whether non-economic barriers prevent utilization.
The role of hospital competition on treatment expenditure and outcome: Evidence from stroke treatment in Taiwan
Project : Awards and Medals Competition (AMC)
Author : Hsienming Lien, Jin-tan Liu and Shin-yi Chou
Date : 2006
Description : This paper examines whether market competition affects treatment expenditure and health outcome of stroke treatment in Taiwan. Our measure of treatment expenditure is the hospital expenditure paid at the index admission (short-term) and the sum of inpatient and outpatient expenditures paid in the subsequent year (long-term). Our measure of health outcome is the probability of death in 1 and 12 months after the hospital’s discharge. Our measure of competition is the conventional “variable radius” HHI index calculated at 75 percentile. Using data of patients hospitalized for new stroke treatment between 1997 and 2001 in Taiwan, we find that market competition results in insignificant impacts on health outcome, either measured by 1 or 12 months survival rates. In terms of treatment expenditure, our results indicate that hospitals facing more competition incur higher inpatient expenditures, but the increase is smaller or even insignificant for the long-term expenditure. Contrary to the MAR hypothesis arguing hospitals compete through the provision of inefficient medical technology, we find the higher inpatient expenditure is not driven by the increase of treatment intensity or the use of expensive medical technology such as CT or MRI, but by the increase in the patient’s length of stay.
Grassroots democracy and income distribution: Evidence from village election in China
Project : Awards and Medals Competition (AMC)
Author : Shen Yan and Yang Yao
Date : 2006
Description : Using village and household survey data collected from 48 villages of eight Chinese provinces for the period 1986 – 2002, this paper studies how the introduction of village election affects income distribution at the village level. We estimate both a static fixed-effect panel model and a dynamic panel model and take care of the endogeneity of the election. The result of the dynamic panel model shows that election has a direct (marginal) effect to reduce the within-village Gini coefficient by 0.033, or 11.8% of the sample average. We also find in dynamic panel models that election does not increase the level and the progressiveness of net transfer income received by households. On the other hand, we find that election increases per-capita public investment. So election’s positive role in reducing income inequality is not caused by pro-poor income redistribution, but by more public investment.
Institutional incompatibility and deregulation: explaining the dismal performance of Kenya\'s coffee cooperatives
Project : Awards and Medals Competition (AMC)
Author : Andrew Mude
Date : 2006
Description : This paper highlights the susceptibility of Kenyan coffee cooperatives to capture by corrupt and opportunistic members and identifies certain features of the underlying institutional environment that facilitates rent-seeking behavior. The lack of a formal regulatory structure with credible enforcement mechanisms, the presence of informal electoral practices conducive to vote -buying, and the legal support for local monopsonies that facilitates exploitive pricing all contribute to the dismal Performance of Kenya’s coffee cooperatives . Using a data set of more than 200 coffee farmers representing nine cooperatives, we find a statistically significant relationship between cooperatives empirically determined to be corrupt and high levels of technical inefficiency in coffee production among their members.
The China phenomenon: price, quality, or variety?
Project : Awards and Medals Competition (AMC)
Author : Sebastian Claro and Roberto Alvarez
Date : 2006
Description : We use highly-disaggregated import data from Chile between 1990 and 2005 to decompose China’s importpenetration. China’s export growth is mainly explained by an increase in the quality of its varieties relative to those from the rest of the world, which raises demand for Chinese varieties as well as increases the number of varieties produced in China. Although Chinese products are cheaper than those from the rest of the world, the small decline in the relative price of Chinese varieties has a negligible contribution to explain China’s export penetration. This pattern is more relevant for products with highly-differentiated varieties, where the decline in Chinese prices – which reflects a significant improvement in productivity in those sectors – is accompanied by a significant increase in quality. Conversely, there is no significant change in the relative quality of products with high elasticity of substitution. These results suggest that changes in quality are closely related to productivity improvements in China’s differentiated-product industries, widening the scope of varieties produced in China. This has important implications for China’s ability to sustain high export growth and for the ability of third countries to confront China’s competition.
The impact of imports from China and India in factor adjustment in the Uruguayan manufacturing sector
Project : Awards and Medals Competition (AMC)
Author : Carols Casacuberta and Nestor Gandelman
Date : 2006
Description : The main purpose of the paper is to investigate how manufacturing firms cope with changing business environment in a country undergoing a political transition. We focus on firm growth and survival with a particular interest to investigate factors beyond firms’ decision to exit from formal sector. In the context of the perceived worsening business climate in Indonesia some firms may choose to become less visible or less formal to enter the informal sector to avoid harassment from government officials, to escape from labor regulation, and to avoid paying local tax and levies which become common after the country went from relatively an authoritarian regime to more democratic one. With democratization many previously repressed interest groups emerge, which causes the fragmentation of economic policy making. Among new players are labor unions and local governments that demand a greater share of the national wealth. In the process firms have to face new rigid labor regulations, to pay more taxes and bribes to local governments. From the point of view of public finance the more firms choose to go ‘informal’ means the greater loss of potential tax revenues. We estimate a probabilistic model where the firm likelihood of becoming smaller status is influenced by firm characteristics, district level variables like bureaucratic harassment, bribery, and the horizon of the local bureaucrats. We also examine the role of FDI firms in affecting firm growth and survival. FDI firms in Indonesia appear to have positive impact on domestic firms’ performance.
Evo, Pablo, Tony, Diego, and Sonny
Project : Awards and Medals Competition (AMC)
Author : Romulo Chumacero
Date : 2006
Description : This paper presents a general equilibrium model for the production, trafficking, and consumption of illegal drugs which endogenously determines relative prices and quantities.The model is calibrated to characterize the market for cocaine and is used to analyze the effects of three types of policies: making the illegal activities riskier, increasing the penalties for conducting illegal activities, and legalizing previously illegal activities. Assessing the effects of these policies using the powerful tool of a general equilibrium model provides illuminating (and in cases surprising) results.
Remittances and poverty in Mexico: a propensity score matching approach
Project : Awards and Medals Competition (AMC)
Author : Alejandra Huerta-pineda and Garardo Esquivel
Date : 2006
Description : In this paper we investigate the effect of remittances on poverty condition among Mexican households. We use three alternative officially defined) measures of poverty in Mexico (food-based, capabilities-based and assets-based) in order to evaluate the impact of remittances on poverty. We use a propensity score approach to match remittance receiving households with households that have similar characteristics but that do not receive remittances. We find that receiving remittances (regardless of the amount) reduces a household’s probability of being in food-based and in capabilities-based poverty in 8 and 6 percentage points, respectively. If the remittance senders resemble the Mexican population, this effect is equivalent to a reduction of around 50 and 30% in the corresponding poverty rates for remittance receiving households vis á vis non remittance receiving households.However, receiving remittances does not seem to affect the p robability of being in assets-based poverty. In that sense, remittances help to reduce the level and depth of poverty, but only up to a certain point.
Manufacturing growth in a country undergoing political transition
Project : Awards and Medals Competition (AMC)
Author : Ari Kuncoro
Date : 2006
Description : The main purpose of the paper is to investigate how manufacturing firms cope with changing business environment in a country undergoing a political transition. We focus on firm growth and survival with a particular interest to investigate factors beyond firms’ decision to exit from formal sector. In the context of the perceived worsening business climate in Indonesia some firms may choose to become less visible or less formal to enter the informal sector to avoid harassment from government officials, to escape from labor regulation, and to avoid paying local tax and levies which become common after the country went from relatively an authoritarian regime to more democratic one. With democratization many previously repressed interest groups emerge, which causes the fragmentation of economic policy making. Among new players are labor unions and local governments that demand a greater share of the national wealth. In the process firms have to face new rigid labor regulations, to pay more taxes and bribes to local governments. From the point of view of public finance the more firms choose to go ‘informal’ means the greater loss of potential tax revenues. We estimate a probabilistic model where the firm likelihood of becoming smaller status is influenced by firm characteristics, district level variables like bureaucratic harassment, bribery, and the horizon of the local bureaucrats. We also examine the role of FDI firms in affecting firm growth and survival. FDI firms in Indonesia appear to have positive impact on domestic firms’ performance.
 
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