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GDN FUNDED PAPERS
Paths of development, specialization, and natural resources abundance
Project : Awards and Medals Competition (AMC)
Author : Rodrigo J Fuentes, Roberto Alvarez
Date : 2006
Description : "This paper addresses three main questions; how can a country specialized in primary goods become an exporter of manufacturing goods? How does factor abundance affect the possibilities of achieving comparative advantages in manufactures? Does the type of natural resource abundance make any difference to the path of development? Based on factor-endowment-driven specialization, we study the trade patterns along the paths of development (defined as capital accumulation) for a large sample of countries in the last four decades. Consistently with the idea that countries are located in different cones of diversification, we find that net exports are a nonlinear function of the capital/labor ratio of the economy. The pattern of gaining comparative advantages in manufacturing goods as a country develops depends not only on whether it is natural resource abundant or not, but also on its type of natural resources abundance. This paper shows that mineral-abundant countries are positioned in a diversification cone with low levels of capital per worker and they are net importers of all manufacturing goods. In contrast to countries with comparative advantages in forestry and Agricultural products, mining countries are the least likely group to change their specialization pattern towards manufacturing goods. On the other hand when we use human capital instead of physical, we find that mineral abundant countries will move to a cone where they produce and export capital intensive manufactures. The forest abundant countries will attain comparative advantages in machinery as they accumulate human capital. Looking at the mineral abundant countries we find some differences in the path of development for oil exporters and non-oil exporters."
Evaluating public health insurance. the case of Buenos Aires province
Project : Awards and Medals Competition (AMC)
Author : Daniel Maceira and Sofia Olaviaga
Date : 2005
Description : In Argentina, the public health system is deeply decentralized and organized mainly at the provincial level, with the exception of some funds and programs controlled by the federal government. Each district authority chooses its health priorities and manages its own provider network. Provinces set the budgets of these authorities based upon past levels of funding, without reference to measures of performance. Due to these inefficiencies, the public health system is the provider of last resort for those without formal health coverage, rather than meeting its goal of providing health care to the entire population. Over the past few years, Argentina has undergone a severe economic crisis that reduced its capacity to provide social services, associated with the growth of the informal, rising levels of underemployment and unemployment, escalating poverty and substantial changes in the country’s development model. This socio-economic context has restricted access to healthcare. In addition, a large proportion of the population has experienced a fall in living standards, with severe consequences for public health. Even though the last few years have seen a slight improvement in public health indicators, great disparities remain among provinces and social groups. The province of Buenos Aires reflects these national trends. In this context, during the year 2000, one of the responses provided by the Buenos Aires Health Ministry was the creation of a Provincial Public Health Insurance program, aimed at guaranteeing access and ensuring the quality of health services for the population without formal health coverage or the economic resources to afford it. In this framework, this first chapter intends to describe the context in which the PHIP developed, its background, as well as the different stages it went through (2000-2006). Finally, the chapter exposes a brief description of the PHIP’s institutional structure (objectives, organization and operational structure, target population, financial structure, beneficiaries’ incorporation system, service package, human resources, evaluation and monitoring, among others).
Role of watershed institutions in mitigating poverty: an economic analysis of determinants and impact of self-help groups (SHGs) institutions across activities in micro watersheds
Project : Awards and Medals Competition (AMC)
Author : Suresh Kumar Devarajulu
Date : 2005
Description : Institution building is now recognized as vital for poverty reduction across the world. This study focuses on the role of Self-Help Groups (SHGs) in mitigating poverty in southern India and attempts to understand the factors underlying the successful functioning of these institutions. Specific objectives include a study of: (i) SHG activities across different activities in micro watersheds, (ii) the importance of the condition of watersheds on the functioning of SHGs, (iii) the household level and contextual factors which determine the women’s participation in SHGs, and (iv) the impact of SHG participation on household income, food availability and poverty reduction. The study is based on both secondary and primary data collected from 75 SHGs and 750 rural households in the district of Coimbatore in the south-Indian state of Tamil Nadu, India. The study finds considerable variation in the functioning and performance of groups across activities and regions. An analysis of factors determining the functioning of the SHGs reveals that the income generated by SHGs depends on the age of the group, the educational level of the SHG leader, age diversity of the group members, type of activities and condition of the watersheds. This suggests that in addition to the group characteristics, the type of activities and the contextual factors are significant for better functioning of the groups. Thus, the State agencies should ensure that the group is formed for activities which generate adequate resources. The issue of optimal group size has been debated for a long time among development personnel and policy makers particularly for the institutions involved in poverty reduction and natural resources management. As expected, our study finds that the possibility of functioning of group for long time (i.e. the age of the SHG) decreases as group size increases. The age of SHGs is significantly influenced by the group size. Further, the case study analysis suggests that better performance of the group is ensured and sustained to some extent when group size is 12 members. This allows for monitoring of individual actions but also makes it possible to have enough members to perform different activities. The results imply that the better managed watersheds with good cropping patterns, and water resources enable the rural labour households not only to get adequate employment but also to participate in other income generation activities and group savings through SHGs. Activities such as goat rearing and cattle rearing are found to be profitable. As these are allied agricultural activities, better managed watersheds have a positive impact on the functioning of these groups. Since the management and maintenance of watersheds are in the hands of other watershed organizations like User Groups, Watershed Committees, Watershed Associations, and village panchayats, the State should ensure the involvement of these organizations in managing and maintenance of watersheds both during and post project periods. The role of SHGs in watershed management is found to be rather limited. As the members of these SHGs directly or indirectly dependent on watersheds for their livelihood, the SHGs should be encouraged to participate in watershed management activities in different phases of implementation. The SHGs should be involved in planning, implementation and maintenance of watersheds and the SHGs should go in hand with the other watershed organizations like User Groups, Watershed Committee, Watershed Associations and Village Panchayats. The study suggests a policy focus on the development of infrastructure in the rural areas, women’s empowerment through ensuring literacy, and steps towards ensuring the sustainability of watershed institutions. Overall, SHG participation has a significant effect on household welfare in many ways. The quantity and quality of food consumed, the health of household members, and children’s education have all improved. Thus, the institution building contributes greatly to poverty reduction in rural India and continuing public support for the expansion of these SHGs appears warranted.
Property rights for the poor: effects of land titling
Project : Awards and Medals Competition (AMC)
Author : Sebastian Galiani and Ernesto Schargrodsky
Date : 2005
Description : Secure property rights are considered a key determinant of economic development. The evaluation of the causal effects of land titling, however, is a difficult task as the allocation of property rights is typically endogenous. We exploit a natural experiment in the allocation of land titles to overcome this identification problem. More than twenty years ago, a group of squatters occupied a piece of land in a poor suburban area of Buenos Aires. When the Congress passed a law expropriating the land from the former owners with the purpose of entitling it to the occupants, some of the original owners accepted the government compensation, while others are still disputing the compensation payment in the slow Argentine courts. These different decisions by the former owners generated an allocation of property rights that is exogenous in equations describing the behavior of the squatters. We find that entitled families increased housing investment, reduced household size, and improved the education of their children relative to the control group. However, effects on credit access are modest and there are no effects on labor income.
Public support for water supply reforms in unplanned sector: empirical evidence from an urban water utility
Project : Awards and Medals Competition (AMC)
Author : Venkatesh Dutta
Date : 2005
Description : As water is a politically volatile good apart from serving as an economic and merit good,the efficient allocation has been elusive both in the short and long run. The urban governments have evaded successive tariff hike for a long time, accumulating great financial losses and bringing the utility virtually to the brink of collapse. The unplanned sector of India’s capital city has an enormous backlog in the provision of reliable water supplies to its population, which is further exacerbated by the growing number of informal urban settlements. In this context, contingent valuation method (CVM) is applied to evaluate a policy of providing better water supply with improved quality and reliability in unplanned settlements of Delhi. Willingness to Pay (WTP) questions are used to value a specific outcome of a policy intended to assure a reliable water supply that has no health risk of contamination. The estimation from linear utility models assert that the proposed changes would provide positive net benefits to customers who are otherwise incurring considerable amount of ‘coping cost’ in the absence of a reliable water supply. The results provide the evidence from unplanned settlements that households' willingness to pay for improved water services is much higher than their current water bills. The indirect cost of unreliable supply to customers is found to be Rs 259 (2.97 US$)1 per month per household - 4.6 times the average monthly water bill paid to the public water utility. In addition to the current average monthly water bill of Rs 56 (1.29 US$), a domestic customer in unplanned areas is willing to pay Rs 101 (2.33 US$) extra for securing a reliable water supply. These findings have important policy implications for gauging public support for water supply improvements in infrastructurally disadvantaged households including institutional reforms conducive to pro-poor growth.
Public support for water supply reforms in unplanned sector: empirical evidence from an urban water utility
Project : Awards and Medals Competition (AMC)
Author : Venkatesh Dutta
Date : 2005
Description : As water is a politically volatile good apart from serving as an economic and merit good,the efficient allocation has been elusive both in the short and long run. The urban governments have evaded successive tariff hike for a long time, accumulating great financial losses and bringing the utility virtually to the brink of collapse. The unplanned sector of India’s capital city has an enormous backlog in the provision of reliable water supplies to its population, which is further exacerbated by the growing number of informal urban settlements. In this context, contingent valuation method (CVM) is applied to evaluate a policy of providing better water supply with improved quality and reliability in unplanned settlements of Delhi. Willingness to Pay (WTP) questions are used to value a specific outcome of a policy intended to assure a reliable water supply that has no health risk of contamination. The estimation from linear utility models assert that the proposed changes would provide positive net benefits to customers who are otherwise incurring considerable amount of ‘coping cost’ in the absence of a reliable water supply. The results provide the evidence from unplanned settlements that households' willingness to pay for improved water services is much higher than their current water bills. The indirect cost of unreliable supply to customers is found to be Rs 259 (2.97 US$)1 per month per household - 4.6 times the average monthly water bill paid to the public water utility. In addition to the current average monthly water bill of Rs 56 (1.29 US$), a domestic customer in unplanned areas is willing to pay Rs 101 (2.33 US$) extra for securing a reliable water supply. These findings have important policy implications for gauging public support for water supply improvements in infrastructurally disadvantaged households including institutional reforms conducive to pro-poor growth.
Who forms local institutions? Levels of household participation in India’s joint forest management program
Project : Awards and Medals Competition (AMC)
Author : Bhagirath Behera
Date : 2005
Description : Participatory approaches aim at achieving representation of a broad segment of local communities, including poor and marginalized groups. Who actually participates in decisive meetings? And does attendance of meetings automatically assure having an influence on decisions taken? The paper addresses these questions focusing on Joint Forest Management in Andhra Pradesh, India. A conceptual framework on determinants of various levels of participation is presented and tested through econometric analysis using data from 660 households within 55 communities. First, the determinants of ‘influencing community decision-making’ for households attending meetings are analyzed. Second, the factors that determine whether households attend community meetings are investigated. Households’ ability to influence decisions and the attitude of the forest department are found to be important determinants of household decisions to attend meetings. While participatory approaches seem to be somewhat successful in achieving representation of marginalized groups in executive committees and attendance of meetings, they are less so in achieving an actual influence by these groups on the decisions taken in the meetings. Results indicate that community elites continue to dominate actual decision-making processes.
L’Afrique et le commerce international des services de télécommunications: Obstacles institutionnels et performances
Project : Awards and Medals Competition (AMC)
Author : Sekou Amadou Ndoure
Date : 2005
Description : Les innovations technologiques ont mis en défi l’hypothèse selon laquelle les services de télécommunications de base sont un monopole naturel, nécessitant la mise en place d’un réseau unique et important, et devant faire l’objet d’un monopole légal. Depuis les années quatre vingt dix ; elles conduisent les opérateurs historiques de télécommunications en Afrique Sub- Saharienne à faire face à de nouvelles règles institutionnelles : passage d’une structure d’administration centrale en société par action, privatisation, introduction de la concurrence sur le marché, mise en place d’institutions séparées de réglementation, respect des obligations de l’Accord Général sur les Services (AGCS) de l’Organisation Mondiale du Commerce (OMC). Cet article examine le recours par les pays de l’Afrique sub-saharienne à ces nouvelles règles, notamment l’AGCS, et évalue le degré avec lequel elles ont permis d’améliorer la disponibilité des services de télécommunication pour les populations et la productivité des travailleurs des télécommunications. Les résultats de l’article offrent un soutien à la mise en place des sociétés par action et à la privatisation. L’article constate aussi une corrélation entre les engagements pris par les pays africains dans le cadre des négociations AGCS sur les télécommunication depuis 1997 et les performances observées dans le secteur (disponibilité et productivité). Il suggère l’adhésion aux principes réglementaires contenus dans le document de référence de l’OMC sur les télécommunications.
Preventing impoverishment, promoting equity and protecting households from financial crisis: universal health insurance through institutional reform in Mexico
Project : Awards and Medals Competition (AMC)
Author : Felicia Marie Knaul, Oscar Mendez-Carniado, Martha Miranda Munoz and Hector Arreola-Ornelas
Date : 2005
Description : Achieving fair financing poses a challenge for health systems. Effective, fair, and sustainable methods to finance complex health institutions are lacking and even the wealthiest countries have difficilty financing universal, comprehensive care.In developing countries, financial protection for health is segmented and fragmented. Access to insurance coverage is regressive and impoverishing health spending common, particularly among the uninsured poor. Lack of financial protection means reliance on household out-of-pocket spending that both provokes impoverishment, and is inefficient and inequitable.The Mexican health system was designed around a segmented model. As a result, out-of-pocket spending accounts for more than half of health finance and each year 2-4 million households -- most poor and uninsured -- suffer catastrophe or impoverishment. The health system reform of 2003 is designed to remedy this by offering publicly subsizided insurance to the more than 50% of families without social security. This study analyzes the evolution and determinants of catastrophic and impoverishing health expenditure in Mexico between 1992 and 2004. This includes a period of economic crisis, and subsequently the initial phases of health reform. Indicators are developed to measure equity aspects and absolute impoverishment from health spending, and these are applied to document financial protection before and after reform. Econometric analysis measures the effect of the reform based on differential coverage across states and a methodology is developed for projecting potential, future impact. Financial protection deteriorated during economic crisis. Post-crisis improvement is concentrated among the poorest and the uninsured and is likely to be due to both the health reform and poverty alleviation. The projections indicate the importance of insuring the poorest and including medications and ambulatory care in the package of covered services. Financial protection in health can prevent temporary shocks – to income and from illness – from generating permanent impoverishment.
Risk segmentation, moral hazard and equity in a mandatory health insurance system
Project : Awards and Medals Competition (AMC)
Author : Claudio Sapelli
Date : 2005
Description : Recently several countries have considered the possibility of implementing a mandatory health insurance system as the center of the health financing apparatus. For example, Pauly (2001) has suggested this for the US, and Jowett (2004) has discussed the possibility for LDCs. For the design of such a system it is important to take stock of the experience of the Chilean health system which has a mandatory health insurance system for a part of the population. The Chilean system could serve as a basis for a reform since it has all the aspects that a system based on health insurance should have: a pillar that includes the poor that is based on an HMO with low or no co-payments and a second pillar for the better off that have more choice. We thereby evaluate the Chilean system along what we consider are the key concerns a health financing system should have. We conclude by recommending improvements to the system that should also constitute the cornerstones of a universal mandatory health insurance system. For decades, the Chilean health system included a mandate for dependent workers to spend a certain percentage of their wages on health insurance but provided only one option: public health insurance. Since 1981, workers have been able to choose between public insurance and several private insurance providers. About half of the country’s active dependent workers opted out of the public and into the private insurance system. The development of the private insurance system has been accompanied by controversy regarding possible inequities in the utilization of medical services, the degree of risk segmentation, inefficiencies in the system’s operation, and other factors. Plus there is the issue that a health system based on insurance may be plagued by the moral hazard problem. This paper discusses the issues of risk segmentation, moral hazard and equity. It starts by reviewing the system’s design on a theoretical level, then deriving hypothesis and finally providing empirical evidence regarding these hypotheses. Particular attention is given to the issues of how individuals choose between the public and private system (to determine the reasons behind risk segmentation) and the differences in utilization among the various income groups (to clarify the issues of possible inequities and of moral hazard).
 
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