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GDN FUNDED PAPERS
  232425
Impact Of Elimination Of Trade Taxes On Poverty And Income Distribution In Ghana
Project :
Author : Vijay K. Bhasin; Samuel Kobina Annim
Date : 0
Description : Ghana has adopted the Poverty Reduction Strategy, which emphasizes increased focus on poverty reduction in the design and implementation of its policies. Trade liberalization is one of the ways through which poverty could be reduced. However, trade liberalization results in decreased fiscal revenue of the government. There is a need to co-ordinate fiscal reforms with trade liberalization. The present study uses the CGE model and examines the impact of alternative fiscal reforms; in which lost tariff revenue is compensated by a lump-sum tax, on the poverty and income distributions of households. The study tests the hypothesis that elimination of trade related import taxes accompanied by an increase in VAT reduce the incidence, depth and severity of household poverty and improve the income distributions of households. On the other hand, the study tests the hypothesis that the elimination of export taxes accompanied by an increase in VAT increase the incidence, depth, severity of household poverty and worsens the income distributions of households.
Fiscal Policy and Sectoral Productivity Convergence in Cameroon: Implications for Poverty Reduction
Project :
Author : Tabi Atemnkeng Johannes
Date : May 0
Description : The literature on structural change has been preoccupied with a statistical description of intersectoral linkages rather than explore their implications. This paper examines the impact of fiscal policy and other economic fundamentals on labour- productivity convergence between agriculture and manufacturing activities and provides the poverty effects in Cameroon covering the period 1969-1998. We find that while government spending on education, health and road infrastructures promote convergence, spending on agriculture reinforce inequality in the level of sectoral labour productivity by a disproportionate increase in non-agricultural sector productivity. The study reveals that the catch-up of the lagging agricultural sector with the leading industrial sector in terms of productivity fosters poverty reduction. It shows that increases in manufacturing and service productivity levels both impact positively on agricultural productivity in the long-run with the former equally contributing in the short-run. Furthermore, both manufacturing and service productivity levels ‘Granger- cause’ changes in agricultural productivity but not the reverse. The empirical results also support the view held by the Lewis-Fei-Ranis neoclassical tradition of productivity convergence between agriculture and manufacturing as work force moves out of agriculture into industry. Proper budget targeting, in the domains of education and training, health, rural road infrastructure, increased mechanisation of the agricultural sector and outward oriented trade policies could foster the catch-up process and therefore could be an option towards an ultimate solution to the growth and poverty crisis in an agricultural and developing economy. Further research is needed in order to provide the contrary.
Economic Growth, Poverty And Institutions: A Case Study Of Bolivia
Project :
Author : Elizabeth Jimenez Zamora; Gaby Candia; Marcelo Mercado Lora
Date : February 0
Description : The aim of this study can be summarized into the following question: Why two decades of sound macroeconomic policies and market oriented structural reforms have not led to sustainable growth and thus to a reduction of poverty in Bolivia? To answer this question, this study does three things: 1) Provide a thorough analysis of economic performance and stabilization economic programs in Bolivia, (2) Empirically identify the variables that have affected economic growth -or the lack of- in the last three decades and, 3) Empirically assess the impact that economic growth might have over poverty and other social indicators of well being. The econometric estimations largely confirmed what had been deduced from the descriptive analysis. Indeed, estimations of a standard growth model for the period 1970-2003 show that the four important variables that have negatively affected economic growth are: “Big Government “ (large government consumption); large fiscal deficits; high inflation rates, and high vulnerability over external shocks. Along the same lines, the most important source of economic growth in the last three decades has been public investment. The inclusion of institutions on the growth estimated function shows that changes in government are negatively related to per-capita GDP growth, implying that a change in the Bolivian president is immediately followed by an economic decline and that more instability in the administrative ranks of the government could negatively affect economic growth. In addition, the role of institutions examined through the use of a panel model clearly shows that for economies such as Bolivia, economic growth has indeed been associated with strengthening the overall institutional context. However, economic growth has not been associated with the demise of corruption as shown by the lack of statistical significance on the proxy for corruption. Finally, the empirical estimation of the impact of economic growth over poverty indicators suggests that while economic growth has been associated with a reduction of poverty it might have been also accompanied by a rise in inequality. The impact of growth over poverty is indeed quite modest and the empirical estimations show that economic growth per-se in Bolivia is not a sufficient force to increase welfare and reduce poverty in a reasonable time horizon.
Domestic Government Debt Structure, Risk Characteristics and Monetary Policy Conduct Evidence from Nigeria
Project :
Author : Robert C. Asogwa; Charles C.Ezema
Date : February 0
Description : Since the early 1980s, the ratio of domestic government debt to gross domestic product (GDP) in Nigeria has risen sharply. By 1964, the level of domestic debt was 5.5 percent of GDP. A decade later (by 1974), this ratio went up slightly to 6.9 percent of GDP. But by 1984, the domestic debt /GDP ratio was over 40 percent. Although it declined slightly in the 1990s, it has since 2000 moved upwards. Nigeria has not been alone in experiencing escalating levels of government domestic indebtedness, but in comparison to other countries in Sub-Saharan Africa, Nigeria’s domestic debt to GDP ratio is clearly on the high side. For the non-HIPC in sub-Saharan Africa, the domestic debt/GDP ratio averaged 23 percent between 1995- 2000, and if we exclude Nigeria, it drops to 18 percent (see Christenesen, 2004). The dramatic growth in the domestic debt /GDP ratio has raised many doubts about fiscal sustainability of the current economic policy. The concerns about sustainability have also been compounded by those related to the very short maturity of most of the government domestic debt, and also the fact that the Central Bank of Nigeria(CBN), still remains the dominant holder of federal government debt instruments. These concerns are further fuelled by the fact that government domestic debt is the major interest bearing financial instrument in circulation and therefore plays a major role in monetary policy implementation.
Do Migrant Remittances Minimize the Impact of Macro-volatility on the Poor in Ghana?
Project :
Author : Peter Quartey; Theresa Blankson
Date : December 0
Description : Migrant worker remittances have been a means of survival for many Ghanaians, particularly in times of macroeconomic shocks. The importance of migrant worker remittances in Ghana is evidenced by the proliferation of money transfer institutions in Ghana (both formal and informal) and the rapid increases in migrant remittances to Ghana. It has been argued that migrant remittances are becoming a potential source of external finance and its magnitude has exceeded the amount of ODA in some developing countries including Ghana. Available data from the Bank of Ghana shows that the amount of remittances to Ghana exceeds ODA and it is therefore of critical concern given considering its growth rate in recent years in particular. The value of remittances increased from $31 million in 1999 to $1.4 billion in 2002. It is general knowledge in Ghana that families with migrant workers; particularly those in developed countries are able to withstand shocks to income and threats to household welfare. However, this relationship has not been tested empirically in Ghana despite the fact that the Ghana Living Standards Survey (GLSS) is rich with such micro-data on the economy.
Bolivia: Impact of shocks and poverty policy on household welfare
Project :
Author : Gover Barja Daza; Javier Monterrey Arce; Sergio Villarroel Böhrt
Date : December 0
Description : This paper evaluates the short term impacts on poverty of pro-poor expenditure and total social expenditure during the 1999-2002 period of Bolivian economic recession. Observed characteristics of recession are simulated by the combined effects of negative terms of trade shock, reduction in foreign saving flows and low output growth. Evaluation is performed by simulating the impacts of shocks and social expenditures in an environment of low growth: i) on macro aggregates of consumption, income, saving and prices (based on a simple static 1-2-3 model built with 1998 data as the base year), ii) on household income and consumption levels by quintiles and areas, and iii) on consumption based poverty indicators by areas. The following were main results from experiments: The terms of trade shock had greater negative impact on household income then reduction in foreign saving flows. In contrast, reduction in foreign saving flows had greater negative impact on household consumption then the terms of trade shock. Poverty measured by the head count ratio has been greater from reduction in foreign saving flows then from the terms of trade shock. Poverty measured by the poverty gap and poverty intensity has concentrated in rural areas, being greater from reduction in foreign saving flows then from the terms of trade shock. Under macroeconomic stability (no shocks and 1998 macro conditions) social expenditure policy for poverty reduction would have had an important positive impact on household income and consumption levels (more so in income then consumption), in reducing the number of poor (more in urban then rural areas), and in reducing poverty gap and poverty intensity (more so in rural areas). However, social expenditure policy does not promote the production of tradables. The combined positive effects from observed social expenditure policy and effort in an environment of low output growth, did not compensate the combined negative impacts from the experienced terms of trade shock and reduction in foreign saving flows. These conclusions show that under macroeconomic disequilibrium poverty reduction efforts become policies of poverty containment or safety net programs. Poverty reduction is a long term objective that requires long term commitment for an environment on macroeconomic stability.
Assessing Poverty Reduction Effects of Fiscal Policy in Benin with an IMMPA Framework
Project :
Author : Toussaint Houeninvo; Epiphane Adjovi; Credo Ekue
Date : February 0
Description : This paper tents to measure the poverty reduction effects of fiscal policy in Benin with an IMMPA framework. After describing the features of Benin economy at macroeconomic as well as sector and institutional level the paper describes in particular fiscal history in Benin and its link with poverty reduction strategy. A stress has been put on the tremendous public expenditure reform Benin has been engaged in since 2000 with the use of the Medium Term Expenditure Framework (MTEF) and the Budget-program as fiscal tools for poverty reduction. We then use the Integrated Macroeconomic Model for Poverty Analysis developed recently by Agénor Izquierdo and Fofack (2003) and applied to Morocco in Agénor and El Aynaoui (2003) to simulate the impact of an increase in Public investment spending (in education health and infrastructure) on economic variables like production, employment, unemployment, profits and incomes and prices. The simulation of an increase in public expenditure leads to a positive impact on economic growth, an improvement in incomes and profits of different actors (firms, households, etc) a moderate consumer price evolution and reduction in Poverty Head Account Index (P0) as well as its severity (P1) and its deepness (P2). For example, Poverty Head decreases from its initial value 31,69% to 31,14% the first year and 27,75 the fiveth year and 26,70% the tenth year. The horizon for the Millennium Development Goals being 2015 this gives Benin Policy Makers a dynamic assessment on the scope of poverty reduction which can be reached by increasing public spending in education, health and infrastructure within the framework of poverty targeted Fiscal reforms based on the Medium Term Expenditure Framework (MTEF).
Why The Moroccan Government Does Not Use Reliable Research When Implementing Fiscal Policy Reforms?: The Driving Role Of Governance And Interest Group Pressures
Project :
Author : Brahim Mansouri
Date : February 0
Description : While fiscal deficits are often thought of as exerting negative effects on key macroeconomic performances, less attention has been devoted to the impact of public spending structure (see Gupta et al., 2002). Our previous research in this area has shown that current public consumption has dramatic negative effects on the Moroccan economy as a whole. By contrast, public investment has been seen to crowd-in private investment and to boost economic growth (see Mansouri, 2001). Surprisingly, fiscal adjustment in Morocco continues to heavily rely on cutting capital expenditures and to maintain and even extend current public consumption. Our paper is dealing with the reasons, which are behind such inefficient fiscal policy reforms. In terms of political economy analysis, we focus here on the driving role of governance and interest group pressures (Mansouri, 2000a). The paper is the extension of a research financed by Ford Foundation in the framework of the Middle-East Research Competition (MERC) Program, managed by the Lebanese Center for Policy Studies (LCPS, Beirut, Lebanon). The original research is entitled: “Macroeconomic Implications of Fiscal Deficits in Developing Countries: The Case of Morocco” (see Mansouri, 2001). The remainder of the paper is organized as follows. Section II analyzes effects of fiscal policy on private spending. Section III is dealing with effects of fiscal policy on external sector variables. On the basis of empirical results in sections II and III, Section IV explores the role of governance and interest group pressures in utilization of reliable policy research for efficient fiscal policy reforms.
The Land Without a Farmer Becomes Barren Policies that Work for Sustainable Agriculture and Rural Livelihoods in Virudhunagar District, Tamilnadu
Project :
Author : S. Rengasamy; John Devavaram; Rajendra Prasad; A. Erskine; P. Bala Murugan; Chris High
Date : February 0
Description : This report forms a part of the international research project on policy and sustainable agriculture, Policies that Work for Sustainable Agriculture and Regenerated Rural Economies, co-ordinated by the International Institute for Environment and Development. (§1.1) The report details the findings of one of the constituent studies, a project undertaken by an Indian NGO, the Society for People’s Education and Economic Change (§1.2). The importance of this project is that it concentrated on rainfed rather than irrigated agriculture – i.e. the sharp end of rural development in India, and that the focus was very much on the micro-level, looking at policy as seen from the ground. One of the recurring themes throughout the research was the importance of appreciating people as individuals, and in this spirit some of the personal qualities of the research team are shared. (§1.3) The research covers events in sites in the Virudhunagar district of Tamilnadu: Tiruchuli Panchayat Union and the Villur chain of tanks. (§2.1) This is an essentially rural area, where the need for sustainable forms of agriculture and rural livelihoods is clear. (§2.2) The political landscape is fractured and complex (§2.3), and the officials with the responsibility of implementing policy face significant obstacles and disincentives in doing so in response to the needs of local communities. (§2.4)
Self Managed Public Schools In San Luis, Argentina Case Study
Project :
Author : Querio
Date : August 0
Description : The Province of San Luis is geographically located in the center of Argentina. It has approximately 367,104 inhabitants, and constitutes one of the country’s smallest educational sectors. In 1991, after transferring schools from the National Ministry of Education to provincial jurisdictions, the Provincial Ministry of Education became responsible for the management of 362 schools, 47 of which are privately managed and correspond to the public sector. In the year 2001, there were 101,913 students registered at public schools, as a result of an important increase in 1996 onwards. In the year 2002, 27.03% ($ 825,947,527) of the total provincial budget was invested in education, amounting to up to $195,324,856. At the turn of the 90´s, and after some erratic experiences with the Ministry of Education´s management, the provincial governor decided to make a fundamental change in the province’s educational system. In order to do this, he did not hesitate to change the provincial tradition based on the idea that the head of Ministry should be someone with connections in education or the academic sector. The first step towards achieving a deep transformation within the provincial educational system was to hire a politician with a significant amount of provincial influence, closely related to the Governor and a strong expertise in management. In this sense, the continuity of the Minister of Education in office for more than three years, who promoted decentralization, schools’ autonomy and evaluation of results2, public sector modernization and budgetary capacity, added to the governor’s political power, contributed towards the good reception of a proposal regarding self-management by a Foundation3 beyond the provincial’s political scenario.
  232425
 
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