From Civil War to Special Economic Zones

Development Strategy, Viability, And Economic Distortions In Developing Countries

This paper presents a three-sector static model to explore the rationale for a series of institutional distortions in developing countries. The authors argue that, after World War II, motivated by a belief in the development of state-of-the-art industries as a means for nation building, the majority of developing country governments attempted to accelerate the growth of advanced capital-intensive industries. However, since developing countries are relatively rich in labor or natural resource endowments but not in capital endowment, advanced capital-intensive industries were not adapted to the endowment structures of these developing countries at the time. Enterprises in those industries were non-viable in open, competitive markets and could not survive without government subsidization or protection. The model shows that, in order to mobilize resources into the capital-intensive, advanced sectors, it is necessary for governments to use distortionary policies such as taxes and subsidies, distortions of factor prices, directive allocation of resources, and nationalization of enterprises. Such distortions enable developing countries to set up advanced, capital-intensive industries in the early stage of their development. However, they also tend to suppress incentives, misallocate resources, and make the economy inefficient.

How Can Donors Help Build Global Public Goods In Health?

Aid to developing countries has largely neglected the population-wide health services that are core to communicable disease control in the developed world. These mostly non-clinical services generate"pure public goods"by reducing everyone's exposure to disease through measures such as implementing health and sanitary regulations. They complement the clinical preventive and treatment services which are the donors'main focus. Their neglect is manifested, for example, in a lack of coherent public health regulations in countries where donors have long been active, facilitating the spread of diseases such as avian flu. These services can be inexpensive, and dramatically reduce health inequalities. Sri Lanka spends less than 0.2% of GDP on its well-designed population-wide services, which contribute to the country's high levels of health equity and life expectancy despite low GDP per head and civil war. Evidence abounds on the negative externalities of weak population-wide health services. Global public health security cannot be assured without building strong national population-wide health systems to reduce the potential for communicable diseases to spread within and beyond their borders. Donors need greater clarity about what constitutes a strong public health system, and how to build them. The paper discusses gaps in donors'approaches and first steps toward closing them.

Agent Orange And The Prevalence Of Cancer Among The Vietnamese Population 30 Years After The End Of The Vietnam War

During the Vietnam War, more than 70 million liters of military herbicide were sprayed over the combat zone. This study uses self and proxy-reported data on cancer status obtained from a nationally representative health survey of the Vietnamese population (N=158,019), combined with measures of military herbicide exposure computed from detailed information on US and allied wartime military activities. No significant difference in the prevalence of reported cancer is detected between communes with some degree of exposure and those with none. When restricting the analysis to exposed communes and adopting a continuous measure of herbicide exposure, there is evidence of a dose-response relationship; among communes that were exposed, increasing exposure to past military spraying is associated with increasing prevalence of reported cancer in 2001-2002. There is mixed evidence as to whether cohorts born before or after the end of the spraying campaigns are equally affected.

Mental Health In The Aftermath Of Conflict

The authors survey the recent literature on the mental health effects of conflict. They highlight the methodological challenges faced in this literature, which include the lack of validated mental health scales in a survey context, the difficulties in measuring individual exposure to conflict, and the issues related to making causal inferences from observed correlations. They illustrate how some of these issues can be overcome in a study of mental health in post-conflict Bosnia and Herzegovina. Mental health is measured using a clinically validated scale; conflict exposure is proxied by administrative data on war casualties instead of being self-reported. The analysis suggests that there are no significant differences in overall mental health across areas which are affected by ethnic conflict to a greater or lesser degree.

The Potential Impact Of The Global Financial Crisis On World Trade

This paper models the global financial crisis as a combination of shocks to global housing markets and sharp increases in risk premia of firms, households and international investors in a global economic model. The model has six sectors of production and trade in 15 major economies and regions. The paper shows that the shocks observed in financial markets can be used to generate the severe economic contraction in global trade and production experienced in 2009. In particular the distinction between the production and trade of durable and non durable goods plays a key role in explaining the much larger contraction in trade than GDP experienced by most economies. The paper explores the implications of the large increase in fiscal deficits and the implications of a global trade war in response to the financial crisis.

Improving Women’s Access to Land and Financial Resources in Tajikistan

Since independence in 1991, the Government of Tajikistan has embarked on a land reform program, which includes extensive farm restructuring. Given the demography of rural households in Tajikistan where the phenomenon of female-headed households is quite significant, women ‘s access to land and credit assumes special importance. To date, however, no thorough gender analysis of access to land and finance in Tajikistan has been conducted. As a result, there is insufficient gender disaggregated data to inform policy. It is not clear how effective the reforms are in addressing factors inhibiting women ‘s access to land and their ability to benefit from any changes. In addition, due to the lack of data, no comprehensive microeconomic study on access to finance has been done. Many Tajik women are sole heads of households and caretakers of their families as a direct consequence of war and migration. Migration in particular has a great impact on gender relations, gender division of labor, and gender roles with the possible empowerment or disempowerment of women left behind. Households headed by women in Tajikistan are 28.6 percent more likely to be poorer than those headed by men. Improving and securing access to land and ensuring the gender sensitivity of land reforms, therefore, has potential for improving the conditions of these vulnerable households. The reports propose several areas of action. While fostering women ‘s access to agricultural production can be considered a policy for improving basic welfare, access to finance is an important ingredient for increased productivity and farm growth (i.e., professionalization and potentially commercialization). Financial access opens up opportunities to diversify income generation beyond farming activities. Complementary initiatives for women ‘s empowerment support their access to productive assets and entrepreneurial standing in society, and may simultaneously lift women ‘s self-constraints in demand for finance.

Not Yet Up to Standard

The relative prosperity enjoyed by Uganda during the 1960s, based largely on the traditional exports of coffee, tea, cotton, and tobacco, was eroded by a devastating civil war over the period 1971 to 1985. The paper is based upon interviews with selected respondents, including government authorities, exporting companies, donors, and practitioner organizations, carried out in 2007 and 2008. The paper is divided into four sections. Section one provides a brief historical perspective on the emergence of the Ugandan fruit and vegetable export industry and examines the role played by different government and donor initiatives in the initial shaping of the sector, between the late 1980s and late 1990s. Section two highlights the strategic commercial approaches adopted by Ugandan exporting companies and farmers during the 2000s in response to past performance and in the face of evolving regulatory and market requirements, especially in the European Union. Section three examines the rationale for, means of support of, and apparent efficacy of a range of recent programs seeking to improve or sustain the competitiveness of Uganda's fruit and vegetable exports via improved compliance with regulatory or private standards. Lessons are drawn from this experience. Section four provides a brief set of general conclusions.

Political Economy of Anglo-French Trade, 1689-1899

Britain – contrary to received wisdom – was not a free trader for most of the 1800s and, despite repeal of the Corn Laws, continued to have higher tariffs than the French until the last quarter of the century War with Louis XIV from 1689 led to the end of all trade between Britain and France for a quarter of a century. The creation of powerful protected interests both at home and abroad (notably in the form of British merchants, and investors in Portuguese wine) led to the imposition of prohibitively high tariffs on French imports -notably on wine and spirits -when trade with France resumed in 1714. Protection of domestic interests from import competition allowed the state to raise domestic excises which provided increased government revenues despite almost no increases in the taxes on land and income in Britain. The state ensured compliance not simply through the threat of lower tariffs on foreign substitutes but also through the encouragement of a trend towards monopoly production in brewing and restricted retail sales of beer (which began around 1700 and continued throughout the eighteenth century). This history is analyzed in terms of its effects on British fiscal and commercial policy from the early 1700s to the end of the nineteenth century. The result is a fuller, albeit revisionist account of the rise of the modern state that calls into question a variety of theses in economics and political science that draw on the naive view of a liberal Britain unilaterally moving to free trade in the nineteenth century.

Seizing Opportunity from Crisis

Leaders meet this week in London in a world that would not seem unfamiliar to Keynes. The World Bank’s latest estimate of global economic growth in 2009, released today, forecasts a contraction of 1.7 percent compared to economic growth last year of 1.9 percent. This would be the first decline in the global economy since World War II. We also face a 6 percent drop in the volume of world trade in goods and services, the largest decline in 80 years.