Suchergebnisse

A vast empirical literature has used ad hoc linear cross‐country regressions to search for the determinants of FDI. The literature is extensive and controversial. Can policy‐makers use this body of research to learn anything that can help them stimulate FDI? The author uses Extreme Bound Analysis (EBA) to examine if any of the conclusions from the existing studies is robust to small changes in the conditioning information set. The EBA upholds the robustness of the correlation between FDI and market‐size, as measured by per‐capita GDP, but indicates that the relation between FDI and many of the controversial variables (namely, tax, wage, openness, exchange rate, tariff, growth, and trade balance)bare highly sensitive to small alterations in the conditioning information set. The author also studies the distribution of the estimated coefficients of the controversial explanatory variables to rank them in order of their likelihood of their being correlated with FDI.

Foreign aid is publicly motivated by a moral obligation to help the poor and develop underdeveloped countries. Despite the vast amount of foreign aid spent annually to address the poverty of millions of people and the economic decline of underdeveloped countries, very little headway has been made. First, this article argues that aid does not work in isolation and many variables influence growth and development and thus the impact of foreign aid; and second that cross-country regression analysis is an inappropriate method to measure the effectiveness of aid. It emphasizes that the methodology used to measure the impact of foreign aid is too generalist. It concludes that foreign aid cannot be treated as a homogenous entity that works equally in all countries in all types of environment and across all times. There is an urgent need to develop a new methodology for measuring the effectiveness of foreign aid.

Ethiopia has experienced a growth acceleration over the past decade on the back of an economic strategy emphasizing public infrastructure investment and supported by heterodox macro-financial policies. To analyze the country's growth performance during 2000–13, the paper employs a neoclassical cross-country System Generalized Method of Moments regression model. The analysis finds that accelerated growth was driven by public infrastructure investment and restrained government consumption, and supported by a conducive external environment. Macroeconomic challenges arising from declining private credit, real currency overvaluation, and relatively high inflation held back some growth. The model accurately predicts Ethiopia's growth over the period of analysis and is robust to country-specific parameter heterogeneity and alternative infrastructure variables. Looking ahead, model simulations under alternative policy scenarios are indicative that growth may decelerate in the coming decade, making it challenging for Ethiopia to attain its middle-income country target by 2025. Although simulated growth rates do not vary much by policy scenario, the paper discusses some of the emerging risks associated with a continued reliance on the current infrastructure financing model and potential future adjustments.

AbstractIn 1999, fertility rates in Central and Eastern European countries reached the lowest levels in the world. Using panel data, this paper analyses the sharp decline in fertility for these countries during their transition towards a market economy. It extends previous research in three ways: First, it distinguishes education by gender as a proxy for human capital. Second, in addition to GDP more economic variables are used to capture the effect of a declining standard of living, including unemployment. Finally, it tries to capture the relationship between advancement toward a new market economy and fertility. Some of the results reflect some special features of the CEE region: only tertiary education is correlated with fertility; fertility is responsive to a 'business cycle' type of macroeconomic factors, particularly, to female unemployment; and foreign direct investment (FDI) as a proxy for new market economy has a negative association with fertility. Copyright © 2007 John Wiley & Sons, Ltd.

This paper discusses the history of the use of cross-country regressions in modern growth economics. These regressions continue to be the workhorse of empirical growth analysis even though their meaning continues to be controversial. I argue that the early interpretations of these regressions have proven to be inappropriate and led to substantial exaggeration of the evidentiary support for various new growth theories. On the other hand, I argue that these regressions have a valuable role to play in identifying the modern analog of stylized facts for growth behavior.

This paper explores the relationship between armed conflict and HIV prevalence in Africa. We review the literature suggesting that conflict can exacerbate the HIV epidemic (through sex with infected soldiers, war-related rape, poverty-related unsafe sex, transactional sex, etc) and the literature arguing the contrary (such as that militaries do not always have higher prevalence rates than the surrounding populations and that war can disrupt sexual networks). Building on past econometric contributions on the debate, our parsimonious cross-country panel data regression analysis of HIV prevalence casts doubt on the argument that conflict worsens the epidemic, particularly at a country level. We do, however, find a negative, albeit statistically weak association between armed conflict, militarization, and HIV prevalence. Fully acknowledging the limitations of our analysis, we stress the importance of looking at the association between HIV prevalence and conflict on a case by case basis, taking lessons from the experiences of other conflict afflicted countries.