Working Papers
2002
May 1, 2002
An Interim Assessment of Ukrainian Output Developments, 2000-01
Description: After a long period of steep decline which followed the breakup of the Soviet Union, Ukraine's economy rebounded in 2000, and the recovery accelerated in 2001. The paper examines the timing and the nature of the recovery from a number of different perspectives such as the presence of idle but productive capital, the stance of domestic policies, real wage developments, learning, and foreign factors. The final chapter presents tentative conclusions, which point to an eclectic explanation involving a range of factors rather then any single major cause of the recovery, as well as an agenda for further research.
May 1, 2002
Moreon the Effectiveness of Public Spendingon Health Care and Education: A Covariance Structure Model
Description: Using data for a sample of developing and transition countries, this paper estimates the relationship between government spending on health care and education, and social indicators. Unlike previous studies, where social indicators are used as proxies for the unobservable health and education status of the population, this paper estimates a latent variable model. The findings suggest that public social spending is an important determinant of social indicators, particularly in the education sector. Overall, the latent variable approach was found to yield more adequate estimates of social production functions, with larger elasticities of social indicators with respect to income and spending on education than the traditional approach, providing stronger evidence that increases in public spending have a positive impact on social indicators. The study also finds that the millennium goal of universal primary education enrollment by 2015 could be achieved through an increase by one-third, on average, in education spending.
May 1, 2002
Caribbean offshore Financial Centers: Past, Present, and Possibilities for the Future
Description: The paper reviews the development of offshore financial activities in the English-speaking Caribbean islands and takes stock of the size and status of these sectors today. In view of the heightened concerns of the international community about money laundering, the costs and risks to countries of having or establishing offshore sectors have risen considerably.
May 1, 2002
Determinants and Repercussions of the Composition of Capital Inflows
Description: The Mexican, Asian, and Russian crises of the mid- and late 1990s have renewed interest among policymakers in the determinants and effects of private capital inflows. This paper analyzes whether policies can affect the composition of capital inflows and whether different compositions aggravate crises. The results support the view that, while fundamentals matter, capital controls can affect the mix of capital inflows that countries receive. The results also show that during the Asian crisis, countries with more yen-denominated debt faired worse, while during the Mexican crisis larger short-term debt stocks increased the severity of the crisis.
May 1, 2002
When is Economic Growth Pro-Poor? Experiences in Malaysia and Pakistan
Description: This paper focuses on two central issues related to the contrasting experiences of Malaysia and Pakistan regarding poverty reduction. First, it examines the structure of economic growth and its proximate determinants in the two countries, including the initial conditions, institutional changes, and macroeconomic policies. Second, it analyzes the links between economic growth and poverty reduction, particularly focusing on public policy mechanisms to reduce poverty and inequality. Malaysia, unlike Pakistan, was able to sustain rapid economic growth with equally impressive reduction in poverty because the governments included the poverty reduction goal in national development plans and pursued policies consistent with the twin goals.
May 1, 2002
Money, Meat, and Inflation: Using Price Data to Understand An Export Shock in Sudan
Description: Sudanese inflation dramatically fell in 2000. But just prior to the sharp decline, an export ban was placed on Sudanese livestock. Motivated by this clue, and in the absence of any reliable income or employment data, this paper systematically develops simultaneous models of the consumer price index (CPI) and the exchange rate to assess the economic impact of the export ban. It finds that livestock exports play a large economic role as an important source of income and as a store of value. In the long run, livestock exports are positively associated with nonfood inflation. In the short run, food price movements are negatively associated with livestock exports: to help smooth income, lower food prices generate increased livestock exports. Therefore, unable to export livestock, farmers may have flooded the local market with meat, lowering food prices. Moreover, the loss of income and the decline in wealth lowered aggregate demand, leading to the decline in nonfood prices.
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