Andersen, Lykke E. (2011). Development from within. La Paz: Bolivia, Plural Editores.

Abstract: A collection of short essays and snippets on development economics and the Bolivian economy published during a period of five years in INESAD’s Monday Morning Development Newsletter.

Link: http://www.inesad.edu.bo/

Lykke Andersen, Ph.D., is Scientific Manager at Conservation International Bolivia; landersen@inesad.edu.bo

Andersen, Thomas Barnebeck, Jeanet Bentzen, Carl-Johan Dalgaard, and Pablo Zelaya (forthcoming 2011). Lightning, IT Diffusion and Economic Growth Across US States. Review of Economics and Statistics.

Andersen, Thomas Barnebeck, Jeanet Bentzen, Carl-Johan Dalgaard, and Pablo Zelaya (forthcoming 2011). Does the Internet Reduce Corruption? Evidence From U.S. States and Across Countries. World Bank Economic Review.

Ballon, Paola and Jaya Krishnakumara (2010). Estimating Basic Capabilities: A Structural Equation Model Applied to Bolivia. World Development, 134(1), 5-17.

Abstract: This paper proposes a suitable theoretical framework for operationalizing the capability approach using the latent variable methodology. A structural equation model is specified to account for the unobservable and multidimensional aspects characterizing the concept of human development and to capture the mutual influence among different capabilities. The model is applied to Bolivian data for studying two “basic” capability domains relating to children: knowledge and living conditions. Individual capability indices are constructed from the estimation results and their empirical distributions analyzed. Our results show a strong interdependence between the above capabilities and confirm the role of exogenous factors in their determination.

Paola Ballon, Ph.D., works at the Institute of Labour Studies, paola_ballon@hotmail.com.

Barrientos, Paola (forthcoming). Dissertation title: Four essays on developmental economics.

Abstract: The first paper analyzes the different convergence "clubs" (clusters of countries within a region) in Latin America from a historical perspective. The chronological time-line is divided into three important known phases: the exporting phase (1900-1930), the industrialization phase (1931-1974), and the globalization phase (1975-2007). During the last two phases, there is strong evidence of convergence among those clubs that succeeded in industrializing and/or building good institutions. The second and third papers deal with the problem of endogeneity between external resources and growth, where external resources (or capital inflows) are understood as investments, remittances, aid, debt and equity portfolio. A typical example of endogeneity is aid: the poorer a country is, the more aid it will receive. This negative relation can be misunderstood as the effect of aid on growth, so it is very important to account for endogeneity. The analysis includes a cross section of several developing countries and a more in depth analysis of Bolivia, that helps to highlight cross-country differences. The fourth paper will analyze the effect of immigrants on the Danish economy, after correcting, again, for endogeneity.

Paola Barrientos is a Ph.D. candidate at the Department of Economics, Aarhus University, Denmark, pbarrientos@econ.au.dk

Mendoza-Botelho, Martín (2010). Quality of democracy in Bolivia: National contestation and grassroots popular participation. In Daniel Levine and José Molina (eds.) Evaluating the Quality of Democracy in Latin America. Lynne Rienner Publishers.

Mendoza-Botelho, Martín (2010). Social Capital, leadership and social change. In Brady Wagoner, Eric Jensen and Julian Oldmeadow (eds.) Culture and social change: Transforming society through the power of ideas. Routledge.

Martin Mendoza, Ph.D., is an Assistant Professor (v) at the Department of Political Science, Tulane University; mmendoza@tulane.edu

Portugal-Perez, Alberto, José-Daniel Reyes, and John S. Wilson (2010). Beyond the information technology agreement: Harmonisation of standards and trade in electronics. The World Economy, 33(12), 1870–1897

Abstract: The findings, interpretations and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors or the countries they represent. We have benefited from discussions with Suzanne Troje, John Godfrey and Ben Shepherd. Without implicating them, we would like to thank Daniel Lederman, Jaime de Melo, Marcelo Olarreaga, Mario Piacentini, Frederic Robert-Nicoud, an anonymous referee and participants at seminars at the University of Geneva, and the European Academy for Standardization in Paris for helpful suggestions on earlier versions of this article. Hanna Luchnikava and Marco Antonio Martinez provided excellent research assistance.

Link: http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9701.2010.01300.x/full

Portugal-Perez, Alberto, (forthcoming). Assessing the impact of political economy factors on rules of origin under NAFTA. Journal of Economic Integration.

Abstract: Rules of origin are legitimate policy instruments to prevent trade deflection in a preferential trade agreement short of a customs union. Trade deflection takes place when a product imported into the preferential trade agreement through the member with the lowest external tariff is transhipped to a higher-tariff member, while yielding a benefit for the re-exporter. Yet, when captured by special interest groups, rules of origin can restrict trade beyond what is needed to prevent trade deflection. By how much do political economy factors account for the stringency of rules of origin? This study quantifies the impact of both determinants - those considered "justifiable" because they prevent trade deflection and those deemed to arise from"political economy" forces - on the restrictiveness of rules of origin under the North American Free Trade Agreement, approximated by a restrictiveness index. The main finding is that political economy forces, especially from the United States, raised significantly the restrictiveness of the rules of origin. Indeed, in industries where political-economy forces were strong prior to the North American Free Trade Agreement, as when the U.S. Most Favored Nation tariff was high or the revealed comparative advantage of Mexico (the United States) was strong (weak), more stringent rules of origin were introduced. Thus, stricter rules of origin are associated with higher production costs reducing the potential benefits of enhanced market access that is initially pursued by this type of agreement.

Portugal-Perez, Alberto, Jaime de Melo and Olivier Cadot (2011). Understanding the barriers-to-entry effects of rules of origin in preferential trading arrangements with an application to Asian FTAs. In M. Jovanovic (ed.), International Handbook of Economic Integration. Edward Elgar Publishing.

Portugal-Perez, Alberto, Axel Mangelsdorf (2011). Voluntary and mandatory food standards. In World Bank (publisher) Non-Tariff Measures. Washington, DC: World Bank.

Portugal-Perez, Alberto, (2011). Aid and the services sector. In Olivier Cadot, Ana M. Fernandes, Julien Gourdon and Aaditya Mattoo, (eds.) Where to Spend the Next Million? Applying Impact Evaluation to Trade Assistance. Washington, DC: Center for Economic Policy Research, World Bank.

Alberto Portugal, Ph.D., works at The World Bank, aportugalperez@worldbank.org

Pop-Eleches, Cristian and Miguel Urquiola (2011). Going to a Better School: Effects and Behavioral Responses. NBER Working Paper No. 16886, March.

Abstract: This paper: i) estimates the effect that going to a better school has on students' academic achievement, and ii) explores whether this intervention induces behavioral responses on the part of children, their parents, and the school system. For the first task, we exploit almost 2,000 regression discontinuity quasi-experiments observed in the context of Romania's high school educational system. For the second, we use data from a specialized survey of children, parents, teachers and principals that we implemented in 59 Romanian towns. The first finding is that students do benefit from access to higher achieving schools and tracks within schools. A second set of results suggests that the stratification of schools by quality in general, and the opportunity to attend a better school in particular, result in significant behavioral responses on the part of teachers, parents, and students. Although we do not expect the magnitude or even the direction of these responses to hold everywhere, their existence has a number of implications for evaluation, particularly since some of them change over time, and some would seem to be relevant only once interventions reach a certain scale.

Link: http://www.nber.org/papers/w16886

MacLeod, W. Bentley and Miguel Urquiola (2010). Keynote presentation at LACEA Network on Inequality and Poverty: Anti-lemons: School reputation and educational quality, NBER Working Paper No. 15112, June 2009.

Abstract: Friedman (1962) argued that a free market in which schools compete based upon their reputation would lead to an efficient supply of educational services. This paper explores this issue by building a tractable model in which rational individuals go to school and accumulate skill valued in a perfectly competitive labor market. To this it adds one ingredient: school reputation in the spirit of Holmstrom (1982). The first result is that if schools cannot select students based upon their ability, then a free market is indeed efficient and encourages entry by high productivity schools. However, if schools are allowed to select on ability, then competition leads to stratification by parental income, increased transmission of income inequality, and reduced student effort---in some cases lowering the accumulation of skill. The model accounts for several (sometimes puzzling) findings in the educational literature, and implies that national standardized testing can play a key role in enhancing learning.

Link: http://www.nber.org/papers/w15112

Miguel Urquiola, Ph.D., is Associate Professor at SIPA and Economics Department, Columbia University, msu2101@columbia.edu.

Valdivia, Walter D. (2011). Innovation, Growth, and Inequality: Plausible Scenarios of Wage Disparities in a World with Nanotechnologies. In Susan Cozzens and Jameson Wetmore (eds.) Nanotechnology and the challenges of equity, equality and development, Yearbook of Nanotechnology in Society, Volume 2, pp. 145-164. Springer.

Abstract: This chapter adopts economic modeling as a tool of Anticipatory Governance in the case of emerging nanotechnologies. Although much growth theory neglects distributional issues, one version considers the income dynamics connected to the diffusion of a new general purpose technology (GPT), that is, one that causes widespread change because it radically changes the productivity of many other technologies. A model proposed by Philippe Aghion is used to explain the relationship between skill and the diffusion of a GPT to possible paths for the development of nanotechnologies. Since new growth theories emphasize explanation over prediction, it is shown here that they can be used to build scenario of the future within the theory of Anticipatory Governance.

Link: http://www.springerlink.com/content/h284k0355g7527l5

Walter Valdivia, Ph.D., is Research Associate at the University of California Berkeley, walter.valdivia@berkeley.edu.

Zapata, Daniela (2011). Child Labor and Schooling in Bolivia: Who’s Falling Behind? The Roles of Domestic Work, Gender, and Ethnicity. World Development, 39(4), 588-599.

Abstract: We analyze the role of gender and ethnicity in the work-school tradeoff among school-aged children. We observe domestic chores in Bolivian data and consider them work, finding that girls are 51% more likely than boys to be out of school and working, mostly in domestic activities. For indigenous children the probability is 60% higher than non-indigenous, and indigenous girls are 23% more likely than boys to be out of school and working. A more comprehensive measure of child labor reveals that in countries with large indigenous populations, indigenous girls are most vulnerable to future poverty and exclusion due to low education.

Link: http://www.sciencedirect.com/science/article/pii/S0305750X10002354

Daniela Zapata is a graduate student at the Department of Economics, University of North Carolina, Greensboro; d_zapata@uncg.edu. Dante Contreras is at Universidad de Chile and Diana Kruger at the Universidad Adolfo Ibáñez.

Zelaya, Pablo and Rainer Thiele (forthcoming 2011). The impact of Aid on Bureaucratic Quality. Journal of International Development.

Zelaya, Pablo and Rainer Thiele (2010). Aid and Sectoral Growth: Evidence from Panel Data. Journal of Development Studies, 46(10), 1749-1966.

Abstract: This article examines empirically the proposition that aid to poor countries is detrimental for external competitiveness, giving rise to Dutch disease type effects. At the aggregate level, aid is found to have a positive effect on growth. A sectoral decomposition shows that the effect is (i) significant and positive in the tradable and the nontradable sectors, and (ii) equally strong in both sectors. The article thus provides no empirical support for the hypothesis that aid reduces external competitiveness in developing countries. A possible reason for this finding is the existence of large idle labour capacity that prevents the real exchange rate from appreciating.

Link: http://www.informaworld.com/smpp/content~content=a931967122

Zelaya, Pablo is Assistant Research Professor at the Department of Economics, University of Copenhagen, pablo.selaya@econ.ku.dk.

2. Conferences, seminars and other announcements.

• The 2011 Bolivian Conference on Development Economics (BCDE 2011) will take place in La Paz, Bolivia on November 14 and 15, 2011. The deadline for submission of abstracts Friday September 16.
  Visit http://www.inesad.edu.bo/bcde2011/ for more information.

• 4to Encuentro de Economistas de Bolivia del Banco Central de Bolivia.
  Visit http://www.bcb.gob.bo/eeb/