World Institute for Research

No. 1/2001

WIDER Growth and Reform the UN and Conference the Bretton Woods

an reduce poverty? Will the 1.2 Institutions Cbillion people living on less than US$1 a day see much benefit from current policies? What do we need to do to by Deepak Nayyar ensure that more poor people share the benefits of growth? These are some of the questions which were discussed by 120 researchers and policy-makers from over 30 countries at the WIDER Development Conference on Growth and Poverty in May (25-26) in Helsinki. Building on some of the themes of the World Bank’s Development Report 2000-2001, and UNDP’s annual Human Development Report, the conference reviewed what is presently known about the relationship between growth and poverty. And it provided a forum for an exchange of views between researchers and policy-makers. The meeting also highlighted issues that require much more attention if Deepak Nayyar presenting his lecture world poverty is to be reduced at a faster rate. he United Nations, the World Bank and the Poverty has fallen significantly in the fast growing Asian TInternational Monetary Fund, created at the economies over the last 3 decades: some countries saw end of the Second World War, today operate on their poverty rates cut in half. The number of people living outdated political and economic foundations. on less that US$1 a day in East Asia fell from 452 million in They need to be overhauled before a crisis induced 1990 to 278 million in 1998. However, in Sub-Saharan Africa by globalization forces the changes required. The the number of poor people rose from 242 million in 1990 to UN and its security council together with the 290 million in 1998, in part because economic growth was Bretton Woods Institutions (BWIs) need urgent either slow or negative. reform to meet globalization’s challenges. The participation of the poor in growth, and therefore It took a world war and a worldwide economic growth’s benefit to them, depends on their access to land, depression to create the UN and the BWIs. Fifty , and markets. If this access is limited, then their years on the international community should not benefits from growth will be limited. Hence, policies such wait for a crisis of such proportions to take action as land reform, more investment in education, and market on global governance. reform are often required to reduce poverty at a fast rate. Women are often disproportionately poor, so gender Its Time to Reform the Reformers discrimination in education spending and employment must The BWIs are the most ardent advocates of also be tackled. economic reform. It is now time to reform the Moreover, policies to raise economic growth can reformers. Both institutions were created to sometimes have adverse short term effects, including manage the international payments system and higher unemployment, greater economic insecurity, and the to help Europe reconstruct. This was at a time weakening of traditional safety nets. And policies for growth shaped by memories of the Great Depression. that ignore the environment, may cause pollution, soil But the world has changed since then. BWI erosion, and deforestation, thereby damaging the orthodoxy has not resolved the economic livelihoods and the health of the poor. All conference papers problems of borrowing countries: deep poverty are available at: www.wider.unu.edu and inequality persist. And the BWIs are

The United Nations University incapable of effectively managing needed to manage global macro- co-operation between nation states today’s international financial economics and prevent crises. which facilitates co-ordinated action system—in particular the instability What are the foundations for a and co-operative behaviour is and volatility of exchange rates and new system of macroeconomic needed. Above all, it is essential to capital flows. The essence of the management? create institutional mechanisms that problem is international capital flows give poor countries and their people The cornerstones must be instit- without any international controls. a voice in the process of global utional mechanisms to foster In fact, globalization has accentuated governance. consultation, consistency, and the crisis of development. surveillance of national macro- The IMF must manage and stabilize economic policies. This must be Ways Forward the international financial system, supported by more emergency not only through crisis management finance, available before (not after) Establish a Global People’s but also through more crisis international reserves are depleted Assembly, modeled on the prevention. It is high time the IMF in times of crisis. Standstill European Parliament, to run practices what it preaches about procedures, or orderly debt workout transparency. Accountability is an procedures, must be initiated to deal parallel to the General imperative without which the Fund with country debt problems, in the Assembly but to serve as the will continue to pursue the interests same way that these procedures voice of global civil society of a subset of the international handle private-sector bankruptcy community—often to the detriment procedures. And countries need Create an Economic Secu- of the general interest of peoples and more support in developing minimum rity Council to govern governments or the collective standards in prudential regulation, globalization, and to ensure interest of the world economy. supervision, and accounting. that the UN provides an The World Bank should cease to be Governing Transnational institutional mechanism for a moneylender and transform itself Corporations consultations on global into an institution more concerned economic policies and also, with development, focused on An international system of development activities in poor governance for transnational wherever necessary, to act countries. Accountability at the corporations is also needed. This as an international regulatory World Bank is limited to finance should focus not only on the authority. ministries and central banks. An rights—but also the obligations— independent evaluation of Bank- of transnational corporations. Establish a high quality supported projects and programmes Restrictive business practices Volunteer Police Force should be a first step to improving should be curtailed, and an to de-politicize UN its accountability to governments international regime of anti-trust inter-vention, and enable and peoples. laws created. This can build on efforts by the UN Conference on it to provide a prompt The number of humanitarian crises Trade and Development, the collective security response with their legacy of death, experience of the EU, and initiatives whenever humanitarian displacement, and destruction, has by the OECD and the IFC. risen dramatically over the past emergencies arise. decade. The response of the Globalization has reduced the power international community and of the of national governments in UN—in peace-keeping, helping economics and politics without a Professor Deepak Nayyar is refugees, mine clearance, corresponding increase in effective Vice-Chancellor of , reconstruction etc—has been ad international co-operation or a member of the WIDER Board, and hoc, inadequate or simply not supra-national government which director of the WIDER project on forthcoming. There is still no system could regulate this market driven ‘New Roles and Functions for the in place to take care of—let alone process. Without effective UN and the Bretton Woods prevent—complex humanitarian international oversight, international Institutions’. This article is based emergencies. Action is urgently problems (such as international on Professor Nayyar’s public lecture required (see Box). crime, or trade in drugs, guns, ‘The Governance of Globalization’ people, and human organs) will on 18 June 2001 at WIDER in Missing Institutions increase while international public Helsinki. Research papers from this project are available through International capital markets have goods (world peace and sustainable the Institute’s Web site at undergone explosive growth since development) will be undermined. www.wider.unu.edu 1944. A new financial architecture is An international mechanism for

2 The End of History by Ravi Kanbur

FAO Photo by G. Bizzarri hen the Berlin Wall fell in 1989, Wit was famously heralded as "the end of history" the end of all "big" debates on the organization of economies and society. Triumphalism aside, there is no doubt that in the early 1990s there was a sense that a consensus could be reached on key issues of economic policy, distribution and poverty. But the 1990s saw the disastrous consequences of mismanaged transition in the formerly communist economies, the financial crises in Mexico, East Asia and Russia and, finally, the debacle in Seattle. In the year 2000, the governors of the World Bank and the IMF—organizations Measures to empower the rural poor are crucial to development whose self-stated mission is to and B, characterized as the "Finance Before exploring these disagree- promote poverty reduction and Ministry" and "Civil Society" ments, it is as well to record here growth—could only meet under tendencies. Group A types are those growing areas of agreement and police protection, under siege by who tend to believe that the cause consensus across these groups in those who believe that the policies of poverty reduction is best served such areas as international public they espouse benefit the rich and by rapid adjustments to lower goods, the importance of education powerful. The end of history lasted inflation and external deficits and the and health in conceptualizing and such a short time! use of high interest rates to achieve addressing poverty, and the key role The street demonstrations that now these ends, internal and external of institutions in determining the accompany global summits can be financial sector liberalization, impact of economic policy. easily but mistakenly dismissed as deregulation of capital controls, Moreover, there is not as much of a being unrepresentative. But they are deep and rapid privatization of state sharp and general divide on the the tip of a whole iceberg of owned enterprises and, perhaps the "markets versus state issue"—there disagreement which includes strongest unifying factor in this is recognition of specific instances vigorous debate in the leading group, rapid and major opening up of market and government failure on newspapers, passionate involve- of an economy to trade and foreign both sides. However, these growing ment of faith-based organizations, direct investment. On each of these areas of agreement throw into sharp as well as the genteel cut and thrust issues, Group B types tend to lean relief the remaining deep of academic discourse. The real the other way. disagreements on economic policy, question we face is why? Why are distribution and poverty. there such deep disagreements on Much of the reason for these deep key aspects of economic policy "Trying to understand differences lie in differences in despite seeming agreement on the perspective and framework on three objective of poverty reduction? legitimate alternative views on economic key features characterizing Finance Ministries versus policy, being open and assessments of economic policy, Civil Society distribution and poverty: nuanced in messages Aggregation, Time Horizon, and It is argued here that the reasons lie rather than closed and Market Power. First, Group A tends deep in the perspective and hard, is not only good to view the consequences of frameworks of analysis adopted by analytics, it is good economic policy in much more different groups. To simplify matters, aggregative terms than Group B. and in full recognition of the fine politics as well" Group A typically focuses on national texture of differences in individual measures of poverty. But it happens views, we consider two groups; A quite regularly that improvements in

3 national level statistics hide a of the village moneylender over the A—in the IFI's, in the G7 Treasuries, worsening for large sections of the poor peasant, to the power of the in the Financial Press, and among population. This was the case, for big corporations in a global setting. some in academia. "Give them an inch example, for the Chiapas region in Group A essentially does not think of nuance and they'll take a mile of Mexico in the early 1990s. Just that the much reviled multinational protection" seems to be the mindset. looking at the national statistics corporations are actually big This is unfortunate. Trying to (which improved) could not have enough in the global market place to understand legitimate alternative predicted the rebellion that was to be truly monopolistic—the basic views on economic policy, being come. The same is true, perhaps theory and analysis of competitive open and nuanced in messages less dramatically but no less markets, where no player is large rather than closed and hard, is not significantly, for gender and ethnic enough to have market power is thus only good analytics, it is good disaggregations of national poverty applied. politics as well. History is clearly not data. at an end. Dialogue is Needed Time Horizons It is as well to consider a seeming The End of History? Second, Group B's major concerns disagreement, that on "growth". are with the consequences over a There is less here than meets the eye. There is a growing time horizon which is both much Very few in Group B would argue that consensus on the shorter and much longer than the the disaster in transition economies importance of education "medium term" horizon (five to seven had nothing to do with the negative and health in conceptualizing years) which Group A typically growth experienced there, or that the and addressing poverty adopts. For those who work with the disastrous impact on poverty of the daily reality of poor people's lives, East Asia crisis was nothing to do But there remain deep and for the poor themselves, short with the collapse of per capita income disagreements on policy run survival trumps medium term (i.e. negative growth which despite seeming agreement benefits every time, if the family is accompanied the crisis). In general, actually on the edge of survival. the disagreements are not about on the objective of poverty Many in Group A now accept this growth in its technical sense—an reduction and support safety nets in general increase in per capita income. Who Disagreement is rooted in terms. However, they would could be against that? The real nevertheless want to press ahead disputes are about the distribution differences over aggregation with economic reforms even if safety of this growth, its long run in poverty measures, the nets were not immediately in place, consequences for the environment, time horizon for poverty anticipating the medium term and what policy packages actually reduction, and the role of benefits. Over the longer term of fifty get you equitable and sustainable market power to a hundred years, many in Group B economic growth. The tendency fear environmental consequences of among some in Group A to show the Improvements in national unchecked economic growth. Group strong correlation between poverty measures of poverty can A, while agreeing that specific reduction and increases in per capita "corrections" are called for, are income (a correlation which cannot hide a worsening for large essentially techno-optimists, be doubted), and to then criticize sections of the poor pointing to history to argue that those in Group B as being "anti predicted environmental disasters growth" is unfortunate. The have not actually come to pass. disagreements are not on the Ravi Kanbur is T.H. Professor of correlation, but on the policy World Affairs and Professor of Third, and most potent of all, Group packages, and on Aggregation, Economics at Cornell University. A instinctively approaches the Time Horizon, and Market Power. This article is based on his WIDER distributional consequences of Public Lecture 'Economic Policy, economic policy through a Given these deep differences, the Distribution and Poverty: the competitive market structure, while way forward is through mutual Nature of Disagreements', given on Group B instinctively thinks of a understanding and comprehension. 12 June in Helsinki. The text on world in which market structure is Unfortunately, many on both sides which the lecture is based can be characterized by pockets of market are adopting the stance of found at Professor Kanbur's home power, and economic policy feeds negotiation rather than dialogue. My page: www.people.cornell.edu/ through this non-competitive focus here is on Group A. Especially pages/sk145, and is also published structure to the consequences for since Seattle, a "line in the sand", in the June edition of the journal the poor. Group B sees this imbalance "this far, no further", mentality seems World Development (Volume 29 at all levels, ranging from the power to have gripped elements of Group No.6).

4 Risk, Poverty, and Safety Nets by Stefan Dercon

oor people in developing to consider two aspects of starting point in delivering micro- P countries must cope with vulnerability and risk. Ex ante, poor insurance. Private and informal droughts, floods, illness, recession, people face a high level of risk that a systems can provide some and political instability. Much of shock will occur. Ex post, poor people protection, but offer only limited their energy goes into coping with have a limited range of options to risk sharing. Even in closely- these shocks and into day-to-day cope with a bad shock once it has knit communities, moral hazard survival, leaving little for efforts to occurred. and enforcement-problems limit improve their lives for the longer the extent of support offered. Information on poverty does not fully term. In contrast, insurance and Moreover, the support they do offer capture these two aspects of risk and credit markets, combined with is typically for idiosyncratic risk, not vulnerability. This is despite much widespread social security, provide covariate or systemic risk. We must progress in modelling transient and an important cushion against therefore avoid expecting too much potential poverty, using outcome poverty in rich countries. of mutual support within poor measures (such as consumption and communities. The poor in developing countries do health) as well as the asset base that have some informal mechanisms to the poor can draw upon to cope with cope with risk and misfortune. These bad outcomes. We must reduce vulnerability are based on self-insurance by Relatedly, recent work on , in order to maximise the means of savings together with Tanzania and elsewhere suggests family or community-based mutual growth in living standards of that risk causes poverty—to the assistance. Nevertheless, their the poor—not just to protect extent that it induces households to scope remains limited. They are take up activities that have high them from the immediate better at dealing with individual- security, but offer a lower mean effects of shocks. specific idiosyncratic risks, such as income in the long-term. Moreover, household illness, than covariate or risk can cause poverty traps; states systemic risks associated with of deprivation following large shocks drought, flood, or recession. These But we should also avoid using to assets and income that are almost events devastate whole scarce resources to substitute for impossible to recover from. For communities, thereby limiting the effective mutual support when it example, evidence from China opportunities for risk pooling within already exists. Public funds are better suggests that shocks are followed by the community or via local markets. used in assisting network or only very slow recovery by poor community-based systems, and We now know much more about households. We must therefore filling the gaps left by informal vulnerability to risk, and how poor reduce vulnerability in order to insurance. Such groups can provide people cope. Building on the insights maximise the growth in living effective monitoring and self-control, of micro-level studies, the WIDER standards of the poor—not just to allowing an outside agent to reduce project on ‘Insurance against protect them from the immediate the otherwise prohibitive Poverty’ draws lessons for policy, effects of shocks. transactions costs that limit financial including the design of more intermediation. Indeed, this may well effective insurance mechanisms and Designing Insurance prove the most cost-effective way safety nets. But where markets fail, the design of to enter into social security Measuring Vulnerability policies is not self-evident. provision; by providing insurance Informational problems (such as and Risk capital and reinsurance possibilities moral hazard and adverse selection) to groups, many of the standard The relationship between risk, as well as the problem of reinsurance crowding out problems may well be vulnerability and poverty is one (to protect the insurer) make avoided. theme of this research. These three insurance notoriously difficult to dimensions are closely connected, provide in poor countries. New Initiatives but the exact links are not that well Nevertheless, there are ways However, problems still remain. The understood. Measurement is a key forward. A good starting point poor are less likely to be part of issue: are vulnerability and risk is to understand how group, community-level networks of mutual completely captured by simply using community, and household-based support, even for idiosyncratic risks available poverty measures? support systems operate. As with such as ill health. Indeed, this In answering this question, it helps micro-credit, these can be an ideal exclusion may be one reason that

5 inflation destroys monetary savings, storage losses degrade savings in kind, and covariate price cycles reduce the value of livestock. They need access to better financial products, including those provided by microsavings institutions as well as better means to pool the price risks associated with asset and goods markets. This dimension has long been neglected but provides another important starting point in helping the poor cope more effectively with risk. Stefan Dercon is Fellow and Tutor in Economics, Jesus College, Oxford University, and director of the they are poor. So, even for One crucial advantage is that it is WIDER project on ‘Insurance idiosyncratic risks, more public help self-selecting: anyone can buy it, against Poverty’. is needed. Basic support systems whether they are directly or with universal coverage offer indirectly affected by rainfall, or even possibilities. But the resources of just gamblers. Obviously, by its very Selected Papers from the very poor countries may not permit nature, the issuer of these rainfall Project Include this, resulting in rationing and new lotteries is exposed to potentially Household Income Dynamics in mechanisms of exclusion. Since very high claims. Governments and Rural China, Joytsna Jalan, and means testing is difficult and costly, their agents could protect their hold- Martin Ravallion a basic self-targeted system—with ings by reinsuring these issues on Inequality and Risk, limited stigma and maximum international markets, tapping into Marcel Fafchamps access—may prove the best the rapidly developing market of starting point. In addition, since the new instruments to deal with cata- The Gradual Erosion of the poor face diverse risks, linking strophic events. Insurance Function of Customary Land Tenure Arrangements : the micro-credit provision to basic health There may even be a strong Case of Tribal Societies in Sub- and other insurance policies can be macro-economic case for subsid- Saharan Africa, Jean Philippe cost-effective. Such interlinked ising these schemes (including Platteau contracts exploit informational and through aid). Shocks such as group-liability externalities. drought or large commodity price Trustworthy Bridges: Intermedia- tion in Finance and Safety Nets in But what do we do about covariate changes have large externalities for Developing Countries, Jonathan or systemic risk? This is the most the economy as a whole. Insulating Conning and Michael Kevane dangerous risk for communities, the producers directly is to be since they are least able to deal with preferred. But since the private Can Financial Markets be Tapped it. Insuring for large shocks, benefits of insurance are smaller than to Help Poor People Cope with for example crop insurance, has the social benefits (including the Weather Risks?, Panos Varangis, often been unsustainable. The externalities), subsidies are Donald Larson, and Jerry Skees administrative costs of monitoring warranted to avoid underinsurance, Targeting and Informal Insurance, and assessing crop damage, and the even though moral hazard puts Ethan Ligon limits on these subsidies. costs of reinsurance, frequently Food-for-Work Programs as Safety undermined traditional crop Finally, we should not forget that Nets, Chris Barrett and Dan Clay insurance. households often use savings to Risk-sharing and Endogenous Still, there are some promising new self-insure. In India, for example, Group Formation, Joachim De alternatives such as rain-indexed in- self-insurance via savings is far more Weerdt important than mutual support for surance contracts. These are effec- Poverty, Risk and Insurance, smoothing consumption over time. tively rainfall lotteries where anyone Stefan Dercon can buy a ticket and payout occurs The key is to have good-quality These and other project papers when a priori established poor rain- savings instruments available to all. are available from fall outcomes occur. This product At present, the poor have a limited www.wider.unu.edu does not require extensive monitor- choice of savings instruments and ing and is administratively simple. these have major shortcomings:

6 Global Production Networks: Risks and Opportunities by Henryk Kierzkowski

lobalization, a term that has Gentered everyday usage, means more than the intensification of trade relations. Improvements in transportation, communications and technology have resulted in a new organization of the production process. Previously concentrated productive activities can now be segmented and geographically dispersed over an international network. This may involve multinational enterprises or, instead, be contracted out as arms-lengths outsourcing transactions, when the costs of coordination are low enough to facilitate increased geographical dispersion of productive activities. The driving force behind the inten- services. This is not new, as components. The later grew at a pace sification of international trade is companies in a variety of industries twice as fast as the former over fragmentation of the production have long used outside suppliers for 1984 -1996. This phenomenon is now process. Integrated technology, parts and components. The auto spreading across Europe. requiring production of a good to industry comes immediately to mind. Off-shore sourcing can occur in a occur in one place and in “one go”, But outsourcing in the past tended variety of settings, but its common is replaced by fragmented to revolve more around domestic objective is to reduce the cost of the technology that breaks down the suppliers than foreign. final product. Typically, companies manufacturing process into separate in high-wage countries will utilize blocks. These blocks need not be The New Division offshore sourcing to reduce labour produced by one firm or in one place of Labour costs. Not only parts and compo- at the same time. They need not even What is new, is the increasing nents, but final assembly and a be produced in the same country! importance of the off-shore element variety of services may be subject to The main idea of fragmentation of in outsourcing and the growing role offshore procurement. Cheap labour production was articulated by Ron of low-wage countries in that need not be, however, the main Jones from the University of development. What has made this reason why a large firm from a Rochester and myself over a decade growth possible has been the recent capital-rich country may wish to ago. revolution in communications and establish components production in Increased fragmentation of related technologies and a sharp a low-wage country (moving there production leads to a finer and finer reduction in coordination costs that its labour intensive stages of division of labour. Services, ranging came with it. With the death of production). Professor Fukunari from transportation and insurance distance, to borrow the title of a Kimura has presented a fascinating to telecommunications and recent book in this area, the scope case of Fujitsu Ltd. moving from banking, play a crucial role in for modularizing and reorganizing Japan to the Philippines not labour the fragmentation process, because production processes has increased but the most capital-intensive stages they form the links between various considerably. No wonder that the of the production of hard disc drives. production blocks. countries of East Asia have been (The case is documented in the book exploiting, in a good sense of the by Cheng and Kierzkowski referred A key feature of globalization in the word, new opportunities. The figure to at the end of this article.) The main eyes of many is offshore production shows the dynamics of the reason for this astonishing result is of parts and components for an traditional East Asian exports that a new generation of disc drives increasing variety of goods and against exports of manufactured is introduced about every two years (continued on page 6)

7 and hence new and extremely Nike decides to move its overseas expensive machines have to be production from Malaysia to another 2001 amortized in such a short period of country? This could easily happen WIDER Annual Lecture time. With three production shifts, for a variety of reasons: service links, Horizontal Inequalities: A capital equipment and facilities are such as the Internet, could become Neglected Dimension of fully utilized in The Philippines, an less dependable or more costly, Development by Professor arrangement that Japanese trade financial or currency crises could unions are apparently not willing reduce or even eliminate the local Frances Stewart. 14 December to accept. cost advantage, or political 2001, 16.00-18.00 at Marina instability could put in question the Congress Center, Helsinki, Fragmentation of Production security and dependability of the Finland. New patterns of production and supply. This lecture will focus on trade emerge in response to International production networks horizontal inequality, i.e. fragmentation of production. In a are like social clubs: you sometimes inequality among culturally multi-commodity world it takes just need to meet very stringent defined groups (e.g. the Malays one good to capture the benefits of conditions. However, the continuity and Chinese in Malaysia, Hutus trade. Similarly, it is enough to have of membership is not at all assured and Tutsis in Rwanda, or comparative advantage at a single and a country may be forced to leave production stage to break into Catholic and Protestants in N. the club. Ultimately, every country Ireland), and the implications international markets without any has to face Groucho Marx’s dilemma this has for social stability, need at all to be an efficient producer and decide for itself whether it is of the entire product. worth joining such a club. conflict and economic Fragmented production is more development. complex than integrated production, Frances Stewart is Professor of because it requires that individual Henryk Kierzkowski is Professor of Development Economics and production blocks be connected by Economics at the Graduate Director of the International service links. These links can be Institute of International Studies in Development Centre, Queen thought of as consisting of bundles Geneva. This article is based upon Elizabeth House, at the University of activities—coordination, Professor Kierzkowski’s public of Oxford. transportation, telecommunications, lecture at WIDER on 1 May 2001. insurance, financial services, and so For more on global production Visitor Programme 2002 networks see Leonard Cheng and on. Efficient production requires, Applications are invited for among other things, that the quality Henryk Kierzkowski (eds) “Global Research Interns and of intermediate goods produced at Production and Trade in various stages remain within quality East Asia”, Kluwer, Boston, Short-Term Sabbaticals to parameters and that production 2001; and Sven Arndt and collaborate with and contribute moves seamlessly from one stage to Henryk Kierzkowski (eds) to the work of WIDER. Based the next. The so-called “just-in-time “Fragmentation: New Production in Helsinki, interns are PhD technology” can be seen as a natural and Trade Patterns in the World students, and sabbaticals are Economy”, Oxford University outcome of the fragmentation of researchers and academics, production. Press, New York 2001. Further information about both books is from around the world. Fragmentation of production available at: Financial support will be presents new opportunities for available to successful various countries but, alas, it is also www.wkap.nl/book.htm/0-7923- applicants. Prospective interns 7330-8 and associated with considerable risks should apply with a research and dangers. Malaysia can become www.oup-usa.org/toc/ proposal, brief CV and a letter a major sub-contractor for Nike and tc_019924331X.html of reference, sabbatical this is in general a positive applicants with a detailed development. After all, would many CV, list of publications, kids in North America, Europe and indeed in Asia buy fancy basketball research proposal and shoes without an extensive (and preferred dates. Full details hugely expensive) distribution and an application form are at network set up in those market and www.wider.unu.edu or by without top super-stars advertising writing to WIDER at the the product continuously on address on p. 12. television world-wide? But what if

8 9 WIDER Publications New Titles Policy Brief 3 Access to Land Launched in May 2001, new titles DP2001/14 Marc Wuyts: The and Land Policy Reforms are added monthly and this list Agrarian Question in Mozambique’s covers May and June. Transition and Reconstruction by Alain de Janvry and Elisabeth Sadoulet, April 2001 DP 2001/26 Halvor Mehlum, Karl Ove DP2001/13 Pablo Arocena: The Moene and Ragnar Torvik: The Reform of the Utilities Sector in Spain Market for Extortions DP2001/11 Sampsa Kiiski and Matti DP 2001/25 James C. Sesil, Douglas Pohjola: Cross-country Diffusion L. Kruse and Joseph R. Blasi: of the Internet Sharing Ownership via Employee Stock Ownership DP2001/10 Catherine Waddams Price and Alison Young: UK Utility DP 2001/24 Laixiang Sun: Econom- Reforms. Distributional Implications ics of China's Joint-Stock Co- and Government Response operatives DP2001/9 Cecilia Ugaz: A Public DP2001/23 Gaim Kibreab: Displaced Goods Approach to Regulation of Communities and the Recon- Utilities struction of Livelihoods in Eritrea DP2001/8 Poh-Kam Wong: ICT DP2001/22 Mário Adauta de Sousa, Production and Diffusion in Asia Tony Addison, Björn Ekman and Åsa Digital Dividends or Digital Divide? Stenman: From Humanitarian Assistance to Poverty Reduction in DP2001/7 Pramila Krishnan: Culture Angola and the Fertility Transition in India A policy-focused summary of the DP2001/21 Li Shi: Changes in DP2001/6 Heli Koski, Petri Rouvinen WIDER project volume Access to Poverty Profile in China and Pekka Ylä-Anttila: ICT Clusters Land (see Books). This Brief presents in Europe. The Great Central Banana the main results obtained in the DP2001/20 Ashish Arora and Suma and the Small Nordic Potato research, where the objective is to Athreye: The Software Industry and India’s Economic Development DP2001/5 Jukka Jalava and Matti analyse different mechanisms of Pohjola: Economic Growth in the access to land for the rural poor in DP2001/19 Ricardo Paredes New Economy. Evidence from an era where redistribution through M.: Redistributive Impact of Advanced Economies expropriative land reform is largely Privatization and the Regulation of inconsistent with the forces of the Utilities in Chile DP2001/4 Colin Mayer: Financing political economy. The array of the New Economy. Financial mechanisms is vast, and each can be DP2001/18 Tony Addison: Recon- Institutions and Corporate subjected to specific policy struction from War in Africa: Governance interventions to make them more Communities, Entrepreneurs, and effective for sustainable poverty States DP2001/3 Edward N. Wolff: The reduction. Impact of IT Investment on Income DP2001/17 Máximo Torero and and Wealth Inequality in the Policy Brief 3 can be ordered in Alberto Pascó-Font: The Social Postwar US Economy bulk quantities. Please contact Impact of Privatization and the DP2001/2 Jed Kolko: Silicon Adam Swallow for further details Regulation of Utilities in Peru Mountains, Silicon Molehills. [email protected] DP2001/16 Tony Addison: From Geographic Concentration and Conflict to Reconstruction Convergence of Internet Industries WIDER Discussion Papers in the US DP 2001/15 Kristin Komives, Dale This new series (issn 1609-5775) Whittington and Xun Wu: Access DP2001/1 Giovanni Andrea Cornia is available to download from to Utilities by the Poor and Sanjay Reddy: The Impact www.wider.unu.edu of Adjustment-Related Social Funds on Income Distribution and Poverty

10 Books That the IT revolution will change Access to Land, Rural the world is a view that must derive Poverty, and Public Action from the visible impact it has had on productivity and economic growth, Edited by Alain de Janvry, Gustavo but how can we measure this impact Gordillo de Anda, Elisabeth Sadoulet and how large is it? This collection and Jean-Philippe Platteau presents new micro- and macro economic evidence to show that in recent years IT investment has ex- erted a strong influence on produc- tivity and economic growth in many industrial and newly industrialized countries. It also identifies national IT strategies to promote participa- tion in the information economy.

Forthcoming books Transition and Institutions: Showing that neither the market nor The Experience of Gradual the state alone offers solutions to and Late Reformers efficiency and equity problems commonly encountered in social Edited by Giovanni Andrea Cornia sectors in poor nations, this and Vladimir Popov collection offers innovative ways to WIDER Studies in Development address these important problems, WIDER Studies in Development Economics, Oxford University Press, favouring an integrative approach to Economics, Oxford University Press, July 2001 social provision. March 2001 This volume reviews the often- Information Technology, Redesigning access to land to neglected role of initial structural and Productivity and Economic increase efficiency and reduce institutional conditions and their Growth: International poverty is back on the policy agenda. subsequent development during the Evidence and Implications This book broadens the analysis course of transition. Focusing on for Economic Growth beyond state-led redistributions to China, Russia, Central Asia and Viet- consider channels of access such as Edited by Matti Pohjola nam it also covers economies like inheritance and inter-vivos transfers, Cuba and North Korea which are in WIDER Studies in Development intra-household and intra- the very early phases of the reform Economics, Oxford University Press, community land allocations, process. April 2001 community titling of open access resources, the break-up of common property resources and the individualization of rights, decollectivization, land markets, and land rental contracts. Each of these channels of access to land is analysed, and recommendations made to enhance their effectiveness for poverty reduction. Social Provision in Low- Income Countries: New Patterns and Emerging Trends Edited by Germano Mwabu, Cecilia Ugaz and Gordon White WIDER Studies in Development Economics, Oxford University Press, April 2001

11 Resource Abundance and Economic Development Edited by Richard M. Auty WIDER Studies in Development Economics, Oxford University Press, July 2001 Explaining the disappointing per- formance of resource-abundant UNU/WIDER was established by UNU as countries by extending the its first research and training centre and growth accounting framework to started work in Helsinki, Finland, in 1985. Through its research and related activities, include natural and social UNU/WIDER seeks to raise unconven- capital this collection draws tional and frontier issues and to provide upon historical analysis and insights and policy advice aimed at models to show that a growth improving the economic and social collapse is not the inevitable development of the poorest nations. outcome of resource abundance WIDER Angle is the newsletter of the World and that policy counts. Institute for Development Economics Comparing Regionalisms: Research of the United Nations University Implications for Global Development (UNU/WIDER). Published twice a year, the newsletter focuses on the Institute’s Edited by Björn Hettne, András Inotai and Osvaldo Sunkel research activities. It is distributed free of charge. The newsletter is also available The New Regionalism series, volume 5, Palgrave, November 2001 on our website at: www.wider.unu.edu This summarizes the WIDER international research project on the Editorial contents, design and layout formation of world regions, and what implications this process will have by Tony Addison for the future world order, particularly as far as the issues of peace and (e-mail: [email protected]), development are concerned. This last volume in a series of five focuses and Ara Kazandjian on comparative research, covering all important regions of the world. (e-mail: [email protected]).

EMU: Impact on Europe and the World UNU/WIDER UNU/INTECH Helsinki UNU/INRA Edited by Charles Wyplosz Maastricht Finland Accra Netherlands Ghana WIDER Studies in Development Economics, Oxford University Press, UNU UNU/ILA UNU/IAS November 2001 Headquarters Amman Tokyo Tokyo, Japan Now that EMU is here and likely to stay, the ‘second generation’ of Jordan Japan research is under way. This volume presents a significant sample of UNU/INWEH UNU/BIOLAC Hamilton Caracas that research and explores questions such as: How do central bankers UNU/IIST Canada Venezuela who used to run their own banks now melt into a single pot? Macau Are labour markets going to shape up? Is the euro becoming a world currency? UNU/WIDER Katajanokanlaituri 6 B 00160 Helsinki, Finland Tel. (+358-9) 6159911 Ordering WIDER publications Fax (+358-9) 61599333 The WIDER Discussion Paper series is available to download from E-mail [email protected] www.wider.unu.edu, Website www.wider.unu.edu Books are available from good bookshops or direct from the For further information on the publishers, www.oup.co.uk and www.palgrave.com Institute’s activities, please contact: Mr Ara Kazandjian, For other inquiries and orders please contact WIDER Publications, tel. (+358-9) 61599210, Mr Adam Swallow, Katajanokanlaituri 6 B, FIN-00160 Helsinki, e-mail [email protected] Finland. Printed by Forssa Printing House WIDER (non-book) series publications, including available back Finland, 2001 stocks are now free of charge. ISSN 1238-9544

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