Studies in Development Economics and Policy General Editor: Anthony Shorrocks UNU WORLD INSTITUTE FOR DEVELOPMENT ECONOMICS RESEARCH (UNU-WIDER) was established by the United Nations University as its first research and training centre and started work in Helsinki, Finland, in 1985. The purpose of the Institute is to undertake applied research and policy analysis on structural changes affecting the developing and transitional economies, to provide a forum for the advocacy of policies leading to robust, equitable and environmentally sustainable growth, and to promote capacity strengthening and training in the field of economic and social policy-making. Its work is carried out by staff researchers and visiting scholars in Helsinki and through net- works of collaborating scholars and institutions around the world. UNU World Institute for Development Economics Research (UNU-WIDER) Katajanokanlaituri 6B, FIN-00160 Helsinki, Finland Titles include: Tony Addison and Alan Roe (editors) FISCAL POLICY FOR DEVELOPMENT Poverty, Reconstruction and Growth Tony Addison, Henrik Hansen and Finn Tarp (editors) DEBT RELIEF FOR POOR COUNTRIES George J. Borjas and Jeff Crisp (editors) POVERTY, INTERNATIONAL MIGRATION AND ASYLUM Ricardo Ffrench-Davis and Stephany Griffith-Jones (editors) FROM CAPITAL SURGES TO DROUGHT Seeking Stability for Emerging Economies David Fielding (editor) MACROECONOMIC POLICY IN THE FRANC ZONE Basudeb Guha-Khasnobis (editor) THE WTO, DEVELOPING COUNTRIES AND THE DOHA DEVELOPMENT AGENDA Prospects and Challenges for Trade-led Growth Basudeb Guha-Khasnobis and Ravi Kanbur (editors) INFORMAL LABOUR MARKETS AND DEVELOPMENT Aiguo Lu and Manuel F. Montes (editors) POVERTY, INCOME DISTRIBUTION AND WELL-BEING IN ASIA DURING THE TRANSITION George Mavrotas and Anthony Shorrocks (editors) ADVANCING DEVELOPMENT Core Themes in Global Economics Mark McGillivray (editor) HUMAN WELL-BEING Concept and Measurement Mark McGillivray (editor) INEQUALITY, POVERTY AND WELL-BEING Robert J. McIntyre and Bruno Dallago (editors) SMALL AND MEDIUM ENTERPRISES IN TRANSITIONAL ECONOMIES Vladimir Mikhalev (editor) INEQUALITY AND SOCIAL STRUCTURE DURING THE TRANSITION E. Wayne Nafziger and Raimo Väyrynen (editors) THE PREVENTION OF HUMANITARIAN EMERGENCIES Machiko Nissanke and Erik Thorbecke (editors) THE IMPACT OF GLOBALIZATION ON THE WORLD’S POOR Transmission Mechanisms Matthew Odedokun (editor) EXTERNAL FINANCE FOR PRIVATE SECTOR DEVELOPMENT Appraisals and Issues Laixiang Sun (editor) OWNERSHIP AND GOVERNANCE OF ENTERPRISES Recent Innovative Developments UND-WIDER (editor) WIDER PERSPECTIVES ON GLOBAL DEVELOPMENT Studies in Development Economics and Policy Series Standing Order ISBN 978-0-333-96424-8 (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and the ISBN quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England Front cover: (UNEP036-2. Children, Thailand. – Running though forest; sun shining though trees). credit: Pramkaew/UNEP/Still Pictures Back cover: (H-114d-04d. PHL, Philippines, 17.10.2003: Burning rubbish dump smokey mountains in Manila. city: Manila). credit: Friedrich Stark/Still Pictures Advancing Development Core Themes in Global Economics Edited by George Mavrotas and Anthony Shorrocks in association with Palgrave Macmillan © United Nations University 2007 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2007 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-0-230-01904-1 ISBN 978-0-230-80146-2 (eBook) DOI 10.1057/9780230801462 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Advancing development : core themes in global economics / edited by George Mavrotas and Anthony Shorrocks. p. cm. Selected papers from a June 17–18, 2005 conference held in Helsinki on the occasion of the jubilee anniversary of the World Institute for Development Economics Research (UNU-WIDER), and dedicated to the memory of Lal Jayawardena, the first Director of UNU-WIDER. Includes bibliographical references and index. 1. Development economics – Congresses. 2. Economic development – Congresses. 3.World Institute for Development Economics Research – Congresses. I. Mavrotas, George. II. Shorrocks, Anthony F. III.World Institute for Development Economics Research. HD73.A33 2007 338.9—dc22 2006048540 10987654321 16 15 14 13 12 11 10 09 08 07 Contents List of Tables ix List of Boxes xiii List of Figures xiv Preface xviii Foreword by Amartya Sen xxvi Acknowledgements xxix Notes on the Contributors xxx List of Abbreviations xxxiii Legacy – Lal Jayawardena xxxv Part I Development Economics in Retrospect 1 The Evolution of the Development Doctrine, 1950–2005 3 Erik Thorbecke 2 Turning Points in Development Thinking and Practice 37 Louis Emmerij 3 From Seers to Sen: The Meaning of Economic Development 50 E. Wayne Nafziger 4 Inequality in Historical Perspective 63 Richard Jolly Part II Inequality and Conflict 5 Health Improvements and Health Inequality during the Last 40 Years 77 Giovanni Andrea Cornia and Leonardo Menchini 6 Inequality and Corruption 100 Eric M. Uslaner 7 Indivisibility, Fairness, Farsightedness and their Implications for Security 123 S. Mansoob Murshed 8 Violence in Peace: Understanding Increased Violence in Early Post-conflict Transitions and Its Implications for Development 135 Marcia Byrom Hartwell v vi Contents Part III Human Development and Wellbeing 9 International Convergence or Higher Inequality in Human Development? Evidence for 1975–2002 149 Farhad Noorbakhsh 10 Investing in Health for Economic Development: The Case of Mexico 168 Nora Lustig 11 A Wider Approach to Aid Effectiveness: Correlated Impacts on Health, Wealth, Fertility and Education 183 David Fielding, Mark McGillivray and Sebastian Torres 12 Is Social Capital Part of the Institutions Continuum and is it a Deep Determinant of Development? 197 Stephen Knowles Part IV Globalization 13 Stormy Days on an Open Field: Asymmetries in the Global Economy 227 Nancy Birdsall 14 A Quest for Pro-poor Globalization 252 Machiko Nissanke and Erik Thorbecke 15 International Migration in an Era of Globalization: Has it Come Out of its Marginality? 273 Arjan de Haan Part V Development Finance 16 International Risk Tolerance, Capital Market Failure and Capital Flows to Emerging Markets 299 Valpy FitzGerald 17 Prolonged Use and Conditionality Failure: Investigating IMF Responsibility 319 Silvia Marchesi and Laura Sabani 18 International Finance and the Developing World: The Next 20 Years 333 Tony Addison Contents vii Part VI Growth and Poverty 19 Gender and Growth in Sub-Saharan Africa: Issues and Evidence 349 Mark Blackden, Sudharshan Canagarajah, Stephan Klasen and David Lawson 20 Decomposing Growth: Do Low-income and HIPCs Differ from High-income Countries? 371 Pertti Haaparanta and Heli Virta 21 Evaluating Targeting Efficiency of Government Programmes: International Comparisons 400 Nanak Kakwani and Hyun H. Son 22 Innovations, High-tech Trade and Industrial Development: Theory, Evidence and Policy 416 Lakhwinder Singh 23 Manufacturing, Services and Premature Deindustrialization in Developing Countries: A Kaldorian Analysis 435 Sukti Dasgupta and Ajit Singh Part VII Development Strategies 24 Why Have All Development Strategies Failed in Latin America? 457 Guillermo Rozenwurcel 25 Development in Chile 1990–2005: Lessons from a Positive Experience 476 Álvaro García Hurtado 26 Three Decades of Rural Development Projects in Asia, Latin America and Africa: Learning from Successes and Failures 493 Annelies Zoomers 27 Development Strategy, Viability and Economic Institutions: The Case of China 518 Justin Yifu Lin, Mingxing Liu, Shiyuan Pan and Pengfei Zhang 28 Institutions, Policies and Economic Development 531 Grzegorz W. Kolodko 29 Patterns of Rent Extraction and Deployment in Developing Countries: Implications for Governance, Economic Policy and Performance 555 Richard M. Auty viii Contents 30 Credit Co-operatives in Locally Financed Economic Development: Using Energy Efficiency as a Lever 578 Robert J. McIntyre Part