Planning studies with an optimal control multisectoral dynamic economic model: The case of Sri Lanka

This article investigates the impact of different development scenarios on optimal investment strategy and economy of Sri Lanka and studies the potential of applying control theory techniques to economic planning. The multisectoral dynamic planning model is formulated as a linear quadratic tracking problem. Targets to be tracked define the development strategies: economic growth, trade deficit reduction, food self-sufficiency, and balanced growth. Besides providing insights into these strategies, empirical results show that the difficulty in setting inequality constraints and ensuring nonnegative solutions could undermine the linear tracking optimal control technique for development planning.     

Agricultural economic reforms,gender inequality and poverty in Senegal

In Senegal, as in many developing countries, the agricultural sector plays a key role in the economy. In addition to supplying food, agriculture is the most important source of employment, especially for women. Through the Plan for an Emerging Senegal (PES), the Senegalese government is implementing an ambitious financing plan to improve the productivity of the agricultural sector and enhance employment opportunities for women. Our study assesses the impact of two PES measures (investment subsidies and an increase in production subsidies for the agricultural sectors) on economic growth, women's employment, poverty and inequality using a dynamic computable general equilibrium model linked to a microsimulation model. The results show that both policies have generally positive effects in reducing poverty and gender inequalities. However, investment subsidies in the agricultural sectors have stronger impacts in reducing gender inequality and poverty in the long term.     

Global Economy and Gender Inequalities: The Case of the Urban Chinese Labor Market*

Objectives. This article examines the effects of economic globalization on gender inequalities in urban China. It argues that the significance of economic globalization on gender inequality depends on its impact on job queues in the labor market of a country. Methods. Using both individual‐ and city‐level data, and a series of multilevel linear and logistic models, we analyze the effects of three city‐level variables on the gender gap in income: foreign direct investment (FDI) per capita, growth rate of FDI, and opening up to overseas investment early on. We also examine gender differences in employment in high‐paying foreign‐invested firms, and in lower‐paying export‐oriented manufacturing. Results. We find no variation in gender gap in income among cities of varying levels of FDI, growth rates of FDI, or whether they were among the earliest to open up to international investment. Women are more likely to be employed in export‐oriented manufacturing industries that offer lower wages and are less likely to work in high‐paying foreign firms and joint ventures. Conclusions. These results suggest that economic globalization profoundly influences gender inequalities by changing the nature of job queues, and men and women are sorted and matched into jobs accordingly. Economic globalization contributed to and perpetuated a gendered distribution of male and female workers in the Chinese urban labor market in the late 1990s.     

Macroeconomic impact of public debt and foreign aid in Sri Lanka

Accumulation of public debt in Sri Lanka is raised significantly since the independence. It exceeded 100% of gross domestic products (GDP) in the late 1980s and the early 2000s. Although it has been declined in the recent past and becomes 79.3% of GDP in 2016; the high level of debt in a weak fiscal position of the small economy Sri Lanka is an issue of concern. In this backdrop, this paper examines the impact of public debt and foreign aid on income, price level and interest rate in Sri Lanka for the post-reform period. It is found that public debt in general and foreign debt, in particular, depresses income and stimulates price level. Domestic debt has some impact on the price level. On the other hand, foreign aid has a deleterious effect on both the income and price level. The foreign debt and aid have raised interest rate both in the short-run and in the long-run, while no significant impact of the domestic debt on interest rate is found. Based on these findings, the paper elaborates on some long-term measures for reducing the dependence on debt and aid in Sri Lanka.     

Regime-specific impact of financial reforms on economic growth in Pakistan

This study uses and proposes a new methodological approach to construct a financial liberalization index on the basis of the dynamic factor model technique. The resulting index is used to investigate the impact of the financial sector reforms in Pakistan on economic growth. Using the Markov regime-switching model over the period 1972–2015, the empirical results showed that the examined relationship is nonlinear, nonmonotonic, state-dependent, and better described by the two-state Markov switching model characterized by the high growth regime and low growth regime. Despite the positive impact of financial liberalization on economic growth in both the high and low growth regimes, financial liberalization relatively strongly affects real GDP growth in the high growth regime. The results further demonstrate that transition probabilities establish an inordinate episode of the low growth regime. Furthermore, the high growth regime is relatively short-lived than the low growth regime. Among the other variables, trade openness and physical capital stock have a positive impact on economic growth, while labor force and government expenditure exert a negative effect on economic growth. Several economic policies are proposed and discussed for better functioning of financial sector development in Pakistan.     

Determinants of Social Expenditure in Sri Lanka

The study examines the determinants of social expenditure in Sri Lanka for the period 1970–2010. The data are from a new data set assembled by the authors. The social spending data are collected from the Central Bank of Sri Lanka on education, health, and also on welfare spending. The study explains the determinants of social spending considering the demand‐side and the supply‐side driving forces and finds that inequality issues have been a major concern of social policy in Sri Lanka. Similarly, this study implies the influence of political behavior to satisfy voters as explained by the fiscal illusion theory. The globalization is not significant for social expenditure as commonly assumed in developed countries. Even the consequences of the self‐interested behavior of bureaucrats are not evident in the Sri Lankan welfare sector.     

经济增长:内生增长理论与中国人力资本投资

内生增长理论是现代经济增长理论中的一个核心内容.从长期经济增长率所依赖的路径来看,人力资本和技术进步作为经济增长的内生因素,可以弥补因其他要素收益递减而带来经济增长停滞这一局面.技术进步是由人力资本投资所形成的有效机制而演化成增长动力的一种必然结果.中国技术进步贡献度低下的最主要原因,是由于人力资本投入不足(人力资本积累不足)造成的.在国家财政政策干预下,以内生增长为动力,逐步形成有利于经济增长的物质资本投资向人力资本投资转换的机制.     

人力资本、社会资本对大学生就业质量的影响

人力资本对就业地区、就业行业、单位性质和承诺月薪的影响力分别为3.08%、10.4%、2.89%、12.38%,总影响力为7.19%;社会资本对以上四项的影响力分别为17.57%、3.54%、3.48%、1.82%,总影响力为4.69%。人力资本和社会资本成为大学生就业质量的双轮驱动力。就业质量差异扩大是一国经济发展的必然结果。人力资本的影响是合理的,而社会资本的影响具有两面性。大学生要努力积累人力资本,高校应开展就业能力导向的教学改革,政府要完善劳动力市场,以改善大学生就业质量。     

教育扩展与大学生就业率的变化

典型调查表明,就业率在教育扩展中呈现下降趋势,近二年研究生处于短缺或基本平衡状态,本科生处于就业困难状态,专科生处于就业危机状态,不同专业毕业生的就业率存在一定差异。这是我国人力资本投资的风险增大和信号性功能减弱的体现。应根据我国经济发展需要做好高等教育的合理规划,调整高等教育的扩招速度、层次结构和专业结构,规范就业率统计体系,以促进大学生就业。     

Welfare programs and the state economy

Welfare policy has been controversial and support is often drawn along political affiliation lines, the economic return of investment in welfare programs is frequently cited as a justification for new and expanded policies. To investigate the direct and indirect effects of welfare programs on economic performance, the authors develop a multilink approach, through employment and investment. The relationship is then tested with data from each of the United States from 1976 to 2006. Findings show welfare programs have no direct effect on a state's economy. Indirectly, welfare has a negative effect through investment, though the effect on employment is minimal.     

斯里兰卡内战结束以来印度对斯政策分析

自2009年斯里兰卡内战结束以来,印度积极参与了斯里兰卡的重建与和解进程并推动两国的经济一体化。但是印度的对斯里兰卡政策并未能取得预定的效果。除了受自身实力、斯里兰卡外交独立性、泰米尔纳德邦等因素的制约外,地区战略的排他性从根本上也影响了印度对斯里兰卡政策的效果。     

SPECIAL ISSUE： REGIONAL CONVERGENCE AND COORDINATED URBAN GROWTH Regional Economic Convergence Mechanisms in the Yangtze River Delta

本文运用非参数DEA分析方法,将中国经济发展的最前沿区域——长三角地区的经济增长分解为物质资本积累、效率改善、技术进步和人力资本投入等四部分,然后利用空间统计与空间计量经济分析技术,采用绝对收敛方程考察了长三角经济增长率与这四类因素的收敛效应。实证结果表明,物质资本所贡献的经济增长主导着长三角各县市区的实际经济增长;长三角区域经济增长存在显著的空间依赖性,并对经济增长的变化趋势产生明显影响;物质资本积累这一新古典经济增长因素是唯一使得长三角地区间差距缩小的因素,主导着长三角地区经济收敛的方向;人力资本、效率改善与技术进步等新经济增长因素使得长三角经济增长趋异,对长三角的经济差距也产生了深刻的影响。     

Reforming formal social security systems in India and Sri Lanka

This paper analyses the formal social security systems of India and Sri Lanka. While many of the social, demographic, and economic indicators differ markedly between the countries, the structure of the social security systems, challenges, and reform directions are quite similar. Thus, the provident fund organizations in both countries need to modernize and benchmark their governance, operations, and investment policies. The dualism in their systems, which has resulted in relatively generous non–contributory pensions being provided to civil servants, also needs to be addressed. This dualism and the fiscal unsustainability of current civil service pension arrangements lend urgency to reforms in this area in the two countries. The prospects for voluntary tax–advantaged private sector schemes are encouraging, particularly in India. The conditions for reforms are more favourable now owing to hopeful signs of an end to longstanding conflict in Sri Lanka, and decade–long experience with financial sector reforms in India.     

外商直接投资与北京经济增长

在总结近二十年来北京实际利用外商直接投资(FDI)特点的基础上,运用1987~2004年相关数据资料,定量分析FDI对北京经济增长的影响,通过研究FDI与国内投资和全要素生产率之间的关系,揭示FDI影响北京经济增长的作用机制。从总体上看,FDI促进了北京经济增长。     

Agricultural policies and development: A socioeconomic investigation applied to Sri Lanka

This paper explores the interrelationship between agricultural policies and development by means of a dynamically recursive, computable general equilibrium model applied to Sri Lanka. The agricultural policies investigated include elimination of the food subsidy, land reform, and technical change in agriculture. The goals considered are the levels and growth rates of GNP and employment, the distribution of income, and the real income level of the lowest income group. The study provides a quantitative assessment of the association between policies and goals and identifies the key economic mechanisms in this association.     

Trade and poverty nexus: A case study of Sri Lanka

The link between trade liberalisation and poverty has become one of the most debated topics in recent years. There is a growing body of empirical literature on this topic and many studies provide mixed results. In this study, Sri Lanka is used as a detailed case study and a computable general equilibrium (CGE) approach is used as an analytical framework to examine the trade-poverty nexus. The results suggest that, liberalisation of the manufacturing industries is more pro-poor than that of the agricultural industries. Overall, this study suggests that trade reforms may widen the income gap between the rich and the poor creating uneven gains across different household groups in Sri Lanka. While short-term complementary policies are needed to compensate vulnerable income groups, long-term policies are needed to make gains from trade liberalisation more inclusive and equitable to maintain economic and political stability in Sri Lanka.     

The economic consequences of the welfare state

What are the economic and employment consequences of larger social insurance programmes? Are larger welfare states diverting resources from economic activity and distorting the investment decisions of firms? I examine theoretical and empirical research on the economic consequences of the welfare state. This review shows that the predictions of a negative relationship between higher levels of social protection and growth have not been borne out in the data. Both insurance programmes and other policies that increase investment in human capital or the overall productivity of workers generate important economic externalities that outweigh the potentially distortionary effects of higher taxes. Empirical studies also fail to uncover a consistent negative relationship between larger welfare states and the level of employment. The employment consequences of the welfare state are mediated by existing institutions and policies—such as the level of centralization of the wage bargaining system—which affect the redistribution of the costs of higher taxes among workers and firms. As a result, the employment consequences of larger welfare states are non-linear.     

Secondary school dropout and work outcomes in ten developing countries

This paper analyzes the impact of secondary school dropout on the work outcomes of young people in ten developing countries. Understanding such a phenomenon is important because it may affect work prospects, exacerbate income inequality and determine macroeconomic lasting effects given that the formation of a skilled workforce is a key element of economic development and growth.When accounting for endogeneity, we find that secondary school dropout decreases the probability of being employed in non-elementary occupations, suggesting that unskilled workers fail to meet the increasing demand for a skilled workforce. Secondary school dropout, indeed, hinders the accumulation of adequate levels of human capital and anticipates entry into the unskilled labor market.Thus, policy-makers should aim at the extension and efficacy of compulsory education to the secondary level to avoid future under-education problems to promote a skilled workforce and encourage economic development and growth in the long run.     

Globalization and income inequality: Implications for intellectual property rights

This paper examines the impact of globalization on income inequality for a cross-section of 62 developing countries over a period of 17 years (1985–2001). The results of the study indicate that globalization explains only 15% of the variance in income inequality. More specifically, the results show that (1) strengthening intellectual property rights and openness are positively correlated with income inequality; (2) foreign direct investment is negative and significantly correlated with income inequality but this is not robust to different model specifications; (3) the institutional infrastructure is negatively correlated with income inequality. The study's findings and the review of the literature suggest that globalization has both costs and benefits and that the opportunity for economic gains can be best realized within an environment that supports and promotes sound and credible government institutions, education and technological development.     

Population,environment and sustainable development

The present population of Sri Lanka (17.7 million) is sufficient to create concern about the use, limitations, and waste of natural resources. Between 1871 and 1946, the population grew at an average rate of 1.4% annually, with high fertility and mortality. The population doubled between 1946 and 1981, and mortality declined. Between 1971 and 1991, the rate of growth declined due to a decrease in fertility and an increase in emigration. With a growth rate of 1.4%, the population will again double to 35 million by 2040. Technological improvements in Sri Lanka have led to an eight-fold increase in metric tons of rice production, but the growth in population has caused a deficiency in output so that basic per capita caloric requirements are not being met. Increased productivity has almost depleted the area available for cultivation, and the use of fertilizers to increase yields has environmental drawbacks. The high fertility of the 1970s contributed to increased labor force participation rates of 2.2%, which resulted in more people joining the labor force than leaving. Thus, the employment market has been unable to absorb the unemployed or potential new workers. Growth of the employment market may also conflict with environmental protection, as exemplified by the mining of the coral reef on the southwestern coast. The conversion of forests to agriculture resulted in forest losses of about 42,000 hectares per year during 1956-83. Deforestation is also occurring in the high forests due to increased pressure for fuelwood. In the wet zone, the use of forests for fuelwood is declining, but rubber wood is being harvested for industrial production. In order to slow population growth to replacement levels by the year 2000 (with a total population of 25 million), contraceptive prevalence must be increased to 72% at a cost of about $25 million.