Fiscal rules and discretion under persistent shocks

This paper studies the optimal level of discretion in policymaking. We consider a fiscal policy model where the government has time-inconsistent preferences with a present-bias towards public spending. The government chooses a fiscal rule to trade off its desire to commit to not overspend against its desire to have flexibility to react to privately observed shocks to the value of spending. We analyze the optimal fiscal rule when the shocks are persistent. Unlike under i.i.d: shocks, we show that the ex-ante optimal rule is not sequentially optimal, as it provides dynamic incentives. The ex-ante optimal rule exhibits history dependence, with high shocks leading to an erosion of future fiscal discipline compared to low shocks, which lead to the reinstatement of discipline. The implied policy distortions oscillate over time given a sequence of high shocks, and can force the government to accumulate maximal debt and become immiserated in the long run

Posterior Reversible Encephalopathy Syndrome: Three Ethiopian Hypertensive Patients Presented with Recurrent Seizure: Case Series and Literature Review

BACKGROUND: Posterior Reversible Encephalopathy Syndrome (PRES) is a potentially reversible neurological disorder of acute to subacute onset characterized by headache, nausea and vomiting, visual disturbance, seizure and altered mental status.Neuroimaging findings are characteristic, which allow early diagnosis in the appropriate clinical setting and enable to institute appropriate therapy timely.CASE PRESENTATION: We report 3 adult patients with a history of hypertension presented with recurrent episode of seizure and altered mentation.While all the 3 patients were preliminarily diagnosed with Ischemic stroke, they were subsequently diagnosed with posterior reversible encephalopathy syndrome after neuroimaging revealed the typical features of the syndrome. They were started on antihypertensive and anticonvulsant drugs. On follow-up examination after 3-4 weeks, the patients showed marked clinical and neuro-imaging improvements.CONCLUSION: Posterior reversible encephalopathy syndrome is a rare condition. The presenting clinical symptoms are non-specific and may mimic other neurological disorders. Therefore, early recognition of classic radiographic features is vital to the diagnosis. Timely diagnosis and treatment of this syndrome is important as the treatment outcome is mostly favorable.

Rural poverty in Ethiopia: household case studies from North Shewa

The paper utilizes qualitative data to expand our understanding of the nature and dynamics of rural poverty. It is based on data from key informant interviews, focus group discussions and household case studies collected in two kebele administrations in Tarmaber wereda of North Shewa, one in the woina dega agro-ecological zone and the other in the dega zone. The qualitative approach undertaken in this study goes beyond measurements of incomes and expenditures in assessing poverty to characterize the significance of varying levels of access to key production assets for household economic status, the nature of poverty in a specific context, and the attributes of locally relevant economic categories of households. The process-oriented approach to poverty provides a fuller and more accurate assessment of the factors explaining why households fall into poverty. It also shows how consideration of the 'active' and subjective aspects of various peasant livelihood strategies brings out the potential of and constraints on each of them. Furthermore, it demonstrates that social phenomena such as networks of mutual assistance, resource exchanges, the social development and adaptive changes in the structure of households, which are best studied through qualitative methods, have significant implications for household economic prospects and patterns of rural poverty. Finally, peasant perceptions and experiences of various government development interventions and institutions are considered in assessing their potential and shortcomings in terms of poverty reduction

Development of Saving and Credit Cooperatives in Mekelle: Evolution, performance and proposed intervention

This study is about the development of Savings and Credit Cooperatives in Mekelle Zone. The fundamental objective of this study is to asses and documents the evolution, performance and challenges of SACCOs in Mekelle Zone. A randomly selected seven sample SACCOs were taken to investigate the status, and their outreach performance based on the commonly accepted growth dimensions: governance, service delivery, financial performance and institutional capacity. A review of relevant documents and interview schedule were prepared and administered with randomly selected members and various committee members. Employee based SACCOs have laid the foundation in the development of SACCOs in Mekelle. SACCOs have shown a noticeable increase in number size diversity of membership post the over through of the command economy. They have increased from 8 prior the end of the command economy to 24 at present. The average membership per SACCO was 127 at the end of June 2006/7. Women share of membership was 33.3 percent. They have expanded in their type of membership base to include some community based members such as: small traders and women traders working in the zone. Regarding governance of the SACCOs, they have a well-developed by law that portrays the hierarchical relationship of various committees giving the ultimate ruling power to the general assembly. How ever absenteeism and inactive and inactive participation is commonly observed in the SACCOs. Besides, women have been under represented in committees and general assembly meetings are not usually conducted on schedule. The SACCOs offer limited financial service. The types of the saving products offered by all SACCOs under the present survey are limited to shares, compulsory deposits and voluntary deposits. They have exhibited substantial growth in the amount of saving they mobilize and deposit per member. The SACCOs offer loans to their members mainly for construction of dwellings, purchase of house furniture, educational fees, medical and hospitalization expenses with repayment period ranging between 2 and 3 years. The Interest rate the SACCOs charge is not adequate to cover fund cost, operating expenses, acceptable range of profit margin and inflation. The SACCOs have exhibited substantial growth in the amount of loan they disburse. They have achieved good repayment performance As far as financial performance is concerned, the saving amount in relation to the total assets for the SACCOs was found to be with in the range of standard of excellence set by WOCCU. On the other hand, the members share to total assets was less than the standard of excellence in majority of the SACCOs. In terms of institutional capital to total asset, they have not maintained the standard of excellence. The SACCOs data under study reveals no delinquency so far. Majority of the SACCOs, have maintained the standard of excellence set on operating expense to total asset ratio; on the other hand, the net income to assets was compared unfavorably to the standard of excellence 10 percent. This is due to the lowest service price they charge to members. Even though the SACCOs are endowed with well educated members, they lack training and education opportunities. They gave little emphasis on training committee members. They also are constrained lack of office, office equipment and facilities. The factors that that limit the SACCOs’ growth identified in the study were: inadequate support and weak regulation and supervision, limited expansion in size and type of membership, inadequate efforts to enhance self governance, limited saving and loan products offered by SACCOs, absence of non financial services, inadequate service charges, poor financial performance, absence of training and educational opportunities, lack of office, office furniture and equipment, and poor record handling and inappropriate information system. Finally the study has proposed various interventions to be undertaken by stakeholders such as: training intervention, enabling the SACCOs be self reliant, active regulatory measures, diversified membership, diversified products, regularly revised service price, and developing appropriate information system

Essays in Children\u27s Time Allocation and Age at Primary School Enrollment

The essays in this dissertation explore the challenges of primary school attendance and the timing of enrollment in primary school in a typical developing country where child labor is widely practiced and poor households have limited access to school. The first essay assesses if when a child was born relative to his/her siblings affect whether the child attends school or participates in child labor. I investigate this question by estimating the effect of birth order on the probabilities of school attendance and child labor participation. Endogeneity of family size may bias the coefficient estimate of birth order since high birth order children are observed only in larger families, and parents who choose to have more kids may be inherently different and children in these families would have worse outcome regardless of family size and birth order. To address the endogeneity of family size, I use instrumental variable approach where the proportion of boys in the family is used to instrument family size. Using a longitudinal household survey data from Ethiopia, I estimate unobserved effect bivariate probit instrumental variable model of school attendance and child labor choices. The results suggest that the probability of child labor participation decreases with birth order, but I find no evidence that suggests birth order affects the probability of school attendance. However, among children who are going to school, hours spent studying increases with birth order. The second essay offers empirical evidence on whether access to primary school induces children to enroll in primary school at the legal enrollment age using household survey data from Ethiopia. I exploit the variation in the intensity of the impact of the education reform across districts in Ethiopia to identify the effect of access to school on the timing of enrollment. Using prereform enrollment rate in primary school to measure the variation in the intensity of the impact of the reform, I estimate difference-in-differences models. The results suggest that the reform has substantially increased the probability the child enrolls in grade 1 by age 7. It is also found out that the reform has decreased age at enrollment in grade 1 by about 4 months. These estimates highlight an important role that access to school plays in inducing parents to enroll their kids in primary school at the legal enrollment age

Holistic Integrated Youth-Centered Development: Need For Change of Focus

Today, the world knows Ethiopia for its abject poverty, war, drought and severe HIV/AIDS prevalence. For these problems, many causes can be mentioned. Some of these are poor or underutilization of the available resources, Lack of good governance, lack of vision, lack of determination and commitment, absence of transparency and accountability. Equally, the inability to use the youth as a key development tool is the formidable cause for remaining in abject poverty. Due to these various reasons, we could not actualize this potential (youth) in to reality (for fighting poverty and achieving sustainable development). In developing countries like Ethiopia, the key role and importance of the youth in fighting poverty and reversing the prevailing adverse trends in all aspects (for instance, in halting HIV/AIDS, alleviating poverty and perennial hunger, maintaining democracy and establishing good governance and achieving sustainable development) is hardly realized. The youth, which constitute a large portion of the population (28.2%), are living in abject poverty and ignorance. They also lack up to date and relevant information in various social, economic, and more importantly on the effect of HIV/AIDS. Nevertheless, the youth can reverse this trend, as they are pillars for sustainable development. They can potentially alleviate economic and social problems of the country. Despite this fact, they have received scant attention from the society. In Ethiopia, knowingly or unknowingly, the youth are the most forgotten, misunderstood and underutilized human element (development resource). Yet, the society largely puts all the blame on the youth for all the problems that prevail in the country. Paradoxically enough, the society expects much from the youth, while holding uncritical biases and negative attitudes towards them. The Government is now on the threshold of building a better understanding of the potential power of the youth to stand in front of poverty and other social problems. This consciousness has now resulted in the official foundation of Ethiopian National Youth Charter in December of this year. It seems that the government has clearly understood that a country can develop hardly without active involvement of the youth. The writer of this paper has started with the following assumption. To fight poverty and perennial hunger, and thereby to achieve sustainable development, a nation should invest in the human element, particularly, the youth. In order to reap good harvest we have to invest on the youth since investing in the youth means investing for change. Indeed, investing on the youth is investment to make a better future. It is a real fact that in a country like Ethiopia, the youth can make a real difference. But, to materialize the above assumption, first and foremost the society should value the youth, understand their needs and interests, empower them to participate in the poverty and hunger fighting campaign and the struggle for halting the spread of HIV/AIDS. It is also important to enhance and enrich their initiative and creativity in order to find answers to the precarious problems of the country by and by. It is only when the youth are educated and transformed in to productive labor power and well-cultured citizens that they can commit themselves to their wellbeing as well as the overall welfare of their society. Thus, primarily this paper aims at elucidating the place and the role of the youth in fighting poverty, perennial hunger and halting the spread of HIV/AIDS in Ethiopia. Since only youth know better about themselves and their problems, the paper makes the information extracted from the youth a source (its information base) for the argument. Based on the available data, and implications of practical personal insight observations and experiences the paper would try to address the intricated problems of the youth from broader perspectives

Vitamin B6 status of pregnant women attending antenatal clinic in northwestern Ethiopia

No Abstract Available Ethiop.J.Health Dev. Vol.19(1) 2005: 63-6

Income and Democracy

We revisit one of the central empirical findings of the political economy literature that higher income per capita causes democracy. Existing studies establish a strong cross-country correlation between income and democracy, but do not typically control for factors that simultaneously affect both variables. We show that controlling for such factors by including country fixed effects removes the statistical association between income per capita and various measures of democracy. We also present instrumental-variables using two different strategies. These estimates also show no causal effect of income on democracy. Furthermore, we reconcile the positive cross-country correlation between income and democracy with the absence of a causal effect of income on democracy by showing that the long-run evolution of income and democracy is related to historical factors. Consistent with this, the positive correlation between income and democracy disappears, even without fixed effects, when we control for the historical determinants of economic and political development in a sample of former European colonies.