The Quonset Economic Impact

This report provides a data-driven and comprehensive assessment of the economic impact and tax incidence implications of economic activities at the Quonset Business Park

Romania -- Systematic Country Diagnostic: background note-agriculture (English)

Agriculture plays a significant socio-economic role in Romania and its transformation to a modern, vibrant, and market-oriented sector is central to fighting poverty, promoting social inclusion, and reducing the urban/rural development divide. Most of Romania\u27s poor live in rural areas and earn their living from agriculture or agriculture-related activities. In 2016, eight out of ten people who were at risk of poverty or social exclusion lived either in rural areas or in towns and suburbs that were predominately rural. Using microdata from the 2013 Household Budget Survey (HBS), this report finds that individuals living in rural areas are 16.5 percent more likely to be poor than those who live in urban areas. Also, those living in rural areas and working in agriculture are 27 percent more likely to be poor. There are large variations in poverty rates and in the risk of poverty or social exclusion across regions in Romania. The risk of poverty or social exclusion is significantly higher in the northeast, southeast, west Oltenia, south Mutenia, and the west regions compared to that in Bucharest-Ilfov, the northwest, and center regions

Institutions, Innovation and Economic Growth

This article contributes to the growth literature by developing a formal growth model that provides the basis for studying institutions and technological innovation and examining how human capital and institutional constraints affect the transitional and steady state growth rates of output. The model developed in this article shows that the reason that growth models a-la-Romer (1990) generate endogenous growth is the use of a set of restrictive and unrealistic assumptions regarding the role of institutions in the economy. The baseline model developed in this article shows that the long-run growth of the economy is intrinsically linked to institutions and suggests that an economy with institutions that retard or prevent the utilization of newly invented inputs will experience low levels and low growth rates of output. The model also predicts that countries with institutional barriers that prevent or restrict the adoption of newly invented technologies will allocate a relative small share of human capital in the R&D sector. Moreover, both the baseline and the extended version of the model suggest that sustainable growth in human capital, not an increase in the stock of human capital, generates a growth effect.Institutions; innovation; human capital; economic growth

Institutions-Augmented Solow Model And Club Convergence

Growth economists still face challenges and limitations to incorporate institutions into the standard growth framework. This article develops a simple augmented Solow growth model that accounts for the interactions between institutions and factor-productivity and examine the impacts of the quality of institutions on levels and growth rates of output. The institutions augmented growth model shows that differences in the quality of institutions preclude convergence and determine both the level and the growth rate of output per worker. The model also shows that poor institutions induce poverty traps. Furthermore, the income gap between rich and poor countries will increase if poor countries’ institutions do not improve relative to their rich counterpart.Solow Model, Institutions, Club Convergence, Poverty Traps

Poverty, Geography and Institutional Path Dependence

Using seven alternative measures of the institutions, this study examines the impacts of the quality of institutions on poverty rates in developing countries. The estimates obtained using the instrumental variable method (2SLS) show that the quality of institutions is negatively related with poverty rates and explain a significant portion of the variation in poverty rates across countries. More precisely, the empirical results suggest that an economy with a robust system to control corruption, market-friendly policies, a working judiciary system, and in which people have freedom to exercise their citizenship will create the necessary conditions to promote economic development and reduce poverty. The results suggest that pro-poor policies aimed at reducing poverty should first consider improving the quality of institutions in developing countries as a pre-requisite for economic development and poverty eradication.Poverty Trap, Institutions, Development

Innovation and institutions: Examining the black box

This dissertation contributes to the literature by investigating the links between institutions and innovation from both a theoretical and an empirical standpoint. Specifically, this dissertation (i) develops a theoretical growth model that explicitly accounts for the influences of institutions on technical innovation and output production; (ii) specifies an empirical model suitable to examine the affect of institutions on technical innovation based on a theoretical model; and (iii) tests if different measures of institutions (i.e., Control of Corruption, Rule of Law, Regulatory Quality and Expropriation Risk) have differentiated impacts on innovation. A major prediction of the theoretical model is that better institutional arrangements boost innovation and thus economic growth. The lack of right institutions will retard or prevent the utilization of newly invented inputs in the productive process, leading to relatively lower levels of output. Therefore, controlling for all other determinants of income, countries or regions that experience institutional constraints preventing the adoption of newly invented technologies will be expected to lag behind in terms of growth and levels of output per capita. Additionally, the theoretical model shows that this gap does not vanish over time. The model also predicts that in the steady state the stock of human capital should not be associated with the growth rate of output, but rather that the growth rate of human capital should be associated with the growth rate of output. The empirical analysis uses cross-country data and instrumental variables in order to examine the influences of institutions on technical innovation. The results support the argument that institutions explain much of the variation on patent production across countries and this finding is consistent across countries that are both on and off the technological frontier. The empirical results also provide evidence that control of corruption, market-friendly policies, protection of private propriety and a more effective judiciary system have growth effects on income because institutional quality affects an economy\u27s rate of innovation. Ultimately, innovation is the engine of economic growth. This study also finds evidence that geography, per se , does not explain innovation across countries. Geography affects innovation, but only through institutions

The Impacts of El Niño and La Niña on Large Grain Producing Countries in ECA: Yield, Poverty and Policy Response

There is a need to further examine and enhance knowledge concerning the relationship among El Niño and La Niña cycles, drought events, and grain production in the Russian Federation, Ukraine and Kazakhstan (RUK) region, which accounts for more than one third of total wheat exports. This report contributes to close this knowledge gap. A data-driven analysis is utilized to gain a better understanding of (a) the potential impact on grain production of droughts linked to the El Niño/La Niña phenomenon in RUK, (b) RUK governments’ policy response to those events and how domestic and regional grain markets are affected, and (c) the implications for food security and poverty in the RUK region. The results from the analysis suggest that the RUK region’s response to climatic events including droughts must change from reactive to preventive and predictive. It must also consider a broad range of interventions to manage risk. Emerging digital technologies offer unique predictive and diagnostic capabilities that can be coupled with climate-smart agriculture to improve resilience to El Niño and La Niña event

Two Tales on the Returns to Education: The Impact of Trade on Wages

This paper uses microdata from the Current Population Survey combined with data from the U.S. International Trade Commission and Bureau of Economic Analysis to evaluate the impacts of international trade (imports penetration and exports intensiveness) on wages with a special focus on the returns to education. Consistent with the literature, our empirical analysis provides evidence that the wage rates of similarly skilled workers differ across net-exporting, net-importing and nontradable industries. Our results add to the literature by showing that the wage gap usually found across importing and exporting industries vanishes for highly-skilled workers (workers with college degree and beyond) when we control for the cross-effect between international trade and education, but the wage gap due to international trade still persists for low-skilled workers. This finding supports the view that education serves as an equalizer and counterbalances the adverse impact from imports-penetration on wages of highly-skilled workersTrade; Returns to Education; Wage Differential

Convergence, dynamics, and geography of economic growth : The case of municipalities in Rio Grande do Norte, Brazil

Analyses of municipal GDP growth in Rio Grande do Norte in the Northeast of Brazil during 1970-96 reveal that the cross-section dispersion of per capita income increased over time. Although the analysis indicates some spatial dependence in income, it is small and has a downward trend, indicating that the growth path is only weakly determined by geographical links in Rio Grande do Norte. Moreover, dynamic analyses based on the Markov chain transition matrix show that the probability of a municipality moving from a poor income class to a rich class is very small and vice-versa. Municipalities located in the middle-income class have high mobility, but there is no strong evidence indicating direction. Public policy should include assisting the rural families by providing them education and training that increases their opportunities for employment. There should also be policies to assist poor and unskilled migrants to integrate fully into the modern economy in the urban areas through skill development training and education.Economic Conditions and Volatility,Environmental Economics&Policies,Urban Governance and Management,Economic Theory&Research,Regional Governance,Governance Indicators,Achieving Shared Growth,Economic Theory&Research,Economic Conditions and Volatility,Environmental Economics&Policies

Do Institutions Impact Innovation?

This paper contributes to the literature on institutions and economic growth by conducting an empirical examination on the links between innovation and institutions. Using cross-country data and the instrumental variable method, this study finds that institutional arrangements explain much of the variation on patent production across countries. We find evidence that control of corruption, market-friendly policies, protection of property rights and a more effective judiciary system boost an economy’s rate of innovation. Most of the previous literature on institutional and economic performance finds a positive association between institutions and levels of income and between institutions and the transitional growth rates of per capita income; however an unambiguous empirical association between institutions and the steady state growth has not yet been established. Based on the theoretical model developed by Tebaldi and Elmslie (2006), which shows that the impacts of institutions on innovation spillover to the growth rate of GDP per capita, this paper shows evidence of a growth effect through innovation, i.e., institutions have a growth effect on income because institutional quality affects an economy’s rate of innovation, the engine of economic growth. Moreover, this study finds that controlling for institutional quality; geographic-related variables are not significant in explaining patent production. This paper also finds evidence to support the idea that in the long-run human capital accumulation is an important variable in shaping institutions.Institutions, innovation, economic growth