Regulation and Development

Jean-Jacques Laffont

Cambridge University Press
March, 2005
ISBN: 0521549485

Providing the first theoretical analysis of regulation of public services for less developed countries (LDCs), Jean-Jacques Laffont demonstrates how the debate between price-cap regulation and cost of service regulation is affected by the characteristics of LDCs. Laffont develops a new theory of regulation with limited enforcement capabilities, and discusses the delicate issue of access pricing in view of LDCs' specificities. His evaluation of the different ways to organize the regulatory institutions makes a significant contribution to the field.

In Regulation and Development Jean-Jacques Laffont provides the first theoretical analysis of regulation of public services for developing countries. He shows how the debate between price-cap regulation and cost of service regulation is affected by the characteristics of less developed countries (LDCs) and offers a positive theory of privatization that stresses the role of corruption. He develops a new theory of regulation with limited enforcement capabilities and discusses the delicate issue of access pricing in view of LDC's specificities. In the final chapter he proposes a theory of separation of powers which reveals one of the many vicious circles of underdevelopment made explicit by the economics of information. Based on organization theory and history, and using simple empirical tests wherever possible, Professor Laffont offers a comprehensive evaluation of the different ways to organize the regulatory institutions and opens up a rich new research agenda for development studies.

 Explaining Growth in the Middle East

Edited by Jeffrey Nugent and Hashem Pesaran

Elsevier Science
February 23, 2007
ISBN-10: 0444522409

ISBN-13: 978-0444522405

This book is about the Middle East and North Africa (MENA) region. This region is generally perceived as having experienced the most disappointing growth performance over the last couple of decades of any region in the world with the possible exception of Sub-Sahara Africa. Despite the region?s immense endowment of natural resources, its per capita income is often viewed as having stagnated. At the same time, most economies of the region have been characterized by extremely high volatility, a condition only partly attributable to the fluctuating price of oil.

 Understanding Japanese Saving:
Does Population Aging Matter?

Robert Dekle

January 21, 2005
ISBN: 0415129761

Japan's economy has been something of an enigma in recent years. This book is a self-contained analysis of Japanese saving behavior that has important implications for all developing countries.

StraussIndonesian Living Standards:
Before and After the Financial Crises

John Strauss et al

RAND Corporation
ISBN: 9812301682

The Asian financial crisis dealt a serious blow to what had been a thirty-year period of rapid growth in East and Southeast Asia. This book uses the Indonesia Family Life Surveys (IFLS) from late 1997 and late 2000 to examine changes in many different dimensions of living standards of Indonesians from just before the start of the crisis to three years after. As of late 2000, individuals in the IFLS data appear to have recovered in their living standards to the levels seen immediately prior to the crisis. This is the case for many dimensions of their standard of living: poverty, incomes, wages, child school enrolments, child and adult health status and health care utilization, and contraception use. The contributors use the available data to present a true-to-life overview of living conditions in rural and urban Indonesia.

StraussIslam and Mammon:

The Economic Predicaments of Islamism

Timur Kuran

Princeton University Press
ISBN: 0691115109

Book Review:

The doctrine of "Islamic economics" entered debates over the social role of Islam in the mid-twentieth century. Since then it has pursued the goal of restructuring economies according to perceived Islamic teachings. Beyond its most visible practical achievement--the establishment of Islamic banks meant to avoid interest--it has promoted Islamic norms of economic behavior and founded redistribution systems modeled after early Islamic fiscal practices.

In this bold and timely critique, Timur Kuran argues that the doctrine of Islamic economics is simplistic, incoherent, and largely irrelevant to present economic challenges. Observing that few Muslims take it seriously, he also finds that its practical applications have had no discernible effects on efficiency, growth, or poverty reduction. Why, then, has Islamic economics enjoyed any appeal at all? Kuran's answer is that the real purpose of Islamic economics has not been economic improvement but cultivation of a distinct Islamic identity to resist cultural globalization.

The Islamic subeconomies that have sprung up across the Islamic world are commonly viewed as manifestations of Islamic economics. In reality, Kuran demonstrates, they emerged to meet the economic aspirations of socially marginalized groups. The Islamic enterprises that form these subeconomies provide advancement opportunities to the disadvantaged. By enhancing interpersonal trust, they also facilitate intragroup transactions.

These findings raise the question of whether there exist links between Islam and economic performance. Exploring these links in relation to the long-unsettled question of why the Islamic world became underdeveloped, Kuran identifies several pertinent social mechanisms, some beneficial to economic development, others harmful.

The Reluctant Economist:
Perspectives on Economics, Economic History, and Demography

Richard A. Easterlin

Cambridge University Press
June, 2004
ISBN: 0521829747

Where is rapid economic growth taking us? Why has its spread throughout the world been so limited? What are the causes of the great twentieth century advance in life expectancy? Or of the revolution in childbearing that is bringing fertility worldwide to near replacement levels? Have free markets been the source of human improvement? Economics provides a start on these questions, but only a start, argues economist Richard A. Easterlin. To answer them calls for merging economics with concepts and data from other social sciences, and with quantitative and qualitative history. Easterlin demonstrates this approach in seeking answers to these and other questions about world or American experience in the last two centuries, drawing on economics, demography, sociology, history, and psychology. The opening chapter gives an autobiographical account of the evolution of this approach, and why Easterlin is a 'reluctant economist'.

The Divergent Dynamics of Economic Growth

Richard H. Day

Cambridge University Press
November, 2003
ISBN: 0521830192

This book explains how changing technology and economizing behavior induce vast changes in productivity, resource allocation, labor utilization, and patterns of living. Economic growth is seen as a process by which businesses, regimes, countries, and the whole world pass through distinct epochs, each one emerging from its predecessor, each one creating the conditions for its successor. Viewed from a long run perspective, growth must be characterized as an explosive process, marked by turbulent transitions in social and political life as societies adapt to new opportunities, the demise of old ways of living, and to the vast increase and redistribution of human populations. The book is based on a new and unique synthesis of classical economics and contemporary concepts of adaptation and economic evolution. Although it is based on analytical methods, the text has been stripped of all equations and with few exceptions is devoid of technical jargon.

Analysis of Panel Data, 2nd Ed.

Cheng Hsiao

Cambridge University Press
February, 2003
ISBN: 0521818559

Panel data models have become increasingly popular among applied researchers due to their heightened capacity for capturing the complexity of human behavior as compared to cross-sectional or time series data models. As a consequence, richer panel data sets also have become increasingly available. This second edition is a substantial revision of the highly successful first edition of 1986. Recent advances in panel data research are presented in a rigorous and accessible manner and are carefully integrated with the older material. The thorough discussion of theory and the judicious use of empirical examples make this book useful to graduate students and advanced researchers in economics, business, sociology, political science, etc. Other specific revisions include the introduction of the notion of strict exogeneity with estimators presented in a generalized method of moments framework, the notion of incidental parameters, more intuitive explanations of pairwise trimming, and discussion of sample selection dynamic panel models.

"Cheng Hsiao has made many significant and important contributions to panel data econometrics, both methodological and applied, beginning with his 1972 dissertation, in numerous articles, and in his masterful and magisterial 1986 monograph, Analysis of Panel Data . He has now extensively revised and updated his 1986 monograph, long a standard reference and popular graduate text. Not only has Hsiao significantly revised the material covered in his original monograph, he has added major new chapters on nonlinear panel models of discrete choice and sample selection, and included new material on the Bayesian treatment of models with fixed and random coefficients, pseudopanels, simulation methods of estimation, and more extensive treatment of dynamic models. Throughout, Hsiao provides both a thorough and insightful methodological discussion and numerous applied examples, which greatly enhance the reader's understanding and intuition. The clarity of his exposition and organization is exemplary. All of us who work in the field of panel data econometrics have been, and will now more than ever, continue to be, in Hsiao's debt."
- Marc Nerlove, University of Maryland

"The first edition of Analysis of Panel Data by Cheng Hsiao has been necessary reading and a landmark for 15 years. The revised and much expanded second edition splendidly integrates the important new developments in the field. One can be sure it will stay a landmark for the 15 years to come."
- Jacques Mairesse, ENSAE, France

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