UN Department of Economic and Social Affairs (DESA) Working Papers

Poverty reduction is a function of economic growth, income distribution and distribution changes. Governance can impact both growth and income distribution. The dominant market-enhancing governance paradigm seeks to enhance the efficiency of markets through ‘good governance’ reforms, ostensibly to trigger or sustain growth. ‘Pro-poor’ good governance reforms purport to enhance the scale and efficiency of service delivery to the poor. The good governance approach to enhancing growth is disputed. Neither theory nor evidence strongly support the plausibility of significantly reducing poverty through the good governance agenda. Alternative governance approaches for addressing poverty are contrasted favourably with the currently dominant paradigm.

Free, independent and hard-hitting media can play an important role in curbing corruption. Media in Uganda has enjoyed considerable freedom in this regard since Museveni came to power in 1986. The evolving power structure and a changing media landscape, however, have presented both challenges and opportunities for media’s watchdog role on corruption. This paper will explore how this environment defined such role between 1986 and 2006 during Museveni’s “no-party” rule. It argues that, although media won important battles to promote accountability in public offices, the regime’s complex power structure has consistently challenged their role as an instrument of public accountability.

Evidence on calorie intake and nutritional outcomes establishes that chronic hunger and food insecurity persist today on a mass scale in India. The liberalization-induced policy of narrow targeting of the Public Distribution System (PDS), a programme of food security that provides a minimum quantity of cereals at subsidized prices, has resulted in worsening food insecurity. Recent evidence from the 61st round of the National Sample Survey in 2004-2005 establishes that targeting has led to high rates of exclusion of needy households from the system and clear deterioration of coverage in States like Kerala where the universal PDS was most effective.

The present study analyzes the determinants of improving outcomes in education, health and basic sanitation and the macroeconomic trade-offs caused by scaling up public spending for the Millennium Development Goals (MDGs), using an integrated modelling approach. At variance with other assessments, the analysis shows that most countries in Latin America and the Caribbean are “off track” towards many of the goals. The study shows that while achieving the goals is affordable for most countries in the region, governments will need to put greater emphasis on tax reforms to mobilize resources for increased social spending while avoiding undesirable macroeconomic trade-offs.

Various different and sometimes contradictory lessons have been drawn from the 1997-1998 East Asian crisis experiences. The ideological implications and political differences involved have complicated the possibility of drawing shared lessons from the crises. The seeming calm and increased growth in most developing countries in the period since 2001 have also undermined the possibility of far-reaching developmental reforms following the experience. Perhaps most importantly, the vested interests supporting existing international financial governance arrangements continue to impede the possibility of implementing lessons drawn from the experience. Such interests are generally supported by conventional wisdom and reinforced by the financial media.

Evidence about commercial banks’ liquidity preference says the following about the loan market in LDCs: (i) the loan interest rate is a minimum mark-up rate; (ii) the loan market is characterized by oligopoly power; and (iii) indirect monetary policy, a cornerstone of financial liberalization, can only be effective at very high interest rates that are likely to be deflationary. The minimum rate is a mark-up over an exogenous foreign interest rate, marginal transaction costs and a risk premium. The paper utilizes and extends the oligopoly model of the banking firm. A calibration exercise tends to replicate the observed stylized facts.

The growth of voluntary initiatives to promote socially responsible business practices has been accompanied by a chorus of criticisms, including claim that much of the activity has been public relations and attempt to deter governments from implementing effective regulations. This paper reviews various types of self-regulating initiative and campaigns that have grown up alongside to assess their effect on labour practices and employment. It concludes by proposing how there could be greater emphasis on market incentives coupled with more effective public measures to induce medium- and small-scale firms to improve their labour practices, including radical overhaul in labour inspectorates functions.

Evidence about developing countries’ commercial banks’ liquidity preference suggests the following about their loan markets: (i) the loan interest rate is a minimum mark-up rate; (ii) the loan market is characterized by oligopoly power; and (iii) indirect monetary policy, a cornerstone of financial liberalization, can only be effective at very high interest rates that are likely to be deflationary. The minimum rate is a mark-up over a foreign interest rate, marginal transaction costs and a risk premium. A calibration exercise demonstrates that the hypothesis of a minimum mark-up loan rate is consistent with the observed stylized facts.

There has long been a minority view that providing people with cash is an effective way of combating poverty and economic insecurity while promoting livelihoods and work. The mainstream view has been that giving people money, without conditions or obligations, promotes idleness and dependency, while being unnecessarily costly. Better, they contend, would be to allocate the available money to schemes that create jobs and/or human capital and that produce infrastructure. This paper reviews recent evidence on various types of scheme and on several pilot cash transfer schemes, assessing them by reference to principles of social justice.