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This paper examines the extent to which developing countries benefit from intersectoral factor transfers by specifying the impact and determinants of sectoral changes and of the degree of dualism (or allocation inefficiency) in a dual economy model. Conditions under which factor reallocation is growth-enhancing are derived. An empirical error-correction equation is estimated for 30 developing countries during 1965-80. Results suggest that labor reallocation effects are especially important in countries with high rates of investment (and thus high rates of labor transfer) and/or at low levels of development (and thus high degrees of dualism).

Labor --- Macroeconomics --- Public Finance --- Production and Operations Management --- Macroeconomic Analyses of Economic Development --- One, Two, and Multisector Growth Models --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Labor Economics: General --- National Government Expenditures and Related Policies: General --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Labour --- income economics --- Public finance & taxation --- Labor productivity --- Public expenditure review --- Human capital --- Capital productivity --- Production --- Expenditure --- Labor economics --- Expenditures, Public --- South Africa

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This study seeks to explain economic growth differences in an aggregate production function framework, where labor reallocation from agriculture to modern sectors influences labor efficiency growth. The econometric analysis uses a panel of 65 countries over 1960-90. The results highlight: (a) the differences in labor reallocation impact on growth, controlled for using the intersectoral wedge in labor productivities; (b) the significance of labor reallocation effects, even after controlling for capital accumulation, initial conditions, and country effects; (c) the role of slow labor reallocation in explaining the dummy variable for Sub-Saharan Africa; (d) the role of initial education levels in explaining differences in labor reallocation rates.

Investments: General --- Macroeconomics --- Public Finance --- Production and Operations Management --- Macroeconomic Analyses of Economic Development --- Industrialization --- Manufacturing and Service Industries --- Choice of Technology --- Economic Growth and Aggregate Productivity: General --- Labor Economics: General --- Education: General --- National Government Expenditures and Related Policies: General --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Investment --- Capital --- Intangible Capital --- Capacity --- Labour --- income economics --- Education --- Public finance & taxation --- Labor --- Public expenditure review --- Labor productivity --- Capital accumulation --- Expenditure --- Production --- National accounts --- Labor economics --- Expenditures, Public --- Saving and investment --- Indonesia

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This paper assesses the effects of India's tax system on growth, through the level and productivity of private investment. Comparison of India's indicators of effective tax rates and tax revenue productivity with other countries shows that the Indian tax system is characterized by: (1) a high dependence on indirect taxes, (2) low average effective tax rates and tax productivity, and (3) high marginal effective tax rates and large tax-induced distortions on investment and financing decisions. The paper finds that the most recently proposed package of reforms would improve tax productivity and lower the marginal tax burden and tax-induced distortions. But firms that rely on internal sources of funds or face problems borrowing would continue to face high marginal tax rates.

Electronic books. -- local. --- Taxation -- India. --- Taxation -- Law and legislation -- India. --- Law - Non-U.S. --- Law, Politics & Government --- Law - Africa, Asia, Pacific & Antarctica --- Taxation --- Law and legislation --- Public Finance --- Corporate Taxation --- Business Taxes and Subsidies --- Taxation, Subsidies, and Revenue: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Public finance & taxation --- Corporate & business tax --- Corporate income tax --- Income and capital gains taxes --- Consumption taxes --- Revenue administration --- Income tax systems --- Corporations --- Income tax --- Spendings tax --- Revenue --- India

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The question of how India should adapt monetary policy to ongoing financial globalization has gained prominence with the recent surge in capital inflows. This paper documents the degree to which India has become financially globalized, both in absolute terms and relative to emerging and developed countries. We find that despite a relatively low degree of openness, India's domestic monetary conditions are highly influenced by global factors. We then review the experiences of countries that have adapted to financial globalization, drawing lessons for India. While we find no strong relationship between the degree of stability in monetary conditions and the broad monetary policy regime, our findings suggest that improvements in monetary operations and communication?sometimes prompted by a shift to an IT regime?have helped stabilize broader monetary conditions. In addition, the experience of countries which used non-standard instruments suggests that room to regulate capital flows effectively through capital controls diminishes as financial integration increases.

Monetary policy --- Finance --- Globalization --- Global cities --- Globalisation --- Internationalization --- International relations --- Anti-globalization movement --- Banks and Banking --- Exports and Imports --- Foreign Exchange --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- International Investment --- Long-term Capital Movements --- Central Banks and Their Policies --- Banking --- Currency --- Foreign exchange --- International economics --- Exchange rates --- Capital inflows --- Open market operations --- Exchange rate arrangements --- Banks and banking --- Capital movements --- India

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This paper investigates the channels through which debt affects growth, specifically whether debt affects growth through factor accumulation or total factor productivity growth. It also tests for the presence of nonlinearities in the effects of debt on the different sources of growth. We use a large panel dataset of 61 developing countries over the period 1969-98. Results indicate that the negative impact of high debt on growth operates both through a strong negative effect on physical capital accumulation and on total factor productivity growth. On average, for high-debt countries, doubling debt will reduce output growth by about 1 percentage point and reduce both per capita physical capital and total factor productivity growth by somewhat less than that. In terms of the contributions to growth, approximately one-third of the effect of debt on growth occurs via physical capital accumulation and two-thirds via total factor productivity growth. The results are generally robust to the use of alternative estimators to control (to different extents) for biases associated with unobserved country-specific effects and the endogeneity of several regressors, particularly the debt variables. In particular, the results are shown to be compatible with a simultaneous significant effect of growth on debt ratios, as suggested by Easterly (2001).

Investments: General --- Labor --- Macroeconomics --- Production and Operations Management --- International Investment --- Long-term Capital Movements --- International Lending and Debt Problems --- Economic Growth of Open Economies --- Economic Development: General --- Economic Growth and Aggregate Productivity: General --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics: Production --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Investment --- Capital --- Intangible Capital --- Labour --- income economics --- Total factor productivity --- Productivity --- Human capital --- Capital accumulation --- Production growth --- National accounts --- Industrial productivity --- Saving and investment --- Economic theory --- Congo, Democratic Republic of the