Ajay Chhibber

Fiscal policy and private investment in developing countries : recent evidence on key selected issues

This paper discusses the following issues regarding the pace of private domestic investment, its prospects for recovery, and its role in adjustment programs of developing countries: (a) the relationship between stabilization measures affected through aggregate demand management and the need for investment recovery; (b) the complementarity or competitiveness of private and public investment; and (c) the role of capital income taxation as a tool in influencing investment incentives. It also examines the effect of the size of the fiscal deficit and alternative sources of financing the budget deficit on private investment. The key issues here are how these options affect the real interest rate, credit allocation, and the real exchange rate and how those variables in turn affect private investment. The impact of public expenditure decisions on private investment, particularly the different types of public investment choices and their impact on private investment are discussed. The paper examines the implications of tax policy for private investment decision and the effect of tax policy on private investment in the presence of capital market imperfections. It also discusses the impact of inflation in the absence of a fully indexed tax system and provides concluding thoughts.

Pro-Poor Growth: Explaining the Cross-Country Variation in the Growth Elasticity of Poverty

It is well established in the literature that, on average, economic growth is associated with reductions in income poverty. However, evidence suggests that some countries see a much faster decline in poverty with the same level of growth in income. The objective of this paper is to analyse the cross-country variation in the growth elasticity of poverty across a sample of developing countries during the period 1990 to 2000. In doing so, it first sets up a theoretical framework, which seeks to identify different policy variables as explanations. Subsequently, when applied to panel data econometric analysis for 52 low and middle income countries, we find that the level of initial inequality, credit available to the private sector, literacy, the extent of business regulations, and trade openness are important determinants of the growth elasticity of poverty.

Securing Against Natural Disasters: Better Preparedness and Better Development

This important book tackles some of the main security challenges facing the international development community today. Containing contributions by leading experts, including some who have been at the centre of the international policy debate, it goes further by putting forward suggestions and recommendations as to how best deal with these threats as well as challenges in this crucial area.