Alberto Posso

Internet Use and Ethnic Heterogeneity in a Cross‐Section of Countries

This paper investigates the association between ethnic heterogeneity and information technology related outcomes such as internet access and internet use. We argue that the global digital divide, as measured by cross-country differences in internet access and use, could be explained by cross-country differences in ethnic heterogeneity. We use indices of ethnic and linguistic fractionalization as measures of ethnic heterogeneity. Using data on a cross-section of 93 countries, we find evidence of a negative association between ethnic heterogeneity and the use and access of internet. Thus, cross-country differences in the global digital divide can be explained by the levels of ethnic fractionalization. Other determinants of the digital divide include income, infrastructure, literacy level, level of urbanization and inequality.

Microfinance and gender inequality: Cross-country evidence

ABSTRACT Microfinance enables poor women to engage in income-generating activities, which helps them become financially independent, strengthening their decision-making power within the household and society. Consequently, microfinance has the potential to reduce gender inequality (GI). Case-study evidence from across the developing world both supports and contradicts this hypothesis. We therefore revisit this issue using macroeconomic cross-country panel data for 64 developing economies over the period 2003–2014. We find that women’s participation in microfinance is associated with a reduction in GI. However, regional interactions reveal that cultural factors are likely to influence the GI–microfinance nexus.

Handle with care: fragile states and the determinants of fragility

The international community has grave concerns over the capacity of so-called ‘fragile states’ to effectively deliver basic services to their people due to their weak policy and institutional environments. This article examines the drivers of state fragility. The World Bank and OECD definitions of fragility are adopted using the World Bank’s Country Policy and Institutional Assessment (CPIA) scores. Analysis is conducted on both binary measures of fragility and the actual CPIA scores using an array of estimation techniques. Findings indicate that democracy, income levels, economic growth, levels of education, country size and natural resource rents are important determinants of fragility. Unlike other studies, findings also suggest that being a Small Island Development State is a primary driver of fragility.

Government expenditure on education and enrolment rates in Indonesia in the new millennium: an East Asian perspective

This note examines the likely impact of increased government expenditure on education in Indonesia resulting from new policy initiatives since the year 2000. These initiatives were consolidated in 2003 following the enactment of a new ‘Law on National Education System’. The effectiveness of this policy is questioned by comparing the expenditure and enrolment rates between Indonesia and other High Performing Asian Economies (HPAEs) – Singapore, Hong Kong, South Korea, Thailand and Malaysia from 2000 to 2007. Privatisation of educational institutions, not greater government involvement, has been the norm across most of the other HPAEs during the 2000s. Privatisation leads to improvements in the quality and cost of education. Enrolment rates indicate that the quality of education has not improved in Indonesia as compared to other HPAEs. Improvements in quality will become a particularly important issue for Indonesia as it continues to cope with the challenges brought about by China and Indias unprecedented growth as labour-intensive manufacturing powerhouses.

Thinking inside the Box: A Closer Look at Financial Inclusion and Household Income

Abstract Using national representative household finance survey data covering more than 6200 Chinese households, we first construct a new multidimensional indicator for financial inclusion. Then we examine the effect of financial inclusion on household income. Our results elicit several findings. First, financial inclusion has a strong positive effect on household income. This effect can be found across all households with different levels of income. Second, low-income households are found to benefit more from financial inclusion than high and mid-level income ones. We argue that, in this sense, financial inclusion helps reduce income inequality.

Beyond enrolments: the determinants of primary-school attendance in Melanesia

ABSTRACT The second millennium development goal (MDG) is to achieve universal primary education and while developing countries have made good progress on primary-school enrolment rates, school attendance remains low. This paper addresses the determinants of school attendance using unique household survey data for two Melanesian economies rarely reported in the international literature: Solomon Islands and Vanuatu. There is a high degree of heterogeneity in the results across both gender and location. The main findings are that as children get older, they are less likely to attend school as are children that work either inside or outside the home. School fees act as a major deterrent for sending children to school, even though governments and international donors have taken significant steps to make primary education free. Finally, community programs that aim at increasing school attendance have been successful, particularly for girls and children in remote areas. A number of policy implications are provided.

¡Fútbol!: Is There a Latin American Bias in the European Champions League?

This article takes a novel approach to the study of discrimination in sports by looking at minutes played by strikers in the Union of European Football Associations Champions League over 1991-2011. We compare differences in minutes played between five ethnic groups: White Europeans, Black Europeans, Africans, White Latin Americans, and Black Latin Americans. We find evidence that White Latin Americans enjoy significantly less game time than White Europeans, while the opposite is true for Black Latin Americans. However, the inclusion of player fixed effects reveals that, after controlling for player ability, there is no evidence of discrimination in this competition.This article takes a novel approach to the study of discrimination in sports by looking at minutes played by strikers in the Union of European Football Associations Champions League over 1991-2011. We compare differences in minutes played between five ethnic groups: White Europeans, Black Europeans, Africans, White Latin Americans, and Black Latin Americans. We find evidence that White Latin Americans enjoy significantly less game time than White Europeans, while the opposite is true for Black Latin Americans. However, the inclusion of player fixed effects reveals that, after controlling for player ability, there is no evidence of discrimination in this competition.

What firm characteristics determine women ' s employment in manufacturing? Evidence from Bangladesh

Purpose – The purpose of this paper is to investigate the principal determinants of women’s employment in the manufacturing sector of Bangladesh using a firm-level panel data from the World Bank’s “Enterprise Survey” for the years 2007, 2011 and 2013. The paper sheds light on the demand-side factors, mainly firm-level characteristics, which also influence this decision. Design/methodology/approach – The authors estimate a fractional logit model to model a dependent variable that is limited by zero from below and one from above. Findings – The results indicate that firm size, whether medium or large, and firms’ export-oriented activities, have an important impact on women’s employment in the manufacturing sector in Bangladesh. Moreover, the authors find that women are significantly more likely to work in unskilled-labour-intensive industries within the manufacturing sector. Research limitations/implications – The research is limited to Bangladesh; however, much of the evidence presented here has implicatio...

Income, democracy and European colonization

The Modernization Hypothesis states that economic development drives democracy within countries. Until recently, this view was widely accepted by scholars, with cross-country regressions indicating that higher per capita incomes are indeed associated with higher levels of democracy. However, recent empirical work has shown that the positive effect of per capita income on democracy disappears with the inclusion of country fixed effects. Moreover, a heterogeneous effect of income on democracy has been found for countries that were colonized relative to those that were not. This article revisits the issue by examining whether the identity of the colonizer matters. Results reveal a negative association between income and democracy for former British colonies. The formation of the Commonwealth of Nations together with Dependency Theory is used to explain this finding.

The rise of the machines: Capital imports and real manufacturing wages in 57 nations

Outward-oriented policy reform has attracted a large number of academics to the study of the trade-labour market nexus. One of these fields has focused on capital intensive (machinery) imports and its effect on manufacturing wages. The skill-enhancing-trade (SET) hypothesis was put forth to explain a potential relationship where an inflow of capital imports results in increased demand for skilled labour and decreased that of unskilled labour, and thus resulted in a rise in skilled wages and a decrease in their unskilled counterparts. This study revisits this hypothesis with a panel from the manufacturing sector of 57 nations. We improve upon previous studies in a number of ways. We add developed nations to the sample and examine capital imports from rich countries as well as the rest of the world. This takes into account the prominence of vertical production networks in international trade. We adhere closely to the neo-classical trade model and employ definitions of skilled and unskilled workers that capture the production process of particular items. Finally, we fit a robust dynamic panel data model that accounts for the endogeneity of the determinants of trade and wages. In this way we test whether the SET hypothesis is generally applicable as opposed to previous studies which use an ad hoc selection of countries and variables. We find that the SET hypothesis is not driving changes in manufacturing wages. Instead, worker productivity and GDP per capita explain these labour market outcomes.