Byron Lew

Does democracy affect environmental quality in developing countries

This article examines the impact of democracy on environmental conditions in a large sample of developing countries for the period 1976–2003. This relationship is explored empirically using three indicators of environmental quality: carbon dioxide emissions, water pollution and deforestation damage. We find evidence that democracy is conducive to environmental improvement but that this result depends on the measure of the environmental quality that is used. We also find remarkable differences in results across our different sub-samples. The conclusion therefore is that there is no uniform relationship between democracy and the state of the environment.

The telegraph, co-ordination of tramp shipping, and growth in world trade, 1870–1910

The growth of trade after 1860 has been attributed to declining tariffs, to falling transport costs, and, recently, to monetary arrangements. However, coincident with the rise of trade the second half of the nineteenth century saw the development of the first electric communication network: the telegraph. The first successful trans-oceanic cable was operating in 1865. The telegraph remained the only direct trans-oceanic communication link until into the twentieth century. Little research has been conducted explicitly linking the impact of telegraphs on international shipping and international trade. A panel is used to show that there is a correlation between the diffusion of the telegraph, co-ordination of shipping, and the growth of world trade even controlling for the impact of other well-studied effects. The telegraph reduced the time ships spent in port and allowed ships to travel farther among ports to collect more valuable cargo.

Are foreign aid and migrant remittances sources of happiness in recipient countries

There is a dearth of research on how foreign aid and migrant remittances influence the level of happiness in recipient countries. This paper fills this void by presenting an empirical model where aid and remittances enter the happiness production function of a recipient country. We find that both aid and remittances are possible ingredients in the complex process of generating happiness and that their interactions, which have been ignored by previous studies in development economics, cannot be dismissed. A clear policy implication of our results is that remittances should be encouraged.

Aid and happiness: untangling the causal relationship in nine European donor countries

The goal of this paper is to use a simple causality test in the spirit of Granger to answer three questions on the relationship between the foreign aid disbursements of a donor country and its level of happiness. First, do higher aid flows make a donor happier? Second, does a happier donor give more aid? Third, does causality proceed in both directions simultaneously? Using data for nine European donors, we find that the answers to these questions are not uniform. In particular, causal relationships exist for France and the UK, but not for other countries.

Foreign aid and ecological outcomes in poorer countries: an empirical analysis

This article examines the relationship between foreign aid and ecological harm in developing countries. The study covers three types of ecological injury: carbon dioxide damage, water pollution and net deforestation. Results based on an empirical model where aid and injury are jointly determined, suggest that aid flows affect ecological conditions in poorer countries as well as being the result of these conditions.

Handbook on the Economics of Foreign Aid

It would be fair to say that foreign aid today is one of the most important factors in international relations and in the national economy of many countries – as well as one of the most researched fields in economics. Although much has been written on the subject of foreign aid, this book contributes by taking stock of knowledge in the field, with chapters summarizing long-standing debates as well as the latest advances. Several contributions provide new analytical insights or empirical evidence on different aspects of aid. As a whole, the book demonstrate how researchers have dealt with increasingly complex issues over time – both theoretical and empirical – on the allocation, impact, and efficacy of aid, with aid policies placed at the center of the discussion.

A theory of tenure-track contracts

This paper offers an explanation of the use of tenure‐track contracts in academia. It argues that, because the results of academic research cannot be sold, a professor’s profitability depends on the market value of the instruction he or she provides. But because that value depends directly on the extent of his or her observable research accomplishments, a profit‐maximizing university will dismiss a professor who fails to initially establish a strong research record, but will tolerate a professor who fails to augment a record that is already strong.

Does income matter in the happiness-corruption relationship?

Purpose - – Empirical evidence on the relation between happiness (life satisfaction) and corruption is barely perceptible in the literature. The purpose of this paper is to contribute to closing this gap by presenting some estimates using a large cross-section of countries over the period 1996-2010. Design/methodology/approach - – The empirical model allows both corruption and per capita income to enter as arguments of a happiness “production function”. The correlation between happiness and corruption is presumed to be non-linear. Findings - – While the results do not support the existence of a Kuznets-type trajectory, the study finds that the level of per capita income determines whether happiness and corruption are related and in what way. The authors estimate cutoff income levels at which corruption has a discernible effect on happiness. The results show that corruption reduces happiness, but only for high-income countries – roughly the upper half of the income range in the sample. Practical implications - – Results nullify the oft-asserted statement that happiness is negatively linked to corruption in all countries. The nature of correlation is more complex. Originality/value - – The paper goes beyond simply testing whether happiness is related to corruption. It conjectures that the relationship between the two variables is non-monotonic. Thus, the analysis considers the notion that the association between happiness and probity is income dependent. A novel feature of the empirical model is that the estimated income cutoff levels are endogenously determined. That is, income thresholds are not pre-determined. The authors also test for the robustness of the results by addressing the issue of potential endogeneity of corruption.

The impact of climate on the law of one price: A test using North American food prices from the 1920s

Using grocery price data for over 100 urban locations across the US and Canada from the 1920s, we show that deviations from the law of one price (LOP) were strongly related to climate differences. The effect of climate has a large impact on the elasticity of deviations from LOP with respect to distance, while having no impact on the border effect. We then test a counterfactual to show that the relationship between deviations from LOP and temperature does not hold when historical temperature data are replaced with contemporary. This is evidence that climate impacts production.

Is the boom in East Asian tourism happening at the expense of other destinations? A cross-country analysis

Over the years, tourism has emerged as the world’s largest peacetime industry employing approximately 221 million people worldwide. According to the UNWTO, the tourist traffic rose to a record 1.087 billion arrivals in 2013 and this surge is expected to continue through 2030, in annual increments of 3.8 percent. Much of this unprecedented boom may be attributed to newly-affluent Asian nations such as Taiwan, South Korea and Malaysia as well as the huge populations of China, India and Indonesia - the first, second and fourth most populated countries in the world. Many analysts worry that the Asia Pacific region - a collection of dissimilar states squeezed between the Indian Ocean and the Pacific - could potentially be gaining market shares at the expense of their older rivals. We disagree with such a notion and will argue instead that the boom in East Asian tourist traffic is attributable to local factors primarily. Our examination of tourism data from the World Development Indicators database comprising a total of 92 countries covering a 16-year period (1995-2011), provides strong empirical support for our claim that the regional variation in tourism growth does not imply that some destinations are gaining at the expense of the rest. We examine changes in tourist arrivals among all relevant bilateral country pairs to test for a link between changes in tourist arrivals in Southeast Asian nations with Europe and North America. We do find that growth in tourist arrivals to countries of Southeast Asia has been particularly strong, but at the same time, tourism growth to Eastern Europe and to the Middle East has also been strong. This suggests that tourism is driven at least partly by economic growth of a destination, and it may also drive that growth. In examining changes in tourist arrivals by bilateral country pairs we find that for the vast majority of cases there is no support for the hypothesis that growth of tourism in one location comes at the expense of tourist arrivals to other countries. The tourism industry is dynamic and growing, and the success of new destinations does not come at the expense of traditional destinations. Rather countries seem to be establishing niches for themselves in terms of tourist offerings and as such may well be more complementary to each other than competitive. All countries—both developed and developing—may be able to stake a claim in the ever expanding global tourist trade.