David Lim

Another Look at Growth and Defense in Less Developed Countries

Lim challenges evidence showing that defense spending encouraged the economic growth of 44 less-developed countries (LDCs) over the 1950-65 periods by reexamining the relationship between defense and growth for 54 LDCs over the 1965-73 period. Regional analyses cover 21 African, 13 Western Hemisphere, 11 Asian, and 9 Middle Eastern and Southern European LDCs. The results show that defense spending was detrimental to economic growth, although adverse effects that were marked in Africa and the Western Hemisphere were absent in Asia, the Middle East, and southern Eurpoe. 4 references, 2 tables.

Fiscal incentives and direct foreign investment in less developed countries

This study found no support for the belief by the governments of most less developed countries (LDCs) that the provision of fiscal incentives is necessary to attract direct foreign investment and that the greater the generosity of these incentive programmes the greater would be the level of such investment. What mattered were the presence of natural resources and a proven record of economic performance. The provision of incentives could not compensate for the absence of either of these two factors. The study is a cross‐sectional one of 27 LDCs for the period 1965–73.

Do foreign companies pay higher wages than their local counterparts in Malaysian manufacturing

Abstract This paper shows that foreign companies pay higher wages than their local counterparts in Malaysian manufacturing. Step-wise regression analysis shows that this is due to two factors. The first, and perhaps the more important, is the greater capital intensity of the production processes used by foreign companies. The second is their tendency to pay wages that they consider, or that are considered to be, commensurate with the wages that they pay in their home countries. This may be called the demonstration effect of wage remuneration in less developed countries.

Instability of government revenue and expenditure in less developed countries

The governments of most less developed countries (LDCs) depend basically on their tax and non-tax revenues to finance their expenditure programmes. Unless countervailing action is taken, instability in government revenue will result in instability in government expenditure. The latter can add considerably to the complexity of fiscal management, which may then render ineffective development planning. ’ It can also reduce business confidence and lead to the precautionary discounting of prospective investment returns and so a lowering of the investment level.2 This note does not attempt to verify the claim that expenditure instability has adverse effects on economic growth. Its aim is the more limited one of (1) presenting estimates of instability in government revenue and expenditure, (2) examining the impact of revenue instability and other factors on expenditure instability, and (3) estimating the contributions of the various sub-categories of expenditure to the instability of government expenditure, for a roup of 45 LDCs over the period 1965-1973. B 2. INSTABILITY OF GOVERNMENT REVENUE AND EXPENDITURE

Income Distribution, Export Instability, and Savings Behavior

This paper examines the effects of income distribution and export instability on the savings ratios of a group of 12 developed and 52 less developed countries (DCs and LDCs) for 1968-73. The effect of income distribution on savings has been studied beforel but not on as comprehensive a group of countries as presented here. The effect of export instability on savings has not been examined before in the literature on the determinants of savings behavior. It has, however, been discussed in the literature on the relationship between export instability and economic growth2 and part of the purpose of this paper is to relate this argument to our discussion of the determinants of savings behavior.

‘Enhancing the quality of VET in Hong Kong: recent reforms and new initiatives in widening participation in tertiary qualifications’

As elsewhere, vocational education and training (VET) has a poor image in Hong Kong. To remove the stigma, the Vocational Training Council of Hong Kong embarked on pro‐active strategic planning to make it more relevant and cost‐effective, exposed long and widely held myths that VET is for dullards which leads only to low‐paid and low‐status jobs, provided a through‐train education system to ensure that VET is no longer an educational cul‐de‐sac, and sought external accreditation aggressively. Though it is early days, there is strong evidence that these strategies have worked.

Testing the Effectiveness of a Quality Assurance System: The Example of Hong Kong.

Operating a quality assurance system in tertiary education is the rule rather than the exception, because of the belief that it will improve quality. However, proving this is not easy. This study examines three ways of providing the evidence: the a priori method, the stepwise backtracking method, and the external evaluation method. The quality assurance system of the Vocational Training Council of Hong Kong is used as a case‐study, but the findings on the advantages and disadvantages of using these methods have relevance for testing the effectiveness of quality assurance systems for other education institutions.

Forecasting Employment Growth in Indonesia

This note discusses the dangers of using the employment-output elasticity to forecast employment creation in Indonesia. It demonstrates the unreliability of employment-output elasticity estimates for Indonesia obtained using various methods, and argues, that, in addition to the estimation problems, the elasticity method has inherent weaknesses that should preclude its use to forecast employment growth in a dynamic world.

On the measurement of capital-intensity

problem of the choice of technique in less developed countries has featured prominently in the literature on economic development1. This paper shows that despite such interest attempts to measure capital-intensity still leave much to be desired and argues that a modified capital-labour ratio, with capital adjusted for utilization and labour to refer to the number of production workers on the biggest shift, is the theoretically most suitable measure of capital-intensity.

Capital Utilisation of Local and Foreign Establishments in Malaysian Manufacturing

I is often argued that foreign firms operating in less developed countries have greater X-efficiency than their local counterparts. However, little empirical evidence has been presented to substantiate this claim. This paper attempts to fill part of this gap, first, by presenting data on the level of capital utilisation in Malaysian and foreign firms in Malaysian manufacturing and, second, by testing the importance of X-efficiency in determining differences in the utilisation levels of the two categories of firms. The extent to which capital is utilised is an important part of economic efficiency, for an increase in capital utilisation can result, ceteris paribus, in lower unit costs of production and a higher rate of economic growth.