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The Developing Economies

Volume 40, Number 1 (March 2002)


The Developing Economies ■ The Developing Economies Volume 40, Number 1 (March 2002)
■ B5
■ 105pp.
■ Published in March 2002
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CONTENTS

Abstract

Sudarno Sumarto, Asep Suryahadi, and Wenefrida Widyanti, "Designs and Implementation of Indonesian Social Safety Net Programs," pp. 3-31.

Designing and implementing social safety net programs in 1998 was a new experience for Indonesia. The looming severe social impact of the financial crisis, which started in mid-1997, forced the government to act rapidly to safeguard real income and access to social services for the poor by instituting new and expanded programs. The success of social safety net programs depends on a smooth disbursement of program budgets and effectively targeting allocations to the poor. But the findings of this study indicate that all of the programs suffer from ineffective targeting and some programs suffer from under-implementation. This has resulted in a twofold problem: an undercoverage of the poor and a leakage of benefits to the nonpoor. This problem points to the difficulties in designing and implementing any program that provides cash or in-kind transfer in a developing country as large and diverse as Indonesia.

Jr-Tsung Huang, "Personal Tax Exemption: the Effect on Fertility in Taiwan," pp. 32-48.

This study utilizes official regional-based panel data on Taiwan, from 1990 to 1996, to investigate the value of the personal tax exemption in a family's income tax in terms of its effect on birth behavior. The estimation results demonstrate that the value of a personal tax exemption has a positive and statistically significant effect on the general fertility rate. This conclusion also holds after excluding the wife's earnings in the empirical model for the sake of potential endogeneity between the wife's earnings and fertility. This study thus suggests that a family income tax policy may be an effective tool for bringing about an increase in the general fertility rate in Taiwan, and hence, a means of mitigating Taiwan's population-aging problem. However, the cost to the government to induce a single additional birth would be very high.

Steven Morling, "Output Adjustment in Developing Countries: A Structural VAR Approach," pp. 49-66.

This paper examines whether temporary fluctuations in output around potential in developing countries are induced primarily by aggregate demand shocks or temporary aggregate supply shocks. Structural vector autoregression (VAR) methodology using long-run restrictions is used to identify temporary output shocks for a large sample of developing countries. Impulse response functions are used to examine whether the temporary shocks behave like demand or supply shocks. The permanent/transitory decomposition appears to split the shocks into permanent supply shocks, and temporary demand or supply shocks depending on which influence dominates in a particular country. In slightly more than half of the countries, temporary shocks behave like temporary aggregate supply shocks while in slightly less than half of the countries the temporary shocks behave like aggregate demand shocks.

Sagren Moodley, "E-Business in the South African Apparel Sector: A Utopian Vision of Efficiency?" pp. 67-100.

The internet is enabling a much tighter integration between manufacturing and both downstream and upstream activities in the apparel value chain. The global apparel industry is moving in the direction of e-business, from the management of inputs and design to marketing and sales. The formerly inwardly oriented South Africa apparel sector cannot afford to miss out on these internet-related developments. E-business provides South African apparel firms with the technology to manage their supply chains more efficiently and to tap into both domestic and international procurement systems. Apparel firms which export have the most to gain in adopting e-business technologies due to its promise of improved market penetration, and its direct link to international competitiveness. Despite strong theoretical arguments suggesting that e-business has much to offer the garments industry, the empirical evidence would seem to suggest that e-business in the South African apparel sector is still in its infancy.