The Developing Economies

Volume 37, Number 2 (June 1999)

■ The Developing Economies Volume 37, Number 2 (June 1999)
■ B5
■ 105pp
■ June 1999

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PDF files can be viewed for articles that were published by 2005.


Sources of Industrial Growth using the Factor Decomposition Approach: Malaysia, 1978-87 (438KB) / Zakariah Abdul Rashid and Ahmad Elyas Elameer

Inequality in the Distribution of Household Expenditures in Indonesia: A Theil Decomposition Analysis (147KB) / Takahiro Akita, Rizal Affandi Lukman, and Yukino Yamada

Book Reviews


Jose L. Tongzon, "The Challenge of Regional Economic Integration: The Vietnamese Perspective," pp. 137-61.

The aim of this paper is to assess the progress of Vietnam's integration with ASEAN and explain the current ambivalence in Vietnam's trade policy as it prepares itself for greater regional competition resulting from the eventual establishment of an ASEAN Free Trade Area (AFTA). It argues that this current ambivalence can largely be attributed to the economic difficulties Vietnam currently faces, and that unless these difficulties are resolved, there is a risk that Vietnam might not be able to implement its AFTA commitments and thus lose the potential benefits of regional economic integration. Vietnam's experience in this regard raises the important issue of conflict between domestic and international strategic policy. In this context the difficulty of adopting appropriate economic measures to benefit from regional integration is clearly shown, providing some lessons for any relatively less developed or former centrally planned economy contemplating joining a regional trading arrangement.

Zakariah Abdul Rashid and Ahmad Elyas Elameer, "Sources of Industrial Growth Using the Factor Decomposition Approach: Malaysia, 1978-87," pp. 162-96.

Malaysia has experienced a tremendous structural change as a result of its industrialization efforts. The present paper uses Chenery's factor decomposition method of analyzing sources of growth to examine structural change during the period of policy shift from inward-looking import-substitution to outward-looking export-promotion strategies. Using sectoral producer and import price indices to deflate 1983 and 1987 Malaysian transaction and import matrices to their 1978 bases, the paper found that: (1) the economy's growth was initially driven by domestic-demand expansion and subsequently by export expansion, (2) technological progress contributed insignificantly to the economy's growth, (3) sectorally, agriculture and manufacturing activities were driven by export expansion while mining and service activities by domestic demand expansion, and (4) like developing countries that typically experience structural problems due to a lack of inter-industrial linkages, Malaysia also developed an increasing reliance on intermediate and capital goods imports as its industrialization effort progressed.

Takahiro Akita, Rizal Affandi Lukman, and Yukino Yamada, "Inequality in the Distribution of Household Expenditures in Indonesia: A Theil Decomposition Analysis," pp. 197-221.

This article explores the factors and forces underlying income inequality in Indonesia using the Theil inequality decomposition technique with household expenditure data from the 1987, 1990, and 1993 National Socio-Economic Survey (Susenas). Among factors that are considered as having affected household expenditure inequality, differences in the level of education and urban-rural disparity are found to be significant in overall inequality. Considering that more than 60 per cent of household heads have only an elementary education or less, raising general educational levels would have a significant bearing on the reduction of overall inequality in Indonesia, ceteris paribus. In contrast to education, gender inequality appears to be insignificant in Indonesia, as the ratio of mean household expenditure between male-headed and female-headed households was only 1.5.

Bagala P. Biswal, "Private Tutoring and Public Corruption: A Cost-Effective Education System for Developing Countries," pp. 222-40.

Private tutoring by the public school teachers in developing countries is very common. This paper develops a strategic multistage game consisting of students, teachers, and the government to explain the practice of private tutoring. In order to achieve "education for all," the government finds it cost-effective to allow the teachers to offer income-generating private tutoring to the students. However, monitoring is the key issue here. The optimal solution takes explicit account of the inter-relationship between public provision and private supplementary tutoring so that a student is assured of his share of education at the lowest cost to the government. The study also shows that an intra-redistribution of resources from richer to poorer students takes place within the public schools.