Unpublished paper delivered at the ABCDE conference, held in Cape Town, South Africa, June 9-11, ... more Unpublished paper delivered at the ABCDE conference, held in Cape Town, South Africa, June 9-11, 2008. - This paper presents a model in which two groups in society are engaged in strategic interaction. Privileged members of society have the opportunity to allocate resources either to their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution to the disadvantaged can increase the productive capacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the elite. Results in the paper derive conditions under which the rich will distribute to the point of equality with the poor; conditions under which the disadvantaged face genocide; as well as the range of intermediate redistributive activity likely to be employed by the privileged. Examination of empirical evidence suggests that the model generalises across the experience of a panel of up to 204 countries, over the 1960-2000 period.
ABSTRACT This paper presents a model in which two groups in society are engaged in strategic inte... more ABSTRACT This paper presents a model in which two groups in society are engaged in strategic interaction. Privileged members of society have the opportunity to allocate resources either to their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution to the disadvantaged can increase the productive ca-pacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the rich. Results in the paper derive conditions under which the rich will redistribute to the point of equality with the poor; conditions under which the disadvantaged face genocide; as well as the range of intermediate redistributive activity likely to be employed by the privileged. Examination of empirical evidence suggests that the model generalizes across the experience of a panel of up to 204 countries, over the 1960-2000 period.
ABSTRACT: This paper investigates the extent of the mark-up of the South African manufac-turing s... more ABSTRACT: This paper investigates the extent of the mark-up of the South African manufac-turing sector, taking into account a number of characteristics of its component industries. We find significant mark-ups to be present in the South African manufacturing industry. In comparative terms, the mark-up is approximately twice that found for the US manufacturing sector. We find that industry concentration exerts a positive influence on the mark-up over marginal cost whilst an indicator of competitiveness suggests that an increase in an industry’s competitiveness relative to other industries allows it to raise its mark-up. However, within-industry increases in competi-tiveness reduces the mark-up. We also analyze the impact of import and export penetration. Both import and export penetration serve to lower the mark-up. The impact of the business cycle on mark-up indicates that the mark-up is countercyclical. Finally, accounting for intermediate inputs significantly lowers the absolute s...
In the six months since the previous East Asia and Pacific (EAP) economic update, developing EAP ... more In the six months since the previous East Asia and Pacific (EAP) economic update, developing EAP has faced a challenging external environment. Financial market conditions in the region, however, have been volatile over much of the past 6 months, as in the rest of the world. Over the next two to three years, growth in developing EAP is expected to ease modestly. Poverty in developing EAP has declined rapidly in recent years, and is projected to fall further with continued growth; however, in several countries the pace of poverty reduction has been restricted by limited labor market opportunities, particularly for disadvantaged groups. The positive outlook for growth and poverty reduction in the region in this base case is subject to elevated risks. The outlook for the Pacific Island Countries (PICs) is heavily dependent on their ability to overcome geographic constraints and take advantage of the relatively narrow set of opportunities available to them. Sustaining the pace of poverty...
Economic growth in Lao PDR is projected to rebound to 6.5 percent in 2019, up from 6.3 percent in... more Economic growth in Lao PDR is projected to rebound to 6.5 percent in 2019, up from 6.3 percent in 2018. This pick up is expected to be driven by growth of the construction sector supported by investments in large infrastructure projects, and a resilient services sector, led by wholesale and retail trade growth. The Government has remained committed to fiscal consolidation to contain public debt in the medium term by tightening public expenditure and improving revenue administration. The medium-term outlook remains broadly favorable, but subject to downside risks from heightened uncertainty in the global and domestic environments. Prolonged trade partners, and spillover to the domestic economy through lower trade and investment, and reduced prices for key export commodities. The authorities may face difficulty in responding to such economic shocks given the low level of foreign currency reserves and significant external public debt. A priority is therefore to create fiscal space thro...
Although decelerating from 6.9 percent the previous year, economic growth in 2018 is estimated to... more Although decelerating from 6.9 percent the previous year, economic growth in 2018 is estimated to remain robust at 6.5 percent. The slowdown in growth in 2018 has been partly due to a combination of the following domestic factors : (i) the severe floods that hit the country during July – September 2018, which adversely affected agricultural production and damaged infrastructure in several provinces; (ii) the weak performance of the mining sector despite higher commodity prices; and (iii) continued fiscal consolidation, which contributed to slower credit growth. These downside factors offset the gains from the industry sector driven by the expansion of construction activities and electricity exports, coupled with robust growth in wholesale and retail trade. There is evidence of increasing job creation between 2010 and 2017. According to the 2017 Labor Force Survey, wage jobs are estimated to have gradually increased since 2010. This has resulted in 28 percent of households situated m...
Growth in developing East Asia and Pacific (EAP) continues to be resilient and in line with previ... more Growth in developing East Asia and Pacific (EAP) continues to be resilient and in line with previous expectations. Already robust domestic demand has been supported by some pickup in external demand and the gradual recovery in commodity prices. Fiscal deficits in the major regional economies widened in 2016, prompting some adjustment toward the end of the year in Indonesia and Malaysia. Monetary policies remained accommodative, and credit continued to grow rapidly in most major economies. Inflation is edging up and producer prices are rising quickly as commodity prices increase. Capital outflows intensified toward end-2016 leading to depreciation pressures, but financial markets have since recovered. The growth outlook for 2017–19 remains broadly positive across the region. China is expected to continue its gradual transition to lower, more sustainable growth. In the rest of the region, growth is projected to pick up moderately. Continued buoyancy in domestic demand, including publi...
One of the key constraints to growth identified by the Accelerated Shared Growth Initiative (ASGI... more One of the key constraints to growth identified by the Accelerated Shared Growth Initiative (ASGI) in South Africa is investment in infrastructure. Analysis of the various measures of physical infrastructure provides one with a declining trend in infrastructure development over the recent past. Investment in economic infrastructure affects GVA directly and indirectly via private investment. There also exist feedback effects from GVA and private investment to investment in economic infrastructure. This implies that economic infrastructure investment responds to growth. Social infrastructure investment is found to have a direct, positive impact on GVA. Theoretical evidence does posit the belief that even though public and private capital may be complements, there may exist threshold effects present with respect to public infrastructure expenditure. The findings do allude to the possibility of a non-linear relationship existing between per capita output and social infrastructure invest...
Abstract: This paper presents a model to account for the behaviour of social elites, in terms of ... more Abstract: This paper presents a model to account for the behaviour of social elites, in terms of their decisions to distribute resources between themselves, and a mass of disadvantaged members of society. Privileged members of society have the opportunity to allocate resources either to improve their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution in favour of the disadvantaged increases the productive capacity of society, but comes at the cost of rising political aspirations of the ...
Annual Bank Conference on Development Economics Working Paper, Apr 1, 2008
This paper presents a model in which two groups in society are engaged in strategic interaction. ... more This paper presents a model in which two groups in society are engaged in strategic interaction. Privileged members of society have the opportunity to allocate resources either to their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution to the disadvantaged can increase the productive capacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the rich. Results in the paper derive conditions under which the rich ...
Unpublished paper delivered at the ABCDE conference, held in Cape Town, South Africa, June 9-11, ... more Unpublished paper delivered at the ABCDE conference, held in Cape Town, South Africa, June 9-11, 2008. - This paper presents a model in which two groups in society are engaged in strategic interaction. Privileged members of society have the opportunity to allocate resources either to their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution to the disadvantaged can increase the productive capacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the elite. Results in the paper derive conditions under which the rich will distribute to the point of equality with the poor; conditions under which the disadvantaged face genocide; as well as the range of intermediate redistributive activity likely to be employed by the privileged. Examination of empirical evidence suggests that the model generalises across the experience of a panel of up to 204 countries, over the 1960-2000 period.
ABSTRACT This paper presents a model in which two groups in society are engaged in strategic inte... more ABSTRACT This paper presents a model in which two groups in society are engaged in strategic interaction. Privileged members of society have the opportunity to allocate resources either to their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution to the disadvantaged can increase the productive ca-pacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the rich. Results in the paper derive conditions under which the rich will redistribute to the point of equality with the poor; conditions under which the disadvantaged face genocide; as well as the range of intermediate redistributive activity likely to be employed by the privileged. Examination of empirical evidence suggests that the model generalizes across the experience of a panel of up to 204 countries, over the 1960-2000 period.
ABSTRACT: This paper investigates the extent of the mark-up of the South African manufac-turing s... more ABSTRACT: This paper investigates the extent of the mark-up of the South African manufac-turing sector, taking into account a number of characteristics of its component industries. We find significant mark-ups to be present in the South African manufacturing industry. In comparative terms, the mark-up is approximately twice that found for the US manufacturing sector. We find that industry concentration exerts a positive influence on the mark-up over marginal cost whilst an indicator of competitiveness suggests that an increase in an industry’s competitiveness relative to other industries allows it to raise its mark-up. However, within-industry increases in competi-tiveness reduces the mark-up. We also analyze the impact of import and export penetration. Both import and export penetration serve to lower the mark-up. The impact of the business cycle on mark-up indicates that the mark-up is countercyclical. Finally, accounting for intermediate inputs significantly lowers the absolute s...
In the six months since the previous East Asia and Pacific (EAP) economic update, developing EAP ... more In the six months since the previous East Asia and Pacific (EAP) economic update, developing EAP has faced a challenging external environment. Financial market conditions in the region, however, have been volatile over much of the past 6 months, as in the rest of the world. Over the next two to three years, growth in developing EAP is expected to ease modestly. Poverty in developing EAP has declined rapidly in recent years, and is projected to fall further with continued growth; however, in several countries the pace of poverty reduction has been restricted by limited labor market opportunities, particularly for disadvantaged groups. The positive outlook for growth and poverty reduction in the region in this base case is subject to elevated risks. The outlook for the Pacific Island Countries (PICs) is heavily dependent on their ability to overcome geographic constraints and take advantage of the relatively narrow set of opportunities available to them. Sustaining the pace of poverty...
Economic growth in Lao PDR is projected to rebound to 6.5 percent in 2019, up from 6.3 percent in... more Economic growth in Lao PDR is projected to rebound to 6.5 percent in 2019, up from 6.3 percent in 2018. This pick up is expected to be driven by growth of the construction sector supported by investments in large infrastructure projects, and a resilient services sector, led by wholesale and retail trade growth. The Government has remained committed to fiscal consolidation to contain public debt in the medium term by tightening public expenditure and improving revenue administration. The medium-term outlook remains broadly favorable, but subject to downside risks from heightened uncertainty in the global and domestic environments. Prolonged trade partners, and spillover to the domestic economy through lower trade and investment, and reduced prices for key export commodities. The authorities may face difficulty in responding to such economic shocks given the low level of foreign currency reserves and significant external public debt. A priority is therefore to create fiscal space thro...
Although decelerating from 6.9 percent the previous year, economic growth in 2018 is estimated to... more Although decelerating from 6.9 percent the previous year, economic growth in 2018 is estimated to remain robust at 6.5 percent. The slowdown in growth in 2018 has been partly due to a combination of the following domestic factors : (i) the severe floods that hit the country during July – September 2018, which adversely affected agricultural production and damaged infrastructure in several provinces; (ii) the weak performance of the mining sector despite higher commodity prices; and (iii) continued fiscal consolidation, which contributed to slower credit growth. These downside factors offset the gains from the industry sector driven by the expansion of construction activities and electricity exports, coupled with robust growth in wholesale and retail trade. There is evidence of increasing job creation between 2010 and 2017. According to the 2017 Labor Force Survey, wage jobs are estimated to have gradually increased since 2010. This has resulted in 28 percent of households situated m...
Growth in developing East Asia and Pacific (EAP) continues to be resilient and in line with previ... more Growth in developing East Asia and Pacific (EAP) continues to be resilient and in line with previous expectations. Already robust domestic demand has been supported by some pickup in external demand and the gradual recovery in commodity prices. Fiscal deficits in the major regional economies widened in 2016, prompting some adjustment toward the end of the year in Indonesia and Malaysia. Monetary policies remained accommodative, and credit continued to grow rapidly in most major economies. Inflation is edging up and producer prices are rising quickly as commodity prices increase. Capital outflows intensified toward end-2016 leading to depreciation pressures, but financial markets have since recovered. The growth outlook for 2017–19 remains broadly positive across the region. China is expected to continue its gradual transition to lower, more sustainable growth. In the rest of the region, growth is projected to pick up moderately. Continued buoyancy in domestic demand, including publi...
One of the key constraints to growth identified by the Accelerated Shared Growth Initiative (ASGI... more One of the key constraints to growth identified by the Accelerated Shared Growth Initiative (ASGI) in South Africa is investment in infrastructure. Analysis of the various measures of physical infrastructure provides one with a declining trend in infrastructure development over the recent past. Investment in economic infrastructure affects GVA directly and indirectly via private investment. There also exist feedback effects from GVA and private investment to investment in economic infrastructure. This implies that economic infrastructure investment responds to growth. Social infrastructure investment is found to have a direct, positive impact on GVA. Theoretical evidence does posit the belief that even though public and private capital may be complements, there may exist threshold effects present with respect to public infrastructure expenditure. The findings do allude to the possibility of a non-linear relationship existing between per capita output and social infrastructure invest...
Abstract: This paper presents a model to account for the behaviour of social elites, in terms of ... more Abstract: This paper presents a model to account for the behaviour of social elites, in terms of their decisions to distribute resources between themselves, and a mass of disadvantaged members of society. Privileged members of society have the opportunity to allocate resources either to improve their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution in favour of the disadvantaged increases the productive capacity of society, but comes at the cost of rising political aspirations of the ...
Annual Bank Conference on Development Economics Working Paper, Apr 1, 2008
This paper presents a model in which two groups in society are engaged in strategic interaction. ... more This paper presents a model in which two groups in society are engaged in strategic interaction. Privileged members of society have the opportunity to allocate resources either to their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution to the disadvantaged can increase the productive capacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the rich. Results in the paper derive conditions under which the rich ...
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Papers by Chandana Kularatne