This year the International Economic Association held its World Conference in Mexico City. The five day event, held from 19th to 23rd of June, featured a huge variety of sessions on many of the key economic issues of the day, as well as keynotes by distinguished scholars including Joseph Stiglitz, Tim Besley, and Dani Rodrik, the last of which was chaired by our director Finn Tarp. During the conference Professor Tarp also took part in a session aimed at connecting young African scholars with senior economists, during which he shared his thoughts about the critical issues facing the profession today. Papers were presented by UNU-WIDER researchers Tony Addison, Miguel Niño-Zarazúa and Carlos Gradín. In addition to the above UNU-WIDER contributed four sessions to the conference, on the extractive industries, inequality in Mexico, rural Viet Nam, and taxation.
Extractive Industries for Economic Development
Presenters: James Cust (World Bank), Evelyn Dietsche (Chatham House), Alan Roe (University of Warwick & UNU-WIDER)
The session focused on extractive resources (minerals, oil, gas) that have, in the last twenty years, become far more important to the economies of low- and middle- income countries, and therefore to their prospects for economic development. Since the volume of resources in these countries is large, and their exploitation is attractive to both companies and governments, they offer considerable potential to support inclusive development. The poverty-reducing potential of a well-managed and regulated extractives sector is extremely large. Consequently, the potential role of extractives in the development agenda is at the very least much more important than was previously thought.
This session was based on work from the UNU-WIDER project Extractives for development, which you can read more about here.
Inequality in Mexico: Reconciling the Narratives from Household Surveys, National Accounts, and Tax Registries
Presenters: Raymundo Campos (Colegio de Mexico), Luis F. Lopez-Calva (World Bank), Carlos Ibarra (UDLA), John Scott (CIDE).
Results from the National Households’ Incomes and Expenditures Survey suggest that income inequality in Mexico has been falling since the mid-1990s. The main driver of this decline has been a decline in earnings inequality. To a lesser degree, government transfers and remittances also contributed to this trend. Although household surveys have enormous value, they also have serious limitations, which this session sought to address.
In particular, they suffer from two shortcomings. First, capital incomes are substantially underestimated. Second, surveys do not represent top incomes well mainly due to three factors: (i) top incomes are statistically rare events; (ii) survey non-compliance is increasing in incomes; and (iii) under-reporting. Thus, a question remains as to whether inequality has indeed declined if capital incomes and incomes of the rich could be taken into account. In the case of Mexico, comparisons between income or private consumption totals between household surveys and national accounts suggest that under-reporting and the “missing rich” are particularly high.
This session was based on work from the UNU-WIDER project Inequality in the giants, which you can read more about here.
Welfare in Rural Viet Nam
Presenters: Carol Newman (Trinity College Dublin), Saurabh Singhal (UNU-WIDER), Smriti Sharma (UNU-WIDER)
Since the implementation of the Doi Moi reforms began in 1986, Viet Nam has undergone a fundamental change in the pattern of economic activity, as households and firms reallocate labour from traditional agriculture to more productive forms of agriculture and modern industrial and service sectors.
This session presented three studies based on two unique high-quality panel datasets (Vietnam Access to Resources Household Survey and the Small and Medium Scale Enterprise Survey) to explore these changes and their implications for rural welfare. A better understanding of what the process of structural transformation means for the welfare and socio-economic characteristics of the rural poor is essential for both the development profession and policy makers at large in coming to grips with the task of promoting equitable and sustainable development and ending poverty. The session also launched the OUP book Growth, Structural Transformation, and Rural Change in Viet Nam: A Rising Dragon on the Move.
Tax and development: micro and macro approaches
Presenters: Professor Robert Osei (ISSER, University of Ghana), Dr Kyle McNabb (UNU-WIDER), Professor Jukka Pirttilä (University of Tampere and UNU-WIDER)
This session presented research findings from three different modern approaches to tax policy analysis in developing countries. It covers papers that build on detailed administrative data from tax authorities, on micro data from surveys that is used in tax-benefit microsimulation, and on renewed and improved macro data on government revenues. Each paper is directly linked to policy issues that governments in developing countries need to respond to. You can read more about the work presented in this session in this blog.
UNU-WIDER greatly appreciates the opportunity to take part in, and contribute to, this wonderful event which brought together thinkers from around the world who care deeply about the development process.