Intra-industry trade as a share of total tradebetween Central and Eastern European nations and the European Union (EU) is among the highest of all the EU's bilateral trade flows. The authors break down data on these trade flows into horizontal and vertical components, and investigate the...

Despite their extensive applications in research and policy studies, no product level comparisons had been made between Bela Balassa's"revealed"comparative advantage (RCA) index and indices associated with the National Bureau of Economic Research (NBER) that reflect the standard Hecksher-Ohlin...

Public provision of education has often been perceived as universal and egalitarian, but in reality it is not. Political pressure typically results in incidence bias in favor of the rich. The author argues that the bias in political influence resulting from extreme income inequalities is...

The authors document the vast expansion of schooling over the past several decades, as well as convergence in schooling measures across countries. They make the observation that poor countries today have higher average education levels than countries at the same level of economic development had...

A recent but rapidly growing empirical literature focuses on the relationship between public and private capital. But for the most part, it ignores the heterogeneity of public investment. In many countries, especially in the developing world, public investment includes not only basic...

Are natural resources a blessing or a curse? The authors present a model in which natural resources have a positive effect on the level of income and a negative effect on its growth rate. The positive and permanent effect on income implies a welfare gain. There is a growth effect stemming from a...

To address the relationship between concessional assistance, corruption, and other types of rent-seeking activities, the author provides a simple game-theoretic rent-seeking model. Insights with interesting implications emerge from the analysis: 1) An increase in government revenue (from...

Conventional wisdom suggests that reducing military spending may improve a country's economic growth, but empirical studies have produced ambiguous results on this point. Extending a standard growth model, the authors exploit both cross-section and time-series dimensions of available data to get...

Argentina was a pioneer of infrastructure reform in the early 1990s. The social dimension of infrastructure services was typically overlooked in the reform process. However, social sensitivities often resurfaced in the years that followed, leading to a series of ad hoc social policy measures...

Sri Lanka's weak economic performance, although compounded by the civil war and budgetary imbalance, largely reflects the following: 1) a stop-and-go pattern of policy reform, because of political constraints - even though the results of reform were generally positive; 2) weak economic...