Volume 05 Issue 02

OIDA International Journal of Sustainable Development
Open access peer-reviewed journal 

The Composition of Government Spending and Economic Growth in Developing Countries: 
The Case of Latin America
Raul Alberto Chamorro-Narvaez a
a Universidad Nacional de Colombia, Carrera, Bogota, Colombia.

Volume 05, Issue 02, Pg. 12-24, 2012.

Abstract: This paper aims to identify the effects of the two economic components of government spending, namely, capital and current spending, on the per capita economic growth rate in a set of Latin American countries over the period 1975 – 2000. Within the neoclassical framework (Solow, 1956; Swan, 1956), government spending, and public policy in general, has no role in determining the long-run economic growth rate, since this is determined by the exogenous population growth and technological progress rates. On the other hand, in some endogenous growth models developed mainly since the early 1990s, such as Easterly (1990), Barro (1990), Barro and Sala-i-Martin (1992, and 2004), Cashin (1995), Bajo-Rubio (2001), and Milbourne et al. (2003), fiscal policy affects the long-term growth rate through decisions on either taxes or expenditures.

The empirical literature tends to reject the predictions of the neoclassical model, in the sense that according to this model, fiscal policy cannot affect growth in the long term. However, results are far from conclusive and it seems they depend on various aspects such as methods or techniques used, assumptions, country or set of countries analyzed, and so on. As long as theoretical models about the influence of public spending on growth is concerned, some of them such as Barro (1990), Cashin (1995), Bajo-Rubio (2000), and Milbourne et al. (2003) predict that a positive effect is expected to be found in countries where the size of government is smaller than a certain threshold, and a negative one in countries where the size of government is bigger than that. Therefore, since generally speaking, with few exceptions, one finds very large public sectors only in developed countries (DCs), studies evaluating the impact of public expenditure on growth should analyze DCs and less developed countries (LDCs) separately. In line with recent growth literature, the study uses a generalized method of moments as suggested by Arellano and Bond (1991) in order to obtain consistent and efficient estimates for a dynamic model, such as an economic growth model.

This paper’s findings suggest that neither government capital nor current expenditures have any impact on the per capita economic growth rate. The positive effect of government capital spending reported in some literature was not found here. Statistically insignificant estimated effects of these kinds of spending could be due to inefficiency. Perhaps they are vulnerable to rent seeking. In addition, inefficiency of government spending has widely been associated in the literature with poor governance and corruption, which are, typically, some characteristics of developing countries.

Keywords:  Economic growth, generalized method of moments, government spending, Latin America

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Microfinance in Bogota, Colombia, as a Development Strategy
Raul Alberto Chamorro-Narvaez a
a Universidad Nacional de Colombia, Bogota, Colombia.

Volume 05, Issue 02, Pg. 24-37,2012.

Abstract: This paper aims to describe and analyze a financial strategy designed and implemented in Bogota, Colombia, in 2002, which considers microcredit as an important tool to provide poorer people credit services. Microcredit is just one of the different components of a broad concept, microfinance, which was developed as an answer to the lack of financial services for the poorer people from formal financial system. 

Microfinance includes the provision of financial services, such as deposits, loans and insurance to poor families who do not have access to resources of the formal financial institutions. The loans are used to invest in micro-enterprises, as well as for investing in health and education, improve housing or deal with family emergencies. However, the strategy of microfinance is not limited to provide financial services only, but also provides training in management of money and strengthens aspects like leadership, confidence, self-esteem, education and micro-management.

Regarding the kind of enterprises that are the target of microfinance in Bogota, Colombia, it is important to mention that micro, small and medium sized enterprises (Mipymes thereafter) involve a big number of workers in the city. According to the Business Chamber of Bogota, there were 202,966 formally constituted enterprises in 2004, from which 201,146 were Mipymes (99%) and concentrated approximately 70% of total formal employment. Particularly regarding Mipymes, 86% were micro, 11% small and 3% medium sized businesses. Mipymes are engaged mainly in trading and the repair of all kinds of motor vehicles (35.4%), followed by real estate activities (13.2%), manufacturing (12.3%); transport, storage and communications (11.6%); and hotels and restaurants (11.3%).

Behavior of firms in Bogota evidences the importance of micro-enterprises and small enterprises in employment generation. However, these types of enterprises face various problems regarding their creation and their operation; among them, the main ones are associated with their financing and management. Faced with this situation, the Treasury Secretary of Bogota implemented a strategy of financial lines in April 2002 to help them, which is based on a scheme of credit throughout the financial system. The main objectives of the financial lines are: i) To facilitate access to credit to micro and small entrepreneurs, ii) to improve the levels of income and employment in the city, and iii) to improve the quality of life of the micro and small entrepreneurs in Bogotá. 

The financial lines designed to help micro, small and medium-sized businesses managed by the Treasury Secretary of Bogota have meant a significant shift in attention to formal business of the city. This financing program for Mipymes was designed with the aim of solving the cyclical problem arisen by the banking crisis of 1999, which led financial institutions to be prepared to accept a lower risk and to raise the interest rates, which discriminated the Mipyme sector of bank financing in a recession and unemployment scenario.

Users of financial lines have registered a rapid growth from their creation. However, the importance of microfinance in this financing program has been limited. Only a portion of the loans of one of them, Bogota Line, which is the one that has concentrated near the 90% of the total disbursements, corresponds to microcredit, as the maximum amounts that are granted by this line to both micro and small businesses, exceed the corresponding to the legally fixed one for microcredit (25 minimum monthly wages, i.e. $10.2 million of Colombian pesos for 2006). In addition, despite the dramatic increase in the resources placed by the financial lines, the strategy has not produced the expected results as long as employment and income for populations living in poverty is concerned.

In this context, it is necessary to assess the possibility that Bogota makes an agreement with National authorities, which allows the Colombian Capital to participate with some economic resources and to make sure that the national strategy does not make more difficult the achievement of some specific objectives of the public policy of the city, such as, the ones that have to do with the reallocation of street sellers and the recovery of the public space.

The national strategy in this context makes it possible to expand the supply of financial services to the poorest people. However, one of its main limitations has to do with the high rate of interest for microcredit, considering the current conditions of the financial markets and the economy as a whole.

To face the problems described above, Bogota could, among other things, design financial products differentiated for non formal micro-entrepreneurs, with different financial conditions, group-based guarantees and technical support to them in the formalization and specialized assistance. 

The main challenge in the short term is to consolidate the involvement of the commercial banks into microfinance. As long as they adopt appropriate technologies of microcredit, competition will reduce the cost of credit and would increase the volume of microcredit. 

Keywords: Bogota, Financial lines, microcredit, microfinance, small businesses

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The Politics of Development in Malaysia: Strategy of Malaysian Islamic Political Party (PAS)
Warjio a, b 
a Research University Team (RUT) Islamic Development Management Project (ISDEV)
Universiti Sains Malaysia (USM), Penang, Malaysia.
b Department of Political Sciences, Faculty of Social Sciences, 
Universitas Sumatera Utara (USU), Medan, Indonesia

Volume 05, Issue 02, Pg. 36-47, 2012.

Abstract: This study analyzes the development Malaysian Islamic Political Party (PAS) in the land scape a plural society of Malaysia. First, its focused on political strategy PAS development. Second, whether the issue faced by PAS as an Islamic political movement that takes the approach of democracy in its construction?. Specifically this study will be based on the area once occupied by PAS Kelantan and Terengganu namely that once ruled by PAS (Shukri Muhammad Salleh, 2000). Kelantan and Terengganu are Federal Government of Malaysia. As is known to have mastered the Kelantan PAS since 1990 until now. When Terengganu between the years 1999-2004. As the ruling party in the two countries, the PAS government has the power and opportunity to carry out the ideals of Islam based on existing legislation.

PAS is Islamic political party. As a party that laid the Qur’an and Sunnah in the principle of struggle, PAS can determine the policies and regulations that involve the interests of the country based principles of Islam. As a political party, the Islamic philosophy that characterizes his existence, in the political scene was settled with the assertion that the grip PAS ideology since he embodied up to today (Mujahid Yusof, 2011)

When PAS controlled Kelantan and Terengganu, they are entitled to take care of the bureaucracy and escorted trips socioeconomic own people according to taste, in line with their understanding of the concept of development and the rule of Islam. In other words, PAS controlled atmosphere and can determine the direction the country are headed way. In this connection, it is no longer sue PAS PAS had to take care of reality but reality.At the time Mahathir Islamization in the development of economic and political system was introduced. Method Islamization Islamize the existing means little by little, not once drastically without the demolition of the existing structure (Shukri Muhammad Salleh, 2000). As methods of application of Islamic values ​​(1974-1979). Islamization development continue to be maintained through the idea of Islam Hadhari (2003) during the era of Tun Abdullah Ahmad Badawi. On the domestic front. PAS in Kelantan Islamic Co-Develop (Membangun Bersama Islam) strategies to introduce (1999-present) during the era of Dato ‘Nik Abdul Aziz Nik Mat. All ideas are said to be based on the development of Islam stems from the government but the political will had to be implemented in the Malaysian political system of liberal capitalism that has not changed.What is interesting, then, based on studies Shukri Muhammad Salleh (2000), through its PAS in Kelantan, despite being in power politics, the PAS is still bound by the vision and five-year development strategy of the Federal government. Similarly, although it has had the power in the state, the PAS government would not have authority over the departments and federal agencies that operate in the state.

Keywords: Islamic Political Party, Malaysia, Politics of Development, PAS, Strategy

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Economic Growth and Public Sector Size: Examples from Kenya’s Vision 2030
Seth Omondi Gor a
 a School of Economics, University of Nairobi, Kenya. 

Volume 05, Issue 02, Pg. 48-59, 2012.

Abstract: The Vision 2030 proposes to contain growth of total expenditures with expenditure rationalization that shifts resources from non-priority to priority areas.  This is expected to see the development expenditure increase from 18% in 2006/07 to 35% by 2012/13.   This study set out to determine the exact causative process between the size of the government and economic growth given that knowledge of the same has important policy implications for the attainment of the ‘Vision’ goals. Economic theory dictates that if government spending accelerates economic growth, in which case causality is Keynesian, then government expenditure acquires the status of an important policy variable. If on the other hand, growth causes expansion in government expenditure, in which case causality is Wagnerian, then government expenditure is relegated to a passive role. Working within the bivariate and trivariate frameworks using the theory of cointegrated processes, the study concludes that in Kenya, causality is Keynesian and therefore the relative size of government spending is a critical policy variable in attaining the vision 2030 goals. This implies that there is potential for achieving long run/potential growth envisaged in the ‘Vision’ by controlling the size of the government.

Keywords: Causality, Granger, Kenya, Vision 2030, Wagnerian

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Green / Sustainable Chemistry: Chemical Waste Management in High School
Zahra Arzani a 
a Beheshty School, Azymeyeh Mehran squre,  Bostan, Karaj, Iran

Volume 05, Issue 02, Pg. 60-67, 2012.

Abstract: Lab experiments are a way to help students interact with the principles of chemistry and understand how the information from their textbook looks in real-life scenarios. In some places, high school teachers mostly use quick demonstration such as the Ammonium Dichromate self-decomposition, commonly called the ” volcano”.  Another popular high-interest experiment is using different salt solutions to create different chemical reactions and different colored precipitates such as lead iodide, silver chloride, barium sulfate and silver chromate. Most of the chemicals which let over in these experiments are toxic and the way of disposal is very important. The objective of the research was founding the safe way to dispose chemical waste in the study area, with no disposal collecting system, and environment protection. To do this, Questioner form was produced about how teachers deal with chemical waste materials in their laboratories in sample high schools in Albors province of Iran. The results showed all labs in my research statistical population were dump chemical waste in rubbish bin or sink. In terms of keeping environment clean three suggestions were made: (a) Using less chemical in each experiment (b) proposing a set of reactions in each case to convert the waste to starting material (c) Lastly cooperate with companies which are nearby to collect the waste (Companies how need those compound as starting material). The survey was then sent to high school science chairpersons across the state of Alborz. Also a groups of teacher in curriculum center has been formed to write a laboratory manual for high school chemistry courses which explained how to manage chemical waste too. Also I found that virtual laboratory is not as effective as practical laboratories.

 Keywords: Chemical Waste, Sustainability; Waste management, High School Chemistry Laboratory, reuse 

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International Migration: Barriers and Opportunities for Indian Health Care Professionals under Mode IV 
of General Agreement on Trade & Services (GATS)
Pardeep Kumar a
a Scholarships and Student Welfare Division, Registrar Office,  University of Delhi, Delhi, India.

Volume 05, Issue 02, Pg. 66-76, 2012.

Abstract: Present paper highlights the issues surrounding trade in health services in India and other developing countries. As it is a well-established fact that in the modern era of globalization, the contribution of services to the global economy is increasing in comparison of the contribution of tangible goods. The paper gives an insight to the shortage of healthcare professionals in developed countries, which is the main cause of migration of health sector workforce from developing to developed countries. The economic impact of such migration on Indian economy has also been analysed in the paper. Today, heath sector is among the most rapidly growing service sectors in the world economy, which has been estimated at $4 trillion yearly in the OECD countries alone. As per the World Trade Report, 2008, the annual percentage change in the trade in commercial services was reported to be 18 percent while the annual percentage change in trade in merchandise goods was 15 percent. The sector has seen new and rapidly evolving forms of cross-border transactions, spurred by factors such as wide-ranging technology, demographic transition, increasing costs of medical care, skill up gradation, growing private sector participation, natural endowments etc. An effort has been made in the present paper to assess the various trade related barrier which are creating hurdle for free and transparent movement of healthcare professionals under Mode-IV of GATS. Besides, the paper shows that economic contribution of Indians working abroad in terms of remittances is more that of total FDI in the economy. The main object of the present paper is to assess barriers to trade in health services particularly in Mode–IV i.e. movement of natural persons abroad. The paper is based on secondary data collected from various sources like Reserve Bank of India (RBI), websites of various international agencies and Governments, data from Ministry of Health & Family Welfare, Government of India. Besides, data from World Health Report, 2006 was also used for preparation of present paper. It has been highlighted in the present paper that among the various categories of health care professionals, nurses are in acute shortage in developed countries mainly OECD member countries. This severe shortage has resulted in to recruiting nurses from countries like Philippines and India. However, there are a number of barriers for recruitment of healthcare professionals which mainly pertain to stringent requirements of qualification. Multiplicity of tests for practicing in destination country is another problem faced by these professionals. For example, in order to become a registered nurse in United States (US), a candidate has to go through minimum three tests- Commission on Graduates of Foreign Nursing Schools (CGFNS), National Licensure Exam (NCLEX) and mandatory language tests. Apart from this, the main problem is of recognition of home country’s qualification in destination country. Lack of recognition of professional qualification remains a major obstacle for developing country professionals willing to provide their services abroad. Therefore, Mutual Recognition Agreement (MRA) on qualification is the only solution for free movement of healthcare professionals because this agreement enables the qualification of professional service providers to be mutually recognized by signatory member countries. Therefore, it may be concluded that unnecessary quantitative as well qualitative restrictions on movement of healthcare professionals should be removed so that the availability and accessibility of global public goods and services towards universal access to health care may be promoted.

Keywords: FDI, GATS, Globalization, Mode-IV, RBI

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Assessment of Utilization of Agricultural Information on Maize Production Among Rural Youth: Panacea for Sustainable Food Security in Nigeria
Olumuyiwa Akin Olaniyi a, Jacob Gbemiga Adewale b
a, b Department of Agricultural Extension and Rural Development, 
Ladoke Akintola University of Technology, Ogbomoso, Nigeria.

Volume 05, Issue 02, Pg. 76-87, 2012.

Abstract: Rural youth are actively involved in agricultural production in Nigeria but the socioeconomic conditions have constrained them and they lack access to scientific and technological information that could enhance their production capacity. Therefore, for meaningful sustainable agricultural and rural development in Nigeria depends not only on the mobilization of large number of youth as active participants in the developmental process, but also on how accessible and well utilised the agricultural information are made available to this important target group. This study assessed the utilization of agricultural information on maize production among rural youth in southwest Nigeria. A total sample of two hundred and forty and two hundred and fifteen rural youth were randomly selected from both Oyo and Osun respectively making a total of four hundred and fifty- five respondents constituted the sample size for the study.  Structured interview schedule was used to elicit information from the respondents. Data analysis was carried out using frequency counts, percentages, mean and standard deviation as descriptive statistics while Pearson Product Moment Correlation (PPMC), Chi square and ANOVA were employed as inferential statistical tools. The study revealed that the most frequently used sources of information by the young farmers are radio, parents, fellow farmers and commercial input dealers and the most often use agricultural information on maize production include: improved maize varieties (WMS= 3.42); selection and rate of chemical application for weed control (WMS = 3.30); and method of fertilizer application (WMS = 2.50). The result of correlation analysis revealed that positive and significant relationships exits between age (r = 0.322, P < 0.05), household size (r = 0.156, P <0.05) and level of utilization of agricultural information. Conversely, there exists negative and significant relationship between farm size (r = -0.177, P<0.05); cosmopoliteness (r = -0.476, P < 0.05) and level of utilization of agricultural information. The result of Chi square analysis revealed that membership of social organization (X2 = 5.235, P< 0.05), extension contact (X2 = 13.739, P <0.05) significantly influenced the level of utilisation of agricultural information on maize production. Also, the study established that significant differences exists in the level of utilization of agricultural information on maize production across the study area (F=46.14 < p=0.05). 

The study concluded that establishment of information resource centres by the government in the rural areas is of paramount importance to utilization of agricultural information as it would facilitate easy access to agricultural information among rural youth in the study area. Hence, the availability and utilization of agricultural information could bring about increase in maize crop production for sustainable food security in Nigeria. 

Keywords: Agricultural, Information, Maize, Rural Youth, Utilization. 

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Bottom-Up Agricultural Extension Services Delivery in Nigerian Local Government Councils: an Assessment of Delta State
Margaret J. Koyenikan a, E. B. Koyenikan b and B. M. Ilekendi c
a, c Department of Agricultural Economics & Extension Services,University of Benin, Nigeria.
b Administration Department, University of Benin Teaching Hospital, Benin-City, Nigeria.

Volume 05, Issue 02, Pg. 88-98, 2012.

Abstract: Local Government Councils (LGCs) in Nigeria is the closest level of formal government to the grassroots. They have the same organizational structure and are expected to implement the assigned roles stipulated in the new Nigerian Agricultural Policy (NAP) which adopts Community-Driven Development (CDD) approach. The study therefore assessed the extent of implementation of field activities and the perceived competency/skills possessed and required by the extension personnel of LGCs in Delta State. Constraints to effective role performance of LGCs were also assessed. The purpose was to evaluate the conformity of the LGCs to the paradigm shift. Simple random sampling technique was used to select six (6) Local Government Councils from the 25 LGCs in Delta State and all the 65 technical staff of the Agricultural and Rural Development (ARD) departments of the LGCs constituted the sample. Structured questionnaire was used for data collection and were analyzed. Results show that only 44.52% of the established staff positions were filled. Majority of the personnel were males (71.74%), with 6-10years working experience (60.87%) and Higher National Diploma (HND) and above (67.39%). Most of the extension delivery activities relevant to the new roles of LGCs were not implemented. The respondents perceived themselves to have low competence in CDD, technical and communication tasks hence indicated strong need for skills to adequately deliver extension services. Educational level of staff had a significant but negative relationship with their competency (r= -0.433; p=0.003). Some constraints to effective role performance of LGCs were insufficient fund allocation to agriculture (Mean=2.82), lack of interest in agriculture of some LGC chairmen (Mean=2.63) and poor technical knowledge of staff (Mean=2.59). It was concluded that LGCs were not well equipped with competent personnel to deliver effective extension services due to poor funding six years into the new NAP.  Adequate staffing, funding and capacity building through collaboration between Federal, Delta State and Local governments and with international partners are recommended.

Keywords: Agricultural-policy, community-driven development (CDD), Local-government, personnel, Nigeria

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Wealth Status and Agricultural Technology Adoption among Smallholder Rice Farmers in Nigeria
Bola Amoke Awotide a, Aliou Diagne b, Alexander Nimo Wiredu c, 
Vivian Ebihomon Ojehomon d
a Department of Agricultural Economics, Faculty of Agriculture and Forestry, University of Ibadan, Nigeria.
b Impact Assessment Unit, Africa Rice Center, Cotonou, Benin Republic.
c CSIR-Savanna Agricultural Research Institute, Tamale Ghana.
d National Cereal Research Institute (NCRI), Badeggi, Niger state, Nigeria.

Volume 05, Issue 02, Pg. 98-115, 2012.

Abstract: Due to the high cost and risk associated with adoption, the wealth of a household may be an important factor in the decision to adopt Improved Rice Varieties (IRVs) in Nigeria. This study assessed the role of household wealth in IRVS adoption. The study employed the Principal Component Analysis (PCA) to generate the wealth index which was used to partition the respondents into wealthy and non-wealthy households. The logit and the Tobit models were adopted to assess the determinants and intensity of adoption of IRVs among 600 randomly selected smallholder rice farmers from the three major rice producing ecologies in Nigeria. Data were collected using well-structured questionnaire. Results indicated that factors determining the adoption and intensity of adoption of IRVs varied between the wealthy and non-wealthy households. Farmers organization, access to credit, access to seed,  education, wealth index, contact with extension agents were some of the variables that had positive and significant influence on the farmers decision to adopt IRVs. Farm size, wealth and income positively and significant affected the intensity of adoption. The cost of seed had negative and significant effect on both the decision to adopt and the intensity of adoption. Hence, if the desired adoption rate and intensity of adoption of IRVs is to be achieved, it is important to embark on wealth group specific policies, adopt programs and policies that can lead to improvement in wealth and households income, encourage formation of farmers’ organization and ensure the price of IRV seeds are affordable to the rural farmers. 

Keywords: Adoption, Farmers, Nigeria, Rice, Wealth 

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Epistemological Beliefs of Undergraduate Students as Function of Gender and Academic Level
Wail Ismail a, Nabeel Abedalaziz b, Zaharah Hussin c, Mohd Faisal Mohamed d, 
Rahmi Md Saad e
a Faculty of Education, Department of Educational Foundations and Humanities, 
University of Malaya, Kuala Lumpur, Malaysia.
b Faculty of education/ Educational psychology and Counseling, University of Malaya, Kuala Lumpur, Malaysia.
c Faculty of Education, Department of Educational Foundations and Humanities, 
University of Malaya,Kuala Lumpur, Malaysia.
d,e  Faculty of Education, Department of Educational Foundations and Humanities, 
University of Malaya, Kuala Lumpur, Malaysia.

Volume 05, Issue 02, Pg. 110-119, 2012.

Abstract: Epistemological beliefs are those concerning the structure or the nature of knowledge and knowing, including definitions of knowledge, how knowledge is constructed, how knowledge is evaluated, and reflects the viewpoint of the individual about what and how knowledge can be acquired and the degree of certainty. The present study sought answers to the following questions: What are the overall epistemological beliefs of undergraduate students? Do epistemological beliefs of undergraduate students differ by gender? Do epistemological beliefs of undergraduate students differ by academic level?   Epistemological beliefs scale comprising 62 items measuring five components of beliefs (i.e. Quick Learning, knowledge, Certain Knowledge, Omniscient authority, innate ability, and simple knowledge) was administered to a sample of 154 undergraduate students from the Faculty of Education at University of Malaya. Descriptive statistics, Two way MANOVA, multiple comparisons, and ANOVA analyses were used. Results indicated that: (1) participants had sophisticated beliefs on Innate ability, whereas they had a naïve belief on Certain knowledge, (2) males scored higher than females in innate ability, whereas both males and female are similar in Quick Learning, Certain Knowledge, Omniscient authority, and simple knowledge), (3) Quick Learning and Innate ability were found to decrease with increase in academic level.

Keywords: Certain Knowledge, Innate ability, Omniscient authority, Quick Learning, Simple knowledge.

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