Monica Das
Assistant Professor of Economics

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UN Projects

“Institutions and Development Revisited: A nonparametric approach.” with S. R. Basu, Policy Issues in International Trade and Commodities Study Series, No 42, UNCTAD, (2010).

A paper with S. R. Basu titled “Institution and Development Revisited: A nonparametric approach.” is published in Policy Issues in International Trade and Commodities Study Series, No 42, UNCTAD (2010). This paper uses nonparametric methodology to examine the role of institutions in understanding differential levels of development across countries. The analysis is carried out for a set of 102 countries over 1980 to 2004. First, we construct a Development Quality Index (DQI) and an Institutional Quality Index (IQI) by using the multivariate statistical method of principal component. These indices are capable of capturing a broader range of issues (economic, social and political) related to development and institutions. Our approach is an improvement over the existing body of literature, which uses single indicators such as GDP per capita as a proxy for development or the rule of law and property rights to measure institutional quality. The DQI is a composite index, which covers 15 indicators of development: GDP/capita, telephone lines/1000 people, television sets/1000 people, radios/1000 people, power consumption/capita, energy use/capita, life expectancy at birth, infant mortality rate, physicians/1000 people, immunization rate, CO2 emissions/capita, adult literacy rate, primary school enrollment rate, secondary school enrollment rate and total years in schools. Likewise the IQI is based on 23 indicators of quality of institutions: legal and property rights, bureaucratic quality, corruption, democratic accountability, government stability, law and order, independent judiciary, regulation, press freedom, civil liberties, physical integrity index, empowerment right index, freedom of association, women's political rights, women’s economic right, women's social right, executive constraint, index of democracy, political rights, polity score, lower legislative, upper legislative  and independent sub-federal units. Then we look at the relationship between institutional quality and development quality using nonparametric methodology. For a majority of the cases considered, institutions have a positive impact on development. Our results indicate parametric estimates suffer from misspecification bias and the impact of institutional quality on development quality is heterogeneous across countries and time periods. The paper was among the “15 most downloaded papers” at the Social Science Research Network during April – May of 2010. In the Policy Issues Series, it is the first paper to use nonparametric methodology to study development and institutional issues. 

“Export Structure and Economic Performance in Developing Countries: Evidence from Nonparametric Methodology” with S. R. Basu, under review, Policy Issues in International Trade and Commodities Study Series, No 49, UNCTAD.

Currently I am working as a consultant with co-investigator S. R. Basu, for a United Nations Project titled “Trade Diversification and Development: Which sectors matter?” During the recent global economic and financial crisis, many developing countries faced a steady decline of their export revenues due to the over-dependence on international trade leading to over-exposure of those economies to the rest of the world. Some developing countries such as China, India, Brazil (part of the BRIC countries) and others could undertake trade-related policies to speed up the recovery process. Diversification of their exports basket has been one of the key trade policy components to stabilize the exports sector growth and subsequently GDP growth. The purpose our project is to examine how transformation in the export structure of a country may influence its economic performance. Our objective is to see if the trade policymaking agenda of developing countries should be directed towards building capacities and capabilities for producing skill and technologically intensive manufacturing goods, similar to those of developed countries. Our findings are relevant for trade policymakers and planners in developing and least developed countries (LDCs) as well as to the United Nations and other multilateral organizations. The advantage of nonparametric methodology is that the relationship of interest can be determined for various countries and country groups. Parametric methods would estimate only one coefficient for all countries in the dataset. With the nonparametric methodology, we are able to examine the relationship between GDP per capita (GDPPC) and level of skill and technology contents of exports in a data driven specification free manner, for 88 developing countries during 1995 – 2007. The methodology allows us to report the median estimates for: (i) regional groupings as Asia, Americas and Africa, (ii) emerging south and other developing countries and (iii) least developed countries and small island developing countries and other developing countries. We find, as the skill and technology content of the exports increase, the impact on GDP per capita increases positivity and significantly as well, after controlling for other policy variables. With these results, I am currently preparing a paper (co-authored with S. R. Basu) titled “Export Structure and Economic Performance in Developing Countries: Evidence from Nonparametric Methodology” for publication in Policy Issues in International Trade and Commodities Study Series, No 49, by UNCTAD.  

 

 

 

Monica Das
mdas@skidmore.edu
(518) 580-5096