Income inequality in the process of economic development : An empirical approach

This thesis studies the effect of income inequality on economic growth. This is done by analyzing panel data from several countries with both short and long time dimensions of the data. Two of the chapters study the direct effect of inequality on growth, and one chapter also looks at the possible indirect effect of inequality on growth by assessing the effect of inequality on savings. In Chapter two, the effect of inequality on growth is studied by using a panel of 70 countries and a new EHII2008 inequality measure. Chapter contributes on two problems that panel econometric studies on the economic effect of inequality have recently encountered: the comparability problem associated with the commonly used Deininger and Squire s Gini index, and the problem relating to the estimation of group-related elasticities in panel data. In this study, a simple way to 'bypass' vagueness related to the use of parametric methods to estimate group-related parameters is presented. The idea is to estimate the group-related elasticities implicitly using a set of group-related instrumental variables. The estimation results with new data and method indicate that the relationship between income inequality and growth is likely to be non-linear. Chapter three incorporates the EHII2.1 inequality measure and a panel with annual time series observations from 38 countries to test the existence of long-run equilibrium relation(s) between inequality and the level of GDP. Panel unit root tests indicate that both the logarithmic EHII2.1 inequality measure and the logarithmic GDP per capita series are I(1) nonstationary processes. They are also found to be cointegrated of order one, which implies that there is a long-run equilibrium relation between them. The long-run growth elasticity of inequality is found to be negative in the middle-income and rich economies, but the results for poor economies are inconclusive. In the fourth Chapter, macroeconomic data on nine developed economies spanning across four decades starting from the year 1960 is used to study the effect of the changes in the top income share to national and private savings. The income share of the top 1 % of population is used as proxy for the distribution of income. The effect of inequality on private savings is found to be positive in the Nordic and Central-European countries, but for the Anglo-Saxon countries the direction of the effect (positive vs. negative) remains somewhat ambiguous. Inequality is found to have an effect national savings only in the Nordic countries, where it is positive.

Hyvinvointivaltion läpimurto : Pienviljelyhegemonian rapautumisen, kansalaisliikehdinnän ja poliittisen murroksen keskinäiset suhteet suomalaisessa yhteiskunnassa 1950-luvun loppuvuosina

A Breakthrough of Welfare State. The inter-relationships of the civic movement, political transformation, and eroding of a hegemony based on small scale farming in the Finnish society in the late 1950's. The unusually rapid and powerful structural change; the non-parliamentary civic movements of 1956 - 1963; and the left majority in the Finnish parliament between 1958 - 1962 all took place as the Finnish welfare state started to develop. The aim of my research is to analyse the inter-relationships of these processes. The research describes the way the former semi self-sufficient, semi-proletarian and labour-intensive form of production - a simple and discriminatory system in itself - made it possible for the majority of the population to survive through hard work. For some it even provided a possibility to prosper. The waning vitality of semi self-sufficiency and small scale agriculture triggered a political ferment and started a period of searching for something new. The process was so intense that it broke up most of the parties and tore down the old consensus that was based on the power of economic and political elite. The most crucial battle of the great transformation was waged over the nature of the state: Should we build a welfare state and construct social security systems, or should we revert to the old night watchman state and, for example, cancel the modest forms of redistribution of income carried out in the 1950's? The people joining the civic movements were either cottagers of the impoverishing countryside or, quite often, people who had come from the countryside and thus had grown up under conditions of some form of solidarity that included taking care of one's own family. The Finnish social insurance developed in the midst of a change in the structure of production of the society, and it became a compromise to satisfy the needs of both the waning society of small scale agriculture and the rising proletarian society based on wage labour. The hodgepodge of political schemes and use of power became a battle between different notions of the economy and the state; the distribution of national income; and the position of Finland in the international context. This battle created a shape of an interregnum - a period of transformation including two notions of society, two alternative paths for the future and the logic of a correctional move. The transformation of Finland from a poor developing country into a prosperous society has been praised as a success story. In 1956 - 1959, when the old form of governance based on the interests of small scale agriculture and wood processing industry was in decay, and when the future seemed uncertain, the projects to reduce social benefits and efforts to distribute national income even more unequally than before led to a powerful counter-movement by citizens and started an hegemonic change and a equal socia development.

Juoksuhaudoista yhteiskuntaan : Vuosien 1965-1975 sotilaallista maanpuolustusta ja puolustusvoimia koskevan joukkotiedotuksen diskursiivinen tarkastelu

The Finnish society developed rapidly in the 1960´s and 1970´s. This was result of international trends. Development of education, urbanization and wide organization of society increased discontent towards prevailing social structure and towards the power elite. Development of technology created possibility to present radical perspectives in mass media. This caused widely spread discussions dividing opinions. The purpose of this thesis was to complement research on national defence and the Finnish Defence Forces especially between years 1965 and 1975. The task of research was to clarify how changes in society and how the significance of this change was interpreted in public discussion about national defence and development of the Defence Forces. The most essential points for this thesis turned out to be discourses structured from public discussion. Main research material consisted of approximately 35000 news, editorials, articles and opinions presented in mass media supplemented by literature, committee reports and other archival sources. Frame of reference for this thesis is based on relativistic worldview. According to this, social reality is relative and there is no single truth. Environment has significant influence on the issue how knowledge and truth are formed. Data analysis was based on critical discourse. The key objective was to clarify the effects of broad changes in society using discursive methods. One essential goal was to form order of discourse using linguistic analysis and also connect discourses to wider sociocultural custom. On this thesis I came to the conclusion that on the review period there were five significant ensembles of discourse. They consisted of several discussions focused on different themes. The discourse of official security policy aimed to define national defence and the position of the Defence Forces as parts of foreign policy. Foreign policy is often perceived as the most significant part of security policy. Historical memory, geographical position of Finland and also the state contracts, changes in international warfare, tasks of the Defence Forces and increasing critic of national defence and the difference in thinking between generations formed the discourse of security policy. In the discourse of the liability to military service, the issue was about individual responsibility to society and national defence. Resisters and unarmed defence demands, encouraged by international examples were the themes. The discourse pointed out how mass media is used to influence and forced the Defence Forces to develop the practices in public information. The discourses of democracy and politics were closer to internal development of the Defence Forces to integrate more into society. The discourse of democracy focused in changing power relationships of the Defence Forces that were known as authoritarian. Issues like conscript and personnel union activity had lot of similarities to general social development. The discourse of politics presented how the Defence Forces were pushed towards parliamentary decision making. The personnel was granted the same rights as other population. Themes related to the discourse on the will to national defence were development of mental national defence, increasing education on national defence and creation of more open public information culture. According to discourses presented above I can state, that the position of the Defence Forces in society was changed between years 1965-1975. This change was advanced by the Defence Forces reformed attitude towards mass media and public information in general. Active participation in public information important became important instead of only answering topics. This positive development created an atmosphere, that was easier for the public to understand and create own pictures of the armed forces. Due to this, I can describe that the defenders and supporters of the armed forces were stuck in their trenches, until discussions presented in discourses and themes developed the Defence Forces to be better fitting part of society. Key words; society, national defence, Defence Forces, discourse, mass media, security policy, liability to military service, conscription, democracy

Sosiaaliturvan ulkopuolella - kokemuksia kansalaisuuden reunalta

Muuttaessaan maasta toiseen ihminen kohtaa useita rajoja. Ylittäessään kohdemaan valtion rajan hän kulkee läpi ensimmäisestä maahanmuuton portista. Toinen raja erottaa tilapäiset asukkaat pysyvistä: tämän maahanmuuton toisen portin läpikulkemisen myötä yksilö pääsee osalliseksi sosiaalisista oikeuksista. Maahanmuuton viimeisestä portista kuljettuaan yksilö saavuttaa kyseisen valtion kansalaisuuden. (Hammar 1990, 21.) Tässä pro gradu -tutkielmassa tarkastelen toisen maahanmuuton portin aukeamista ja sosiaaliturvan piiriin pääsyä odottavien maahan-muuttajien kokemuksia. Käytän tarkastelussa sosiaalisen kansalaisuuden ja marginaalisuuden käsitteitä. Tutkielmassa selvitän, miten sosiaali- ja terveyspalveluiden sekä toimeentuloturvan ulkopuolelle jääminen vaikuttaa maahanmuuttajien arkeen ja miten he kokevat osallisuutensa ja jäsenyytensä yhteiskunnassa. Tutkimus on lähtökohdiltaan fenomenologis-hermeneuttinen ja sovellan lähestymistapana ko-kemuksiin keskittyvän narratiivista tutkimusta. Tutkimusaineisto on koottu kevään 2011 aikana ja se koostuu 10 teemahaastattelusta. Haastateltavien maahanmuuton keinot ja syyt vaihtelivat: he olivat saapuneet Suomeen perhesyistä, työn vuoksi tai hakeakseen turvaa. Haastateltavat tavoitettiin Helsingin Diakoniaopiston, Pro-tukipisteen, Kansainvälisen seurakunnan ja tuttava-verkostojen kautta. Aineiston analyysi toteutettiin sisällönanalyysillä Atlas-ohjelman avulla syksyn 2011 aikana. Toisen maahanmuuton portin aukeamisen odottaminen oli raskaaksi: tuota aikaa leimasi epä-varmuus, tyhjyys ja yksinäisyys. Sosiaaliturvan ulkopuolella jääminen aiheutti osalle haastatel-tavista taloudellisia vaikeuksia sekä ongelmia terveydenhuollon palveluiden piiriin pääsemisessä. Toisaalta apua hakeneet haastateltavat olivat sitä lopulta saaneet. Auttamistyön ammattilaiset ja maistraatti saivat haastateltavien kertomuksissa portinvartijan aseman. Kaikille sosiaaliturvan ulkopuolelle jääminen ei ollut ongelma vaan he kokivat sosiaaliturvan puutetta suuremmaksi ongelmaksi työnteko-oikeuden puuttumisen. Kuulumisen ja ulkopuolisuuden kokemus voivat olla läsnä samanaikaisesti, ja kuulumisesta neuvotellaan jatkuvasti esimerkiksi sosiaalisessa kanssakäymisessä tai palveluita hakiessa. Insti-tutionaaliset käytännöt ja poiskäännyttämisen kokemukset tuottavat marginaalisia identiteettejä. Tasavertainen oikeus sosiaaliturvaan vahvistaa kokemusta kuulumisesta ja kodista. Sosiaaliturva ei kuitenkaan yksin määritä kuulumisen ja kodin kokemusta vaan siihen vaikuttavat myös muut tekijät. Näistä tärkeimmät ovat kehon fyysinen sijoittuminen Suomeen, perhe- ja ystä-vyyssuhteet, työ, asunto ja rasismin kokemukset.

'South-South' Remittance - Poverty reduction nexus. The Case of 'Hadiya' immigrants in South Africa, as Agents of 'Constituence development' in Ethiopia, and the policy implications of their 'remittance instrument'

This thesis explores the link between South-South remittance and development. It attempts to establish improved understanding about the role of immigrants as agents of constituency growth and development. By doing so, it illuminates the dark corners of the policy implications that the unconventional development agency of immigrants might have for countries in the Organization ft Economic Cooperation and Development (OECD). The thesis problematises the existence of state-centric international cooperation as providing the recipe for failed Aid in the face of global poverty menace. In the last half a century, the relative shi' of focus to non-state actors brought about the proliferation of NGOs. That, intrun, helped improve international access to crisis situations; however, their long-term remedial impacts on poverty and development have been contested. Major misgivings for non-governmental organizations (NGOs) are, on one hand, low level goal-bound expenditures and lack of independence from influence of the state, on the other. Therefore, the thesis enterprises to empirically verify its fundamental question whether remitting immigrants constitute an alternative development agency to the traditional players: the State and NGOs. Its main arguments are: due to state's failures in bringing sustainable development in many countries of the South, the future of poverty reduction and development also rests in immigrants' remittances. Nonetheless, in the last decade, remittance security-nexus dominated its discourse. Because of that remittance was viewed as something requiring global regime and restrictions. These temptations to tightly regulate remittance flows carry the danger of overlooking its trans-boundary nature and its strong link with livelihood of the poor. Therefore, to avoid unintended consequences of interventions, there need to be clear policy that bases itself on a discursive knowledge on the issues of North-South and South-South remittances The study involved both literature based and empirical research. It employed Discourse Analysis (C as main method for the former and snow-balling as its approach for the latter. For the first part the thesis constructed three conceptual models, these are: metrological model, police model and ecological model on remittance development-nexus. Through this modeling, the thesis achieved better deconstruction on the concepts remittance, immigrants and development agency. The protagonists of each model, the values and interests they represent, and their main arguments along various lines of dichotomies have been discussed. For instance, the main treats of meteorological model include: it sees remittance as transitional economic variable which require constant speculations and global management; it acts as meteorological station for following up or predicting the level, direction, flow and movement of global remittance. It focuses on official lines and considers the state as legitimate recipient of advic and positive consequence of remittance. On the other hand, police model views remittance as beir at best, development neutral or as an illicit activity requiring global regulations and tight control. Both immigrants and remittance viewed as subversive to establishments. It gives primacy to state stable agent of development and a partner for international cooperation. The anti-thesis to the police model is supplied by ecological model, which this thesis is a part. Ecological model on remittance and immigrants argues that, tight global regulations alone cannot be a panacea for possible abuse of informal remittance system. Ecological model, not only links remittance to poverty reduction, the main trust of development, but also considers the development agency of immigrants as critical factor for 21st century north-south development intervention. It sees immigrants as development conscious and their remittance instrument as most stable flow of finance to the developing countries. Besides, it sees remittance as effective poverty solutions than Foreign Direct Investment and international AID. This thesis focuses on the significance of South-South remittance and investigates the South Africa - Ethiopia remittance corridor, as case study; and empirically verifies the role of Ethiopian (Kembata and Hadiya) immigrants in South Africa as agents of local development back home. The study involved techniques of interview, group discussions, observations and investigative study. It also looked into the determinants of their migration to South Africa, and their remittance to Ethiopia. The theoretical models in the first part of the thesis have been operationalised throughout the empirical part to verify if the Kembata and Hadiya immigrants played the crucial role in their household poverty and local development in comparison with the Ethiopian state and the NGOs involved in the system. As evidenced by the research the thesis has made three distinct contributions to the discourse of remittance development-nexus. Fist, it systematized the debate about linkages between remittance, immigrants, development agency and policy of international cooperation by creating three conceptual models (school of thoughts); second, it singled out remitting immigrants as new agents of development in the South; third, it deconstructed concept of remittance and established South¬South remittance as additional sphere of academic investigation. In addition to the above contributions, the thesis finds that Kembata and Hadiya immigrants have engaged in various developmental activities in their locality than usually anticipated. Hence, it concludes that Ethiopian immigrants constitute an alternative development agency to the state and other non-state actors in their country, and the lesson can be applied to poverty reduction strategies in most developing countries.

Macro-economic analysis of forestry options on carbon sequestration in India

The forestry sector provides a number of climate change mitigation options. Apart from this ecological benefit, it has significant social and economic relevance. Implementation of forestry options requires large investments and sustained long-term planning. Thus there is a need for a detailed analysis of forestry options to understand their implications on stock and flow of carbon, required investments, value of forest wealth, contribution to GNP and livelihood, demand management, employment and foreign trade. There is a need to evaluate the additional spending on forestry by analysing the environmental (particularly carbon abatement), social and economic benefits. The biomass needs for India are expected to increase by two to three times by 2020. Depending upon the forest types, ownership patterns and land use patterns, feasible forestry options are identified. It is found among many supply options to be feasible to meet the 'demand based needs' with a mix of management options, species choices and organisational set up. A comparative static framework is used to analyze the macro-economic impacts. Forestry accounts for 1.84% of GNP in India. It is characterized by significant forward industrial linkages and least backward linkage. Forestry generates about 36 million person years of employment annually. India imports Rs. 15 billion worth of forest based materials annually. Implementation of the demand based forestry options can lead to a number of ecological, economic and institutional changes. The notable ones are: enhancement of C stock from 9578 to 17 094 Mt and a net annual C-sequestration from 73 to 149 Mt after accounting for all emissions; a trebling of the output of forestry sector from Rs. 49 billion to Rs. 146 billion annually; an increase in GDP contribution of forestry from Rs. 32 billion to Rs. 105 billion over a period of 35 years; an increase in annual employment level by 23 million person years, emergence of forestry as a net contributor of foreign exchange through trading of forestry products; and an increase in economic value of forest capital stock by Rs. 7260 billion with a cost benefit analysis showing forestry as a profitable option. Implementation of forestry options calls for an understanding of current forest policies and barriers which are analyzed and a number of policy options are suggested. (C) 1997 Elsevier Science B.V.

Modeling and control of unified power flow controller for transient stability

FACTS controllers are emerging as viable and economic solutions to the problems of large interconnected ne networks, which can endanger the system security. These devices are characterized by their fast response, absence of inertia, and minimum maintenance requirements. Thyristor controlled equipment like Thyristor Controlled Series Capacitor (TCSC), Static Var Compensator (SVC), Thyristor Controlled Phase angle Regulator (TCPR) etc. which involve passive elements result in devices of large sizes with substantial cost and significant labour for installation. An all solid-state device using GTOs leads to reduction in equipment size and has improved performance. The Unified Power Flow Controller (UPFC) is a versatile controller which can be used to control the active and reactive power in the Line independently. The concept of UPFC makes it possible to handle practically all power flow control and transmission line compensation problems, using solid-state controllers, which provide functional flexibility, generally not attainable by conventional thyristor controlled systems. In this paper, we present the development of a control scheme for the series injected voltage of the UPFC to damp the power oscillations and improve transient stability in a power system. (C) 1998 Elsevier Science Ltd. All rights reserved.

Environment Education for Ecosystem Conservation

Conservation of natural resources through sustainable ecosystem management and development is the key to our secured future. The management of ecosystem involves inventorying and monitoring, and applying integrated technologies, methodologies and interdisciplinary approaches for its conservation. Hence, now it is even more critical than ever before for the humans to be environmentally literate. To realise this vision, both ecological and environmental education must become a fundamental part of the education system at all levels of education. Currently, it is even more critical than ever before for the humankind as a whole to have a clear understanding of environmental concerns and to follow sustainable development practices. The degradation of our environment is linked to continuing problems of pollution, loss of forest, solid waste disposal, and issues related to economic productivity and national as well as ecological security. Environmental management has gained momentum in the recent years with the initiatives focussing on managing environmental hazards and preventing possible disasters. Environmental issues make better sense, when one can understand them in the context of one’s own cognitive sphere. Environmental education focusing on real-world contexts and issues often begins close to home, encouraging learners to understand and forge connections with their immediate surroundings. The awareness, knowledge, and skills needed for these local connections and understandings provide a base for moving out into larger systems, broader issues, and a more sophisticated comprehension of causes, connections, and consequences. Environmental Education Programme at CES in collaboration with Karnataka Environment Research Foundation (KERF) referred as ‘Know your Ecosystem’ focuses on the importance of investigating the ecosystems within the context of human influences, incorporating an examination of ecology, economics, culture, political structure, and social equity as well as natural processes and systems. The ultimate goal of environment education is to develop an environmentally literate public. It needs to address the connection between our conception and practice of education and our relationship as human cultures to life-sustaining ecological systems. For each environmental issue there are many perspectives and much uncertainty. Environmental education cultivates the ability to recognise uncertainty, envision alternative scenarios, and adapt to changing conditions and information. These knowledge, skills, and mindset translate into a citizenry who is better equipped to address its common problems and take advantage of opportunities, whether environmental concerns are involved or not.

Groundwater Management in India:Physical, Institutional and Policy Alternatives

Groundwater constitutes a vital natural resource for sustaining India’s agricultural economy and meeting the country’s social, ecological and environmental goals. It is a unique resource, widely available, providing security against droughts and yet it is closely linked to surface-water resources and the hydrological cycle. Its availability depends on geo-hydrological conditions and characteristics of aquifers, from deep to alluvium, sediment crystalline rocks to basalt formations; and agro-climate from humid to subhumid and semi-arid to arid. Its reliable supply, uniform quality and temperature, relative turbidity, pollution-safe, minimal evaporation losses, and low cost of development are attributes making groundwater more attractive compared to other resources. It plays a key role in the provision of safe drinking water to rural populations. For example, already almost 80% of domestic water use in rural areas in India is groundwater-supplied, and much of it is being supplied to farms, villages and small towns. Inadequate control of the use of groundwater, indiscriminate application of agrochemicals and unrestrained pollution of the rural environment by other human activities make groundwater usage unsustainable, necessitating proper management in the face of the twin demand for water of good quality for domestic supply and adequate supply for irrigation, ensuring equity, efficiency and sustainability of the resource. Groundwater irrigation has overtaken surface irrigation in the early 1980s, supported by well energization. It is estimated that there are about 24 million energised wells and tube wells now and it is driven by demand rather than availability, evident through the greater occurrence of wells in districts with high population densities. Apart from aquifer characteristics, land fragmentation and landholding size are the factors that decide the density of wells. The ‘rise and fall’ of local economies dependent on groundwater can be summarized as: the green revolution of 1980s, groundwaterbased agrarian boom, early symptoms of groundwater overdraft, and decline of the groundwater socio-ecology. The social characteristics and policy interventions typical of each stage provide a fascinating insight into the human-resource dynamics. This book is a compilation of nine research papers discussing various aspects of groundwater management. It attempts to integrate knowledge about the physical system, the socio-economic system, the institutional set-up and the policy environment to come out with a more realistic analysis of the situation with regard to the nature, characteristics and intensity of resource use, the size of the economy the use generates, and the negative socioeconomic consequences. Complex variables addressed in this regard focusing on northern Gujarat are the stock of groundwater available in the region, its hydrodynamics, its net outflows against inflows, the economics of its intensive use (particularly irrigation in semi-arid and arid regions), its criticality in the regional hydroecological regime, ethical aspects and social aspects of its use. The first chapter by Dinesh Kumar and Singh, dwells on complex groundwater socio-ecology of India, while emphasizing the need for policy measures to address indiscriminate over-exploitation of dwindling resources. The chapter also explores the nature of groundwater economy and the role of electricity prices on it. The next chapter on groundwater issue in north Gujarat provides a description of groundwater resource characteristics followed by a detailed analysis of the groundwater depletion and quality deterioration problems in the region and their undesirable consequences on the economy, ecosystem health and the society. Considering water-buyers and wellowning farmers individually, a methodology for economic valuation of groundwater in regions where its primary usage is in agriculture, and as assessment of the groundwater economy based on case studies from north Gujarat is presented in the fourth chapter. The next chapter focuses on the extent of dependency of milk production on groundwater, which includes the water embedded in green and dry fodder and animal feed. The study made a realistic estimate of irrigation water productivity in terms of the physics and economics of milk production. The sixth chapter analyses the extent of reduction in water usage, increase in yield and overall increase in physical productivity of alfalfa with the use of the drip irrigation system. The chapter also provides a detailed synthesis of the costs and benefits associated with the use of drip irrigation systems. A linear programmingbased optimization model with the objective to minimize groundwater use taking into account the interaction between two distinct components – farming and dairying under the constraints of food security and income stability for different scenarios, including shift in cropping pattern, introduction of water-efficient crops, water- saving technologies in addition to the ‘business as usual’ scenario is presented in the seventh chapter. The results show that sustaining dairy production in the region with reduced groundwater draft requires crop shifts and adoption of water-saving technologies. The eighth chapter provides evidences to prove that the presence of adequate economic incentive would encourage farmers to adopt water-saving irrigation devices, based on the findings of market research with reference to the level of awareness among farmers of technologies and the factors that decide the adoption of water-saving technologies. However, now the marginal cost of using electricity for agricultural pumping is almost zero. The economic incentives are strong and visible only when the farmers are either water-buyers or have to manage irrigation with limited water from tube-well partnerships. The ninth chapter explores the socio-economic viability of increasing the power tariff and inducing groundwater rationing as a tool for managing energy and groundwater demand, considering the current estimate of the country’s annual economic loss of Rs 320 billion towards electricity subsidy in the farm sector. The tenth chapter suggests private tradable property rights and development of water markets as the institutional tool for achieving equity, efficiency and sustainability of groundwater use. It identifies the externalities for local groundwater management and emphasizes the need for managing groundwater by local user groups, supported by a thorough analysis of groundwater socio-ecology in India. An institutional framework for managing the resource based on participatory approach that is capable of internalizing the externalities, comprising implementation of institutional and technical alternatives for resource management is also presented. Major findings of the analyses and key arguments in each chapter are summarized in the concluding chapter. Case studies of the social and economic benefits of groundwater use, where that use could be described as unsustainable, are interesting. The benefits of groundwater use are outlined and described with examples of social and economic impacts of groundwater and the negative aspects of groundwater development with the compilation of environmental problems based on up-to-date research results. This publication with a well-edited compilation of case studies is informative and constitutes a useful publication for students and professionals.