HOI WAI JACKIE CHENG
Development economist at the UN, core team member of UN flagship reports, currently based in New York, and previously based in Beijing, Oxford and Hong Kong.
cheng3[at]un[dot]org
OTHER WORKS
May 20, 2021
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Rural development for inclusive growth and a balanced settlement of the population
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(Coauthored with Marcelo LaFleur and Hiroshi Kawamura)
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in UN DESA World Social Report 2021: Reconsidering Rural Development
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Excerpt: Looking back to the recent past (2003–2017), more than 147 million agricultural workers were in developing countries where the agricultural labour productivity did not experience any meaningful catching-up with that in the developed countries. And looking forward, countries that are home to at least 501 million agricultural workers are unlikely to reach SDG 2.3—to double the agricultural productivity and incomes of small-scale food producers by 2030—unless they see an acceleration in agricultural labour productivity growth from the levels seen since the turn of the century.
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Chronic underinvestment in the agricultural sector and underfunded agricultural research across developing economies are key factors behind the subpar agricultural productivity growth. Tepid investment in agriculture reflects low expected return, which is in turn driven by a host of factors that are putting downward pressure on agricultural productivity. These include volatile agricultural prices that have been on a decade-long decline; insufficient and uneven access to agricultural knowledge and technology; inadequate infrastructure; insecure land access; the gender gap in access to productive resources; climate change; and environmental degradation. Coupled with these factors are the de-prioritization of the agricultural sector by urban-minded governments and the ongoing COVID-19-induced disruptions to the agricultural glob- al value chain. Given that agriculture is highly context specific, measures to advance agricultural productivity must adapt to the institutional environment of each community, accounting for differences in market structure, industrialization level and other institutional factors.
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It should be noted that improvement in agricultural productivity does not always lead to broad-based and immediate poverty reduction—due in part to the fact that, in some cases, the lion’s share of the benefits are captured by small-scale, commercial farmers who live above the poverty line. In countries where poverty is more prevalent among landless rural households that mainly engage in non-farm activities, keeping a vibrant non-farm economy in rural areas is crucial for lifting, and keeping, many rural residents out of poverty. A viable rural non-farm economy also presents significant potential for generating jobs for the growing young labour force found in many developing countries.
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Expansion of the rural non-farm economy is not an inevitable consequence of higher agricultural productivity. Rural firms suffer a number of disadvantages, including weaker economies of agglomeration and economies of scale, less connection with global manufacturing and service value chains, and lack of appeal to the younger labour force—all of which hinder the development of rural non-farm sectors. Moreover, by pushing up land cost and wages, expansion of the agricultural sector could have unintended adverse effect on other sectors.
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Continuous improvement in human capital, infrastructure and governance is essential in enabling both the reallocation of resources to rural non-farm sectors and productivity growth in these sectors. Also, some frontier technologies hold promise for mitigating some of the disadvantages that rural firms face, which could pave the way for a more vibrant rural non-farm economy. Inclusive rural financing is crucial and pressing given the persistent rural-urban gap in access to finance, but governments must also keep a watchful eye on the rising risk posed by rural debt that can be observed across countries at different development levels.
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[Full report pdf] [Overview pdf] [DESA news]
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October 11, 2019
Economic uncertainties, insecurity and inequality
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(Coauthored with Hamid Rashid, John Sloan and Ana Rachael Powell)
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in UN DESA Sustainable Development Outlook 2019: Gathering storms and silver linings
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Excerpt: The prevalent, heightened sense of economic insecurity often has first-order effects on aggregate economic output. Existing empirical evidence suggests that uncertainty has direct impacts on economic decisions of households and firms, holding up consumption, investment and trade as economic agents become unsure of their economic future and decide to wait until the uncertainty dissipates. Moreover, households and firms paralysed by uncertainty could become less sensitive to changes in business conditions and policy actions. Such a cautious approach could quickly take hold of an economy as people tend to follow the actions of others, displaying the so-called herding behavior, especially during economic uncertainty. Furthermore, heightened uncertainty also means policymakers are more susceptible to ill-informed decision-making, which would be incongruent with careful long-term planning. Together, these dynamics pose a major conundrum for policymakers as they need to introduce quick and assertive policy actions with incomplete information.
Across countries, multiple indicators that capture different aspects of economic insecurity correlate with economic inequalities. A greater level of inequality intensifies the feeling of economic insecurity caused by uncertainties, as it presents the possibility of much worse economic outcomes—relative to a low-inequality case—if one ends up on the wrong side of the spectrum of possible economic outcomes. On the other hand, rising economic insecurity has differentiated impacts on different population groups that could further worsen inequality, hampering efforts to leave no one behind.
The distributional effect of economic insecurity could also manifest in terms of its link with cognitive performance. Both laboratory exercises and quasi-experiments in the field have shown that people have considerably different levels of cognitive performance depending on the gap between their needs and the resources available to fulfill them. The greater the needs gap, the more it captures one’s attention, generates intrusive thoughts, and reduces cognitive capacities. The inability to reach one’s aspirations—a key feature of economic insecurity—is analogous to the inability to close the needs gap. This suggests that those facing greater economic insecurity (typically those already less well off) would face a greater “cognitive tax” that would drag down their productivity and widen their well-being gap with others.
January 16, 2018
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Towards a more comprehensive assessment of fiscal space
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(Coauthored with Ingo Pitterle)
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UN DESA working paper
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The prolonged sluggishness in the world economy since the global financial crisis has led to growing calls for a reorientation of macroeconomic policies toward more supportive fiscal measures. Such calls inevitably invite the question of how much fiscal space governments actually have. This paper provides a systematic review of the most popular definitions and measures of fiscal space. It examines the evolution of fiscal space measures and discusses the pros and cons of each measure. It then outlines several key factors that could help to further strengthen existing approaches and allow a more comprehensive assessment of fiscal space. By illustrating how different measures paint considerably different pictures of an economy’s fiscal space, the paper underscores the need to use a dashboard of indicators.
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September 2016
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Low carbon development in China and India: Issues and strategies
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(Advisor on the research team (China component))
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A collaborative study by The Energy and Resources Institute, National Centre for Climate Change Strategy and International Cooperation, Central University of Finance and Economics, Zhejiang University, and United Nations Development Programme
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About the study: The collaborative study on low carbon development for China and India is directed towards developing specific strategies for low carbon development in crosscutting areas, such as financing, technology and innovation policy, and sub-national initiatives. The project focuses on understanding peer-country experiences, promoting knowledge exchange, and dissemination to shape domestic policies and implementation. By engaging with policymakers, the project seeks to support policy incubation and development at both the national and sub-national levels. Targeted policymaker engagement and advocacy supports design and adoption of new policies and programmes, based on findings from the study. The intended outcome of the collaborative project on low carbon development for China and India is supporting policy development by facilitating South-South cooperation, creating relevant knowledge, and building capacities through exchange of experiences and ideas.
August 2015
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An Analysis for An Equitable and Sustainable Welfare System
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(Research team member)
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A collaborative study by the Department of Social Development Research under the Development Research Center of the State Council of China and United Nations Development Programme
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About the study: After more than three decades of development since the introduction of reform and opening up, China has established a social welfare system that has underpinned the country’s economic growth and societal stability. Although the current social welfare system emphasizes universality, scheme designs differ among regions, among professions, and between urban and rural residents. The institutions may be similar, but the service quality, benefits and management agencies vary greatly. Moreover, efforts to narrow the beneficiary gap quite often lead to the increase in benefits of both the less developed regions/groups and the more advanced ones, making the efforts largely ineffective. With the solidifying social stratums, accelerating urbanization and the aging process, as well as the slowdown of China’s economy and fiscal capacity growth, increased fragmentation renders the traditional approach unsustainable. Establishing new development concepts to tackle these issues, as well as promoting institutional integration and social welfare system sustainable development has become not only a significant research area, but also a top government priority.
This report focuses on several selected public service and social security programmes that are closely related to China’s current socio-economic development and are given priority in policy considerations. These include compulsory education, health care, old-age pension and social assistance.
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