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1982. State Development Planning: Did it Create an East Asian Miracle?
- Author:
- Benjamen Powell
- Publication Date:
- 09-2004
- Content Type:
- Working Paper
- Institution:
- Independent Institute
- Abstract:
- East Asian countries have recorded large increases in per capita GDP over the last fifty years. Some observers have referred to this growth as an “East Asian Miracle.” One popular explanation attributes the rapid growth to state led industrial development planning. This paper critically assesses the arguments surrounding state development planning and East Asia's growth. Whether the state can acquire the knowledge necessary to calculate which industries it should promote and how state development planning can deal with political incentive problems faced by planners are both examined. When we look at the development record of East Asian countries we find that to the extent development planning did exist, it could not calculate which industries would promote development, so it instead promoted industrialization. We also find that what rapid growth in living standards did occur can be better explained by free markets than state planning because, as measured in economic freedom indexes, these countries were some of the most free market in the world.
- Topic:
- Development, Industrial Policy, and Politics
- Political Geography:
- Israel and East Asia
1983. Institutional Foundations of Economic Freedom: A time-series cross-section analysis
- Author:
- Xavier de Vanssay, Vincent Hildebrand, and Zane A. Spindler
- Publication Date:
- 05-2004
- Content Type:
- Working Paper
- Institution:
- Independent Institute
- Abstract:
- Using time-series cross-section analysis, we provide additional empirical validation for the principal-agent model developed by Adserà, et al. (2003). In our innovation, efficient economic policy is proxied by “economic freedom” from the Fraser Institute database and “political institutions” are proxied by variables from the Database of Political Institutions. Our results suggest that the more credible the threat of removal from office, the more government officials will pursue efficient economic policies.
- Topic:
- Development, Economics, Government, and Political Economy
1984. Firm Size, Technical Efficiency and Productivity Growth in Chinese Industry'
- Author:
- Dic Lo and Yuk-Shing Cheng
- Publication Date:
- 12-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- Since the mid-1990s, China's state leadership has adopted a policy of nurturing the competitiveness of large state-owned industrial enterprises. The implications of this policy have been a matter of debate in the literature. This paper seeks to provide some useful input into the debate. With a view of investigating into the potential of long-term development of large enterprises, we estimate the “sequential production technology” in computing the Malmquist productivity index for various size-groups of enterprises in Chinese industry. Our findings indicate that large enterprises did register the fastest productivity growth and improvement in technical efficiency in the 1994-97 period. It thus appears that large-scale, mainly state-owned Chinese enterprises have exhibited the potential of m a king noticeable improvements and the relevant state policy does have its justification.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- China
1985. Social origins of Ottoman industrialisation: Evidence from the Macedonian town of Naoussa
- Author:
- Costas Lapavitsas
- Publication Date:
- 09-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- Ottoman industrialisation in cotton spinning was led by the town of Naoussa in Macedonia. This paper shows that Naoussa capitalists grasped the opportunities created by trade liberalisation, accumulated capital in domestic manufacture of woollen cloth, and secured a regular supply of low-wage female labour and free hydraulic energy. It is further shown that they took advantage of local institutional and political mechanisms within the Christian community independent of the relatively remote Ottoman state. But there was no capitalist transformation of agriculture, even though Naoussa capitalists often owned large land estates. Lack of broader institutional and political influence and absence of capitalist transformation of agriculture hampered the transformation of Naoussa capitalists from a provincial social group into a broad-based capitalist class.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- Macedonia
1986. China's Nexus of Foreign Trade and Economic Growth: Making Sense of the Anomaly
- Author:
- Dic Lo
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- Using a range of specifications that are standard in the relevant literature, this paper finds that China's rapid and sustained economic growth in the reform era has tended to be negatively correlated with its export growth and positively correlated with its import growth. This finding runs counter to widely -held perceptions on China's nexus of foreign trade and economic growth, and thus presents a serious challenge for interpretation. On the basis of some further regression analyses, and drawing on a number of applied studies on the subject matter, the paper argues that the finding is plausible and of complex ramifications. The conclusion which this paper arrives at, therefore, is that the Chinese experience has tended to be a case of strategic integration into the world market, rather than conforming to the standard neoclassical thesis of trade regime neutrality.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- China
1987. The case for regional exchange rate arrangement in East Asia'
- Author:
- Takuji Kinkyo
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- The Asian crisis highlighted the difficulties for developing countries to actively manage exchange rates in an environment of high capital mobility. Now it became fashionable to argue that the exchange rate should be either allowed to float freely or irrevocably fixed. This paper examines the case for regional exchange rate arrangements as an instrument to enhance the manageability of exchange rates and discusses the options in East Asia. It critically assess the existing proposal of common basket peg system and suggests that East Asia should seek to create an Asian-version of regional monetary system modeled on the EMS.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- East Asia and Asia
1988. Disorderly adjustments to exchange rate misalignments: The experience of Korea'
- Author:
- Takuji Kinkyo
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- This paper analyzes Korea's exchange rate dynamics before and during the crisis of 1997-98 by estimating the long-run fundamental exchange rate and the associated error correction model. The analysis suggests that although Korea's exchange rate was substantially overvalued before the crisis, the subsequent exchange rate dynamics could not fully be accounted by the need to correct misalignments. It was found that there was a large deviation from the short-run fundamental value of exchange rates, indicating the presence of “overshooting of the overshooting equilibrium” during the crisis. The findings have important policy implications for crisis management in emerging market economies.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- Korea
1989. Transmission channels of capital flow shocks: why Korean crisis was so severe'
- Author:
- Takuji Kinkyo
- Publication Date:
- 08-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- The Asian crisis highlighted the vulnerability of emerging market economies faced by sudden capital flow reversals. An important question that has critical implications for crisis management is how negative shocks in capital inflows were transmitted to economic activities, transforming financial instability into fully-fledged crises. Using VARs, this paper analyzes the transmission mechanism of capital flow shocks during the Korean crisis of 1997-98. Although it is commonly believed that severe economic contractions were caused by credit crunch, the analysis suggests that the major constraint for production was a steep rise in prices of imported inputs due to sharp exchange rate depreciations.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- Asia and Korea
1990. Does South Africa Suffer from the Fear of Float' Syndrome?An Analysis of the Efficacy and Challenges of a Managed Floating Exchange Rate Regime with Financial Integration'
- Author:
- Olano Makhubela
- Publication Date:
- 07-2004
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- The paper examines whether South Africa suffers from a 'fear of float' syndrome. The analysis also covers the efficacy and challenges of a managed floating exchange rate regime. I use time series data, volatility equations and ARCH models to test the volatility of South Africa's exchange rate, interest rate and foreign exchange reserves. Evidence shows that South Africa has volatile interest and exchange rates, but not foreign exchange reserves. Yet, South Africa does not seem to suffer from an extreme and chronic form of 'fear of floating'. South Africa requires financial integration to finance its current account deficits and to complement its low savings rate. Yet, evidence indicates that both capital account openness and foreign exchange control liberalization have no robust impact on growth. The authorities' intervention in the 2001 currency crisis did not help. Hence, I recommend that South Africa should use interest rates early to target both inflation and foreign exchange rates. Challenges remain in the form of relatively high interest rates, volatile capital flows, perceptions, destabilizing speculation, and loopholes in foreign exchange controls.
- Topic:
- International Relations, Development, Economics, and International Political Economy
- Political Geography:
- South Africa