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1342. Economic Convergence through Savings, Trade and Technology Flows—Lessons from Recent Research
- Author:
- Per Botolf Maurseth
- Publication Date:
- 10-2002
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- This paper reviews the theoretical and empirical literature on income disparity between countries and convergence in economic growth. New theoretical models modify and often reverse the prediction of convergence in the traditional neo-classical model of economic growth. A particular feature of the recent literature as compared to traditional studies of economic growth is that it acknowledges interdependence between countries. International capital flows, trade in goods and (maybe most important) international technology flows influence individual countries growth performance. The empirical literature on the dynamics of the international distribution of income per capita reveals massive unconditional divergence in income levels. For sub-samples of countries on the other hand, the data support the conditional convergence hypothesis: when other factors are accounted for, there is a tendency for income per capita to converge. For the OECD countries, as well as for some other countries, knowledge flows, either embodied in traded goods or disembodied seem to be important for whether poorer countries are able to catch up with richer ones.
- Topic:
- International Relations, Economics, International Trade and Finance, and Science and Technology
1343. International R Spillovers and the Effect of Absorptive Capacity
- Author:
- Leo A. Grünfeld
- Publication Date:
- 08-2002
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- We study the productivity effects of R spillovers through imports, foreign direct investment and domestic intermediates, using a highly disaggregated data set for Norwegian business sectors. As opposed to the large body of similar studies, we explicitly analyse the importance of absorptive capacity effects, claiming that the positive contribution from R spillovers is an increasing function of the R activities of the economic units that receive the spillovers. We find strong support for the existence of R spillovers through imports and domestic intermediates, but no sign of such spillovers through foreign ownership. Surprisingly, we identify absorptive capacity effects relating to spillovers from imports, but no such effects with respect to domestic intermediates. One possible explanation is that the cost of learning from international R sources is larger than from domestic R sources, implying that own R investments can counteract the negative effect of geographical and cultural distance on R spillovers.
- Topic:
- International Relations, Economics, Industrial Policy, and International Trade and Finance
- Political Geography:
- Norway
1344. Multinationals Searching for R Spillovers
- Author:
- Leo A. Grünfeld
- Publication Date:
- 08-2002
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- This paper surveys the literature on R and technology spillovers as a motive for FDI. During the last years, a growing body of theoretical studies has generated formal arguments supporting the economic rationale for such behaviour. Yet, theoretical contributions are clustered within a few schools and a wider approach is necessary in order to understand the mechanisms that relate R spillovers to FDI. The empirical literature is more numerous, but provides ambiguous conclusions with respect to the strength of this motive. Micro studies provide less supportive results as compared to studies based on more aggregate data. Studies based on patent information are generally supportive to the existence of this motive.
- Topic:
- International Relations, Economics, International Trade and Finance, and Science and Technology
1345. International R Spillovers and the Absorptive Capacity of Multinationals
- Author:
- Leo A. Grünfeld
- Publication Date:
- 08-2002
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- This paper studies R spillovers as a motive for firms to go multinational. The establishment of a foreign subsidiary may increase a firm's ability to learn from foreign R activity since R spillovers between firms are moderated by geographical distance. As opposed to earlier studies on this subject, we also model the concept of absorptive capacity where spillovers are endogenised as a function of the firms'own R investments. We employ a three-stage Cournot duopoly model to identify under what conditions a firm chooses to service a foreign market through exports or localised production (going multinational). With exogenous R investments, the absorptive capacity effect contributes to increase the gains from going multinational when the firm is a technology leader in terms of R If R investments are endogenous, only medium-sized absorptive capacity effects will result in firms going multinational. Also, higher spillover rates do not necessarily drive down R and profits for the multinational firm. This stands in contrast to models that ignore the aspect of absorptive capacity.
- Topic:
- International Relations, Economics, International Trade and Finance, and Science and Technology
1346. Non-Cooperative Dynamics of Multi-Agent Teams
- Author:
- Robert L. Axtell
- Publication Date:
- 07-2002
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- Results on the formation of multi-agent teams are reviewed and extended. Conditions are specified under which it is individually rational for agents to spontaneously form coalitions in order to engage in collective action. In a cooperative setting the formation of such groups is to be expected. Here we show that in non-cooperative environments—presumably a more realistic context for a variety of both human and software agents—self-organized coalitions are capable of extracting welfare improvements. The Nash equilibria of these coalitional formation games are demonstrated to always exist and be unique. Certain free rider problems in such group formation dynamics lead to the possibility of dynamically unstable Nash equilibria, depending on the nature of intra-group compensation and coalition size. Yet coherent groups can still form, if only temporarily, as demonstrated by computational experiments. Such groups of agents can be either long-lived or transient. The macroscopic structure of these emergent 'bands' of agents is stationary in sufficiently large populations, despite constant adaptation at the agent level. It is argued that assumptions concerning attainment of agent-level (Nash) equilibrium, so ubiquitous in conventional economics and game theory, are difficult to justify behaviorally and highly restrictive theoretically, and are thus unlikely to serve either as fertile design objectives or robust operating principles for realistic multi-agent systems.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States and Latin America
1347. Spatial and Temporal Patterns in Civil Violence: Guatemala 1977-1986
- Author:
- Timothy R. Gulden
- Publication Date:
- 02-2002
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- This paper examines detailed records from the civil conflict in Guatemala between 1977 and 1986. It reveals a number of novel patterns which support the use of complex systems methods for understanding civil violence. It finds a surprising, non-linear relationship between ethnic mix and killing; thereby inviting analysis based on group dynamics. It shows the temporal texture of the conflict to be far from smooth, with a power spectrum that closely resembles that of other, better understood, complex systems. The distribution of incident sizes within the data seems to fall into two distinct sets, one of which, corresponding to "regular" conflict, is Zipf distributed, the other of which includes acts of genocide and is distributed differently. This difference may indicate that that agents of the state were proceeding under different types of orders. These results provide an empirical benchmark for the modeling of civil violence and may have implications for conflict prevention, peace keeping, and the post-conflict analysis of command structures.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, Latin America, Central America, and Guatemala
1348. Environment's New Role in U.S. Trade Policy
- Author:
- John Audley
- Publication Date:
- 09-2002
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- Trade Act of 2002 integrates environmental policy priorities into U.S. trade negotiations. The manner in which resulting tensions between trade and environment are resolved requires greater involvement by Congress. Of particular short-term importance to Congress should be how bilateral negotiations with Chile and Singapore are concluded and regional negotiations with Central America begun. Congress should also use its oversight power to develop clearer instructions regarding a host of environmental policy issues, including investment and services negotiations, environmental reviews of trade agreements, and clarification of U.S. foreign assistance regarding technical assistance and capacity building for our trading partners. In short, TPA presents Congress with the leverage it needs to oversee trade negotiations, an opportunity to work with the administration and win back public support for U.S. trade policy that respects worker rights and protection of the environment.
- Topic:
- Environment, International Trade and Finance, and Politics
- Political Geography:
- United States and Chile
1349. Foreign Direct Investment: Does the Rule of Law Matter?
- Author:
- John Hewko
- Publication Date:
- 04-2002
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- THE CONVENTIONAL WISDOM within the international development community is that foreign direct investment (FDI) is an important component of economic growth and prosperity in transitional and developing countries and that a crucial, if not decisive, factor in enticing such investment is a stable, consistent, fair, and transparent legal and judicial system. As a recent World Bank publication concluded: The massive move by developing and transition countries toward market economies necessitated the adoption of strategies for the encouragement of private investment, domestic and foreign. Naturally, there was a general realization that such an objective could not be achieved without modifying and, sometimes, completely overhauling the legal and institutional framework and firmly establishing the rule of law, thereby creating the necessary climate of stability and predictability.
- Topic:
- Emerging Markets, Government, and International Trade and Finance
1350. Politics and Parallel Negotiations: Environment and Trade in the Western Hemisphere
- Author:
- John Audley and Edward Sherwin
- Publication Date:
- 04-2002
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- IN DECEMBER 1994, at the behest of then–U.S. president Bill Clinton, the leaders of the 34 Western Hemisphere democracies convened in Miami for the first comprehensive hemispheric summit in more than 25 years. The assembled heads of state pledged that their countries would forge a path toward regional integration based on four overarching principles: Governments should build strong democratic institutions, prosperity should be promoted through free trade and economic cooperation, poverty and discrimination should be eliminated, and the natural environment should be preserved through policies promoting sustainable development. “Future generations,” Clinton said at the time, “will look back on the Miami summit as a moment when the course of history in the Americas changed for the better.”
- Topic:
- Environment and International Trade and Finance
- Political Geography:
- United States, America, South America, Latin America, Central America, and North America
1351. Rethinking the Export-Import Bank
- Author:
- Aaron Lukas and Ian Vásquez
- Publication Date:
- 03-2002
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- The Export-Import Bank of the United States (Ex-Im Bank) was created in 1934 as an independent federal agency operating under a renewable congressional charter. That charter most recently expired on September 30, 2001. Since then, the Ex-Im Bank has been operating under a series of continuing resolutions set to expire on March 31, 2002.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States
1352. Back to the Nest? Europe's Relations with the African, Caribbean and Pacific Group of Countries
- Author:
- John Ravenhill
- Publication Date:
- 12-2002
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- Europe's association with African, Caribbean and Pacific (ACP) countries was the first of its interregional relationships. In the nearly half century since the signature of the Treaty of Rome, it developed into Europe's most institutionalized and multidimensional interregional relationship. It embraces not only trade and investment issues but also a development "partnership" that includes what has traditionally been the EU's largest single aid program, a joint parliamentary assembly, meetings of organizations representing civil society, and a dialogue on human rights. This chapter examines the factors that have shaped this relationship over the last four decades. The principal focus is on the trade regime, not just for consistency with the other contributions to this volume but also because it is in its trade dimension that the relationship has changed most dramatically over time.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Africa, Europe, Caribbean, and Rome
1353. Lessons of the Euro for the Rest of the World
- Author:
- Barry Eichengreen
- Publication Date:
- 12-2002
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- Europe's single currency is widely invoked as a potential solution to the monetary and exchange rate problems of other regions, including Asia, Latin America, North America and even Africa. This lecture asks whether the Europe's experience in creating the euro is exportable. It argues that the single currency is the result of a larger integrationist project that has political as well as economic dimensions. The appetite for political integration being less in other parts of the world, the euro will not be easily emulated. Other regions will have to find different means of addressing the tension between domestic monetary autonomy and regional integration. Harmonized inflation targeting may be the best available solution.
- Topic:
- Economics, International Trade and Finance, and Political Economy
- Political Geography:
- Africa, Europe, Asia, and Latin America
1354. The Development of Europe's Linkages with East Asia: Hybrid Trans-Regionalism?
- Author:
- Julie Gilson
- Publication Date:
- 12-2002
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- This chapter argues that the EU-Asia trans-regional relationship is still very hard to measure but that there is developing both a notion of economic Asia, a desire to collectivise responses in the face of differentiated resource allocation and a growing dominance of the form of regionalism demonstrated by the EU.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Europe and Asia
1355. The European Union and North America
- Author:
- Edward A. Fogarty
- Publication Date:
- 10-2002
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- This paper assesses the past, present, and future of transatlantic commercial relations in terms of EU trade strategies. After surveying the medium-term trajectories of the relationships with the United States, Mexico, and Canada-both separately and as a group-it will consider several possible sources of European Union trade preferences vis-à-vis NAFTA, including interest groups' incentives to seek to capture national and European governing institutions, the balance between the European Commission and the Council of Ministers, European leaders' desire to balance against overweening American power, and possible attempts to construct either a common Western identity or, alternatively, a European identity in contradistinction what the United States seems to represent. The hope is that these different approaches provide a contrasting set of interpretations whose comparison side-by-side allows new insights into the dynamics governing EU-North American trade relations.
- Topic:
- International Trade and Finance
- Political Geography:
- United States, Europe, Canada, North America, and Mexico
1356. Mortgage Default Insurance in the U.S.: Implications for Russia
- Author:
- Raymond Struyk and Douglas E. Whiteley
- Publication Date:
- 03-2002
- Content Type:
- Working Paper
- Institution:
- Urban Institute
- Abstract:
- The objective of this paper is to introduce the concept of mortgage default insurance as developed in the United States into the context of Russian mortgage lending. The first part of the paper discusses the broad principles and operations of mortgage default insurance offered by private companies as it works in the United States. The pricing of this product and the preconditions for offering such insurance are highlighted. The second section outlines the operation of the U.S. government-supported default insurance offered by the Federal Housing Administration (FHA). The final part applies the foregoing information to the situation in Russia today and concludes that the conditions necessary for launching mortgage default insurance do not currently exist in the country. Nevertheless, there are a number of essential actions that can and should be taken over the next several months to put Russia on the road to establishing such insurance in a few years. The paper finishes with a possible action plan for the next two years.
- Topic:
- Development, Government, and International Trade and Finance
- Political Geography:
- Russia, United States, Europe, and Asia
1357. Regulatory Europeanization, National Autonomy and Regulatory Effectiveness: Marketing Authorization for Pharmaceuticals
- Author:
- Jürgen Feick
- Publication Date:
- 11-2002
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- The EC harmonized market entry regulation for pharmaceuticals from the early sixties on, but it achieved neither its goal of uniform national regulatory decisions nor that of automatic mutual recognition. Subsequent attempts to Europeanize the procedures themselves resulted in two alternatives in 1995: a Centralized Procedure for innovative pharmaceutical products implemented at the EU level, and a Decentralized Procedure which tries to assure mutual recognition. First, the paper analyzes the distinctive modes of Europeanization employed in these regulatory alternatives, examining both their impact on the effectiveness of European governing and the balance they strike between European interventionism, national participation and national autonomy. Second, it tries to assess whether Europeanization furthers the goals of pharmaceutical market entry policy as defined in European regulations – public health protection, creation of a single market and the reduction of regulatory costs to industry. There is little evidence that the public's health is less well protected when regulation is Europeanized. Only the Centralized Procedure contributes significantly to the goal of establishing a single market. Regulatory costs in terms of approval time did go down especially for pharmaceutical firms using the Centralized Procedure, mainly because of efficiency-enhancing legal provisions and institutionally induced regulatory competition between national authorities.
- Topic:
- Economics, International Trade and Finance, and Science and Technology
- Political Geography:
- Europe
1358. Business Interest Representation and European Commission Fora: A Game Theoretic Investigation
- Author:
- Andreas Broscheid and David Coen
- Publication Date:
- 07-2002
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- The relationship between business and the EU institutions has evolved from its corporatist origins into a complex elite pluralist arrangement centered around industrial fora and policy committees. We view the growth of forum politics as the direct consequence of the unprecedented boom in economic and public interest lobbying in the early 1990s: While the increase in European interest representation provided greater legitimacy for the European integration program, it put a strain on the existing open pluralist European business-government relationship. One of the European Commission's (EC) informal solutions was to create restricted-entry policy fora and select committees, which it hoped would provide fast and reliable decision-making. Employing a formal model of industrial fora and committees, we specify the mechanisms that we believe caused the establishment of the current elite pluralist system of interest representation in the EU. We argue that in the process of establishing selective-entry fora for interest representation, the European Commission acted not only as policy entrepreneur, but also as a political entrepreneur, fostering collective action.
- Topic:
- Government, International Trade and Finance, and Political Economy
- Political Geography:
- Europe
1359. Breaking the Path of Institutional Development? Alternatives to the New Determinism
- Author:
- Colin Crouch and Henry Farrell
- Publication Date:
- 06-2002
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- The concept of path dependence is being used in highly deterministic ways in neo-institutionalist analysis, so that studies using this framework have difficulty in accounting for, or predicting, change. However, the original Polya urn model from which path dependence theory draws predicts that alternative paths will be possible. It can be argued that actors will be able to use these when they perceive a need to change. This article seeks to capture this possibility through accommodating a Bayesian parametric decision maker, interacting with an environment. This makes it possible to examine how change may involve such processes as: the use of past or redundant institutional repertoires; transfer of experience across action spaces; or from other agents, through networks of structured relationships; the emergence of perceived “one best” solutions. This approach points to the need to change how typologies are used in neo-institutionalist research, so that those features of cases which do not fit the pre-conceived framework of a type are not disregarded as “noise”, but properly evaluated as potential resources for change.
- Topic:
- Economics, Emerging Markets, and International Trade and Finance
1360. How Reliable is Pooled Analysis in Political Economy? The Globalization-Welfare State Nexus Revisited
- Author:
- Bernhard Kittel and Hannes Winner
- Publication Date:
- 05-2002
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- Panel data analysis has become very popular in comparative political economy. However, in order to draw meaningful inferences from such data, one has to address specification and estimation issues carefully. This paper aims to demonstrate various pitfalls that typically occur in applied empirical work. To illustrate this, we refer to the debate on the globalization-welfare state nexus. We reexamine a model by Garrett and Mitchell (2001), a leading study in this regard. Utilizing a data set of 17 OECD countries and the time period 1961 to 1993, they find evidence that globalization and partisan composition have a significant impact on the extent of public activity. However, because they apply a dynamic specification in levels, they do not adequately take into account both the dynamic and spherical nature of the data. In contrast, we propose an autoregressive model in first differences that is shown to perform well in statistical terms. Further, we explicitly pay attention to the time pattern of the globalization-welfare state nexus. Substantively, we find evidence that government spending is primarily driven by the state of the domestic economy. Neither partisan effects nor the international economic environment have affected public expenditure considerably.
- Topic:
- Economics, Globalization, International Trade and Finance, and Political Economy