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1051. Migrant Transfers as a Development Tool: The Case of Morocco

Author:
Nina Nyberg Sørensen
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
In 2003, the Global Development Finance Annual Report took formal notice of remittances as an important source of external development finance for the first time, listing Morocco as the 4th largest remittance recipient among developing countries. This paper examines the positive and negative results of remittances on Moroccan development, as well as of other migration-driven social changes. It offers a brief historical background to Moroccan migration and examines more closely Moroccan emigration to the EU from the early 1960s. Remittance practices are discussed, as is the issue of return migration. The paper concludes by discussing prospects for general development in the country and summarizing policy options in the field.
Topic:
Development, Economics, and Migration
Political Geography:
Europe and Morocco

1052. The Development Dimension of Migrant Transfers

Author:
Nina Nyberg Sørensen
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The current appreciation of remittances as a development tool is recent and several questions on how best to capture their development impact remain. This working paper addresses some of the fundamental questions pertaining to the role of remittances in the migrationdevelopment nexus. Apart from offering a conceptual tool for understanding of the importance of remittances for developing countries, the paper gives a global overview of various types of remittance flows, the dynamics of such flows and their possible developmental impact on developing countries, including those experiencing conflicts. The paper concludes by offering some ideas on how appropriate policy measures could contribute to making remittances into an effective development tool.
Topic:
Development, Economics, and Migration
Political Geography:
Europe

1053. Through Economy to Democracy and Security? An Integrated Approach to Stability in South East Europe - 7th Workshop of the Study Group "Regional Stability in South East Europe"

Author:
Frederic Labarre
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
Austrian National Defence Academy
Abstract:
In contrast to the Central European transition countries, the economies of South East Europe (SEE) have been facing complex and interrelated political and economic problems. The dissolution of Yugoslavia combined with market losses, war in Bosnia and Herzegovina and Croatia, sanctions finally culminating in the Kosovo conflict were the main causes of political and economic instability in the whole region. Taking into account these factors, output recovery has been much slower in SEE than in the Central European countries. Measured in purchasing power standards, Croatia is the best performer in the region, with its GDP at about 38% of the EU average. Next comes Bulgaria (32%), whereas the respective values for Serbia and Montenegro and Albania range between 15-17%. Looking at the economic performance in the 1990-2002 period, Croatia and Romania reached almost 94% of their pre-transitional level in 2002, followed by Bulgaria and Macedonia (about 88% each). Serbia and Montenegro, the worst-affected, reached only about half of what it was in 1990. The cumulative output decline there was one of the largest among all the Central and East European countries.
Topic:
NATO, Diplomacy, Economics, Political Economy, and Regional Cooperation
Political Geography:
Europe, Bosnia, Herzegovina, Kosovo, Yugoslavia, Bulgaria, Balkans, and Romania

1054. War Economies in a Regional Context: Overcoming the Challenges of Transformation

Author:
Kaysie Studdard
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
International Peace Institute
Abstract:
This policy report distills key findings from research commissioned by the International Peace Academy's program on Economic Agendas in Civil Wars (EACW) on the regional dimensions of war economies and the challenges they pose for peacemaking and peacebuilding. Drawing from analytical research as well as case studies of Afghanistan in Central Asia, Sierra Leone in West Africa, and Bosnia and Herzegovina in Southeast Europe, a number of key issues concerning the political economy of regional war economies and lessons for more effective peacebuilding were identified: The notion that internal conflicts have economic "spill over" or "spill into" effects on neighboring states needs to be extended and deepened. Policymakers should work to develop a more comprehensive understanding of the interstate impacts of civil conflict that gives greater weight to systemic cross-border networks and less to potentially 'one-off' transborder phenomena.
Topic:
Economics, Peace Studies, Regional Cooperation, and War
Political Geography:
Afghanistan, Europe, Central Asia, Bosnia, Herzegovina, and West Africa

1055. Is The Corporate Loan Market Globally Integrated? A Pricing Puzzle

Author:
Mark Carey and Gregory P. Nini
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We offer evidence that interest rate spreads on syndicated loans to corporate borrowers are economically significantly smaller in Europe than in the U.S., other things equal. Differences in borrower, loan and lender characteristics associated with equilibrium mechanisms suggested in the literature do not appear to explain the phenomenon. Borrowers overwhelmingly issue in their natural home market, and bank portfolios display significant home “bias.” This may explain why pricing discrepancies are not competed away, but the fundamental causes of the discrepancies remain a puzzle. Thus, important determinants of loan origination market outcomes remain to be identified, home “bias” appears to be material for pricing, and corporate financing costs differ in Europe and the U.S.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States and Europe

1056. Benefits and Spillovers of Greater Competition in Europe: A Macroeconomic Assessment

Author:
Tamim Bayoumi, Douglas Laxton, and Paolo Pesenti
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Using a general-equilibrium simulation model featuring nominal rigidities and monopolistic competition in product and labor markets, this paper estimates the macroeconomic benefits and international spillovers of an increase in competition. After calibrating the model to the euro area vs. the rest of the industrial world, the paper draws three conclusions. First, greater competition produces large effects on macroeconomic performance, as measured by standard indicators. In particular, we show that differences in competition can account for over half of the current gap in GDP per capita between the euro area and the US. Second, it may improve macroeconomic management by increasing the responsiveness of wages and prices to market conditions. Third, greater competition can generate positive spillovers to the rest of the world through its impact on the terms of trade.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
Europe

1057. The Optimal Degree of Discretion in Monetary Policy

Author:
Susan Athey, Andrew Atkeson, and Patrick J. Kehoe
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the model, well-designed rules trade off society's desire to give the monetary authority discretion to react to its private information against society's need to guard against the time inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic mechanism design problem seems complex, society can implement the optimal policy simply by legislating an inflation cap that specifies the highest allowable inflation rate. The more severe the time inconsistency problem, the more tightly the cap constrains policy and the smaller is the degree of discretion. As this problem becomes sufficiently severe, the optimal degree of discretion is none.
Topic:
Civil Society, Economics, Government, and International Trade and Finance
Political Geography:
Europe

1058. Peace-building and Development in Guatemala and Northern Ireland

Author:
Charles A. Reilly
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Kroc Institute for International Peace Studies, University of Notre Dame
Abstract:
Guatemala and Northern Ireland signed historic peace accords in 1996 and 1998 respectively. This paper, part of a longer term project comparing lessons learned from implementation in the two cases, focuses especially on Guatemala, making some middle range peace/development policy recommendations for that country's recently elected government and civil society organizations. Despite very different economic development levels, both countries are divided, find peace implementation difficult, and are heavily influenced by outside actors - including their own diaspora. Guatemala is deeply divided internally along class, race and ethnic lines, with more than 15% of its population in the U.S. (and close affinity with Mayan peoples who live across the Mexican border). Ireland too is divided along religious and ethnic lines, a border crosses the island. The North is linked politically to the United Kingdom, with social ties to emigrant populations there, in the south and in the United States. Guatemala, like its Central American neighbor El Salvador, embarked on peace-building with UN oversight, while the Northern Irish had United Kingdom and Irish Republic support for making peace. (Without pre-judging an eventual political resolution of the two Irelands, I'll refer to both Northern Ireland and the Irish Republic, since that peace process, like Guatemala's, necessarily transcends borders). When compared to Northern Ireland, Guatemalan religious differences are minor, and religious leaders, Catholic, Protestant and Mayan played key roles in the peace process. Emigration figures large in both settings, as do many centuries of colonial or imperial domination. Both countries have struggled with post-accord violence which has reached alarming levels in Guatemala. Peace and development are inseparable - hence I emphasize growth with equity issues that are cause and consequence of both conflicts.
Topic:
Development, Economics, and Peace Studies
Political Geography:
United States, United Kingdom, Europe, Central America, Mexico, and North Ireland

1059. The Challenge of Poor Governance and Corruption

Author:
Jens Chr.1 Andvig
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper is the author's so-called “Opponent paper” to Susan Rose-Ackerman's proposals for good governance and anti-corruption policies at the Copenhagen Consensus 2004 meeting 24–28 May. There the most promising anti-corruption policies had to compete with other best policies at other fields such as fight against AIDS, malaria, hunger prevention, and so on. He argues that while corruption and governance problems are important and may prevent any other kind of policy to succeed, no really effective anti-corruption policy has so far been proposed, and if it was, we wouldn't know that it did. Hence, it would be unreasonable to make a strong claim for anti-corruption projects against their competitors.
Topic:
Economics, Human Welfare, and Politics
Political Geography:
Europe

1060. Economic Survey of the Czech Republic, 2004

Publication Date:
11-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Following accession to the European Union the big issue for the Czech Republic is to strengthen growth prospects. Growth potential at present is somewhat above 3 per cent, implying a moderate pace of catch-up to living standards in the EU and elsewhere. There is room for greater ambition in growth performance, and it is welcome to see this reflected in the programme of the new Czech government. This Survey underscores four main challenges. Fiscal consolidation is the dominant challenge for macroeconomic policy, and is not only necessary to cope with ageing and to bring down the tax burden but is also needed to fulfil euro-area entry conditions. A welcome programme of fiscal reform has begun, including proposals for a system of multi-year aggregate spending ceilings and significant expenditure cuts. However, to date, mainly revenue-raising measures have been implemented while the full impact of expenditure measures is yet to be realised. The attempt to secure broad political consensus on pension reform is commendable, but it must be underscored that whatever reform is finally implemented, it will have to bring considerable fiscal savings. Health-care reform also has to deliver savings, but concrete proposals have yet to be made. To facilitate assessment of the true fiscal position, extra-budgetary funds need to be more fully integrated in mainstream government budgeting procedures. Also, with the further decentralisation of public services, the need for good budgeting practices and accountability in regional and municipal governments is all the more important. The Central Bank and the Ministry of Finance have formulated a transparent strategy for entering the euro area, that foresees minimising the time spent in ERM II. Annual reports will assess the economic conditions in relation to the Maastricht Criteria and a request to enter ERM II will only being made if the probability of a positive first assessment by the EU authorities is high. The choice of a 3 per cent inflation target for the run-up to euro entry is justifiable on medium-term grounds. However there may be some difficulty communicating the consistency of this target with the Maastricht criterion for price stability. The Czech authorities should therefore pay close attention to how the Maastricht criteria are interpreted and applied by the European Commission and the ECB and adjust their communication strategy accordingly. Most of the catch-up in living standards will have to come from boosting productivity growth. This means swifter re-allocation of resources across firms as well as stronger in-firm productivity growth. While the Czech Republic is a strong competitor for attracting foreign direct investment, policy towards poorly performing firms and business start-ups has problems, slowing down the exit and entry of firms. Bankruptcy procedures are cumbersome, often long and usually end up in liquidation, with asset stripping not uncommon. Reforms have long-since been planned, and it is welcome that new legislation looks finally set to go ahead. The legislation aims at strengthening the role of creditors, speeding up proceedings and allowing composition to play a bigger role. Likewise, efforts to streamline business registration are welcome and should be implemented as soon as possible. The general business climate is also damaged by issues in network industry competition, as some services, notably internet, are expensive in international comparison. Mobility between jobs and regions is weak. Administrative extensions of collective wage agreements, strict employment protection legislation (EPL) on individual dismissals, rent control, severe poverty traps (particularly for families) and a high tax wedge have contributed to considerable long-term unemployment. The Roma population is hit especially hard in this respect. Migration is to some extent mitigating the labour-market rigidities with Slovaks filling skilled vacancies and other eastern Europeans (mainly Ukrainians) taking up unskilled jobs that are unattractive for locals. Tackling the unemployment problem requires measures across a wide front, but most notably social benefit reform is needed along with reduction in the tax wedge as well as easing of EPL. The widespread social and economic exclusion of the Roma needs more attention, particularly in the education system. A more open immigration policy is needed to address immediate issues such as the inconsistency between granting work permits as well as for better alignment of immigrants' skills with those needed on the Czech labour market.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe, Ukraine, and Czech Republic