Why Does Zimbabwe Export Manufactures and Uganda Not? Econometrics Meets History

Uganda and Zimbabwe are predicted on the basis of their human and natural resources, to have similar shares of manufactures in their exports However, Uganda falls a long way short of the predicted share, while Zimbabwe greatly exceeds it. Uganda's manufactured export share is unusually small mainly because of high transport costs, due to its distance from the sea and inadequate infrastructure. Zimbabwe's manufactured export share is unusually big mainly because its comparative advantage in manufacturing was enhanced by the know-how brought in by European settlers and a long-term policy of promoting the sector.     

Offshore assembly and NIC-manufactured exports to the United States: Changing correlates of success

Comparative studies of the NICs usually show that their success at exporting manufactures to the North is unrelated to the role of intrafirm trade and subcontracting in their exports, since in some very successful NICs intrafirm trade has played a small and diminishing role. This study explores hyptheses suggesting why intrafirm trade and subcontracting may become more important factors in NIC exports because of the changing composition of their exports, changing technology, and developed country protectionism. Data on the share of eight developing countries' manufactured exports to the United States under offshore assembly provision (OAP) item 807.00 are tested for their changing importance to export growth over the period 1970 to 1984. For all NICs, the share of their exports to the United States under OAP became more positively related to export performance in the 1980s than it had been in the 1970s. For Asian NICs, non-OAP exports continued to outperform OAP exports.     

Decolonisation and development in Burma

Over the last decade, economists have conducted numerous studies concerning trade barriers posed by national tariffs. In spite of this interest, few comprehensive analyses of transport barriers have been attempted. This seems surprising since transport costs, like tariffs, influence the magnitudes of trade flows, and types of goods exchanged internationally.

Recent changes in United States import statistics permit estimation of the incidence of international transport and insurance charges by product and by country. Using these records, this study shows that the overall ad valorem incidence of India's transport costs is approximately 14 per cent, or more than double current MFN tariffs. However, the spread between transport charges and tariffs is greater on some products of special export interest to India.

Analysis of the transport charges by processing stages shows that these costs escalate with increased fabrication. Thus, freight costs, like “tariffs, retard the growth of processing industries in India. This, plus the fact that India is at a sizeable cost disadvantage relative to its competitors, stresses the need for policies aimed at lowering the incidence of transport costs, or directing future export ventures, to areas where the shipping cost differential is less imposing.     

EU trade and development policy beyond the ACP: subordinating developmental to commercial imperatives in the reform of GSP

Following the stagnation of negotiations with the African, Caribbean and Pacific states, the centrepiece of the European Union's (EU's) trade and development strategy has been a reform of the Generalised System of Preferences. Although policy-makers in the Commission's Directorate General for Trade have argued they are ‘refocusing’ these preferences on the ‘neediest’, by rendering a significant proportion of emerging economies' exports ineligible for the scheme, this article argues that the reform is actually part of a broader ‘reciprocity’ agenda being pursued in the context of the current economic crisis. This is about ensuring the EU possesses sufficient offensive leverage in ongoing free trade agreement negotiations, rather than representing any mercantilist move towards greater domestic protection. In arguing that the EU's developmental trade agenda is increasingly subordinated to commercial imperatives, this article adds to a literature that has situated the study of EU trade and development policy within the field of political economy.     

Manufactured exports and terms of trade of developing countries: Evidence from Sri Lanka

Terms of trade implications of diversification into manufactured exports in a traditional primary‐exporting country are examined in the light of the Sri Lankan experience over the past two decades. The empirical analysis focuses on trends in both commodity and income terms of trade, employing a methodology which takes care of the ‘spurious regression’ problem. The results suggest that, contrary to the ‘new’ terms of trade pessimism, export diversification has brought about significant terms of trade gains for the Sri Lankan economy. Overall, the study casts doubt on the robustness of results coming from analyses of price trends in aggregate manufactured exports and calls for systematic time‐profile analyses of the countries which have achieved significant export diversification in order to inform the policy debate.     

The Micro-Determinants of Public Policy: A Case of Thailand’s Trade Policy

As international trade is vital to Thailand’s economy, the implementation of trade policy has always been at the center of the country’s public administration. Apart from the analysis of the macro-determinants of trade policy formulation, the factors affecting trade policy at a micro level is also equally important. This paper looks at factors influencing individuals’ perception of international trade policy. It uses questionnaire data, collected from Bangkok residents in 2017. The binary, logit and probit, models with marginal effects are employed for the estimation. The results indicate the significance of variables representing individuals’ knowledge and understanding of international trade policy as well as variables relating to individuals’ exposure to the new environment. The government, therefore, should make sure that accurate information is widely disseminated and reaches all stakeholders. People’s better understanding of trade policy should allow policy administration to be more efficient, producing maximum benefits for the country and its people.     

Trade Liberalisation,the Peso,and Mexico's Commodity Trade Flows with the United States

We assess the effects of real peso devaluations, as well as the effects of GATT and NAFTA, on Mexico's in-payments and out-payments with the United States for 102 industries. We find that relatively few trade flows are sensitive to changes in the real exchange rate, probably due to production-sharing and intra-industry trade, but devaluations affect Mexican imports more than exports. Trade liberalisation has had a larger impact, particularly on imports of intermediate goods and exports of certain manufactures. Many affected export industries are ones that have previously been shown to have economies of scale.     

Tariffs and economic development: Some theoretical issues 1

There is evidence to suggest that in Brazil import substituting industrialization has brought an increased dependence on the foreign sector. Further growth is highly dependent upon the ability to increase exports, and economic policy exercises an important function in such export expansion. In an attempt to analyse the behaviour of manufactured exports, a regression model, complemented with in‐depth interviews with individual firms, is posited and tested with Brazilian data. In analysing policy variables and other determining factors in terms of their effects on manufactured export performance, it is found that exchange rate policy, tax incentives, LAFTA, and a recession‐boom effect have all played important roles in shaping Brazilian industrial export growth.     

Terms of trade and class conflict in a computable general equilibrium model for Mexico

A computable general equilibrium model for Mexico is constructed in which class conflict over the distribution of the surplus is the principal determinant of the terms of trade. The model consists of seven social classes and eight productive sectors. Classes are distinguished as ‘fundamental’ or ‘subsumed’ according to whether their incomes are primarily determined by conscious class struggle or by the resulting system of relative prices. Flexible prices are assumed to clear markets for which non‐produced means of production, such as agricultural land, limit supply while output in the remaining sectors is determined by the level of effective demand. For the latter sectors, two theories of price formation are compared and are seen to differ radically in their implicit conception of the nature of class conflict. A ‘Keynes‐Kalecki’ closure is considered in which prices are determined by a fixed mark‐up on costs. This enables capitalists to protect themselves from incursions on the rate of profit due to labour militancy or state‐imposed terms‐of‐trade policy designed to favour peasants andlor the agrarian bourgeoisie. A second, ‘Marx‐Sraffian’ price closure constrains the economy to a wage‐profit‐terms‐of‐trade surface; where the economy conjuncturally resides on this surface depends upon the level of effective demand, wages and terms‐of‐trade policy. Various policy scenarios are investigated under both closures.     

A look inside an emerging nuclear supplier. Advocacy coalitions and change in Argentine foreign nuclear policy

What light can foreign policy analysis (FPA) shed on how and when the balance of power between domestic coalitions in foreign nuclear policymaking changes and how these different balances directly affect policy outcomes? Drawing on interviews with scientists, technologists and career diplomats, this comprehensive examination of Argentine nuclear exports policy as public policy aims to depict when and how policies varied between 1976 and 2004, due to shifts in the balance amongst advocacy coalitions, albeit of incentives and constraints placed by international and institutional nuclear environments. The article provides a better account of how Argentine nuclear foreign policy changed under the influence of four competitive and contrasting advocacy coalitions: the pro-import substitution and protectionist coalition, the pro-technological autonomy and South-South trade coalition, the pro-business and commercial openness coalition and the antinuclear and pro-environment coalition.     

Tensions in the discourse and practice of the European Union's Aid for Trade

The contemporary global Aid for Trade (AfT) agenda emerged out of world trade negotiations and it could have profound implications for the future of development aid, depending on how it is interpreted. The European Union (EU) has recontextualised this global agenda to suit its own approach to trade and development; specifically a focus on regional integration, and free market but ‘pro-poor’ development models. AfT is ascribed a variety of purposes in EU texts and its use continues to adapt as the EU's trade and development policy evolves. Institutionally the AfT framework has not strongly affected EU processes, organisational structures or methodology. A study of the use of EU aid for regional integration reveals dissonance between its development relationship and its trade policies while a focus on pro-poor AfT reveals a lack of capacity. Overall, there are tensions not just between discourse and practice but between different discourses of the EU.     

Urban unemployment and optimal tax policy in a small,open dual economy

This paper analyses optimal tax policies in a two‐sector model of an LDC, similar to that of Harris and Todaro [1970]. The analysis assumes a small, open economy with a non‐competitive urban wage which depends on prices of both agricultural and manufactured goods. Optimal policies are considered for cases where an employment subsidy in manufacturing and/or taxes on international trade are the only feasible instruments, and where government revenue has an excess burden. Comparisons are made with results obtained by Harris and Todaro, Hagen, and Bhagwati and Srinivasan, for similar models.     

Contextuality and data collection methods: A framework and application to health service utilisation

When establishing the value of imports for tariff assessment, most countries apply duties to a cost‐insurance‐freight (c.i.f.) value of the traded good. One effect of using a c.i.f. valuation base is to place a disproportionate burden on countries that have relatively higher freight and insurance costs. Using matched tariff and transport cost information for six Latin American countries this study examines the influence of alternative valuation procedures on the level and incidence of tariff protection. The results show that developing countries are generally at a major transport and insurance cost disadvantage (relative to developed countries) on inter‐regional trade and that the relatively high Latin American tariffs applied on c.i.f. prices further worsen their competitive position. A shift to free‐on‐board. (f.o.b.) valuation would remove the bias against developing country intra‐trade.     

The industrial society in transition: Comparative public policymaking - the United States and Sweden

This paper attempts to contrast the industrial policymaking “styles” of the U.S. and Sweden. The study looks past the clutter of economic and trade issues into underlying political culture and institutional regime. The conceptual framework of pluralism versus managed pluralism is employed to examine some complex issues related to economic and industrial management, and to help explain the problem. A strategy to advance the long-term interests of a country must go beyond the “legislative pork barrel” approach, simply to create employment and to keep jobs. Industrial policy must have both institutional and policy linkages. Government-business cooperation at a sectoral level is essential in providing policy loans and tax incentives. The state, to facilitate policy implementation, has to pursue linkage developments between industrial, human resource, economic, and trade policies.     

North‐South trade and female labour in manufacturing: An asymmetry

A simple method of measuring the impact of North‐South trade on the female intensity of manufacturing is applied to data for developed and developing countries. The results confirm that growth of exports has increased the relative demand for female labour in the South. However, there does not appear to have been a general counterpart reduction in the relative demand for female labour in Northern manufacturing, even among blue‐collar workers. There are several possible reasons for the apparent conflict between these findings and other evidence that in Northern manufacturing females have been disproportionately displaced by trade with the South.     

Don’t buy from me Argentina: Politics, economics, and trade liberalization in Argentina, 1992–2001

Recently, while opening their markets to international trade through tariff reduction, developing nations have been quietly adopting nontariff measures that impose new barriers on imports. This study contributes to a literature that assesses reactions to recent widespread economic reform, particularly in the developing world. While analysts have identified many determinants of the reform process, we are only beginning to assess the factors that shape its twists, turns, and even reversals. In particular, we do not yet have a clear understanding of the determinants of governments’ treatment of different groups and actors in this process. This article examines these reactions to trade liberalization in Argentina, an important middle-income nation, by drawing upon the significant body of theoretical and empirical literature on trade policy in developed nations that demonstrates that both economic and political factors condition policy implementation. Utilizing a data set of nontariff trade disputes from 1992 to 2001, the analysis employs probit maximum likelihood techniques to assess the relationship between trade policy outputs and economic and political factors. The findings suggest that economic factors, including import flows, and political factors such as the breadth of representation appear to condition trade policy decisions in Argentina. The results also suggest that overall macroeconomic context affects policy outputs. Jeffrey Drope is an assistant professor in the Department of Political Science, University of Miami. His recent articles and current research examine the political economy of trade policy and, more generally, how interests and institutions interact to generate policy. I thank Wendy Hansen, Ken Roberts, and theSCID reviewers and editors for valuable comments, the Latin American Institute at the University of New Mexico for financial support, and Pablo Sanguinetti for helpful introductions in Argentina.     

Compensatory Aid and Debt Relief: A Case Study of Uganda

We propose a contingency financing framework to assist low-income countries in the achievement of debt sustainability. The framework relies on an accounting method to quantify external shocks to the balance of payments and provides compensatory financing to offset their impact. We apply the framework to the case of Uganda during the period 1988–2002 and find that it would have been highly effective in identifying and offsetting the adverse liquidity implications of shocks to the country's trade balance.     

Incoherence between Tax and Development Policies: the case of the Netherlands

Abstract

This article discusses incoherence between tax and development policies, a relatively new area in the debate on policy coherence for development, using a case study of the Netherlands. Dutch business entities play a key role in tax avoidance structures of multinational corporations. We argue that the Dutch tax regime facilitates the avoidance of substantial amounts of tax revenues in developing countries when compared to the Dutch aid budget. As domestic tax revenues are an important source of financing for development, this suggests that the Dutch tax policy is incompatible with the Dutch policy on development co-operation. The lack of policy coherence is largely unintended but it has structural and political causes.     

Fiscal Reforms and the Fiscal Effects of Aid in Uganda

Abstract

Uganda implemented public expenditure and revenue management reforms from the early 1990s with specific aims of improving budget planning and aligning aid with fiscal priorities. The dynamic relationship between aid and domestic fiscal aggregates is analysed using a Cointegrated Vector Autoregressive model with annual data for 1972–2008 and quarterly data for 1997–2014. Aid has been a significant element of long-run fiscal equilibrium, associated with increased tax effort and public spending and reduced domestic borrowing. Fiscal reforms have improved aid and expenditure management, contributing to improved fiscal performance in Uganda, with lessons for other African countries.     

Export Response to Technical Barriers to Trade: Firm-Level Evidence from Pakistan

This study empirically examines the responses of trade margins to a battery of technical barriers to trade (TBT) and explores the mechanism, drivers and speed of adjustment. It uses a highly-disaggregated transaction-level dataset of mango-exporting firms from Pakistan and exploits a quasi-natural experiment in the identification strategy. It finds that, following the application of TBT measures, exports increased along the intensive margins. The process of adjustment took around four years, and larger quantities as well as higher prices drive this effect. Moreover, firms shrink their client base in destination markets but ship large quantities to a few big retailers.