Savings,investment and foreign capital flows: Have capital markets become more integrated?

How mobile is capital across countries? Does the expansion of world financial markets in the 1970s and 1980s reflect a tendency towards one integrated world capital market, accessible for both industrialised and developing countries? Or, alternatively, are savings and investment rates for each economy closely tied because of international capital market imperfections? This article critically assesses recent studies that have tested these hypotheses empirically for industrialised countries, presents new evidence and expands data analysis to include the group of developing countries. Contrary to recent studies it is concluded that across industrialised countries domestic investment and savings are now much less closely linked than in the 1960s. But the larger capital market integration does not extend to the group of developing countries despite their increased use of funds from international financial markets to finance domestic investment. The exploratory nature of the data analysis only permits to draw some suggestive, though important, conclusions for economic theory and policy.     

Corporate governance reform: the case of Korea

Due partly to the expectations of foreign investors, the reform of corporate governance following the 1997 financial crisis has largely been in line with the Anglo-American outsider model at the expense of Korea's traditional insider model. The increased role of the (equity) market vis-à-vis banks and shareholder activism, NGOs and foreign investors has helped to constrain ‘tunnelling’ by controlling shareholders. While the complicated ownership structures have yet to be resolved, the governance paradigm of chaebols has gradually changed from one dominated by family or controlling shareholders to a system in which the power of professional managers and monitoring of markets have increased substantially.     

International Institutions and Workers’ Rights: Between Labor Standards and Market Flexibility

International financial institutions (IFIs) like the International Monetary Fund and the World Bank often have used the leverage afforded them through their loan mechanisms to demand domestic labor market flexibility. At the same time, the International Labour Organization’s call to respect Core Labor Standards (CLS) in the global economy has increasingly gained acceptance since 1998. CLS that sanction freedom of association and collective bargaining have been particularly emphasized by the ILO since these are collective rights that enable the exercise of other rights. While IFIs have generally held to free market principles, new research findings and international pressure has led the IMF and World Bank to be more open to the idea of core labor standards. Implementation has often lagged, but some advances have been made. This includes the World Bank’s commitment to ensure respect for CLS through its private sector lending arm. Yet to be seen is whether these policy shifts will lead to greater respect for labor standards or whether the continuation of market-oriented reforms will further undermine labor’s collective power, creating new challenges for future resistance.     

Policy Relations and Policy Subsystems: Financial Policy in Hong Kong and Singapore

Existing studies of Hong Kong’s and Singapore’s success as leading Asian international financial centers (IFCs) have largely focused on economic structural factors at the neglect of political economic contextual variables. Taking a policy subsystems approach and based on extensive field research, this article attempts to address this shortcoming by conceptualizing the “policy relations” that exist between state, industry, and other non-state actors in the two IFCs and delineating the “division of policy roles” among these actors. In the process, this article contributes toward the existing IFC literature and conceptualizes the sociopolitical relations that exist among financial sector actors.     

The new face of developing country debt

Developing country debt has been a major preoccupation for development policy makers and practitioners since the debt crisis of 1982. It is a major obstacle to economic and social progress in developing countries. After the resolution of the Asian financial crisis of the late 1990s and the debt relief initiatives for low-income countries of 1997–2006 concerns about developing country debt seem to have receded. However, there are a growing number of problems that warrant concern, including the accumulation of domestic debt, short-term debt and private non-guaranteed debt, and increasing recourse by low-income countries to international capital markets. At the same time developing countries have strengthened their capacity to oversee and analyse their debt portfolios. Nonetheless, significant weaknesses remain in debt management capacity at the national level. Moreover, the activities of ‘vulture funds’ and the lack of a sovereign debt restructuring mechanism reveal major shortcomings in the international institutional architecture that need to be addressed urgently.     

Global Capitalism and the Transformation of State Socialism

The article outlines the footprint of international economic interests under state socialism, and considers in more detail the economic integration of the postcommunist countries into the world system in the post-1989 period of the building of capitalism. The focus of the article is on the extent of economic globalization of countries and their economic corporations. It is contended that the globalization of capitalist companies and the direct role of global economic forces had little importance under state socialism. Since 1989, policy in the former state socialist countries has been geared to “joining” the world system, optimistically its core. Important differences have developed between the postsocialist states with respect to economic penetration and exposure to the world market. The outcomes have not fulfilled the expectations of early advocates of transformation and entry to the world economy. Although the new member states of the European Union have entered the world economy as formal members of the “core,” they are not economically equal to the dominant “old” members of the EU. In all the postcommunist countries, there is an absence of large scale global companies, of comparable levels of innovation, research and development. Russia is a resources rich country, a “hybrid” social formation containing elements of state economic control, national capitalism, and global capitalism. I conclude that the semi periphery is not a transient category in the world economy; it has potential for persistence and renewal.     

How can emerging powers speak? On theorists,native informants and quasi-officials in International Relations discourse

Emerging powers like China, India and Brazil are receiving growing attention as objects in International Relations (IR) discourse. Scholars from these emerging powers are rarely present as subjects in mainstream IR discourse, however. This paper interrogates the conditions for scholars in emerging powers to speak back to the mainstream discipline. It argues, first, that ‘theory speak’ is rare from scholars based in periphery countries perceived to be ‘emerging powers’. Despite increasing efforts to create a ‘home-grown’ theoretical discourse in China, India and Brazil, few articles in mainstream journals present novel theoretical frameworks or arguments framed as non-Western/Southern theory or even as a ‘Chinese school’ or ‘Brazilian concepts’. Second, scholars from emerging powers tend to speak as ‘native informants’ about their own country, not about general aspects of ‘the international’. Third, some scholars even speak as ‘quasi-officials’, that is, they speak for their country.     

From the New International Economic Order to the G20: how the ‘global South’ is restructuring world capitalism from within

Abstract

In the early 1970s the G77 and the Non Aligned Movement ( nam ) challenged the material and intellectual pillars of the postwar liberal capitalist system through collective action at the UN to establish a New International Economic Order ( nieo ). The aim was to complete the ‘emancipation’ of the ‘global South’ by creating binding institutional frameworks, legal regimes and redistributive mechanisms correcting historically constructed core–periphery disparities. That ambitious effort failed in the face of ‘Northern’ resistance and national segmentation within the nam . Today re-emerging states of the global South are engaged in a more successful effort to gain voice and alter international hierarchy by claiming a central place in the world capitalist system and restructuring it from within. The vertical late-modern world system centred in the Atlantic and ordered by the ‘West’ is thus gradually giving way to a polycentric international structure in which new regional and transnational ‘South–South’ linkages are being formed. This paper critically reviews the transformation and argues that, while it is creating long sought-for conditions of relative international equality, it has also dampened the emancipatory promise of the anti-colonial struggle.     

The Evolution of ‘Homegrown Conditionality’ in India: IMF Relations

This article explores the historical relationship between the Government of India (GOI) and the International Monetary Fund (IMF) as a successful model for the ways in which a developing country can learn to work with and through multilateral organisations to promote economic and political development while sustaining democratic institutions and relative international political autonomy. In the mid-1960s, India's relations with the USA, IMF, and World Bank were strained after an attempt by these institutions to exert ‘leverage’ over Indian economic policies was exposed to parliamentary debate and the scrutiny of a free press. By the late 1970s, the GOI charted a new course in its interaction with the IMF. In 1981, India was awarded the largest IMF loan to a developing country up to that time. This article will evaluate India's economic reform strategy in the early 1980s and explain the development of the concept of ‘homegrown conditionality’ within the GOI.     

Labor Standards and Labor Market Flexibility in East Asia

Since the 1980s, de jure labor standards have improved in Northeast and Southeast Asia and de jure labor market flexibility has decreased. For most countries in the region, however, de facto labor standards are much worse than de jure standards, and de facto flexibility is much higher than de jure flexibility. International pressure has rarely produced meaningful change in either labor standards or labor market flexibility. Authoritarian regimes have proven the most immune to international pressures to improve labor standards and to increase labor market flexibility. The most significant improvements to labor standards usually follow democratization, with international influences working in tandem with domestic pressures. International actors have had little effect on improving labor standards in semi-democracies, with the exception of Cambodia, but progress there depended on a carrot, not a stick. Demands by the international financial institutions to increase labor market flexibility have been minimal, with the notable exception of South Korea. Both democracies and authoritarian regimes have adopted laws that reduce labor market flexibility, and domestic political concerns rather than international influences were the primary driving force.     

The new international financial architecture and Caribbean ofcs: Confronting financial stability discourse

This article examines the role and force of international finance in contemporary capitalism and the norms being established by international financial governance structures. More than the matter of exclusion, the article argues that financial stability discourse girding issues related to the nature of capital market liberalisation, terrorist financing, money laundering and tax evasion attempts to suture over, erase and/or render illegitimate ideational resistance—particularly by offshore financial centres (ofcs) of the global South. The ongoing experience of the English-speaking Caribbean ofcs is discussed as local operatives have long been simultaneously framing as well as resisting Anglo-American insistence on a new configuration of market ethics, norms and sociality in the virtual world of ‘shores’ and high finance. This adds to the emerging body of work seeking to discursively unpack financialisation.     

When it pays to be a ‘fragile state’: Uganda’s use and abuse of a dubious concept

The labelling of certain states as ‘fragile states’ has often been portrayed as an act of domination by Western donors over the developing world. Nonetheless, this type of categorisation also presents opportunities to non-Western governments. This article suggests that the aid-dependent government of Uganda has increased its room for manoeuvre with donors by emphasising the degree of instability in the north of the country. By using this notion of state fragility, the Ugandan regime has successfully persuaded donors to continue their support, despite its domestic transgressions. The article will also attempt to explain the regime’s use of a contradictory, but equally persuasive, international discourse that presents Uganda as stable, strong and secure. In exploring how Kampala has successfully employed both narratives to carve out greater agency with donors, the article will emphasise the significance of donors’ physical detachment from the Ugandan ‘periphery’ in this dynamic.     

国际金融体系改革的评估与展望

由美国次贷危机开始的全球金融危机爆发之后,国际金融体系的改革取得重要进展。国际货币基金组织、世界银行两大重要国际金融组织以及国际金融监管体系领域均实现近年来最大改革,新兴市场国家崭露头角。但是在国际金融体系的公平性、公正性和有效性方面,仍然存在很多问题。中国应以G20为主要平台,推动国际金融机构改革继续深入,加强国际监管协调,支持储备货币多元化和人民币国际化,同步推进区域和双边金融合作,以真正实现全球金融安全网。     

Employment,restructuring, and gender: The case of San José, Costa Rica

San José has been the territorial fulcrum of Costa Rica’s post-World War II socioeconomic exceptionalism relative not only to Central America but to the periphery of the world economy at large. Research on the contemporary reorganization of the world economy underscores the gendered aspects of widening socioeconomic inequalities on an international scale. From these standpoints, this paper analyzes change in San José’s labor market in terms of two basic questions. First, to what extent has the recent experience of very small countries on the periphery reflected the baseline features of restructured inequalities of employment and gender as portrayed in the literature on global transformation during the late twentieth century? And second, given that the aggregate prosperity of Costa Rica since its economic crisis of the early 1980s has been premised on neoliberal reforms, to what extent have shifts in the gender contours of San José’s labor market amounted to recovery or loss compared with its socioeconomic exceptionalism of the pre-crisis era?     

Varieties of capitalism and the Estonian economy: Institutions,growth and crisis in a liberal market economy

This article examines Estonia's economic institutions, performance and vulnerability to the global economic crisis in the context of the varieties of capitalism framework. It shows that Estonia shares many characteristics of a liberal market economy, but that there are also some features which do not fit the classical model, notably its corporate governance institutions. It also suggests that the varieties of capitalism framework can account for key features of Estonia's economic performance, including its growth trajectory and adjustment to the global financial crisis. The article also reflects on the broader significance of these findings for understanding post-communist capitalism.     

Thai interest rates∗

Using conventional assumptions of price control by buffer devices, several aspects of control of trade in cocoa by buffer funds, buffer stocks and export quotas are explored with the provisions of the Draft International Cocoa Agreement in mind. Analysis of revenue and price effects of these devices is facilitated by drawing on literature concerning cocoa market parameters.

Expanding the short‐run diagrammatic analysis of buffer funds by Snape and Yamey, possible revenue effects under optimum marketing‐board farmer prices are shown when (a) the farmer price is held constant for two years and shifts in demand and supply are experienced and (b) farmer price is allowed to fluctuate from one year to the next according to optimum considerations (under constraints regarding the maximum and minimum farmer price). Surpluses and export proceeds are shown to increase with a farmer price (net of transportation costs) equal to or lower than the world price. Control, however, may destabilize export proceeds and world price.

Use of proposed buffer stock and export quota devices in a market already controlled by buffer funds is shown, under conditions specified, to have uncertain effects on export proceeds. Buffer funds may reduce and destabilize producer country proceeds while export quotas have the opposite effect. A buffer stock in a market already controlled by a buffer fund interested in maximizing short‐run export proceeds may not, with cocoa market parameters hypothesized, be an improvement over the buffer fund during years for which the ceiling price is to be supported.     

Competition as Public Policy: a Review of Challenge Funding

Since their introduction in 1984 Challenge funds have been widely adopted by central government. They are now used by twelve government departments to distribute competitively more than £3,250 million of Exchequer funds. The introduction of Challenge funds appears to have been politically driven, usually focusing on the objectives of cost and efficiency rather than quality and equity. They represent a further manifestation of the introduction of competition and ‘market style’ structures. This paper examines the key features of 41 Challenge funds and their operational characteristics. Numerous benefits, such as cost savings and innovation, arising from the introduction of Challenge funds have been put forward. By reviewing other studies, which have investigated the impact of the introduction of competition in producer and consumer markets, and through comparison with previous schemes it is possible to examine the potential impact of Challenge funds. Administrative and monitoring mechanisms are found to be centralizing control, despite assertions to the contrary. There is a growing concern that the level of information collection required is too arduous and it is used to control and regulate schemes rather than as a method of investigating where operations could be improved. Leverage from Challenge funds has been no more successful than earlier non-competitive initiatives. Competitive bidding could stifle innovation and participatory democracy is not encouraged or facilitated by Challenge funds.     

The scope and limits of financial liberalisation in developing countries: A critical survey

This article reviews the growing literature on financial reform in developing countries. We draw both on the theoretical contributions outlining the case for and against liberalisation as well as on the experience of many developing countries with liberalisation. We argue that the existence of market failures in financial markets hampers the liberalisation process and indeed suggests that the simple liberalising strategy envisaged in much of the literature is inappropriate. We argue instead for an alternative strategy which integrates some aspects of liberalisation with the development of appropriate financial institutions designed to serve best the needs of the real economy.     

Utilizing FDI to Stay Ahead: The Case of Singapore

A country of 5 million people in 710?km², Singapore has built itself into an integral part of global markets with living standards that are among the highest in the world. The purpose of this article is to apply a capabilities-based approach to understand how a small, resource-scarce country dependent on global markets has done so well. The core of Singapore??s success has been the continuous updating and expanding of domestic social capabilities to meet the needs of foreign companies. Government policies were hypersensitive to providing conditions for foreign firms to be successful. Foreign firms investing in Singapore by now have helped close the income gap with advanced economies and are on the way to closing the innovation gap. Singapore demonstrates that with deliberate attention to building skills, institutions and infrastructure, it is possible for a small country to upgrade skills and to move up the production-value chain with primary reliance on foreign direct investment (FDI). Cultivation of private Singaporean firms has been secondary but may be the next step needed to sustain progress, both to respond to increased competition from China and others, and to build a knowledge-based economy.