Two sides of economic openness: non-tariff barriers to trade and capital controls in transition countries, 1993–2000

This article presents new measures of foreign economic openness in the transition countries that allow us to distinguish between non-tariff barriers to trade and capital controls. We argue that this distinction is important for the analysis of foreign economic relations in the post-communist world. While most states lowered barriers to trade since 1993, they increased the number of capital controls, which had been low at the beginning of the transition process. The ELITE (Economic Liberalization in the Transition Economies) data set, which is based on the IMF statistics on exchange arrangements and exchange restrictions and encompasses 24 transition countries, further demonstrates important exceptions to this trend. The comparison of the ELITE indicators with alternative measurements of economic openness indicates the need to move towards more refined analyses of the political economy of the transition process.     

East Asian financial regionalism: why economic enhancements undermine political sustainability

East Asian financial regionalism was born in response to the Asian Financial Crisis of 1997–1998. The centrepiece of financial regionalism was the Chiang Mai Initiative (CMI), an emergency liquidity mechanism created by the ASEAN+3. It embodied both a clear interpretation of what had gone wrong in 1997–1998 and an understanding of the need for institutions that would be politically viable despite Sino-Japanese rivalry. Enforcement under CMI relied on the ‘IMF link’ – release of funds would be predicated on crisis countries' initiating negotiations with the International Monetary Fund (IMF), as a means of reducing moral hazard, enforcing conditionality and diverting blame from the leading creditors, Japan and China. The global financial crisis of 2008–2010 and the eurozone crisis that followed have inspired important changes meant to address CMI's economic gaps, including accelerated adoption of ‘CMI Multilateralization’ (CMIM), the creation of a new surveillance unit (ASEAN+3 Macroeconomic Research Organization, or AMRO), and the establishment of a new precautionary line. Many observers have remarked that these developments weaken the IMF link, which had effectively subordinated CMI to the IMF. While the moves appear to demonstrate a more confident, autonomous regionalism and a relative devaluation of the US-dominated global financial institutions, this paper argues that in fact, the ASEAN+3 states have again unearthed the underlying politics of divided leadership and mutual suspicion. CMIM is now threatened by the renewed potential for internal divisions. Further complicating the picture, both China and Japan have recently established large bilateral swap lines outside of the CMIM framework with several of their ASEAN+3 partners, raising the question of whether CMIM is moving towards political irrelevance even as it has arrived at a high water mark in its institutional development.     

Crises and unpredictability in developing countries

Developing countries have suffered most of the financial crises in the context of the process of economic and financial globalisation. Both current and previous crises have revealed that unpredictability is a feature common to all the episodes which occurred during the process of globalisation. Although certain alarms went off, any of those external financial crises were actually predicted by the advanced methods in use for prediction and country risk analysis. Taking into consideration the information above, the aim of this paper is to check the ability to foresee external financial crises in developing countries of both the country risk index published by Euromoney and the Credit Ratings variable included therein. We have focused on the external financial crises that took place between 1992 and 2011, that is, in a full globalisation era. The results are negative. It appears that neither the index nor the sovereign ratings are able to reflect early enough the vulnerabilities that arise previously to the setting off the crisis episodes. This leads us to conclude that the existing models of country risk have limits. Thus, it would necessary to develop new instruments to measure this risk, considering uncertainty as an essential feature of the current economic and financial environment.     

Neoliberal globalisation,the nation-state and financial crises in the semi-periphery: A comparative analysis

The process of neoliberal globalisation has been associated with successive financial crises in the context of the 1990s, raising serious doubts concerning the sustainability of rapid growth in an environment of uncontrolled movements of short-term capital. The article probes into the origins of the financial crises in the semi-periphery through a structured comparison of three key recent crises in the world economy, namely the Mexican and Turkish crises of 1994 and the Asian crises of 1997. Whilst the magnitude of the capital flows and the dimensions of the subsequent crises are strikingly different, there are nonetheless important elements common to all three cases studied. One such common element involves the overdependence of the countries concerned on the short-term financial flows, in a setting characterised by premature capital account liberalisation in the absence of adequate regulation. It is striking that, contrary to the conventional IMF wisdom, financial crises have occurred in spite of 'sound fundamental', namely fiscal equilibrium and low inflation. The recent financial crises highlights a paradoxical situation: the need for effective regulation at a time when the capacity of the nation state to undertake the type of regulation needed severely circumscribed. Hence, the establishment of an effective regulatory framework at the global level emerges as a major requirement if successive financial crises, with significant economic and social cost, are to be avoided in the future.     

Hybrids and Contradictions: Human Resource Management in the Contemporary Public Sector

Public employment is a dynamic field of study, buffeted by the ever-changing and reforming public sector environment and by external events such as changing demographics and the global financial crisis. This first article to the special edition on contemporary public sector human resources provides a broad overview of recent developments, starting with the nature of public sector reforms and proceeding with analysis of the far-reaching effects on public employment. For many western countries, this has led to a hybrid model of old and new practices, with many internal contradictions and a confusing array of accountabilities. The new arrangements led to a de-privileging of public servants through reductions in merit and tenure. They also reduced the institutional capacity of central personnel institutions to co-ordinate and monitor public employment and public management. The article proceeds with a review of the implications of these changes in the face of new challenges such as skills shortages and economic pressures. This overview provides a backdrop for the variety of articles presented in the special edition.

Peter Blunt, Mark Turner, and Henrik Lindroth's “Patronage, Service Delivery, and Social Justice in Indonesia” appears in the International Journal of Public Administration, Volume 35, Issue 3, 2013, pp. 214—220. doi:10.1080/01900692.2011.641050. It is related to this special issue's content.     

The rise of the Global South,the IMF and the future of Law and Development

Following the onset of the Asian Financial Crisis the world has witnessed a re-accommodation of the global financial system. In the particular case of middle-income countries they have disentangled themselves from the conditionality of the IMF and grown into more assertive actors in international forums, proposing new alternative mechanisms to become more financially independent and for the provision of development assistance. This article critically reviews the new reality by assessing the strategies deployed by developing countries to reduce the IMF’s influence, and explores the potential consequences of the rise of middle-income nations for Law and Development.     

Markets,Politics, and Learning: Explaining Monetary Policy Innovations in Brazil

An increasing number of developing and emerging economies have adopted an inflation targeting framework for monetary policy during the last two decades. This article investigates the politics of inflation targeting by focusing on the case of Brazil. I argue that the decision to implement an inflation targeting system in 1999 did not only reflect the concerns of political leaders with maintaining electoral support and external credibility. In addition, the choice of this new policy approach was informed by a shift in the technical consensus among Brazilian economists about the most effective way to tame inflationary pressures in a context of high capital mobility. The shift to inflation targeting thus reflected a process of social learning among technical elites, facilitated not only by the failure of the previous policy but also by the successful experience of other inflation targeting countries. Moreover, the evidence presented here suggests that, as the first country to adopt inflation targets in the context of an IMF-supported program, Brazil became a test case and a natural experiment for the redefinition of IMF conditionality and surveillance mechanisms. The paper thus sheds light on a process of reciprocal learning, whereby the IMF not only contributed to collective learning but also learned from the Brazilian case, subsequently becoming an active promoter of inflation targeting among developing countries.     

Watching from the sidelines? The decline of the IMF's crisis management role

This article compares the International Monetary Fund (IMF)'s crisis management role during the Asian financial crisis in 1997–98 with the role it has played during the ‘credit crunch’ which emerged in the wake of the subprime crisis in the United States. With prominent calls for the construction of new forms of global financial governance to prevent a recurrence of the subprime crisis in the future, we explore how the designated guardian of the international financial system has responded to the credit crunch in order to evaluate the strengths and weaknesses of the existing system. Our comparison of the US subprime crisis and the Asian financial crisis of the late 1990s indicates that the IMF has lost credibility with its members, and particularly with its principal sponsor, the United States, which has curbed its capacity to develop multilateral solutions to major financial crises.     

Research and trends in governmetal accounting and reporting

Budgeting is a form of financial reporting using accounting information. This paper reviews current research and trends in governmental accounting and reporting for state and local governments in the United States. In the first section, the contributions of the Governmental Accounting Standards Board are reviewed, including the conceptual framework now guiding the evolution of accounting standards. Also reviewed are developments that are expected to have a significant impact on budgeting in the future, including service efforts and accomplishments reporting, financial condition, and budget reporting. The second section reviews accounting research in four distinct areas: capital markets; financial reporting; behavioral experiments; and, public choice. The future of governmental accounting and reporting will reflect changes in the standards of practice and the use of theory to direct research.     

World Turned Upside Down? Rise of the global South and the contemporary global financial turbulence

By focusing on the consequences of the dismantling of regulations over the financial sector, the current debate on the causes of the global economic meltdown obscures the cyclical occurrence of speculation in capitalism, as the accumulation of more capital than can be profitably invested in the production and sale of commodities results in financial expansion. Historically financial expansion has signalled the end of one world-scale system of accumulation and the transition to a new system as capital flows from declining powers to rising powers. However, the contemporary period is distinguished by capital flows from rising powers to declining ones. An analysis of the current crisis suggests a reversal of this anomaly as it reduces the ability of China and other East Asian states to support the US dollar. At the same time ‘emerging market economies’ have begun to forge new relationships that could provide the framework for a new system of partnership between states and enterprises to reconstruct a new cycle of accumulation if two hurdles are overcome: 1) absorption of labour that is being displaced because of the high organic composition of capital and 2) dampening of the growing inequalities in income which has not only restricted the growth of markets but is also fuelling increasing social conflict.     

Reconceptualizing Early Ghana

At the time of his death, Nehemia Levtzion had initiated a project to revise Ancient Ghana and Mali in the light of new scholarship since its original publication in 1973. He proposed that the question of origins and early development of Sudanic polities such as Ghana should be thoroughly reconsidered with regard to findings from research in archaeology and related disciplines. In this article, I discuss four topics (climate variability, sedentary-mobile interactions; external / internal dynamics; and organizational variability) central to Levtzion’s 1973 account of Ghana’s origins and the implications of research results to date for our understanding of early political consolidation in the Sahel.     

Poland's foreign policy since 1989: the challenges of independence

In its first decade of post-communist independence, Poland achieved far more than most dared believe in 1989. Despite domestic political and economic turmoil, it has joined Europe as a new member of NATO and a prospective member of the EU. This article traces the evolution of Polish foreign policy since 1989 over four time periods: First, the early uncertainties from 1989 to 1992 when Warsaw — caught between a reunifying Germany and a collapsing USSR — was intent on solidifying its relations with Central European neighbors. Second, the watershed year of 1993, which witnessed changes in every aspect of Poland's external relations — the demise of Visegrad, first moves toward NATO and EU enlargement, the emergence of serious tensions in Warsaw's relations with the East, especially Russia. Third, the years in the anterooms of Europe from 1994 to 1996, when Poland and its central European neighbors lobbied for early accession to the EU and NATO, while relations with Russia remained in the deep freeze. And fourth, the period since 1997, in which Warsaw has been negotiating its “return to Europe”, joining NATO in 1999 and actively pursuing membership in the EU. These gains have not come quickly or easily; rather, they demonstrate a hard earned consistency in Poland's foreign policy agenda, despite numerous changes in domestic politics, as well as an increasingly realistic vision of the country's place in post-Cold War Europe.     

Accounting for human resource development in the public sector

This article evaluates the merits of utilizing human resource accounting (HRA) concepts to account for human resource development (HRD) in the public sector. It describes the development of the economic theory of human capital and the increasing recognition of human resources as human assets of public organizations to be managed and accounted for in a manner similar to capital assets. The development of HRA concepts concerning human resource value and cost is discussed. These HRA concepts are applied to HRD and to current and potential uses in external financial reporting and internal managerial accounting in public organizations. This article concludes that the application of HRA concepts to HRD would have significant benefit for the operational and strategic management of human resources in public organizations. Using HRA information in internal managerial decision making would demonstrate the value gained in excess of costs incurred for such activities. The application of HRA concepts in pubic organizations, whether to internal managerial accounting and decision making or to public sector financial reporting, would heighten the priority of HRD activities by recognizing them as asset building rather than as an expense.     

The mexican financial crisis

In the period 1990-93 Mexico's economy experienced expansion and structural change. This was associated with economic opening, market deregulation, and large inflows of foreign capital. Mexico had dealt with the external debt problem through a Brady debt restructuring. This restructuring lowered the financial requirements of the public sector, improved market expectations, and set the stage for a decline in domestic interest rates.

In the early 1990s Mexico attracted fully one-fifth of all capital flows directed into developing countries. These inflows more than financed the current account deficit, and permitted Mexico to expand its official reserve holdings. The portfolio capital inflow bolstered the stock market, which appreciated in value. Mexico's entry into NAFTA provided another reason to be optimistic concerning economic and business prospects.

However, Mexico's external payments position was falling deeper into deficit. By mid-1994 it was possible to observe that the current account in Mexico's balance of payments had shifted further into deficit, and that the high unsustainable level of capital inflow was diminishing. Political violence and assassinations in 1994 caused foreign investors to look more carefully at investment prospects, and steadily rising interest rates in the United States created incentives favoring dollar rather than peso financial instruments. As peso interest rates began to rise, the Mexican government and commercial banks turned to dollar-indexed or outright dollar borrowing. By December 1994 this increased dollar liability position together with a runoff in foreign exchange reserves left Mexico in a difficult liquidity position. The December 20, 1994 devaluation failed to renew confidence in the viability of Mexico's payments position, and two days later the peso was floated. In the early weeks of 1995 a massive Mexican financial assistance package was provided by the United States, the International Monetary Fund, and others.

An analysis of the components of Mexico's GDP and balance of payments suggests that the financial disequilibrium was clearly evident by mid- 1994. Over the period 1993-94 domestic absorption had increased beyond the ability of the economy to sustain it. Parallel to this, the current account deficit had increased beyond the ability of foreign exchange resources to support this deficit. Failure by the government and central bank to take action in the third quarter of 1994 resulted in a runoff of foreign exchange reserves, speculative trading in the financial markets, growing skepticism concerning the viability of existing arrangements. Fiscal and monetary tightening early in 1995 produced an improved financial equilibrium, suggesting that similar action at mid-1994 might have avoided the near debt crisis that manifested itself in December 1994 jand the following weeks.     

The Impact of the Unemployment Rate on Unemployment Benefits in Barbados: An Impulse Response Approach

The purpose of this article is to determine how the rate of unemployment will impact on unemployment benefits in Barbados using annual data from 1982 to 2009 with the use of an impulse response function. The results show that when a shock is applied to the rate of unemployment, which causes it to rise, unemployment benefits will contract marginally and this reaction will not stabilize until the 14th period when a new equilibrium will be attained. Since this new equilibrium will lie below the original equilibrium, rising unemployment will impact negatively on unemployment benefits although this decline will only be marginal.     

The Politics of State Sector Reforms in Vietnam: Contested Agendas and Uncertain Trajectories

The 1997 Asian financial crisis and subsequent impact on Vietnam's economy reignited a decade-old internal debate over economic reforms (doi moi). Heralded by many as a success story, the pace of doi moi was the cause of sharp conflicts within the ruling party as the IMF prescribed speeding up the process. At first glance it seemed that neo-liberalism was triumphant. However, this article argues that we need to take a closer look at the content and meaning of 'reform' in the Vietnamese context. Neo-liberal reforms were modified to ensure they consolidated rather than unravelled the authority of the Vietnamese state and to accommodate the new hybrids of state-business alliances.     

Changes of ethnic composition in the Baltic States

"The aim of this article is to analyze changes in the ethnic structure in the Baltics. The publication of the results of the 1989 Census data allows one to analyze the dynamics of ethnic structure in Estonia, Latvia and Lithuania since the 1920s." The author notes that "as a result of significant changes in all demographic processes in the 90s, the proportion of the titular nationalities in all three Baltic States has increased for the first time, while the proportion of Slavs, particularly of Russians, decreased."     

POST‐ACCESSION POLITICIZATION OF NATIONAL EU POLICY COORDINATION: THE CASE OF SLOVENIA

This article focuses on how domestic and EU‐level political factors affect the functional aspect of the national coordination of EU affairs. Due to the idiosyncrasies of the post‐communist countries which have joined the EU since 2004, an analysis of dynamic changes in the national systems of coordination needs to focus on three factors: (a) functional pressures from the EU; (b) the consolidation of the national party system; and (c) existing traditions of politico‐administrative relations. The international economic and financial crisis is considered as a fourth factor that has affected the first three factors through the increase in the EU's 'informal intergovernmentalism', which adds to the politicization of EU matters. The Slovenian case points to an increased, though selective, politicization of EU business due to both national‐ and EU‐level factors.     

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.     

Local government and the arts revisited

This article discusses policy developments in the arts and local government since the publication of the original article on this topic. It assesses the continued relevance of the thinking behind policy attachment in the original article for understanding and explaining policy in this sector, and indicates the direction in which the concept of policy attachment could be developed in both analytical and empirical ways.