How Does Globalisation Affect Regional Inequality within A Developing Country? Evidence from China

Developing countries are increasingly concerned about effects of globalisation on regional inequality. This paper develops an empirical method for decomposing the contributions of two major driving forces of globalisation, foreign trade and foreign direct investment (FDI), on regional inequality and applies it to China. Even after controlling for many other factors, globalisation is still found to be an important factor contributing to the widening regional inequality. The paper ends by investigating the role of factor market segmentations in aggravating the distributional effect of changing regional comparative advantages in the process of globalisation.     

Accounting for Changing Earnings Inequality in Costa Rica, 1980–99

After declining from the mid-1970s to the mid-1980s, inequality in monthly earnings in Costa Rica stabilised from 1987 to 1992 and then increased from 1992 to 1999. In this article, we use recently developed techniques to measure the extent to which these changes in earnings inequality were the result of changes associated with the distributions of personal and workplace characteristics of workers or the earnings differences associated with those characteristics. We present evidence that the most important cause of the fall in inequality prior to 1987 was a decline in returns to education. Inequality stopped falling in Costa Rica in the 1990s in part because returns to education stopped falling. The most important cause of rising inequality in monthly earnings in the 1990s was an increase in the proportion of workers working a non-standard work week (part-time or over-time).     

Policy Experimentation in China’s Economic Rise

Policy experimentation is frequently highlighted as a potent means to facilitate institutional innovation, and avoid reformist leaps in the dark by injecting bottom-up initiative and local knowledge into the national policy process. Yet experimentation remains a surprisingly vague concept in the debate over variants of economic governance. This article contributes to the study of experiment-based policymaking by examining the distinctive tools, processes, and effects of experimental programs in major domains of China’s economic reform. China’s experience attests to the potency of experimentation in bringing about transformative change, even in a rigid authoritarian, bureaucratic environment, and regardless of strong political opposition. Large-scale experimentation stimulated policy learning and economic expansion effectively in those sectors in which political elites could benefit from supporting new types of private and transnational entrepreneurial activity. Conversely, experimental programs largely failed in generating an effective provision of social goods which would require a combination of active societal supervision and strict central government enforcement to make it work. Though the impact of reform experiments varies between policy domains, China’s experimentation-based policy process has been essential to redefining basic policy parameters. At the heart of this process, we find a pattern of central–local interaction in generating policy—“experimentation under hierarchy”—which constitutes a notable addition to the repertoires of governance that have been tried for achieving economic transformation. The research for this article was supported by the German National Research Foundation and the Fairbank Center for East Asian Research at Harvard University. The author is especially indebted to Elizabeth Perry, Steven Goldstein, Rolf Langhammer, Dani Rodrik, Victor Shih, Ezra Vogel, and Rudolf Wagner for their encouragement and comments. Nancy Hearst made a crucial contribution by bringing precious sources from the Fairbank Center’s library to my attention that I otherwise would have overlooked.

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Changing Forms of Accountability in Education? A Case Study of LEAs in Wales

Political mechanisms of accountability were marginalized by Conservative government reforms during the 1980s and 1990s which sought a more market-oriented approach within the public sector in order to enhance ‘consumerism’. In education, parents were given more choice between schools and were provided with more information on school performance. The promotion of market accountability has involved a reduction in the powers of local education authorities (LEAs) which had been central to the operation of political accountability. However, whilst market-based forms of accountability were firmly enhanced in principle by the legislation, to what extent have the forms of accountability operating within LEAs changed in practice? Interviews with Chief Officers and the Chair of the Education Committee are used to identify changing perceptions and practices of accountability in LEAs in Wales. The findings indicate that although local politicians and officials have been forced to operate within the legislative framework of market accountability, they have sought to impede its successful implementation. The policy community in Wales facilitated the LEAs’ capacity to respond in this way. The market-based reforms conflicted with fundamental values held in Wales, which remain those of professional accountability.     

Does Access to Formal Finance Matter for Welfare and Inequality? Micro Level Evidence from Nigeria

Using a treatment effects model, decomposition techniques and representative household data from Nigeria, we study the welfare and inequality implications of access to formal finance. While improving household welfare, formal access to finance increases inter-household inequalities, despite ameliorating the inequality enhancing effect of urban residence and enhancing the inequality ameliorating effect of greater educational attainment. The positive effect of access to formal finance on inequality is smaller than the effect of unobserved household characteristics, indicating that welfare and equality enhancing strategies should follow a holistic approach as opposed to one focusing on one isolated policy variable at a time.     

Subnational Economic Nationalism? The contradictory effects of decentralization in Peru

Across the third world, transnational corporations (TNCs) and subnational governments (SNGs) are coming into new forms of contact as a result of liberalization and decentralization. Despite scholarly expectations that subnational governments will respond by seeking out foreign direct investment, in much of Latin America these governments are confronting rather than courting transnational corporations. Conceptualizing this phenomenon as ‘subnational economic nationalism’, the article explores both how subnational governments are challenging neoliberalism and why these challenges often fail to subvert neoliberal outcomes. By examining two struggles against transnational capital that had different outcomes but that took place within a single subnational jurisdiction (Arequipa, Peru), the article argues that decentralization can work at cross purposes. While voters are increasingly demanding that elected subnational officials adopt nationalist positions vis-à-vis TNCs, these same officials often seek financial support from TNCs so that they can compete successfully in the subnational elections that have been introduced by political decentralization.     

Whistleblowing: what does it mean in China?

In China, whistleblowing has both political and social functions. For the government, whistleblowing works as a social control mechanism, especially for containing corruption of its officials, while for ordinary citizens, whistleblowing provides then: with a legal weapon to fight against official malfeasance, misfeasance, and nonfeasance. This paper examines the causes, processes, and consequences of whistleblowing with an emphasis on the difficulties and dilemmas in blowing the whistle. It argues that given its important functions and implications, whistleblowing should be further legalized, encouraged, and protected to the largest possible extent in China.     

A Return to the Cultural Revolution in China?

China's remarkable progress has shown that modernity does not only belong to the West. At the same time, China's modernization has been largely fueled by direct investment of foreign firms which also dominate key technologies and critical positions in the global supply chain. In this section we get the real facts on the interpenetration of China and the global economy. A leading Chinese entrepreneur and thinker puts modernization with Chinese characteristics in historical perspective. One of China's leading dissidents assesses the arrest of Ai Weiwei.     

Does Decentralization Reform Always Increase Economic Growth?: A Cross Country Comparison of the Performance

This study aims to test the impact of decentralization on the economic growth of a country. Based on the longitudinal data set of 63 countries with a time series spanning 1960 to 2007, the test result reveals that there is a negative relationship both between fiscal decentralization and GDP growth and between political decentralization and GDP growth. In order to examine the different impacts of decentralization, the same analysis was applied to subsets of countries categorized into three groups according to the economic stage of the country. This further analysis found that there is a negative relationship between political decentralization and growth in developing countries, between fiscal decentralization and growth in semi-developed countries, but no relationship in developed countries. These results show that decentralization is not always instrumental in economic growth, which means that the time variable, or more precisely the stage of economic development of a country, is an important factor when introducing decentralization reforms.     

Statistical Tragedy in Africa? Evaluating the Data Base for African Economic Development

Abstract

Measurement is increasingly at the centre of debates in African economic development. Some remarkable upward revisions of GDP, which are signs of statistical systems improving, caused the declaration of a statistical tragedy in Africa. This special issue evaluates the database for African economic development with articles on the quality of the data on GDP, health and education, poverty, labour, agriculture and income distribution.     

Where in the World Will China Invest Its Billions?

Despite grand visions of a cosmopolitan planet living in peace, the first globalization at the turn of the 20th century descended into World War I as the old empires scrambled to preserve themselves as others sought self‐determination. Powers on the losing end of that war reasserted themselves in yet another worldwide calamity within decades. After World War II, in the early 1950s, with the victorious American‐led alliance in the driver's seat, institutions such as the United Nations and the Bretton Woods arrangements created a global stability that enabled peace, prosperity and the “rise of the rest.” In 2014, the world order is shifting again with the rise of China reviving in Asia the very kind of nationalist rivalries that led Europe to war twice in the 20th century. Will we be able to build new institutions that accommodate the new powershift without resorting to war, or will the second globalization collapse as well? Top strategists from the US, Japan and China respond to this momentous question.     

Does public participation matter? Inclusive growth in East Asia

Inclusiveness in economic development has lately emerged as a critical factor for development. This paper adopts an analytical concept of inclusive growth to evaluate East Asia’s economic success. It contests the Western conceptualization of the critical role of public participation in development, and argues that it has played a limited role in terms of inclusive growth in East Asia. Several factors have influenced the outcome of research in this area including the choice of methodology adopted, the challenge of defining and measuring inclusive growth, and the unclear mode and impact of public participation in the process.     

Economic interest or security concerns? Which affected how individuals in five Asian countries—Indonesia,Japan, Malaysia,the Philippines,and South Korea—viewed China in 2013?

With rapid economic growth, China has become its neighbours’ largest trade partner in the twenty-first century. At the same time, the growth of China’s military and its assertiveness are raising concerns among its neighbours that China’s rise will pose a threat to them. In this context, will China’s neighbours—Indonesia, Japan, Malaysia, the Philippines, and South Korea—view China positively or negatively? By using statistical analysis, this paper aims to explore whether individuals are more affected by their economic position or national security concerns when they view China. The findings in this article suggest that individuals’ security concerns have stronger associations with their attitudes toward China than economic conditions. Specifically, individuals’ views on China’s military growth and territorial disputes had negative effects on their attitudes toward China. On the other hand, economic interests had weaker associations with individuals’ views of China than security concerns.     

How Did the Automotive Component Suppliers Cope with the Economic Crisis in Hungary?

This article studies the reaction of automotive component suppliers in Hungary to the 2008–2009 economic crisis. We find that the global suppliers viewed the crisis as an opportunity to reinforce the competitiveness of their Hungarian affiliates by engaging in product and process upgrading, and upgrading through research and development. The regional suppliers combined defensive strategies aimed at reducing costs with offensive measures in the form of product upgrading, production upgrading and expansion into new markets. The local suppliers reduced costs and reduced their workforce, but also reacted offensively by expanding into new markets, upgrading their activity and collaborating with other local suppliers.     

Why Is There Less Public Trust in Local Government Than in Central Government in China?

The public’s trust in government, whether at national, regional, or local levels, is always a subject that arouses interest and debate among researchers as well as politicians. This article presents findings from an analysis of survey research conducted in 2011 and provides insights both on a hierarchical trust pattern of public trust in central and local governments in China, and on the key factors accounting for variance in this respect by multiple regression analysis.     

Problems of Coordination in Field Administration in Bangladesh: Does Informal Communication Matter?

The main thrust of the article is to analyze the state of problems of inter-organizational coordination in the upazila (second tier of local government) in Bangladesh. It also explains to what extent informal communication matters for inter-organizational coordination. Based on empirical data collected in 2009, findings of the study suggest that a number of factors have facilitated non-existence of inter-organizational coordination at the upazila. These factors include lack of division of activities, dualism in control over officers, lack of proper functioning of the committees, and dual authority in disbursement of funds and its impact on timely disbursement. Findings also suggest that in the absence of coordination among different departments, informal communication has been observed to be one of the prominent mechanisms of ensuring coordination. However, existence of factors like lack of willingness to be engaged in informal communication and lack of cooperation has hindered the process of building informal communication among different departments. Despite having some problems this research has concluded that informal communication has helped the process of coordination among different departments while they are carrying out their responsibilities.     

Does Recent Victimization Impact Confidence in the Criminal Justice System?

This study assesses whether recent victimization influences one’s confidence in the criminal justice system. Specifically, the study tests whether the predictors of confidence in major types of actors in the justice system are different for victims and nonvictims. British Crime Survey (BCS) data are analyzed using a series of structural equation models with multiple group methods. Overall, the findings support the idea that there is little difference between victims and nonvictims in how views of legal actors predict overall confidence. Additionally, prosecutors are slightly more influential on system confidence, regardless of victimization experience. Policy implications and future research directions are discussed.     

Has Structural Economic Vulnerability Decreased in Least Developed Countries? Lessons Drawn from Retrospective Indices

The Economic Vulnerability Index (EVI) is a well-recognised measure of the structural vulnerability of developing countries and is regularly used and published by the United Nations for cross-country comparison purposes, primarily to review the list of Least Developed Countries (LDCs). However, due to the revisions in methodology occurring over time, the official EVI cannot be used to assess the changes in vulnerability. In this paper, we use two retrospective series of the EVI, based on constant definitions. The real change in vulnerability is thus isolated from the impact of revisions in the design of the index, allowing comparison of the evolution of LDCs and non-LDCs. The implications of the revisions in the EVI design are then discussed.     

Does public opinion matter in Ukraine? The case of foreign policy

The article critically surveys the impact of domestic public opinion on foreign policy in Ukraine by integrating it within theories of public opinion. Studies of public opinion in Ukraine have not given due weight to the unique characteristics of the Ukrainian ‘public’, which differs greatly from the Western public. Ukrainian society is passive, atomized and its power is ‘submerged’ relative to that of the state. The article argues that public opinion is of minimal importance in the area of foreign policy.