State Business Relations and Economic Growth in Sub-Saharan Africa

This paper contributes to the literature on the determinants of economic growth in sub-Saharan Africa by examining the effect of effective state-business relations on economic growth for a panel of 19 sub-Saharan African countries for the period 1970–2004. We propose a measure that we argue captures the various dimensions of effective state–business relations in sub-Saharan Africa. We then estimate standard growth regressions using dynamic panel data methods with this measure, along with the more conventionally used measures of institutional quality such as degree of executive constraints, the rule of law, the degree of corruption and the quality of the bureaucracy. Our results show that effective state–business relations contribute significantly to economic growth – countries which have shown improvements in state–business relations have witnessed higher economic growth, controlling for other determinants of economic growth and independent of other measures of institutional quality.     

Poverty and Survival

A recent literature highlights the uncertainty concerning whether economic growth has any causal protective effect on health and survival. But equal rates of growth often deliver unequal rates of poverty reduction and absolute deprivation is more clearly relevant. Using state-level panel data for India, we contribute the first estimates of the impact of changes in poverty on infant survival. We identify a significant within-state relationship which persists conditional upon state income, indicating the size of survival gains from redistribution in favour of households below the poverty line. The poverty elasticity declines over time after 1981. It is invariant to controlling for income inequality but diminished upon controlling for education, fertility and state health expenditure, and eliminated once we introduce controls for omitted trends.     

Why aren't countries rich?: Weak states and bad neighbourhoods

This article challenges a common viewpoint that the policy choices made by state leaders are central to explanations of economic growth. It argues that there are two possible flaws in this viewpoint. First, that state leaders have a free choice in policy decisions; second, that it is policies that in large part determine growth rates. Using a set of variables designed to capture the weakness of the policy autonomy of the state and possible non‐policy influences on growth rates, the article concludes that initial conditions are a better determinant of wealth and growth than free policy choice.     

Privatisation and economic growth in developing countries

This article re-examines the relation between privatisation and economic growth. Previous studies that have attempted to measure this relationship have concluded that privatisation has had a sizeable positive effect on economic growth. Our study uses data for 63 developing countries over the time period 1988–97. It uses the framework of an extreme-bounds analysis (EBA) to conduct a cross-country growth regression analysis. Our findings contradict earlier results, but reaffirm the view that effective competition and its regulation may need to accompany privatisation to make a positive impact on economic growth.     

Interest rates,saving, investment and growth in mexico 1960–90: Tests of the financial liberalisation hypothesis

The theory of financial liberalisation argues that rising real interest rates induces more saving and investment and therefore acts as a positive stimulus to economic growth. This hypothesis is tested for Mexico over the period 1960–90, making the important distinction between financial saving and total saving. Financial saving is found to be positively related to real interest rates partly through capital flows and partly through domestic asset substitution, but total saving is invariant with respect to real interest rates. Investment is positively related to the supply of credit from the banking system, but the net effect of interest rates on investment is negative. Furthermore, taking McKinnon's ‘virtuous circle’ model of economic growth shows no favourable effects of interest rates on economic growth. It is concluded that any favourable effect of financial liberalisation and higher real interest rates on economic growth must come through raising the productivity of investment.     

Neoclassical and structural analysis of poverty: winning the ‘Economic Kingdom’ for the poor in Southern Africa

In situations characterised by historical injustice in the distribution of economic resources, such as in many southern African ‘settler’ countries, there is a powerful intuitive case that ameliorative and palliative public policy is insufficient to significantly affect poverty reduction. This is because of the dulling effects on growth caused by significant structural inequality in the distribution of resources. However, the proposition that inequality is a problem for poverty reduction is contentious. This article reviews the neoclassical and structuralist literatures on the relationship between growth, inequality and poverty. It argues that the first is inconclusive and, furthermore, can only be so, while the second requires to be made more relevant to the discussions of how redistribution and inequality relate in legitimate policy and practice. The concept of property regimes can help here, within a more contextual understanding of development in practice as not necessarily involving growth and economic progress, but as being subject to periodic phases of ‘de‐development’, or well‐being retrogression. The paper concludes that state‐sponsored redistribution policy has an important role to play in changing underlying property regimes for the benefit of the poor in southern Africa. Inequality does matter, and a consideration of radical, redistributive social change is worth rehabilitating as an efficient means of reducing poverty, particularly in situations of low or fluctuating growth. This consideration, in turn, requires a political acceptance of the legitimacy of a broader role for economic public policy and state action.     

The Political Economy of Child Mortality Decline in Tanzania and Uganda, 1995–2007

This article identifies political economy factors that help explain dramatic differences in the pace of child mortality reduction between Tanzania and Uganda from 1995 to 2007. The existing literature largely explains divergence in basic health outcomes with reference to economic variables such as GDP per capita. However, these factors cannot explain recent divergence across African countries with similar levels of GDP per capita, rates of economic growth, and levels of health funding. I argue that institutional and governance divergences between Tanzania and Uganda can be linked directly to differing coverage levels of key child health interventions (especially related to malaria control), and thus to differing child health outcomes. These institutional differences can be explained in part by historical factors, but more relevant causes can be found in recent political events. In Tanzania, there was an unusually effective project of institution building in the health sector, while in Uganda, by contrast, there was a negative political shock to the health system. This was driven by the repatrimonialization of the Ugandan state after President Yoweri Museveni??s decision to eliminate term limits in the 2001?C2006 period. This repatrimonialization process reversed previous health sector institutional gains and had particularly negative effects on child health service delivery in Uganda over the period in question.     

Transition strategy,corporate exploitation,and state capture: An empirical analysis of the former Soviet states

It is difficult to find, at a glance, a clear connection between corruption and the reform processes in the states of the former Soviet Union (FSU). The key to untangling this issue is to look at the peculiarities of their transition strategies and economic crisis compared with those of Central and East European countries. This paper aims to unravel the complex ties between the transition process and corruption in the FSU states through theoretical and empirical analyses of the impact of multiple factors. These factors include the extent of decentralization of the government–enterprise relationship and the degree of state intervention in corporate management as well as the impact of economic distress that have been affecting the frequency and degree of corporate exploitation and state capture. In this manner, our study aims to complement earlier achievements in this field.     

Growth,governance and corruption in Bangladesh: a re-assessment

This paper revisits Bangladesh’s ‘double paradox’ – sustained macroeconomic growth despite the poor state of governance and a high level of corruption – by critically reviewing trends in governance and corruption indicators during 1990–2017 vis-à-vis other South Asian countries. In addition, we draw upon data from a purposefully designed survey of manufacturing firms to assess the state of economic governance in the export-oriented ready-made garments (RMG) sector, the country’s main source of foreign exchange and driver of economic growth. Consistent with the country’s poor ranking in a host of indicators of investment climate and corruption perception, in-depth interviews of RMG factory owners confirm the high cost of doing business in various forms. We also find no evidence of growth-mediated improvements in indicators of governance. On the contrary, our review of print media reports suggests a growing governance deficit in the country’s financial sector. We conclude by discussing the implications of our findings for the country’s future growth as well as performance of the RMG sector.     

Russia's post-crisis growth: its sources and prospects for continuation

This article provides an in-depth analysis of Russia's post-crisis growth, with a view to understanding the prospects for its continuation. It examines in detail the chief drivers of growth, as well as the main developments and policies that have been underlying it. A key finding is that the role of the oil sector, and particularly privately owned oil companies, has been vastly more important in driving economic growth from 2001 to 2004 than thus far recognised. The oil sector's contribution to growth has hitherto been severely underestimated because official data do not account for transfer pricing and thus fail to fully reflect the importance of the hydrocarbon sector in the Russian economy. In the light of this finding, this article also assesses the economic impact of the ‘Yukos affair’. Looking forward, it is reasoned that—given its economic structure—Russia is bound to remain a heavily resource-dependent economy for some time to come. The article further argues that, given good macroeconomic management and the avoidance of gross policy errors, Russia could realistically hope to sustain high growth rates over the medium term. However, given current tendencies for greater state involvement in key sectors of the economy, such an outcome is not by any means guaranteed.     

The impact of the Owen falls hydro‐electric project on the economy of Uganda 1

Inflation induced by an increase in the money supply may be conducive to economic growth, because it can be positively related to the savings ratio. This relationship is, however, limited by a certain rate of money supply which is associated with the maximum overall savings ratio. Treating money as a consumers’ good based upon Levhari‐Patinkin [1968], this study estimates a quadratic‐form savings function using international cross‐section data. It shows that the optimal rates of money supply are 11–12 per cent and 6–8 per cent in underdeveloped and developed countries respectively.     

Transport Policies and Development

This survey reviews the current state of the economic literature, assessing the impact of transport investments and policies on growth, inclusion, and sustainability in a developing country context. It also discusses the specific implementation challenges of transport interventions in developing countries.     

Elite recruitment and state-society relations in technocratic authoritarian regimes: The Russian case

This article argues that Russia has a peculiar form of authoritarianism that exhibits pronounced technocratic features. The analysis places in a comparative frame the bases of regime legitimacy and the paths to political, administrative, and economic power in Russia. By locating the Russian state in a matrix that considers the ideology of governance on one axis and the backgrounds of elites on the other, the article highlights areas of overlap and separation between state–society relations in Russia and other regimes in the developed and developing world. It also illustrates the ways in which technocratic elites in Russia differ from their counterparts in other parts of the world.     

A Subnational Study of Insurgency: FARC Violence in the 1990s

This article examines the traditional political and economic factors that have been purported to explain the prevalence of insurgency. It tests the following hypotheses at the subnational level in Colombia: guerrilla violence is positively associated with exports; higher levels of insurgency are associated with low levels of GDP per capita or negative growth rates; guerrilla violence emerges in the context of weak state presence; and higher levels of state repression are associated with higher levels of insurgent violence. The analysis utilizes a zero-inflated negative binomial to capture dynamics of both intensity and onset of violence. The econometric analysis is supplemented with cartographic visualization and qualitative analysis.     

Regulatory reform,property rights,and economic development

Overcoming tradeoffs between the social benefits of regulation and the economic benefits of development has never been easy in practice. This article examines the economic development consequences of state and local regulation by developing a framework that provides a theoretical basis for expecting regulatory costs to influence the amount and location of new development. After elaborating the theory, I identify two ways state and local governments may be able to pursue regulatory goals without creating disincentives for economic development. One approach is for state or local government to socialize costs of regulatory compliance through public expenditures or subsidies. A second, and more promising, approach is to pursue regulatory reform which lessens private sector transaction costs by reducing regulatory uncertainty. This framework is illustrated using two cases: state regulation of the chemical industry, and growth management regulation.     

The myth of equilibrium: winner power, fiscal crisis and Russian economic reform

It has become common to describe Russia as a state that has only achieved partial reform due to the influence of powerful economic forces, the ‘winners’ of economic reform, and to assume that the Russian state lacks autonomy. This paper questions how far reform in Russia has been compromised by the power of winners. The failure of economic reform between 1992 and 1998 is explained as a policy response by state officials unable to manage tendencies towards fiscal crisis because of the state's general helplessness in managing the Russian economy, rather than as a surrender of sovereignty to economic interests.     

Egypt’s Many Public Administration Transitions: Reform Vision and Implementation Challenges

ABSTRACT

This article discusses Egypt’s many transitions toward public administration reform. It argues that some of these transitions have collided with an existing large and complex bureaucracy and a legacy of state-led development, such as the protracted and contentious process related to the civil service regulation reforms. Similarly, despite decades of decentralization efforts, state budgeting praxis remains centralized and concentrated. While attracting private investment for job creation and economic growth is a key priority to Egypt, state centrism overshadows the experience. Other transitions, however, have thrived at a much faster pace, such as the adoption of e-government.     

Changing development models in small economies: The case of Jamaica from the 1950s to the 1990s

By examining in detail the successes and failures of different development models in one developing country over a four-decade period, this article sketches a development model for small economies in the 1990s as an alternative to the neoliberal model pushed by the International Monetary Fund. It reviews the experience of Jamaica with various development models from the 1950s to the 1990s, with special attention focused on the experience of the Seaga government of the 1980s. It also draws lessons from the successful development experience of small European countries and of the East Asian Newly Industrialized countries. In normative terms, the alternative development model attempts to combine growth with equity and democracy. In analytical terms, it takes account of the constellation of domestic forces and appropriate political strategies, as well as of international economic and political conditions. The main features are a strong role for the state in economic interactions with transnational corporations, in identification of export markets and promotion of export production, in selective protection of domestic industry with an export potential, in promotion of agriculture linked to industrial development, in improvement of human resources and promotion of regional economic integration. Within these parameters, a crucial role is assigned to the domestic private sector and a complementary one to foreign investment. Distribution is to be addressed primarily through distribution of productive assets and access to health care and education. Evelyne Huber is professor of political science at the University of North Carolina, Chapel Hill. She is a coauthor ofDemocratic Socialism in Jamaica andCapitalist Development and Democracy. She is currently involved in research on the changing role of the state in Latin America and on comparative social policy. John D. Stephens is professor of political science and sociology at the University of North Carolina, Chapel Hill. He is a coauthor ofDemocratic Socialism in Jamaica andCapitalist Development and Democracy. His current research focuses on options for social democracy and comparative social policy.     

The social–economic impact of shale gas extraction: a global perspective

This article explores the global social–economic impact of shale gas extraction, comparing the differing social and economic impacts shale gas extraction may have on communities in developed and developing countries. It argues that the benefits of fracking are more likely to be enjoyed by communities in highly and very highly developed countries rather than by those in countries with low or medium levels of development . Additionally, it shows that the potential risks and drawbacks of shale gas and its extraction are more likely to be experienced by communities in these latter countries than by those in highly or very highly developed countries. However, it also demonstrates that even communities in developed countries are vulnerable to environmental and health risks associated with shale gas extraction.