Trade Liberalisation and Export Performance in Selected Developing Countries

This article examines the impact of trade liberalisation on export growth for a sample of 22 developing economies. The research applies dynamic panel data models based on fixed-effects and generalised methods of moments (GMM) estimators. In addition, heterogeneous panels for the complete sample, as well as for different regions of the world, are estimated using a time-series/cross-section technique. The main findings are that trade liberalisation is a significant determinant of export performance, but its effect varies across continents. Export duties have a small detrimental effect on export growth, while relative price changes and world income growth have the expected signs.     

Production networks,economic integration and the services sector: Implications for regional trade agreements in southern Africa

Debate on an appropriate framework for economic integration in southern Africa has hitherto focused largely on matters relating to trade in final goods, with little analysis of the potential benefits of production sharing and fragmented trade, or of challenges related to the accompanying role of the services sector. The first goal of this article is thus to explore the possible benefits for the development of specialisation and trade expansion related to the international fragmentation of production, and whether such benefits may be better harnessed by southern African countries in a context of regional integration. Secondly, the critical role of the services sector in production-sharing arrangements leads to questions about developing country services sectors and regional versus multilateral services liberalisation. The article therefore considers the importance of the services sector in the fragmentation context, and the growing debates surrounding services aspects of developing country regional trade agreements. It is argued that while there may be a case for the promotion of production-sharing arrangements in regional trade agreements in southern Africa, key constraints that continue to hinder the region's trade and development agenda remain the conflicting rules of origin in economic arrangements with overlapping membership, and non-tariff barriers to trade, particularly intra-regional transport costs.     

Promise or pitfall? The limited gains from agricultural trade liberalisation for developing countries

It has become an article of faith in international trade negotiations that farmers in developing countries have much to gain from agricultural trade liberalisation. This paper assesses the evidence for such claims, relying on World Bank data and analyses, United Nations trade data, and other economic modelling carried out to inform the current round of World Trade Organisation negotiations. It concludes that the promise of agricultural trade liberalisation is overstated, while the costs to small-scale farmers in developing countries are often very high.     

When $262 Billion Is Not Enough: Rethinking Reserve Accumulation in South Korea

In the wake of the 2008 global financial crisis, South Korea was hit hard by a sudden reversal in capital flows, a severe credit crunch and extreme exchange-rate instability. Despite having accumulated large holdings of reserves in a self-help strategy to hedge against such capital account shocks, the government was ultimately forced to abandon its defensive position and ask for external assistance. This article provides a critical examination of the broader forces behind Korea’s reserve accumulation and its problematic consequences. In addition to explaining reserve accumulation as a financially induced phenomenon, the economic costs of reserve hoarding are estimated and its efficacy evaluated in light of the crisis. It is shown that Korea’s reserve accumulation, undertaken as a costly form of self-insurance, was neither sufficient nor efficient in guarding against the volatility of global financial markets. To navigate the pitfalls of financial globalisation more successfully and cost-effectively, Korea needs to go beyond focusing exclusively on the asset side of its vulnerable international liquidity position by blindly hoarding more reserves at ever-escalating costs. It needs to also tackle the liabilities side of the ledger by reducing its heavy exposure to short-term, flight-prone foreign capital.     

The logic of interdisciplinary studies

In this article, I argue that emerging economies are systematically becoming more susceptible to both currency and banking crises after financial liberalisation (FL). Using data for 27 emerging economies from 1973 to 1998, univariate and multivariate analyses indicate that the likelihood of currency crises and banking crises increase after FL. In particular, liberalisation allows more liquidity to enter an emerging economy, which finds its way into productive and speculative projects. What is common to both types of crises is a significant increase in speculative financing, thereby increasing the chance for borrower default. Thus, the outflow of international capital becomes more likely. The chance of a crisis occurring in response to changes in short-term loans is greater after FL than before. Similarly, the chance of a currency crisis occurring following a currency overvaluation is larger after FL than before. In comparison, the likelihood of a banking crisis occurring in response to an overvalued currency remains the same. Finally, the results show that the chance of a currency crisis declines over time, while the chance of a banking crisis increases after FL.     

The Economy of China

Evidence suggests that following liberalisation reforms in India, public sector contributions to social development projects responsible for public goods allocation and the provision of services have receded in favour of an enlarged role for private sector initiatives, particularly through public-private partnerships. As part of a “good governance” agenda, the state is embracing such partnerships, modelled on information communication technology (ICT), within a wider development strategy (ICTD) to improve goods allocation and government's image as a trustworthy agent. This has also coincided with a changing political economy that has granted greater authority to more localised units of government over economic and developmental processes. This paper examines a case study of Urban e-Seva, an ICTD public-private partnership in Hyderabad, and couches it in a larger examination of contemporary social development in India. The paper concludes that government needs to be embedded in public-private partnerships, that it must continue to be at the forefront of allocation strategies in general, and that globalisation is strongly shaped by public institutions operating at the sub-national level. Furthermore, reforms are needed to correct for globalisation and liberalisation's inabilities to foster proper social development in India.     

Procedure over substance? CETA and the political economy of subsidiarity

ABSTRACT

Competing notions of subsidiarity can help to understand the intricacies of new types of trade deals as concluded between Canada and the European Union. From this perspective the Comprehensive Economic and Trade Agreement (CETA) balances two fundamentally different models of economic distribution and decision making authority either giving priority to private actors and their domestic communities or to political institutions aiming for a social embedding within global markets. Examining CETA as an unusual compromise in international regulatory cooperation, this article focuses on the settlement of highly contentious issues through complex procedural innovation. While this eventually made a final agreement between trading partners with two different polities possible, it could not settle widely diverging assessments about the long-term economic effects of the new deal. As a consequence, and to build bridges between distinct spaces of subsidiarity, the final agreement represents a flexible and open-ended approach to future trade relations.     

Why the CCM won't lose: the roots of single-party dominance in Tanzania

This paper provides an empirical investigation of the factors contributing to single-party dominance in Tanzania. Despite the fact that Tanzania has had a multi-party democracy since 1995, the party which governed during single-party rule, the Chama Cha Mapinduzi (CCM), has won the vast majority of seats in the National Assembly in the first four multi-party elections. In order to understand the CCM's grip on power, this article analyses the results of a survey conducted amongst subsistence farmers in Tanzania, which provides information on farmers’ livelihood conditions, access to media and political views, and hence provides insight into the preferences underlying voting behaviour. It discusses the dominant reasons for CCM support, as well as the characteristics of farmers who are more likely to support an opposition party. It concludes by discussing possible policy options for enhancing political competition in Tanzania.     

Populisms old and new: the Peruvian case⋆

President Fujimori is often seen as exemplary of the Latin American “neopopulist”. Having inherited a country in crisis, he managed to engineer profound changes in the economic sphere, legitimising his government through a direct rapport with the mass of the population that marginalised representative institutions. This article seeks to place this “neopopulism” in an historical context by focusing on the socio‐economic and political characteristics that have sustained a tradition of populism in Peru. It argues that “top‐down” styles of political mobilisation have long had a debilitating effect on the development of a representative party system, and that populist traits can be traced through regimes of widely differing ideological orientations.     

When trade unions succeed: Cases of blocked liberalisation in the common market

Despite the generally accepted weakness of trade unions at the European Union level, an analysis of two high profile cases – the Services Directive and the Port Directive – shows that trade unions are able to mobilise effectively at the European level and, within constellations of actors, crucially impact EU decision making. In contrast to common claims that a lack of access to EU institutions makes such groups powerless, it is argued here that the exclusion of large opposing societal groups from consultations is neither a quick nor a sure fire recipe for dismantling opposition. On the contrary, it politicises the process and may lead to opposing groups mobilising in more contentious ways.