Business-friendly Policies Research Articles

The International Economic Crisis and the 2010 Presidential Elections in Ukraine

The international financial crisis of 2007–9 had a significant impact upon the context, agenda and outcome of the 2010 Ukrainian presidential elections. Among the main reasons for Viktor Yanukovych's success in winning the election were his business-friendly policies, his advocacy of stability and his pro-Russian orientation. His platform chimed with the sentiments of large numbers of voters who were taking a defensive posture in the face of a year-long recession. Yuliya Tymoshenko was treated – and punished – because as the incumbent prime minister she failed to utilize the resources available to her government, including a large IMF loan, to bring the recession to a halt and stimulate a recovery. Viktor Yushchenko was rejected by the electorate because he was increasingly regarded as a president incapable of co-operative relations either with his own government or with the Russian government. These capacities in a president were seen by the electorate as indispensable for tackling the crisis.

Globalization, Party Positions, and the Median Voter

The authors argue that the effects of economic globalization on social democratic parties in Western Europe are conditional on the position of the median voter. If the median is far enough to the right, such parties will adopt business-friendly policies because they are required to win office. Only when the median is relatively far to the left will globalization constrain social democratic parties, forcing them to adopt policies further to the right in order to retain credibility. It is on this basis the authors argue that empirical studies are misspecified unless they include an interaction between measures of globalization and the position of the median. In addition to presenting formal theoretical arguments, the article reports empirical findings from fifteen countries in the period from 1973 to 2002 that support the conclusion that the effects of globalization are indeed contingent on the median. The authors find that the effects of globalization are significant for social democratic parties only in circumstances in which the median is relatively far to the left.

Do governing institutions affect foreign direct investment inflows? New evidence from emerging economies

In recent years, Western governments and international financial institutions have urged developing countries to undertake a range of institutional reforms to attract greater investment flows and hasten socioeconomic development. But do countries with strong governing institutions and business-friendly policies truly attract proportionally more foreign direct investment (FDI) than those with weaker institutions and a less favourable policy mix? This study seeks to answer this question by examining data on FDI inflows for a sample of 64 emerging economies over time. The article begins by reviewing the literature on the determinants of FDI and recent empirical studies probing the connection between governing institutions and FDI flows to emerging economies. Based on this literature, several hypotheses are developed and tested with a new measure of institutional quality. The article concludes by interpreting the results of the statistical analyses, considering their policy implications, and offering directions for future research.

The Manufacturing Sector in the South: Status and Recent Trends

Manufacturing has been in decline throughout most of the U.S., following a pattern seen in most industrialized economies. The southeastern states were once an exception to this trajectory due to factors such as lower costs and business-friendly policies; many domestic and international firms continue to establish operations across the region. At the same time, most states in the South are experiencing an overall decrease in manufacturing employment as production is increasingly relocated offshore. This paper provides a brief examination of the manufacturing sector across the South, including employment and production trends. Many southern states still retain aboveaverage concentrations of manufacturing. Overall employment in this sector is decreasing, yet value-added from manufacturing shows signs of increase and perhaps suggests an industrial transition, especially in many key subsectors. These potential shifts raise questions about sustainable regional economic development.