Changes In Economic Policy Research Articles

The Nature, Estimation, and Management of Political Risk

The Nature, Estimation, and Management of Political Risk, by Janice Monti-Belkaoui and Ahmed Riahi-Belkaoui (Westport, Conn.: Quorum Books, 1998). Reviewer: David L. Weimer, Professor of Political Science and Public Affairs, University of Wisconsin-Madison. Corporate strategy must increasingly be global in perspective. A global capital market, falling information costs, and increasingly free trade in goods demand an international perspective. At the same time, transportation costs for natural resources and final products, and especially restrictions on international labor mobility, create a variety of locational opportunities for multinational firms. With these opportunities, however, come risks associated with the political systems of host countries, including changes in institutions, such as property rights and the political regimes themselves, and changes in economic policies, such as those governing exchange rates, taxes, labor practices, prices, and imports. The volume by Janice Monti-Belkaoui and Ahmed Riahi-Belkaoui attempts to identify the sources of these political risks as well as provide frameworks for estimating and managing them. The authors intend their book to be of use to the entire business community, ranging from executives to researchers. Although it sets out the major issues in a way that one could imagine being of some value to especially patient executives, and it includes some original empirical research of potential interest to researchers, it seems most appropriate as a source of general background for corporate staffs that have to confront political risk in making business decisions. Its strength in this regard is a recitation of the various classifications, analytical elements, and prescriptions found in the scholarly literature. Indeed, the majority of its lists, tables, and figures are reprinted directly from these original sources. Thus, someone new to the topic would find clear summaries of the essential points of much of the relevant academic work. The authors leave at least one very important gap of particular relevance to those who might actually be faced with the task of predicting political events in a particular circumstance-the expected utility approach pioneered by Bruce Bueno de Mesquita and colleagues.1 The expected utility approach uses information provided by country specialists about the relative strengths and commonalities of policy positions of various actors involved in political decisions, broadly defined, to make predictions of outcomes based on the assumption that the actors pursue their self-interests. In a recent review, James Lee Ray and Bruce Russett provided the following assessment: "This 'expected utility' forecasting model has now been tried and tested extensively. …

What's New about the New Economy? Sources of Growth in the Managed and Entrepreneurial Economies

textabstractThe purpose of this paper is to document the fundamental shift that is taking place in OECD countries. This shift is from the managed economy to the entrepreneurial economy. While politicians and policy makers have made a plea for guidance in the era of entrepreneurship, scholars have been slow to respond. This paper attempts to make a first step identifying and articulating these differences. We do this by contrasting the most fundamental elements of the newly emerging entrepreneurial economy with those of the managed economy. We identify fourteen trade-offs confronting these two polar worlds. The common thread throughout these trade-offs is the increased role of new and small enterprises in the entrepreneurial economy. A particular emphasis is placed on changes in economic policy demanded by the entrepreneurial economy vis-?-vis the managed economy.

Economic crisis, small-scale agriculture, and forest cover change in southern Cameroon

The rate of forest cover loss in the humid tropics of Cameroon is one of the highest in Central Africa. The aim of the large-scale, two-year research project described here was to understand the effect of the country's economic crisis and policy change on small-scale agricultural systems and land-clearing practices. Hypotheses were tested through surveys of more than 5000 households in 125 villages, and through time-series remote sensing analysis at two sites. The principal findings are that: (1) the rate of deforestation increased significantly in the decade after the 1986 onset of the crisis, as compared to the decade prior to the crisis; (2) the main proximate causes of this change were sudden rural population growth and a shift from production of cocoa and coffee to plantain and other food crops; and (3) the main underlying causes were macroeconomic shocks and structural adjustment policies that led to rural population growth and farming system changes. The implication of this study is that it is necessary to understand and anticipate the undesirable consequences of macroeconomic shocks and adjustment policies for forest cover. Such policies, even though they are often not formulated with natural resource consequences in mind, are often of greater relevance to the fate of forests than forest policy.

Group points to underlying causes of ecosystem, blodiversity loss

Freshwater diversion, urban water pollution,and overfishing are leading to the decline of some of Pakistan's coastal mangrove ecosystems. In Mexico's Calakmul Biosphere Reserve, near the border of Guatemala, population growth and poverty are pushing forest clearing. Meanwhile, in Chilika Lake in southeast India, changes in economic policies and global markets have led to changes in commercial aquaculture that is partly responsible for the decline of local fisheries and the bird population.These are the conclusions of some of the 10 case studies contained in a World Wildlife Fund (WWF) report, issued on July 6, that examines forests, wetlands, steppes, mangroves, and other habitats to determine the underlying causes for biodiversity loss.

Power System Control Automation in Developing Economies - The Nigerian Experience

The electricity industry of both developed and developing economies are undergoing rapid and profound changes and restructuring. It has been an industrial sector that has for so long being the preserve of government monopoly institutions. The liberalization and privatization initiative planned by the Nigerian government indicate a major change in economic policy, but this is not unique to Nigeria. Global trends show a movement towards deregulation and the introduction of competition in the electricity industry, as a means of providing lower energy prices to end users. Further compounding this is the emergence of distributed generation schemes, as a major factor in power system planning and operation mix. This paper addresses the electricity industry in Nigeria, the activities and experiences acquired in power system operation and control, and the challenges arising with regard to complete automation of the process.

Culture, politics and ergonomics

The beginning of a new century is an appropriate moment to consider the role of ergonomics in relation to the problems facing society. To help solve these serious global problems, ergonomics needs to be open to new disciplines, particularly those in the social sciences. Also, it may be difficult to generalize research on human-centred sociotechnical design without taking into account national characteristics, economics and political constraints. Currently there is more interest than ever in what ergonomics has to offer, but to deliver its promise requires a much broader approach than is usual. By adopting such new approaches one may help solve both the problems of the overdeveloped post-industrial societies and those of the societies of the Third World, where a new approach to work and economics may provide an improved chance for development given the recent changes in global economic policy.

An analysis of short‐run response of export and domestic agriculture in sub‐Saharan Africa⋆

AbstractShort‐run responses of export and domestic shares of total agricultural output to changes in stocks of domestic savings (SAV), development assistance (ODA), private foreign commercial capital (PFX) and other variables is investigated. A profit function approach is used. Time series data for 19 sub‐Saharan African countries are pooled into three panels using similarities in changes in economic policy regime.Statistical evidence suggests that for the panel of countries that were undertaking liberalized economic reforms, the slope coefficients of some of the variables in the models have changed significantly between 1970–1980 and 1981–1993. For the 1981–1993 period, the impacts of ODA, PFX and SAV on export and domestic shares were different for this panel. The effect of increases in agricultural labor was different across the three panels. There is also evidence that productivity growth in the export agriculture sub‐sector is negative in all the groups.It is recommended that to halt the decline in export share of agricultural output in the group of countries that have undertaken substantial improvements in economic policy environment, efforts must be made to reduce the negative impact of domestic savings and agricultural labor, while at the same time working to reduce the bias of development assistance against food security.

Paradigms, Economic Ideas and Institutions in Economic Policy Change: The Case of New Zealand

After 1984 New Zealand abandoned an economic policy paradigm based on a broadly social democratic Keynesianism and rapidly and comprehensively liberalised its economy. Drawing on interviews with eighty-seven members of institutional elites thought potentially influential on economic policy and individuals nominated as influential, this paper shows economic policy change was highly derivative of neoclassical and related schools of economics. Key ‘policy entrepreneurs’, sometimes educated in graduate programmes in American economics departments in the late 1970s, were important in convincing their respective institutions and other policy makers to support the new policy directions. Economic theories, sometimes of a controversial nature, were often adopted quite self-consciously and their dominance in decision making and their relative lack of modification in the policy process reflected the simplicity of institutional and policy making structures and the paucity of intellectual debate in New Zealand. Once established, the broadly neoclassical paradigm became highly dominant, extending its reach from macro- and micro-economic policy to gradually taking over public sector management and ownership issues, the labour market and social policy issues such as health and welfare policy.

What Difference a Crisis? Continuity and Change in South Korea's Foreign Economic Policy

This paper examines pre-crisis and post-crisis developments in Korea's foreign economic policy (FEP). In undertaking this exercise, it constructs a framework of FEP analysis within which these developments are studied. Korea's own 1997-8 financial crisis heightened pressures upon the country to introduce far-reaching policy reforms and structural economic adjustment. This pressure was partly formalized by the terms and conditions imposed by the International Monetary Fund's (IMF) 'bailout' programme. These and other crisis-related pressures were expected to make a profound impact on the structure, conduct and process of Korean FEP, which up to the crisis had been primarily orientated by neo-mercantilist principles. However, this paper argues that various sources of resistance pertaining to certain structural economic and socio-cultural factors will make these principles more resilient than commonly thought. Furthermore, the relative significance of continuity overchange in Korea's FEP is contended generally. It isalso argued that wider lessons can be drawn here, particularly relating to the resilience of the developmental state.

Strategic Orientation of Russian Managers

Summary This paper explores the strategic orientation of managers in the setting of the Russian transition economy. We propose that change in economic policies coupled with access to capital and knowledge gained through partnerships with foreign firms will affect the development and use of discernible strategic orientation. We report survey results from a group of 41 top managers in St. Petersburg, Russia regarding their strategic orientation and how that orientation relates to market needs. Cluster analysis procedures confirm distinguishable strategic types may be emerging, but that even where top managers are developing distinctive orientations, they are not yet focused on identifying and responding to customer needs, an antecedent of market orientation.

Anatolian Peasants in the Great Depression 1929–1933

The effects of the Great Depression of 1929 on peasants in Turkey is an area of study that has remained neglected, despite the fact that peasants then constituted 75 percent of the population. The reason why the condition of peasants has not attracted much attention is the dramatic change between the economic policies of the 1920s and those of the 1930s. The immediate consequence of the stock-market crash and the sudden drop in prices was the shrinkage of international trade. Governments dealt with the depression by implementing quotas on imports, and liberal economic policies were no longer considered successful. Protectionism became the most popular policy for the management of economies in difficulty. The change in economic policies during this period constituted a break with the past and therefore has been the principal focus of studies on the Great Depression.

Creating Value Under Uncertainty

The business environment in Nigeria has been unstable and chaotic for many years. Inflation reached 100% in 1995 and frequent unpredictable changes in economic policies have destabilized the economic environment. Yet, some business enterprises have sustained a tradition of superior competitive performance, earning good returns on investment even as many environment wearied multinationals divest. The aim of this paper is to examine the actions taken by two successful companies to create value in Nigeria's uncertain business environment. The paper begins with a short summary of Nigeria's economic environment and its impact on manufacturing performance. It then reviews the principles of Economic Value Added (EVA) as a measure of corporate performance. The second part of the paper analyses the performance of two selected Nigerian companies-Nigerian Breweries Pic and Dunlop Nigeria Pic-and describes the strategies these companies used to achieve high and sustained corporate performance in Nigeria's economic environment. The paper ends with a discussion on the suitability of EVA-based performance measures in uncertain business environments.

Neoliberalism, Corporatism, and Small Business Political Activism in Contemporary Mexico

AbstractIn the 1980s and 1990s, neoliberalism and changing policy-making regimes presented social actors throughout Latin America with new challenges and opportunities. This article analyzes the political strategies developed by two organizations representing small manufacturers in Mexico for responding to these sweeping economic and political changes, emphasizing the organizational bases of political activism. Strategies are assessed according to organizations' public expression of support for or opposition to economic policies, the extent to which organizations work within existing arrangements for interest representation, and the political alliances made by small business organizations and their leaders. One strategy in Mexico entailed acquiescing to radical economic policy changes, deploying significant resources to preserve a set of corporatist institutions that regulated business association, and supporting the government incumbents. Another strategy entailed voicing persistent public criticism of neoliberalism, spearheading a national campaign against business corporatism, and supporting the Center-Left opposition. Analysis of these strategies demonstrates the important effects of institutional legacies during periods of regime change. The perseverance of corporatist institutions can make it difficult for weak actors to shed old modes of activism, notwithstanding a changed array of material and political incentives.

Interests, Institutions, and Ideology in Securing Policy Change: The Republican Conversion to Trade Liberalization After Smoot‐Hawley

This paper investigates how changes in both institutional incentives and economic interests are important for securing durable changes in economic policy. We study how bipartisan support developed to sustain the Reciprocal Trade Agreements Act (RTAA) of 1934, which fundamentally transformed U.S. trade policy. The durability of this change was achieved only when the Republicans, long‐time supporters of high tariffs who originally vowed to repeal the RTAA, began to support this Democratic initiative in the 1940s. We find little evidence of an ideological shift among Republicans, but rather an increased sensitivity to export interests for which the institutional structure of the RTAA itself may have been responsible. We conclude that the combination of greater export opportunities and the institutional change that strengthened exporters' lobbying position was required to bring about Republican support for trade liberalization.

North Korean External Economic Policies and Inter-Korean Economic Cooperation

This study focuses on an analysis of North Korea's external economic policy changes, and the present status and distinctive features of inter-Korean economic cooperation. North Korea is in a dilemma situation between the necessity of renewing its economic development strategy and the risk of weakening the basic principles of its system by an economic opening policy. In any case, North Korea is least expected to launch into an all-out external economic opening, but it will rather adopt, if at all, a policy of a “system-defending opening” than a “reform-oriented opening.” As a result, inter-Korean economic exchanges and cooperation also will be developed within the category of such a limited opening.

Interests, Institutions, and Ideology in Securing Policy Change: The Republican Conversion to Trade Liberalization after Smoot-Hawley

This paper investigates how changes in both institutional incentives and economic interests are important for securing durable changes in economic policy. We study how bipartisan support developed to sustain the Reciprocal Trade Agreements Act (RTAA) of 1934, which fundamentally transformed U.S. trade policy. The durability of this change was achieved only when the Republicans, long-time supporters of high tariffs who originally vowed to repeal the RTAA, began to support this Democratic initiative in the 1940s. We find little evidence of an ideological shift among Republicans, but rather an increased sensitivity to export interests for which the institutional structure of the RTAA itself may have been responsible. We conclude that the combination of greater export opportunities and the institutional change which strengthened exporters' lobbying position was required to bring about Republican support for trade liberalization.

The Impact of Economic Reform on Industrial Labour Relations in China and Vietnam

Both China and Vietnam are undergoing a social experiment as they diverge from the path of their Soviet compatriots and attempt transition to a 'socialist market mechanism'. The economic reform in both countries aims towards the so-called 'third way' between the failed command economies and the capitalist alternative. However, after over a decade of reform, it is necessary to investigate whether China and Vietnam are locked into the cycle of reform and retreat which was characteristic of East European societies before 1989 or whether indeed the two countries are developing a stable system consonant with the notion of a 'socialist market economy'. This article tackles these issues by examining and comparing the changing labour relations systems in China and Vietnam in the wake of the changes in economic policies and enterprise regulation towards new forms of labour contracts, wages and welfare systems, worker representation and trade unionism, and legal frameworks. So far there have been significant changes in society and the two countries are still experimenting to find their way towards the 'socialist market economy' by following the philosophy of 'crossing the river by feeling the stones'. The new industrial relations lie at the heart of the reform and their successful management is the key factor determining the outcome of the further transition.

The nature, estimation, and management of political risk

The Nature, Estimation, and Management of Political Risk, by Janice Monti-Belkaoui and Ahmed Riahi-Belkaoui (Westport, Conn.: Quorum Books, 1998). Reviewer: David L. Weimer, Professor of Political Science and Public Affairs, University of Wisconsin-Madison. Corporate strategy must increasingly be global in perspective. A global capital market, falling information costs, and increasingly free trade in goods demand an international perspective. At the same time, transportation costs for natural resources and final products, and especially restrictions on international labor mobility, create a variety of locational opportunities for multinational firms. With these opportunities, however, come risks associated with the political systems of host countries, including changes in institutions, such as property rights and the political regimes themselves, and changes in economic policies, such as those governing exchange rates, taxes, labor practices, prices, and imports. The volume by Janice Monti-Belkaoui and Ahmed Riahi-Belkaoui attempts to identify the sources of these political risks as well as provide frameworks for estimating and managing them. The authors intend their book to be of use to the entire business community, ranging from executives to researchers. Although it sets out the major issues in a way that one could imagine being of some value to especially patient executives, and it includes some original empirical research of potential interest to researchers, it seems most appropriate as a source of general background for corporate staffs that have to confront political risk in making business decisions. Its strength in this regard is a recitation of the various classifications, analytical elements, and prescriptions found in the scholarly literature. Indeed, the majority of its lists, tables, and figures are reprinted directly from these original sources. Thus, someone new to the topic would find clear summaries of the essential points of much of the relevant academic work. The authors leave at least one very important gap of particular relevance to those who might actually be faced with the task of predicting political events in a particular circumstance-the expected utility approach pioneered by Bruce Bueno de Mesquita and colleagues.1 The expected utility approach uses information provided by country specialists about the relative strengths and commonalities of policy positions of various actors involved in political decisions, broadly defined, to make predictions of outcomes based on the assumption that the actors pursue their self-interests. In a recent review, James Lee Ray and Bruce Russett provided the following assessment: This 'expected utility' forecasting model has now been tried and tested extensively. …

Child Poverty and Deprivation in the Industrialized Countries, 1945-1995.

The authors in this volume utilize a common analytical framework to evaluate how economic, family structure, and public policy changes affected the well-being of children in the industrialized countries in the West and the East from the end of the Second World War to the mid-1990s. Throughout the industrialized world, the living standards and social well-being of children improved remarkably over these five decades. But the quarter-century 'golden age' that followed the Second World War gave way to a period of stagnation after the early 1970s. Many of the negative developments of the past two decades could not have been easily prevented because of the profound structural changes that have affected all industrialized economies and the profound political changes that have affected the former Soviet Bloc. Nonetheless, adverse or neglectful social policies share some of the blame for the recent unfavourable changes in child well-being. The evidence presented suggests that, given current economic prospects and family structures, further weakening of social policies targeted at children could erode much of the progress of the past fifty years.

The Defining Moment: A Review Essay

This article reviews The Defining Moment, edited by Michael D. Bordo, Claudia Goldin, and Eugene N. White. The volume studies how the Great Depression changed government policies, including changes in monetary policy, fiscal policy, banking policy, agricultural policy, social insurance, and international economic policy. I argue that a theory of policy evolution is required to answer how the Great Depression affected these policies. In the absence of this theory, the contributors provide insight into the question by showing how policies changed sharply in the 1930s with little or no historical precedent or by showing how policies were tied to political or other considerations unique to the period. While this volume does not always provide answers to the questions posed, it does raise a fundamental issue in the analysis of government policy: Why during some crisis periods are bad policies adopted, whereas during other periods they are not ?