Economy-wide Reforms Research Articles

Political Stability, Quality of Governance and Stock Market Performance in Nigeria: A VECM Approach

Governance structure is riddled with rent-seeking behaviour by public agents, public institutions are not only ineffective and retroactive but there is also no regards to rule of law, no accountability and above policy inconsistencies which affects the economy including vibrant development of the stock market. This paper examined the impact of political stability and quality of governance market performance in Nigeria from 1986-2022. The variables of this study are credit to the private sector, gross domestic product, inflation, and investment (domestic), and broad money supply. The other variables are political stability, quality of governance government expenditure, unemployment and value of stocks traded. The data for these variables were sourced from the Central Bank of Nigeria Statistical Bulletin and the National Bureau of Statistics of various years. This paper was anchored on the efficient market hypothesis and the impulse response function and variance decomposition was used. The result suggested that market capitalization was strongly endogenous in the short-run predicting itself about 93 percent and 86 to 85 percent in the long-run while a one standard deviation of shock from gross domestic product to market capitalization continuously decreased from periods 1 to 10. The conclusion from the analysis of the findings is that political stability and quality of governance impacted on stock market performance. This paper recommended economy-wide reforms tom stem the impact of negative shock on the economy and stock market.

Regulation of Digital Platforms as Part of Economy-Wide Reforms to Australia's Failed Privacy Laws (Australian Privacy Foundation Submission to the Australian Government on Implementation of the ACCC's Digital Platforms Inquiry—Final Report)

This is the final submission to the Australian Government by the Australian Privacy Foundation (APF) on the final report of the Australian Consumer & Competition Commission (ACCC) Report on regulation of digital platforms. APF welcomes the contribution made by the ACCC to improving the understanding of how the protection of privacy is central to addressing anti-competitive concerns and consumer protection in the data economy. APF's primary focus in this submission is on the consumer privacy aspects of the Inquiry, but with an eye to the issues of market power, and the trust that is fundamental for public administration in online environments. The APF strongly supports the ACCC's analysis and recommendations, across the board. ACCC’s analysis is consistent with a wide range of Australian and international official and private reports over the past three years, demonstrating that there is international recognition of a substantive problem that must be addressed. In particular, APF urges the Government’s adoption of the recommendations in Chapter 7 to achieve vital and substantial upgrades in Australia’s privacy protection, in order to address the major inroads into privacy because of the enormous growth in data surveillance by the private sector since 2000, the pressing need for a more powerful and much more effective Privacy Commissioner, and to achieve the privacy right of action previously recommended. For reasons detailed in this Submission (and summarised at its end), APF expresses its strong support for the adoption by the Australian Government of all of the following Recommendations: 16: Strengthen protections in the Privacy Act (a) Update ‘personal information’ definition (b) Strengthen notification requirements (c) Strengthen consent requirements and pro-consumer defaults (d) Enable the erasure of personal information (e) Introduce direct rights of action for individuals (f) Higher penalties for breach of the Privacy Act 17: Broader reform of Australian privacy law, having regard to: 1. Objectives 2. Scope 3. Higher standard of protections 4. Inferred information 5. De-identified information 6. Overseas data flows 7. Third-party certification 18: OAIC privacy code for digital platforms, including but not limited to: 1. Information requirements 2. Consent requirements 3. Opt-out controls 4. Children’s data 5. Information security 6. Retention period 7. Complaints-handling 19: Statutory tort for serious invasions of privacy 20: Prohibition against unfair contract terms 21: Prohibition against certain unfair trading practices

Land degradation and poverty

Land is one of the few productive assets owned by the rural poor, and almost all such households engage in some form of agriculture. Over 2000–2010 the rural poor on degrading agricultural land increased in low-income countries and in sub-Saharan Africa and South Asia. Although degradation threatens the livelihoods of the poor, this interaction is complex and conditioned by key economic, social and environmental factors. These factors also limit the poverty-reducing impacts of economic growth and economy-wide reforms. A comprehensive development strategy requires investments that improve the livelihoods of affected populations and regions, and facilitates outmigration in severely impacted areas. The interaction between land degradation and the livelihoods of the poor is complex and conditioned by important economic, social and environmental factors. These factors are also in part responsible for the limited success of economic growth policies to reduce poverty.

Sweetness and Power - Public Policies and the ‘Biofuels Frenzy’

Sweetness and Power - Public Policies and the ‘Biofuels Frenzy’

The New Development Economics: We Shall Experiment, but How Shall We Learn?

Development economics is split between macro-development economists—who focus on economic growth, international trade, and fiscal/macro policies—and micro-development economists—who study microfinance, education, health, and other social programs. Recently there has been substantial convergence in the policy mindset exhibited by micro evaluation enthusiasts, on the one hand, and growth diagnosticians, on the other. At the same time, the randomized evaluation revolution has led to an accentuation of the methodological divergence between the two camps. Overcoming the split requires changes on both sides. Macrodevelopment economists need to recognize the distinct advantages of the experimental approach and adopt the policy mindset of the randomized evaluation enthusiasts. Micro-development economists, for their part, have to recognize that the utility of randomized evaluations is restricted by the narrow and limited scope of their application. As the Chinese example illustrates, extending the experimental mindset to the domain of economy-wide reforms is not just possible, it has already been practiced with resounding success in the most important development experience of our generation.

Rural Unemployment: Incidence and Evidence

The effect of population growth and demographic transition on economic growth, poverty, inequality and on rural livelihoods has been widely discussed and debated (Birdsall and Sinding 2001). Within this debate, the focus has also been on how the age structure of a country’s population could affect its future rate of growth. A productive work force coupled with a larger working age population could offer the opportunity for a country to grow faster. This phenomenon is referred to as the demographic dividend. In the context of East Asia, it has been argued that one of the factors contributing to the annual increase in per capita income of over 6 percent over the period 1960-1995 was the favorable age structure of the population. These countries had a bulge in the working age population and created opportunities for the workforce. This enabled them to reap the demographic dividend (Bloom and Williamson 1998). Against the backdrop of these discussions, in this paper we examine the employment and unemployment scenario over the period 1993-2004 in the context of India. This is also the period when the Indian government undertook a slew of economy wide reforms. India is a relatively young country and it is often conjectured that it might be ideally poised to reap the demographic dividend. Over 37 percent of its population is in the age group 0-14 years, 17.7 percent is in the age group 15-24 years and 14.8 percent is in the age group 25-34 years. It is projected that the proportion of population in the working age group of 15-64 years would increase from 62.9 per cent in 2006 to 68.4 percent by 2026 (Economic Survey 2006-2007, p. 215). There has been feminization of the workforce over the years. Except for the low poverty regions, in all other regions the workforce participation rate for women have increased and that of men have declined in 2004-2005 compared to 1993-1994. Over the period employment situation worsened in the low poverty region. Though there was some tendency of diversification of workforce away from agricultural sector, the unemployment rate almost doubled for both men and women. Thus even though people are moving out of agricultural sector all of them are not getting absorbed in the non agricultural sector.

Market Design: The Policy Uses of Theory

The use of modern microeconomics in policy is illustrated by the markets for spectrum, electricity, greenhouse-gas reductions, defense procurement, and Treasury bills. Further examples are antitrust divestiture rules, market-based redistribution, fishery conservation, and privatization. The limits of the use of theory are also discussed, by reference to China's economy-wide reforms. Lessons on the policy use of theory are drawn.

Market Design: The Policy Uses of Theory

The use of modern microeconomics in policy is illustrated by the markets for spectrum, electricity, greenhouse-gas reductions, defense procurement, and Treasury bills. Further examples are antitrust divestiture rules, market-based redistribution, fishery conservation, and privatization. The limits of the use of theory are also discussed, by reference to China's economy-wide reforms. Lessons on the policy use of theory are drawn.

Economics Reform and Wage Differentials in Latin America

This paper develops and applies a new approach to the estimation of the impact of economy-wide reforms on wage differentials, using a new high-quality data set on wage differentials by schooling level for 18 Latin American countries for the period 1980-1998. The results indicate that reform overall has had a short-run disequalizing effect of expanding wage differentials, although this effect tends to fade over time. This disequalizing effect is due to the strong impact of domestic financial market reform, capital account liberalization and tax reform. On the other hand, privatization contributed to narrowing wage differentials, and trade openness had no effect on wage differentials. Technological progress, rather than trade flows, appears to be a channel through which reforms are affecting inequality. The paper also explores the effects of reforms on wage levels; tentative results suggest that reforms have had a positive effect on real average wages, but a negative effect on the wages of less-schooled workers. Keywords: reform, inequality, wages, trade, distribution

Economic Reform and Wage Differentials in Latin America

This paper develops and applies a new approach to the estimation of the impact of economy-wide reforms on wage differentials using a new high-quality data set on wage differentials by schooling level for 18 Latin American countries for the period 1980-1998. The results indicate that reform overall has had a short-run disequalizing effect of expanding wage differentials, although this effect tends to fade away over time. This disequalizing effect is due to the strong impact of domestic financial market reform, capital account liberalization and tax reform. On the other hand, privatization contributed to narrowing wage differentials and trade openness had no effect on wage differentials. Technological progress, rather than trade flows, appears to be a channel through which reforms are affecting inequality. The paper also explores the effects of reforms on wage levels; tentative results suggest that reforms have had a positive effect on real average wages, but a negative effect on the wages of less-schooled workers.

Sustainable development and climate change: applying the sustainomics transdisciplinary meta-framework

This paper analyses key issues linking sustainable development and climate change. It describes sustainomics as transdisciplinary, integrative, balanced, heuristic and practical meta-framework for making development more sustainable. The environmental, social and economic criteria for sustainability play an important role in the sustainomics framework. Environmental sustainability focuses on the overall performance or health of ecological systems. Social sustainability seeks to reduce the vulnerability and maintain the health of social and cultural systems, and their ability to withstand shocks. Economic sustainability aims to maximize the flow of income that could be generated while at least maintaining the stock of assets (or capital) which yields these beneficial outputs. The paper seeks to integrate these concepts through two broad approaches involving optimality and durability, and applies these ideas to climate change analysis. This framework helps decision makers focus on the structure of development, rather than just the magnitude of economic growth (conventionally measured). Sustainomics helps to incorporate ecological and social concerns into the decision making framework of human society. Operationally, it plays this bridging role by helping to map the results of environmental and social impact assessments (EIA and SIA) onto the framework of conventional economic analysis of projects. Sustainable development policies must take into account, the powerful economy-wide reforms in common use - including both sectoral and macroeconomic adjustment policies which have widespread effects throughout the economy. The highest priority needs to be given to finding win-win which promote all three elements of sustainable development (economic, social and environmental). Measures which advance one objective at the expense of another need to be analysed within a framework that facilitates trade-offs. Economy-wide policies that successfully induce growth, could also lead to environmental and social harm, unless the macro-reforms are complemented by additional environmental and social measures. The sustainomics approach helps to identify and analyse economic-environmental-social interactions, and formulate effective sustainable development policies, by linking and articulating these activities explicitly through the AIM framework.

Rigorous Speculation: The Collapse and Revival of the North Korean Economy

In this paper, we use cross-entropy estimation techniques to construct the underlying data base for a computable general equilibrium model (CGE) of the North Korean economy, starting from incomplete data, ridden with gross measurement errors. The cross-entropy estimation approach is powerful and flexible, allowing us to make full use of what information we have in whatever form. CGE modeling forces internal consistency. The end product is a model that incorporates fragmentary information in a rigorous way and allows us to examine the implications of a number of alternative scenarios including rehabilitation of flood-affected lands, liberalization of the international trade regime, and military demobilization. North Korea has been experiencing a famine. Its economy is characterized by systemic distortions and comparative disadvantage in the production of grains. As a consequence, the potential payoffs to economy-wide reforms, even defined narrowly in terms of domestic food availability, dwarf more targeted attempts to raise agricultural productivity. To many, this finding—that a famine might be better addressed by the export of manufactures than the recovery of flood-damaged lands—is a striking and counterintuitive result. Moreover, we find that if reforms were to be undertaken, the country could generate a significant additional “peace dividend” by partially demobilizing its enormous military.

Links between economic liberalization and rural resource degradation in the developing regions

This paper examines evidence of the effects of economic liberalization and globalization on rural resource degradation in developing countries. The principal resource effects of concern are processes of land use change leading to forestland conversion, degradation and deforestation. The main trends in globalization of interest are trade liberalization and economy-wide reforms in developing countries that have 'opened up' the agroindustrial sectors, thus increasing their export-orientation. Such reforms have clearly spurred agroindustrialization, rural development and economic growth, but there is also concern that there may be direct and indirect impacts on rural resource degradation. The direct impacts may occur as increased agricultural activity leads to conversion of forests and increased land degradation from 'unsustainable' production methods. However, there may also be indirect effects if agroindustrial development displaces landless, near-landless and rural poor generally, who then migrate to marginal agricultural lands and forest frontier regions. This paper explores these direct and indirect effects of globalization and agroindustrialization on rural resource degradation both generally, plus through examining case study evidence. The paper focuses in particular on the examples of structural adjustment, trade liberalization and agricultural development in Ghana, and maize sector liberalization in Mexico under North American Free Trade Agreement (NAFTA).

Is environmental degradation an inevitable consequence of economic growth: tunneling through the environmental Kuznets curve

Economywide reforms often contribute simultaneously to economic, social and environmental gains. However, Unintended adverse side effects occur in many cases—when such growth inducing reforms are undertaken while neglecting other policy, market or institutional imperfections. The remedy does not generally require reversal of the original economywide reforms, but rather the ex-ante implementation of additional complementary measures that remove such imperfections. The EKC approach seeks to relate the state of the environment to the stage of development. Developing countries could learn from the experiences of industrialized nations, and restructure growth and development to `tunnel' through any potential EKC—thereby avoiding going through the same stages of growth that involve relatively high (and even irreversible) levels of environmental harm. An environmentally adjusted measure of national income could significantly change the shape of the development-environment relationship. Recommendations for decision-making include: actively seeking `win–win' policies that simultaneously yield both economic and environmental gains; pre-empting environmental harm through ex-ante remedial measures; and fine-tuning reform policies to avoid severe environmental damage. The adoption of more sustainable policies will facilitate the attainment of higher levels of development at a lower environmental cost.