Favorable Terms Of Trade Research Articles

A Practical Narrative of Tariff Protection in Pakistan

This research work quantifies the changes in effective rates of protection in Pakistan during the last decade of 2011–20. Based on its results, it supports a more flexible trade policy in Pakistan. Further, it identifies the sectors with strong and weak long-run productive capacities and highlights the role of trade barriers in these industries. A key concern is the decreasing productive capacity of textile and leather sectors where the textile industry has the largest share in the total exports from Pakistan. Hence, there is a dire need to invest more in research and development activities in such industries. Finally, the country needs to increase its range of export items and export destinations with more favourable terms of trade, which can be achieved by reducing its historically high import tariff rates. Effective Rate of Protection, Input-Output Table, Industry, Trade, Pakistan JEL Classification: C67, D57, F6, L5, R15

Does Inequality Matter for Poverty Reduction? Evidence from Pakistan’s Poverty Trends

The paper explores the linkages between poverty, growth and inequality in the context of Pakistan. Time series macro data are used for the period 1979 to 2002. Consistent poverty and inequality measures are interpolated to facilitate the estimation of poverty elasticity with respect to growth and inequality in a multivariate regression framework. The paper also attempts to find out macroeconomic and structural correlates of inequality. The empirical findings—high poverty elasticity with respect to inequality measures—confirm the importance of inequality in poverty reducing effort. Inflation, sectoral wage gap, and terms of trade in favour of manufacturing exacerbate inequality, while progressive taxation, investment and development expenditure on social services play a significant role in reducing inequality. The results also indicate a positive correlation between per capita GDP and income inequality.

Botswana

As of end-2021, Botswana had recovered to its pre-crisis output level thanks to a strong rebound in demand for diamonds, a successful vaccination campaign, and policy support. Fiscal and current account deficits both narrowed sharply, and foreign reserves stabilized but buffers are yet to be fully rebuilt. Inflation exceeded the central bank’s medium-term objective range, while unemployment rose close to record highs. Growth in 2022 and beyond is expected to be around potential, while fiscal and external positions are projected to strengthen with more favorable terms of trade and strong fiscal consolidation. Risks to the outlook are associated with the war in Ukraine, the pandemic, and the implementation of fiscal consolidation and economic diversification plans.

Trade and Trees: How Trade Agreements Can Motivate Conservation Instead of Depletion

Free trade can often lead to resource depletion, such as deforestation in the tropics. This paper first presents a dynamic model whereby the South (S) depletes to export the extracted units (timber) or the produce (beef) from land available after depletion. Because of the damages, the North benefits from trade liberalization only if the remaining stock is, in any case, diminished. For that reason, S speeds up exploitation. The negative results are reversed if the parties can negotiate a contingent trade agreement, whereby the allocation of gains from trade, and thus the location on the Pareto frontier, is sensitive to the size of the remaining stock. In equilibrium, S conserves to maintain its favorable terms of trade, S conserves more than in autarky, and more when the gains from trade are large. The parties cannot commit to future policies, but they obtain the same outcome as if they could.

Britain, European Economic Community Enlargement, and ‘Decolonisation’ in Hong Kong, 1967–1973

ABSTRACTPoliticians and businesspeople in Hong Kong paid close attention to British efforts to join the European Economic Community (EEC). The British colony was exempted from most tariffs in Britain, an arrangement that could not survive EEC enlargement. EEC members were unwilling to extend to Hong Kong, a significant exporter of manufactured goods, the same trade preferences offered to other dependent territories. Instead, the unique provision the EEC made for the colony was limited inclusion into their Generalised System of Preferences scheme, which granted tariff concessions to developing countries. Historians of Hong Kong have shown how the colony experienced British imperial withdrawal in a number of ways, despite remaining under British rule until 1997. This article demonstrates that an important element is missing from this account: how global economic shifts led to an erosion of imperial ties. EEC enlargement from 1973 entailed the end of Hong Kong's privileged access to the British market, but for the colony, the importance of imperial economic links had already faded. At the same time, an assessment of Hong Kong's capacity to pursue favourable terms of trade in global markets independently from Britain offers a more tentative conclusion of the extent of the colony's autonomy.

Making rapid strides: sources and drivers of agricultural growth in Uttar Pradesh, India

Agricultural sector continues to play a crucial role for economic development, especially in low-income countries like India where the sector is large both in terms of aggregate income and total labour force. This paper aims to identify the key sources and drivers of agriculture growth in Uttar Pradesh, the largest food producing state of India. The study is conducted as a quantitative time-series analysis for the period 1990–1991 to 2014–2015 using simple least square method (p ≤ 05). Although, the volatility of agriculture represented in terms of coefficient of variation is low in Uttar Pradesh in comparison to the national average, yet the growth of gross domestic product from agriculture (GDPA) has been low. The agricultural economy of Uttar Pradesh continues to be dominated by cereals with around 60% of its gross cropped area under cereal crops. The results of regression analysis indicate that better rainfall, irrigation facilities, favourable terms of trade, road development and fertiliser use played an important role to improve agriculture growth in the state. The paper offers a perspective for policy formulation which may be of interest to development scholars and policy-makers.

Making rapid strides: sources and drivers of agricultural growth in Uttar Pradesh, India

Agricultural sector continues to play a crucial role for economic development, especially in low-income countries like India where the sector is large both in terms of aggregate income and total labour force. This paper aims to identify the key sources and drivers of agriculture growth in Uttar Pradesh, the largest food producing state of India. The study is conducted as a quantitative time-series analysis for the period 1990–1991 to 2014–2015 using simple least square method (p ≤ 05). Although, the volatility of agriculture represented in terms of coefficient of variation is low in Uttar Pradesh in comparison to the national average, yet the growth of gross domestic product from agriculture (GDPA) has been low. The agricultural economy of Uttar Pradesh continues to be dominated by cereals with around 60% of its gross cropped area under cereal crops. The results of regression analysis indicate that better rainfall, irrigation facilities, favourable terms of trade, road development and fertiliser use played an important role to improve agriculture growth in the state. The paper offers a perspective for policy formulation which may be of interest to development scholars and policy-makers.

Restricting mutualistic partners to enforce trade reliance.

Mutualisms are cooperative interactions between members of different species, often involving the trade of resources. Here, we suggest that otherwise-cooperative mutualists might be able to gain a benefit from actively restricting their partners' ability to obtain resources directly, hampering the ability of the restricted partner to survive and/or reproduce without the help of the restricting mutualist. We show that (i) restriction can be favoured when it makes the resources of the restricting individual more valuable to their partner, and thus allows them to receive more favourable terms of trade; (ii) restriction maintains cooperation in conditions where cooperative behaviour would otherwise collapse; and (iii) restriction can lead to either an increase or decrease in a restricted individual's fitness. We discuss the applicability of this scenario to mutualisms such as those between plants and mycorrhizal fungi. These results identify a novel conflict in mutualisms as well as several public goods dilemmas, but also demonstrate how conflict can help maintain cooperation.

PROSPECTS FOR THE CUSTOMS UNION IN TERMS OF MODERN THEORIES OF REGIONAL INTEGRATION

Leading the trend of world development is globalization, which covers all areas of public life, including economic, and national economies poses more challenges, fi rst and foremost – ensuring competitiveness on a global scale, fi nd their own niche in the international division of labor. The development of the global trading system is characterized by two interrelated trends – the expansion of economic openness and the formation of trade unions, to ensure the most favorable terms of trade between the participating countries. The latest trend has led to the relevance of research topic Prospects of Customs Union from the point of view of modern theories of regional The integration processes taking place in the former Soviet Union in fact since joining the former Soviet republics of the status of independent states. Already in 1991. CIS was created, which brought together 12 post-Soviet countries (all former Soviet republics except the Baltic). Since then, the integration processes in the post-Soviet space are permanent, and therefore, we set a goal – to analyze the prospects of the Customs Union from the point of view of modern theories of regional integration. Notwithstanding that goal has led to the need to address a number of problems, namely: • consideration of the role and place of regional trade (economic) union, the importance of their experience, especially for developing countries and countries with economies in transformation; • justify the importance of the openness of the national economy to generate the preconditions for sustainable economic growth, determining the levels of trade (economic) integration; • analysis of modern views on the nature of regional integration; • consideration of the characteristics of individual regional trade and economic unions, including the Customs Union, and determine their place in the modern system of world trade. The study is based on the use of a systematic approach using historical and logical methods. The result of the study was the conclusion there is a positive relationship between foreign trade and economic growth of member countries of the regional unions, including TC and the EAEC; articulated position relative to the benefi ts and future economic and political prospects of the Customs Union and the Eurasian Economic Union. The theoretical signifi cance of the article is the novelty and the possibility of further study the relationship between economic and political prospects of the vehicle and the EAEC.

Endogenous Cycles in Rural to Urban Migration

We argue that the cost of rural–urban migration may act as an effective entry deterrence for successful migration to the urban sector. This cost results in some form of price rationing as the cash holding of a typical rural household falls short of the required cost. We demonstrate that certain endogenous forces will mesh in with the government policies to generate cumulative improvements in terms of trade in favour of the rural sector. Such improvements in terms of trade are shown to close the gap between the cost and the cash holding of a rural household. As a result, the rate of migration is positively related to the improvements in terms of trade in favour of agriculture. On the other hand, the terms of trade are shown to be inversely related to the rate of migration from agriculture. We establish, for the first time to the best of our understanding, that an endogenously driven and self-sustaining migration cycle would emerge from the rich dynamics involving migration flows and intersectoral terms of trade. We also demonstrates the possibility of a complex dynamics that can characterize the rural–urban migration and the attending development process. One can argue, on the basis of this type of complex dynamics, development process can be unpredictable and highly fragile. In other words, the principles of econophysics can offer an important new framework to understand labour flows in a complex society. JEL: J31, C78

Growth and Determinants of Employment in Indian Agriculture

Accelerating economic growth, transition from an agrarian economy to an industrial or modern economy would depend on how well the agricultural sector enables this transition. Recognizing that the majority of workers are employed in agriculture where labour productivity is low, a faster growth of agriculture is necessary to make employment more remunerative. While no significant increase in the number of workers can be expected in Indian agriculture, greater use of underemployed and unemployed persons becomes important. Taking this into consideration, the present paper examines the employment dynamics in agriculture by looking at the trends in growth and empirically estimates the effects of determining factors by using the data from 1972–73 to 2009–10. Considering the Keynesian theoretical explanation about the change in employment which depends on expected output or change in output, the empirical estimations corroborate the view that performance of agriculture determines the capacity to generate employment in the sector where employment is positively influenced by High Yielding Varieties (HYV), terms of trade and public investment and variables like non-agricultural output and productivity have a negative relation with labour in the sector. It is necessary for the agricultural sectors to absorb the underemployed and unemployed persons so as to induce the technology, investment and favourable terms of trade.

Global Trends and Tribulations in Mining Regulation

This article reviews changes from 2009 to mid-2012 in the mining law, regulations or policies of 16 mining countries around the world, as they reflect two fundamental tensions underlying mining law: (1) the tension between sovereign control and individual initiative; and (2) the tension between national law and the local nature and impacts of mining. The trend tends to confirm a shift in the terms of trade in favour of host countries, now exerting greater sovereign control over the conditions of access to resources and the sharing of benefits, while imposing stricter requirements for national procurement and hiring, and greater local participation in licensing, monitoring and benefits. Unlike the extreme nationalistic policies in a few countries, the more measured changes in the laws and policies of most of the countries appear to be sustainable under current market conditions.

A review of methodological issues relating to the estimation of terms of trade and trends in terms of trade between agricultural and non-agricultural sectors of the Indian economy since 1950’S

The movements of intersectoral terms of trade (TOT) in India since independence is characterized by periodical shifts in favor and against agriculture. The intersectoral terms of trade has been favorable during 1967- 1968 to 1977-1978 and during the post reforms period. But the indicators of performance and growth of the sector has been showing unimpressive trends in the post reforms period. While considering the slow pace of reforms in the country, it is also observed that policy changes in agriculture were still slower. This paper analyses the impacts of the swings in terms of trade (favorable and unfavorable to agriculture) on the performance of agricultural sector in the country. It was revealed that while the favorable swing in terms of trade has caused increased private gross fixed capital formation in agriculture, it has not led to any perceptible improvement in agricultural production or growth rate of agriculture gross domestic product (GDP). While the favorable TOT during 1967-68 to 1977-78 is speculated to be the result of government price support mechanism, this paper argues that the favorable TOT in the post reforms period is a result of decline in the aggregate crop output rather than government policies. Key words: Terms of trade (TOT), agricultural growth rate, gross domestic product (GDP), government policies.

Securing Uncertainty

The theoretical concept John Herz called a ‘security dilemma’ has rarely been applied to sub-state social figurations, although security dilemmas do shape political behaviour in post-conflict peacebuilding. Comparable to state formation, sub-state groups develop institutional capacities. Often led by ‘warlords’ or ‘strongmen’, these entities resemble states within, while lacking recognition and legitimacy from without. Between these entities arises a sub-sovereign form of security dilemma. It is a result of uncertainty about the other’s motives regarding expansion, control of sources of funding, or domination within the legal order of the ‘state’. When statebuilding is pursued by external actors, aiming to fill the legal void, the ‘state’ can become a source of existential risks for sub-state entities. Risks – from extinction to the transformation of a group’s socio-political identity – can stem from another sub-state group taking over the state, appropriating superior means of coercion and hence enabling itself to subjugate others; relative deprivation concerning external funding or revenue from trade or smuggling; or loss of investment in networks of patronage, favourable terms of trade, or monopolies for certain goods. External support adds considerable uncertainty about interventionists’ capabilities, willingness and ability to steer and control statebuilding efforts. This article explores how risks and their perception shape interaction between social actors and at the same time how awareness and consideration of these risks may influence external actors’ behaviour. It argues that understanding risk constellations within an intervention and their processual transformation is vital for external statebuilding support.

Property Rights, Renewable Resources and Economic Development

This paper analyzes the role of endogenous property rights in the development of an open resource-based economy. I incorporate renewable resources and endogenous decisions on property rights into a convex growth model with the formal and informal sectors. I find that along the transition path to steady state, property rights enforcement is not constant but improves with time as well as involves intermediate property rights specification (between open access and perfect property rights). International trade and labor market are driving these endogenous changes. Property rights improve with favorable terms of trade when the economy exports resource services and stronger property rights help maintain the resource stock by deterring illegal harvest. This pushes labor away from the informal harvest sector toward greater participation in the formal sector of the economy. In turn, more labor participation in the formal sector along with capital formation increase the country’s output and consumption. Overall, with an open economy and well-functioning institutions, renewable resources have a positive impact on economic growth.

The Effects of Competition‐Based Public Policy on Contractual Arrangements

When competition is naturally limited, policymakers craft regulation to obtain effects similar to those that would have occurred in the presence of competition. In many instances, regulation of this type is not successful in overcoming market failures. We rely on property rights theory and transaction cost theory to predict when state‐level policy statements will actually lead to a redistribution of benefits at the city level. We test this theory in the context of cable television franchise renewal agreements—a setting historically resistant to competition. We look to the language of the franchise agreements for evidence of concessions made by the cable operator to the city, and using a difference‐in‐difference estimator, we find that pro‐competitive regulation translates into concessions to the city. However, a credible threat of competition embedded in regulation is not enough to curb opportunism associated with monopoly supply in cases of large franchisees; larger cable operators are at least 60 percent less likely to offer more favorable terms of trade. However, consistent with transaction cost predictions, asset‐specific investments by the cable operator do curb opportunism; there is a 51 percent increase in the odds of a franchisee offering more concessions for a 1 standard deviation change—about 1,020 mi of the plant. These findings are important for those involved in crafting policy at all levels of government as well as for researchers interested in understanding the role of long‐term contracting and the use of hybrid mechanisms such as franchise agreements in contemporary governance.

Export transitions

This paper uses a broad multi-country dataset to describe the main stylized facts about export performance in the last four decades. First, transition probability matrices are computed to look at changes in the position of countries at the world distribution of the export to GDP ratio. It finds that transitions toward high export ratios have been mainly experienced by Asian countries, but also that some reformers, like Mexico and Chile, have been able to improve their position relative to other studied economies. African countries mainly sunk to the bottom part of the world distribution, although they constitute only half of the economies with relatively bad export performance. In the consideration of the structural factors that may play an important role for long-run transitions, the results suggest that more open economies and those with better institutions are more likely to move to high export ratios in the long-run. Second, the within-country experiences are analyzed for identifying episodes of export transitions. Using an event study methodology, a very weak association is found between export transitions and investment rate. In contrast, the results suggest that transitions are potentially driven by improvements in financial development. Finally, favorable terms of trade, increments in productivity, and reductions in exchange rate distortions are not found to be a catalyst for export transitions.

Empowering tomorrow's African entrepreneurs and managers: the Global Business School Network

The essay introduces an innovative low-cost knowledge-based approach to development cooperation: the Global Business School Network (GBSN). Since 2003 GBSN has been addressing a cross-cutting development issue which has been neglected or altogether ignored by Official Development Assistance institutions as well as private philanthropic funders: the extreme scarcity of well-trained local leaders and managers — ‘problem-solvers’ — in Sub-Saharan Africa (SSA) as well as other low-income areas of the world. This shortage can be alleviated by sending Africans abroad for training, or by nurturing local training institutions by means of multi-year capacitybuilding efforts. GBSN opted for the latter, as it offers the best chances of long-term locally grounded sustainability. After a brief introduction setting out salient facts about development (or the absence thereof ) in SSA, the next section offers a knowledge-based framework for development and development cooperation; the subsequent section focuses on GBSN as a case in point, a global knowledge network of business schools with the potential to enhance local capacity to generate tomorrow’s leaders and managers in SSA. Why are Sub-Saharan economies lagging behind? Economic growth of SSA countries has accelerated these past ten years, thanks largely to improved macroeconomic policies and favourable terms of trade. Yet living standards of the vast majority of the population are still lagging far behind that in other regions. Taking a longer-term perspective, with the exception of South Africa and extractive industry clusters, SSA is unique in having experienced massive urbanisation, with some of the world’s fastestgrowing cities, without a corresponding increase in industry. Because of a failure over centuries to raise smallholder agricultural productivity, migration to the cities often is ‘a simple displacement of poverty to the urban environment’

Trade agreements, bargaining and economic growth

Rebelo’s two-sector endogenous growth model is embedded within a two-country international trade framework. The two countries bargain over a trade agreement that specifies: (i) the size of the foreign aid that the richer country gives to the poorer one; (ii) the terms of the international trade that takes place after the aid is given. Foreign aid is given not because of generosity, but because it improves the capital allocation across the world and thus raises total world production. This world production surplus enables the rich country to raise its equilibrium consumption and welfare beyond their no-aid levels. To ensure it, the rich country uses a trade agreement to condition the aid on favorable terms of trade.

Trade Agreements, Bargaining and Economic Growth

Rebelo's two-sector endogenous growth model is embedded within a two-country international trade framework. The two countries bargain over a trade agreement that specifies: (i) The size of the foreign aid that the richer country gives to the poorer one; (ii) the terms of the international trade that takes place after the aid is given. The aid is given not because of generosity, but because it improves the capital allocation across the world and thus raises total world production. This world production surplus enables the rich country to raise its equilibrium consumption and welfare beyond their no-aid levels. To ensure it, the rich country uses a trade agreement to condition the aid on favorable terms of trade.