Increase Private Investment Research Articles

Growth in Sub-Saharan Africa

The paper investigates empirically the determinants of per capita economic growth for a large sample of sub-Saharan African countries during 1981-92. The results indicate that (1) an increase in private investment has a relatively large positive impact on per capita growth; (2) growth is stimulated by public policies that lower the budget deficit in relation to GDP (without reducing government investment), reduce the rate of inflation, maintain external competitiveness, promote structural reforms, encourage human capital development, and slow population growth; and (3) per capita income converges after controlling for human capital development and public policies.

Does the hazard change with new legislation? ?The New Zealand experience

2 1. In this the fourth year of the Decade, New Zealand has put in place a number of legislative vehicles to achieve the immediate IDNDR targets, and to work towards the long-term goals of the Caring for the Earth strategy and Agenda 21. 2. New Zealand has a system of “nested” plans at all levels of government, dealing with anticipatory measures and provisions guiding communities in their preparation and response to natural disasters. 3. Individual and community responsibility for developing strategies are encouraged by school education programmes, active civil defence volunteers at a local level, regional planning for facilitating and coordinating response, and national coordination in the event of major disasters. In addition, any emergency actions carried out in the event of a natural disaster must be remedied. 4. There is close collaboration between all levels of planning. However, as the Acts are implemented, there will be different styles of collaboration not yet apparent. 5. Protection of natural habitats is mainly provided for in the policy statements and plans at the regional and local levels of planning under the Resource Management Act. Civil Defence Plans would be developed taking this into account. 6. Improved understanding of natural processes requires an ongoing process of public education and explanation of issues, objectives and policies about natural hazards. 7. The Resource Management Act provides mainly for the avoidance of natural hazards in planning for use of natural and physical resources. It is based on river catchments, an important IUCN requirement for sub-national planning. The Civil Defence Act reinforces the need for individuals to develop a sense of personal responsibility for avoiding and mitigating the effects of natural hazards. Over the Decade, there should gradually be less government regulation of land uses and activities and less government funding in the event of individual disasters. 8. There are concerns that as government funding of programmes diminishes, there will not be a corresponding increase in private investment in insurance, research and collaboration. In the event of natural disaster occuring before alternative systems are developed, individuals and communities may suffer hardship.

Growth in Sub-Saharan Africa

The paper investigates empirically the determinants of economic growth for a large sample of sub-Saharan African countries during 1981-92. The results indicate that (i) an increase in private investment has a relatively large positive impact on per capita growth; (ii) growth is stimulated by public policies that lower the budget deficit in relation to GDP (without reducing government investment), reduce the rate of inflation, maintain external competitiveness, promote structural reforms, encourage human capital development, and slow population growth; and (iii) convergence of per capita income occurs after controlling for human capital development and public policies.

Growth in Sub-Saharan Africa

The paper investigates empirically the determinants of economic growth for a large sample of sub-Saharan African countries during 1981-92. The results indicate that (i) an increase in private investment has a relatively large positive impact on per capita growth; (ii) growth is stimulated by public policies that lower the budget deficit in relation to GDP (without reducing government investment), reduce the rate of inflation, maintain external competitiveness, promote structural reforms, encourage human capital development, and slow population growth; and (iii) convergence of per capita income occurs after controlling for human capital development and public policies.

Building value through telecommunications: Regulatory roadblocks on the information superhighway

In a global economy that is increasingly information intensive, almost everyone agrees that an advanced telecommunications network infrastructure is key to economic growth and value creation. Throughout the world there has been a flurry of government activity promoting investment in advanced telecommunications network infrastructures. Since public sector budgets are strained in most countries, new government policies and regulations must be targeted to stimulate private sector investment. But business worship at the altar of cash flow; investment incentives are directly related to the pursuit of high profits and competitive advantage. Established regulatory processes, on the other hand, continue to focus on constraining earnings and market power, and therefore represent a formidable institutional roadblock to increased private investment. However, if governments can avoid the temptation to overregulate the introduction of competitive entry into telecommunication service markets, rapid deployment of the Information Superhighway will not necessarily fall victim to a fundamentally flawed regulatory process.

The Role of The European Bank in The Energy Sector

The European Bank for Reconstruction and Development was established in 1991 and is owned by the western industrialized countries, including Canada, and the former communist countries of Europe and Central Asia. Its purpose is to assist the latter countries to make the transition from command to market economies in a democratic framework. The Bank, with an initial capital of approximately US$1.2 billion, directs 60 per cent of its resources towards private enterprises and state-owned enterprises which are being privatized. The remainder of the EBRD's lending is directed to governments for infrastructure development. The EBRD's lending, now at US$1.5 to 2 billion a year, is small in relation to the investment needs of its countries of operation. As a result, the Bank tries to maximize its leverage by limiting its share in total project financing to 35 per cent and encouraging co-financing by other lenders and investors. Through its lending it tries to create a demonstration effect and to encourage institutional reforms which increase private investment flows. In the energy sector, most of the EBRD's lending has been in the oil and gas sector in Russia, but it is open for business in other sectors and in all countries of operation. Unlike other development banks, the EBRD is prepared to finance nuclear power projects, especially for improving the safety and extending the operating life of nuclear power stations built before the fall of communism. In this connection, it operates a Nuclear Safety Account established by the G-7 countries after the 1992 Munich Summit. The Bank also is prepared to finance conventional power plants where these would permit the closure of obsolete or unsafe nuclear plants. In the oil and gas sector, most of the EBRD's lending has related to private sector, joint venture projects in Russia, aimed at oilfield rehabilitation and development. Three of the eight projects done so far have involved Canadian firms, reflecting their expertise in secondary and tertiary recovery, and cold weather operations. The private sector ventures supported by the Bank normally involve joint stock companies owned 50 per cent by western partners and 50 per cent by Russian state oil companies, which are being privatized or are operating according to private sector principles. The joint stock companies make up the difference between the EBRD's financing and total project cost through equity contributions in cash and kind, and through debt financing. The EBRD adds value not simply through its own financing. Its involvement in a project promotes co-financing by other investors. Its influence on behalf of foreign and local investors can help overcome administrative and regulatory difficulties affecting projects. Furthermore, the EBRD can give potential clients the benefit of its accumulated knowledge on how to structure the deal to meet host country priorities and regulations and to benefit from the greatest possible financing from the EBRD and from other lenders and investors.

Policy inconsistency and external debt service

In this paper it is argued that the willingness of debtors to make external debt-service payments reflects, in part, their inability to credibly and permanently default. The benefits of a credible default would include increased private investment. But this would, in turn, tend to create conditions in which it would then be optimal for the government to resume payments. Thus, debt remains a threat even after the announcement of repudiation. It follows that the expected benefits of such an action are limited and may be offset by penalties imposed by creditors. (JEL F34).

Work Reorganization, Industrial Relations and Vocational Training: The Milwaukee-Waukesha Training Partnership

The demanding competency requirements of flexible production systems pose severe problems for the traditional D.S. industrial relations system based on seniority based job control. Industrial unions are initiating the Milwaukee-Waukesha Training Partnership (MWTP) with leading manufacturers in the metropolitan area. The MWTP is jointly governed at the regional, sectoral and workplace levels. Its mission is to set sectoral competency benchmakrs and increase public and private investment in training. Upgrading the skills of the manufacturing workforce is the precondition for reorganizing work and maintaining high-wage employment in the area.

Type II Policy and Mandated Benefits in Economic Development

Economic development policy in the United States is dominated by public subsidy and incentive programs designed to induce private sector investment. The market-generated benefits of increased private investment are assumed to justify the public expense of such programs. The author argues that a second type of development policy exists, called Type llpolicy, that is based on a conflicting set of assumptions and that mandates public benefits by requiring private developers to provide direct economic and social goods. An analysis of policy in 281 localities shows that Type II programs are widespread, are strongly associated with higher levels of community-based activity in the economic development arena, and are not restricted to prosperous locations.

Policy Inconsistency and External Debt Service

In this paper it is argued that the willingness of debtors to make external debt-service payments reflects, in part, their inability to credibly and permanently suspend debt service. The benefits of a credible debt-service suspension would include increased private investment. But this would, in turn, tend to create conditions in which it would then be optimal for the government to resume payments. Thus, debt remains a threat even after the announcement of suspension of debt service. It follows that the expected benefits of such a suspension are limited and may be offset by penalties imposed by creditors.

Inflation and Economic Growth: Some International Evidence on Structuralist and Distortionist Positions: Note

An important debate has centered on the effects of inflation on economic growth. This paper employs Granger causality tests in a diverse array of countries in an attempt to discriminate between several competing hypotheses. A central question in this debate has been whether inflation contributes to or detracts from economic growth. Felix (1961), Seers (1962), Baer (1967), Georgescu-Roegen (1970), and Taylor (1979, 1983) have advanced a structuralist argument that inflation contributes favorably to real growth. Alternatively, Campos (1961), Harberger (1963), and Vogel (1974) have argued that the inefficiencies produced by inflation reduce real growth. The structuralist view that inflation has a positive effect on growth is based on the contention that inflation is a mechanism which induces forced savings (GeorgescuRoegen 1970; Taylor 1979). First, the government of a developing country, faced with an inadequate fiscal system, may resort to borrowing from the central bank as a way to finance expenditures. Thus inflationary finance may increase capital formation if the government uses its inflation-tax revenues to increase real investment. As long as private sector investment does not fall one-for-one, inflationary finance may contribute to real growth. Second, nominal wages may lag behind prices because of slowly adjusting expectations, sluggish wage bargains, or systematic governmental wage repression. If this is so, then inflation may increase growth in neoclassical fashion by shifting the income distribution in favor of higher saving capitalists and hence increasing savings and growth. From a more Keynesian perspective, inflation may increase growth by raising the rate of profit, thus increasing private investment. An alternative view is that inflation has a negative effect on growth (Mundell 1971; Taylor 1979). This position might be labeled the distortionary inflation view. Inflation may (with the help of government policies) create a variety of outputreducing inefficiencies (Baer 1967). First, inflation in a country with a fixed exchange rate will lead to a deteriorating trade balance and to speculative capital

Private and public initiatives in health maintenance organizations.

Public policy controversies about the cost-containing potential of HMOs and the failures of many plans should not overshadow the fact that HMOs will be forces in the health care sector in the 1980s, largely as the result of increasing private investment. There is a large, stable segment of the prepaid industry that developed as a result of private sector and community concern long before the federal HMO Act of 1973, and it is their initiatives along with increasing investment activity by insurance companies and management companies in particular, that will serve as a base for consolidation and growth of HMO plans. HMOs have not proved to be the miraculous cost-containing mechanism of the future, but their impact will be felt even more for the changes they stimulate in the customary organizational forms, in financing, and in the role of business in health care.

Photovoltaics

The federal government has sponsored a program of research and development on terrestrial photovoltaic systems that is designed to reduce the costs of such systems through technological advances. There are many potential paths to lower system costs, and successful developments have led to increased private investment in photovoltaics. The prices for photovoltaic collectors and systems that appear to be achievable within this decade offer hope that the systems will soon be attractive in utility applications within the United States. Most of the advances achieved will also be directly applicable to the remote markets in which photovoltaic systems are now commercially successful.

The Investment Outlook in France

Editorial Note: Mr. Rist's article was completed in September 1965 but the conclusions, applied to the then near term prospects, are still current. These conclusions have since been largely verified by events, particularly by a recovery in automobile sales, accompanied by a slight decline in residential building. The slight firming of the index of industrial production has probably been caused in part by inventory rebuilding, indications of which were discussed in the text. The author still holds the opinion that the improvement in the French economy will accelerate over the near term and that higher earnings and increased private investment will be evident toward the end of 1966.

What Can Regulators Regulate? The Case of Electricity

What Can Regulators Regulate? The Case of Electricity

United States Foreign Investment and Dollar Shortage: A Comment

SO many important documents born on both sides of the Atlantic -the Fifth Report of O.E.E.C. on the one side and the Randall Report on the other, to name the most recent -have stressed the desirability of increased private investment in Europe as a means of correcting the continuing weakness (to put it no more strongly) of Europe's dollar trading accounts, that it is refreshing and salutary to read the persuasive criticism of the concept presented by Mr. Ernest Bloch.2 His discussion leads him to the view that States private investment cannot be considered as making any appreciable contribution either directly or indirectly to the dollar shortage. I Looking this problem from the receiving end, so to speak, I wonder if this somewhat sad conclusion is wholly warranted? As to the facts, there can be relatively little disagreement. Private investment by the United States in the world as a whole during postwar years, Mr. Bloch suggests, has been at least equal to that of the twenties; 4 certainly this is so if one allows for the re-investment of undistributed earnings during postwar years and for the changes in prices. Taking the net movement of long-term capital during the I92 0'S shown in recent data, private long-term United States investments abroad (including the reinvestment of undistributed earnings) rose from $6.5 billion the end of I9I9 to $I5.2 billion the end of I930, an annual average growth of $790 million.5 For the post-war period, the same data indicate a growth of private long-term United States investment abroad from $I2.3 billion the end of I946 to $22.I billion the end of I953, an annual average growth of $I400 million.6 As Mr. Bloch remarks, post-war private foreign investment has been very much lower in relation to GNP than during the I920'S. I make the ratios 0.95 per cent over I920-29 and 0.47 per cent during I947-53.7 It is true, of course, that if one adds in the enormous dollar flow pumped out to the world economy since the war in the form of United States government grants and loans, the ratio of the total dollar-flow to GNP is vastly increased. But the significant fact remains that the private United States propensity to invest abroad is only one half of what it was in the twenties. Now that the flow of government grants to the outside world is coming to an end, it would be an optimist indeed who would argue that the private propensity to invest funds abroad will rise as the public propensity declines. The shift in the private propensity, one suspects, is a great deal more permanent than the enormous postwar flow of government dollars. But it is on the flow of private American capital to Europe that the discussion must center in this context. As Mr. Bloch points out, the flow to this area has been relatively insignificant. In I929, about I9 per cent of United States direct investment abroad was directed to Europe; of the increase of $4.3 billion in such investment between I929 and I950, only $0.3 billion, or 7 per cent, has gone to Europe.8 Between end-i95o and end-I953, the total value of private long-term United States investments abroad increased by $4.6 billion; the value of such investment in Western Europe increased by only $o.s8 billion.9 Nor is this all. Earlier data have indicated that for the world as a whole re-invested earnings accounted for about 37 per cent of total private United States foreign investment dur-