Liberalization Measures Research Articles

Державне регулювання інвестицій в сільському господарстві: зарубіжний досвід та можливості його імплементації в Україні

Визначено основні тенденції загальносвітового досвіду у використанні засобів стимулювання інвестиційного розвитку агросектору. Наведено характеристику інструментів та засобів державного регулювання інвестицій у сільському господарстві країн Азії, Північної Америки та ЄС. Проаналізовано основні засоби та напрямки реалізації інвестиційної політики урядами зарубіжних країн щодо стимулювання розвитку сільськогосподарських виробників.

Does a rising tide lift all boats? Liberalization and real incomes in advanced industrial societies

Many scholars argue that liberalization increases both economic growth and income inequality in developed economies. However, there is limited research on how liberal economic policies shape the earnings of different income groups in the national economy. The current study thus attempts to fill this gap in the literature by examining a panel dataset of 15 advanced industrial societies during the years 1970–2010. According to the results, long-run measures of liberalization increase the incomes of the top 0.1%, but does not return significant results for the incomes of the top 1.0% and top 10%. Furthermore, no discernible effect of liberalization is observed for the incomes of the bottom 90%. When taken together, although most researchers focus on inter-group inequality by examining how liberalization augments the incomes of top earners vis-à-vis bottom earners, the evidence of this study indicates scholars should also focus on intra-group inequality among top earners, as liberalization seems to benefit only a very small segment of elite earners in the national economy.

Income Inequality, Ethnic Diversity, and State Minimum Wages

ObjectivesThe objective of the current study is to examine the determinants of wage floors set by state governments in the United States, with a particular focus on the effects of income inequality and ethnic diversity.MethodWe estimate the effects of income inequality, ethnic diversity, and their interaction on real state minimum wages using a state‐level panel of Census demographic data from 1981 to 2010. We also control for state‐level demographics and additional state‐level information, such as measures of voter and government liberalism, along with time and state fixed effects.ResultsWe find that the impact of income inequality is mediated by ethnic diversity. When states are highly ethnically homogeneous, increases in income inequality are associated with higher state minimum wages. When states are highly ethnically heterogeneous, increases in income inequality are associated with lower state minimum wages. The impact of income inequality lacks statistical significance when levels of ethnic diversity are either average or somewhat below average.ConclusionsOverall, our results suggest that the negative impact on state minimum wages in heterogeneous states could stem from rising income inequality, which increases the social distance between whites and other ethnic groups and weakens mass support for wage policies that are believed by the public to be beneficial to the poor.

Implications of institutional frameworks for renewable energy policy administration: Case study of the Esaghem, Cameroon community PV solar electrification project

This study analyzed a rural renewable energy project—the Esaghem Village solar photovoltaic-based electrification project—in Manyu Division, Cameroon. The aim was to unveil impediments to the project rooted in the country's institutional framework for energy policy administration. The framework adheres to the country's Weberian-style administrative machinery. Conspicuous features of the machinery, including its pyramidal structure, tendency for top-down hierarchical communication, aversion for interorganizational interaction, and standardization are shown to constitute major institutional impediments. These features caused problems such as a lack of information, skills, and innovation. They also exacerbated problems relating to custom formalities and stand to threaten project sustainability. Administrative reform actions including the promotion of inter-organizational coordination, administration decentralization reinforced with the creation of renewable energy extension programs, and market-oriented liberalization measures are recommended. These reforms promise to facilitate the diffusion of solar PV electrification and other renewable energy technologies in Camerooon and other developing countries.

Biswajit Nag & Debashis Chakraborty (eds), India’s Trade Analytics: Patterns and Opportunities

Abstract. India, a leading developing country, initiated the process of trade liberalization since early nineties, but the wider effects of the reforms started taking shape only in the new millennium. The unilateral trade policy reforms undertaken by the country were supplemented by the WTO-induced liberalization measures from mid-nineties onwards. The investment liberalizations ushered in updated technology and global management practices across sectors. The internal policy reforms as well as the evolving global trade architecture created a number of winner sectors across the Indian economy, e.g., – tea and spices, fisheries (agriculture), garments, leather products, automobiles (manufacturing) and IT services (services). Confident with growing export potential as well as the rising trade openness in the partner countries, India started entering into a number of regional trade agreements (RTAs), primarily in Asia, from 2005 onwards. Keywords. Trade, Patterns and Opportunities. JEL. F00, F10, F13, F40.

Rethinking the Kantian Peace: Evidence from a Liberal, Moderate, and Conservative Measure of Norm Diffusion

Abstract This article revisits in today’s global setting the debate among international relations scholars over the so-called Kantian or democratic peace. In particular, it argues that findings made by S. M. Mitchell in a seminal 2002 article in the American Journal of Political Science regarding the diffusion of norms via third party conflict resolution relied upon a questionable methodology and now require belated revision. An alternative measure of norm diffusion would rely upon the proportion of democratic states, particularly contiguous states, in a given region. Moreover, a more detailed look at such diffusion after 1945 suggests important differences over the viability of democratic peace, especially regarding state behavior outside the Western Hemisphere.

Directed credit, financial development and financial structure: theory and evidence

ABSTRACTThe recent initiative of the RBI in reviving the policy of directed credit allocation in a period dominated by the neoliberal philosophy necessitates reconsideration of the role of policy-directed credit allocation process on financial development and financial structure of firms. Introducing certain policy parameters, the paper attempts to model how financial development-financial structure interlinkage is influenced by the liberalization policies of the government. The theoretical construct is empirically verified using both aggregated and disaggregated (firm-level) data comprising a panel of 932 Indian manufacturing firms. Findings reveal that following the liberalization measures in the early 1990s, there has been a structural shift in the debt–equity ratio of firms, with equity market activities assuming prominence over time. As regards financial development, it has been observed that the withdrawal of DFIs specialized in term-lending activities in the early 2000s led to a significant increase in the degree of financing constraints faced by the manufacturing firms. This contradicts the basic premise of financial liberalization. The paper argues that under certain conditions, government intervention in the form of directed credit programmes would not only act as an effective instrument in ushering financial development, but also provide important guidelines in ensuring sustainability of institutions.

Effect of Trade Liberalisation on Wage Inequality in Indonesia

This study attempts to find out the influence of trade liberalisation on wage inequality in Indonesia. A two-stage estimation approach is used. Using the national labour force survey dataset, the study estimates industry wage premium and industry-specific skill premium in the first stage conditional on individual worker characteristics. In the second stage, the study regresses industry wage premium and industry-specific skill premium on tariff as a measure of trade liberalisation, respectively. It is concluded that trade liberalisation significantly contributes to increasing wage inequality. This contribution occurred through changes in industry wage premium but not industry-specific skill premium.

Financial liberalization, exchange‐rate regime, and banking crisis likelihood

AbstractThis paper provides empirical evidence of the impact that financial liberalization plays, within various exchange rate regimes, on the likelihood of systemic banking crisis. Using a sample of 50 banking crisis episodes over the period of 1985–2005, I investigate the impact of financial liberalization and exchange‐rate regime on the likelihood of systemic banking crisis. When interacted with an overall financial liberalization measure, exchange‐rate regime was significant and positive under a flexible regime. Other empirical results show that when interacted with financial liberalization dimensions, exchange‐rate regime variables produced significant results under intermediate and flexible exchange‐rate regimes.

Globalization and Social Movements

A growing body of scholarship acknowledges the increasing influence of global forces on social institutions and societies on multiple scales. We focus here on the role of globalization processes in shaping collective action and social movements. Three areas of global change and movements are examined: first, long-term global trends and collective action; second, research on national and local challenges to economic globalization, including backlash movements and the types of economic liberalization measures most associated with inducing oppositional movements; and third, the emergence of contemporary transnational social movements. In each of these arenas we address debates on diffusion, intervening mechanisms, and the outcomes of collective mobilization in response to global pressures.

Building the urban commons in Singapore: the cemetery, red-light district and public housing estates as sites of contestation

ABSTRACTThis paper investigates the state of informal social activism initiated by Singaporean youth via the creation of ground-up initiatives. Having witnessed state-civil society relations, where calibrated liberalisation, co-option and coercive measures are used as strategies of state control, these informal collectives seek new modalities and methodologies in their efforts to build the urban commons. By following three of such collectives, this paper seeks to explore the overlapping cultural and social realms they operate in, as well as the new modalities and methodologies they bring, such as participatory art and design. They negotiate constraints from both the state and market through (1) strategic positioning of legal statuses and (2) the formation of a network society, building social capital and a new vocabulary for future efforts in self-organisation.

The dynamics of inflation, exchange rates and the trade balance in a small economy

PurposeThe purpose of this study is to examine the temporal relationships between inflation and exchange rate changes and their implications for the trade balance in Uganda, which saw persistent trade deficits, rising inflation and disinflation episodes, as well as significant exchange-rate realignments and other liberalization measures over the sample period considered.Design/methodology/approachThe short-run dynamics of the variables in question and the pattern of their long-run relationships are examined applying the bounds testing approach to cointegration on quarterly data.FindingsThe estimates suggest that, in the long run, a real depreciation leads to an increase in inflation; and that both real depreciation and inflation exert no significant effect on the trade balance. The estimated short-run dynamics suggest a causal relationship between the trade balance and the real exchange rate and between the real exchange rate and inflation, which is also found responsive to developments in the foreign sector. Taken together, the short-run and long-run multipliers seem to provide a weak support for the J-curve effect, while no evidence is found for the presence of the S-curve effect.Originality/valueThe study sheds light on the relationship among real exchange rate, inflation and the trade balance in the context of a small developing economy; it highlights that an improvement in the trade balance requires more than an appropriate exchange rate policy and underscores the importance of other policies in strengthening the external sector of the economy.

INDUSTRIAL TRANSFORMATION WITH HETEROGENEOUS LABOR AND FOREIGN EXPERTS

This paper develops an endogenous growth model with industrial transformation and a stylized foreign expert-based internalization advantage framework to determine the composition of heterogeneous foreign multinationals in a developing host economy. A key feature of the model is the introduction of a dichotomous relationship between domestic and foreign firms, where the latter perceives heterogeneity among the productivity of domestic workers. This results in the skills acquisition decision and foreign subsidiaries' operational mode choice to be determined along the same ability distribution of the host economy. This subsequently determines the shares of the different types of multinationals in a host economy. Parameterized for Malaysia, policy experiments are conducted. A balanced investment liberalization measure for all foreign firms is found to outperform measure targeting only selected types, though there is a threshold doing-business cost value below which such a standalone Foreign Direct Investment (FDI)-promoting policy does not generate positive growth effect. This then calls for composite program that maximizes the policy complementarities between human capital and FDI-promoting policies.

Trade Liberalization and its Environmental Impact in India: An Empirical Analysis

The debate on the impact of trade on environment is pertinent considering the increasing volume of trade among world nations and the changes in environmental quality. In India, this increase was higher because of the gradual lifting of the quantitative restrictions and reduction in tariffs after trade liberalization in 1991. The pollution haven effect occurs when trade liberalization, coupled with lax environmental regulations results in increasing economic activities in pollution intensive industries. Using industry level data for the period 1998-2008, for fifty eight manufacturing industries in India, this paper looks at output and export trends and attempts to examine, whether trade liberalization is associated with a shift in production and exportation towards pollution intensive goods industries (pollution haven effect). Manufacturing output has been significantly higher from the water pollution intensive sectors compared to the air and toxic pollution intensive sectors. This evidence provides some support for concerns that there is significant contribution in production of manufacturing industries from dirty industries. The results of the study suggest that while trade liberalization measures have been pursued to promote economic growth in India but they have led to some potentially adverse environmental consequences.

Adaptation of Internal Trade Requirements in RTAs: Substandard Internal Trade Liberalization

GATT Article XXIV:8 requires regional trade agreement (RTA) parties to eliminate duties in substantially all the trade (SAT) between the parties. However, this requirement has not been seriously enforced during GATT and WTO years because WTO members have not agreed to an exact definition of SAT. Nevertheless, some WTO members examining RTAs in the WTO Committee on Regional Trade Agreements (CRTA) expressed the view that elimination of tariffs in 90% of tariff lines satisfies the SAT requirement on the ground that the average of tariff elimination coverage of RTAs is 90%. RTA parties with tariff-elimination coverage below the average level have adapted to this perceived norm by prolonging tariff elimination schedules or by using subjective measures of internal trade liberalization. Paradoxically, the adaptations support the argument that the GATT Article XXIV:8 requirement is an operationally binding constraint on the RTA parties, although there is no agreement on any fixed percentage of internal-trade-liberalization coverage that meets the Article XXIV:8 requirement.

European Railroad Deregulation. Does it work?

<p><em>We analyzed the performance of the European railway public system over the period 2004 to 2014 in which the sector was subject to a substantial restructuring process and implementation of numerous deregulation and liberalization measures with the aim to revitalize the railway. This paper estimates simultaneously a model of stochastic production frontier and a model of technical inefficiency for 16 countries. The results show technological progress and improve on technical efficiency, but it is also noted the important cuts in inputs. The network heterogeneity shows that railroad systems with down network density and high percentage of electrified network are more efficiency. Likewise, we have analyzed the impact of subsidies and reforms implemented on railways efficiency. Maintenance subsidies improve efficiency due to reductions of incidents on the rail network, let more efficient and reliable service. While, operating subsidies have a negative effect because improve inefficient behavior. By the other hand, reforms have not had the expected results. </em><em>We find that vertical separation is not necessary to achieve efficiency gains. T</em><em>he opening passenger market seems to lead to a greater efficiency gain, but freight market shows negative results although this result can be influenced by unfavorable economic context.</em><em></em></p>

Has Financial Liberalisation Promoted Economic Growth in Nigeria? Evidence from Auto-Regressive Distributed Lag (ARDL) Approach

This study attempted to ascertain whether or not financial liberalisation policies promoted economic growth in Nigeria for the period spanning 1986 –2014, using Auto-regressive Distributed Lag (ARDL)-bounds testing approach and unrestricted error correction model (UECM) to cointegration analysis. Macroeconomic time series data were obtained from Central Bank of Nigeria (CBN) Annual Statistical Bulletins, National Bureau of Statistics (NBS) Bulletins, and World Bank Development Indices. Three alternative measures of financial liberalisation (FINDEX1, FINDEX2, FINDEX3) and six intervening variables were incorporated into the study. The empirical findings show that the impact of financial liberalization on economic growth varied for different measures of financial liberalization undertaken; and were significant both in the short run and the long run: FINDEX1 promoted economic growth significantly, and corroborates the growth-stimulating effect of financial liberalization; while FINDEX2 and FINDEX3 exerted significant negative impacts on economic growth. Real exchange rate, degree of openness, consumer price index, increase in life expectancy of labour, and debt service ratio significantly influenced economic growth in the short run and long run. None of the measures of financial liberalisation Granger-caused economic growth, but a one-way causation ran from FINDEX2 to FINDEX1, and from FINDEX3 to FINDEX1.The study recommends increased financial deepening, reduction of lending rates, removal of bottlenecks in the banking and stock markets institutions in Nigeria.

Growth-Equity Trade-offs in Structural Reforms

Do structural reforms that aim to boost potential output also change the distribution of income? We shed light on this question by looking at the broad patterns in the cross-country data covering advanced, emerging-market, and low-income countries. Our main finding is that there is indeed evidence of a growth-equity tradeoff for some important reforms. Financial and capital account liberalization seem to increase both growth and inequality, as do some measures of liberalization of current account transactions. Reforms aimed at strengthening the impartiality of and adherence to the legal system seem to entail no growth-equity tradeoff—such reforms are good for growth and do not worsen inequality. The results for our index of network reforms as well as our measure of the decentralization of collective labor bargaining are the weakest and least robust, potentially due to data limitations. We also ask: If some structural reforms worsen inequality, to what degree does this offset the growth gains from the reforms themselves? While higher inequality does dampen the growth benefits, the net effect on growth remains positive for most reform indicators.

Pollution haven hypothesis and India's intra-industry trade: an analysis

With the adoption of trade liberalisation measures India's merchandised trade has expanded considerably in post-1991. One of the important factors of such commendable growth is the significant expansion in India's Intra-industry Trade. Given this circumstance, it is an important task to find out whether such rapid growth in Intra-industry Trade (IIT) has any detrimental effect on the environment. With this purpose, the current paper measures the shares of pollution content of India's 'inter-industry trade' and 'IIT', and its impact on the environment by using Input-Output framework for the period 2001–2002 to 2011–2012. Applying the Grubel-Lloyd index the paper estimates the shares of IIT including Vertical and Horizontal in India's total trade with the USA and the EU-27. It observes that the Vertical IIT is dominant over those of the Horizontal IIT and export in IIT is highly pollution intensive. Above all, the results of Pollution terms of trade provide stronger evidence on the pollution haven effect.

THE STUDY OF LAW ON INVESTMENT LIBERALISATION POLICIES IN THE REGION OF ASEAN AND THE EFFECTS ON INDONESIA

<p class="Bodytext0">In order to realize a single ASEAN market through the free flow of investment in ASEAN, the ASEAN member states have agreed on the <em>ASEAN Comprehensive Investment Agreement</em> or known by the term ACIA signed in Cha-Am (Thailand) on February 26, 2009. The issue is how the rule of law against the liberalization of foreign investment in the ACIA Agreement and how its influence on Indonesia. This research method is a normative juridical research by using a qualitative data analysis technique. Based on the Article 1 (a) of ACIA related to the purpose of the establishment of ACIA the ACIA Agreement contains the legal concept of foreign investment: an investment regime that is "free and open" in ASEAN in order to achieve the ultimate goal of economic integration within the ASEAN Economic Community. This is done through progressive liberalization measures on investment regimes in the Member States of ASEAN. The concept of investment liberalization in the ASEAN region is also well supported by the principles of <em>National Treatment</em> (Article 5 of ACIA) and the principles of <em>Most Favored Nation Treatment</em>/<em>MFN Treatment</em> (Article 6, paragraph 1 of ACIA) in which these two principles are widely known as the principles of law in international economic law. While Indonesia itself has been also engaged in signing and ratifying the ACIA Agreement through Presidential Regulations No. 49 of 2011. This certainly provides a challenge and an opportunity to take advantage of this Agreement, as well as adjust the settings of Indonesian foreign investment (Law No. 25 of 2007) with the consent of the ACIA.</p><p class="Bodytext0"><strong>Keywords:</strong> Implementation; Liberalization of Investment; ASEAN Region; Influence and Indonesia.</p>