Peripheral Economies Research Articles

Acumulación de capital en la periferia

Este artículo presenta un análisis del proceso de acumulación de capital en las economías periféricas, fundamento del desarrollo desigual a escala mundial. Partiendo de un enfoque de economía política, y del supuesto de que la capacidad productiva de excedente es menor en la periferia, se destacan aspectos como la dependencia para la importación de activos de capital, la depreciación del tipo de cambio real, tipos de interés, deflactores de precios y volatilidad monetaria. Estos elementos en última instancia presionan relativamente al alza los ratios de la composición del capital, lo que limita el nivel de la tasa de beneficio y, por extensión, constituye un fundamento objetivo para presionar hacia una mayor desigualdad en la distribución del ingreso.

Debt patterns of the peripheral economies of Europe: from the increased growth post-implementation of the Euro to the Great Recession

<p>The main purpose of this article is to outline the specificities of the indebtedness process of each country of the European periphery — Greece, Italy, Ireland, Portugal, and Spain — that guided the behavior of the demand and the indebtedness of the domestic economic agents from 2000 to 2017. The main results indicated that from 2000 to 2008, all of the countries had foreign sector surpluses (current account deficits), which characterized distinct indebtedness processes of the domestic economic agents. The reversal of these processes was accompanied by larger public deficits and the replacement of private debt with public debt. With the exception of Ireland, the positive impacts on the economic performance of these countries between 2009 and 2017 came from the foreign sector through the devaluation of the euro in the period.</p>

Shallow market integration and weak developmental capacities: Ukraine’s pathway from periphery to periphery

How do transnational integration regimes (TIRs) shape domestic developmental capacities to benefit from trade integration? Some scholars acknowledge the passive influence TIRs can have on domestic capacities to spur development. Others conceive of TIRs as active agents of change but disagree as to whether their effects are positive or negative. This paper takes issue with some of these approaches and reveals important caveats of others by investigating how the shallow mode of transnational market integration shapes domestic developmental capacities. The paper uses the developmental pathway of Ukraine’s automotive industry as a case study. Strikingly, the sector maintained its peripheral position despite initial developmental features that made it as good an investment destination for multinationals as automotive sectors in other peripheral economies that eventually became more integrated in transnational value chains. I argue that it needs strong states being able to use the opportunities offered by the shallow mode of integration for development. By contrast, weak states can hardly shield themselves against capture by rent-seeking networks, since TIRs only provide limited assistance for building developmental capacities in the context of shallow integration.

Changing modes of market integration, domestic developmental capacities and state-business alliances: insights from Turkey’s automotive industry

This article investigates how different modes of transnational integration shape developmental state capacities in peripheral economies. The Turkish automotive industry serves as an ideal case to investigate this question. Turkey is a country that was exposed to different integration strategies, and we can trace the effects of these changing strategies on the evolution of developmental state capacities in a strategic sector. We make two arguments: first, we argue that the character of the domestic state-business alliance is an important factor that filters the effect of different modes of integration on developmental state capacities. Second, we argue that in cases with limited state autonomy the shallow mode of integration helps to increase the political and economic power of pre-existing rent-seeking alliances and with it, to consolidate the institutional status quo. Should the state be endowed with larger autonomy from vested interests, it helps to preserve the institutional status quo of at least some developmental capacities. By contrast, the deep mode can alter the domestic balance of forces and help to induce institutional changes leading to increased developmental capacities. Our dynamic analysis reveals important insights into the developmental advantages and disadvantages of different modes of integration.

On the stability of stock-bond comovements across market conditions in the Eurozone periphery

We analyze the relationship between returns on equity and long-term government bonds in the crisis-hit Eurozone peripheral economies. In particular, we are interested in the stability of the relationship across differing market conditions and if long-term bonds act as a safe haven for equity investors during periods of financial distress. Employing a Markov-switching vector autoregression model with three regimes, we find that the stock-bond relationship varies across market conditions and across countries. Overall we observe increased comovement during the crisis regimes at the market level, with the relationship between the financial sectors and the domestic sovereign bond being its most important driver across countries.

Bunge e Sanbra: formação de grupos econômicos no Brasil (1923-1994)

Este artigo identifica os motivos que levaram a Sociedade Algodoeira do Nordeste Brasileiro, S. A. (Sanbra), subsidiária da Bunge Brasil, a se tornar um grupo econômico. Será analisada sua história de mais de 70 anos, de 1923 até 1994, quando a firma foi incorporada na reestruturação da Bunge. O artigo baseia-se em fontes primárias consultadas no Centro de Memória Bunge, em São Paulo, sobretudo os Relatórios de Diretoria e Balanços Anuais e a revista Atualidades Sanbra. Teoricamente seguirá os autores que tratam da formação de business groups em economias periféricas. Como conclusão prévia pode-se afirmar que alguns fatores contribuíram para a transformação da Sanbra em grupo econômico, principalmente o reinvestimento do capital próprio, o lançamento de novos produtos, a atuação em diversos setores, relacionamento com fontes creditícias do Estado, assim como a ocupação do território nacional.

A Mata Meridional Pernambucana e o subdesenvolvimento: uma aproximação a partir da teoria de Celso Furtado

No século XX os debates econômicos voltavam-se, sobretudo, às teorias clássicas para explicar o processo de desenvolvimento das nações, havendo uma lacuna quanto à reflexão específica sobre países e regiões periféricas. Diante da incapacidade em explicar o subdesenvolvimento destas áreas, Celso Furtado, dentre outros economistas, passou a avaliar a permanência do subdesenvolvimento como um traço histórico-estrutural da formação das economias periféricas. Neste contexto, enquadra-se a Microrregião da Mata Meridional Pernambucana, constituída desde o período colonial a partir da indústria canavieira e que, na atualidade, mantém padrões de subdesenvolvimento típicos daquela fase. Tomando-se como hipótese a validade das reflexões furtadianas para a compreensão do subdesenvolvimento microrregional e mediante pesquisa bibliográfica e levantamento de dados, o presente texto tem como objetivo geral avaliar a pertinência da teoria desenvolvida por Furtado quanto à análise do quadro de subdesenvolvimento da Microrregião na atualidade. Como objetivos específicos busca-se relacionar o desenvolvimento de economias centrais e periféricas; descrever o processo de subdesenvolvimento; e identificar elementos socioeconômicos que caracterizam a Microrregião atualmente. Tendo em vista as características histórico-estruturais locais conclui-se que as reflexões engendradas pelo autor são aplicáveis à compreensão da permanente, mas não inalterável, situação de subdesenvolvimento microrregional.
 
 Abstract
 
 MATA MERIDIONAL PERNAMBUCANA AND UNDERDEVELOPMENT: AN APPROACH THROUGH THE CELSO FURTADO’S THEORY
 
 In the twentieth century the economic debates turned mainly to the classical theories to explain the process of development of the nations, and there is a gap regarding the specific reflection on countries and peripheral regions. Faced with the inability to explain the underdevelopment of these areas, Furtado, among other economists, began to evaluate the persistence of underdevelopment as a historical-structural trait of the formation of peripheral economies. In this context, the Mata Meridional Pernambucana, constituted since the colonial period from the sugar cane industry and which at present maintains patterns of underdevelopment typical. Taking as a hypothesis the validity of Furtado’s reflections for the understanding of microregional underdevelopment and from bibliographical research and data collection, the present text has as general objective to evaluate the pertinence of the theory developed by Furtado in the analysis of the framework of underdevelopment of the Microregion today. Specific objectives are related to the development of central and peripheral economies; describe the process of underdevelopment and; identify socioeconomic elements that characterize the Microregion today. Through the local historical-structural characteristics, it is concluded that the reflections generated by the author are applicable to the understanding of the permanent, but not unalterable, of microregional’s underdevelopment.

The compensation hypothesis goes east: FDI and welfare state demand in postcommunist countries

AbstractWhile existing research provides evidence that globalisation sparks citizen demand for the welfare state in wealthy Western democracies, less is known about how globalisation affects public demand for welfare elsewhere. This study explores the link between globalisation and welfare preferences in postcommunist countries by examining workers at multinational corporations (MNCs). These workers have previously been found to have lower levels of job security, even in Western Europe. Additionally, in the postcommunist context, MNC employment also frequently offers better opportunities than other available jobs. This combination of risk and benefit creates higher demand for social insurance (such as unemployment insurance) because MNC workers have both higher job insecurity and higher costs of job loss (if the benefits of MNC employment make it difficult to find an equally good job). Original survey data from Ukraine shows that MNC workers experience greater insecurity and are paid more than other workers. They also express preferences for more expansive welfare programmes, prioritising those related to labour market insurance. This pattern of MNC workers’ experience and preferences is confirmed in cross‐national survey data from 30 peripheral economies, demonstrating that the compensation hypothesis has wider application than previously shown.

Macro-prudential policies, the global financial cycle and the real exchange rate

This paper examines whether a global financial cycle originating from center economies affects the real exchange rates in peripheral economies and to what extent macro-prudential policies can isolate peripheral economies from this external shock. We build a dynamic stochastic general equilibrium (DSGE) model to describe how macro-prudential policies mitigate the fluctuations of the real exchange rate in a small open economy in response to external shocks, in which households are subject to liquidity constraints. Using a sample of 37 emerging and small advanced economies, we show that a counter-cyclical macro-prudential policy implementation is effective in mitigating the fluctuations in the real exchange rates caused by a U.S. interest rate shock.

Import substitution strategies in the global economy: lessons for Russia

The world experience of implementation of import substitution strategy is being studied; reveals the essence of the main models; Identify those aspects that will prove useful in modern Russian conditions. The development of import-substituting industries according to the intra-oriented strategy is carried out in order to develop exclusively the domestic market of the country. From the point of view of the national economy, this strategy leads to the preservation of the backlog, primarily in the field of technological and scientific-technical cooperation and prevents the emergence of industries in the economy-locomotives that can ensure the world level of progress. The use of this model of import substitution has become a determining trend in the development of the so-called new industrial countries (NIS).The intra-oriented strategy of import substitution plays a stimulating role in creating a diversified national economy, expanding the production of important goods on its own. The conceptual basis for the implementation of this strategy was the theory of the peripheral economy, developed by a group of Latin American scientists headed by the Executive Secretary of the UN Economic Commission. According to this concept, the demand for products. The use of the designated model of import substitution has become a trend of development of the so-called new industrial countries of Latin America. Another option for the implementation of import substitution policy can be a strategy of foreign-oriented import substitution, which is characterized by the achievement of structural changes in the economy through the replacement of imported components and parts in export products. Implementation of import-substituting policy, according to this model, involves the development of production of national goods on a sufficiently large domestic market, followed by their promotion on the world market.

Exchange rate policy, class conflict and economic development from Furtado’s view

ABSTRACT The aim of this paper is to analyze the contributions of Celso Furtado regarding the role of exchange rate policy and its relation to social conflict in the economic growth of peripheral economies. For that, we revisit Furtado’s analyses about the Venezuelan case and in The Economic Formation of Brazil. We highlight two main conclusions from such works: i) exchange rate appreciation due to a natural resources curse harms economic growth; ii) exchange rate policy is mainly a phenomenon associated with political economy, in which social conflict emerges. Hence, we claim that Furtado’s analyses are still significant today.

Designing Urban Customs and Border Marketplaces: A Model and Case Study From Lotfabad, Iran

ABSTRACT Even though Iran’s borders are vast, shared with seven neighboring states, its borderlands are socially and economically deprived owing to their remoteness from the capital and their marginal location on the national periphery. Therefore, considering the need for border development is essential. Because so many borderland residents survive through border-related commerce, improving this peripheral economy should lead to better economic development, quality of life, poverty reduction, and overall standard of living. These goals can be realized in part through vital infrastructure, including customs areas and border marketplaces that provide convenient shopping and leisure facilities, facilities for importing and exporting goods, as well as the entrance and departure of people. Based upon interviews with ten local specialists in a key Iranian border town, Lotfabad, and a Delphi panel with ten global border specialists, the study indicates that urban development perspectives and urban design provide a conceptual foundation for developing border areas. In this regard, a conceptual model for designing customs areas and border marketplaces comprised of economic, social, legal and physical dimensions was developed by considering principles such as passive defense, accessibility, variety, inclusiveness, vitality, infrastructure, visitability, identity and local architecture, sustainability, visual character, continuity and coherence, compatibility with nature, and environmental cleanliness. This model could help planners and urban designers in developing border regions more effectively.

THE FINANCIAL CONNECTEDNESS BETWEEN EUROZONE CORE AND PERIPHERY: A DISAGGREGATED VIEW

This paper examines the financial stress interconnectedness among Greece, Ireland, Italy, Portugal, and Spain (GIIPS) economies and Germany. Based on market-level financial stress indices, we examine the stress transmission process as well as the causal network relationships in banking sector, bond, money, and stock markets. The period under investigation, 2001–2013, allows to test the effects of the 2007–2009 financial crisis as well as the subsequent European sovereign crisis. Using two alternative techniques for connectedness analysis, our evidence suggests that the peripheral economies of Italy and Spain play a highly significant role in the stress transmission in all markets, especially in the cases of banks and equity markets. Moreover, we visualize our results using network analysis. Contrary to common wisdom, Portugal, Ireland, and mainly Greece do not seem to have an important role in amplifying stress levels.

The Core, Periphery, and Beyond: Stock Market Comovements among EU and Non‐EU Countries

AbstractUsing linear and nonlinear correlations, copulas, quantile dependence and lower tail dependence, we find that (1) equity markets of the advanced European Union (EU) countries comove more closely with each other than with the peripheral economies, (2) comovements with non‐EU countries are lower, (3) relative comovement structure before, during, and after the global financial crisis has been very stable, and (4) the level of comovements remained virtually the same between the crisis and post‐crisis periods. Our results are robust to controlling for Fama‐French, U.S. and global risk factors, as well as monetary policy, market interest rates, exchange rates, and uncertainty.

Emerging trends in government venture capital policies in smaller peripheral economies: Lessons from Finland, New Zealand, and Estonia

AbstractEmerging trends from the developing venture capital industries of three smaller peripheral economies (Finland, New Zealand, and Estonia), demonstrate that government policy can overcome scale and distance barriers to assist in establishing venture capital to support innovative potential high growth ventures. Eight common policy themes for successful venture capital development are: new venture stimulation; dedicated finance policy institutions; stable, internationally harmonized tax and regulations; business angel development; inward investment; international venture capital fund development; smooth pipeline of investment; effective investment exit market. Venture capital policy development themes are interconnected, requiring a holistic ecosystem approach. A blueprint for successful small peripheral economy venture capital development requires an initial phase of new venture demand stimulation and ensuing simultaneity of policies to engineer venture capital development.

I’m already thinking of the housekeeping chores - misogyny in small couple and family entrepreneurship

This article treats misogyny as a structural and complex socioeconomic, political and institutional phenomenon. Its operation is explained in the domain of small couple and family entrepreneurship in traditional sectors of production and services in Serbia at a time of the forces financialization of post-socialist Serbia as a peripheral economy. As sources and mechanisms of a misogynistic attitude it recognizes both a patriarchal gender regime, and the global and national financial and political oligarchies, which through processes of marketization, financialization and the general centrality of the economy in society stimulate and reproduce misogyny. Gender policies created in such a context remain insufficiently geared towards the economic and social development and the emancipation of women and hence ineffective. The empirical findings of a study on 10 couple and 30 family businesses (micro and small sized) illustrate the presence of misogyny in this domain of entrepreneurship. Misogynic relationships of differing visibility and intensity are present in family businesses, in relation to the most important long-term management decisions about the distribution of power and resources in household and business roles in the family firm, in all styles and bargaining models of management. These relationships manifest themselves through prejudices, stereotypes, ritualization and offensive hierarchies. The burden of home work and care work predominantly on female shoulders, and women?s ownership and/or management positions overall are obscured by and subordinate to the male members of the household and family businesses.

Activization of Development of Economically Peripheral Regions of Russia

In article the problem of overcoming a peripheral state and activization of development of economy underdeveloped the agrarnooriyentirovannykh of regions of Russia as one of the directions of ensuring the balanced territorial development of the country and realization of integration effect of synergy and also weakening of the contradictions and threats connected with big differences of social and economic levels of regions is considered. The author of article sets tasks: definition of type of the problematical character inherent in underdeveloped regions of the certain country in a mirror of the known Theory of peripheral economy of the countries of the world; identification of the lag reasons, characteristic of type of problematical character, in development; search and justification of the directions and measures of achievement of the self-movement of regions in development; definition of a role of the state and civil institutes in a solution of the problem of activization of development of underdeveloped regions. A basis of a research are fundamental works of domestic and foreign scientists in the field of regional studies and problems of development of the backward countries of the world. During the research the cross-disciplinary and statistical types of the analysis allowing to develop conceptual approaches to development of backward regions are used. As a result of a research the factors influencing reproduction of a chronic condition of backwardness of underdeveloped regions, existence of the altruistic and egoistical beginnings in qualities of a condition of the public environment are defined. An assessment of a role of public administration and civil activity in activization of development of regions with economy of peripheral character is given. The thesis about refusal of dogma of the developed interregional division of labor is proved, the regions of agrarian specialization deprived of a minimum of the industrial enterprises are doomed to loss of a commercial crop, modernization lag and preservation of economic vegetation. A key link of the institutional transformations directed to activization of development of the country and its regions, the author considers need of regeneration of the existing public administration. Achievement of responsibility of subjects of management of all levels for effectiveness of social and economic development has to be a purpose at the same time. Scientific developments and the offered approach to overcoming the contradictions connected with uneven development of regions of the country can be used when developing measures of the institutional transformations directed to activization of development of regions with economy of peripheral character.

Unsafe abortion: a patriarchal and racialized picture of women’s poverty

Abstract This article aims to analyze how the reality of criminalized abortion reinforces inequalities of gender, race/ethnicity, and class, which are co-produced within the context of sexage, understood here as the appropriation of women by men, reducing them to the status of thing. The bibliographic and documentary research was carried out, from the perspective of materialistic, historical and dialectical analysis. The main conclusion is that criminalization reinforces the logic of social inequalities in Brazil and the world. This is because poor and black women are the most affected, those who die the most, and because almost all unsafe abortions in the world occur in the peripheric economies. Thus, the consequences of criminalized abortion, whether moral, health or economic, mainly impact poor, black, young women living in peripheral economies.

SOVEREIGN DEBT CRISIS IN A MONETARY UNION: ACCOUNTING FOR EXCESSIVE DEBT, HOUSING BUBBLES, AND THE TRANSMISSION OF CRISES

Despite vast empirical documentation of the recent sovereign debt crisis in southern Europe, there is little research accounting for the following stylized facts in a single coherent framework: continuous borrowing, high growth, housing bubbles, and current account deficits since the beginning of the European Monetary Union ending with a sudden crisis and subsequent contagion of crisis. We fill this gap by proposing a model and fitting it to the data. Using a growth model with collateral constraints of small peripheral economies in the institution of a monetary union, we analyze the multilayer moral hazards underlying excessive borrowing. Since housing bubbles can support a constant loan‐to‐value (LTV) ratio lower than LTV limits, peripheral economies can lock into a steady‐state Ponzi growth equilibrium with high growth and current account deficits, but these economies become vulnerable to crises. We identify the “self‐fulfilling crisis region” (SFCR), in which the economy grows fast with a seemingly safe LTV ratio, but with a vulnerability to crises. Moreover, a crisis in one sector propagates to other sectors by endogenously expanding their SFCRs. We derive some policy implications on LTV regulations and market psychology. Finally, our calibration exercise presents how bubbles develop and burst along with contagion across sectors, accounting for the data. (JEL E44, F34, O16)

ECB monetary expansions and euro area TARGET2 imbalances: a balance-of-payment-based decomposition

The recent financial literature seems to have reached a consensus about the influence of European Central Bank (ECB) unconventional monetary policies in explaining the multiple divergent trends of TARGET2 (T2) balances in the eurozone from 2010 and the ensuing segregation of risks in each national economy. According to the ECB, ‘mechanical’ effects in the accounting of government bonds explain the explosion of T2 balances. Divergence could therefore not be attributable to a ‘capital flight’ from peripheral economies towards northern Europe. Such an explanation does not seem to fit well with the analysed cases of Italy, Spain, and Germany. A decomposition of the T2 balances through the analysis of the financial accounts of the balance of payments shows indeed that the deterioration in the balances of Italy and Spain is mainly due to a shift of private-sector financial wealth from government securities to foreign assets (bonds, shares, and mutual funds). In the case of Germany, the abnormal growth of T2 balances is mainly attributed to the persistent influence of current-account surpluses reaching 6–8 percent of GDP and increasing due to the indirect effects of quantitative easing policies on the exchange rate between the euro and the other major international currencies.