privatisation in developing countries a review of the evidence and the policy lessons privatisation is widely promoted as a means of improving economic performance in developing countries however the policy remains controversial and the relative roles of ownership and other structural changes such as competition and regulation in promoting economic performance remain uncertain this article reviews the main empirical evidence on the impact of privatisation on economic performance in developing economies the evidence suggests that if privatisation is to improve performance over the longer term it needs to be complemented by policies that promote competition and effective state regulation and that privatisation works best in developing countries when it is integrated into a broader process of structural reform

what went wrong with the recent reforms in the southern cone this paper describes and interprets the outcome of the reform packages in chile argentina and uruguay during 1974 83 it is shown that all three countries experienced initial success with the rescue operation from the severe macroeconomic disequilibrium at the inception of the reforms the paper then discusses the areas in which the reforms were successful and why the countries experienced boom bust cycles resulting in large increases in external indebtedness and internal financial crises the paper attributes the failure of the reforms to a combination of policy inconsistencies implementation difficulties and market frictions jointly these factors generated a sustained appreciation of the real exchange rate and a large spread between the cost of dollar denominated and peso denominated loans in turn the appreciation and interest rate difference created protracted opportunities for arbitrage that distracted firms from the business of production

gatt and the economics of food safety abstract food safety is of increasing importance in higher income countries where consumers demand higher quality and safer food they will do so through the market when information makes it possible they will demand better assurances of safety through government regulations where externalities and health risks prevail the microeconomics of this demand for increased food safety is discussed in terms of how it can lead to non tariff barriers to trade that might ultimately be regulated by the gatt the public goods nature of food safety is explored along a continuum of food quality characteristics for the purpose of identifying when government regulations are needed

input versus emission taxes environmental taxes in a mass balance and transaction costs perspective the standard policy recommendation to limit pollution is to use taxes or tradeable quotas on emissions a general emphasis on emissions does not however take proper account of the characteristics of the material flow through the economy an analysis of the relationships between transaction costs and features of this flow shows that it may be less costly to tax inputs into the economy the paper focuses on the advantages of a mass flow perspective in environmental economics the trade off between the precision of an environmental regulation and its implementation costs and develops criteria for choosing between input and emission related instruments

privatization in developing countries a review of the issues abstract the theory and early experience of privatization in developing countries are reviewed privatization has been spurred by widespread dissatisfaction with the performance of public enterprises and the need to cut government expenditures unless it is accompanied by liberalization measures privatization of public enterprises is unlikely to result in significant gains in economic efficiency the sequencing of privatization and liberalization reforms will often determine their impact on efficiency but the correct order of implementation is not clear political opposition to privatization is likely to be limited to the state bureaucracy which will often be able to mobilize in order to limit the impact of reforms early implementation experiences suggest technical difficulties are as constraining as political factors

residual state ownership policy stability and financial performance following strategic decisions by privatizing telecoms we question previous research assuming that privatizing firm performance generally benefits from decreasing state ownership and the passage of time both of which purportedly align principal agent incentives promoting organizational decision making that increases shareholder value when state ownership shifts from majority and controlling to minority and non controlling the performance impact may be positive in the short run particularly where there is instability in the local investment policy environment consistent with this proposition we develop and test hypotheses derived from a minority and non controlling or residual state ownership framework grounded in credible privatization and institutional theory we propose that 1 residual state ownership positively affects shareholder returns after strategic decisions by privatizing firms because it signals state support for managerial initiatives 2 the passage of time since initial privatization negatively affects shareholder returns after strategic decisions by privatizing firms because initial undertakings in support of the privatizing firm are reversed and 3 home country investment policy stability moderates these two effects greater stability obviates the need for residual state ownership and slows policy reversals over time we find empirical support for our residual state ownership framework in event study analyses of cumulative abnormal returns cars associated with 196 major investments announced from 1986 to 2001 by 15 privatizing telecoms from around the world cars are positive at 5 25 state ownership levels but turn negative at higher state ownership levels cars turn sharply negative within 1 2 years from initial privatization dates increasing policy stability diminishes positive ownership and negative time effects on cars results confirm the potential supporting role that residual state ownership can play in enhancing strategic decision making and financial performance by privatizing firms particularly where there is instability in the home country investment policy environment

product stereotypes strategy and performance satisfaction the case of chinese exporters does following a product strategy of price leadership result in superior performance satisfaction for chinese exporters does branding products and targeting less developed countries significantly improve chinese exporters satisfaction with export performance results indicate performance satisfaction decreased when chinese firms pursued price leadership product strategies while performance satisfaction increased when chinese exporters used a branding product strategy branding products and targeting other less developed countries with these brands significantly increased performance satisfaction over branding alone

macroeconomics after the crisis time to deal with the pretense of knowledge syndrome the recent financial crisis has damaged the reputation of macroeconomics largely for its inability to predict the impending financial and economic crisis to be honest this inability to predict does not concern me much it is almost tautological that severe crises are essentially unpredictable for otherwise they would not cause such a high degree of distress what does concern me about my discipline is that its current core by which i mainly mean the so called dynamic stochastic general equilibrium approach has become so mesmerized with its own internal logic that it has begun to confuse the precision it has achieved about its own world with the precision that it has about the real one this is dangerous for both methodological and policy reasons to be fair to our field an enormous amount of work at the intersection of macroeconomics and corporate finance has been chasing many of the issues that played a central role during the current crisis including liquidity evaporation collateral shortages bubbles crises panics fire sales risk shifting contagion and the like however much of this literature belongs to the periphery of macroeconomics rather than to its core i will discuss the distinction between the core and the periphery of macroeconomics as well as the futile nature of the integrationist movement that is the process of gradually bringing the insights of the periphery into the dynamic stochastic general equilibrium structure i argue that the complexity of macroeconomic interactions limits the knowledge we can ever attain and that we need to place this fact at the center of our analysis we should consider what this complexity does to the actions and reactions of the economic agent and seek analytical tools and macroeconomic policies that are robust to the enormous uncertainty to which we are confined

public sector expenditures and financial crisis in chile abstract working with official government statistics this paper shows that imf stabilization guidelines which blame inflation and balance of payments disequilibrium on fiscal deficits are incorrect in the case of chile there government spending has for the most part been held in check during the military government however there are leading and lagging expenditure areas within the government military spending has steadily increased while social expenditures have been cut the latter point directly contradicts the official government position

the nature of heterodox economics heterodoxy serves as an umbrella term to cover the coming together of separate projects or traditions in answering the question what distinguishes heterodoxy from the orthodoxy the author argues that matters of ontology are central in answering the question how are the various traditions that make up the modern heterodoxy to be distinguished from each other the author defends criteria other than varying commitments to specific substantive theories policy measures or techniques or basic units of analysis

do regimes matter epistemic communities and mediterranean pollution control international regimes have received increasing attention in the literature on international relations however little attention has been systematically paid to how compliance with them has been achieved an analysis of the mediterranean action plan a coordinated effort to protect the mediterranean sea from pollution shows that this regime actually served to empower a group of experts members of an epistemic community who were then able to redirect their governments toward the pursuit of new objectives acting in an effective transnational coalition these new actors contributed to the development of convergent state policies in compliance with the regime and were also effective in promoting stronger and broader rules for pollution control this suggests that in addition to providing a form of order in an anarchic international political system regimes may also contribute to governmental learning and influence patterns of behavior by empowering new groups who are able to direct their governments toward new ends

consumer product export opportunities to liberalizing ldcs a life cycle approach this paper reviews popular and academic literature in order to describe several relationships which appear to exist between liberalization in ldcs and imports of consumer goods based on this review the parameters of a life cycle model are developed for consumer product exports to liberalizing ldcs such exports are hypothesized to 1 be minimal prior to liberalization and 2 rise rapidly in the early stages of liberalization and 3 decline sometimes precipitously several years later these hypotheses are tested using consumer import data from three unique ldcs chile egypt and china finally the implications of the model for ldc governments exporters and foreign investors are explored

stabilization with liberalization an evaluation of ten years of chile s experience with free market policies 1973 1983 the recent post 1973 economic experience of chile has attracted considerable attention both from professional economists and from the media most observers have been particularly impressed by the sharp contrasts observed in chile in such a short period of time for example in 1973 chile had one of the highest rates of inflation in the world over 600 whereas in 1981 it experienced one of the lowest rates of inflation 9 5 also in 1975 real gnp declined by 12 9 but during 1977 80 real gnp grew at an average rate of 8 5 per annum in 1982 however the country faced a new recession with real gnp dropping by 14 5 in 1983 the gnp was reduced further by 2 3 the fact that these episodes developed while the military government was actively pursuing free market oriented policies that greatly liberalized the economy adds considerable interest to the chilean case 2 the year 1973 marked an important turning point in chile s economic and political history in september of that year the military took over the government from president salvador allende and a period of dramatic economic changes began chile was transformed from an economy isolated from the rest of the world with strong government intervention into a liberalized world integrated economy where market forces were left free to guide most of the economy s decisions the period 1973 81 was characterized by important achievements inflation was greatly reduced the government deficit was virtually eliminated the economy went through a dramatic liberalization of its foreign sector tariffs were reduced to a uniform 10 level and prices including interest rates were full liberalized probably one of the most interesting aspects of the chilean economy during this period is that major

a tale of two enterprises swaziland s lessons for privatization abstract the generally accepted poor performance of public enterprises is attributed in large part to state ownership public enterprise performance is also judged to be poor by purely financial criteria at aggregate and generalized levels this paper undertakes two enterprise level analyses in the southern african kingdom of swaziland the study found that there are more fundamental factors than ownership which affect public enterprise performance state ownership can be a bane instead of boon and the poor performance of an enterprise may be partly reflective of unsuccessful private entrepreneurship the study also reveals some unique strategies in public enterprise management and significant implications for privatization programs

agri environmental policy and urban development patterns a general equilibrium analysis this paper investigates the spatial effects that the provision of environmental public goods have on residential location choices in a suburban context specifically a spatial general equilibrium framework is developed to analyze the consequences of adopting an agri environmental policy promoting the provision of positive farming externalities we use a static monocentric model of an open city where agricultural bid rents and agricultural amenities vary endogenously in space and where the positive externalities associated with agricultural production are valued by households consistent with empirical evidence of the potential side effects that conservation policies may have in terms of urbanization patterns and land price changes we show that under certain conditions implementing an agri environmental policy may promote additional suburban development moreover we demonstrate that the emergence of disconnected suburban areas may be significantly influenced by the location of land regulated by an agri environmental policy finally we discuss distributional aspects and show that while introducing an agri environmental policy has a negative impact on most residential land value it can have positive effects on farmland and residential land located within the regulated areas suggesting the non neutrality of such policies regarding the agents assets

agricultural externalities and environmental regulation evaluating good practice in citrus production economic activity takes place in a scenario characterized by an increasing number of environmental regulations aimed at bringing under control the emission of contaminating wastes in this paper we evaluate the impact of transforming a code of good practice in nitrogen fertilization on spanish citrus fruit farms into an environmental regulation of compulsory fulfilment using data envelopment techniques we calculate unrestricted and environmentally regulated short run maximum profits both profit values are then used to compute an index of the cost of regulation our results suggest that the cost of shifting from a merely recommended practice to a binding rule is low on average the loss of profit computed is only about 4 furthermore we find that farms overall efficiency is low and that the current gap between observed and regulated fertilization practices could be overcome by improving overall management efficiency

curbing agricultural exceptionalism the eu s response to external challenge from 1948 to 1994 the agricultural sector was afforded special treatment in the gatt we analyse the extent to which this agricultural exceptionalism was curbed as a result of the gatt uruguay round agreement on agriculture discuss why it was curbed and finally explore the implication of this for eu policy making we argue that in particular two major changes in gatt institutions brought about restrictions on agricultural exceptionalism first the uruguay round was a single undertaking in which progress on other dossiers was contingent upon an outcome on agriculture the eu had keenly supported this new decision rule in the gatt within the eu this led to the macsharry reforms of the common agricultural policy cap in 1992 paving the way for a trade agreement on agriculture within the gatt second under the new quasi judicial dispute settlement procedure countries are expected to bring their policies into conformity with wto rules or face retaliatory trade sanctions this has brought about a greater willingness on the part of the eu to submit its farm policy to wto disciplines

an economic assessment of the common market organization for bananas in the european union abstract the main objective of this paper is to provide some estimates of how the world banana market has been affected by the common market organization cmo for bananas established in the european union eu on 1 july 1993 and modified in april 1994 we quantify the effects of the new eu regulation on world and eu prices on the structure of eu imports from latin american countries african caribbean and pacific acp countries and eu regional suppliers on the pattern of consumption in the various eu member states and on consumers and producers welfare using a static partial equilibrium model of the world banana market simulation results suggest that the two key variables in determining the effects of the cmo are the size of the tariff quota on dollar and non traditional acp bananas and the capacity of acp countries to exhaust their acp contingent share

the current economic crisis its nature and the course of academic economics the current crisis has triggered significant debate concerning economic theory and policy largely absent from this debate is an informed discussion of the methods used by economists in analysing the economy and formulating their proposals but method matters here i argue that current academic research practices need to be transformed before real insight can be achieved specifically i indicate why and how a more grounded framework than that presupposed by current research practices facilitates a potentially more fruitful approach to understanding the crisis

ranking farms with a composite indicator of sustainability the assessment of sustainability at farm level has been growing in popularity over the last few years this article contributes to this line of research by building up composite indicators for different facets social economic environmental and global of farm sustainability using a methodological approach that combines data envelopment analysis dea and multicriteria decision making mcdm methods and assigns common weights to each individual sustainability indicator this approach is applied to a database of 163 farms located in the campos county a region belonging to the dry lands of the spanish northern plateau using 12 individual indicators of sustainability our findings show that both economic and environmental composite sustainability indicators are positively correlated but that this is not the case for the social indicator we also check the influence of a set of variables on farm sustainability using bootstrapping statistical techniques and showing that increasing farm size membership in agricultural cooperatives and farmers medium and upper agricultural specific technical education all exert a significant positive influence on sustainability these results provide clues for policy makers that intend to design sustainability increasing structural agricultural policies

is there redemption for conventions this article explores the concept of convention in the social sciences it presents the two major neo humean philosophical approaches to convention and challenges their intuitive appeal and research implications the weaknesses of these approaches are examined and a new direction is suggested for the study of convention the paper goes on to develop a framework for the analysis of conventions using the notion of the exemplar introduced by thomas kuhn an illustration of this alternative approach is provided using the example of the wage relation copyright 2005 oxford university press

microeconomic adjustments in chile during 1977 1981 the importance of being a grupo abstract this paper uses the financial statements of industrial firms to provide an integrated firm level view of the changes in the chilean economy during 1977 1981 both real side and financial shocks had major effects on the performance of some types of firms exportable goods producers did relatively poorly in real activities for reasons probably tied to chile s real prolonged exchange rate appreciation import competing firms that began the period with high protection did even worse apparently reflecting the larger change in their output prices as protection was dismantled the reforms thus shifted demand away from industries least in line with the country s comparative advantage but they also hurt exportables the very sector authorities intended to promote on the financial side the highly positive real cost of peso borrowing reduced industrial profits considerably a handful of powerful conglomerates grupos generated large but presumably unrealized capital gains by investing in the securities of related enterprises such activities allowed them to offset relatively poor returns on real operations and their ownership of the country s major banks allowed them to consolidate control of a large volume of assets with debt finance these two results explain why the grupos were suddenly in considerable financial difficulty when the chilean boom ended in 1982

activist fiscal policy during and after the great recession that began in december 2007 the u s federal government enacted several rounds of activist fiscal policy in this paper we review the recent evolution of thinking and evidence regarding the effectiveness of activist fiscal policy although fiscal interventions aimed at stimulating and stabilizing the economy have returned to common use their efficacy remains controversial we review the debate about the traditional types of fiscal policy interventions such as broad based tax cuts and spending increases as well as more targeted policies while there have been improvements in estimates of the effects of broad based policies much of what has been learned recently concerns how such multipliers might vary with respect to economic conditions such as the credit market disruptions and very low interest rates that were central features of the great recession the eclectic and innovative interventions by the federal reserve and other central banks during this period highlight the imprecise divisions between monetary and fiscal policy and the many channels through which fiscal policies can be implemented

the demand for international regimes international regimes can be understood as results of rational behavior by the actors principally states that create them regimes are demanded in part because they facilitate the making of agreements by providing information and reducing transactions costs in world politics increased interdependence among issues greater issue density will lead to increased demand for regimes insofar as regimes succeed in providing high quality information through such processes as the construction of generally accepted norms or the development of transgovernmental relations they create demand for their own continuance even if the structural conditions such as hegemony under which they were first supplied change analysis of the demand for international regimes thus helps us to understand lags between structural change and regime change as well as to assess the significance of transgovernmental policy networks several assertions of structural theory seem problematic in light of this analysis hegemony may not be a necessary condition for stable international regimes past patterns of institutionalized cooperation may be able to compensate to some extent for increasing fragmentation of power

international debt and linkage strategies some foreign policy implications for the united states the global debt problem influences the foreign policy capabilities of the united states through its impact on the government s linkage strategies in foreign affairs in some circumstances policy makers are forced to make connections between different policy instruments or issues that might not otherwise have been felt necessary in others opportunities for connections are created that might not otherwise have been felt possible the polish debt crisis of 1981 82 the latin american debt crisis of 1982 83 and the imf quota increase in 1983 are suggestive in this regard linkage strategies bred by the debt issue are more apt to be successful when the interest shared by the united states with other countries in avoiding default is reinforced by other shared economic or political interests they will also be more successful to the extent that the government can supplement its own power resources by relating bank decisions to foreign policy considerations power in such situations however is a wasting asset even when employed indirectly through the intermediation of the imf

the rip tide of privatization lessons from chile abstract chile is one of the rare exceptions where the voluble enthusiasm for privatization has been put into effect of the 500 companies that were under state ownership in the early 1970s only 19 remained under public control at the end of the decade moreover a land reform which had affected 43 of the country s cultivable area was rolled back by almost 40 privatization indisputably increased the economic power of a number of conglomerates and fostered the concentration of assets however the complexity of the liberalization package that accompanied privatization makes it difficult to establish strict causality for the economic collapse that followed in the early 1980s the chilean experience with privatization reveals some interesting lessons that other countries may wish to consider

good bye financial repression hello financial crash some unintended consequences of financial liberalization in latin america are analyzed in this paper intrinsic imperfectious in financial markets and the policy dilemmas they pose are reviewed first the stylized facts of southern cone experiments in financial liberization are then presented alternative ways of organlzing domestic capital markets under latin american conditions are discussed and an eclectic reform mongering program is proposed

capping the cap implementation of the uruguay round agreement by the european union abstract this paper considers the detailed implementation of the uruguay round agreement on agriculture by the european union eu and its likely impact on the cap the agreement sets three constraints to agricultural support in developed countries the commitment to reduce domestic support by 20 per cent will have no effect tariffication and the new access provisions will only marginally improve the competitiveness of imports into the eu in the short run but do set the scene for more meaningful tariff cuts in the next round it is the constraints on subsidized exports which will most limit the cap and impact on world markets although even here the effects could easily be exaggerated the export constraints will bite deeper in the longer run particularly in the context of an enlargement of the eu to embrace several states from central and eastern europe which could trigger a more fundamental cap reform despite its limited impact the agreement should be judged a success in that it does impose limits on the cap and sets the scene for the next round of negotiations proposed to begin in 1999

implications of 1992 for eec farm and food policies abstract three broad issues are first discussed article 8a of the eec treaty does not in itself ensure that a single market will be effected on 1 january 1993 the protocol on german internal trade raises particular difficulties and third countries particularly in the context of the gatt talks must not be neglected green money and monetary compensatory amounts mutual recognition irradiation and non returnables in denmark are four particular policy issues discussed before the question is raised whether 1992 will bring benefits few studies of the impact of 1992 have been published and none can be said to have definitively answered this question

the limits of ontological critique from judgmental rationality to justification the cambridge social ontology cso programme s inability to generate a meaningful dialogue with mainstream economics is difficult to understand by mere reference to judgmental rationality and without reference to cso s ideological configuration our paper uses an economie des conventions framework to draw systematic comparisons between cso s ideological configuration and the ideological configurations of mainstream economic theories and practice the resulting analysis helps us to understand not only why cso generated little response from the mainstream but also how cso might renew its critique in ways that might be more likely to produce a response

managing the evolution of multilateralism author s downs george w rocke david barsoom peter n abstract in the past five years a relatively extensive literature has emerged that explores the demand for multilateral cooperation that is those factors that motivate states to develop or resist developing formal institutions that operate to increase interstate economic military or environmental cooperation 1 these factors include the transaction costs associated with ad hoc and multiple bilateral arrangements increased interstate trade the diffusion of liberal trade theory information about the costs of environmental degradation and trends in elite ideology to date however our understanding of the supply side of multilateralism the standards that are set for admission the order and speed with which candidate states are admitted and the impact of expansion on cooperation and future evolution has been relatively undeveloped 2 partly as a result theorists have had little to say about how multilateral institutions are likely to evolve or what the policy consequences of their expansion will be 3 supply side issues are important because multilateral organizations usually do not spring forth full blown they grow instead of forming an inclusive agreement that is one that covers nearly all of the states that its designers eventually hope to include many multilateral organizations start out with substantially smaller memberships and generally expand over time we argue that among the many possible explanations for the choice of this design strategy there is a rational choice argument

in the shadow of law or power consensus based bargaining and outcomes in the gatt wto this article explains how consensus decision making has operated in practice in the general agreement on tariffs and trade world trade organization gatt wto when gatt wto bargaining is law based consensus outcomes are pareto improving and roughly symmetrical when bargaining is power based states bring to bear instruments of power that are extrinsic to rules invisibly weighting the process and generating consensus outcomes that are asymmetrical and may not be pareto improving empirical analysis shows that although trade rounds have been launched through law based bargaining hard law is generated when a round is closed and rounds have been closed through power based bargaining agenda setting has taken place in the shadow of that power and has been dominated by the european community and the united states the decision making rules have been maintained because they help generate information used by powerful states in the agenda setting process consensus decision making at the gatt wto is organized hypocrisy allowing adherence to the instrumental reality of asymmetrical power and the sovereign equality principle upon which consensus decision making is purportedly based

impact of the 1996 us fair act on the common agricultural policy in the world trade organisation context the decoupling issue abstract the united states us federal agriculture improvement and reform fair act of 1996 represents a watershed not only from a domestic point of view but also from the perspective of the next round of international agricultural negotiations in particular it will force the european union eu to reform its agricultural policy so that compensatory payments for support price cuts are included in the green box or at least are much more decoupled than at present us exports of several agricultural products including maize pork and poultry meat barring a prolonged global economic downturn should increase substantially over the 7 year period of the act and beyond accordingly the us will certainly attempt to ensure that trade barriers with the eu and subsidised competition from the eu in third markets are kept to a minimum though the 1999 eu proposals for a new reform of the common agricultural policy cap represent a courageous step in the right direction they are likely to be insufficient to comply with future world trade organisation wto commitments in particular with regard to the decoupling of direct aid payments we have made a number of proposals for an internal support policy which explicitly recognises that european farmers have several functions that require specific forms of public intervention and which should comply with future wto requirements

the dilemma of cheap food and self sufficiency the case of wheat in iran self sufficiency in wheat has been one of the major goals of iranian agricultural policies since the revolution of 1979 even so the country failed to achieve this goal by the early 2000s despite a satisfactory growth in wheat production this paper addresses this failure and the political difficulties in introducing reforms that would reduce the need for import first the production and consumption of wheat are examined the conclusion is that the cheap bread policy has mainly been responsible for the imbalances between domestic supply and demand and the continued reliance on wheat imports moreover the paper argues that the subsidy program is an expensive safety net for the needy and shows that the iranian government has intended to reform the program since the early 1990s however subsidy reforms are politically sensitive especially in developing countries where subsidies are considered very important both for supporting the poor and for political stability an analysis of the iranian attempts at subsidy reform suggests that they have not yet succeeded mainly due to such political considerations

determining the need for issue linkages in multilateral trade negotiations in multilateral trade negotiations trade offs usually are made within the issue areas that are on the agenda in the absence of cross issue trade offs linkages agreement may not be possible to maximize both the potential gains from trade and the scope for agreement negotiators need to be willing and able to consider the feasibility of issue linkages this raises the practical problem of determining when such trade offs are likely to be necessary although quantitative methods of policy analysis have been developed they have not been widely used by policymakers in part owing to the fact that negotiations focus largely on nontariff measures this article proposes a qualitative approach to the problem and applies it to the tokyo and uruguay round negotiations on safeguards to protect domestic industries from problems related to increases in imports

the great crash of 2008 and the reform of economics the 2008 economic crash led to remarkable shifts of opinion among world leaders does this crisis create favourable conditions for the reform and revitalisation of economics itself from a subject dominated by mathematical techniques to a discipline more oriented to understanding real world institutions and actors and why were warnings of financial collapse not heeded recent shortcomings are partly related to the global triumph of market individualist ideology and partly to the exaggerated roles of modelling and quantification these failures of economics are partly peculiar to the discipline and also a result of other wider institutional and cultural forces

approaching the environmental sustainable value in agriculture how factor endowments foster the eco efficiency abstract small and labor intensive farms guarantee a higher degree of environmental sustainability compared to rich capital intensive farms this paper offers a methodological contribution to the value based sustainability approach consisting in computing a modified indicator of environmental sustainable value using this approach the authors test how factor endowments such as capital land and labor contribute to environmental sustainable value using a long term panel of region representative european union farm accountancy data network farms in 2004 2015 the seminal within between specification was employed to control time variant and time in variant space heterogeneity of european regions the articles main finding is that higher capital endowment and lower labor intensity is beneficial for environmental sustainable value the result that farming with higher labor endowment might be less eco efficient contradicts the commonly known perception of this problem in light of our findings we conclude that the pro investment direction of the common agricultural policy should be followed but one size fit all policy is not working

reforms and macroeconomic adjustments in chile during 1974 1984 abstract this paper provides a background on the main macroeconomic developments of the reform period after a review of the macroeconomic disequilibrium before the reforms the paper interprets the macroadjustments the interpretation covers two distinct periods 1973 1976 when policy was based on a closed economy view and 1977 1982 when macropolicy was increasingly guided by an open economy model the paper argues that the setback that chile suffered during 1982 1983 and the large external debt that was accumulated were the result of two major errors the first was the use of the exchange rate to stabilize prices without due regard for the incentives for large capital inflows that arose from this policy at a time when international capital markets were very liquid the second major error was in the second half of 1981 after a large drop in capital inflows the authorities relied on an automatic adjustment mechanism by which the monetary squeeze from the reduction in capital inflows would improve the real exchange rate because wages were indexed to prior inflation the adjustment mechanism was bound to create substantial unemployment as indeed was the case the paper concludes with the assessment that most of the micro reforms were in the right direction and had the expected result and the errors were mostly in the design of macroeconomic policies

the eec s policies and its food abstract this article examines four interrelated aspects of the european community s policy as they affect food supply the customs union the adoption of a common agricultural policy the move towards a single market and the recent extension of the ec s competence to embrace environmental matters ec intervention has certainly affected the range quality composition and price of food in europe s stores and that involvement is likely to grow but the cap does not have the dominant role in determining the food europeans eat europe s international buying power and the ready availability of foods on world markets are more potent considerations

the status and prospects for genetically modified crops in europe abstract despite the rapid expansion in the global area planted with genetically modified gm crops there has been resistance to this technology in europe this article considers why molecular technologies used to produce gm crops are reviewed and crops currently and soon to become available listed it is argued that the prospects for gm crops depend on 1 consumer acceptance which depends on the perception of the benefits gm crops offer and on confidence in the legislative framework and regulatory procedures designed to identify and quantify any potential disadvantages 2 further technological advances which might reduce any adverse consequences of and enhance the benefits from gm crops 3 patent law which underpins incentives for private investment and largely determines the development of market structure and 4 the relative profitability of gm crops vis a vis conventionally bred varieties which will be a key determinant of the area planted importantly regulations which increase consumer confidence may also raise the costs of planting gm crops and therefore will act to reduce the area planted

addressing uncertainty in economics and the economy this article explores the way society in general and economists in particular deal with fundamental uncertainty it is argued that uncertainty is interdependent with the evolution of institutions and behaviour including that designed to help society cope with uncertainty whilst some mainstream theory does address uncertainty it employs a much narrower concept than fundamental uncertainty generally in spite of the evident increase in fundamental uncertainty during the crisis most mainstream theory ignores it although ignoring uncertainty can sometimes be a successful coping mechanism it is argued that as a blanket coping mechanism ignoring uncertainty seriously limits the realism of theory and therefore also practice and policy it is concluded that economists should embrace uncertainty by tailoring methodologies and theories to address it this would provide a more fruitful basis for policy aimed at reducing uncertainty in the economy and also reducing our own uncertainty

reconsidering agri environmental policy permitted by the uruguay round agreement agri environmental policies are increasingly being used to redress the balance between jointly produced agricultural and environmental outputs and are permitted by the uruguay round ur agreement with the general provision that they not distort trade in this paper we argue that any market consequences of efficient welfare enhancing agri environmental policies should not be considered trade distorting to consider them so is inconsistent with economic efficiency and with ecological integrity social cost benefit analysis cba is a more appropriate test and guide of trade consistency for agri environmental policies and using trade effects as the test may not enhance social welfare moreover specific provisions in the ur agreement restricting payments under agri environmental policies to opportunity costs are not warranted on economic efficiency grounds and consign the environment to a status subsidiary to agricultural output

the monetarist experiment in chile a critical survey abstract chile constitutes the most outstanding case of implementation of an extreme market economy model during nine years between 1973 and 1982 a model was implemented that for its pureness deepness and extension induced a drastic transformation of the chilean economy the main features of the model are examined focusing on the anti inflationary policy the reform of the financial system and the external opening then the global results concerning output income distribution and saving investment are studied the paper shows that the balance of the results was clearly negative during the 1973 1981 period output stagnated the concentration of wealth was spectacular and saving and investment rates fell significantly the characteristics themselves of the model and the weakening of the productive apparatus that they originated additionally explain that the international recession was multiplied during 1982 within the domestic economy the paper concludes with an attempt to interpret the main causes of the failure of this experiment

food law and the internal market taking stock abstract the history of community food law is briefly traced the changes in policy which followed the difficulties encountered in vertical harmonization and the cassis de dijon case are described 1989 is identified as a turning point since the legal framework for community food law has now been agreed the future legislative programme is described as is the need for cooperation between member states and the commission through all processes from scientific assessment to control

agri environmental relationships and multi functionality further considerations multi functionality is a currently fashionable argument especially within the eu for continued support of the farming sector however there is a substantial danger that this will be used and be seen to being used as a facade for continued traditiona l support and protection if so the current trend towards liberalised agricultural markets on which much of the developing world depends will be frustrated nevertheless farming does matter to many communities over and above its marketable surplus and the incomes so generated it follows that any negotiations aimed at liberalising agricultural trade have to take these arguments seriously to do so requires that the critical elements of the debate be widely understood this paper outlines these critical elements in the light of a previous contribution from hodge 2000 it argues that there are ways in which quasi market systems can be used to correct market failures implicit in the notion of multi functionality it also argues that proper compensation to existing supported farmers is a necessary and separate condition for sensible policy reform much of the commentary on farm trade liberalisation confuses the two separate conditions for reform multi functionality and compensation this confusion threatens progress towards agricultural trade liberalisation without generating any reliable benefits of a more multifunctional agriculture

legalization trade liberalization and domestic politics a cautionary note if the purpose of legalization is to enhance international cooperation more may not always be better achieving the optimal level of legalization requires finding a balance between reducing the risks of opportunism and reducing the potential negative effects of legalization on domestic political processes the global trade regime which aims to liberalize trade has become increasingly legalized over time increased legalization has changed the information environment and the nature of government obligations which in turn have affected the pattern of mobilization of domestic interest groups on trade from the perspective of encouraging the future expansion of liberal trade we suggest some possible negative consequences of legalization arguing that these consequences must be weighed against the positive effects of legalization on increasing national compliance since the weakly legalized gatt institution proved sufficient to sustain widespread liberalization the case for further legalization must be strong to justify far reaching change in the global trade regime

economic liberalism in chile 1973 82 a model for growth and development or a recipe for stagnation and impoverishment public policy in chile since the coup d etat of 1973 has been formulated in a highly authori tarian institutional setting the socio political constraints that would normally militate against a radical redefinition of the social economic and political basis of society have been all but absent in the economic sphere policy makers armed with a wide mandate from the army and possessing a strong academic grounding in monetarism were able and deter mined to reverse dramatically the previous trend towards growing state intervention and planning a trend that had begun in the 1930s but which had reached its apex under the socialist government of salvador allende 1970 73 in reorganising the economic basis of society policy makers were guided to quite an extraordinary degree by the principles of economic liberalism the doctrine maintains that in an exchange economy based on the division of labour individuals left free to pursue their own self interest will necessarily cause the welfare of the group be enhanced the free market is argued to be sovereign and through the price system to constitute the best mechanism for allocating society s resources both in production and consumption from this there stems an insistence on limiting the powers of government during 1973 there developed in chile a serious crisis of economic stability when the army came to power in september of that year consumer prices were inflating at 2096 monthly over 90096 on an annual basis the imbalance between public sector revenues and expenditures had grown out of control the deficit of central government alone reaching almost 25 of gdp the deficit on the current account of the balance of payments stood at 2 8 of gdp while foreign reserves were actually us 231 m in the red gdp invest ment and consumption were all contracting table 1 shows the principal macroeconomic aggregates from september 1973 to mid 1976 a period that can be viewed as constituting the first phase in chile s experiment with liberalism the top economic priority of the new regime was the reduction of inflation and the improvement of the country s external payments position to this end the government in conjunction with the imf adopted a highly ortho dox approach to stabilisation the exchange rate was greatly devalued and restrictive monetary and fiscal measures introduced prices were decontrolled and denationalisation

the effect of international environmental institutions how we might learn more analysts of international politics can measure and explain the effect of international environmental institutions on the behavior of states and other actors and on the natural environment in three steps first we measure the outcome to be explained in terms of goal attainment defined as the difference over time or across cases between actor behavior or the state of the natural environment on dimensions identified by institutional goals and certain end points determined by institutional goals second we assess the effect of an institution in terms of the extent to which the existence or operation of the institution contributes ceteris paribus to variation in goal attainment we transform these two variables into a score of institutional effectiveness to indicate the degree to which institutions contribute to the resolution of the environmental problems that motivate their establishment third we analyze the relationship between institutional effectiveness and specific dimensions of institutional design such as decision making rules membership and access conditions and the compliance system

agri environmental policies in the eu and united states a comparison abstract agri environmental policies aeps in the united states and the european union are examples of payments for environmental services that pay farmers to reduce the negative externalities of agricultural production while serving as a means to transfer public funds to farmers we show that despite similar origins aeps in the two regions differ both in their specific objectives and in their implementation for example aeps in most member states of the eu 15 have the additional objective of using agriculture as a driver for rural development this objective is achieved by compensating farmers for the private delivery of positive public goods such as attractive landscapes produced by agriculture the rationale is market failure and there is empirical evidence that europeans are willing to pay for such positive externalities no comparable provision exists in u s policy by contrast u s aeps focus almost entirely on reducing agriculture s negative externalities such as soil erosion second we find that u s programs are more targeted than their eu counterparts and take opportunity cost into account the eu programs on the other hand address a wider range of externalities and are focused more on the paying for a particular farming process than reducing specific negative externalities the eu takes a broader view of aeps than does the united states both in terms of type of activity that can be funded and by using less targeting by land characteristics and so the european program could be more easily used as a mechanism for transferring income to producers despite this we find evidence that many of the amenities targeted by the programs are demanded by the population

interactions between agricultural and environmental policies a conceptual framework agricultural policy has a well documented impact on farmers production decisions and those decisions land water and agricultural chemical use may in turn affect the environment there is a public perception that existing agricultural policies are linked to agricultural pollution as exemplified by the conclusions of the recent national research council report alternative agriculture 1989 there is only limited theoretical or empirical research addressing these linkages however this paper develops a conceptual framework that can be used to analyze the interactions between agricultural and environmental policies and pollution this framework integrates physical and economic models at a disaggregate level necessary to capture the heterogeneity of the physical environment and the economic behavior of farmers following e hochman and d zilberman 1978 the disaggregate units can be statistically aggregated to a level useful for policy analysis agricultural and environmental policies can be categorized according to their effects on the intensive and extensive margins combining the different policy instruments with the microeconomic heterogeneity we find that existing agricultural and environmental policies can have either positive or negative effects of nonpoint source pollution to infer an aggregate effect requires data that do not currently exist our framework provides a basis for empirical investigations of these effects given adequate data moreover we find that agricultural policy instruments can be used to mitigate pollution if used appropriately

the impact of the gatt agreement on eu fruit and vegetable policy abstract this paper examines the eu s plans for implementing the uruguay round gatt agreement on agriculture with respect to fresh fruits and vegetables it considers the import access export subsidy and domestic support commitments in particular the eu has decided to retain a minimum import price regime for fresh fruits and vegetables the new entry price system displacing the old reference price system is to apply on a consignment basis the entry price and reference price systems are compared and some conclusions drawn about the likely impact of entry prices on potential third country suppliers of the eu market