the irish case of dependency an exception to the exceptions the dependency approach has recently been criticized by authors who quote the exceptional east asian cases the irish case is used to refute these new modernizationist arguments on two counts 1 countries such as ireland not the east asian countries have regimes with characteristics that tend to set dependency relations in motion these characteristics include radical free trade free enterprise andforeign industrial domination 2 because of these characteristics ireland has endured economic stagnation and tendencies toward higher inequality irish economic growth under foreign dominated industrialization was slowed by decapitalization and by the absence of linkages between foreign and domestic industry time series models show that foreign penetration and free trade are related to slower economic growth because of slower investment growth and other reasons inequality increased primarily because of rising unemployment although social welfare programs reduced the effects of direct income inequality their effects have been reduced by regressive taxation and austerity programs

globalization and the great u turn income inequality trends in 16 oecd countries the debate on the resurgence of income inequality in some advanced industrial societies has often focused on the impact of an increasingly integrated world economy typified by growing capital mobility heightened international competition and an increase in migration this study represents one of the first systematic cross national examinations of the role of globalization in the inequality u turn results indicate on the one hand that total inequality variation is principally affected by the percentage of the labor force in agriculture followed by the institutional factors union density and decommodification and only then by globalization on the other hand longitudinal variation in inequality while still dominated by the percentage of the labor force in agriculture is also principally affected by aspects of globalization such as southern import penetration and direct investment outflow and to a lesser extent by migration in other words globalization explains the longitudinal trend of inc

international cooperation behind the veil of uncertainty the case of transboundary acidification the complexities of international environmental problems are only poorly understood hence decision makers have to negotiate about abatement measures even though they do not know the true model of the ecological system and have only a rough idea about the costs and benefits of their action it will be analysed to what extent this kind of model uncertainty where players do not only have incomplete information about the payoff functions of the other players but also about their own payoff function affects the prospects of international cooperation using a simple game theoretic model it is shown how countries can use the veil of uncertainty to hide their distributional interests the arguments are based on a deviation from the common prior assumption which seems particularly questionable in a setting comprising various countries with different cultural and scientific backgrounds finally the model will prove useful to quantitatively and qualitatively illustrate the central role of model uncertainty in the negotiations of the first sulphur protocol signed to combat transboundary acidification

payments systems and monetary policy abstract a dynamic spatial model is constructed where there is a role for money and for centralized payments arrangements and where there are aggregate fluctuations driven by fluctuations in aggregate productivity with decentralized monetary exchange and no centralized payments arrangements there is price level indeterminacy and the equilibrium allocation is inefficient a private clearinghouse arrangement improves efficiency but produces a real indeterminacy the pricing of daylight overdrafts is irrelevant for the equilibrium allocation efficiency is achieved with a zero nominal interest rate on overnight central bank lending or through private overnight interbank lending

economic globalization and women s employment the case of manufacturing in mexico sociological research has been generally critical of the effects of economic globalization on developing countries however greater worldwide economic integration may have created new employment o

foreign capital dependence and development a new direction scholars have long debated the impact of foreign investment on the economies of less developed countries many argue that foreign investment is beneficial for the host economy others argue just as forcefully that dependence on foreign capital is detrimental this study offers a new conceptualization of foreign capital dependence that may resolve this debate foreign investment concentration which is the proportion of a host country s foreign direct investment stocks owned by the single largest investing country the theory is that high investment concentration limits the autonomy of state and business elites to act in the long term interests of domestic growth in a series of cross national panel regression models of 39 less developed countries estimated at five year intervals from 1970 to 1995 the often cited negative effects of foreign capital penetration on growth in gnp per capita are dramatically reduced or entirely replaced when investment concentration and the related concepts of export commodity and trade partner concentrations are included in the analyses foreign investment concentration has a significant long term negative effect on growth that is strongest over the initial five year period and decreases over the next 15 years a similar effect is also found for the 1990 1997 period this structural aspect of capital dependence has a greater impact on development than does the overall level of foreign capital penetration

the role of uncertainty and learning for the success of international climate agreements abstract transnational externalities e g transboundary pollution trade contagious diseases and terrorism warrant coordination and cooperation between governments but this proves often difficult one reason for the meager success is the public good character of many of these economic problems encouraging free riding another reason one might suspect is uncertainty surrounding most environmental problems and in particular climate change this provides often an excuse for remaining inactive paradoxically some recent papers have concluded just the opposite the veil of uncertainty can be conducive to the success of international environmental cooperation in this paper we explain why and under which conditions this can be true however we argue that those conditions are the exception rather than the rule most important we suggest a mechanism for those conditions where learning has a negative effect on the success of cooperation which removes this effect or even turns it into a positive effect our results apply beyond the specifics of climate change to similar problems where cooperation generates positive externalities

dependency disarticulation and denominator effects another look at foreign capital penetration less developed countries desparately need capital to develop but countries dependent on foreign capital face slower economic growth higher income inequality and possibly impaired domestic capital formation these conclusions emerge from a reassessment of glenn firebaugh s broad critique of capital dependency research which exposed an important error in earlier studies the solution charts new theoreticall ground by factoring dependency effects into the differential productivity of foreign and domestic investment and the negative externalities from foreign capital penetration the revised formulation is applied to cross national analyses of economic growth decapitalization and income inequality the findings consistently support capital dependency theory

correlated equilibrium as an expression of bayesian rationality if it is common knowledge that the players in a game are bayesian utility maximizers who treat uncertainty about other players actions like any other uncertainty then the outcome is necessarily a correlated equilibrium random strategies appear as an expression of each player s uncertainty about what the others will do not as the result of willful randomization use is made of the common prior assumption according to which differences in probability assessments by different individuals are due to the different information that they have where information may be interpreted broadly to include experience upbringing and genetic makeup copyright 1987 by the econometric society

are the economy and the environment decoupling a comparative international study 1960 20051 ecological modernization theory posits that even though economic development harms the environment the magnitude of the harmful link decreases over the course of development in contrast the treadmill of production theory argues that the strong relationship between environmental harms and economic development will remain constant or possibly increase through time to evaluate these competing propositions interactions between economic development and time are used in cross national panel analyses of three measures of carbon dioxide emissions the results vary across the three outcomes as well as between developed and less developed countries providing mixed support for both theoretical perspectives the authors conclude by discussing how both theories could benefit from engaging contemporary research concerning changes within the transnational organization of production and the structure of international trade and how these global shifts influence environment economic development relationships

reversal of fortunes democratic institutions and foreign direct investment inflows to developing countries does increased democracy promote or jeopardize foreign direct investment fdi inflows to less developed countries we argue that democratic institutions have conflicting effects on fdi inflows on the one hand democratic institutions hinder fdi inflows by limiting the oligopolistic or monopolistic behaviors of multinational enterprises facilitating indigenous businesses pursuit of protection from foreign capital and constraining host governments ability to offer generous financial and fiscal incentives to foreign investors on the other hand democratic institutions promote fdi inflows because they tend to ensure more credible property rights protection reducing risks and transaction costs for foreign investors hence the net effect of democracy on fdi inflows is contingent on the relative strength of these two competing forces our argument reconciles conflicting theoretical expectations in the existing literature empirical analyses of fifty three developing countries from 1982 to 1995 substantiate our claims we find that both property rights protection and democracy related property rights protection encourage fdi inflows after controlling for their positive effect through property rights protection democratic institutions reduce fdi inflows these results are robust against alternative model specifications statistical estimators and variable measurements

economic openness democracy and income inequality an empirical analysis scholars have studied effects of economic openness and democracy on national income inequality in two literatures in democracy studies scholars agree democracy reduces inequality but empirical evidence is ambiguous in globalization studies effects of economic openness on inequality are debated but have not been rigorously examined this article is the first systematic statistical study of the effects of both economic openness and democracy on income inequality these effects need to be studied together the authors measure national income inequality from a comprehensive gini coefficient data set economic openness is measured from trade flows foreign direct investment inflows and financial capital inflows the period studied is 1960 to 1996 the unit of analysis is a country decade and the sample includes 69 countries the authors find that democracy and trade reduce income inequality foreign direct investments increase income inequality and financial capital does not affect income inequality policy implications are discussed

the long term effects of foreign investment dependence on economic growth 1940 1990 does dependence of a national economy on foreign investment promote economic growth or underdevelopment the recent exchanges between glenn firebaugh and william j dixon and terry boswell suggest the contentious nature of this debate this study analyzes models similar to those tested in previous research but with data from earlier time points to examine the long term effects of foreign capital penetration accumulated stocks of foreign capital gdp in 1938 have a short term five year positive effect on economic growth followed by a 20 year lagged negative effect on economic growth beginning in 1960 and lasting at least 30 years similar effects are found using a second indicator of foreign investment dependence debits on investment income for the 1950 90 period the international migration of capital has facilitated development of the world s natural resources and has been instrumental in transmitting the direct effects of the industrial revolution from area to area thereby it has helped to increase

income inequality development and dependence a reconsideration we reconsider the role of foreign investment in income inequality in light of recent critiques that question the results of quantitative cross national research on foreign capital penetration we analyze an unbalanced cross national data set in which countries contribute different numbers of observations with a maximum of 88 countries and 488 observations dated from 1967 to 1994 random effects regression models that control for unmeasured country heterogeneity are used to investigate effects of foreign capital penetration on inequality measured as the gini coefficient against the background of an internal developmental model of inequality we adapt firebaugh s 1992 1996 critique of the literature on the effect of foreign investment on economic growth to the study of income inequality and find that the stock of foreign direct investment has an effect on inequality that is independent of the mechanisms identified by firebaugh we explore tsai s 1995 claim that the effect of foreign capital penetration is spurious and find that foreign stock has a significant positive effect on inequality net of region specific differences an alternative interpretation of the findings of the foreign investment inequality literature is discussed in light of the discovery of an inverted u shaped relationship between income inequality and foreign investment stock per capita we conclude that thinking on the relationship between income inequality and investment dependence should be revised in light of an investment development path relating the inflow and outflow of foreign capital to economic development

boon or bane reassessing the productivity of foreign direct investment we assess the effects of foreign and domestic capital on economic growth using the latest data and better models of economic growth than those previously used we explicitly consider the role of human capital in the process of economic development we find no evidence that foreign direct investment harms the economic prospects of developing countries the flow of foreign capital from 1980 to 1991 spurred growth in gross domestic product per capita while the level of foreign stock or foreign penetration had no discernible effect indeed new foreign investment was more productive dollar for dollar than was capital from domestic sources previous suggestions that foreign investment flows are less beneficial than domestic ones were based on a misinterpretation moreover foreign direct investment stimulates investment from domestic sources consequently developing countries have no reason to eschew foreign capital as dependency theorists urge

trade openness foreign direct investment and child labor summary the skeptics of globalization argue that increased trade openness and foreign direct investment induce developing countries to keep labor costs low for example by letting children work this article argues that there are good theoretical reasons why globalization might actually have the opposite effect we test this with various measures of child labor and provide the first analysis of foreign investment in addition to trade we present evidence that countries that are more open to trade and or have a higher stock of foreign direct investment also have a lower incidence of child labor this holds for the labor force participation rate of 10 14 year old children the secondary school nonattendance rate and a count measure of economic sectors with child labor incidence as the dependent variables globalization is associated with less not more child labor

inequality and insurgency maldistribution of land in agrarian societies is commonly thought to be an important precondition of mass political violence and revolution others argue that because of the difficulty of mobilizing rural populations for political protest land maldistribution is irrelevant except as part of an inegalitarian distribution of income nationwide these rival inequality hypotheses have significant implications with respect to the kinds of reforms likely to reduce the potential for insurgency in a society they are tested using the most comprehensive cross national compilation of data currently available on land inequality landlessness and income inequality support is found for the argument that attributes the greater causal import to income inequality moreover the effect of income inequality on political violence is found to hold in the context of a causal model that takes into account the repressiveness of the regime governmental acts of coercion intensity of separatism and level of economic development

strategic information acquisition and the mitigation of global warming abstract we consider the strategic role of uncertainty and information acquisition for the mitigation of global warming before the countries decide on their contribution to a mitigation of global warming they may invest in information about the country specific benefit of reductions of the emissions of greenhouse gases we show that information acquisition has a substantial strategic value countries may prefer not to learn their benefit of climate protection even if information acquisition does not involve a direct cost this strategic information choice may further decrease the efficiency of the public good provision

remittances and economic growth larger impacts in smaller countries this paper examines the impact of remittances on economic growth in small island developing states sids results from variants of an empirical model suggest that while on average there is at best no association between remittances and growth in developing countries there is a positive association between these variables in sids this finding holds for sids in sub saharan africa and the pacific but not for those in latin america and the caribbean relationships between remittances economic volatility and household labour supply are offered as reasons for these findings

income inequality democracy and public sector size this study synthesizes and tests explanations of how public sector size and democracy affect income inequality the results based on unbalanced panel data for 64 developing and developed countries

disarticulation and human welfare in less developed countries disarticulation refers to the juxtaposition of economic sectors with different levels of development and productivity disarticulation is hypothesized to have a negative effect on social well being net of economic development because it inhibits the spread effects generally thought to be associated with economic growth findings are in accord with this hypothesis although the relationship is complex the strongest effects of disarticulation are found among the poorest nations the concept of disarticulation opens a new and promising avenue of research that may help to resolve contradictory findings of recent research on the political economy of growth

growth effects of foreign and domestic investment over tha past few years numerous studies in sociology have concluded that foreign investment harms poor nations these studies have focused on the coefficient for foreign capital stock controlling for flow new investment and defying logic have inferred that a negative coefficient for stock reflects dependency effects that retard economic growth since capital stock is the denominator for investment rate the greater the stock the lower the investment rate for a given level of new investment hence the negative coefficient for capital stock found in dependency studies indicates a beneficial investment effect not a harmful effect this point is demonstrated by reanalysis of the data used in dependency studies in these data foreign investment spurs growth earlier analysts have concluded otherwise only because their conclusions have belied their findings

the global economy as instituted process the case of central and eastern europe i argue that economic globalization indicated by the tremendous rise in world foreign direct investment fdi in recent decades is not driven simply by investor considerations of economic risk and return but is significantly shaped by the construction of demand for foreign capital by receiving states states signal this demand through the levels of formal and substantive legitimacy they grant to fdi they institutionalize globalization in formal rule as a normatively desirable development strategy states substantiate this commitment by providing domestic and foreign actors with ideational and organizational resources to facilitate fdi to illustrate this argument i use the case of central and eastern europe which was largely closed to global capital before the collapse of communism analyses of quantitative and qualitative data show that substantive legitimacy granted to fdi by host states more than formal regulations determined the size of foreign capital flows into postsocialist countries in the

international macroeconomic policy coordination when policymakers do not agree on the true model the authors relax the assumption of the literature on international coordination that policymakers know the true model t wo countries will still be able to agree on a cooperative policy pack age that each believes will improve the objective function relative t o the nash noncooperative solution however the bargaining solution may move the target variables in the wrong direction these points ar e illustrated with monetary and fiscal multipliers taken from simulat ions of ten leading econometric models out of 1 000 possible combina tions of models that could represent u s beliefs non u s beliefs and the true model monetary coordination improves u s welfare in on ly 546 cases copyright 1988 by american economic association

modeling the forms of international cooperation distribution versus information the problems of distribution and information impede international cooperation they arise when actors select how they will cooperate an exploration of the interaction between these problems using a limited information model of cooperation leads to six conclusions first leadership solutions to coordination problems always exist but leadership here is very different from hegemonic provision of public goods second actors can cooperate in the face of anarchy even without a shadow of the future third diffuse reciprocal strategies arise naturally in coordination problems fourth norms and institutions are intertwined within successful cooperation fifth the form of cooperation on an issue varies with the relative importance of distribution and information finally and most important distributional and informational problems interfere with each other arrangements to cooperate can successfully address one but not both of these problems