trade politics in the third world a case study of mexican gatt decision in 1980 mexico decided not to join the general agreement on tariffs and trade gatt certain objective conditions formed a positive environment for mexican adherence but president l6pez portillo postponed mexican entry indefinitely this critical decision is examined from two perspectives a left leaning foreign policy and domestic constraints in the mexican political system major foreign policy factors were a growing resentment of u s dominance combined with a preference for conducting relations with the u s on a bilateral basis internal political pressures reflected the continued reform of the mexican political system at the upper levels and the relative autonomy of some elite groups from the state l6pez portillo s decision did not constitute an outright rejection of trade liberalization however the decision could have international repercussions in politicizing u s mexican trade relations in slowing trends toward freer trade especially in latin america and in strengthening multilateral organizations like unctad in which third world countries exercise considerable power

some evidence on herding behavior of u s banks the authors examine the international lending decisions of u s commercial banks of different sizes from 1977 to 1982 for evidence ofthe ex istence of herding behavior granger sims causality tests for the loans gran ted by the top nine the next fifteen and the remaining u s banks provide no c lear evidence of herding between the top nine and the next fifteen banks there is however evidence that the remaining banks mostly small ones herded behind the top twenty four banks overall the analysis presented here points to a very weak herding behavior copyright 1987 by ohio state university press

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

brazilian development in long term perspective brazil is now the eighth largest market economy in the world its 1979 per capita income of over 1 500 in current dollars its sophisticated industrial structure and its recent dynamism combine to give it a prominent place among the advanced developing countries not surprisingly recent brazilian experience has been an important subject for the analysis of economic development not all of it uncritical such a focus on the brazilian miracle and its aftermath is too limited brazilian growth and industrialization have a long history as do the regional and personal income inequalities that today increasingly command attention understanding the origins of brazilian growth in the nineteenth century export economy and the subsequent patterns of import substitution will not yield better rules for short term debt management or monetary policy but the longer perspective makes clear that sustained economic development requires more than following the dictates of the international market and getting prices right indeed it may on occasion involve rejecting such signals i shall interpret four significant episodes

the origins and development of the northeast asian political economy industrial sectors product cycles and political consequences theories of the product cycle hegemony and the world system are used to analyze the creation and development of the northeast asian political economy in this century japan south korea and taiwan have each developed in a particular relationship with the others the three taken together form a hierarchical constantly interacting political economic unit during the period of colonial rule japan was unique in building an imperial economic unit marked by a strong role for the state whether in tokyo or taipei by a tight integral unking of all three nations into a communications and transport network running toward the metropole and by a strategy of both using the colonies for agricultural surpluses and then locating industries there after 1945 a diffuse american hegemony replaced japan s unilateral system but elements of the prewar model have survived strong states direct economic development in south korea and taiwan here termed bureaucratic authoritarian industrializing regimes both countries are receptacles for japan s declining industries and both countries develop in tandem if in competition with each other the most recent export led competition has seen taiwan succeed where south korea has temporarily failed leaving seoul in an export led trap burdened with rapidly increasing external debt taiwan furthermore has industrialized relatively free of social disruption whereas korean society resisted its transformation at japanese hands and remains more rebellious today there can be one japan and one taiwan but not two or many of either in the world economy

the state and economic stagnation in tropical africa abstract politics while only one strand in the explanation of africa s massive economic problems is nonetheless a significant factor a central conundrum facing postcolonial political leaders is how to govern and hold together unintegrated peasant societies in the absence of legitimacy personal rule a particular mode of patrimonial governance provides an answer permitting regime survival and the advancement of political insiders but personal rule has an economically destructive tendency that only shrewd political leadership and propitious world economic conditions can check if uncontrolled certain political practices corrode bureaucratic and legal rationality and promote the misallocation of scarce public resources the result can be a downward spiral of interrelated political and economic decline that is increasingly difficult to reverse

the state and strategies of international adjustment all states are continuously in the process of adjusting to change in the political economy of international and national systems problems inherent in this adjustment process are a basic source of national behavior and international conflict the heuristic model presented in this paper provides systematic explanations for the strategic choices that states make in the adjustment process through the specification of the range of strategic options and of the formal interests of states new insights are gained concerning the articulation between national and international political economy empirical cases are drawn from the politics of energy adjustment in the 1970s

the political economy of income distribution in south korea the impact of the state s industrialization policies abstract a number of previous studies of economic growth and income distribution in south korea based largely on 1960s data concluded that south korea was an exception to kuznets inverse u pattern of income inequality also it was regarded as an exception to the usual negative consequences predicted by dependency theory for an economy so dependent on foreign capital and world markets this author presents more recent data for the 1970s and early 1980s in order to support his claim that the trend toward income equality that appeared in the 1960s was reversed in the 1970s the author develops a thesis that stresses the role of the state in shaping the korean political economy he argues that it has been the strong south korean developmentalist state in firm control of both domestic and foreign capital and its export oriented industrialization policies that have been the principal determinant of the pattern of income distribution he contests the usual explanation related to the level of economic development or external dependency per se

third world indebted industrialization international finance and state capitalism in mexico brazil algeria and south korea the past fifteen years have seen two important developments in the international economic system the rapid industrialization of many less developed countries ldcs and their increasing indebtedness to private financial institutions massive bank loans have been used to fund industrial growth in many ldcs international financial markets have replaced multinational corporations as the third world s most important source of private foreign capital in four major borrowing countries mexico brazil algeria and south korea the process of indebted industrialization has its roots in the internationalization of finance the increasing role of the state and the use of funds raised on the international capital markets to finance industrial development the results include rapid expansions of ldc industrial production and ldc exports of manufactured products as well as the formation of an implicit partnership between private financial institutions and state capitalist elites in the third world

the mouse that roared taiwan s management of trade relations with the united states this analysis seeks to contribute to the growing literature on the subject of the weak in the world of the strong it examines taiwan s attempts to cope with u s commerical pressure in view of its mounting bilateral trade surplus in the recent years 10 6 billion in 1985 and 6 2 billion in the first half of 1986 taiwan s past ability to achieve relatively favorable outcomes in its commerical dealings with the united states is explained at two levels at the more micro level of bargaining tactics used by the weak in managing the strong attention is directed to taiwan s resort to 1 problem redefinition 2 damage limitation 3 exploring loopholes 4 linkage politics and 5 transnational coalitions these measures are complemented by more long term and basic economic adaptation termed positive adjustment at the more macro level two prerequisites suggested by yoffie 1983 for successful adaptation in a protectionist and competitive economic environment are discussed 1 taiwan s policy

the price of wealth business and state in labor remittance and oil economies this article contrasts the effects of state controlled oil revenues and privately controlled labor remittances on institutional development state capacity and businessgovernment relations in saudi arabia and the yemen arab republic these two countries represent extreme cases of dependence on external capital in deeply divided societies presided over by fragile emerging bureaucracies by tracing the two cases through a pattern of economic boom 1973 83 and recession 1983 87 the study demonstrates that the type volume and control of capital inflows decisively influence the relative development of the bureaucracy s extractive distributive and regulatory capacities and affect the ability of the state to respond to economic crisis in both cases external capital inflows precipitated the decline of extractive institutions however oil revenues and labor remittances had divergent effects on businessgovernment relations and this circumscribed the state s ability to implement austerity programs during the recession during the crisis the saudi government s efforts to cut subsidies to the private sector and to implement extractive policies were blocked by the state sponsored merchant class in contrast the yemeni government instituted a thoroughgoing austerity package that targeted the independent merchant class in both cases external capital inflows did not augment the efficacy of those that controlled them these paradoxical outcomes are explained by tracing the different effects of oil revenues and labor remittances on the distribution of economic opportunity in the public and private sectors and the resulting effects on the regional tribal and sectarian composition of the bureaucracy and the commercial class

a new bankruptcy procedure that uses multiple auctions abstract we propose a new bankruptcy procedure that makes use of multiple auctions the procedure is designed to work even when capital markets do not function well for example in developing economies or in economies in transition although it can be used in all economies

distributional coalitions and other sources of economic stagnation on olson s rise and decline of nations one of the most important recent contributions to the field of comparative political economy is mancur olson s the rise and decline of nations in that work olson deduces from his logic of collective action a series of implications regarding the impact of social organizations in particular distributional coalitions on economic growth that can explain variations in national growth rates across a wide range of time and space this article considers the assumptions upon which that logic is founded the plausibility of the several implications drawn from that logic and the application of the theory to account for differences among five nations in rates of economic growth in the post world war ii era the analysis suggests that the characteristics of group activity emphasized by olson represent at best only a small perhaps negligible part of the explanation of cross national differences in growth instead it suggests that an important source of the variation among nations in growth rates is the international political and economic system in particular the discussion of the german japanese and british cases suggests that stagnation or growth is to a considerable extent the product of a nation s position in the world economy the policy responses through which governments seek to perpetuate or improve that position and the constraints upon or opportunities for growth oriented domestic economic policy posed by that position

the impact of 9 year compulsory education quasi experimental evidence from taiwan using a regression discontinuity design this article investigates the causal impacts of 9 year compulsory education on students educational attainment and dropout rate by taiwan population and ho

colonial legacies and state institutions in china evidence from a natural experiment what is the legacy of japanese colonial rule in east asia in this article i use a geographic regression discontinuity design to examine of the long run effects of japanese rule over northern china i find that the japanese colonization of northern china had a positive long run effect on state institutions with persistent increases in schooling health and bureaucratic density i also find suggestive evidence that colonization led to increases in wealth as measured by census data and nighttime luminosity the positive legacy of japanese colonization in northern china suggests that intense state building efforts can pay long run dividends even in the context of a brutal and extractive regime

the state and foreign investment the cases of taiwan and singapore the influence of a host state on direct foreign investment attracts the attention of scholars much less than do the constraints of the latter on the former this study addresses the impact of state regulatory policies on the roles of inward foreign investment in taiwan and singapore s manufacturing sector the similarities between the two small asian open economies are first discussed the different roles played by the foreign investors in their economies are then compared a review of the literature in orthodox theories and radical points of view reveals several possible explanatory variables for such differences through the logic of the most similar systems design or method of difference some seemingly plausible factors are ruled out due to their similarities in the two chosen entities it is found that some pull factors such as geographic location colonial legacy external political environment and indigenous industrial capacity and conversion factors such as state policies toward foreign in

privatization in latin america what does the evidence say privatization is under attack criticisms run from corrupt deals to abuse of market power and social welfare losses we evaluate the empirical record on privatization relying on recent comprehensive studies from latin america the paper presents four main results first the increased profitability of privatized firms is not explained by sample selection biases second in the quest to identify the sources of increased profitability after privatization we find little evidence that validates concerns of generalized market power abuses exploitation of workers and lack of fiscal benefits third the manner in which privatization is carried out matters transparency and homogeneity in procedures speed and limited restructuring prior to privatization lead to better outcomes and less room for corruption and discretion finally privatization s success is enhanced by two complementary policies deregulation or reregulation of industries previously shielded from competitive forces and an effective corporate governance framework that facilitates privatized firms access to capital at lower cost overall the empirical record shows that privatization leads to increased profitability and productivity firm restructuring fiscal benefits output growth and even quality improvements most cases of privatization failure can be linked to poor contract design opaque processes with heavy state involvement lack of reregulation and a poor corporate governance framework

hegemonic stability theory and 19th century tariff levels in europe although the theory of hegemonic stability has attracted an impressive array of adherents current formulations leave many conceptual issues unresolved existing formulations also fail to draw from the theory any implications concerning the process by which a hegemonic state creates and maintains a regime as an example great britain is generally agreed to have been hegemonic in the nineteenth century but britain s behavior was generally inconsistent with that implied by a theory of hegemonic stability i advance an alternative set of explanations for changes in international tariff levels based on the notion of a political business cycle

causality between export growth and industrial development empirical evidence from the nics a comment abstract in a recent article chow 1987 argued that his empirical evidence supports the hypothesis that export growth causes industrial development in this comment i point out several serious shortcomings of chow s analysis

rational herding in financial economics abstract this paper briefly describes recent papers on the economics of rational herding in financial markets some models can predict perfect herding in which rational agents all act alike without any countervailing force such herding typically arises either from direct payoff externalities negative externalities in bank runs positive externalities in the generation of trading liquidity or in information acquisition principal agent problems based on managerial desire to protect or signal reputation or informational learning cascades the paper also provides a few pointers to related literature and suggests issues to be addressed in future research

testing theories of regime change hegemonic decline or surplus capacity two theories explain changes in the international regimes for major economic sectors a theory of hegemonic stability explains sectoral change as a consequence of ebbing hegemony a theory of surplus capacity attributes regime shifts to a serious global problem with excess production capacity in the sector the history of the world automobile industry shows that surplus capacity offers the better prediction and explanation for the timing of regime changes however a synthesis of the two theories is even more satisfactory hegemonic decline is a necessary but not sufficient condition for change surplus capacity in the absence of a hegemon creates the conditions necessary for change

dependency theory and taiwan analysis of a deviant case the case of taiwan represents a challenge to two predictions from dependency theory that foreign economic penetration leads to slow economic growth and also to heightened inequality since the early 1950s taiwan has received massive foreign aid and investment but it has also had one of the highest sustained rates of growth in the world while income inequality on the island has decreased substantially an examinatin of this deviant case is pursued by consideration of the various mechanisms dependency theorists claim are responsible for the linkage of foreign economic penetration to stagnation and inequality in the taiwan case none of these mechanisms work out as predicated instead a variety of factors including the nature of the japanese colonial experience the emphasis on labor intensive enterprise and the absence of an entrenched burgeoisie created a situation in which both rapid growth and increasing equality could occur consideration of taiwan draws attention to flaws in the arguments of most

herd behaviour by japanese banks after financial deregulation this paper investigates whether japanese banks followed herd behaviour during the 1980s and 1990s the results indicate the existence of herding during the sample period while the inefficiency of herding is concentrated in the early to mid 1980s the period immediately after financial deregulation began evidence for the inefficient herding is observed in the behaviour of banks that made loans to new borrowers and in the behaviour of banks that followed the type of banks that were more informed on lending to new borrowers on the other hand inefficient herd behaviour is rarely observed in the 1990s

debt and development in historical perspective the external constraints of late industrialisation revisited through south korea and brazil current debates about the role of external finance in development mostly overlook the insights from early development economics that late industrialisation generates a structural tendency to run trade deficits thereby exacerbating rather than relieving external foreign exchange constraints the developmental role of external finance is therefore based on its strategic marginal contribution to relieve such constraints external debt in particular also allows countries to pursue industrial strategies without reliance on foreign direct investment these insights are revisited in this paper as a critical input to both mainstream and heterodox contemporary scholarship on debt and development while the mainstream generally avoids discussion of state led industrial policy the heterodox has converged on a view that developing countries should avoid external finance the contrasting external account histories of south korea and brazil are examined to demonstrate the validity of the classic insights and the contemporary fallacies while the south korean case speaks much to its geopolitical context this does not necessarily refute the principle that post war late development engenders an intensive demand for external finance which must be met if industrialisation strategies are not to be stymied as in the case of brazil no matter how effectively domestic strategies are conceived and implemented

growth waves systemic openness and protectionism there is a distinctively repetitive quality about trade policy problems domestic economic growth slows producers seek protection against foreign competitors and national decision makers raise barriers to trade while at the same time criticizing their counterparts in other governments for engaging in similar practices because trade is one of the more important topics in international and comparative political economy and because this scenario has played itself out more than a few times it is not surprising that a number of theorists have sought to model the underlying processes thought to produce movements toward and away from protectionism by now a variety of different types of approaches ranging from the cognitive to the systemic have been tried systemic structure ideas and ideology surplus capacity business cycles and shifts in elite orientation and domestic coalitions in response to external crises have been emphasized as principal theoretical foci our position is that the different levels of analysis and alternative foci all have merit and utility what they lack is an appreciation for the underlying systemic processes that link together these various facets of the political economy we seek to develop a theoretical argument that explicates these underlying processes the argument centers on recurring growth waves characterized in alternating pattern by the ascent of system leaders and the subsequent successful attempt of technological followers to catch up with the leaders the downturns of the growth waves produce conditions favoring protectionism but we contend the form and the intensity of protectionism that are likely to be produced will depend on which of the two types of growth waves is in progress ascent waves are characterized by the emergence of new technological leaders and a consequent increase in the gap between the leaders and the technological followers during the periods of structural transition and intense

defense burden and economic growth unraveling the taiwanese enigma indicate that all these models capture parts of the empirical reality but none can account for all the complexity of this reality indeed in some crucial respects each of the models based as they have been primarily on intercountry comparisons is contradicted by the taiwanese time series i conclude that taiwan has not so much been able to avoid entirely the trade offs between defense and growth as to relax these trade offs the reasons contributing to this relaxation tend to set the taiwanese experience apart from the experiences of most other countries

distributional coalitions state strength and economic growth toward a comprehensive theory of economic development high performing economies in the asia pacific region together with only mediocre economic development in latin america prompts the question of what explains differential economic growth rates among developing countries combining a statist perspective with olson s theory of interest group formation this research hypothesizes that nations with weak distributional coalitions will more likely experience high growth and state intervention will be effective using a longitudinal research design this secondary analysis involves a comparative and interactive examination of eight asian pacific and twelve latin american countries by considering the role of the state in interaction with distributional coalitions in society the results indicate that approximately two thirds of the variance in national economic growth is explained

information contagion and bank herding we show that the likelihood of information contagion induces profit maximizing bank owners to herd with other banks when bank loan returns have a common systematic factor the cost of borrowing for a bank increases when there is adverse news on other banks since such news conveys adverse information about the common factor the increase in a bank s cost of borrowing relative to the situation of good news about other banks is greater when bank loan returns have less commonality in addition to the systematic risk factor hence banks herd and undertake correlated investments so as to minimize the impact of such information contagion on the expected cost of borrowing competitive effects such as superior margins from lending in different industries mitigate herding incentives

the political economy of industrial policy in korea the article aims to provide some additional empirical support and theoretical consolidation for the emerging alternative interpretation of the korean developmental experience which emphasizes the role of the state after briefly reviewing some mainstream interpretations it presents a detailed account of state intervention in korea where it is revealed that industrial policy played the central role then it explains how the korean state was able to avoid some of the obvious dangers of such a policy which is often associated with economic failures in developing countries it then explores the basis of state power in korea which provided a background for such an outcome copyright 1993 by oxford university press

employment income distribution and economic growth in seven small open economies resurgent interest has been manifested among development economists in trickle down i e the view that the more rapid the rate of economic growth the more rapid the improvement in employment and income distribution throughout this paper the term income distribution will refer to the location and dispersion of the pattern of incomes i e to absolute incomes and poverty and to relative income inequality empirical evidence supports trickle down in some cases but the evidence is contrary to trickle down in others the evidence from my own study of six countries experiences2 is summarised in tables i and 2

cutting across doctrines positive adjustment in japan japan s economy keeps changing too fast its economic policies are too active and independent and its domestic structures seemingly deviate too much from western patterns to conform to theories that rely on general equilibrium in mature economies static economics including recent monetarist supply side and rational expectations models some aspects of dynamic and development economics and most of the neoliberal current in international relations theory are seriously challenged on the other hand the mercantilist paradigm theories focusing on the role of the state and analyses exclusively adopting the subsystemic level of international relations theory have substantial problems with the ample evidence of adaptation to external factors the dynamism and schumpeterian qualities of japanese private enterprises and the far reaching liberalization of japan s foreign exchange and foreign trade control regime as the only oecd member to have pursued anticipatory adjustment on the macrolevel and as the obvious model for the oecd category of positive adjustment japan presents a case of universal relevance it suggests propositions linking targets and instruments of quantitative and qualitative policies as well as processes of internalization of global factors and externalization of domestic factors it provides material for revising extending and integrating international relations theory and the theory of economic policy

the techno bureaucratic elite and the entrepreneurial state in dependent industrialization a common characteristic of dependent industrializing countries is a substantial direct entrepreneurial role for the state one explanation for this is that in dependent industrializing countries the system of allocation and production has been captured by a key group the techno bureaucratic elite the argument is that this elite lends its political support to the state in return for the state substituting as entrepreneur in the industrialization process in this article we analyze the theoretical implications of this explanation of the entrepreneurial state a formal model is constructed of the relationship between state entrepreneurship material consequences for the techno bureaucratic elite and important domestic and international constraints we then use deductive methods to analyze the logic of state entrepreneurship among other things we show how cyclical fluctuations in the global economy are reflected in constantly changing levels of state entrepreneurship and we investigate the consequences of alternative kinds of dependency syndromes for histories of entrepreneurial substitution and for streams of benefits to the techno bureaucratic elite it is demonstrated that there is an inverse relationship between the tendencies to reach stable levels of state entrepreneurship and the long term potential for economic growth

south korean and taiwanese development and the new institutional economics the publication of books by both alice amsden and robert wade provide an opportune moment to reflect on the study of east asian development after an initial surge of interest beginning in the 1970s the field has reached a plateau and scholars recently have cast a wide net in searching for ways to extend the field in assessing the state of the art regarding the economic development of the east asian newly industrialized countries nics this review will treat three themes first i will argue that the focus on states versus markets is becoming stale and that much of the scholarly interest lies in the politics behind the economics second i argue that political scientists have underexplored the historical origins of korean and taiwanese capitalism and that such attention promises to strengthen both theories and explanations of development third i argue that the international system has been more important in promoting development in east asia than accounts in the first wave have recognized the purpose of this review is to assess the field reveal

the political economy of privatization in developing countries abstract privatization in ldcs refers here to the sale or leasing of assets in which the state has a majority interest and the contracting out of publicly provided services privatization is in part a response to the need for fiscal austerity its pace and scope will be determined importantly by the way in which the public sector was built privatization is easier to implement than has been supposed because its austerity and equity costs are relatively small compared to those of broader structural adjustment processes in which it is commonly situated however the payoffs from privatization are relatively small too there is high opportunity cost in time and management for the complicated task of preparing public assets for sale capital market thinness characterizes ldcs and popular capitalism does not appear to be a realistic option in ldcs privatization is likely to be entangled in regional and ethnic conflicts these may be as consequential for formulating and implementing programs as are the critical coalitions that form between economic sectors such as capital and labor or importers and exporters we believe that privatization is not a linear or ineluctable process indeed many privatizations may be implemented in the absence of a commitment to market forces but where the state seeks to redefine the instruments and scope of its interventionism

the politics of legal reform as a result of the emerging market crises of the last decade and a large body of academic research on the influence of investor protection in the development of capital markets and economic growth there is a growing consensus that reforming the legal infrastructure supporting business should be an important component of reforms in many developing countries but the consensus is unwieldy as there are still many forces against reform and little agreement about what constitutes feasible legal reforms this paper has two parts in the first we identify the forces for and against legal reform and review the role these forces play in episodes of reform in the second we seek to further our understanding of what constitutes good laws and regulatory mechanisms and more importantly how to make them enforceable in different countries if legal reform is to succeed the commonly advocated principles of corporate governance in the international community must be brought down to the local political and judicial realities translating international corporate governance initiatives into clear and enforceable rights for creditors and shareholders that incorporate these constraints will be difficult but necessary bankruptcy law and corporate law reform need to be politically feasible and enforceable legal reforms should be complemented with carefully drafted judicial reforms as well as market based mechanisms that foster a culture of corporate governance

state steel and strength structural competitiveness and development in south korea this article introduces the concept of structural competitiveness to explain the rapid development of south korean steel industry three elements of structural competitiveness are state autonomy sound economic policy and indigenous technological capability these elements have a significant bearing on the bargaining capacity of the state autonomous investment decisions labour control the acquisition and absorption of modern technology and ultimately international competitiveness global competitiveness of south korea does not refute the technological dependence of developing countries rather it suggests the kind of socio institutional and economic policy contexts that are often necessary to foster competitive industries

the international financial market and us interest rates abstract this paper examines the linkages between the eurodollar and us domestic financial markets it is shown that using weekly data allows the isolation of significant fluctuations being transmitted between markets in both directions in particular financial markets in the us are affected significantly by foreign events it is impossible to reach precise conclusions about the causes of historical variation in the rates however this paper provides evidence that at most 40 of the variation in eurodollar interest rates over the 1975 1978 period can be traced to domestic us sources and that between about one fifth and two thirds of the variation in domestic rates can be traced to foreign sources

law finance and firm growth we investigate how differences in legal and financial systems affect firms use of external financing to fund growth we show that in countries whose legal systems score high on an efficiency index a greater proportion of firms use long term external financing an active though not necessarily large stock market and a large banking sector are also associated with externally financed firm growth the increased reliance on external financing occurs in part because established firms in countries with well functioning institutions have lower profit rates government subsidies to industry do not increase the proportion of firms relying on external financing the corporate finance literature suggests that market imperfections caused by conflicts of interest and informational asymmetries between corporate insiders and investors constrain firms in their ability to fund investment projects the magnitude of these imperfections depends in part on the effectiveness of the legal and financial systems because these systems differ across countries the literature implies that there should exist systematic cross country differences in firms ability to obtain external capital to finance investment in this paper we examine whether the underdevelopment of legal and financial systems does prevent firms in some countries from investing in potentially profitable growth opportunities in particular we focus on the use of long term debt or external equity to fund growth see our earlier work demirgut kunt and maksimovic 1996a which compares firms financial structures in developed and developing countries and finds the greatest difference to be in the provision of long term credit we estimate a financial planning model to obtain the maximum growth rate that each firm in our thirty country sample could attain without access to long term financing we then compare these predicted growth rates to growth rates realized by firms in countries with differing degrees of development in their legal and financial systems our approach enables us to identify specific characteristics of the legal and financial systems that are associated with long term financing of firm growth thus we provide a micro level test of the hypoth

north south the implications for multinational banking abstract international finance should be of great value to developing countries because their potential growth paths are out of step with the world economy and because the gambles they must take to develop are much more diversifiable in the context of the world economy than locally however the actual benefits of north south finance have been limited by an overreliance on non specific bank credit with the inherent limitations and by errors in judgement by both borrowers and lenders in fact the current crisis threatens to reverse many of the earlier gains while the current crisis is primarily the result of the world recession the severity of its effects on lenders and borrowers reflects three key aspects of bank credits 1 its perverse real repayment patterns 2 its specific nature which implies that risks are transferred only through generalized non performance with its attendant deadweight costs and 3 its concentration in a small but critical segment of capital markets these characteristics would be serious even with ideal behavior by lenders and borrowers but they also can lend to inappropriate and possibly erratic behavior specific suggestion for restructuring the system of north south finance are given including 1 smoothing repayment patterns 2 increasing repayment flexibility 3 increasing risk bearing non specific finance 4 increasing non recourse financing and 5 increasing project specific risk capital

traders teachers and tyrants democracy globalization and public investment in education this article develops a model of the redistributive political economy of education spending focusing on the role of democracy and economic openness in determining the provision of education i argue that democratization should be associated with higher levels of public education spending lower private education spending and a shift from tertiary education spending toward primary education spending furthermore i argue that integration with the international economy should lead to higher public education spending conditioned on regime type and income and should push the balance between tertiary and primary education toward states particular comparative advantages these propositions are tested on a data set of more than one hundred states from 1960 to 2000 using a variety of panel data techniques including instruments for democracy the logic of the causal mechanism developed in the formal model is also tested on a number of case histories including the philippines which shows great variation in democracy and openness and india and malaysia which constitute unusual cases that lie off the diagonal of open democracies and autarkic autocracies the author would like to thank beth simmons torben iversen michael hiscox jeffry frieden jim alt teri caraway john freeman jane gingrich david samuels w phillips shively mark kayser john ahlquist and michael kellerman for highly useful comments and criticisms in addition i thank the current and past editors lou pauly emanuel adler david stasavage and lisa martin and three anonymous reviewers for their suggestions

automobiles in international trade regime change or persistence the concept of a regime is frequently used to describe and explain behavior in international political economy peter cowhey and edward long attempting to test theories of surplus capacity and hegemonic decline advanced a version of a regime governing international trade in automobiles which was fundamentally liberal from 1966 to 1975 but then collapsed into protectionism their diagnosis is mistaken however because the trade regime for autos was neither as liberal as they assert during the 1950s and 1960s nor as protectionist as they believe it has become in the 1980s the discussion focuses on a new definition of the auto trade regime based on four fundamental rules that have persisted since the 1950s by examining data on auto imports since 1955 on a region by region basis it becomes clear that the trade expansion of the postwar years was not based on a global liberalization of the trade regime but on carefully managed regional arrangements that favored imports within the region or extra regional imports that did not threaten domestic producers the flurry of restraints on japanese imports in recent years is not a collapse into protectionism but a reinforcement of the fundamental regime rules the auto industry case illustrates the tendency of analysts to underestimate protectionist elements in industry trade regimes and to overestimate the amount of changes that take place in their fundamental rules

international lending patterns of u s commercial banks the international lending behavior of the u s commercial banks depends upon economic links between countries much of the difference between the international loan portfolios of u s banks and those of the non u s banks may be explained by the patterns of trade flows and investments by nonfinancial corporations these trade flows and investment patterns explain most of the variations in the bank lending patterns for 70 80 percent of the countries the analysis points to an increasing influence of economic ties on the lending process over time

agency problem institutions and technology policy explaining taiwan s semiconductor industry development abstract taiwan has made significant progress in the semiconductor industry with government agencies and bureaucrats as the driving forces over the past 30 years taiwan s impressive achievement in the semiconductor industry clearly indicates that the government failures and agency problem usually associated with deep government involvement did not occur in taiwan why is that the case this paper proposes a principal agent framework for technology policy and applies the framework to discuss the institutional arrangements through which bureaucrats were controlled effectively in executing the semiconductor industry policies in taiwan by analyzing the institutional and organizational arrangements taiwanese leaders made to mitigate the agency problem this paper brings bureaucrats into the popular developmental state theory and emphasizes that the success of state intervention should not be taken for granted and it also brings politics into technology policy analysis and stresses the importance and complexity of agency problem in technology policy

informal market governance in japan s basic materials industries too much emphasis has been placed on formal state policies and on ties between individual firms to explain japanese economic behavior and impediments to imports in japanese markets we need to look instead at informal governance by trade associations in so doing the concept of relational contracting should be applied not just to dyadic relationships between individual firms but also to relationships between entire industries whole industries engage in relational contracting to ensure the stability of both prices and supplies these industry agreements stabilize japanese markets but at the same time keep imports out of them this informal governance complements state policies to support uncompetitive industries these agreements are more likely to occur and succeed between selling and buying industries that each are relatively concentrated when upstream products are standardized when upstream goods constitute a smaller share of downstream production costs when these sectors have not experienced previous conflicts that undermine cooperation and when the ministry of international trade and industry wants a domestic supply of its products

trade strategy and the dependency hypothesis a comparison of policy foreign investment and economic growth in latin america and east asia the role of state policy in the industrialization of third world nations has become the subject of increasing interest in recent years in the past the debate over economic development has either focused on the traditional modernization approach or the dependency theory of underdevelopment 2 dependency theorists base their model of development on the belief that foreign investment from core countries is harmful to developing nations long term economic growth economic relationships between the core and the periphery are structurally detrimental for the latter because of the inherent dynamics of international capitalism yet despite the claims of dependency theory the recent experience of the east asian newly industrialized countries suggests a wider range of development possibilities which include government policies specifically designed to attract foreign investment these countries appear to have structured their domestic economies in order to mitigate the pernicious effects of dependent relationships with core countries this raises new questions about the development process and the role of policy and foreign investment in the economic transactions between core and peripheral countries dependency theory a neo marxist predecessor of world systems research claims that first world nations become wealthy by extracting surplus labor and resources from the third world capitalism perpetuates a global division of labor which causes the distortion of developing countries domestic economies declining growth and increased income inequality 3 those countries on the periphery cannot become fully modernized as long as they remain in the capitalist world

the state and capitalist transformation in sub saharan africa a development model declining performance of the postcolonial african states suggest the inefficiency of centralization and or socialist strategy that currently dominates the region the solution however is not a return to the largely unrestrained liberal economic models of the 1960s such as import substitution industrialization or commodity export specialization whether from the left or right the inability of all three models to define precise development roles for africa state elites suggest their insensitivity to and inadequacy for the needs of these politically dynamic young states of africa an alternative model presented in this article would involve state elites in grass roots capitalist development the model fosters decentralization and economic development without sacrificing rule legitimization and national integration as equal objectives in many respects the model is an attempt to adapt to african realities the norms of embedded liberalism that properly describe current western liberalism

roads to follow regulating direct foreign investment the united states faces a formidable and growing economic challenge from japan over the last decade the american state has characteristically responded to the loss of domestic market dominance in the manufacturing sector to foreign firms by invoking the principles of free and fair trade in order to delegitimate this foreign competition and legitimate the imposition of trade barriers designed to encourage the investment of multinational corporations mncs in the united states these tactics have largely succeeded in attracting investment and thus aided domestic employment and the balance of trade the short term benefits however have been achieved at long term unforeseen undesirable economic and political costs in terms of both the balance of payments and state autonomy alternative state responses to the threat posed by japanese mncs while consistent with principles of free trade challenge the traditional liberal conception of the scope and domain of state behavior and provide more effective policies in achieving both short and long term objectives this article draws on data relating to the treatment of subsidiaries of american automobile manufacturers by european governments with competing indigenous producers in specifying two variables critical to identifying policy alternatives first the degree of access granted by the state to foreign firms limited or unlimited access and second the type of support provided by the state to domestic firms discriminatory or nondiscriminatory intervention the analysis suggests that there are four possible policy combinations which generally reflect the four different postwar state policies pursued by west germany france britain and the united states of these four the combination employed by west germany has proved most effective in pursuing policies consistent with liberal trade principles while reconciling short term employment and fiscal goals with the broader long term objectives of sustaining state autonomy and balance of payments surpluses in the face of foreign competition british policies which have consistently proved the most ineffective have sacrificed long term objectives for short term ones as a result of structural changes during the 1970s the american state s chosen policy combination was altered and now replicates the traditional british formula the united states therefore risks comparable economic and political consequences

the entrepreneurial state evidence from taiwan duvall and freeman 1983 propose an explicit theory to explain the entrepreneurial role of the state in developing societies their argument illuminates linkages between the benefits that an elite group receives from state entrepreneurial activity and the support that this group provides to the state in this article the authors examine theoretically and empirically the ability of their theory to explain the evolution of state entrepreneurship in a rapidly industrializing society taiwan overall the authors show that the formal theory of duvall and freeman holds several features not heretofore explicated but that it is remarkably robust in providing a cogent framework in which to interpret recent taiwanese economic history in short the fit between the model of duvall and freeman and the empirical data for taiwan is quite strong this suggests that state entrepreneurship is used in developing societies in a countercyclical way in order to help manage the political economy the authors also explore the

the long gestation and brief triumph of import substituting industrialization abstract as a set of ideas and practices import substituting industrialization became the dominant development strategy after wwii this article examines the highly diverse origins of what became a kind of consensus one that was most explicitly articulated through the ecla cepal school inspired by raul prebisch explicit attention is paid to the congruence of economic strategy and political formations as the washington consensus displaces the ecla consensus one must ask how those developing countries that have not yet industrialized may do so in the absence of high levels of protection

the gatt and the regulation of trade barrier regime dynamics and functions since the second world war complex and changing sets of norms and rules have governed trade relations among most countries they have largely originated from a unique and accidental international organization the general agreement on tariffs and trade gatt we have labeled these norms rules and decision making mechanisms the gatt regime or global trade barriers regime the importance that gatt members have attached to certain norms has shaped the regime s procedural mechanisms rules and implementation of rules classifying those norms as sovereignty or interdependence norms we posit that the strength or autonomy of the regime can be established by analyzing the prominence of the interdependence norms in the issue area we close by exploring some of the functions of the regime in international trade and political relations

rocks hard places and the new protectionism textile trade policy choices in the united states and japan why have advanced industrial countries responded with different types of protectionist policy to postwar international competition and the resulting societal pressure for state action in contrast to the across the board tariff wars of the 1930s postwar protectionism is a patchwork of tariffs unilateral and nonunilateral quotas administrative restrictions state subsidies and production cartels arguments based on international economic structure international regimes statist approaches and domestic structure all appear to have difficulty in accounting for divergent trade policy choices this article introduces a more nuanced identification and integration of the international and domestic sources of the new protectionism an examination of textile trade policy in the united states and japan reveals that when state policymakers face conflicting international constraints and domestic pressure over the use of overt types of protectionist policy the greater the domestic pressure the more overt the policy response

the economics of special interest politics the case of the tariff this paper investigates the interaction of politicians and special interest lobbies the goal is to model the equilibrium levels of redistributive policies such as taxes subsidies tariffs and regulatory decisions the model is applied throughout to the setting of tariffs by contributing to political campaigns special interest lobbies generate economic returns higher tariffs generate revenue for import competing industries through higher product prices higher milk support prices raise dairy farm income and so forth the lobby invests to maximize these net economic returns in evaluating their chances of election politicians weigh the favorable effects of special interest money against the unfavorable association with the lobby and the social cost of the redistributive policy section i explores the lobby s problem it describes a formalization of mancur olson s discussion of the voluntary provision of public goods and optimal contributions by lobbies to political campaigns section ii describes determination of the equilibrium tariff positions of each politician in a political campaign

understanding the state in south korea bureaucratic authoritarian or state autonomy theory south korea cannot be seen as an example of the bureaucratic authoritarian state type neither its position in the world system nor its industrialization strategy can be used to give a sufficient explanation of its political and social character although these factors have played a part particular historical political and cultural circumstances have permitted the state to enjoy a degree of autonomy during the period of rapid social and economic transformation from the 1960s to the 1980s the determinants and character of the transition to democratization generally support this analysis but also indicate that limits exist to the degree of liberalization to be expected in the political system

twenty five years of economic development revisited abstract the basic question asked in this essay is do morawetz s findings in twenty five years of economic development hold when extended to a period 1975 1989 of great turmoil in the international economy the record is mixed some of the trends that were observed during 1950 1975 did not carry over to 1975 1989 growth during 1950 1975 now looks exceptional compared to what followed and the balance of payments and debt constraints to growth have come sharply to the fore others especially the divergence in growth among countries and regions and the relationship between growth poverty and inequality foreshadowed longer run trends some of morawetz s conclusions also do not hold when seen in the light of the experience of 1975 1989 for example his pronouncement regarding a socialist and inward alternative to equitable growth and development now appears premature but the most surprising finding is the confirmation of his little noted statement regarding the contribution of political stability and stability of the economic rules of the game and by extension of the nation building process to development performance

the newly industrializing countries in the international system explanations of the growth of the newly industrializing countries nics by neoclassical economists and dependency theorists neglect the role of politics in shaping development strategies different social configurations state structures and ideas about development help explain the divergent policy choices made by the export oriented east asian nics korea and taiwan and the more inward looking countries of latin america particularly mexico and brazil these different strategic choices in turn account for variations in the patterns of external dependency that characterize countries in the two regions

tariffs and trade fluctuations does protectionism matter as much as we think despite the widespread assumption that tariffs reduce trade volume in the short term it is conceivable that long term expansion and contractions in trade actually drive tariff levels a granger causality analysis performed on british u s french german japanese and a systematic aggregate data on gdp tariff levels encompassing the 1854 1990 period finds mixed support for both the short and long term interpretations in general the antecedence of trade on protectionism predominates over the antecedence of protectionism on trade one implication is that the long term context should not be ignored in analyzing short term dynamics

protectionism and world politics much unwarranted gloom and doom has been written of late about the new protectionism it has been widely held to be a major hindrance to third world development an obstacle in the path of world economic recovery and even a threat to good international relations the facts about trade in recent years suggest a different story and the need to look far more critically at some of the myths propounded by liberal economists for it was not protectionism that was responsible for starting the depression of the 1980s any more than that of the 1930s then as now it was financial uncertainty and the consequent shrinkage of credit that slowed both growth and trade nor is protectionism a serious menace not only has it failed to stop the flood of industrial exports from asian countries there afe good reasons of state and corporate self interest why it need not be feared in the future far from being a threat to the international economic order as imf and gatt ideologues would have us believe bilateral trading agreements between states and corporations are sustaining continued growth in trade despite financial disorder

a global interpretation of the rise of the east asian food import complex abstract the last quarter century explosion of consumer affluence in japan south korea taiwan and china accompanied a new phase in the organization of the global food economy it also conditioned the increasingly speculative capital investments in the region this paper argues that the restructuring of production and consumption relations involved a movement away from the us centered bilateral food surplus regime and toward a multilateral food regime based in wto led agricultural liberalization and the corporate restructuring of agriculture the east asian food import complex advances the neoliberal project of global free trade spawning agro export zones throughout southeast asia

how middle powers can manage resource weakness japan and energy the post world war ii world has seen the transformation of the international system from a configuration with several rival great powers into one with two superpowers and a set of lesser but still substantial powerssecond tier states with democratic politics and mixed economies one of the recurrent concerns of the latter has been to secure supplies of natural resources we argue that postwar conditions point to eight elements of prudent resource policy for middle level powers such states should i avoid military means 2 choose trade partners whose political interests overlap with their own and who enjoy political stability 3 seek to create in supplier and transit countries a structure of economic interests that will make supply agreements self enforcing 4 diversify with respect to commodity dependence supplier share and transit bottlenecks 5 tailor stockpiles to the urgency of demand 6 exploit technology to reduce dependence and enhance bargaining advantages 7 encourage the private sector and public enterprises to become intermediaries in the international resource trade and 8 pursue strategic interdependence among consumer nations by creating multilateral stakes in the maintenance of normal commerce in resources in this paper we develop a set of general prescriptions for the behavior of mid level powers with small endowments of natural resources we hold that states which follow these prescriptions will avoid endangering their economic performance indeed they may outperform others that apparently hold an advantage in terms of greater resource endowments and military power we use the case of japanese energy policy to develop our prescriptions and to demonstrate their feasibility the case has special interest because of the importance of energy resources in the world economy japan s extreme dependence on and thus policy efforts related to imported energy and the vigor of the japanese economy

bankruptcy law in latin america past and future this paper studies bankruptcy law in latin america focusing on the brazilian reform we start with a review of the international literature on this subject next we examine the economic incentives associated with several aspects of bankruptcy laws and insolvency procedures in general as well as the trade offs involved we follow this theoretical discussion with an empirical evaluation of the quality of current insolvency procedures in latin america we find that the region is governed by a set of laws that is inefficient even when compared with regions of lower per capita income this inefficiency has severe consequences for credit markets and the cost of capital next we focus on the recent brazilian bankruptcy reform analyzing its main components and possible effects the appendix describes difficulties of the reform process in brazil and lessons other latin american countries can learn from it

can the east asian model of development be generalized abstract export led growth has become increasingly popular among analysts and some governments as a development strategy besides contrasting its virtues to the distortions of the import substitution model popular through the 1960s advocates of the model frequently illustrate its merits by pointing to the remarkable success of its most prominent practitioners the east asian gang of four hong kong korea singapore and taiwan this study explores a possible limitation of the model known as the fallacy of composition while the model may work well if pursued by a limited number of countries it may break down if a large majority of developing countries seeks to pursue it at the same time because the resulting outpouring of manufactured exports might be more than western markets could absorb protectionist response might be the result of attempts to generalize the east asian export model of growth

institutional uncertainty and the maturity of international loans abstract this paper shows that non economic uncertainty in foreign countries contributes to a bias toward short term maturity in international lending frequent government changes and weak institutions explain why some countries find it difficult to obtain long term financing debt maturity is also explained by the level of economic and financial development of a country the composition of loan portfolios in terms of the type of borrowers and debt restructuring programs among other variables the results are obtained using data on international lending by three groups of u s banks large medium sized and small small banks shorten the maturity of their international loans in response to uncertainty to a greater extent compared to large banks

the politics of adjustment lessons from the imf s extended fund facility the international debt crisis has forced painful economic adjustments on the developing world in the short run it has forced governments to seek to correct payments imbalances through stabilization programs usually undertaken with conditional assistance from the international monetary fund imf the crisis has also revealed deeper weaknesses in many third world economies weaknesses demanding more basic reforms in the structure of incentives prices and investment

new patterns of governance for industrial change perspectives for brazil brazil is one of many developing countries that are struggling to upgrade their industries to attain international competitiveness sustained industrial competitiveness this article argues rests not only on firms capabilities micro level and a stable economic framework macro level but also and in particular on a tissue of supporting sector specific and specialised institutions and targeted policies meso level and on governance structures that facilitate problem solving between state and societal actors meta level the concept of systemic competitiveness seeks to address the interrelationship between the four levels the article analyses various obstacles to achieving systemic competitiveness in the particular case of brazil

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

revisiting economic development in post war taiwan the dynamic process of geographical industrialization taiwan s post war economic growth has been spectacular and has attracted divergent even contrasting explanations from the students of economic development while neo classicists interpret taiwan s miracle as a model of a free market economy the statists put government policy as their main emphasis however neither the neo liberalists nor the statists take the phenomena of uneven development very seriously by ignoring the process of geographical industrialization both discourses are not able to reveal the dynamic rhythm and more importantly the diversity and possibility of capitalist development this paper tackles the issue by unraveling the divergent regional industrial trajectories and the resulting geographical and social embeddedness in post war taiwan au taiwan le developpement economique d apres guerre a ete mirobolant d ou des explications divergentes de la part des etudiants du developpement economique alors que les neoclassicistes considerent le miracle taiwanais comme un modele type

loan pushing and triadic relations this paper is an attempt to define and explore the phenomenon of loan pushing in international lending in the 1970s the earliest descriptions of loan pushing are anecdotal this paper surveys the various facets that emerge from these anecdotes and suggests a possible definition that serves as the basis for a theoretical model this model inspired by the confessions of a banker explores a triadic relationship between a corporation in the lender country the lender bank and a borrower in a developing country and suggests that a rational profit maximizing commercial bank could end up pushing loans on to the borrower changes in international commercial banking in the 1970s that facilitated this type of loan pushing are discussed next to the extent that the loan pushing doctrine is valid it implies that the commercial banks were at least as responsible for the massive lending boom of the 1970s as the borrowers and should have been made to bear the cost of adjustment as well the process of sovereign lending in the 1970s appears to consist of voluntary and mutually agreeable contracts between the transnational commercial banks and credit seeking developing countries the suggestion that there could be in this process an element of aggressiveness on the part of the commercial banks that actively and systematically pushed loans on to developing country borrowers may at first sight seem inconceivable if a borrower voluntarily enters into a loan contract he is obviously doing so because the contract is beneficial if such is the case then would it be correct to characterize the process as one of loan pushing also the commercial banks are supposed to be rational profit maximizers thus the amount of lending cannot be more than optimal what then is meant by loan pushing these are a few questions that immediately come to mind it has been argued that international credit can contribute to increasing donor exports see for instance winkler 1929 hyson and strout 1968 gwynne 1983 taylor 1985 darity and horn 1988 basu 1991 basu and deshpande 1995 this is indeed one of the arguments used to explain the phenomenon of loan pushing however not the only one the aim of this paper is to explore the idea of loan pushing a little more deeply by first trying to understand the concept along with a brief review of the literature in the area section 2 the confessions of a young banker gwynne 1983 provide the basis of the theoretical model section 3 which considers a triadic relationship between a commercial bank in a creditor country a debtor nation and a corporation in the creditor country and the compulsions of loan pushing arising

venture capitalists decision policies across three countries an institutional theory perspective this paper examines the influence of economic institutions upon venture capitalists vcs decision policies we conducted policy capturing experiments on 119 vcs across three countries representing distinct economic institutions us mature market economy south korea emerging economy and china transitional economy results show that vcs in rules based market economies us rely upon market information to a greater extent than vcs in emerging economies korea and chinese vcs transitional economy weight human capital factors more heavily than either us or korean vcs findings suggest that although professional institutions may dictate which information is included in vc decision policies the extent to which that information is emphasized is determined partly by the economic institution in which the decision maker operates journal of international business studies 2007 38 691 708 doi 10 1057 palgrave jibs 8400291

the dynamics of negotiated protectionism r ecent protectionism by the united states has principally taken the form of negotiated barriers to trade such as voluntary export restraints these barriers tend to evolve over time and to display three patterns which we label institutionalized temporary and sporadic protectionism cartel theory and studies of the politics of protection suggest that the dynamics of negotiated protectionism will depend on three variables the barriers to entry into an industry the size of the domestic industry and the exit barriers for domestic firms low barriers to entry will lead to institutionalized protectionism when the domestic industry is large and exit difficult temporary protectionism results when the domestic industry is small and exit easy and sporadic protectionism is likely when barriers to entry are high brief studies of u s protectionism in textiles and apparel steel footwear televisions and automobiles illustrate the value of this framework t rade protectionism has often been thought of as a unilateral act by a sovereign state yet much protectionism during the 1970s and 1980s has been negotiated rather than unilaterally imposed voluntary export restraints vers and similar arrangements have become the preferred means by which the united states has sought to cartelize industrial sectors threatened by imports such negotiated protectionism has been particularly evident in five industries in the united states during part or all of the last quarter century in textiles and apparel steel footwear television sets and autos the united states has negotiated trade restrictions with numerous foreign exporters while the u s government has occasionally provided unilateral measures of protection for small industries all u s administrations since world war ii have been reluctant to countenance general schemes of protection for major industries yet beginning with the eisenhower administration s negotiations in textiles in 1956 virtually every u s president has actively sought vers for economically and politically sensitive industrial sectors

explaining the dynamics of the southeast asian political economy state society and the search for economic growth this essay reviews two sets of books that explore the origins and dynamics of southeast asia s growth and economic transformation one set of books utilizes a structuralist framework and emphasizes the role of the state in creating a now powerful capitalist class the other set of books utilizes an institutionalist framework to explain how new patterns of private public sector collaboration have resulted in rapid economic growth the authors point to weaknesses in both approaches and to areas where the two approaches can be fruitfully synthesized they also offer suggestions for future research

bank systemic risk and macroeconomic shocks canadian and u s evidence abstract this paper investigates how banks as a group react to macroeconomic risk and uncertainty more specifically it examines the relationship between bank systemic risk and changes and disruptions in economic conditions adopting the methodology of beaudry et al 2001 we introduce a new estimation procedure based on egarch to refine the framework developed by baum et al 2002 baum et al 2004 baum et al 2009 and quagliariello 2007 quagliariello 2009 and we analyze the relationship in the current industry context i e in the context of market based banking our results confirm that banks tend to behave more homogeneously vis a vis macroeconomic uncertainty in particular we find that both the cross sectional dispersion of loans to assets and the cross sectional dispersion of non interest income share shrink during slow growth episodes and particularly during financial crises when the resilience of the banking system is at its lowest more importantly our main findings indicate that the cross sectional dispersion of loans to assets has increased in the last decade whereas the cross sectional dispersion of non interest income share appears to be more volatile and sensitive to macroeconomic shocks

market culture and authority a comparative analysis of management and organization in the far east three frameworks purport to explain industrial arrangements and practices a market approach that emphasizes economic characteristics a cultural approach that sees organization as the expression of patterned values and an authority approach that explains organization as a historically developed structure of domination the efficacy of each approach is tested in explaining the organizational structures of three rapidly growing east asian economies japan south korea and taiwan the paper argues through comparative analysis that organizational growth is best explained by market and cultural factors but that authority patterns and legitimation strategies best explain organizational structure

finance and the sources of growth the authors evaluate whether the level of development in the banking sector exerts a causal impact on economic growth and its sources total factor productivity growth physical capital accumulation and private saving they use 1 a pure cross country instrumental variable estimator to extract the exogenous component of banking development and 2 a new panel technique that controls for country specific effects and endogeneity they find that banks do exert a large causal impact on total factor productivity growth which feeds through to overall gdp gross domestic product growth the long run links between banking development and both capital growth and private savings are more tenuous

applying most different systems designs comparing development policy in alabama and jamaica in every polity development policy choices often remain either implicit or largely ignored whereas economic growth can be measured with some precision development policy choices continue to cons

institutions and dynamic comparative advantage the electronics industry in south korea and taiwan if development proceeds by stages then taiwan as a more developed economy should have preceded south korea into high technology capital and knowledge intensive production in fact korea has overtaken taiwan in many respects the resolution of the paradox is traced principally to differences in industrial and firm structures in the two countries the conglomerate organizational mode in korea has permitted entry into many markets the smaller taiwanese firms have been unable to sustain themselves in these markets as there firms head onto the 1990s the limitations of their present industrial structures presage a possible convergence with each moving towards the other this paper suggests the importance of studying flexible institutional response and particularly the inner workings of a firm as an integral element of a theory of dynamic comparative advantage copyright 1990 by oxford university press