Foreign direct investment in Central and East European countries: State of affairs, prospects and policy implications

Foreign direct investment (FDI) is rightly considered as an engine in transforming Central and East European Countries (CEECs). Without massive inflows of capital, technology and management know-how a sustainable growth is unlikely to happen. Although governments in CEECs make more than air effort to create a favourable climate for FDI, the international investors' community has responded hesitatingly. Only the number of projects have skyrocketed, the amount of capital invested has increased only at a slow pace. Foreign investors are testing the water, but they are not rushing to jump. The paper attempts to provide an overview of the current state and prospects of FDI in CEECs. First, it briefly reviews the theoretical framework for understanding FDI. Then it focuses on the trends and patterns of FDI-flows. Finally, it draws attention to the policy towards FDI.

The Generic Private Sector in an Economy of Transition: Developments and Impacts on the Czech Economy

The long-lasting problems of the Czech economy, which have become apparent since 1996, have their roots in the behavior of a significant part of the domestic enterprise sector. These problems were called into being by a very intensive, nevertheless deeply non-standard mass privatization. The authentic (generic) private sector cannot be based on a command coming from the upper hierarchies of the social organization. It can arise only from gradual acts at the level of economic agents making their decisions autonomously at the grass roots of the economy. Soft market environment set by the Czech mass privatization policies was counter-productive for the development of entrepreneurial activities as defined by Schumpeter. The lobbies of pressure groups, defending the privileges of former socialist corporations, became dominant in shaping Czech politics, fiscal and banking economic policies and the build-up of economic institutions. The authentic private sector that evolved mainly from small and medium-sized enterprises was driven from its start to a position of an outsider. Notwithstanding the lack of government support, market imperfections, bureaucracy and failing judiciary, the sector of newly established businesses has shown a high degree of viability and at the end of the 1990s it became a dominant player on the market side of the Czech economy. The future of the Czech economic development cannot be separated from the situation in both the enterprises under foreign ownership and the small and medium-sized firms under indigenous owners. The economic policy-making should be based on these facts and provide for the requirements of these two progressive segments of the Czech authentic private sector. This also implies that merits of mass privatization should be subject to a fundamental overhauling on both the academic and the economic policy sides

ASEAN's new role in the Asia Pacific Region: can it be a driving force of wider regional economic cooperation?

This paper analyses how ASEAN members (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei) have been responding to the changing world economic environment, and how ASEAN, as a regional organisation, has been changing its priorities to reflect members' adjustments to the international environment. In its early phase, ASEAN was simply a group of neighbouring countries without coordinated external policy positions. However, it is now becoming a subsystem in international relations and able to put a collective point of view. The members of ASEAN have realised that it is more effective to voluntarily coordinate their positions in international forums and negotiations. The ASEAN Free Trade Area( DFA) agreement is analysed as a new type of A SEAN cooperation and a step towards broader cooperation in the Asia Pacific region. Whether ASEAN can and should be a driving force for broader economic cooperation in the Asia Pacific region is discussed. An ASEAN initiative in this regard, namely the Asia Pacific Economic Cooperation (APEC) process, will be a test of unity for ASEAN itself. Also, the desirability of creating a middle-power coalition, consisting of ASEAN members, Australia, New Zealand and Korea, is considered. Such a coalition would be more beneficial for ASEAN, as well as for other countries in the region, than the proposed framework of the East Asian Economic Caucus (EAEC). This is a revised version of a paper presented at an international symposium on ' Multi-layered Regional Cooperation in Southeast Asia after the Cold War', organised by the Institute of Developing Economies , 9-10 November 1994, Tokyo, Japan

Doctor of Philosophy

dissertationThis dissertation explores the economics of regulation prior to and after 1980 in the United States. During the golden age of capitalism, regulation consisted of a set of rules of conduct that imposed mutually binding, socially beneficial restrictions on economic competition. It was widely believed this regulation would sanction those inclined to act opportunistically, making it possible for individual capitalists to act on their enlightened (rather than short-term opportunistic) self-interest. Confidence in the effectiveness of regulation was a commitment device, which allowed individual capitalists to act in concert with their collective class interests. However, the process of deregulation that began around 1980 gradually gave rise to an environment where free riding on others' cooperation became the dominant strategy. The dissertation revisits the theory of the State to highlight the role played by regulatory institutions with respect to the agency of the capitalist class. An analytical framework models the intensity of regulation as a commitment device that increases the likelihood of successful collective action. Theoretical predictions indicate that because deregulation is individually profitable in the short run, it makes collective action more difficult overall as capitalists act opportunistically. The empirical dimension of this research explores the State's relative autonomy, which is necessary if regulation is to be a credible commitment device. Empirical findings indicate that the relationship between the State and the rate of profit at the industry level changed significantly after 1980 compared to the period before. The empirical results, consistent with predictions of the analytic model and descriptive analysis, suggest that the relative autonomy of the State before 1980 and lack thereof after was an important component in capitalists' ability to act collectively

Understanding Reform: The Case of Poland

This report reviews the reform process in Poland in the period 1989-2001, from the formation of the first non-Communist government to the defeat of right-wing forces in the 2001 parliamentary elections and the formation of a governing left-wing coalition of social democrats and the peasants’ party (both of them with roots in the Communist era). It reconstructs the sequence of reforms, assesses their relative successes, and focuses on the problem of the stagnation of the reform process at the end of the 1990s.Poland, reform, transition

Was the IMF's Imposition of Economic Regime Change Justified? A Critique of the IMF's Economic and Political Role in Korea During and After the Crisis

As late as October 1997 the IMF declared that the Korean economy was experiencing a temporary liquidity squeeze, not a solvency problem. Yet in December 1997 Deputy Managing Director Stanley Fischer declared that Korea suffered from a systemic “breakdown of economic relations” so complete that only radical economic restructuring could restore prosperity. The IMF attached what it called “extreme structural conditionality” to its loan agreements with Korea, demanding a complete and rapid transition from Korea’s traditional East Asian economic model to a globally integrated neoliberal model. We subject the IMF’s assertion that the allocative efficiency of the Korean economy had collapsed by 1997 to a number of empirical tests, including time series and cross-section analyses of capital productivity and corporate profitability, and firm and industry level econometric tests of the proposition that investment spending was excessive and misallocated in the pre-crisis period. This evidence does not support the IMF’s systemic breakdown claim. We conclude that the IMF’s imposition of “extreme structural conditionality” on Korea is best understood as an illegitimate and antidemocratic exercise of power designed to meet the needs of the IMF’s key constituents rather than those of the majority of Korea’s people.