Trade Sustainability and Aid under Liberalization in Fragile Least Developed Countries

This study investigates the effect of trade liberalization on export growth, import growth, the trade balance and the current account of the balance of payments in 17 least developed countries (LDCs) over the period 1970 to 2001. The paper also assesses the marginal relation between capital flows (e.g., aid flows) and import growth, and the trade balance and the current account of the balance of payments. The higher import growth contrasts with the more modest export growth following trade liberalization and this has fundamental policy implications, especially for the balance of trade and the balance of payments. However, the financing and sustainability of the trade deficit in the reforming countries will depend not only on the outcome of trade liberalization, but also on other macroeconomic policies, developments in the real exchange rate and the inflows of foreign capital.trade liberalization, aid, balance of payments, dynamic panel data, least developed countries

Terms of Trade Shocks and the Current Account in Small Island States

This paper investigates the dynamic relationship between terms of trade shocks and the current account in selected small islands developing states. The findings show that the terms of trade explain a significant proportion of the variation in the current account balances. Also, the current account balances reflect a J-curve type reaction to terms of trade innovations. Real output also reacts negatively to changes in the terms of trade.terms of trade shocks, current account balance, panel data, vector autoregression, VAR

Export Productivity and Specialization in China, Brazil, India and South Africa

This paper analyses the patterns of export productivity and trade specialization profiles in the China, Brazil, India and South Africa, and in other regional groupings. In doing so, the investigation calculates a time varying export productivity measure using highly disaggregated product categories. The findings indicate that export productivity is mainly determined by real income and human capital endowments. Importantly, the study reveals significant differences in the export productivity and specialization patterns of countries with comparable per capita income levels. For instance, China?s export productivity and implied export sophistication is in line with that of countries with higher per capita incomes, including some OECD industrial economies.export productivity, trade specialization, comparative advantage

China and India: Country Role Models of Development Success?

The paper discusses views on China and India as country role models. In so doing the article recounts the economic and political reforms pursued by the two countries. The paper also outlines the outstanding reforms and the bottlenecks that could jeopardize economic performance and development going forward, drawing lessons for other developing countries.China, India, reforms, growth, development

Energy Consumption and Carbon Emission-Based Productivity Change and Industrialization in Post-Reform

The paper investigates the determinants of productivity growth in China. It also analyses the sustainability of the country’s industrial growth by estimating sectoral productivity, accounting for energy usage and emission since the start of the marketoriented reforms in the late 1970s. The growth accounting analysis indicates that productivity is the most significant driver of growth. Energy and capital are also important factors promoting China’s industrial growth. The substantial productivity improvement of China’s industry is attributable more to high-tech light industrial sectors. Heavy industry, characterized by high energy emission levels, lags behind in terms of productivity and overall technical change.productivity growth, industrial sustainability, energy consumption, carbon emission

Export Productivity, Finance, and Economic Growth: Are the Southern Engines of Growth Different?

Using a panel of 139 countries over the period 1992-2003, we analyse the links between export productivity, economic growth and financial development indicators. We then investigate whether the links observed in China, India and Brazil systematically differ from those observed in other countries in the sample. We find that both GDP per capita and investment generally exert a positive and significant effect on export productivity. Except for Brazil, financial development is not an important determinant of export productivity. Moreover, except for Brazil, export productivity plays a positive effect on growth, and so does financial development for both China and Brazil, but not for India. Finally, in both India and Brazil, FDI is negatively associated with growth.export productivity, financial development, FDI, growth

China and India.s Development Strategies: Lessons for Developing Countries

Development, Industrial Policy, Environmental Sustainability

Fragile States

Many of the world.s poorest countries can be described as .fragile states. wherein governments cannot or will not provide an environment for households to reduce, mitigate, or cope with poverty and other risks to wellbeing. Many of these states are in conflict or just emerging from conflict. The UNU-WIDER project .Fragility and Development. explored state fragility and its relationship to household vulnerability, noting that there is a lack of research on the economic dimensions of conflict, aid, and development in fragile states. This Research Brief provides a summary of the various contributions made by this project, including case studies on Iraq, Kosovo, Palestine, and Somalia. It also addresses a number of pertinent questions such as; when are states fragile? What are the costs that fragile states impose on their people and the international community? Should the sovereignty of fragile states be reconsidered? And how can aid flows to fragile states be made more effective?vulnerability, poverty, households, hazards, shocks

The Challenge of Small Island Developing States

Small Island Developing States, Vulnerability