Direct Foreign Investments And Productivity Growth In Hungarian Firms, 1992-1999

The impact of FDI on total factor productivity in Hungary during the 1990s' is assessed with a large enterprise panel. Foreign equity is associated with higher productivity levels and has a substantial, positive spillover effect on aggregate TFP growth. However, this benefit is significant only when associated with export orientation, while inward-looking FDI has negative side effects. Regionally, the north-western area, close to EU borders, benefits much more from FDI, whether foreign-owned or locally-owned private firms are considered. Otherwise, only the later absorb a reduced volume of externalities. Finally, State ownership implies lower levels of productivity, but does not hinder the capacity to respond to market incentives, including FDI induced externalities.http://deepblue.lib.umich.edu/bitstream/2027.42/39809/3/wp425.pd

IMF in Theory: Sovereign Debts, Judicialisation and Multilateralism

It is argued that the successive regimes for restructuring sovereign debts, since the early 20th century have been shaped by the articulation of three institutional functions: information gathering and economic expertise, then third-party mediation, lastly policy enforcement, also called conditionality. Whereas these functions where integrated within the Fund during the 1980s’ debt crisis, mediation has now been outsourced, under the pressure of the demand by the private sector for a thorough judicialisation of the restructuring process. That is, its inscription within rather rigid procedural rules which would provide much more protection against the interests and the intervention of the sovereigns, especially G7 governments. Two responses to this demand have been formulated: the creation of a supra-national “bankruptcy court”, as envisaged in the SDRM proposal put forward by the IMF in 2001; and the reliance upon national courts, specifically those in which jurisdiction the initial debt contracts had been signed. This latter option corresponds to the contract-based approach to sovereign defaults based on Collective Action Clauses, which was eventually adopted in spring 2003. It is defended that outsourcing third-party mediation makes the IMF considerably much weaker, as it remains with only two functions and no consistent rules of interaction with its traditional partners – private investors and the government of debtor countries.sovereign debts; judicialisation; multilateralism; IMF; conditionality; debts; system of payments; international lending

Bankruptcy Laws: Part of a Global History

This contribution first presents a brief outline of the economic logic of bankruptcy laws as of their historical development in Europe since the Middle-Ages. This experience is then compared with what an economy without a bankruptcy law would like, and three specific, intermediary examples are then discussed : in Ancient Rome, in pre-Meiji Japan and in the traditional Muslim world patterns of bankruptcy laws were developed, although the fully-fledged institution did not emerge. It is then hypothesised that the strong, direct interaction between core state institutions (a court, a judge) and private agents with valuable assets calls for a specific and rather demanding institutionnal set-up: a strong public authority should be mobilised in support of the collective action of creditors, albeit without invading their assembly and pre-empting assets. This specifically liberal rule emerged only in the medieval, European trading cities and was then interrestingly protected by the ulterior, absolutist monarchies. From there on and in the following centuries, it continued its worldwide expansion.This contribution will be published in: Debin Ma et Jan-Luiten van Zanden (dir). Law and Long Term Economic Change: An Eurasian Perspective, Stanford University Press (april 2011

Qu'est-ce qu'un droit de propriété international ?

Alors que le débat public considère qu’après dix années de croissance rapide l’économie mondiale est désormais globalisée, les économistes soulignent plutôt les nombreuses raisons pour lesquelles ce mouvement est encore partiel. Et, de fait, la distance est encore grande qui sépare la situation actuelle d’un hypothétique marché mondial, entièrement unifié. Cela étant, beaucoup de contributions académiques font aussi l’hypothèse, au moins dans leurs toutes premières phrases introductives, que la dynamique actuelle est un processus à peu près inéluctable, allant dans le sens de marchés toujours plus intégrés. Les problèmes de gouvernance nés de ce processus sont alors analysés en termes de retard, ou d’ajustement (très) frictionnel entre l’extension de l’initiative privée et des institutions publiques mal adaptées, et donc menacées d’archaïsme. Une grande partie des débats qui entourent l’évolution du Fonds monétaire international et de l’Organisation mondiale du commerce est, de fait, posée dans ces termes (...)

Comment un Etat fait-il faillite ?

La chose est connue : depuis des siècles, les Etats se mettent en défaut de paiement sur leur dette. Charles Quint en 1559 en est un exemple classique mais la monarchie française a vécu sous la menace d’une banqueroute pendant au moins cent cinquante ans, jusqu’à la Révolution. De même, le Mexique, indépendant en 1821, s’est endetté pour la première fois à Londres en 1824 et a cessé ses paiements trois ans plus tard. Plus près de nous, les années 1930 ou encore la décennie 1980 en Amérique latine offrent des exemples similaires, où la crise est venue le plus souvent avec une grosse récession, des tensions sociales intenses et l’hyperinflation. Aujourd’hui, alors que de nombreux Etats européens sont surendettés, la question se pose à nouveau : des défauts de paiements par des Etats souverains sont-ils encore possible? Et pourquoi sont-ils si dangereux ? (...)

Bankruptcy Law, Majority Rule, and Private Ordering in England and France (Seventeenth–Nineteenth Century)

Rather than evolving as a platform for renegotiation and debt discharge, as in France, English bankruptcy law emerged as a liquidation-only institution after majority arrangements among creditors were prohibited, in 1621. However, after 1705, good faith debtors could be offered a discharge, i.e. a form of limited liability. Later, private practices also developed into a little-known body of consistent, court-enforced, “quasi-bankruptcy rules” based however on voluntary adhesion. A key element was the convergence between the old, Law Merchant “composition agreement” and the English trust, to which creditors could jointly convey assets. By the 1780s, therefore, merchants were offered rigidity under the statutes or large, though voluntary negotiability in their shadow. Conversely, the French traders’ courts consistently helped the merchants overcome undue defaults, i.e. market failures. But majority vote limited the capacity to restructure rights and to design arrangements that may have better preserved their collective interest over time

Rapport sur le risque pays du Maroc

L’économie marocaine s’est comportée de manière satisfaisante au cours des dernières années et ne présente pas de risque d’investissement majeur à échéance de 3 à 5 ans. Les comptes extérieurs, le taux de change et la dette publique totale (66 % du PIB) ne montrent pas de tension sérieuse. Ce constat reflète aussi l’absence de dette extérieure nette et l’absorption réussie, en 2005, de chocs exogènes non-négligeables (pétrole, textile, sécheresse). En outre, cette économie volatile, à l’insertion internationale fragile, conserve des marges de manoeuvre pour répondre efficacement à d’éventuels nouveaux chocs (commerce extérieur, risque climatique, terrorisme, etc.). Le double excès d’offre observé sur les marchés de facteurs (chômage et surplus d’épargne) témoigne cependant d’obstacles structurels à l’initiative privée, à l’investissement et à la croissance. Les institutions publiques et notamment la régulation juridique des échanges semblent en particulier poser problème. Audelà, ces facteurs suggèrent que le rapport entre l’Etat et les acteurs économiques reste peu propice à l’émergence d’une dynamique de rattrapage économique rapide. Il est donc peu probable que le Maroc puisse prendre à moyen terme le statut d’économie émergente, caractérisée par une règle capitaliste dure et une capacité à absorber les fortes tensions sociales . L’action des pouvoirs publics devrait rester centrée sur la recherche, pas à pas, de compromis viables entre trois objectifs principaux : un ajustement toujours difficile à la concurrence internationale, la préservation d’un degré élevé de stabilité macroéconomique, et la défense d’une société qui n’est pas, a priori, la mieux armée pour répondre aux risques et aux opportunités de la globalisation

Against Globalization: Sovereignty, Courts, and the Failure to Coordinate International Bankruptcies (1870–1940)

Coordination of cross-border bankruptcies between 1870 and World War II offers a puzzling image. On the one hand, diplomats, academic lawyers, and private lobbies repeatedly tried to bring regulations closer to the ideal of unity and universality of proceedings: all parties and assets should be assembled in a single forum, governed by a single law. On the other hand, these demands were matched by repeated failures, so that territoriality, fragmentation, and thus relative economic inefficiency dominated. For example, many states adopted bankruptcy laws that were universal in design yet opposed any symmetric endeavor of their neighbors. This institutional stalemate cannot be easily traced to the resistance of shielded interest groups, such as senior creditors. I argue that the problem actually resulted from the interaction of two dimensions of sovereignty: the domestic dimension, whereby (under a liberal constitution) courts protect property rights and possibly reallocate them, as in a bankruptcy procedure; and the international dimension (i.e., the interstate political order), which determines the extent to which states will compromise their domestic prerogatives in order to commit themselves to stronger rules of cross-border cooperation. Between 1870 and 1840 it then seems that the constraints proper to the operation of coherent and trusted legal orders, at the national level, far outweigh the potential benefits more mutual opening. In contrast, the international regime that emerged after 1990 shows how greater international enfranchisement of economic agents was matched by much more fluid coordination and recognition between national jurisdictions.An earlier version of this paper was presented at the conference:"Power, Institutions, and Global Markets: Mechanisms and Foundations of World-wide Economic Integration, ca 1850-1930", organised by C de Jong and N. Peterson; Konstanz (Germany), June 200