Growth and the Investment Climate: Progress and Challenges for Asian Economies

The views and opinions of authors expressed in this paper do not necessarily state or reflect those of DFID or the Asia 2015 organisers.

The new resilience of emerging and developing countries: systemic interlocking, currency swaps and geoeconomics

The vulnerability/resilience nexus that defined the interaction between advanced and developing economies in the post-WWII era is undergoing a fundamental transformation. Yet, most of the debate in the current literature is focusing on the structural constraints faced by the Emerging and Developing Countries (EDCs) and the lack of changes in the formal structures of global economic governance. This paper challenges this literature and its conclusions by focusing on the new conditions of systemic interlocking between advanced and emerging economies, and by analysing how large EDCs have built and are strengthening their economic resilience. We find that a significant redistribution of ‘policy space’ between advanced and emerging economies have taken place in the global economy. We also find that a number of seemingly technical currency swap agreements among EDCs have set in motion changes in the very structure of global trade and finance. These developments do not signify the end of EDCs’ vulnerability towards advanced economies. They signify however that the economic and geoeconomic implications of this vulnerability have changed in ways that constrain the options available to advanced economies and pose new challenges for the post-WWII economic order

The role of national intellectual capital in the digital transformation of EU countries. Another digital divide?

Purpose: This study, an exploratory one, aims to empirically investigate the association of national intellectual capital (NIC) with the national digital transformation readiness of the European Union's (EU’s) member states. Apart from building the conceptual model of NIC, this study explores the role of NIC dimensions in the digital divide between European countries. Design/methodology/approach: Based on the literature review and the available EU statistical data and indexes, the theoretical framework and conceptual model for NIC were developed. The model explores the relation of NIC and its dimensions (human, social, structural, relational and renewable/development capital) on the readiness of European countries for digital transformation and the digital divide. Significant differences between EU countries in NIC and digital readiness were tested. Multiple linear regression was used to explore the association of each NIC dimension with digital transformation and digital divide within the EU. Findings: Despite a positive association between all dimensions of NIC and digital transformation readiness, the proposed model of NIC was not confirmed in full. Regression analysis proved social capital and working skills, a dimension of human capital, to be the predictors of digital transformation at a national level, able to detect certain elements of digital divide between EU member states. Structural capital, knowledge and education, as dimensions of human capital, were predictors of the digital divide in terms of the integration of digital media in companies. Research limitations/implications: This research has a limited propensity for generalisation due to the lack of common measurement models in the field of NIC exploration. Practical implications: This research offers policy makers an indication of the relationships between NIC and digital transformation, pointing out which dimensions of NIC should be strengthened to allow the EU to meet the challenges of digital economy and to overcome the digital divide between EU member states. Social implications: The use of digital technologies is key in creating active and informed citizens in the public sphere and productive companies and economic growth in the business sphere. Originality/value: This study provides an original theoretical framework and conceptual model through which to analyse the relationship between NIC and digital transformation, which has thus far not been explored at the level of the EU. This research makes an original contribution to the empirical exploration of NIC and produces new insights in the fields of digital transformation and intellectual capital

Reducing Inequality – The Missing MDG: A Content Review of PRSPs and Bilateral Donor Policy Statements

Although important gains have been made in reducing global poverty, the pace of progress across the world is not on track to achieve the 2015 MDG targets. Is this due to lack of ownership on the part of national governments and the international community? This article examines whether the Poverty Reduction Strategy Papers (PRSPs) and donor policy statements are aligned with MDG priorities and targets. The analysis found a high degree of commitment to MDGs as a whole but both PRSPs and donor statements are selective, consistently emphasising income poverty and social investments for education, health and water but not other targets concerned with empowerment and inclusion of the most vulnerable such as gender violence or women's political representation. The article concludes that a new, ninth Goal needs to be added – to reduce inequality – to make the MDGs aligned to the original purpose of the Millennium Declaration

Deceleration in World Economic Growth and Industrial Development in the Third World

SUMMARY UNCTAD's work in the area of manufactures has been guided by the idea that manufacturing is the engine of autonomous growth and development. Until recently industrialisation proceeded apace in the Third World. But many countries have built up a highly import?dependent industrial structure and have fared badly in the downturn in the world economy since the late 1970s. UNCTAD needs to shift the balance away from the expansion of industrial capacity per se towards the creation of industrial structures with a lower propensity to import. RESUMEN Desaceleración en el crecimiento económico mundial y en el desarrollo industrial del Tercer Mundo El trabajo de la UNCTAD en el campo de los productos manufacturados se ha guiado hasta el momento por la idéa de que los productos manufacturados actúan como motor para un crecimiento y desarrollo autónomos, Hasta hace poco la industrialización en el Tercer Mundo se movía a marcha forzada. Pero muchos países formaron una estructura industrial basada en la importación y salieron perdiendo al bajar la economía mundial en los años 70. La UNCTAD necesita cambiar el énfasis en la expansión de la capacidad industrial para llegar a la creación de estructuras mundiales menos propensas a la importación. RESUMES Ralentissement de la croissance économique mondiale et du développement industriel dans le Tiers Monde Les travaux de CNUCED dans le domaine de l'industrie ont été guidés par l'idée que l'industrialisation est le moteur de la croissance et du développement autonomes. Jusqu'à présent l'industrialisation se développait rapidement dans le Tiers Monde. Mais plusieurs pays ont établi une structure industrielle grandement dépendantes de l'importation et ont beaucoup perdu dans le retournement de l'économie mondiale à la fin des années 70. CNUCED doit déplacer l'équilibre au?delà de l'expansion industrielle en elle — même vers la création de structures industrielles avec une dépendance moindre sur l'importation

Aggregate and Heterogeneous Sectoral Growth Effects of Foreign Direct Investment in Egypt

This paper investigates the sectoral impacts of FDI on growth in Egypt between 1990 and 2007 based upon a unique data set. It highlights the aggregation bias inherent in many empirical studies that focus solely on the economy-wide effects of foreign investment. Aggregate inflows of FDI are shown to be detrimental to the country’s economic growth performance, possibly as a result of the ‘crowding-out’ of more productive domestic investment. Some positive sector-specific effects however, are found for investment in Manufacturing & Petroleum, which also has beneficial spillovers into other sectors. FDI in the Finance & Retail and Telecommunications & Information Technology sectors are found to generate significantly negative growth effects while those in Services and Tourism are negative but generally insignificant. These findings suggest that ‘market-seeking’ FDI in certain sectors has conspicuous ‘crowding-out’ effects, possibly owing to insufficient domestic absorptive capacity. The results of this study further demonstrate the importance of potential sectoral heterogeneity of own sector and inter-sectoral economic growth effects of FDI. It therefore highlights the critical need for policy makers to take a more disaggregated sectoral-level evaluation of the benefits of foreign investment, particularly in developing economies such as Egypt

Getting real about food prices

The 2008 price spike in world grain prices had serious impacts on food security and poverty but analysts have consistently described these real food prices as low in historical terms. The inconsistency between the severity of the food crisis and low real prices results from the use of advanced and global economy price indices to calculate real prices. This ignores the high share of food in poor people’s expenditures and indirect effects of income growth on expenditure patterns of rich and poor consumers. Poor consumers have not experienced the same falls in real food prices as those with growing incomes and are more vulnerable to price shocks. As high and fluctuating international grain prices appear to be a feature of the current world economy, food price and policy analysis must recognise this, and develop and use different price indices that take account of differences between consumer groups

What explains the uneven take-up of ISO 14001 at the global level?: a panel-data analysis

Since its release in the mid-1990s, close to 37 000 facilities have been certified to ISO 14001, the international voluntary standard for environmental management systems. Yet, despite claims that the standard can be readily adapted to very different corporate and geographic settings, its take-up has been highly geographically variable. This paper contributes to a growing body of work concerned with explaining the uneven diffusion of ISO 14001 at the global level. Drawing from the existing theoretical and empirical literature we develop a series of hypotheses about how various economic, market, and regulatory factors influence the national count of ISO 14001 certifications. These hypotheses are then tested using econometric estimation techniques with data for a panel of 142 developed and developing countries. We find that per capita ISO 14001 counts are positively correlated with income per capita, stock of foreign direct investment, exports of goods and services to Europe and Japan, and pressure from civil society. Conversely, productivity and levels of state intervention are negatively correlated. The paper finishes by offering a number of recommendations to policymakers concerned with accelerating the diffusion of voluntary environmental standards

Political Economy of Aid in Conflict: An Analysis of Pre- and Post-Intifada Donor Behaviour in the Occupied Palestinian Territories

Despite conflict-affected economies being among the largest recipients of aid worldwide, the theoretical frameworks and the political inclinations of donors make it very unlikely for their assistance programmes to have a lasting developmental impact in conflict zones. This paper highlights the key shortcomings in donors’ theoretical frameworks, policies and approaches when dealing with a situation of conflict – suggesting that such shortcomings in some cases could even contribute towards a prolonging of the conflict itself. A pre- and post-Intifada analysis of donor activities in the occupied Palestinian territories is presented in order to demonstrate the stark shifts in donor funding in response to the rise of conflict: from development spending to institution building and governance reforms. It is argued that this shift was not only out of tune with the emerging needs of the Palestinian economy, but also, in some cases, helped worsen the impact of the conflict on the Palestinian economy – yet, nevertheless, it helped to justify the donors’ continued presence in one of the most politically-charged conflicts in the world