When does International Capital Mobility Require Tax Coordination?

Basic economic theory identifies a number of efficiency gains that derive from international capital mobility. But just as with free trade in goods, there is no guarantee that capital mobility makes everyone better o¤. Consequently, capital mobility may be politically unsustainable even though it enhances efficiency. This paper discusses how such a dilemma might arise, and suggests that international tax coordination might serve as a way out under some circumstances.capital movements;taxation

The impact of Chinese import penetration on the South African manufacturing sector

This article uses a Chenery-type decomposition and econometric estimation to evaluate the impact of Chinese trade on production and employment in South African manufacturing from 1992 to 2010. The results suggest that increased import penetration from China caused South African manufacturing output to be 5 per cent lower in 2010 than it otherwise would have been. The estimated reduction of total employment in manufacturing as a result of trade with China is larger – in 2010 about 8 per cent – because the declines in output were concentrated on labour-intensive industries and because the increase in imports raised labour productivity within industries

The macroeconomics of a financial Dutch disease

We describe the medium-run macroeconomic effects and long-run development consequences of a financial Dutch disease that may take place in a small developing country with abundant natural resources. The first move is in financial markets. An initial surge in foreign direct investment targeting natural resources sets in motion a perverse cycle between exchange rate appreciation and mounting short- and medium-term capital flows. Such a spiral easily leads to exchange rate volatility, capital reversals, and sharp macroeconomic instability. In the long run, macroeconomic instability and overdependence on natural resource exports dampen the development of nontraditional tradable goods sectors and curtail labor productivity dynamics. We advise the introduction of constraints to short- and medium-term capital flows to tame exchange rate/capital flows boom-and-bust cycles. We support the implementation of a developmentalist monetary policy targeting competitive nominal and real exchange rates in order to encourage product and export diversification

Dutch disease-cum-financialization booms and external balance cycles in developing countries

We formally investigate the medium-to-long-run dynamics emerging out of a Dutch disease-cum-financialization phenomenon. We take inspiration from the most recent Colombian development pattern. The “pure” Dutch disease first causes deindustrialization by permanently appreciating the economy’s exchange rate in the long run. Financialization, i.e. booming capital inflows taking place in a climate of natural resource-led financial over-optimism, causes medium-run exchange rate volatility and macroeconomic instability. This jeopardizes manufacturing development even further by raising macroeconomic uncertainty. We advise the adoption of capital controls and a developmentalist monetary policy to tackle these two distinct but often intertwined phenomena

Trade openness, income levels, and economic growth: the case of developing countries, 1970–2009.

This paper attempts to investigate the extent to which trade openness has had an impact on the levels of income and rates of growth in a sample of 115 developing countries for the period 1970–2009. Additionally, to assess whether there is an income level threshold for a country to benefit from international trade, the sample is broken down into three mutually exclusive groups of countries: low-income, lower middle-income, and upper middleincome countries. The main novelty of the paper lies on the use, on the one hand, of a new and better trade openness measure and, on the other hand, of non-stationary heterogeneous panel cointegration techniques to cope with the problem of cross-sectional dependence. The results show a positive bidirectional relationship between trade openness and income level in the long run, thus suggesting that trade openness is both a cause and a consequence of the level of income. The results for the short run, that is, the link between openness growth and economic growth, go in the same direction

The early experience of smart specialization implementation in EU cohesion policy

This paper discusses the early-stage experience of the smart specialization agenda within EU Cohesion Policy. The analysis examines the types of policy prioritization choices made by different member states and regions and seeks evidence on the extent to which weaker regions, in particular, might be constrained in their choices. The paper then reviews the evidence arising out of various surveys of policy-makers’ own experience and perceptions of the agenda, and concludes with a discussion of the major features of the policy progress so far and the main challenges ahead

Cosmopolitanism, Self-Interest and World Government

Cosmopolitans, if they are interested in seeing their principles realised, must hope that persons worldwide can become motivated to act in accordance with what those principles demand. But although it is important that genuinely moral motives are developed, we should not ignore the potential pragmatic value of self-interested motives to the realisation of cosmopolitan ends. This article considers three such motives: economic self-interest, prudent self-interest and democratic self-interest. I argue that in each case, usefully harnessing these motivations implies or requires global political integration that amounts to ‘world government’. This argument has the effect of reinforcing the already popular view that realising cosmopolitan principles entails global political integration. For those who already endorse that view, my argument will act as supporting evidence; by contrast it represents a challenge to those cosmopolitans who have remained ambivalent about, or indeed have explicitly rejected, the need for global political integration