Long waves in Argentine economic development

Argentine economic development from 1864 to 1983 can be roughly devided into a period of economic progress (1864 - 1930) and into one of economic decline (1930 - 1983). Of the many issues that could potentially explain such an unprecedented development of a basically resource-rich country, this paper deals with distributional conflicts, inflation, exogenous shocks and political instability. The analysis shows that redistributive incomes policies in favour of labour and government accomodated by a very loose monetary policy seem to lie at the heart of an institutionalised distributional conflict over a stagnant national income. To the extent that political instability can be associated with the underlying distributional conflict the political cycle hypothesis adds some explanatory power to the above. With the only exception of World War I, which seems to have triggered inward-oriented industrialisation policies, exogenous shocks do not seem to have been of major importance for Argentine economic performance; at best such shocks should have reinforced the negative impact of incomes and monetary policies.

Clothing the world efficiently: The MFA and consumers

The sarcasm of Baetiat almost 150 years ago quite aptly and in all seriousness covers a fair share of the arguments raised whenever foreign industries are more competitive than domestic ones. Vested interests, ranging from employers and employees to unions and elected officials, arouse support around the well-known protectionist arguments, among which the employment issue plays a central role. Such is the case with the Multifibre Agreement (MFA), which came into being under the umbrella of GATT, itself (ironically enough) born out of the recognition of the need to ensure full employment and a steadily increasing volume of real income (see GATT Preamble). This paper first gives a brief overview of the scope of the problem; attention is then drawn to certain theoretical and policybased incongruences before moving on to some statistical underpinnings.

International arms trade: Revealed political preferences or cartel behaviour?

On the basis of a world matrix of international trade in majorconventional weapons for 1985, a comparison is made between the regional structure of arms trade and the regional structure of trade in civilian goods from a comparable technological background. It turns out that there are striking divergencies between both kinds of trade structures, even within military alliances. These divergencies are then captured by an indicator which is named revealed political preference (RPP). It is argued that introducing a free-trade regime within NATO and other industrialised western countries would make arms trade increase, and, in particular, make the shares of Japan and West Germany in arms exports rise manifold, thereby raising world economic welfare. It is suggested that different hypotheses for explaining world arms-trade structures are relevant according to the region analysed, like the trading-with-the-enemy hypothesis with respect to the arms trade between advanced and less-developed countries, or the military-industrial-complex hypothesis for arms trade within alliances.

Growth, growth fluctuations, and the stages of technological advance

It is a well-established tradition to define the subject before embarking on an investigation. In our case, definition is to be concerned with economic development and scientific-technical progress. The former poses no problem in the economist's profession. According to Mirabeau, every moral or physical advance can be grasped by one indicator, which he called the net product. Today, Mirabeau would probably encounter objections as far as the measurement of moral progress by the net product is concerned, although some would argue that also today morals, as well as gods, are always with the winners. Anyhow, real changes in the availability of goods and services is, according to national and international standards, measured by changes in real net social product; conceptual problems - e.g., of how to treat the non-pecuniary costs (environmental pollution) and benefits (value added of housewives) - are, of course, part of every measurement. What matters here is that the approach as such is hardly controversial.

Industrial adjustment in Western Europe: Retrospect and prospect

The purpose of this paper is to discuss major factors behind failures and successes in structural adjustment. The analysis includes the experience of four major European countries: France, Italy, the United Kingdom and West Germany. These countries are known for diverging performances. Germany has the highest real per capita income, the lowest inflation, and the strongest currency, while its unemployment rate, though depressing by her own historical standards (8 per cent in 1986 as compared to 1 per cent on average during the sixties), is distinctly below those of the other three countries. On the other side of the spectrum is Italy, but this nation is in fact composed of three economies - a highly developed and rapidly growing one in the north, a very backward one in the south and a dynamic economia somersa almost everywhere. The United Kingdom has become the only oil-rich country in the sample, but probably the one which has been struggling most with micro-economic inefficiencies and the power of interest groups (labour unions in particular) in the economic-political decision process for decades. France has become an industrial and technological leader in a shorter space of time (starting its economic transformation in the late fifties) than any of the other sample countries, but it also was struck by an unparalleled experimentation with socialism during the early eighties.

Towards a funded system of social security: Design and implications ; the case of Germany

What would a feasible system of social security in Germany have looked like in the year of 1995 and beyond? In order to find an answer we describe three base systems: ( l ) a purely funded system of social security, (2) a fully mandatory funded system of social security, and (3) a partially mandatory funded system. It is argued that - neglecting problems of transition - a purely funded system would be the best in economic terms; a fully mandatory funded system would need almost as many controls as the currently prevailing system (often labelled pay-asyou- go system). A partially mandatory funded system, assuring some kind of basic income, would need less controls and less governmental authority than the fully mandatory system but more than a funded system. After quantification of two scenarios which represent components of the three base systems, a system of taxation with respect to contributions and/or benefits is discussed which is at the same time simple in terms of costs of bureaucracy and does not tax economic growth more than necessary.

Comparative invention performance of major industrial countries: Patterns and explanations

The paper firsjt presents an analysis of invention performance; as measured by patenting activities, of six countries (France, Italy, Japan, United Kingdom, USSR, West Germany) relative to the United States for 41 SIC industries over the past twenty years. It turns out that Non U.S. countries as a whole have increased their (relative) invention performance in all fields of technology, including high technology fields. In the second section hypotheses which can be supposed to explain the relative decline of the United States' patenting activities are discussed and tested. There is strong evidence that catching up processes as well as integration effects contributed most to the relative decrease of the United States; there also is evidence, that government interventions regarding technology production have had counter-productive effects in the United States.

Die gesamtwirtschaftlichen Kosten der Protektion

Die Handelshemmnisse der Bundesrepublik benachteiligen nicht nur ausländische Produzenten, sondern auch - über höhere Preise und schlechtere Versorgung - in hohem Maße die Konsumenten in der Bundesrepublik. Mehr noch als der Zollschutz mindern nicht-tarifäre Handelshemmnisse die Wohlfahrt der Bevölkerung. Dabei fallen quantitative Handelshemmnisse am stärksten ins Gewicht, insbesondere die Kontingente und Selbstbeschränkungsabkommen im Bereich der Textil- und Bekleidungsindustrie. Die Handelsschranken bewirken eine beträchtliche Einkommensumverteilung von den Konsumenten zu den Produzenten. Nur zwei Prozent der Industriebeschäftigten verdanken ihren Arbeitsplatz dem Zollschutz; innerhalb der Bereiche, die auch durch nicht-tarifäre Handelshemmnisse geschützt sind, wäre eine Liberalisierung freilich mit einem etwas höheren Beschäftigungsrückgang verbunden. Schrittweises Vorgehen und flankierende Anpassungshilfen könnten vermeiden helfen, daß durch die Liberalisierung Arbeitslosigkeit entsteht. Es gibt deshalb im Falle der Bundesrepublik kaum ein gesamtwirtschaftlich vertretbares Argument, das das Fortbestehen der außenwirtschaftlichen Schutzmaßnahmen rechtfertigen könnte. --

On the political economy of protection in Germany

At a time when protectionist tendencies are on the upswing world wide once again, it is important to gain evidence on the cause of such movements. Proper diagnosis of the determinants of protection may provide a more promising avenue to avoiding discriminatory economic policies than reiteration of the welfare losses of protection has been able to do. For this purpose Germany constitutes a potentially fruitful case study. First, historically, economic and political regimes have varied widely. Second, institutional conditions at the present are unique enough to warrant and require a closer look at the mechanisms which provide protection. Third, Germany constitutes a large and still relatively liberal market for the products of the less developed and newly industrialized countries. Hence, trade policy developments in Germany are likely to lead to serious repercussions in those countries. The general framework chosen for analysis of German protective mechanisms posits the existence of a political market for protection, and follows from the work of Downs (1957), Buchanan and Tullock (1962), and Ohlson (1965), as well as the application of this principle to international trade and protection issues by a number of authors. Very briefly, the demand for protection on the part of producing units is derived from firms' opportunity costs in eliciting protection; and the supply of protection is derived from governments' opportunity cost in granting protection. In applying this guiding hypothesis to Germany, explanatory variables are sought which messure or proxy those opportunity costs, both on average over time, and across industries at a point in time. The specific hypotheses tested must in part be derived from institutional features peculiar to Germany. In the next section of this paper, this framework is applied historically to the period 1880 - 1978, and in the section thereafter, it is applied to explain the structure of protection in manufacturing industries in 1974. Developments since then are briefly discussed.