1 FINANCIAL LIBERALISATION AND THE RELATIONSHIP BETWEEN FINANCE AND GROWTH Philip Arestis University of Cambridge CEPP WORKING PAPER NO. 05/05 June 2005 Department of Land Economy 19 Silver Street Cambridge CB3 9EP Telephone: 01223 337147 UNIVERSITY OF CAMBRIDGE Centre for Economic and Public Policy 2 Introduction1 The relationship between financial development and economic growth has received a great deal of attention throughout the modern history of economics. Its roots can be traced in Lydia of Asia Minor where the first money was in evidence. The first signs of public debate, however, on the relationship between finance and growth, and indeed on experiments with free banking, can be located in Rome in the year 33 AD. In that year there was probably the first classic case of public panic and run on the banks. The Romans debated intensely and fiercely at that time the possibility of placing a hitherto free banking system under the control of the government. Since then, of course, a great number of economists have dealt with the issue. An early and intellectual development came from Bagehot (1873), in his classic Lombard Street, where he emphasised the critical importance of the banking system in economic growth and highlighted circumstances when banks could actively spur innovation and future growth by identifying and funding productive investments. The work of Schumpeter (1911) should also be mentioned. He argued that financial services are paramount in promoting economic growth. In this view production requires credit to materialise, and one "can only become an entrepreneur by previously becoming a debtor .What [the entrepreneur] first wants is credit. Before he requires any goods whatever, he requires purchasing power. He is the typical debtor in capitalist society" (p. 102). In this process, the banker is the key agent. Schumpeter (1911) is very explicit on this score: "The banker, therefore, is not so much primarily the middleman in the commodity `purchasing power' as a producer of this commodity . He is the ephor of the exchange economy" (p. 74). Keynes (1930), in his A Treatise on Money, also argued for the importance of the banking sector in economic growth. He suggested that bank credit "is the pavement along which production travels, and the bankers if they knew their duty, would provide the transport facilities to just the extent that is required in order that the productive powers of the community can be employed at their full capacity" (II, p. 220). In the same spirit Robinson (1952) argued that financial development follows growth, and articulated this causality argument by suggesting that "where enterprise leads finance follows" (p. 86). Both, however, recognized this as a function of current institutional structure, which is not necessarily given. In fact, Keynes (1936) later supported an alternative structure that included direct government control of investment. Although growth may be constrained by credit creation in less developed financial systems, in more sophisticated systems finance is viewed as endogenous responding to demand requirements. This line of Environmental Limits to Population Growth Environmental Limits to Population Growth Bởi: OpenStaxCollege Although life histories describe the way many characteristics of a population (such as their age structure) change over time in a general way, population ecologists make use of a variety of methods to model population dynamics mathematically These more precise models can then be used to accurately describe changes occurring in a population and better predict future changes Certain models that have been accepted for decades are now being modified or even abandoned due to their lack of predictive ability, and scholars strive to create effective new models Exponential Growth Charles Darwin, in his theory of natural selection, was greatly influenced by the English clergyman Thomas Malthus Malthus published a book in 1798 stating that populations with unlimited natural resources grow very rapidly, and then population growth decreases as resources become depleted This accelerating pattern of increasing population size is called exponential growth The best example of exponential growth is seen in bacteria Bacteria are prokaryotes that reproduce by prokaryotic fission This division takes about an hour for many bacterial species If 1000 bacteria are placed in a large flask with an unlimited supply of nutrients (so the nutrients will not become depleted), after an hour, there is one round of division and each organism divides, resulting in 2000 organisms—an increase of 1000 In another hour, each of the 2000 organisms will double, producing 4000, an increase of 2000 organisms After the third hour, there should be 8000 bacteria in the flask, an increase of 4000 organisms The important concept of exponential growth is that the population growth rate—the number of organisms added in each reproductive generation—is accelerating; that is, it is increasing at a greater and greater rate After day and 24 of these cycles, the population would have increased from 1000 to more than 16 billion When the population size, N, is plotted over time, a J-shaped growth curve is produced ([link]) 1/7 Environmental Limits to Population Growth The bacteria example is not representative of the real world where resources are limited Furthermore, some bacteria will die during the experiment and thus not reproduce, lowering the growth rate Therefore, when calculating the growth rate of a population, the death rate (D) (number organisms that die during a particular time interval) is subtracted from the birth rate (B) (number organisms that are born during that interval) This is shown in the following formula: ΔN (change in number) = B (birth rate) - D (death rate) ΔT (change in time) The birth rate is usually expressed on a per capita (for each individual) basis Thus, B (birth rate) = bN (the per capita birth rate “b” multiplied by the number of individuals “N”) and D (death rate) =dN (the per capita death rate “d” multiplied by the number of individuals “N”) Additionally, ecologists are interested in the population at a particular point in time, an infinitely small time interval For this reason, the terminology of differential calculus is used to obtain the “instantaneous” growth rate, replacing the change in number and time with an instant-specific measurement of number and time dN = bN − dN = (b − d)N dT Notice that the “d” associated with the first term refers to the derivative (as the term is used in calculus) and is different from the death rate, also called “d.” The difference between birth and death rates is further simplified by substituting the term “r” (intrinsic rate of increase) for the relationship between birth and death rates: dN = rN dT The value “r” can be positive, meaning the population is increasing in size; or negative, meaning the population is decreasing in size; or zero, where the population’s size is unchanging, a condition known as zero population growth A further refinement of the formula recognizes that different species have inherent differences in their intrinsic rate of increase (often thought of as the potential for reproduction), even under ideal conditions Obviously, a bacterium can reproduce more rapidly and have a higher intrinsic rate of growth than a human The maximal growth rate for a species is its biotic potential, or rmax, thus changing the equation to: dN = rmaxN dT 2/7 Environmental Limits to Population Growth When resources are unlimited, populations exhibit exponential growth, resulting in a J-shaped curve When resources are limited, populations exhibit logistic growth In logistic growth, population expansion decreases as resources become scarce, and it levels off when the carrying capacity of the environment is reached, resulting in an S-shaped curve Logistic Growth Exponential growth is possible only when infinite natural resources are available; this is not the case in the real world Charles Darwin recognized this fact in his description of the “struggle for existence,” which states that ...Rào cản môi trường trong thương mại của Mỹ và hàm ý cho Việt Nam Nguyễn Thị Thu Hiền Trường Đại học Kinh tế Luận văn ThS ngành: Kinh tế thế giới và Quan hệ kinh tế quốc tế; Mã số: 60 31 07 Người hướng dẫn: TS. Nguyễn Anh Thu Năm bảo vệ: 2012 Abstract: Luận văn làm rõ nội dung, vai trò, mục đích của rào cản thương mại quốc tế. Hệ thống hoá được những vấn đề mang tính khái quát về rào cản môi trường. Đưa ra các rào cản môi trường được áp dụng ở Mỹ. Phân tích và đánh giá hiệu quả thực trạng áp dụng rào cản môi trường ở Mỹ; từ đó đưa ra một số hàm ý cho Việt Nam nhằm xây dựng và áp dụng rào cản môi trường nói chung và xây dựng quan hệ thương mại Việt - Mỹ nói riêng. Keywords: Kinh tế đối ngoại; Thương mại quốc tế; Rào cản thương mại Content 1. Tính cấp thiết của đề tài. Thế giới ngày nay đang sống trong quá trình toàn cầu hoá mạnh mẽ, một nền thương mại tự do toàn cầu đang là mục tiêu của nhiều quốc gia mà minh chứng rõ nét nhất là sự ra đời và phát triển của Tổ chức thương mại thế giới (WTO). Tuy nhiên, do nhiều nguyên nhân, đặc biệt là do trình độ phát triển kinh tế không đồng đều, các nước đều duy trì các rào cản thương mại nhằm bảo hộ nền sản xuất nội địa. Bên cạnh hàng rào thuế quan, rất nhiều hàng rào phi thuế đã ra đời. Mức độ cần thiết và lý do sâu xa dẫn đến việc bảo hộ nội địa của từng quốc gia cũng khác nhau, đối tượng cần bảo hộ cũng khác nhau càng khiến cho các hàng rào phi thuế trở nên đa dạng. Chính các hàng rào này đã, đang và sẽ gây ra những cản trở đối với sự phát triển của thương mại quốc tế và phương hại đến ý tưởng xây dựng và hoàn thiện một nền thương mại tự do toàn cầu, cạnh tranh bình đẳng. Cũng chính vì vậy, nhiệm vụ của các quốc gia hiện nay là làm sao xây dựng được một chính sách thương mại vừa có khả năng hội nhập lại vừa có thể phát triển sản xuất trong nước. Để giải quyết cùng lúc hai mục đích này, nhiều nước trên thế giới, đặc biệt là các nước phát triển đã sử dụng đến “rào cản xanh” hay nói chính xác hơn là “rào cản môi trường”. Về thực chất, đây là một hệ thống quy định liên quan đến môi trường áp dụng cho sản phẩm nhập khẩu (trong đó nêu lên những tiêu chuẩn nhất định về quá trình sản xuất, sử dụng cũng như tái chế và tiêu hủy sản phẩm); do đó nêu cao ý thức bảo vệ trái đất và nhân loại. Và đây cũng chính là cơ sở vững chắc để loại hình "bảo hộ" này được các nước xây dựng và mở rộng. Hiện nay, những rào cản môi trường đã bị lạm dụng, được sử dụng quá nhiều gây khó khăn đối với hoạt động thương mại của các nước đang phát triển hay thậm chí đối với cả một số nước phát triển, đi ngược lại với tinh thần tự do hoá thương mại toàn cầu. Hơn phân nửa số lượng các rào cản môi trường tương đối mới, có hiệu lực từ năm 1999, 2000. Nhiều rào cản của EU có nguồn gốc từ các biện pháp được áp dụng vào cuối những năm 80 của thế kỷ 20 cho dù đa số được đặt ra vào cuối những năm 90 của thế kỷ 20 và năm 2000. Hiện nay, một số chính sách môi trường quan trọng được thông qua ở châu Âu sẽ tạo ra thêm các rào cản môi trường. Ở Mỹ, hầu hết các rào cản được áp dụng từ giữa đến cuối những năm 90, một số xuất hiện từ năm 2000. Còn ở Nhật, các rào cản chủ yếu tồn tại từ năm 1999 [8]. Việc sử dụng ngày càng nhiều các rào cản thương mại môi trường là do các quy định môi trường ngày càng tăng. Nếu thập kỷ trước chỉ mới có các hướng dẫn (guide) thì hiện nay phạm vi sử dụng các biện pháp thương mại để bảo vệ môi trường ngày càng tăng. Ở châu Âu, các chương trình về các quy định môi trường mới được dự đoán sẽ tăng trong tương lai. Nhìn chung, hệ thống rào cản môi trường trong thương mại quốc tế rất đa dạng và được áp dụng rất khác nhau tuỳ thuộc vào điều kiện cụ thể của từng nước. Theo số liệu thống kê năm 2003 cho thấy đã có đến hơn 40 rào cản môi trường đối với thương mại quốc tế trong hơn thập kỷ qua và dự kiến sẽ có ít nhất 20 rào cản được áp dụng [15]. Hiện nay, số lượng các rào cản môi trường được Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za Compiled by the Democracy & Governance Research Programme, Human Sciences Research Council Published by HSRC Press Private Bag X9182, Cape Town, 8000, South Africa www.hsrcpublishers.ac.za In association with the Journal of Contemporary African Studies, Institute of Social and Economic Research, Rhodes University, Grahamstown 6140, South Africa © 2003 Human Sciences Research Council First published 2003 All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. ISBN 0-7969-2025-7 Cover by Flame Design Cover photograph by Kelly Walsch Production by comPress www.compress.co.za Distributed in Africa by Blue Weaver Marketing and Distribution, P.O. Box 30370, Tokai, Cape Town, 7966, South Africa. Tel: +27 21-701-4477, Fax: +27 21 701-7302, email: booksales@hsrc.ac.za Distributed in the United States of America and Canada by Independent Publishers Group, 814 North Franklin Street, Chicago, IL 60610, USA. www.ipgbook.com. To order, call toll-free: 1-800-888-4741 All other enquiries, Tel: +1 312-337-0747, Fax: +1 312-337-5985, email: frontdesk@ipgbook.com Distributed worldwide, excluding Africa, Canada and the United States of America by The Nordic Africa Institute, Box 1703, SE 75 147 Uppsala, Sweden. Tel: +46 18 562200, Fax +46 18 552290, email: orders@nai.uu.se Free download from www.hsrc p ress.ac.za Contents Acknowledgements viii Acronyms x Introduction xiii Henning Melber 1 Democracy and the Control of Elites 1 Kenneth Good 2 Liberation and Opposition in Zimbabwe 23 Suzanne Dansereau 3 In Defence of National Sovereignty? Urban Governance and Democracy in Zimbabwe 47 Amin Kamete 4 As Good as It Gets? Botswana’s “Democratic Development” 72 Ian Taylor 5 Chieftaincy and the Negotiation of Might and Right in Botswana’s Democracy 93 Francis B. Nyamnjoh 6 Between Competing Paradigms: Post-Colonial Legitimacy in Lesotho 115 Roger Southall 7 From Controlled Change to Changed Control: The Case of Namibia 134 Henning Melber Free download from www.hsrc p ress.ac.za 8 Armed Struggle in South Africa: Consequences of a Strategy Debate 156 Martin Legassick 9 Culture(s) of the African National Congress of South Africa: Imprint of Exile Experiences 178 Raymond Suttner 10 Liberal or Liberation Framework? The Contradictions of ANC Rule in South Africa 200 Krista Johnson Contributors 224 Index 225 vi Free download from www.hsrc p ress.ac.za Tables Table 3.1: Voter composition in Harare in 1990 and 2000 55 Table 3.2: Constituency representation for Harare in parliament in 1990 and 2000 56 Table 3.3: The assault on democracy 59 Table 3.4: In defence of national sovereignty 65 Table 3.5: No patriotic agenda 67 Table 4.1: Number of seats won in Botswana’s general elections 75 Table 4.2: Percentage of popular vote won by party in Botswana’s general elections 75 Table 7.1: Election results 1989–1999 for the larger political parties 141 Figures Figure 3.1: Levels and types of elections in urban Zimbabwe 52 vii Free download from www.hsrc p ress.ac.za Acknowledgements It took just over a year between the conference on ‘(Re-)Conceptualising Democracy and Liberation in Southern Africa’ in July 2002 in Windhoek and this publication of revised versions of most of the papers originally presented there. This required the concerted efforts of many persons and institutions. The Nordic Africa Institute provided the bulk of the material and administrative support to organise the event within its Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za Compiled by the Democracy & Governance Research Programme, Human Sciences Research Council Published by HSRC Press Private Bag X9182, Cape Town, 8000, South Africa www.hsrcpublishers.ac.za In association with the Journal of Contemporary African Studies, Institute of Social and Economic Research, Rhodes University, Grahamstown 6140, South Africa © 2003 Human Sciences Research Council First published 2003 All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. ISBN 0-7969-2025-7 Cover by Flame Design Cover photograph by Kelly Walsch Production by comPress www.compress.co.za Distributed in Africa by Blue Weaver Marketing and Distribution, P.O. Box 30370, Tokai, Cape Town, 7966, South Africa. Tel: +27 21-701-4477, Fax: +27 21 701-7302, email: booksales@hsrc.ac.za Distributed in the United States of America and Canada by Independent Publishers Group, 814 North Franklin Street, Chicago, IL 60610, USA. www.ipgbook.com. To order, call toll-free: 1-800-888-4741 All other enquiries, Tel: +1 312-337-0747, Fax: +1 312-337-5985, email: frontdesk@ipgbook.com Distributed worldwide, excluding Africa, Canada and the United States of America by The Nordic Africa Institute, Box 1703, SE 75 147 Uppsala, Sweden. Tel: +46 18 562200, Fax +46 18 552290, email: orders@nai.uu.se Free download from www.hsrc p ress.ac.za Contents Acknowledgements viii Acronyms x Introduction xiii Henning Melber 1 Democracy and the Control of Elites 1 Kenneth Good 2 Liberation and Opposition in Zimbabwe 23 Suzanne Dansereau 3 In Defence of National Sovereignty? Urban Governance and Democracy in Zimbabwe 47 Amin Kamete 4 As Good as It Gets? Botswana’s “Democratic Development” 72 Ian Taylor 5 Chieftaincy and the Negotiation of Might and Right in Botswana’s Democracy 93 Francis B. Nyamnjoh 6 Between Competing Paradigms: Post-Colonial Legitimacy in Lesotho 115 Roger Southall 7 From Controlled Change to Changed Control: The Case of Namibia 134 Henning Melber Free download from www.hsrc p ress.ac.za 8 Armed Struggle in South Africa: Consequences of a Strategy Debate 156 Martin Legassick 9 Culture(s) of the African National Congress of South Africa: Imprint of Exile Experiences 178 Raymond Suttner 10 Liberal or Liberation Framework? The Contradictions of ANC Rule in South Africa 200 Krista Johnson Contributors 224 Index 225 vi Free download from www.hsrc p ress.ac.za Tables Table 3.1: Voter composition in Harare in 1990 and 2000 55 Table 3.2: Constituency representation for Harare in parliament in 1990 and 2000 56 Table 3.3: The assault on democracy 59 Table 3.4: In defence of national sovereignty 65 Table 3.5: No patriotic agenda 67 Table 4.1: Number of seats won in Botswana’s general elections 75 Table 4.2: Percentage of popular vote won by party in Botswana’s general elections 75 Table 7.1: Election results 1989–1999 for the larger political parties 141 Figures Figure 3.1: Levels and types of elections in urban Zimbabwe 52 vii Free download from www.hsrc p ress.ac.za Acknowledgements It took just over a year between the conference on ‘(Re-)Conceptualising Democracy and Liberation in Southern Africa’ in July 2002 in Windhoek and this publication of revised versions of most of the papers originally presented there. This required the concerted efforts of many persons and institutions. The Nordic Africa Institute provided the bulk of the material and administrative support to organise the event within its A GUIDE TO ECONOMIC GROWTH IN POST-CONFLICT COUNTRIES January 2009 Office of Economic Growth Bureau for Economic Growth, Agriculture and Trade U.S. Agency for International Development (USAID) RWANDAN FARMERS PRODUCE HIGH QUALITY COFFEE THROUGH THE BRINGTO COOPERATIVE, WHICH BENEFITED FROM USAID ASSISTANCE. (USAID/RWANDA) A GUIDE TO ECONOMIC GROWTH IN POST-CONFLICT COUNTRIES II USAID III A GUIDE TO ECONOMIC GROWTH IN POST-CONFLICT COUNTRIES PREFACE is Guide to Economic Growth in Post-Conflict Countries seeks to develop comprehensive recommendations for USAID and similar donors on how to encourage economic growth in countries emerging from conflict. e Guide is based on the premise that improved economic well- being can enhance the prospects for sustaining peace and reduce the high percentage of post-conflict countries that return to violence. e Guide is based on staff research and workshops organized by the Economic Growth Office of USAID’s Economic Growth, Agriculture, and Trade (EGAT) Bureau during 2007-2008, augmented with input from other USAID and field implementers, staff of other United States Government agencies (including the Department of Defense), the World Bank and International Finance Corporation, and several bilateral donors and think tanks. e Guide is intended for USAID field officers. In this respect, we think it fills an important gap. A former USAID Mission Director involved in three of our major programs over the past decade recently commented on the draft that, “I wished something like this had been right at my side as we tried to figure out what to do [in the early stages of my post-conflict assignments] . . . is should really be required for reading and internalizing by anyone going into a post-conflict situation.” As the Guide evolved, we realized that what we were learning would be useful to a broader audience and began to incorporate examples and case analysis from the experience of other donors. We encourage readers to draw lessons for their own organizations and needs. We hope the Guide spurs comment and further thought, and leads to improved depth of analysis – including on the outcomes and cost- effectiveness of our donor programs – as experience builds. e views expressed here, however, are those of the authors and EGAT’s Office of Economic Growth. ey do not necessarily reflect the views of the United States Agency for International Development or the United States Government. I wish to express my appreciation for the staff of EGAT who have developed the Guide and for the professionalism they demonstrated in showing how conventional development approaches can be adapted to the different world of post-conflict societies. Particular thanks are due to Steve Hadley, who initiated the project and helped us to rethink priorities and sequencing of our donor interventions; and to the lead editors, David Dod and James (Jay) T. Smith, who made sense out of the large and growing literature and drew thoughtfully from their own experience and that of others. Mary C. Ott Director, Office of Economic Growth Bureau for Economic Growth, Agriculture, and Trade IV USAID TABLE OF CONTENTS Executive Summary vi Part 1: A New Approach to Post-Conflict Recovery 1 I. Introduction 2 II. Special Circumstances and Characteristics of Post-Conflict Countries 4 III. Post-Conflict Economic Growth Programming – Some Fundamentals 9 IV. Deciding What To Do When – Prioritization and Timing 15 Part 2: Best Practices 20 V. Macroeconomic Foundations 21 A. Fiscal ... further growth Thus, the exponential growth model is restricted by this factor to generate the logistic growth equation: dN dN (K − N) = rmax = rmaxN dT dT K 3/7 Environmental Limits to Population Growth. .. rate of growth than a human The maximal growth rate for a species is its biotic potential, or rmax, thus changing the equation to: dN = rmaxN dT 2/7 Environmental Limits to Population Growth When... but the population of seals would decrease 5/7 Environmental Limits to Population Growth Section Summary Populations with unlimited resources grow exponentially, with an accelerating growth rate