Trade and development directions for the 21st century

Trade and Development Trade and Development Directions for the 21st Century Edited by John Toye Visiting Professor, Department of Economics, University of Oxford, UK The work is published for and on behalf of the United Nations Edward Elgar Cheltenham, UK Northampton, MA, USA â The United Nations 2003 All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior permission of the publisher Published by Edward Elgar Publishing Limited Glensanda House Montpellier Parade Cheltenham Glos GL50 1UA UK Edward Elgar Publishing, Inc 136 West Street Suite 202 Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Trade and development : directions for the 21st century / edited by John Toye p cm Papers presented at the Round Table of Eminent Economists at the opening session of the U.N Conference on Trade and Development (UNCTAD X) in Bangkok, Thailand in February 2000—Introd “The work is published for and on behalf of the United Nations” Includes index International trade—Congresses Economic development—Congresses Economic history—1990– —Congresses I Toye, J.F.J II United Nations Conference on Trade and Development HF1379 T6875 2003 338.9—dc21 2002034702 ISBN 84376 044 Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall Contents List of contributors vi Introduction John Toye The historical conflict of socialism and capitalism, and the post-socialist transformation Bernard Chavance Globalization and development strategies Deepak Nayyar Trade policy as development policy: building on fifty years’ experience L Alan Winters Industrialization under new WTO law Alice H Amsden Technological change and opportunities for development as a moving target Carlota Perez Financing for development: current trends and issues for the future Kwesi Botchwey Agricultural trade barriers, trade negotiations and the interests of developing countries Hans Binswanger and Ernst Lutz Economic dependence on commodities Alfred Maizels 10 Income distribution and development Frances Stewart 11 Order, the rule of law and moral norms Jean-Philippe Platteau 12 Regional cooperation in a changing global environment: success and failure of East Asia Ippei Yamazawa 13 Economic governance institutions in a global political economy: implications for developing countries Peter Evans Index 16 35 62 82 100 131 151 169 185 218 268 288 309 v Contributors Alice H Amsden, Massachusetts Institute of Technology, Cambridge, USA Hans Binswanger, Director of Rural Development and Environment for Africa, The World Bank Kwesi Botchwey, Harvard University, Cambridge, USA Bernard Chavance, University of Paris VII, France Peter Evans, University of California, Berkeley, USA Ernst Lutz, Senior Sector Economist, Rural Development and Environment for Africa, The World Bank Alfred Maizels, Oxford University, UK Deepak Nayyar, Vice Chancellor, University of Delhi, India Carlota Perez, Honorary Research Fellow, SPRU – Science and Technology Policy Research, University of Sussex, UK, Adjunct Senior Research Fellow, INTECH/UNU, Maastricht, The Netherlands and Visiting Scholar 2002, Cambridge University, UK Jean-Philippe Platteau, Department of Economics, Centre de Recherche en Economie du Développement, University of Namur, Belgium Frances Stewart, Oxford University, UK John Toye, Visiting Professor, Department of Economics, University of Oxford, UK L Alan Winters, University of Sussex, UK Ippei Yamazawa, Hitotsubashi University and Institute of Developing Economies/JETRO, Tokyo vi Introduction John Toye When the tenth session of the UN Conference on Trade and Development (UNCTAD X) took place in Bangkok, Thailand, in February 2000, it was the first major international conference of the twenty-first century Given its position of honour in the diplomatic chronology of the millennium, it seemed an appropriate occasion to generate some broad reflections on the theme that has animated UNCTAD since its establishment as an organ of the UN in 1964 Its mission was to correct the situation in which problems of international trade policy were dealt with separately from issues of development and of international finance Stated in the boldest of terms, then, two questions needed to be addressed First, what can now be said with confidence about the interdependence of trade and development? Second, what national and international policies should flow from that understanding? It was my great privilege to be invited by Rubens Ricupero, the Secretary General of the Conference, to organize a Round Table of Eminent Economists at the opening session of UNCTAD X The aim of the round table was to place before the conference a set of papers representing the research and experience of some of the leading economists around the world on the subject of the policy implications of the links between international trade and development Mr Ricupero wanted the delegates to be given a sense of the way in which academic opinion on the trade and development nexus had developed over the previous half-century, of where it stood at the start of the new millennium and of the implications for the future of international economic policy In order to try to fulfil this mandate, I immediately had to confront a painful problem of selection No dozen authors, however distinguished, could possibly cover what is a vast field, encompassing a multitude of topics, on all of which exist many fine shadings of opinion Any such team of scholars would necessarily fail to represent the full range of available opinion, exclude important issues and simplify significant nuances Nevertheless, I did not advise that the enterprise was hopeless and that nothing could be done It seemed to me better to take the opportunity that I was offered, and to try to use it to maximum advantage, than to throw in my hand because the task could not be carried out to perfection Trade and development Inevitably, personal judgement entered into making the choice of participants I decided steadfastly to ignore the UN’s political and administrative concerns with geographical and gender representation I allowed myself to be guided by my own understanding of merit in this very competitive field I was greatly gratified that so many of those who were originally invited were able to agree to make presentations in Bangkok This volume contains the twelve papers on which the Bangkok presentations were based Part of the guidance that I gave to the authors was negative I suggested that they did not attempt either to produce full reviews of the academic literature on their assigned topic or to write new academic papers that would add substantively to that literature Instead, I wanted them to state, within what must have seemed to them an extraordinarily tight word limit, the main messages of value that they thought should be the starting point for thinking about trade and development in the twenty-first century I thought about the task as one of winnowing the academic literature of the last fifty years The criterion of the authors’ success would be the wholesomeness of the intellectual grain, and its capacity to provide nourishment and inspiration to the future policy makers of the international economy Since the round table was the initial event of UNCTAD X, it provided a framework for the subsequent official intergovernmental deliberations in Bangkok, or at least a context of ideas that many of the later contributions tried to address The official deliberations of the conference were inevitably diverse and wide-ranging Those present heard ideas and opinions coming to them from all points of the compass of international governance – from heads of state and heads of government, from the delegations of the member states of UNCTAD, from the leaders of the international financial institutions, from ministers, from representatives of parliaments and of non-governmental organizations, from entrepreneurs in both small and multinational enterprises, from the directors of the agencies and regional commissions of the United Nations system, as well as from academic experts It turned out to be a very rich and varied diet of speech making Because of this richness and variety, it would be misleading to try and summarize the message of either the round table or the later contributions to UNCTAD X under any simple label In the policy discourse on economic development, the dominating voices of the last two decades of the twentieth century were those articulating and praising the so-called ‘Washington Consensus’ This was nothing less ambitious than a statement of twelve rules of economic policy for development with which all sensible economists were supposed to agree, and which therefore could be safely implemented when they, or their supporters, happened to find their way to political power However, this digest of policy rules was gradually seen to be too limiting Even within the World Bank, that pillar of the Washington Consensus, rumblings of dissent were eventually heard Joseph Stiglitz, then the Introduction bank’s chief economist, began to adventure ‘toward the Post-Washington Consensus’.1 Stiglitz went on to push outward the boundary of sensible economic thinking, and in the course of doing so quit the bank in 1999 Politicians, too, have been abandoning the Washington Consensus The British Chancellor of the Exchequer, Gordon Brown, did so in early 2000 He said: we need to move beyond the Washington Consensus of the 1980s, a creature of its time that narrowed our growth and employment objectives Which assumed by liberalising, deregulating, privatising and getting prices right, private markets would allocate resources efficiently for growth This has proven inadequate for the insecurities and challenges of globalisation We need to find a new 2000 paradigm.2 Here then was an open invitation to a lively academic entrepreneur to come up with a ‘new consensus’ From the political point of view, it would be very tempting for me to claim that the deliberations at UNCTAD X constituted the arrival of a ‘Bangkok Consensus’ This could be neatly packaged into another set of twelve points – rather different points, of course – and touted around as a recipe for development policy on which all sensible economists could henceforth agree The fate of previous consensuses on economic policy, however, suggested to me that to accept this implicit invitation would be unwise Consensuses have a vexing and perplexing habit of self-destructing This may not matter much to politicians, to whom all consensuses are grist to their mill, and the erosion of one consensus is but the opportunity for fashioning another For intellectuals, though, it is criticism that is the lifeblood of the evolution of ideas, and to them the declaration of a new consensus seems rather like a polite request to abandon the habit of thinking However, even those who, as I do, react badly to consensus mongering, accept that in recent years some convergence of views among economists has taken place on the subject of economic policies for development This is largely because there has been some attrition at both of the extreme ends of the ideological spectrum In this introduction, I shall point out some of the important ways in which the spectrum of economic opinion about trade and development has in fact narrowed in recent years This is most notable among academic experts, but it follows a broader movement of politics in the 1990s, that combined Democratic occupancy of the US White House with a growing social democratic hegemony in Europe This political phase also saw the softening of postures of those leaders of international organizations who (like Michel Camdessus) were appointed in the 1980s and remained in office through the 1990s.3 This phase may well have ended with the Presidency of George W Bush and the events of 11 September 2001 Economic governance and developing countries 307 Wade, R (1996b), ‘Japan, the World Bank and the art of paradigm maintenance’, New Left Review, 217, May/June Wade, R (1998), ‘The Asian debt and development crisis of 1997: Causes and consequences’, World Development, 26(8): 1535–53 Wallach, L and M Sforza (1999), Whose Trade Organization? Corporate Globalization and the Erosion of Democracy, Washington, DC: Public Citizen Waltz, K (1979), Theory of International Politics, Reading, MA: Addison-Wesley Weber, S (1999), ‘Ethics, actors, and global economic architecture: What is the role of international organizations?’, discussion paper for Carnegie Council Workshop, June White, H (1981), ‘Where markets come from?’, American Journal of Sociology, 87: 517–47, November Williamson, O (1985), The Economic Institutions of Capitalism, New York: The Free Press Wolfe, R (1999), ‘The World Trade Organization’, Trade Politics: Environments, Issues, Actors and Processes, New York: Routledge World Bank (IBRD) (1993), The East Asian Miracle: Economic Growth and Public Policy (A World Bank Policy Research Report), New York: Oxford University Press for the World Bank World Bank (IBRD) (1997), World Development Report: The State in a Changing World, New York: Oxford University Press Index Abernathy, W 105 Abowd, J 202 Abramovitz, M 107 Adelman, I 190 adjustment costs 67 Africa 142–3, 232–8 see also sub-Saharan Africa African Development Bank 142 Agell, J 241 agriculture 77, 193–4, 196 trade barriers 10, 151–64 Ahluwalia, M 189 Ahmed, R 196 aid programmes 136, 137, 155–7, 232 Ajanant, J 92 Akyuz, Y 10, 294 Alburo, F.A 276 Alesina, A 190 Ali, A.A.G 143, 188 Altshuler, A 119 Amoako, K.Y 143 Amsden, A.H 24, 74, 83, 90, 93, 101, 119, 294 Anand, S 188 Anderson, D 197 Anderson, K 154, 156, 159 Anderson, P 225, 229 anti-dumping duties 66, 82, 84–6 Aoki, M 239, 254 Arocena, R 123 Aronfreed, J 243 Arrow, K 224 Arthur, B 105 ASEAN Free Trade Agreement (AFTA) 270, 271, 281–2, 284 ASEAN preferential trade arrangement (ASEAN PTA) 281 Asia Pacific Economic Community (APEC) 279, 281–3, 284–6 Asian financial crisis (1997–9) 9–10, 131, 133, 288 regional cooperation 13, 268–86 Asselain, J.C 28 assets 44–5 distribution 188, 191–3, 196–7, 200 Association of South-East Asia Nations (ASEAN) 279, 281–2, 284–5 Atkinson, T 205 Austen, R 234 autarchy 7, 114 authoritarianism 225, 227 Axelrod, R 223, 224, 239, 242–3 Bagchia, A 241 balance of payments 7, 47, 82, 84, 86, 283 Balassa, B 65, 66 Balcerowicz, L 23 Baldwin, R.E 66 Bale, M 156 Banfield, E.C 224 Bangkok Conference 1, 2, 3, 9, 10, 11, 13–14 banking sector 40, 45–6, 125, 282 Barr, A 251 barriers to entry 101–4, 115 Bates, R.H 225–6, 231, 235, 236, 253 Bayart, J-F 235, 236, 237, 253 Behrman, E 195 Bell, M 116, 119 Benabou, R 191 Berend, I 22 Berger, P 244 Berger, S 29 Bergsten, J.S 243 Berkowitz, D 221 Berman, B 235 Berman, E 202 Berry, A 200, 201, 208 Bertola, G 190 Besley, T 197 Beyer, H 201 Bhagwati, J.N 65–6 Bienen, H 237 309 310 Trade and development Bigsten, A 73, 252 Binmore, K 219 Binswanger, H.P 233 Birdsall, N 191 Blackhurst, R 290 Blandford, D 156 Blockmans, W.P 231 Bloom, D.E 191 Blum, J 228 Board of Investment (Thailand) 89–92 Boehm, C 241 Bogor Declaration 281, 284 Bonney, R 225, 227 Boone, C 235, 236, 237 Booth, D 237 Borrell, B 163 Bourdieu, P 250 Bourguignon, F 188, 191–2, 195, 208 Bowles, S 219, 249 Boyer, R 29, 30 Bradford Delong, J 230 Braudel, F 30 Brenner, R 229 Bressand, A 121 Bretton Woods system 24, 46, 74, 82 Bromley, D 241 Brown, G Bruno, M 189, 190 Brus, W 20 Bruszt, L 24 Buchanan, J.M 238 buffer stocks 175, 180, 181 Burgess, R 197 Burmeister, L 194 Burton-Jones, A 122 business networks 221–5 Cable, V 293 Camdessus, M 3, 11 Camerer, C 241 capabilities 44–5 capacity building 294–5, 303 capital account 40, 48, 50, 132, 285 capital accumulation 231, 293 capital flight 48, 132, 143–5, 170 capital flows 131, 133–5, 276–8 capital markets 9, 143, 172, 277, 294 capital mobility 41, 43, 46, 51, 204, 231, 286 capitalism 8–10, 203 Golden Age of 42, 288, 303 socialism and (historical conflict) 4, 16–31 Card, D 203 ‘casino capitalism’ Cassiolato, J 125 Castells, M 121, 122 Castro-Leal 206 catching up 18, 21, 74, 102–4, 302 central planning 20 chaebols 278 Chandler, A.D 87 Chapagain, D 241 Chavance, B 17, 21, 22, 24–5, 28, 29, 31 Chazan, N 234 cheating 218, 219, 241, 243, 250, 251 Chen, M 205 Chesnais, F 121 Chile China 93–5, 245, 251, 254 Chou, E 196 Chu, K 189, 205 civil society 246, 292, 298, 302 Cocoa Agreement (1993) 178–9 Cold War 4, 6, 7–9, 137, 232, 254 Coleman, J.S 243 Collective Action Plans (APEC) 284 collectivist culture/society 222 Collier, P 233 Cologne Initiative 139, 141 commodities economic dependence on 10–11, 169–83 exports 132, 169–76, 178–82 prices 10–11, 175–81 role 169–70, 209 Common Agricultural Policy 77, 157 common external tariffs 85 Common Fund for Commodities 172–3, 177–8, 180 common market 271 communism 94, 203 community/communality 246 comparative advantage 64, 73–4, 75, 158, 162 competition 87, 115–17, 298 consumer-demand linkages 151 consumerism 45, 50 Index continuous improvement 113, 122 contracts 220, 222, 223, 242 control mechanisms 87, 88, 95 Cooper, C.A 65 cooperation, regional 268–86 Coquery-Vidrovitch, C 234, 235 Corden, W.M 65 core labour standards 289, 298–302 Coriat, B 112 Cornia, G.A 201, 203 correctives 53–4, 55–6 corruption 12, 89, 90–1, 253 costs 67, 73, 135, 218, 255 countervailing duties 82 CPP (in Ghana) 234 creative destruction 22, 112 credit 197, 218 ‘crony capitalism’ 294 Croome, J 160 cumulative causation 30, 37, 54–5 Cundiff, E 104 currency crisis 274–7, 279, 282–6 current account deficits 48 custom unions 85, 271 Daito, E 89 Danish Research Unit on Industrial Dynamics (DRUID) 122 Dasgupta, P 240 Davey, S.G 206 David, P 105 Davis, D.R 201 Dawes, R.M 241 Deardorff, A.V 84 death rates 206–7 debt 131, 132, 171, 174, 277, 283 –equity ratio 88, 90, 94 relief 138–43, 148–50 servicing 139–42, 148–50 deindustrialization 67 Deininger, K 188, 191, 196 Delorme, R 24 Demery, L 189 democracy 56–7 Dennis, B 191 Department for International Development (DFID) 76 deregulation 40, 43, 47, 93, 273, 284 de Tocqueville, A 246 311 developing countries 4, 268–9 agricultural trade barriers 10, 151–64 economic governance institutions 14–15, 288–304 effects of commodity prices 179–81 emerging market 131–2, 133–4 financing development of 9, 131–46 potential role of WTO 295–8 technological change/opportunities 8, 100–126 trade policy 6–7, 62–79 see also third world development 21–2, 36–8 changing opportunities 112–17 exclusion and 42–5, 53–5 financing for 9, 131–46 income distribution and 11, 185–210 institutions (Thailand) 88–93 state and (globalization) 48–53 study background/context 1–15 technological change 8, 100–126 Development Assistance Committee 157 development policy 6–7, 62–79 development strategies globalization and 6, 35–57 inventing/reinventing 118–21 technology at core of 122–3 developmental states 293, 294 Diaz-Alejandro, C Dickens, R 203 DiNardo, J 202 diversification (commodities) 176–7 division of labour 222 Dixit, A 70 Dixon, S 229 Dobb, M 190 Doha Round 7, 14 Doner, R.F 92 Dore, R 29 Dorosh, P 194 Dosi, G 104, 105, 106 Drèze, J 205 dumping 66, 82, 84, 85–6 Duncan, E 254 dvorianstvo 228 East Asia economic crisis 274–9 miracle 7, 270, 272–4, 278, 282 regional cooperation 13, 268–86 312 Trade and development Easterly, W 143 Eastern Europe 4, 157 Eatwell, J 24 ECLAC 114, 123, 198 Economic Commission (EC) 271 economic cooperation (East Asia) 283–5 economic crisis (East Asia) 274–9 economic development (study background) 1–15 economic governance institutions 14–15, 288–304 economic growth, income distribution and 11, 185–210 Economic Planning Agency (Japan) 273 economic policy 269–70 consensus 2–3, 23, 38 Economic and Social Council 172 economic and technical cooperation (Ecotech) 284 economic union 271 education 88–9, 123 income distribution and 191, 193, 195–6, 198, 206, 207 efficiency 30, 73 EGA 142 Eichengreen, B 295 Eiser, J.R 241 El-Ghonemy, R 197 Ellman, M 24 Elster, J 25, 223, 241, 243, 248 ‘emerging market’ 131–2, 133–4 emotions (role) 242–4 employment 42–3, 45, 54 income distribution and 192–3, 195, 197–8, 202–3, 204 endogenous growth 64, 67–8, 78 enforcement mechanisms 218–20, 223–4 England 225–6, 229 Enhanced Structural Adjustment Facility (ESAF) 138–9 entitlements 44 environmental costs 181–2 equality 190–92, 209–10 see also inequality Ernst, D 122 Estrin, S 24 Europe (good/bad states) 225–32 European Economic Community 74 European Union 5, 77, 157, 159, 270, 271, 297 Evans, P 292, 293, 294 Evans-Pritchard, E.E 250 Evers, H.D 89 exchange rate 47–8, 75, 145, 163, 194 regional cooperation and (East Asia) 274–7, 279–80, 283 exclusion, development and 42–5, 53–5 Executives’ Meeting of East Asia and Pacific Central Banks (EMEAP) 282 Expansion in FDI and Trade in Services (EFDITS) 78 export-processing zones 86, 118 export promotion 64, 66, 86, 100, 118 exports 39, 48, 74–5, 92–3, 95, 195 agricultural 153–4, 157–8, 161, 164 commodities 132, 169–76, 178–82 prices 274, 276 VERs 66, 84 Fafchamps, M 219, 223, 251–2 fairness 239, 241, 242 favouritism 252–3 Fehr, E 241, 242 Fei, J 194 Fieldhouse, D 125 Finance Ministers Meeting (APEC) 282 financial intermediaries 45–6 financial liberalization 40, 43, 48, 294 Financial Market Development (FMD) Taskforce 282 financial markets 51–2 banking sector 40, 45–6, 125, 282 financing for development 9, 131–46 Finger, J.M 70, 160 Firmin-Sellers, K 234 first world/third world disparities (WTO role) 295–8, 301 Fisher, S 138 Fishlow, A 188, 190, 192 Flegg, A 207 flexible networks 101, 112, 113, 121 Fligstein, N 293 Food and Agriculture Organization (FAO) 160, 164 Food Aid Convention 155 food supplies/policies 155–7 Forbes, K 190 Index Fordism 21 foreign direct investment (FDI) 27, 78 financing for development 132–8, 143 globalization and 39–40, 44, 50 regional cooperation 273, 276–9 foreign exchange markets 40 Foreigners’ Occupation Control Law (Thailand) 90 formal law 219–21, 238–9 France 226–7 Frank, R 241, 249 free-rider problem 164, 240 free trade agreements (FTAs) AFTA 270, 271, 281–2, 284 Mercosur 270, 271 NAFTA 5, 85, 270, 271, 272, 284–5 Freeman, C 101, 106, 107, 116, 123 Freeman, R 299, 301 Freeman, R.B 202 Frimpong-Ansah, J.H 234 Fukuyama, F 223, 224, 247, 251 full employment 188 functional income distribution 186, 203–4 Gabor, A 125 Galbraith, J.K Galenson, W 189 Galor, O 191 Gambetta, D 219, 245 game theory 218–19, 240 GDP 36, 131, 132, 185 Gemeinschaft 255 General Agreement on Tariffs and Trade (GATT) 47, 65, 82, 95, 152, 273, 290 Development Clause 270 Doha Round 7, 14 Kennedy Round 74 Uruguay Round see Uruguay Round general equilibrium analysis 63–4, 223 generalized morality 244–9, 253, 255 generalized system of preferences (GSP) 75, 162 Gerschenkron, A 104 Gesellschaft 255 Ghiara, R 201 gift exchange 222–3 Gintis, H 249 global economic governance 292–5 313 global environment 13, 268–86 global governance 301–4 global income distribution 208–9 global political economy 14–15, 288–304 globalization 5, 14, 29, 100, 119, 256 challenge (East Asia) 285–6 developing economies in context of 268–9 development strategies and 6, 35–57 East Asian miracle as response 272–3 global governance and 288, 293–4, 296, 300, 301, 303–4 income distribution and 204, 208–10 regional cooperation and 13, 268–9, 272–3, 279, 283–4, 285–6 rules of the game 45–8 state/development in context of 48–53 Glorious Revolution (1688) 225–6 Glyn, A 203 Goldfarb, R.S 243, 245 Goletti, F 196 Goody, J 234 Gorbachev, M 20, 21, 28 Goto, A 122 Gottschalk, P 201 governance economic 14–15, 288–304 global 301–4 government failure 55 Grameen Bank 197 Granovetter, M 245 Great Depression 18, 171 Greif, A 220, 222, 239 Griffith, W.B 243, 245 growth economic, income distribution and 11, 185–210 endogenous 64, 67–8, 78 engine of regional cooperation 279–82 -impeding logic of African states 232–8 Grubler, A 107 guanxi 222–3 Guhan, S 205 Guherty, M.K 201 Guillen, M 86 Haddad, L 205 314 Trade and development Hamilton, G.G 223, 251 Hathaway, D 158 Hausman, D.M 239, 240 Havana Charter 5, 172 Hayami, Y 218, 223, 251, 254 Hayek, F 220 Heavily Indebted Poor Countries Initiative (HIPC) 133, 138–42 heavy industries 169 Hefner, R.W 223 Herbst, J 237 Highly Advanced National Projects 94 Hirsch, S 101, 103 Hobday, M 115, 119 Hobsbawm, E 12 Hoda, A 85 Hodder, R 223 Hoekman, B 159 Hoffman, K 109 horizontal income distribution 187 horizontal inequality 207–8 Hosking, G 225, 228 household income distribution 186, 187, 203–4, 205 Hsinchu Science Park 93–4 human capital 192 human development, income distribution and 191, 192, 206–7 human development index 27, 206 humanism 246 Hungary 230–31 Hyden, G 237 IDA-12 132 IDS Collective Efficiency Research Project 115 Illinois Coalition (1999) 125 import substitution (IS) 62, 64–70, 74, 76, 100, 118, 122, 199, 201 imports 82, 90, 92, 101, 173, 177 income distribution 11, 42–4, 185 definitions 186–7 effect of growth 187–9 effect on growth 189–92 egalitarian growth patterns 192–200 function 203–4 global 208–9 horizontal inequality 207–8 inequality dimensions 204–7 recent trends 200–204 incremental capital output ratio 143 India 253–4 individual action plans (IAPs) 281 individualistic cultures/beliefs 222 Industrial Finance Corporation of Thailand 90 Industrial Revolution 82, 226 industrial society 19 industrialization 21, 36–7, 47, 49, 51, 118, 154, 269, 277 income distribution and 193–4, 197 trade policy and 64–5 under WTO law 7, 82–95 inequality income distribution and 11, 186, 188, 190–91, 200, 201–2, 204–8, 209 see also equality infant industry protection 7, 66, 69, 82, 86, 95 infant mortality 206–7 inflation 7, 8, 283 information revolution 100, 109, 111 information technology 40, 100, 109, 111–13, 120, 121–3, 124 infrastructural investment 54 Ingco, M 155, 158, 159 innovation 103, 105, 109, 122 in capitalist/socialist systems 22 changing opportunities 112–17 local systems of 125 national systems of 94, 107, 123 Institute of Developing Economies 272 institute of International Finance 144 institutional arrangements 17–18, 21–2 institutions (in global political economy) 14–15, 288–304 Integrated Programme for Commodities (IPC) 172 integration 38–45, 48–50 intellectual property rights 5, 47, 51, 270, 296, 299 Inter-American Development Bank (IADB) 142, 195, 197, 203 intermediate goods 179 internalization mechanism 242–3 International Agricultural Trade Research Consortium 158 International Bank for Reconstruction and Development 131, 133–4, 136, 144 Index international capital flow 133–5 International Cocoa Council 178–9 international commodity agreements 172–3, 174, 175, 179–80 International Labour Organization (ILO) 290, 299 International Monetary Fund (IMF) 9, 11, 38, 46–7, 51–2, 67, 133, 138–9, 141–2, 164, 171, 274, 277, 286 international trade see trade; trade policy International Trade Organisation intra-firm trade 39 intra-household income distribution 205 investment 8, 86, 191, 194 in commodities 170 FDI see foreign direct investment in infrastructure 54 portfolio 47–8, 50, 132, 277, 279 regional cooperation 272, 276–8 savings and 137–8, 143 Thailand 89–92 trade policy and 64–5 Investment Promotion Law (Thailand) 90 ‘invisible hand’ 87 Irvine, J 122 Italy 230 Jackson, R.H 235 James, W.E 90 Janos, A 236 Johnson, H.G 66 joint ventures 119 Jones, O 203 Jones, S.R.G 243 Joseph, R 237 Josling, T 155, 161–2 Jubilee 2000 141 Kahnemann, D 241 Kakar, S 253–4 Kaldor, N 190 Kali, R 221–2, 223 Kalypso, N 121 Kanbur, R 186, 205 Kanbur, S.M.R 188 Kandori, M 239 Kanellou, D 121 Kant, I 248 Kao, C 222 315 Katz, J 101 Katz, L.F 202 Kawagoe, T 218, 223, 251 Kennedy, P 237, 250 Kennedy Round 74 Kenneth, S 121 Keynes, J.M 8–9, 29, 30 Khoo, L 191 Khruschchev, N 18, 21 kinship 245, 247, 251, 252, 256 Klepper, S 121 Knorringa, P 115 knowledge 102, 104, 122 -based assets 87, 92, 93 technical know-how 101, 103, 105–6 Kolodko, G 23, 30 Kornai, J 20, 22, 28, 29 Kosovo crisis 141 Kotler, P 104 Kriegel, B 220, 247 Krueger, A 66, 69, 77, 79, 160, 203, 290 Krugman, P.R 68, 70, 201, 273 Kuznets, S 185, 187–8 Kuznets curve/process 187–8 labour 42, 45, 54, 195, 222 core standards 289, 298–301, 302 mobility 43, 46, 51 rights 303 skilled/unskilled 201–2, 204 see also employment; unemployment; wages Láchler, U 201, 202 Lall, S 116 Lamoreaux, N 122 Lancaster, K 65 land 191, 196–9, 231–2, 249–50 Landes, D 220, 245, 247 Lane, R.E 219, 224, 245 Laski, K 20 Lastres, H 125 Lau, L 196 Lavigne, M 23 law/legislation 219–39 Law Merchant system 218 Learner, E.E 202 Ledeneva, A.V 219 Lee, J.W 73 legal systems 221–5 316 Trade and development Leibenstein, H 189 Lenin, V.I 21 Leontief, W 102 less developed countries (LDCs) 101–2 Lewis, W.A 188, 190 liberalization 93, 282 agriculture 154–7, 161 financial 40, 43, 48, 294 globalization and 40, 42–3, 49–50, 56, 271, 273 income distribution and 209, 210 regionalism and 270, 271, 279, 284 trade 40, 42–3, 49–50, 56, 62–3, 65, 67–8, 70, 73–6, 201–2 Lien, D.-H.-D 225, 226, 231 life expectancy 185, 207 limited morality 249–54 Lindbeck, A 242 Lipsey, R.G 65 Lipton, M 191, 193, 197 liquidity crisis 276–7, 282, 286 Little, I 66 living conditions 36, 49, 57 living standards 210 loans 30, 132–3, 135–8, 141, 171 local government 124–5 locational advantage 119, 121 Lomé Convention 157, 162–3 Low, P 86 ‘low-income trap’ 174 Lu, Q 94–5 Luckham, R 232 Luckmann, T 244 Luedde-Neurath, R 254 Lundberg, P 241 Lundvall, B.-A 107, 122, 123 Lustig, N 186, 202 Lutz, E 156 Maastricht Treaty 137, 271 McCalla, A 164 McCleod, D 202 MacDonald, I 224 Machiavelli, N 246 Mack Smith, D 230 McLaren, J 76 McNally, D 226, 229, 246 McPherson, M.S 239, 240 macro policy (postwar trade) 63–4 Magnin, E 24, 25, 29 Maharashtra Employment Scheme 195 Malaysia (New Economic Policy) 197–8 managerial ‘common sense’ 109–12, 113 Mandeville, B 87 Manila Action Plans (MAFCBD) 281, 282–3 Mansell, R 122 manufacturing sector dependence on commodities 10–11, 169–83 industrialization under WTO 7, 82–95 Mao Zedong 21 maquiladoras (free trade zones) 119 marabouts (in Senegal) 238 Maran, M 13 market 55, 153 economy 25, 30–31 order 244–8 socialism 20 structuring 197–200 Marrakech Meeting 155 Martin, B 122 Martin, J 227 Marx, K 22, 30, 190 Marxist–Leninist ideology 19, 21 mass production 109–10, 112, 113, 115, 118, 122, 126 Massell, B.F 65 Massoz, M 250 mature technologies 102–4 median voter 191 Mehrotra, S 206 Mercosur 270, 271 Mesa-Largo, C 205 metanorm 224, 242 Milanovic, B 188, 203, 209 Milgrom, P 218 Mill, J.S 226 minimum efficient scale 87, 88 minimum wage 202–3 Ministry of Finance (Thailand) 91–2 Ministry of Industry (Thailand) 90, 91 ‘model factories’ 94 modernity, values and 125–6 Mokoli, M 233 monetary-wage labour systems 23, 28 Moore, M 231–2, 233, 235 moral norms 13, 238–49 morality 241 generalized 244–8, 249, 253, 255 limited 249–54 Index Morley, S 200 Morris, C.T 190 Morrisson, C 192, 195, 208 mortality rates 206–7 most-favoured-nation status 163, 271 Multi-Fibre Arrangement (MFA) 66 multi-year price cycles 178–9 multilateral trading systems 46–7, 51–2 Murphy, D 191 Murrell, P 24 Mytelka, L 101, 109, 125 Nadvi, K 114, 115, 125 Narongchai, A 92 Nash equilibrium 239, 244 nation-states 22, 29, 35, 39, 49–51, 53, 220, 289, 291, 293–4, 298, 301 national economic governance 292–5 National Economic and Social Development Plan (Thailand) 90 National Socialism 126 national state 8, 124 National System of Innovation 94, 107, 123 nationalism 256 natural environment 181–2 natural raw materials 169, 177–8 natural resources 233 Naughton, B 24, 28 Nayyar, D 73 Nazism 126 neoclassical economics 41, 65 neoliberalism 11, 23, 41, 126 nepotism 252, 253 net debt transfers 140–41, 149 net present value of debt 139, 141 net resource transfers 140–41, 150 Neumark, D 202 New Economic Policy (Malaysia) 197–8 newly industrializing economies (NIEs) 65–6, 136, 269 Ng, F 159 ‘nightwatchman state’ 293 Nkrumah, K 234 NLM (in Ghana) 234 non-discrimination 75–6, 172 non-governmental organisations (NGOS) 14, 141, 296 non-tariff barriers (NTBs) 67, 75, 157, 159, 281 317 non-tariff measures (NTMs) 84, 273 Nonaka, I 122 North, D 24, 31, 220, 225, 226–7 North-South dialogue 52, 75, 109, 114, 118, 187 North American Free Agreement (NAFTA) 5, 85, 270, 271, 272, 284–5 Nove, A 21, 24 Nuti, D 30 O’Brien, P.K 82 OECD 84, 152–5, 157–8, 162, 164, 200–201, 269 official development assistance (ODA) 132–3, 135–8, 141, 157, 171 oligarchy 231, 290, 296 Omnibus Trade Act (US) 86 open economic policies 269–70 open regionalism 14 open trade policies 62–3, 65, 67–8, 70 openness trends 288, 289 operational conditions 69–70 Opp, K.D 243 original equipment manufacture 119 Ortiz, S 248 Osaka Action Agenda 281, 284 Oswang, T 188 Otero, M 125 outsourcing 119, 269 outward orientation 64, 66, 67, 199 Pacific Economic Cooperation Council (PECC) 282 PAFTAD 285 Pagden, A 245, 246, 247 Panizza, U 190 paradigms present 122–6 technoeconomic 109–12 transitions 114–15 Paris Club 139, 142 parliament (role) 225–6, 229 partial equilibrium 223 path dependence 24, 30, 31 patronage 237, 252 Paukert, F 187 Pavitt, K 116, 119 Pearce, D 163 Peck, J 122 318 Trade and development pensions 205 per capita income 36, 185, 187–8, 189 Perez, C 103, 109, 123 performance standards 87–8, 91, 92, 95 Perotti, R 190 Persson, T 190 Peters, T 112 Phelps, E 224 Pinochet, A Pipes, R 225, 227–8, 229 Pistor, K 220–21 Platonov, S.F 225 Platteau, J.P 244, 250, 251 Plaza Agreement 283 podestà 220 Poland 230–31 Polanyi, K 30, 250 policy making (trade) 62–79 political dominance (USA) 41 political economy approach (income distribution) 190, 191, 198–9 global (economic governance) 14–15, 288–304 political power/rights 225–7, 228 in African states 232–8 Porter, M 107 portfolio investment 47–8, 50, 132, 277, 279 positive-sum games 116, 118, 121 positive-sum relation 295 positive discrimination 197 Pospisil, L 250 post-socialist transformation 22–31 post-tax income distribution 205 poverty 13, 37–8, 42, 50, 139, 145, 276 environmental damage and 182 income distribution and 185, 191, 192 reduction 11, 36, 132, 151–4, 192 trade liberalization and 76–7 Powelson, J.P 197 power 124 political rights and 225–8, 232–8 structures 115–17 of WTO 290–91 Poznanski, K 24 Prebisch, R 5, 13 prices agricultural 159 commodities 10–11, 169–82 exports 274, 276 primary commodities see commodities prisoner’s dilemma 240, 244 private capital flows 133–5 private income distribution 187 privatization 23–4, 28, 30, 41, 43, 47, 93 proactive approach 53 product life cycle 101–2 productivity 21, 42, 273 property rights 226–7, 229, 244, 248, 298, 303 protectionism 6, 10, 62, 64–5, 74, 272 agriculture 155–60 infant industry 7, 66, 69, 82, 86, 95 Protestantism 245–6, 247, 248 Psacharopoulos, G 196 public bads/public goods 53 Public Citizen 296 punishment 242, 243 Putnam, R.D 220, 224, 247, 249 quantitative restrictions 158 quotas 66, 84, 158–9, 161–3, 175–6, 179 Qureshi, M 142 Rabin, M 241 Raby, D 84 Raby, G 70–71 Radosevic, S 115 Raeff, M 225, 227 Rahman, S 202 Rama, M 202 Ramaswami, V.K 66 Ranis, G 191, 194, 196 Rauch, J 294 Ravenhill, J 237 reactive approach 53–4 realpolitik 296 reciprocity 87, 93, 95, 241–5, 255–6 Reformation 246, 247 regional cooperation 13, 268–86 regional trading arrangements (RTAs) 65, 70–71, 75–6, 85 regionalism 5, 70–71, 269–72 regulatory capture 6, 7, 66, 72 Reinert, E 116 religion 245–9 rent seeking 64, 66, 236, 254 rentier incomes 233 research and development 88, 94, 95, 103, 177 Index resource allocation 41, 63–4, 65, 173 Rhyne, E 125 Riasanovsky, N.V 225, 228 Ricardo, D 64, 186 Ricupero, R riksdag (Sweden) 227 risk/risk management 11, 180–81 Riskin, C 21 Robbins, D 201, 202 Roberts, M.J 73 Robinson, J 28, 44 Rodriguez, F 68 Rodrik, D 12, 68, 190, 288 Roemer, M 201 Rosberg, C.G 235 Roth, A.E 241 Ruggie, J 290, 293 rule of law 13, 218–56 rules 31, 90–91 rules of the game 5, 6, 45–8 rural communities 151–2, 236, 249–50 Rush, H 109 Russia 227–9 Sabot, R 191 Sachs, J 68, 140, 148–50 Sahal, D 106 Sahlins, M 250 Sapir, J 30 savings 137–8, 143, 189–90, 272 Scandizzo, P.L 154 Schiff, M 163, 194 Schmitz, H 114, 115, 125 Schoeck, H 248 Schott, J.J 84 Schotter, A 219 Schumpeter, J 21, 22, 30 science/technology 88, 92–5, 123, 145 science parks 86, 88, 93–4 Seattle Meeting 14, 160, 281 Seligman, A.B 245–6 Sen, A.K 190, 205 Sen, B 185 Senge, P 122 services sector 78, 270, 296 Sforza, M 296 Sgard, J 30 Shah, A 205 Shin, J.-S 114 short-term capital 277–8 319 Shott, S 238 Shuler, P 160 Sicily 229–30 Silcock, T.H 89 Silicon Valley 104 skilled labour 201–2, 204 Skinner, E.P 235 Skinner, Q 247 Sklar, R.L 237 Smeeding, T.M 201 Smith, A 64, 226, 239 Smithsonian Agreement 283 social capabilities 106–8 social income 186, 206 social norms 223–4, 239, 240, 251 social ownership 20 social solidarity 126 socialism 11–12, 270 capitalism and (historical conflict) 4, 16–31 post-socialist transformation 22–31 socialization process 243, 244–5 Soete, L 103 Somavia, J South Asia 131, 135, 137–8, 142–3, 253 Soviet Union 4, 6, 7–9, 137, 232, 254 Spain 225, 226, 227, 230 Spilimbergo, A 202 Squire, L 188, 191, 196 Stalin, J 21 Staniland, M 237 Stark, D 24 state-owned enterprises 8, 23–4, 26 states 8, 124, 205 African 232–9 development and 48–53 enforcement need 219–21 good/bad 225–32 intervention 54–6, 71–3 role of 30–31, 49, 55–6 Sternberg, F 17 Stewart, F 194–5, 196, 197, 200, 207 Stiglitz, J.E 2–3, 24 Stolper–Samuelson theorem 201 Stone, L 246, 252 Stone Electronic Technology Ltd 95 Strange, S 124, 293 strategic alliances 52–3, 119 structural adjustment 20, 46–7, 50, 138 320 Trade and development sub-Saharan Africa 131–3, 135, 137–8, 142–6, 232–8, 250–52 subsidies 7, 82, 86–7, 92, 95, 157–9, 161, 163 Suehiro, A 89 Sugden, R 241 supply management 175–6, 182 sustainable development 13 Sweden 227 synthetic materials 169, 177–8 Szanton, D.L 218 Tabellini, G 190 Tainan Science Industrial Park 93 Tangermann, S 155, 159, 161–2 tariffs 118, 271, 273, 281 agricultural 154, 155, 156, 157–62 trade policy 65–6, 70, 75, 77, 78 WTO law 82, 84–6, 90–92, 95 see also General Agreement on Tariffs and Trade (GATT) taxation 75, 90, 163, 176 income and 190, 194, 197, 204–6, 209 Taylor, L 201 technoeconomic paradigms 109–12 technology 40, 51, 73, 283–5 development opportunities 8, 100–126 transfer 90, 100, 118, 119 Tendler, J 125 Teranishi, J 253 terms of trade 131, 145, 169, 171, 209 Teulings, C.N 202 Thailand 88–93 Thaler, R.H 241 third world 4, 5, 118, 172, 300 first world disparities 295–8, 301 Tilly, C 225–7, 229–331, 232, 235 Tokyo Round 70 Tordoff, W 234, 235, 237 Toulan, O 86 trade 48, 271 agricultural 10, 151–64 liberalization see liberalization study background/context 1–15 Trade Analysis and Information Systems (TRAINS) 78 trade policy 6–7, 62–79 transaction costs 73, 135, 218, 255 transition doctrine 22–8 transnational corporations 45–7, 50, 51, 118, 300 Trivers, R.L 242 trust 219, 222, 224–5, 244, 251 Tybout, J.R 73 Tyler, T.R 239 Tyran, J.R 241, 242 UNCTAD 4, 86, 160, 164, 172, 180 income distribution 189, 200, 204, 208 regional cooperation 269–70, 286 role 62–3, 67, 70–71, 75, 78–9 UNCTAD X 1–3, 9, 10, 11, 13–14 UNDP 27, 200, 206, 208 unemployment 42, 54, 77, 276 UNESCO 123 UNIDO 83 United Microelectronics Corporation 94 United Nations 2, 142, 172 see also UNCTAD Uruguay Round 14, 70, 84–6, 154–62, 174, 177, 270–71, 284 USA 3, 20, 31, 86, 159, 300 Cold War 4, 6–9, 137, 232, 254 economic governance 15, 291–2, 295–7 Utterback, J 105 Uvalic, M 23–4 Valdes, A 155, 161, 163, 164, 194 values 125–6 Vamvakidis, A 75 Vancouver Declaration 282 Van der Hoeven, R 201, 204 Vaughan-Whitehead, D 23–4 vertical distribution (income) 187 vertical inequality 207, 208 voluntary export restraints 66, 84 von Tunzelmann, N 116 Wachtel, H 298, 299 Wade, R 254, 293, 294 wages, 17–18, 29, 42–3, 201–3, 300 Waldmann, R.J 207 Wallach, L 296 Waltz, K 291 Wang, Z.K 75 Warner, A 68 Wascher, W 202 Index Washington Consensus 2–3, 23, 38 wealth 123, 125, 197, 236 Weber, M 243, 245 Weber, S 291 Wehn, U 122 Weingast, B 225, 226 well-being 186, 187, 204, 206–7 Wells, L.T 101, 102 Whalley, J 205 White, G 254 Wiggenhorn, W 122 Wiles, P 29 Wilkinson, R 206, 207 Williamson, O.E 224 Winters, L.A 75, 76 Wolf, J 106 Woo-Cummings, M 254 Wood, A 68, 195, 202 Woolsey-Biggart, N 223 World Bank 2–3, 11, 24, 152, 199, 293–4 agricultural policy 152–3, 160, 164 commodity markets 176, 180 development strategies 38, 46–7, 51–2 financing development 131–4, 136, 142, 144–5 321 income distribution 194, 196, 202 regional cooperation 270, 272, 286 trade policy and 67, 78–9 WTO law and 83, 88 World Trade Organisation 4–5, 14–15 145, 177 agricultural policy 152, 156, 160–64 development strategies 46–7, 51–2 industrialization under 7, 82–95 as organization 289–93, 295–7 potential role 295–303 regional cooperation 269–71, 284, 286 trade policy and 70, 74, 78 Worobec, C.D 228 Wyrobisz, A 231 Xue, L 94 Yamazawa, I 277, 281, 284 Young, C 237 Zecchini, S 24 Zeria, J 191 Zietz, J 155 Zwart, A 156 .. .Trade and Development Trade and Development Directions for the 21st Century Edited by John Toye Visiting Professor, Department of Economics, University of Oxford, UK The work is published for. .. proceeded, they formed a collective entity, originally the Group of 77, that raised the issue of the interdependence of trade and development The issue, simply put, is that the rules that govern the. .. faced their own surprises, in the form of the contrasting effects of shock therapy on Poland and the Russian Federation, the actual importance of changes in formal rules (legislation), the possibility