Search

As successors to structural adjustment programmes, Poverty Reduction Strategy Papers (prsps) were introduced in 1999 as preconditions for World Bank and imf concessional financing and for debt relief. prsps now serve as the basis of negotiations for a variety of development financing and have influenced the design of other aid instruments. This paper considers the impact of the prsp framework on the constitution of global economic governance, in particular its effect in foreclosing possibilities for a radical revision of the rules and institutions of international economic law. The paper argues that the prsp project not only reframes fundamental tenets of international co-operation and global communal responsibility but also establishes a new disciplinary framework for Third World state engagement with the global economy and the international law which sustains it. In this way the discourse and methods of resistance against the injustices of the international order have been appropriated to distil such dissent through qualified operationalising of contestable notions of ‘participation’, ‘ownership’, ‘partnership’ and ‘poverty reduction’, disabling the resurgence of any form of emancipatory politics in the international economic order, whether through a state-led nieo-style revival or cosmopolitan social movement. [ABSTRACT FROM PUBLISHER]

Purpose: This paper attempts to document the effect of economic uncertainty on financing constraints faced by private firms. Design/methodology/approach: Ordered logistic regression is used to analyze the data of private firms from 101 developing countries. The data was provided by the World Bank's Enterprise Surveys and was gathered during the period between 2006 and 2019. Findings: The findings show that firms headquartered in countries with high economic uncertainty face more financing constraints than firms headquartered in countries with low economic uncertainty. The authors argue that the increase in economic uncertainty allows capital providers to adjust their lending decisions by reducing the provision of capital to firms. The paper also shows that firms headquartered in countries with strong institutional infrastructure and well-functioning firms are less likely to be affected by economic uncertainty while accessing finance. Practical implications: The findings would help managers, investors, regulators, and policymakers better understand the implication of economic policy uncertainty on the real economy. This study also sheds the light on the importance of minimizing volatility, ambiguity, and randomness in governmental decisions and policies. Regardless of the pertinence of these policies, arbitrariness surrounding their development and communication can limit their effectiveness and produce unwanted effects. Originality/value: This paper is closely related to prior literature that documents the behavior of credit providers and investors (the supply side) during the periods of economic uncertainty. The authors differ from this strand of literature by taking the perspective of firms – the demand side. [ABSTRACT FROM AUTHOR]

The article evaluates the contribution of outward foreign investment to so-called South-South co-operation. The authors imply that policy makers refer frequently to the need to increase and deepen economic co-operation among emerging, transition, and developing countries, and to the positive role that private sector actors can make in this regard. The expansion of South-South foreign direct investment (FDI) over the past decade has generated preliminary information, largely based on case studies, of the pros and cons of South-South FDI.

Copyright of Proceedings of the Faculty of Economics in East Sarajevo / Zbornik Radova Ekonomskog Fakulteta u Istočnom Sarajevu is the property of University of East Sarajevo and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The word poverty had been and is still one of the most familiar and serious problems facing different economies of the world. While the developed countries try to minimize this menace to some extent, other underdeveloped countries wallow in its dominance with impunity. Poverty has been identified to be more associated with rural country side, and linked with some known barriers for its reduction such as government failures, deprivation, inflation and diseases. In Nigeria, although several poverty alleviation policies and programmes have been implemented the problem still persists, it is against this background that this paper examines whether poverty alleviation policies could be a catalyst to the development of the economies of the south-Saharan region that is mostly affected. This paper finds out whether it is lack of democratization, inability to tap the abundance of human and natural resources in Nigeria that could be the bane for the persistent increases in the poverty status of the populace. The paper also suggests positive and attitudinal changes that could properly implement the numerous policies and programmes, to reduce poverty to the bearrest minimum, towards the development of the Nigerian economy. [ABSTRACT FROM AUTHOR]

Economic complexity measures the productive knowledge embedded in an economy by analysing the export structure of countries. Although the recent literature suggests that economic complexity might arise as a useful tool to lower output volatility by both diversifying export bundles and increasing the sophistication of exports, the empirical evidence on this issue is rather scarce. We contribute to the existing literature by investigating the effect of economic complexity on output volatility for a large set of developing countries. To this end, we apply a panel vector auto regression (PVAR) methodology, which allows us to capture the dynamic interrelationships between variables. The findings of the paper robust to the alternative specifications reveal that economic complexity affects output volatility negatively. Hence, economic policies aimed at diversifying productive capabilities and export bundles should be one of the major priorities in developing countries. [ABSTRACT FROM AUTHOR]

The study in this paper investigates how information technology (IT), directly and indirectly, affects capital flows to Sub-Saharan African countries. It also examines the asymmetric effects of IT on capital flows. The general method of moments methodology is employed to estimate a decomposed model of capital flows, which produced results that clearly show the correlative effect of IT is relatively more significant, compared to the effects of other explanatory variables. Furthermore, the results reveal appreciable asymmetric effects of IT on capital flows and the components, with the effects found to be uneven and dissimilar. It is also revealed that capital flows and the components reinforced themselves over time. The salutary effects of IT on capital flows, therefore, need to be sustained. In order to achieve this goal, economic policies should be fashioned to drive the deepening of IT, stable policy environment, synergy among determinants of capital flows, usage of advanced IT in financial markets, awareness of investment opportunities in a real sector, and application of IT in weak sectors. Such policies are most likely to sustain and improve upon the current trend of capital flows to Sub-Saharan Africa. [ABSTRACT FROM AUTHOR]

The contemporary global capitalism's development system appears to be similar to the historical patterns and processes of global capitalism characterised by excessive exploitation of natural resources, depredation of peripheral economic development policies, and capital accumulation at the expense of peripheral security. Furthermore, through an increase in the interconnectedness of the world, global capitalist development has reinforced the exploitative dependence that leaves development a mountain too high to climb for peripheral nations. Thus, dependency theory is often skewed in analyses that juxtapose it with modernisation theory in explaining the Third World dilemmas. The aim of this paper was to review the literature to analyse the contesting and harmonious views on dependency theory to determine its relevance in the modern world. Using extant literature, this paper argued that dependency theory is relevant in explaining today's world. This is because it extensively describes how the current international trade system supports the territorial invasion of Third World countries by the core to repatriate resources to their motherland, impeding Africa's socio-economic progress. [ABSTRACT FROM AUTHOR]

This paper investigates whether news‐based measures of economic uncertainty affect professional forecasters' disagreement about economic variables and economic policy instruments in Brazil. With the use of an "Economic Policy Uncertainty" index and a "Media Uncertainty" index to construct an index of economic uncertainty unrelated to policy, we study the effects of economic policy uncertainty and policy‐unrelated economic uncertainty on professional forecasters' disagreement. With the use of data from January 2002 to January 2021, we find that disagreements in expectations increase with both higher economic policy uncertainty and higher policy‐unrelated economic uncertainty. An exception is disagreement about future inflation, corroborating the importance inflation targeting for anchoring inflation expectations. We further show that economic policy uncertainty affects disagreement about Brazilian fiscal policy, whereas it does not affect disagreement about Brazilian monetary policy. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to investigate the increasing demand for corporate liquidity and examines the various factors influencing the cash position of firms in India. The financial policy to hold cash gained impetus after the financial crisis when the companies faced a severe cash crunch. However, the firms operating in emerging nations have an imperfect market mechanism with stringent regulatory norms. Thus, this paper attempts to examine the determinants of corporate cash holdings in an emerging country like India. Design/methodology/approach: The paper focuses on the impact of various factors (leverage, firm size, profitability, growth along with other variables), on the cash structure of all the manufacturing companies listed on the Bombay stock exchange. The study employs panel data methodologies over a sample of 323 firms over a period of eight years from 2010 to 2017. Findings: Significant estimators affecting cash holdings of a firm are the size of a firm, debt levels, tangibility, sales growth and research and development expense. Overall, the study finds evidence on the existence of Pecking Order theory in explaining the determinants of cash holdings in the Indian market. Research limitations/implications: The study attempts to explore the critical determinants of cash in the Indian context which can be useful for managers and academicians to understand how the key theories of cash holdings operate in an emerging economy like India. Originality/value: India is an emerging economy and has recently gained global attention and has become a hotspot for foreign investments. Thus, this paper explores pieces of evidence on the critical factors affecting cash holdings in India. The study would provide an understanding of the existing cash policy in the Indian context and attempts to find the changes in the financing structure adopted by the manufacturing industry in the given period. [ABSTRACT FROM AUTHOR]

Foreign Direct Investment plays a very vital role in the development of the nation. Domestic capital is inadequate for the purpose of overall development of the country. Foreign capital is the way by which we can fill the gaps between saving and investment of domestic economy. In present scenario, Indian Economy is one of the most emerging economies of the world today. In the last two decades world has been extensive inflow of FDI into developing countries. Many developing countries are in competition with each other to attract FDI. Since 2014, India has emerged as of the top foreign destination in the world with a significant rise in FDI. Foreign Investment in India started back in 1991 after implementation of New Economic Policy. During 2000s, there is a big rise in Foreign Direct Investment in India. This paper focuses on secondary data based Sectoral Analysis of the inflow of FDI in India during 2000 to 2019. This paper also focuses on FDI policy framework, country-wise, equity wise FDI inflow in India. [ABSTRACT FROM AUTHOR]

The concept of free trade is more than 200 years old with economists Adam Smith and Abbé de Condillac both arguing in 1776 the merits of trade that was free from government regulation and constraints. From that point forward, mainstream economists have maintained that economies unencumbered by government impediments, such as tariffs and quotas, function more efficiently and effectively. Free trade in practice, however, does not always benefit every party involved, particularly in the absence of competition. This analysis: a) defines free trade; b) examines the support for and challenges to the economic strategy from both a theoretical economic, and allegedly more practical, perspective; and c) compares the global worldview on free trade to biblical perspectives to determine whether there is biblical support for this economic policy. To evaluate the biblical perspectives on free trade, this paper considers broad biblical concepts that encompass the issues of regulation versus liberalization of trade policy. The paper specifically focuses on biblical directives to care for vulnerable populations, such as women in developing countries and foreign laborers, when it examines the impact of free trade. It concludes that for free trade to be biblical, participants must commit to and honor biblical principles, including caring for those in need, paying a reasonable wage, and serving God with the wealth and profits accumulated. Adhering to these principles can mitigate the negative consequences that are sometimes associated with free trade. [ABSTRACT FROM AUTHOR]

The analysis of rents and rent-seeking is highly relevant for evolutionary economics but it has received little attention. This paper surveys the recent literature on technological change, rents, and rent-seeking applied to economic development. Economic development requires developing countries to upgrade technologically while coping with pervasive rent-seeking activities. We assess these issues in turn. This paper first surveys the literature on technical learning and institutional change due to the adoption and adaptation of new technology. Next, the debate on rents and rent-seeking, especially in relation to the issue of technological change in the process of development, is presented. Finally, we assess the roles of the state in solving the critical constraints faced by firms and industries. This paper asserts that the processes of development and industrial upgrading require understanding the mechanisms of rent management—a configuration of incentives and pressures that fully correspond to the existing political, institutional, and industrial structures of a developing country. The rent management analysis emphasizes the diversity of empirical contexts across and within countries. [ABSTRACT FROM AUTHOR]

In this essay it is suggested that the success of Japan and the newly industrialized countries (NICs) is, in no small measure, due to their intuitive grasp of the relationships between technology, growth and economic policy as these countries constantly adjusted economic policy to reflect changed economic circumstances, with concomitant changes in economic structure. The key element to the explanation in this paper is 'economic organization'. Economic organization refers to more than the simple dichotomy between 'centralization' and 'decentralization' of decision making at the highest level. As is now widely recognized, market economies consist of many firms; these firms, however, may be organized in different ways. At one extreme each may be highly centrally controlled, in which case the economy can be thought of as a polyarchy of hierarchies. There are two aspects of economic organization of particular relevance: the ability to monitor and to innovate. Changes in technology have profound effects on how well different organizational structures can perform these central functions and, on the other hand, an important aspect of economic development is organizational innovations which affect the ability of the economic system to monitor and innovate. Moreover, the performance of an economy depends not just on the internal organization of its firms and the market structure; it depends on how well capital markets function. These too may be organized in markedly different ways. The paper is organized into six sections. The first describes the major phenomena to be explained, the stylized facts with which any explanation of growth must come to terms. [ABSTRACT FROM AUTHOR]

Manufacturing for export is gradually becoming the main pillar of economic growth in many developing countries, including Vietnam. Since 1986, Vietnam has adopted an open economic policy and promoted trade activities. Therefore, Vietnam's exports have significantly increased and contributed to economic development. The benefits of exports are undeniable, but Vietnam also faces serious environmental problems caused by these activities. This paper analyzes the impact of Vietnam's export activities on economics and the environment through comparison between carbon emissions and value-added embodied in exports using an input–output model, then provides some recommendations to adjust Vietnam's export strategy in the future. The main findings indicate that carbon dioxide emissions (CO2) embodied in exports have increased from 2006 to 2015. The carbon intensity of exports increases, while the value-added intensity decreases. As compared with production for the domestic market, production for domestic demand creates faster value-added and slower carbon emissions than production for exports. This study suggests that Vietnam should reform its export structure alongside technological improvements and other policy adjustments to curb Vietnam's growing CO2 emissions. [ABSTRACT FROM AUTHOR]

The role of the state in development has undergone substantial changes under the influence of the New Institutional Economics. The new school, which grounds the emergence of the state as an institution on rational individual behaviors, assumes that the developmental state is not intervening and restricting but coordinating and developing. Influencing neo-liberal development economists, this view also holds that the complementarities are key between the state, market, and civil society, which shines out the goal of good governance more and more. However, the goal that includes comprehensive institutional reforms is far from being realistic and feasible for developing countries. These countries with limited resources need to rely on the improvement of institutional capacity while implementing economic development policies, considering diverse development stages and unique institution compositions. The present paper addresses the "good enough governance" and "just enough governance" approaches that emerge with the understanding of an effective state in economic development and are shaped around good governance but develop a critical perspective. In this respect, the study explores the significance of organizing the institutional reforms according to the states' existing institutional capacities and development levels, as well as determining the priorities transparently in the development process. [ABSTRACT FROM AUTHOR]

In this paper, we discuss financialisation as the development of fictitious capital in more developed and less developed countries. The controversies surrounding the meaning of fictitious capital require a preliminary discussion on its conceptual definition, which is done by means of an analysis of the relationship between real and fictitious capital within the labour theory of value. Once theoretically explained why the relative autonomy of circulation from production supports financialisation as the development of fictitious capital, we focus on the limits of this relative autonomy, which is something objectified in economic crises. Relevant data were gathered to determine how the concentration of financial investments in fictitious capital in a few markets was able to underpin its enormous and lasting development, even though this fictitious capital, by definition, does not generate surplus or new (labour) value. Furthermore, the analysis of net capital flows between developed and developing countries also demonstrates that the latter are net donors of capital. Therefore, it is possible to verify the relationship between the development of fictitious capital and the increase of inequality between countries. [ABSTRACT FROM AUTHOR]

The purpose of the study was to examine the effect of monetary policy on key macroeconomic indicators in Ghana. The study used annual time series data from 2002 to 2017, which was sourced from the World Development Indicator (WDI) and the Bank of Ghana (BOG). The data were converted to Quarterly data between 2002Q1 and 2017Q4, which covers a sample period of sixteen years. The study employed the Autoregressive Distributed Lagged Model (ARDL) for analyzing the data. Unit root test was conducted using the Augmented Dickey-Fuller (ADF) tests, and the results of the analysis exhibited a cointegration realtionship among the variables of order one (1). Monetary policy changes affected lending rates by (0.32%) compared to the other variables. Overall, the results suggests that monetary policy affects macro economic indicators performance in Ghana. Based on the foregoing, the paper recommends that, in efforts to enhance the effectiveness of monetary policy, the need for policy intervention in determining the stance of fiscal policies, develop financial markets, and liberalize controlled interest rates. [ABSTRACT FROM AUTHOR]

The relationship between foreign aid and economic growth has been the subject of much controversy. A recent theme suggesting that aid promotes growth, but only in a good policy environment has ratchet up that debate. In this paper, we assess the importance of policy and aid in generating growth when the aid, policy, and growth relationship is nonlinear. This allows us to examine the varying effects of aid and policy in different data segments, which we do without imposing any particular structure on the underlying relationship. We find that policy is an important determinant of growth. We also find partial corroboration of the view that aid is growth enhancing in a good policy environment, and some evidence of diminishing returns to aid. These findings suggest that nonlinearities if not appropriately addressed fail to capture the detailed underlying dynamics and thereby mask some key features of the aid-policy-growth relationship. [ABSTRACT FROM AUTHOR]

This paper presents an empirical analysis of the factors which promote entrepreneurial activity across a number of transition, developing and developed countries. It produces results which highlight the importance of institutions in promoting entrepreneurial activity. This work is part of an on-going research project on the relationship between the legal system and factors which influence economic development. In particular, it has been shown that legal rules protecting creditors and investors influence the size of financial markets which in turn influence economic development. Our paper thus extends the analysis of the impact of institutions beyond that previously established to demonstrate its influence on another driver of economic development. Copyright © 2005 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Closing the infrastructural gaps and fostering the entrepreneurial processes are considered the key to reduce African unemployment and boost productivity to achieve inclusive development. Therefore, investment in infrastructure is crucial for creating a conducive entrepreneurial environment. In this paper, we provide a contribution for this purpose, by evaluating the impact of infrastructure on entrepreneurship in a panel of twenty African countries for a period of 2006–2018. Consistent with previous studies, we find that infrastructures play a significant role in improving entrepreneurial development. In specific, we show that transport, electricity, water and sanitation facilities, ICT and broadband infrastructures have a positive and significant effect on entrepreneurial startups in Africa. Our reports show clearly there is a positive association between infrastructures and entrepreneurial startups at a one percent significance level. These findings are robust to alternative estimation. It points out that physical infrastructure is more relevant in the case of less developed countries in promoting entrepreneurial development. [ABSTRACT FROM AUTHOR]

This paper describes the structure and estimation of a Social Accounting Matrix (SAM) of Kenya for the year 2014. Among its specificities, this SAM includes a very high disaggregation of the agri‐food sector and accounts for the double role of households as producers and consumers. Accounting for these characteristics is crucial to provide robust socioeconomic analysis in the context of developing countries. Indeed, this type of database is valuable to perform ex‐ante evaluations of economic policies with various economic models and techniques. In this paper, we present an application with a linear multiplier analysis (backward linkages and value chain decomposition). The results show the capacity of the primary sector in Kenya to generate value added and employment, with this growth distributed more intensely in rural households whose main livelihood is semi‐subsistence agriculture. [ABSTRACT FROM AUTHOR]

Abstract: Since 2013, Australian aid has been reduced and increasingly focused on delivering benefits to Australia. Motivated by these changes, this paper fills three gaps in the existing literature on public opinion about aid. It provides the only recent detailed study of Australians' opinions about aid. It studies specific policy questions in addition to the broader questions typical of international research. And it studies views on the purpose of aid, an area not previously researched. Although Australians are generally supportive of aid, most backed major aid cuts in 2015. However, most Australians think the purpose of Australian aid should be helping people in poor countries, not bringing benefits to Australia. There is a clear left–right divide in responses to all questions; however, some variables correlated with support for aid fail to explain variation in views about aid's purpose. The paper concludes by discussing ramifications for those who seek to change aid policy. [ABSTRACT FROM AUTHOR]

The subject of research in this paper refers to the analysis of the impact of free zones on the economic growth of developing countries. The objective of the research is to explain to the scientific and professional public the way of functioning and the transmission mechanism of free zones in generating economic growth ceteris paribus. The analysis covers free zones in three countries in the development of compatible characteristics: Serbia, Croatia and Belarus. The research problem is sublimated in the question of whether and in what way free zones have an impact on the economic growth of developing countries? The research was conducted by analyzing the relevant literature and by using the panel analysis. The results of the research showed the existence of statistically significant determination of GDP per capita, as an indicator of economic growth, by variations of macroeconomic parameters of the functioning of free zones. That is, the operation of free zones has a statistically significant impact on the economic growth of targeted developing countries ceteris paribus. Whether growth will be inclusive and sustainable in the long run depends on political and economic decision makers and defined economic policy. In this way, the hypothesis was confirmed that the establishment of free zones in developing countries, with the condition of integration of the national economy into the work of zones, creates preconditions for sustainable and inclusive economic growth. [ABSTRACT FROM AUTHOR]

The paper assessed the effect of economic policy on the effects of aid to agricultural production and consumption on agricultural growth in developing countries. We used data from a panel of 117 countries from 1996 to 2020 fitted to a GMM estimator. We found that both aid-to-production and aid-for-consumption discourage agricultural growth. Economic policy independently enhances agricultural growth. Foreign direct investment promotes agricultural growth. In the presence of economic policy, whilst aid-to-production did not discourage agricultural growth, it worsened the effect of aid-to-consumption on agricultural growth. Among other recommendations, developing countries should seek less foreign aid-toproduction and more FDI into agricultural production as both the former and the latter would increase agricultural growth. Governments in developing countries must enhance trade and macroeconomic policies and promote FDI as this would increase agricultural growth. [ABSTRACT FROM AUTHOR]

Understanding how environmental restrictions affect the relationship between economic stability and unbalanced technical innovation is crucial for optimizing environmental and financial policy frameworks in developing nations to achieve sustainable development goals (SDGs). Understanding the driving effect of green funding on green development is vital for promoting economic transformation and achieving long-term green growth. Green growth is one of the most exciting new strategies for sustained economic expansion. Despite environmental technology's significance, further study is required to ascertain whether and how environmental technologies affect green development. Therefore, the purpose of this study is to examine how environmental technology may promote green growth in the G7 by reducing reliance on renewable and non-renewable energy sources. Investing in higher education is the most powerful thing a society can do intellectually if it is serious about attaining sustainability by applying skills, providing consulting, delivering training, and disseminating knowledge. Thus, the paper analyzes how the G7 countries' pursuit of green economic development is affected by economic policy uncertainty, investments in renewable energy, human capital, and health expenditure. The G7 economies' panel data from 2005 to 2021 was used to verify the assertions using the GMM estimate. Additional generalized method of moment (GMM) tests, including a one-step test and a two-step test with a robust check, are used to estimate the variables in this study. The research shows that economic policy uncertainty and health expenditure have negative effects on green economic growth, whereas investments in renewable energy, green finance, human capital, and an ageing population have favorable effects. The research findings direct the formulation of policy implications that would maintain the role of green financing as a growth engine in the Chinese economy. [ABSTRACT FROM AUTHOR]

While the energy sector is the largest global contributor to greenhouse gas (GHG) emissions, the agriculture, forestry, and other land use (AFOLU) sector account for up to 80% of GHG emissions in the least developed countries (LDCs). Despite this, the nationally determined contributions (NDCs) of LDCs, including Nepal, focus primarily on climate mitigation in the energy sector. This paper introduces green growth—a way to foster economic growth while ensuring access to resources and environmental services—as an approach to improving climate policy coherence across sectors. Using Nepal as a case country, this study models the anticipated changes in resource use and GHG emissions between 2015 and 2030, that would result from implementing climate mitigation actions in Nepal's NDC. The model uses four different scenarios. They link NDC and policies across economic sectors and offer policy insights regarding (1) energy losses that could cost up to 10% of gross domestic product (GDP) by 2030, (2) protection of forest resources by reducing the use of biomass fuels from 465 million gigajoules (GJ) in 2015 to 195 million GJ in 2030, and (3) a significant reduction in GHG emissions by 2030 relative to the business‐as‐usual (BAU) case by greater use of electricity from hydropower rather than biomass. These policy insights are significant for Nepal and other LDCs as they seek an energy transition towards using more renewable energy and electricity. [ABSTRACT FROM AUTHOR]

A sudden stop is the slowdown or cut-off of capital flows into an economy resulting in consumption and output collapses. Developing countries are known to experience this problem more frequently. The consensus in the literature is that these reversals are caused by poor economic management in these countries. While it is understandable that weak macroeconomic fundamentals lead to sudden stops, this paper shows that developing countries may face a sudden stop even when their macroeconomic indicators do not suggest one is imminent. A combination of certain factors can dry up funds for these countries: A unique borrower, borrowing at a significantly high level, pushing interest rates to the point where a developing country is not able to borrow due to credit rationing. The US has run a significant current account deficit over the last 30 years, borrowing far more than any other major economy. This paper analyzes the impact of the US deficits on developing countries that are trying to finance their projects. It provides regression results, then develops and simulates a theoretical model to investigate this. The Arellano-Bond dynamic paneldata regression results show that the US deficits are negatively associated with the current account deficits of the developing countries. The developing country loses its ability to borrow freely when the US's borrowing exogenously increases. The real business cycle model shows that this entry to the market causes a sudden stop-type effect even when the developing country is not experiencing any immediate problems in its economy. The simulation results show that the reduced borrowing opportunities for the current period and possibly future periods distort the production process and decrease welfare in developing countries. These results suggest that developing countries, when planning their projects and the related need for borrowing, need to be wary of these conditions in addition to their own situation. Moreover, when a sudden stop occurs, international institutions such as the IMF and the World Bank should be cautious. They should examine whether the sudden stop was the result of poor planning and macroeconomic conditions or the result of an external factor such as the US increasing its borrowing to crowd out other borrowers. [ABSTRACT FROM AUTHOR]

This paper discusses the relationship between regulation and contracts in infrastructure industries and the role of regulation, particularly the role of regulatory agencies in the review, revision, and renegotiation of contracts. The paper starts with a short survey of relevant economic and legal issues. Examples are presented of how and why infrastructure contracts, including concession contracts, have been combined with monitoring and enforcement by external regulatory agencies. The examples discussed include historical UK experience, recent French experience, and developing country experience. The paper concludes with a discussion of the role that regulatory entities can play to reinforce trust and sustain contracts by enabling simpler contracts, resolving contract misunderstandings, and providing processes for ordered renegotiations. [ABSTRACT FROM AUTHOR]

No empirical evidence has yet emerged for the existence of a robust positive relationship between financial openness and economic growth. This paper argues that a key reason for the elusive evidence is the presence of a time-varying relationship between openness and growth: countries tend to gain in the short term, immediately following capital account liberalization, but may not grow faster or even experience temporary growth reversals in the medium to long term. The paper finds substantial empirical evidence for the existence of such an intertemporal tradeoff for 45 industrialized and emerging market economies. The acceleration of growth immediately after liberalization is found to be often driven by an investment boom and a surge in portfolio and debt inflows. By contrast, the quality of domestic institutions, the size of FDI inflows and the sequencing of the liberalization process are found to be important driving forces for growth in the medium to longer term. [ABSTRACT FROM AUTHOR]

Large segments of the population in poor countries continue to suffer from a high level of unmet health needs, requiring macro-level, broad-based interventions. Healthy public policy, a key health promotion strategy, aims to put health on the agenda of policy makers across sectors and levels of government. Macro-economic policy in developing countries has thus far not adequately captured the attention of health promotion researchers. This paper argues that healthy public policy should not only be an objective in rich countries, but also in poor countries. This paper takes up this issue by reviewing the main macro-economic aid programs offered by international financial institutions as a response to economic crises and unmanageable debt burdens. Although health promotion researchers were largely absent during a key debate on structural adjustment programs and health during the 1980s and 1990s, the international macro-economic policy tool currently in play offers a new opportunity to participate in assessing these policies, ensuring new forms of macro-economic policy interventions do not simply reproduce patterns of (neoliberal) economics-dominated development policy. [ABSTRACT FROM AUTHOR]

The article focuses on the factors of private flows that are involved in cross-border lending by international markets. Private banks' overall democratic preferences emerge quickly from a look at cross-border banking claims. The preference for emerging democracies is particularly striking in regions where democratic transitions multiplied in the past years, in which cross-border bank lending tends to rise following authoritarian breakdowns. Good fiscal and monetary policies and institutional quality in emerging democracies favours the banking business.

This paper focuses on the practical approach to sustainable development in Bhutan and specifically on public views on and experiences with the implementation of this strategy. Bhutan's development goal is ‘gross national happiness’. The strategy it has adopted to achieve this goal is known as the ‘middle path strategy’, which essentially addresses four sources (‘pillars’) of gross national happiness: economic development, ecological preservation, cultural preservation and good governance, without giving greater emphasis to any one pillar over the others. The paper is based on a survey conducted in 10 districts of Bhutan. Standard pre-designed questionnaires were used for interviews with representatives of three main groups in society: the state, civil society and the market. The results of this survey, the first of its kind to be carried out in the country, revealed that there is general agreement with the substance of the development strategy, although not everyone is fully aware of its scope and implications. A remarkable outcome of the survey, and one that contrasts with happiness studies conducted elsewhere in the world, was the high score for happiness in a country whose gross domestic product is so small. However, people do feel uncertain and the chosen development path is still fragile. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment. [ABSTRACT FROM AUTHOR]

This paper attempts to provide an economic model in the context of developing countries to address the policy strategies related to poverty reduction. With a view to deal with the shortcomings of the existing approaches as regards poverty reduction, this paper develops a model on the basis of the policy framework of the IMF and the World Bank to show how demand growth can be a crucial mechanism in determining the potential rate of growth, and then to suggest ways in which poverty-conceptualised officially in absolute terms with a subjective cut-off point (e.g. US $1/$2 a day), and a new objective measure in terms of consumption deprivation-can be linked with the key policy variables contained in the adjustment programmes. A strategy of investment in infrastructure and in human development, and improving access to credit markets, particularly in rural areas to encourage or `crowd in' private investment is a precondition for growth and poverty alleviation. Debt relief can only provide a temporary, not a sustainable, solution to the problem of reducing poverty. [ABSTRACT FROM AUTHOR]

This article discusses multilateral framework which helps in sustainability of development financing. This framework helps in a justified channeling of external development funds to developing countries. Self-interests of donor countries are less likely to influence decisions regarding which recipient country gets what and when. Thus, demands for enhancing donor support to multilateral aid institutions, both quality and quantity-wise, as well as improving the effectiveness of these institutions themselves are justified.

The impact of external financing on the economies of developing countries is still a subject of debate among economists and policy makers. The objective of this paper is to contribute to this debate by shedding light on the interaction between foreign direct investment (FDI) and external debt. To this end, we begin by formulating an overlapping generation growth model that integrates a banking sector and find two complementary results. First, we show that external financing boosts investment projects and accelerates the dynamic of capital accumulation and economic growth. The second one mitigates this channel by showing two opposite indirect effects of external debt and FDI. Indeed, while external debt financing increases the vulnerability to a bank run that generates a recessionary impact on economic growth, FDI attenuates this recessionary impact and plays the role of a shock absorber. We empirically confirm these results for 67 developing countries over the period 1972–2015 using the GMM estimation of growth models and panel‐logit models to predict the determinants of banking crises. Hence, this study provides a comprehensive assessment of developing countries' involvement in financial globalization and offers recommendations for their future international economic policies. [ABSTRACT FROM AUTHOR]