Abstract This paper modifies the Acemoglu–Robinson model of the economic basis of democracy to discuss the impact of the international regime regulating capital flows on the consolidation and quality of democracy. Two regimes of capital mobility are considered, Bretton Woods and Rodrik’s hyperglobalization, in an international economy formed by an advanced North and a developing South. The model shows that hyperglobalization compromises the stability of democracy in the South by limiting the ability of the citizens to tax the elite and provide public goods which are critical for technical change and income distribution. At variance with the mainstream results, it is argued that financial globalization is a barrier to democratic consolidation. The model is consistent with key findings of the empirical literature on globalization and democracy, as well as with evidence from the economic history of Latin America.
{"title":"Financial Globalization as a Barrier to Democratic Consolidation: a North-South Model with Public Goods","authors":"G. Porcile","doi":"10.1515/jgd-2019-0009","DOIUrl":"https://doi.org/10.1515/jgd-2019-0009","url":null,"abstract":"Abstract This paper modifies the Acemoglu–Robinson model of the economic basis of democracy to discuss the impact of the international regime regulating capital flows on the consolidation and quality of democracy. Two regimes of capital mobility are considered, Bretton Woods and Rodrik’s hyperglobalization, in an international economy formed by an advanced North and a developing South. The model shows that hyperglobalization compromises the stability of democracy in the South by limiting the ability of the citizens to tax the elite and provide public goods which are critical for technical change and income distribution. At variance with the mainstream results, it is argued that financial globalization is a barrier to democratic consolidation. The model is consistent with key findings of the empirical literature on globalization and democracy, as well as with evidence from the economic history of Latin America.","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jgd-2019-0009","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48464292","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This research analyzes the cocaine market from an economic perspective. The consumption of the coca leaf is ancient, and cocaine has been consumed for over 100 years. Longitudinal data from producing countries is taken to estimate cocaine cost structure, and longitudinal data from regions around the world is taken to estimate demand curve. Data is annual and comes from United Nation Office on Drugs and Crime reports. A microeconomic model under imperfect competition is calibrated to estimate volumes and prices of cocaine under illegal market and legal market. Results show that cocaine production has internal economies of scale, and the demand curve satisfies law of demand. Moreover, the world demand for this narcotic segmented by regions is elastic and normal good as income increases. From this economic picture, it is necessary to regulate this market efficiently through price within a context of legality in production and consumption.
{"title":"Demand and Supply in the Cocaine Market: An Empirical Study","authors":"Humberto Bernal","doi":"10.1515/jgd-2018-0047","DOIUrl":"https://doi.org/10.1515/jgd-2018-0047","url":null,"abstract":"Abstract This research analyzes the cocaine market from an economic perspective. The consumption of the coca leaf is ancient, and cocaine has been consumed for over 100 years. Longitudinal data from producing countries is taken to estimate cocaine cost structure, and longitudinal data from regions around the world is taken to estimate demand curve. Data is annual and comes from United Nation Office on Drugs and Crime reports. A microeconomic model under imperfect competition is calibrated to estimate volumes and prices of cocaine under illegal market and legal market. Results show that cocaine production has internal economies of scale, and the demand curve satisfies law of demand. Moreover, the world demand for this narcotic segmented by regions is elastic and normal good as income increases. From this economic picture, it is necessary to regulate this market efficiently through price within a context of legality in production and consumption.","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":"11 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jgd-2018-0047","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42974826","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
D. Heymann, Juan Pablo Brichetti, P. Juarros, Gustavo Montero
Abstract Deep recessions and disruptions in credit markets have caused social concern and motivated research for a long time. They still challenge macroeconomic analysis. We map some observable features of a set of such episodes, trying to find common elements of the whole family of events. The different macroeconomic experiences show a high degree of heterogeneity. Given that, what emerges as a central element of crises is their character as a life-changing episode for the people concerned, which remains in their memory and triggers a search for lessons, as they frustrate past expectations and force widespread reevaluations of wealth and income prospects. Critical periods involve dynamics at different time scales, as economic changes with lasting implications take place in an environment of dramatic day-to-day variability. Crises tend to be associated with breaks in the growth trends of the economies in question, in a way that may surprise not only agents inclined to eccentric behavior, but also those who held beliefs based on prevalent economic analysis. Macroeconomic disturbances of this sort raise strong questions about the pertinence, and the logic, of usual rational expectations assumptions and modeling practices. These issues are briefly discussed in an opening section.
{"title":"Expectations, Coordination Failures and Macro Crises","authors":"D. Heymann, Juan Pablo Brichetti, P. Juarros, Gustavo Montero","doi":"10.1515/jgd-2020-0001","DOIUrl":"https://doi.org/10.1515/jgd-2020-0001","url":null,"abstract":"Abstract Deep recessions and disruptions in credit markets have caused social concern and motivated research for a long time. They still challenge macroeconomic analysis. We map some observable features of a set of such episodes, trying to find common elements of the whole family of events. The different macroeconomic experiences show a high degree of heterogeneity. Given that, what emerges as a central element of crises is their character as a life-changing episode for the people concerned, which remains in their memory and triggers a search for lessons, as they frustrate past expectations and force widespread reevaluations of wealth and income prospects. Critical periods involve dynamics at different time scales, as economic changes with lasting implications take place in an environment of dramatic day-to-day variability. Crises tend to be associated with breaks in the growth trends of the economies in question, in a way that may surprise not only agents inclined to eccentric behavior, but also those who held beliefs based on prevalent economic analysis. Macroeconomic disturbances of this sort raise strong questions about the pertinence, and the logic, of usual rational expectations assumptions and modeling practices. These issues are briefly discussed in an opening section.","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jgd-2020-0001","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44654881","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This study examines the role of official development assistance (ODA) in affecting adolescent fertility rates in low- and middle-income countries. Approximately 95% of adolescent births occur in middle- and low-income countries, and the average adolescent fertility rate in low-income countries is five times higher than in high-income countries. Aid donors typically pursue multiple objectives when providing development aid, many of which can go beyond changes in per capita GDP and include human capital factors such as adolescent fertility and infant mortality. Using data over the period from 1995 to 2015, our results suggest that total ODA has a beneficial impact by lowering the adolescent fertility rate either directly or through the channel of income growth. Our results also show that this beneficial effect on the adolescent fertility rate is stronger in low-income countries than in middle-income countries. Findings based on sectoral aid suggest that health aid has a stronger effect than aid in other sectors.
{"title":"Foreign Aid and Adolescent Fertility Rate: Cross-Country Evidence","authors":"Zhuang Hong, M. Wang, J. Daniels","doi":"10.1515/jgd-2018-0051","DOIUrl":"https://doi.org/10.1515/jgd-2018-0051","url":null,"abstract":"Abstract This study examines the role of official development assistance (ODA) in affecting adolescent fertility rates in low- and middle-income countries. Approximately 95% of adolescent births occur in middle- and low-income countries, and the average adolescent fertility rate in low-income countries is five times higher than in high-income countries. Aid donors typically pursue multiple objectives when providing development aid, many of which can go beyond changes in per capita GDP and include human capital factors such as adolescent fertility and infant mortality. Using data over the period from 1995 to 2015, our results suggest that total ODA has a beneficial impact by lowering the adolescent fertility rate either directly or through the channel of income growth. Our results also show that this beneficial effect on the adolescent fertility rate is stronger in low-income countries than in middle-income countries. Findings based on sectoral aid suggest that health aid has a stronger effect than aid in other sectors.","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jgd-2018-0051","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46600729","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Danielle Trachtenberg, W. Kaplan, V. Wirtz, K. Gallagher
Abstract This paper develops new indicators that measure the strength of intellectual property rights (IPR) provisions in Chile’s free trade agreements (FTAs). We use these new indicators to examine the extent to which FTAs with strong IPR provisions impact the volume, unit value and overall value of imported biologic medicines into Chile. We find that FTAs with more stringent IPR provisions increase both the volume and the unit value of imported biologics, suggesting greater availability of imported biologics at a higher price. Further research, however, is necessary to determine whether the increases in volume and unit prices of imports lead to greater universal access to biologics or greater inequity in access to these medicines.
{"title":"The Effects of Trade Agreements on Imports of Biologics: Evidence from Chile","authors":"Danielle Trachtenberg, W. Kaplan, V. Wirtz, K. Gallagher","doi":"10.1515/jgd-2019-0030","DOIUrl":"https://doi.org/10.1515/jgd-2019-0030","url":null,"abstract":"Abstract This paper develops new indicators that measure the strength of intellectual property rights (IPR) provisions in Chile’s free trade agreements (FTAs). We use these new indicators to examine the extent to which FTAs with strong IPR provisions impact the volume, unit value and overall value of imported biologic medicines into Chile. We find that FTAs with more stringent IPR provisions increase both the volume and the unit value of imported biologics, suggesting greater availability of imported biologics at a higher price. Further research, however, is necessary to determine whether the increases in volume and unit prices of imports lead to greater universal access to biologics or greater inequity in access to these medicines.","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jgd-2019-0030","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42652883","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper investigates the de-risking phenomenon from the perspective of an international bank’s decision to de-risk in a foreign market, where there is asymmetric information and costly monitoring. We consider three adverse shocks to a foreign affiliate’s (i) perceived credibility, (ii) costs of monitoring, and (iii) reputation, as reflected in a loss of franchise value. We show that the headquarters’ incentives to reduce international exposures are prompted by increasing funding and monitoring costs and by falling franchise values. Distortions arise because adverse credibility shocks make funding rates less responsive to actual risk choices, and impairments in the bank’s reputation negatively affect franchise values. All else equal, this reduces the bank’s incentives to retain and monitor the foreign affiliate, and risks increase. The risk effects are most pronounced in the case of credibility shocks, and incentives to reduce international exposures are strongest when reputational risks affect headquarters.
{"title":"Credibility, Reputation and De-Risking in Global Banking: Evidence from a Theoretical Model","authors":"Michael Brei","doi":"10.1515/jgd-2018-0022","DOIUrl":"https://doi.org/10.1515/jgd-2018-0022","url":null,"abstract":"Abstract This paper investigates the de-risking phenomenon from the perspective of an international bank’s decision to de-risk in a foreign market, where there is asymmetric information and costly monitoring. We consider three adverse shocks to a foreign affiliate’s (i) perceived credibility, (ii) costs of monitoring, and (iii) reputation, as reflected in a loss of franchise value. We show that the headquarters’ incentives to reduce international exposures are prompted by increasing funding and monitoring costs and by falling franchise values. Distortions arise because adverse credibility shocks make funding rates less responsive to actual risk choices, and impairments in the bank’s reputation negatively affect franchise values. All else equal, this reduces the bank’s incentives to retain and monitor the foreign affiliate, and risks increase. The risk effects are most pronounced in the case of credibility shocks, and incentives to reduce international exposures are strongest when reputational risks affect headquarters.","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":"10 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jgd-2018-0022","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41709286","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Industrial policy is tainted with bad reputation among policymakers and academics and is often viewed as the road to perdition for developing economies. Yet the success of the Asian Miracles with industrial policy stands as an uncomfortable story that many ignore or claim it cannot be replicated. We argue that one can learn from these miracles and we suggest that three key principles were behind their success: (i) the support of domestic producers in sophisticated industries, beyond the initial comparative advantage; (ii) export orientation; and (iii) the pursuit of fierce competition with strict accountability.
{"title":"Principles of True Industrial Policy","authors":"Reda Cherif, Fuad Hasanov","doi":"10.1515/jgd-2019-0034","DOIUrl":"https://doi.org/10.1515/jgd-2019-0034","url":null,"abstract":"Abstract Industrial policy is tainted with bad reputation among policymakers and academics and is often viewed as the road to perdition for developing economies. Yet the success of the Asian Miracles with industrial policy stands as an uncomfortable story that many ignore or claim it cannot be replicated. We argue that one can learn from these miracles and we suggest that three key principles were behind their success: (i) the support of domestic producers in sophisticated industries, beyond the initial comparative advantage; (ii) export orientation; and (iii) the pursuit of fierce competition with strict accountability.","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jgd-2019-0034","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46223862","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract There exists a consensus in the literature that during the 90s the main reason for fear of floating in emerging economies was the excessive liabilities dollarization, both in private and public sectors, which resulted in central banks’ interventions over the exchange rate. The main objective of these interventions was preventing the negative balance sheet effects originated by currency depreciations. Latin America certainly fits in this description, as convincingly documented by Calvo and Reinhart (Calvo, Guillermo A., and Carmen M. Reinhart. 2002. “Fear of Floating.” Quarterly Journal of Economics 117 (2): 379–408.). However, Latin American economies have reduced their debt in foreign currency since the early 2000s. Moreover, these economies extensively increased their amount of international reserves in the last decade and some of them – like Colombia and Mexico – have even reached the IMF’s flexible credit line, which operates as an international lender of last resort. All these changes – lower liability dollarization, higher international reserves, and new collaterals – suggest that the fear of devaluating in Latin America should be lower. Nevertheless, floating has not been the decision in terms of exchange rate policy. Conversely, most of Latin American countries that announced free floating opted for managed floating regimes and discretional interventions, in what can be considered as a new era of fear of floating. This paper finds empirical evidence that the main motivation for fear of floating has changed during the recent boom in commodity prices, 2005–2013, when foreign exchange interventions under flexible regimes were focused on avoiding excessive currency appreciations and apparently preventing Dutch disease.
{"title":"The New Drivers of Fear of Floating: Evidence from Latin America","authors":"Jonathan Malagón, Camila Orbegozo","doi":"10.1515/jgd-2017-0012","DOIUrl":"https://doi.org/10.1515/jgd-2017-0012","url":null,"abstract":"Abstract There exists a consensus in the literature that during the 90s the main reason for fear of floating in emerging economies was the excessive liabilities dollarization, both in private and public sectors, which resulted in central banks’ interventions over the exchange rate. The main objective of these interventions was preventing the negative balance sheet effects originated by currency depreciations. Latin America certainly fits in this description, as convincingly documented by Calvo and Reinhart (Calvo, Guillermo A., and Carmen M. Reinhart. 2002. “Fear of Floating.” Quarterly Journal of Economics 117 (2): 379–408.). However, Latin American economies have reduced their debt in foreign currency since the early 2000s. Moreover, these economies extensively increased their amount of international reserves in the last decade and some of them – like Colombia and Mexico – have even reached the IMF’s flexible credit line, which operates as an international lender of last resort. All these changes – lower liability dollarization, higher international reserves, and new collaterals – suggest that the fear of devaluating in Latin America should be lower. Nevertheless, floating has not been the decision in terms of exchange rate policy. Conversely, most of Latin American countries that announced free floating opted for managed floating regimes and discretional interventions, in what can be considered as a new era of fear of floating. This paper finds empirical evidence that the main motivation for fear of floating has changed during the recent boom in commodity prices, 2005–2013, when foreign exchange interventions under flexible regimes were focused on avoiding excessive currency appreciations and apparently preventing Dutch disease.","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jgd-2017-0012","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47109972","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.1007/978-3-030-11766-5
S. Sen
{"title":"Globalization and Development: Entrepreneurship, Innovation, Business and Policy Insights from Asia and Africa","authors":"S. Sen","doi":"10.1007/978-3-030-11766-5","DOIUrl":"https://doi.org/10.1007/978-3-030-11766-5","url":null,"abstract":"","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":"27 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74063914","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.1007/978-3-030-14370-1
N. Phillips, J. Ravenhill*
{"title":"Globalization and Development: Economic and Socio-Cultural Perspectives from Emerging Markets","authors":"N. Phillips, J. Ravenhill*","doi":"10.1007/978-3-030-14370-1","DOIUrl":"https://doi.org/10.1007/978-3-030-14370-1","url":null,"abstract":"","PeriodicalId":38929,"journal":{"name":"Journal of Globalization and Development","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80218453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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