European Union integration lessons for ASEAN + 3: the importance of contextual specificity

This paper will argue that EU integration appears to offer ASEAN and three Northeast Asian Countries (China, Japan and South Korea) political and security lessons concerning maintenance of regional stability, as well as some economic lessons. There is not, however, any institutional blueprint for integration that these countries could emulate. This is in part because economies are characterized by “contextual specificity” of chosen institutions and their corresponding working rules. These institutions and rules evolve in particular cultural and historical settings and are shaped by the specific country’s philosophical basis, political structure, and attitudes of authorities towards alternative types of economic institutions and the types of corresponding rules they could choose to establish for those institutions.     

A new institutional approach to pro-poor agricultural development: Lessons from Asia

Dr. Naya has been one of only two instructors of a course unique to the University of Hawaii called, “The Economics of Cooperation.” He was an early observer of deliberation councils and other institutions whereby the investment coordination problem was partly solved by extra-market cooperation in the East Asian “miracle” countries. These insights contributed to The Economics of Cooperation (1992), which featured the role of government as facilitator—a theme of Hawaii State Development Planning when Dr. Naya served on the Governor’s cabinet.Reconsidering government as a facilitator, and not as a replacement for markets, is one of the primary contributions of the New Institutional Economics (NIE). This paper extends and applies the facilitation perspective to the problem of agricultural development. Policy failures are detailed and sourced to the fallacy of misplaced exogeneity. In contrast, the method of fundamental explanation, inherent in NIE, acts as a corrective to misguided interventionism that has prevented pro-poor rural development from taking place.     

Outsourcing the State? Public–Private Partnerships and Information Technologies in India

This paper examines public–private partnerships (PPPs) for development through the example of telecenters in two Indian states. How might a developmental state position itself with respect to civil society under a PPP model of service delivery? We find that each state’s political economy is reflected in its PPP strategy, but that in both states the emerging middle classes rather than the poor benefit most from ongoing telecenter projects. Outsourcing development services to private entities need not “privatize” the state but does alter the way in which citizens “see” the state. Service delivery through telecenters becomes a symbol of government efficiency and responsiveness.     

Neo-Corporatism and Territorial Economic Development: The Ecuadorian Indigenous Movement in Local Government

This article argues that the democratization of local governments that has been led by indigenous movements in Ecuador can best be described as “neocorporatist”. The article, based on the evidence from two cases of indigenous local governments in the Andes, argues that the forms of “neo-corporatism” created by the Ecuadorian indigenous movement on its entry into government are designed as participatory institutional frameworks that also serve as channels for the expression of social movements’ demands. The neocorporatist practices deployed by indigenous movements in these areas have had mixed results, both in terms of their implementation and of their capacity to foster viable income-generating activities for poor rural areas. On balance, while the forms of neocorporatist government fostered by the indigenous movement can have positive impacts on economic development, there are still two broad limitations. First, it continues to be difficult to foster a process of territorial economic development that effectively addresses the distinct interests that exist among different community organizations. Second, the negative effects of the wider economic context in which local territories find themselves remain beyond the control of the local government.     

Is Devolution Democratization?

Recent attempts at introducing new forms of governance in forest management in India have focused on devolution to user-groups or village level “participatory committees.” Success or failure is attributed to the presence or absence of “social capital” among these groups. These groups have never existed outside the state, however, and social relations, including social capital, are continually being transformed by administrative and market forces. This paper argues that what matters is not the degree of government intervention, i.e., more or less devolution, or the degree of social capital among local communities, but state accountability. This can only be ensured through addressing questions of political reform.     

A theory of the pre-modern British aristocracy

Between c. 1550 –c. 1880, a small group of individuals ruled England and oversaw her transformation from a small country to the British Empire—and in the process they became exceedingly wealthy. Known as aristocrats, their unusual lifestyles were the antithesis of modern secular values. Today aristocrats are often viewed as a hindrance to pre-modern growth and development because they appeared to operate so inefficiently. This paper argues that the aristocrats efficiently provided the valuable service of “trustworthy servant”, by investing their wealth in hostage capital. This theory explains terms of entry and exit out of the aristocracy, the strict family settlement, their education patterns, extravagant lifestyle, and their ultimate voluntary retreat from power.     

Big is ugly? How large-scale institutions prevent famines in Western India

For centuries, recurrent droughts have caused severe famines in the Deccan region of western India. By 1920, large-scale institutions integrated this region into an industrial and globalizing world—ending famines and causing a rapid decline in mortality rates, hence a rise in human welfare. These results are contrary to the “small is beautiful” discourse of some anti-globalization theorists. Yet, as these theorists suggest, big institutions also often make inefficient use of vital resources. Institutions such as the Deccan irrigation canals can be essential to survival yet require careful redesign to ensure future food security.     

Struggling with Sustainability—A Comparative Framework for Evaluating Sustainable Development Programs

“Sustainability” is an inherently dynamic, indefinite and contested concept. “Sustainable development” must, therefore, be seen as an unending process—defined not by fixed goals or the specific means of achieving them, but by an approach to creating change through continuous learning and adaptation. How, then, do we evaluate a development program’s contribution to such a process? This paper constructs a framework for evaluating sustainable rural development programs using both process- and outcome-oriented criteria, and demonstrates its application. The SANREM CRSP/SEA research and development program in The Philippines—including ICRAFs efforts to organize communities around agroforestry and environmental conservation—is assessed.     

Thinking About the Liquidity Trap

The phenomenon of the liquidity trap—defined as a situation in which even a zero interest rate is insufficiently low to produce full employment—has taken on new importance with the persistent slump in Japan. This paper restates recent theoretical work on liquidity traps, drawing a link between “intertemporal” models that are mainly concerned with demonstrating the underlying logic, and more ad hoc models that bear directly on policy; it then reexamines policy alternatives, including fiscal stimulus and inflation targeting. J. Japan. Int. Econ., December 2000, 14(4), pp. 221–237. Woodrow Wilson School, Princeton University, Princeton, New Jersey 08544-1013 Copyright 2000 Academic Press.Journal of Economic Literature Classification Numbers: E52, E58, E31, F31.     

Efficient markets and great lakes timber: A conservation issue reexamined

“… the forest resource is one which, under the active competition of private enterprise, is apt to deteriorate … that the maintenance of continued supplies as well as of favorable conditions is possible only under the supervision of permanent institutions with whom present profit is not the only motive. It calls preeminently of the state to counteract the destructive tendencies of private exploitation.” (Bernhard E. Fernow, Chief, Division of Forestry, USDA, 1886, and drafter of 1891 legislation which established the National Forest Reserves. Economics of Forestry, New York: Crowell and Company, 1902, p. 20)     

Human Development and Economic Sustainability

This paper attempts to integrate the concern for human development in the present with that in the future. In arguing for sustainable human development, it appeals to the notion of ethical “universalism”—an elementary demand for impartiality of claims—applied within and between generations. Economic sustainability is often seen as a matter of intergenerational equity, but the specification of what is to be sustained is not always straightforward. The addendum explores the relationship between distributional equity, sustainable development, optimal growth, and pure time preference.     

The relative contributions of location and preferential policies in China's regional development: being in the right place and having the right incentives

A large part of the literature on provincial inequality in China has found it necessary to include regional dummies in the provincial growth regressions. A smaller but vocal part of the literature has emphasised the granting of preferential policies to explain the faster growth of the coastal provinces. We replace the regional dummies with a measure of the ability to participate in international trade (Geography), and a preferential policy index (Policy). We find that geography and policy had about equal influence on coastal growth (3 percentage points each). Geography affected growth with a much longer lag than policy, however. The policy index was highest for the metropolises (Beijing, Shanghai, and Tianjin) and lowest for the central and northwestern provinces. The preferential policies are to a large extent “deregulation policies” that enabled marketization and internationalization of the coastal economies and allowed them to become more like their East Asian neighbours (and competitors). The weak (statistically insignificant) support for conditional convergence is in line with the existence of institutions that retard the income convergence process generated by the movement of labor and capital and by the Stolper–Samuelson mechanism. The household registration system ties the peasants to the land, the monopoly state bank system favors borrowing by state enterprises, and local protectionism reduces inter-provincial trade. Clearly, these institutions need to be deregulated. An effective strategy to develop the western provinces must therefore encompass physical capital formation, human capital formation, and institutional capital formation.     

Welfare Implications of RTAs Within the WTO System in the Presence of FDI

We examine the welfare implications of the two major types of regional trade agreements (RTAs)—free trade agreements (FTAs) and customs unions (CUs)—within the WTO system in the presence of FDI. To do so, we analyze multilateral tariff cooperation in the context of two types of WTO regimes: a pure WTO regime without any RTAs and a modified WTO regime in which RTAs coexist with the multilateral framework. Our main finding is that in the presence of significant foreign ownership, RTAs within a multilateral system do not raise the national welfare of its members, thereby weakening the incentives of countries to form RTAs.     

The Manufacture of Popular Perceptions of Scarcity: Dams and Water-Related Narratives in Gujarat, India

This paper critically examines some narratives of water scarcity in Kutch, western India. It argues that images of dwindling rainfall and increasing drought largely serve to legitimize the controversial Sardar Sarovar dam and manufacture dominant perceptions concerning scarcity. This manufacture has naturalized scarcity in the region and largely benefits powerful actors such as politicians, industrialists and large farmers. But the needs of the poor in water-limited areas are neglected. By exploring the various connotations of scarcity, the paper argues that scarcity is both a biophysical phenomenon as well as a powerful discursive construct. By distinguishing between the “real” and “manufactured” aspects of water scarcity, the paper attempts to enhance understandings of environmental change at the local level.     

Which Way is “Up” in Upgrading? Trajectories of Change in the Value Chain for South African Wine

Global Value Chain (GVC) analysis uses the concept of upgrading to highlight paths for developing country firms to “move up the value chain,” usually through the lenses of four categories—product, process, functional, and inter-sectoral upgrading. The implicit normative expectation is that these firms move toward producing higher value-added products and/or take on more sophisticated functions along a value chain. In this article, upgrading is approached more broadly as “reaching a better deal,” including a balance between rewards and risk. The case study of South African wine shows that better product quality, improved processes, and some functional upgrading have co-existed with processes of “downgrading,” higher risks, and limited rewards, especially in traditional export markets. A reflection on further conceptual development and directions for empirical research is also provided.     

Europe and East Asia in the context of regionalization: Theory and economic policy

Much academic interest has recently centered on economic regionalism as a framework of international economic relations. The European Community (EC) has been a focal point. Other regional economic organizations (APEC, NAFTA), have been subjects of debate.This paper discusses three principal arguments: (1) the “natural”/“optimal” regional grouping, (2) transaction cost advantage in a regional model, and (3) the balancing of intraregional and extra-regional economies. Indeed, the argument is most certainly for an international regime of an “open,” not a “fortress” economic regionalism.This paper examines the subject relative to economic theory and policy.     

The Increasing Selectivity of Foreign Aid, 1984–2003

The Monterrey Consensus includes the idea that foreign aid is more effective when targeted to countries with sound institutions. We examine the extent to which foreign aid, bilateral and multilateral, is “selective” in terms of democracy and property rights/rule of law. We find that multilateral assistance is more selective than bilateral aid in targeting countries with good rule of law. “Selectivity” is a new phenomenon. During 1984–89, both bilateral and multilateral aid had significant negative relationships with rule of law; by 2000–03 this had shifted to a significant positive relationship for multilateral aid, and a positive but statistically insignificant relationship for bilateral aid.     

Women and political participation in Africa: Broadening the scope of research

The article argues for a more flexible and inclusive approach to research on women and the state in Africa and, in particular, women's political participation. Inter alia it suggests moving away from restricted Western definitions of politics, from overly aggregated notions both of “the state” and of “women,” and from too centralized a focus on government; and moving to include a greater appreciation of informal organizations, unusual modes of participation, uneven tradeoffs and even manipulated politics. Its concern is to ensure that we do not overlook or close off those narrow spaces of participation which may, by default, have been allowed to women, or which women may have fashioned for themselves.     

From New Order to Regional Autonomy: Shifting Dynamics of “Illegal” Logging in Kalimantan, Indonesia

In recent years there has been a tendency to view the seemingly irremediable spread of “illegal” logging in Indonesia in isolation, or as a result of disassociated and premeditated criminal acts. This paper proposes a different view of the problem by discussing the changing dynamics of the “illegal” logging sector in the two districts of Berau, East Kalimantan and Kotawaringin Timur, Central Kalimantan. It suggests that “illegal” logging is not a simple case of criminality, but a complex economic and political system involving multiple stakeholders. Furthermore, “illegal” logging is not a stationary condition that can be effectively dealt with through coercive or repressive measures alone. Rather, it should be viewed as a dynamic and changing system deeply engrained in the realities of rural life in Indonesia. Regional autonomy has also created a supportive environment for the “illegal” logging trade and allowed it to gain resilience.     

A theory of gridlock: Strategic behavior in legislative deliberations

This paper studies compromise and inflexibility in political negotiations. It provides the first analysis of gridlock, a result in which politicians fail to agree on an ideal compromise but which most voters find preferable to the status quo. A multistage game is developed in which contending political blocs choose from hardline or compromise strategies. The outcomes—compromise, gridlock, or one party's ideal legislation—are a function of the incentives of political actors to cooperate or fight. The model illustrates problems in political markets that may occur when consumers are poorly informed.