THE DEVELOPMENT OF REGIONAL INTEGRATION IN EAST ASIA: FROM THE VIEWPOINT OF SPATIAL ECONOMICS

This paper examines the recent evolution of regional integration in East Asia, and discusses the prospects and tasks of further integration. After an overview of the globalization and regional integration trend in EU, NAFTA and East Asia during the past half-century, we introduce the basic framework of spatial economics, often called the new economic geography. In terms of globalization and regional integration, it is important to examine the general effects of decreasing transport costs (broadly defined) on spatial distribution of economic activities. Given this theoretical framework, we examine the changing economic interdependency within East Asia, as well as that between East Asia and the rest of the world over the last three decades. Next, we focus on regional diversity and disparity in East Asia. Finally, we compare the regional integration in EU with that of East Asia, and examine the tasks and prospects of further promotion of East Asian integration.     

REGIONAL INTEGRATION AND POVERTY: A REVIEW OF THE TRANSMISSION CHANNELS AND THE EVIDENCE

While there is an extensive literature on the impact of regional trading agreements on trade and capital flows, as well as on the relationship between international trade, growth, and poverty there is comparatively little treatment of the possible linkages between regional integration and poverty. We analyze the channels through which regional integration could impact on poverty, and then review the existing evidence on the impact of regional integration on poverty. We focus on two key characteristics that make any regional integration process different from unilateral and multilateral liberalization: first, the asymmetric nature of the liberalization process; second, the scope or ambition of the regional liberalization being undertaken and the nature of the institutional arrangements that are put into place to manage the process of regional integration. We also distinguish between short, medium, and long run effects on poverty of regional integration processes. There is some direct evidence explicitly linking regional integration and poverty, but in good part the shedding of the light depends on an indirect literature on trade, FDI, migration, and inequality.     

ON REGIONAL SHOCKS IN THE SPANISH ECONOMY

It is well known that the nature of potential shocks impinging on a set of countries or regions may have important implications for relevant aspects of economic policy. This paper addresses the shocks issue empirically by applying the State Space methodology and the Kalman Filter to the case of the Spanish regions. The main conclusions are as follows: (i) it seems that the shocks affecting the Spanish regions have been mostly symmetric; (ii) their effects have been persistent rather than transitory; and (iii) supply shocks have been slightly more frequent than demand shocks.     

REGIONAL ECONOMIC INTEGRATION AND ITS IMPACTS ON GROWTH, POVERTY AND INCOME DISTRIBUTION: THE CASE OF VIETNAM

Trade liberalization and regional economic integration have recently accelerated in East Asia, where several free trade areas have been established or are under negotiation. Vietnam, after acquiring Association of Southeast Asian Nations (ASEAN) membership in 1995, has signed a bilateral trade package with the United States and participated in the China-ASEAN free trade area. This paper attempts to analyze the impact on Vietnam of ongoing regional economic integration, focusing on growth, poverty reduction and income distribution. For this purpose, we have constructed a globally linked Computable General Equilibrium (CGE) model and made use of Global Trade Analysis Project (GTAP) database version 6.0 and Vietnam's living standards surveys. The simulation analysis shows that the regional economic integration generally has a positive impact. It both enhances welfare and improves income-distribution for Vietnam. Household income and consumption increase, and poor and rural household groups benefit more than urban high income groups.     

REGIONAL ECONOMIC INTEGRATION AND ITS IMPACTS ON GROWTH, POVERTY, AND INCOME DISTRIBUTION: THE CASE OF INDONESIA

Indonesia continually tries to open its economy through free trade areas (FTAs) on bilateral, regional, and multilateral bases. This paper discusses the impacts of FTAs on the Indonesian economy, particularly for economic growth, poverty, and income distribution. By using a Global Computable General Equilibrium (GCGE) model, we conducted the simulation analysis by setting eighteen scenarios for the ongoing and potential FTAs of different frameworks. Indonesia is found to benefit from joining in FTAs, except for the FTA with India. It is also implied that FTAs increase rural household income at higher rates than they increase urban household income. Moreover, FTAs' impacts are more favorable for unskilled workers than for skilled ones, and also for relatively poor households more than for rich households, both in urban and rural areas. In brief, FTAs provide Indonesia with income redistribution effects.     

THE LABOUR FOOTPRINT: A FRAMEWORK TO ASSESS LABOUR IN A COMPLEX ECONOMY

As addressing labour becomes crucial in the move towards sustainability, there is the need for assessment tools suitable for current complex economic systems. This article presents an input–output based framework (‘labour footprint’) for evaluating labour issues behind the production of different economic commodities, including entire supply chains. In line with the guidelines of the International Labour Organization, six labour issues are considered: collective bargaining, forced labour, child labour, gender inequality, hazardous work, and social security. This conceptual article sets to (a) define this footprint's labour dimensions, (b) cite relevant data sources, (c) describe its calculation, (d) illustrate its application through a case study, and (e) discuss this framework's relevance from ‘conscious consumption’, ‘supply chain responsibility’, and regulators' standpoints. Since it advances the evaluation of fundamental labour issues and the scope of multi-criteria analyses, this footprint may be a valuable tool for sustainability assessments.     

REGIONAL DISPARITIES IN THE PROCESS OF THE DEVELOPMENT OF NIGERIA: A HISTORICAL PERSPECTIVE

This paper examines the policy actions of earlier administrators in Nigeria. The account reveals that regional inequalities in the country evolved during the 100 years of British Colonial Administration. Moreover, activities of various ethno-linguistic groups in the country after political independence undoubtedly exacerbated the situation. The paper concludes that the major structural changes in agriculture, transportation and education initiated by the British during the colonial period: (a) had profound effects on the evolution of regional disparities; and (b) established an important basis for further development of the country. Nonetheless, activities of post-independence administrators have perpetuated and even aggravated the regional and individual socio-economic disparities in the country.     

EFFECT OF PUBLIC INVESTMENT ON THE REGIONAL ECONOMIES IN POSTWAR JAPAN

This paper examines the effect of public investment on the regional economies of postwar Japan. It evaluates the effects of efficiency-verses-equity-oriented allocation policies by estimating the aggregate regional production function and calculating the marginal productivity of public capital for each region, using panel data covering the 47 prefectures over the period from 1955 to 2000. The empirical results show that public capital investment has alternated between an allocation policy based on efficiency and one that is based on equity, and, in fact, such investment was used as a policy tool for adjusting income distribution and accelerating economic growth. Numerical simulations are used to analyze the trade-offs between economic efficiency and inter-prefectural equity. The results indicate that in the case of income-elastic labor mobility, an efficiency-oriented allocation policy leads to larger aggregate gross domestic product by promoting both growth and equity simultaneously.     

REGIONAL CONVERGENCE AND THE ECONOMIC PERFORMANCE OF PERIPHERAL AREAS IN TURKEY

The objective of this paper is to examine regional convergence and core-periphery relations in Turkey. The main question explores the degree to which there has been a transformation of interregional disparities in terms of "convergence" and performance of peripheral regions in Turkey by considering GDP per capita over the 1980-97 period. As a result of σ and β convergence (absolute and conditional) analyses, following Barro and Sala-i-Martin (1995), there is no evidence for convergence across both provinces and the functional regions in Turkey from 1980 to 1997. Moreover, a high level of the spatial dependence was revealed. Therefore, the level of regional GDP per capita growth was highly related to the neighbors and disparities are still obvious between the east and west of Turkey. Most of the new dynamic areas are also located in the west. Notwithstanding policies for "Priority Provinces in Development" (PPD), the findings of the convergence analysis indicates that PPDs do not grow faster than core-developed provinces. Moreover, the majority of them remained as poor regions with their neighbors. While the PPDs share similar features compare to the developed provinces, they are differentiated in terms of their performance.     

REGIONAL OFFICES IN SINGAPORE: SPATIAL AND STRATEGIC INFLUENCES IN THE LOCATION OF CORPORATE CONTROL

This paper reports a postal questionnaire survey of 130 regional offices in Singapore. The survey examines location decisions, current location evaluation and business objectives of regional offices. The extent to which competition for regional offices is possible among Asian business centers and the regional development consequences of business strategy linked to regional offices are assessed. Variations among regional offices according to country of origin and year of establishment are analyzed. The survey concludes that Singapore retains its lead as a center for regional offices, but that the sources of its attractiveness are changing and that it is not gaining from any relocation of corporate control out of Hong Kong. Public policy incentives to attract regional offices in competition to Singapore may be most successful if aimed at Asian organizations. Promotion to offices from North America and Europe should emphasize the relative growth opportunities in Southeast and East Asia.     

MODELING THE ECONOMIC EFFICIENCY OF IRRIGATION WATER SUPPLY IN DRY AND HUMID REGIONS

This paper tests the economic efficiency of irrigation water as supplied by single purpose and by general purpose public utilities in dry and humid regions, respectively, in terms of underprovision and overprovision. The proposed methodology mixes conceptual frameworks developed by Farrell (1957) and Brueckner (1979, 1982) . A typical agricultural production function uses the institutional attributes of the water-providing authority as an argument. Both short-run and long-run estimates are provided. Although in both cases irrigation water is heavily subsidized, there is no evidence of systematic underprovision or overprovision for the dry north and west, under the single purpose Irrigation Authority. However, water is oversupplied to more humid areas by the general purpose Central Water Authority. Empirical estimates confirm that the efficiency of the single purpose Irrigation Authority cannot be attributed to irrigation technique. The general purpose Water Authority suffers from inefficiency in coordinating rainwater availability with the institutional water supply.     

EXTENSIONS TO THE MULTIPLIER DECOMPOSITION APPROACH IN A SAM FRAMEWORK: AN APPLICATION TO VIETNAM

The aim of this paper is to provide an extension of a technique recently introduced by Pyatt and Round (2006) to decompose each element of the ‘global multiplier matrix’ in ‘microscopic detail’ in order to capture the linkages between each household groups’ income and the exogenously injected income of other accounts. The methodology we propose allows dividing the impact of exogenous injections into four different effects: direct-direct effect (D-D); direct-indirect effect (D-I); indirect-direct effect (I-D) and indirect-indirect effect (I-I). Results using the 2000 Vietnamese SAM show that the highest direct effects on the income of household groups are related to exogenous injections into the agricultural sector, while the highest indirect effects result from investing in other agriculture-related sectors such as, for example, food processing. Policy interventions focusing on the agricultural sector and on rural households will thus have the greatest effect on reducing the level of income inequality.