THE WORLD BANK'S RESPONSE TO THE DEVELOPING COUNTRY DEBT CRISIS

The World Bank has responded to what it has perceived as two debt crises. The first is the highly publicized crisis in the middle-income, heavily indebted countries–mainly those in Latin America. The second has affected a set of about 20 much poorer African countries. The World Bank's responses to the two crises have been dissimilar as well. In the case of the heavily indebted, middle-income countries, whose debt is mainly to private creditors, the World Bank first responded with its Special Program of Action, beginning in 1983. Under the October 1985 Baker Plan, the World Bank was to increase its gross disbursements to these countries by 50 percent–a goal it has nearly met. Unfortunately, other creditors have not met Baker Plan goals, and so investment and growth in debtor countries has stagnated. The World Bank cannot continue providing a disproportionate share of financing needs. The World Bank has responded to the problems of the poorest debtor countries through its Special Program of Action for debt-distressed countries in Africa, and has coordinated its own concessional International Development Agency–soft loan window–lending with aid from other official creditors and donors.     

股东利益至上的全球银行业最大并购案——荷兰银行被收购案分析

本文描述了荷兰银行收购案的始末,分析了苏格兰皇家银行牵头的财团以分拆收购的方式战胜巴克莱银行的整体收购策略的原因,客观地评价了此次收购战中各参与方的损益,为收购的法律完善提供了建议和支持。并剖析了这项由我国国家开发银行间接参与的收购案对于我国银行业乃至全球银行业参与全球金融的多方面指导意义。     

MEASURING THE ECONOMIC PERFORMANCE OF TRANSITION ECONOMIES: SOME LESSONS FROM CHINESE EXPERIENCE

This article quantifies the comparative performance of China in several dimensions. Firstly, it shows that China's move from a command to a market economy was less abrupt and more successful than that of 29 other economies making a similar transition. Secondly, while official estimates show annual GDP growth of 9.6 percent in 1978–2003, this is reduced to 7.9 percent after adjustment for exaggeration of industrial performance and growth in non-material services. Thirdly, as the exchange rate understates China's achievement, a purchasing power parity (PPP) converter is necessary to measure comparative level of performance. Our PPP converter shows that China in 2005 was the world's second largest economy, with a GDP about 80 percent of the U.S. It is assumed that China will have overtaken the U.S. as the world's biggest economy before 2015. Until recently, the World Bank estimate of the PPP for China was close to that of Maddison, but the Bank's new estimate for 2005 shows Chinese GDP about half this level. The Bank's new estimates for China and other Asian countries are not plausible, and this paper advances several reasons for rejecting them. Finally, energy use per head of population is a good deal smaller than that of the U.S., and its total energy use for a much bigger population is likely to be somewhat smaller than that of the U.S. in 2030. However, heavy dependence on dirty coal means that it will have bigger carbon emissions than the U.S. This is a major problem as Beijing and other big cities already have severe pollution problems.     

我国养老金“多支柱”模式存在的问题及改革方向

20世纪70年代以来,如何应对人口老龄化导致的养老保障财务危机,成为世界各国关注的重要议题。"多支柱"模式是世界银行倡导的养老保障改革最佳方案。为了应对"未富先老"的人口老龄化压力,我国逐步建立了养老金"三支柱"模式,但"三支柱"模式无法解决现存的许多问题。为了促进我国养老保险制度可持续发展,我国有必要吸取世界银行的思想和建议,积极构建符合我国国情的养老金"五支柱"模式。     

Identifying a policymaker's target: an application to the Bank of Canada

We develop a new way to test hypotheses about policymakers' targets and implement that test for Canadian monetary policy. For example, if the Bank of Canada is targeting a 2 per cent inflation rate, and if the Bank's instrument takes eight quarters to affect inflation, then deviations of inflation from 2 per cent should be uncorrelated with the Bank's information set lagged eight quarters. We show that there was a major change in the Bank's objectives near the time when formal inflation targets were announced and that the Bank has indeed been targeting inflation since then. JEL Code: E52, E61
Identifier une cible du définisseur de politique: une application à la Banque du Canada. Les auteurs développent une nouvelle manière de tester des hypothèses quant aux cibles des définisseurs de politiques, et utilisent ce protocole pour analyser la politique monétaire canadienne. Par exemple, si la Banque du Canada s'est donnée pour cible un taux d'inflation de 2 pour-cent, et si l'instrument utilisé par la Banque du Canada met huit trimestres à avoir son effet sur le taux d'inflation, alors les déviations de l'inflation autour de 2 pour-cent ne devraient pas être co-reliées à l'information disponible aux autorités monétaires quand elle a agi. On montre que il y a eu changement dans les objectifs de la Banque aux environs du moment où les cibles formelles d'inflation ont été annoncées, et que la Banque a de fait ciblé le taux d'inflation depuis.     

关于铸币税问题的思考

铸币税不是一种税,而是指铸造货币所获得的收入;发行货币是铸币税的源泉,铸币税是中央银行发行货币的结果;现代经济制度下,铸币税是指中央银行的货币发行所获得的利润。     

Politics of religiously motivated lending: An empirical analysis of aid allocation by the Islamic Development Bank

We investigate whether lending by the Islamic Development Bank mirrors Saudi Arabia's political interests based on religious affinity using panel data for its 56 member countries over the 1970–2007 period. Our results indicate that Sunni regime countries receive favorable treatment in terms of loan allocation, as well as Shia majority populated countries in exceptional occasions of conflict with other religious minority groups, while non-Muslim countries are the least favored. There is also evidence that lending by the World Bank to the same group of countries and over the same time frame does not respond to the political stance of Saudi Arabia founded on religion. These findings reveal the advantage that Saudi Arabia gains by assuming the leadership of a Regional Development Bank in contrast to coordinating common strategies in a global International Financial Institution with other large shareholders for whom religion might not be essential for political alliances.     

Can the ECB be Truly Independent? Should It Be?

Most of the literature on the independence of the Central Bank assumes only one policy instrument is available: monetary policy. If we introduce fiscal policy as well, when preferences may differ among policy-makers, the situation is radically different. In this case fiscal policy will substantially weaken the impact of the Central Bank's actions, and may annihilate them altogether. The Stability Pact may then be a liability, instead of an asset, because it renders both policies impotent (even if credible). We examine whether there is any incentive to retain monetary policy independence; and whether accountability can and should be used to ensure fiscal and monetary policies support each other, rather than undermine each other.     

A Perspective on Modelling the Australian Real Trade Weighted Index since the Float

Since the deregulation of the Australian dollar market in December 1983, considerable effort has been devoted by the central bank to understanding movements in the value of the currency. As the Reserve Bank of Australia (RBA) has a pivotal role to play in currency markets, attention has been focussed on the modelling techniques used by the Bank's researchers in this process. This paper examines the ancestral development of the current model of the Australian Trade Weighted Index ( rtwi ) used at the RBA, as specified in Beechey et al. (2000). Estimates and forecasting evaluations of the various models imply that only the relationships between the rtwi , the terms of trade and interest differentials hold consistently, providing the empirical foundation for the current RBA model.     

Product and process innovation and total factor productivity: Evidence for manufacturing in four Latin American countries

The literature on firm productivity recognizes the important role played by firm innovation activities on firm productivity in developed countries. However, the literature for developing and emerging economies is scarce and far from conclusive. The aim of this paper is to study the innovation–productivity link (distinguishing between process and product innovations) for manufacturing at the firm level for four Latin American countries (two classified as upper‐middle income countries by the World Bank—Argentina and Mexico—and two as lower‐middle income—Colombia and Peru). We aim testing whether the level of development is a mediating factor in the innovation–productivity link. The data used have been drawn from the World Bank panel enterprise surveys, for 2006 and 2010. First, we estimate total factor productivity (TFP) and, second, we use the estimated TFP as a regressor or as dependent variable, in two models for testing self‐selection of the most productive firms into innovation or the existence of returns to innovation in terms of productivity. Our results confirm the mediating role of the level of development in the innovation–productivity link: both the self‐selection and the returns‐to‐innovation hypotheses work only for the upper‐middle income countries.     

Endogenous Farmer Schooling and the Application of High-Yielding Variety Technology in a Less-Developed Country

The paper uses data from the World Bank's Pakistan Integrated Household Survey to study the effect of farmer schooling on the application of high-yielding variety technology in Pakistan in 1990–91. Unlike previous studies of the role of schooling in agriculture in less-developed countries, it emulates estimation of Mincer earnings functions to treat schooling as an endogenous variable. This purges the estimates of inconsistency arising from positive correlation between unobserved farmer ability and schooling, and measurement errors in observed schooling. A measure of access to schools identifies the true causal effect of schooling on the use of improved seeds.     

The Organizational Structure of Banking Supervision

Does it matter whether banking supervision is undertaken in‐house in the Central Bank or in a separate specialised supervisory institution? After all, bank supervisors and the Central Bank must continue to work closely together wherever the supervisors are located. Nevertheless there has been a recent trend towards hiving off bank supervision to a separate agency, as in the UK. The main driving forces are the rise of the universal bank, increased conglomeration, and concerns with conflicts of interest. Such separation, however, raises questions whether systemic stability might suffer. The ethos and culture of the separate supervisor might come to focus more on conduct of business, consumer protection, issues. Potentially systemic financial crises would have to be handled by a committee. These are qualitative issues, and developed countries, with differing historical, legal and institutional backgrounds, will come to differing conclusions. But in less developed countries, more weight needs to be placed on ensuring the quality of the supervisory staff, i.e. their professional skills, independence from external pressures, and adequate funding. This tells strongly towards retaining banking supervision under the wing of the Central Bank in such emerging countries. (J.E.L.: E5, F3, G2).     

非均衡经济中区域中央银行金融调控与监管研究

本文从我国区域经济、金融发展不平衡和地域特殊性较强的现实出发,分析了区域中央银行宏观金融调控和金融监管的尴尬境地,提出了应加强中央银行各级分支行,尤其是大区分行的相对独立性,充分调动其调控与监管的积极主动性,以适应我国的现实国情,在“掌握精神,灵活处理”的原则指导下积极监管、适当调控,全面提高金融调控与监管的效率。     

Sharing Money Creation in a Monetary Union*

How to share money creation among the members of the European Monetary Union? To address this issue, we construct a two‐country New Open‐economy Macroeconomics model of an asymmetric monetary union with an incomplete financial market and home bias in consumption. We consider two sharing rules consistent with the current regulations of the European System of Central Banks. First, each participating National Central Bank supplies half of the European Central Bank determined money creation in the monetary union. Secondly, each National Central Bank adapts the national increase in money demand, under the constraint that the total money creation in the union does not exceed the level determined by the ECB for the whole union. We show that the current sharing rule, which ignores countries’ heterogeneity, is superior in terms of welfare. The key role of the current account is emphasized. It proves an efficient decentralized mechanism for allocation of money.     

The impact of regulatory measures on commercial bank interest rates: A micro analysis of the Barbados case

This study estimates the impact on commercial banks' interest-rate behavior of the more pervasive regulatory measures adopted by the Central Bank of Barbados. The results indicate that the cash ratio, the stipulated government securities ratio, and the savings deposit rate floor significantly impacted the loan rate for every bank. Generally, the deposit rate for any given bank has been responsive to fewer policy variables than the loan rate. The loan rates, though generally responsive to all policy variables other than the bank rate, have exhibited very low elasticities. The results indicated that the ceiling on the average lending rate, when it existed, depressed loan rates by less than 1 percent on average. This is largely attributable to the Central Bank's policy of adjusting the ceiling in line with market trends.     

Return of industrial policy?

For the sake of freedom, economic growth and poverty reduction the state in market economies should limit itself to regulating markets and (sometimes) correcting ‘market failures’. This neoliberal conception has been the near-consensus for the past two to three decades in the West and in western-led international organizations such as the World Bank. But as of recently, the consensus has been challenged by circumstances with which it cannot contend. This article spells out key ideas behind the consensus – in particular, its rejection of industrial policy. It then argues that the US government has long practised – to good effect – a hitherto little noticed type of industrial policy focused neither on the individual firm nor on the geographic region but on networks of firms, and that a (small) change in the American normative climate has occurred post 2008 in favour of a government steering role in markets. Moreover, some middle-income countries, with manufacturing sectors shrinking in the face of East Asian competition, have recently shown renewed interest in industrial policy. Finally, parts of the World Bank have recently begun to operationalize industrial policy, under the banner of ‘building competitive industries’ (industrial policy by another name), as has not been the case since the mid 1980s. The combination of these several forces may herald the emergence of new global norms in favour of a more ‘developmental’ role of the state.     

Is there the threshold effect of cigarette price on smoking prevalence? A cross-country panel data analysis

This article shows new cross-country evidences by empirically investigating the joint effects of cigarette price levels and joining the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) on smoking prevalence in 74 countries over the period of 2000, 2003, 2005 and 2006. We assessed cigarette price elasticity for three national income levels using different databases on cigarette price from the Economist Intelligence Unit (EIU), demographic and socioeconomic country characteristics from the World Bank and adjusted smoking prevalence rates published by various yearly WHO reports on the global tobacco epidemic from 2000 to 2010. A panel threshold regression was used to capture the nonlinear effects that cigarette prices on smoking prevalence at the three national income levels endogenously determined by estimation. Our findings supported the evidence that joining the WHO FCTC would have a positive effect on reducing cross-country smoking prevalence, especially among countries with low- and medium-income levels. Moreover, some simulated results show that a price hike of 10% would reduce smoking prevalence in countries with national income levels equal to or less than US$1900 and by 7.2% in countries with national income levels between US$1900 and US$2510 more than those with national income levels that are higher than US$2510.     

Competition And Its Regulation: Key Issues

This article examines the role of competition policy in developing countries. The leading international development agencies, such as the World Bank and the Asian Development Bank, have proclaimed their support for private sector–led development as the best strategy for reducing poverty. The benefits of private sector development are dependent on ensuring competitive market conditions, which are often absent in developing countries. However, theoretical notions of competition and the ways in which it is perceived to work vary widely and have implications for the type of competition policy that is to be implemented. Competition laws are widespread in industrialized countries but are only just beginning to be introduced in developing countries. The article examines some of the implications of applying competition policy in developing countries when account is taken of different theoretical perspectives, and of the structural and institutional differences between industrialized and developing countries.     

Growth,inequality, and poverty reduction in developing countries: Recent global evidence

The study presents comparative global evidence on the transformation of economic growth to poverty reduction in developing countries, with emphasis on the role of income inequality. The focus is on the period since the early-mid-1990s when growth in these countries as a group has been relatively strong, surpassing that of the advanced economies. Both regional and country-specific data are analyzed for the $1.25 and $2.50-level poverty headcount ratios using World Bank Povcalnet data. The study finds that on average income growth has been the major driving force behind both the declines and increases in poverty. The study, however, documents substantial regional and country differences that are masked by this ‘average’ dominant-growth story. While in the majority of countries, growth was the major factor behind falling or increasing poverty, inequality, nevertheless, played the crucial role in poverty behavior in a large number of countries. And, even in those countries where growth has been the main driver of poverty-reduction, further progress could have occurred under relatively favorable income distribution. For more efficient policymaking, therefore, idiosyncratic attributes of countries should be emphasized. In general, high initial levels of inequality limit the effectiveness of growth in reducing poverty while growing inequality increases poverty directly for a given level of growth. It would seem judicious, therefore, to accord special attention to reducing inequality in certain countries where income distribution is especially unfavorable. Unfortunately, the present study also points to the limited effects of growth and inequality-reducing policies in low-income countries.     

Bagehot's Lombard Street and Macroeconomic Stabilisation

Bagehot's Lombard Street (1873) has been recognised as the classic statement of the role and necessity of a Lender of Last Resort in a fractional reserve system. This perception has concealed, however, the fundamental nature of the work, which developed a sophisticated model of the business cycle, as the basis for shifting the focus of monetary control from the high‐powered money base to control via the rate of interest. In the course of developing this model, Bagehot was able to show that using Bank Rate to protect the reserve in the Bank of England, in anticipation of the cycle of the market rate of interest, rather than simply following the market rate, would both enable the Bank to fulfil its role as Lender of Last Resort, and to stabilise the business cycle.