Has Nguyen Phu Trong's Leadership Curbed Economic Reform? Economic Reform Trends in Vietnam

This paper argues how the features of Vietnam's political‐administrative system and their recent changes have affected economic reform, particularly reform of state‐owned enterprises. After the 12th Party Congress in 2016, the Party Secretary General Nguyen Phu Trong's administration has seemed to exaggerate its conservative and totalitarian‐looking rule in the political arena. In contrast, the economic reform policies introduced by Trong's administration seem more transformative and progressive. This paper suggests that this contradiction must indicate changes in the policies relating to the state management of economic entities and/or a disguised form of reform to retain state influence over economic management, both of which tend to end up with pervasive rent‐seeking practices.     

Technology and the firm

The globalization of the economy is a process driven by the enterprise. As enterprises form networks of alliances they tend to create huge oligopolistic structures on a global scale. Although these global enterprises are not subject to national norms, it is evident that a new alliance is growing up between the enterprise and the state. In the context of fierce international competition, enterprises need the support of the state, which is able to ensure that its 'national champions' enjoy optimum conditions for development; in return, successful enterprises are the state's best guarantee of national independence. But through this alliance the enterprise has acquired a totally new legitimacy, approaching that formerly reserved for the state, while the state finds itself engaged in global economic competition, which lacks adequate regulatory procedures. There is also a growing disassociation between globalized economic power on one hand, and political power conjned within national borders, on the other. There is a need to formulate a new regulatory framework, in order to overcome a situation where actors representing particular interests impose their own rules on actors representing the public interest. Such a framework would encourage the emergence of a transnational civilian society able to mobilize itself in the face of global economic, technological and environmental problems.     

Gulf Cooperation Council Oil Exporters and the Future of the Dollar

How has industrial restructuring and technological upgrading in South Korea undertaken in the post-crisis era impacted on the state's capacity to guide strategic industry development? The latest reincarnation of the ‘end of the developmental state’ thesis proposes that industry policies are losing their strategic long-term oriented character due to the state's lack of legitimacy to play a guiding role after the economic recovery. I test this view in light of the Korean state's role, since the early 2000s, in the promotion of a new mobile communications software standard known as the Wireless Internet Platform for Interoperability (WIPI). I argue that the Korean state retains a strategic long-term approach to techno-industrial governance. The argument is developed through examining how bureaucratic actors gained the legitimacy to challenge Qualcomm, the strategy involved in promoting WIPI, and how the bureaucracy supported domestic firms under an increasingly open international trading environment. The findings reveal the state's ability to renew its legitimacy to play a developmental role through re-articulating policy goals from catching-up to nurturing innovation. Furthermore, the state has experimented with new forms of cooperation between government and business to nurture the growth of new infant technological growth sectors such as telecommunications.     

Alliances versus Federations: An Extension of Riker's Analysis of Federal Formation

This essay explores the distinction between federations and alliances and asks the question: When will states choose to federate rather than ally? William Riker argues that a necessary condition for a federal state's formation is that those offering the federal bargain must seek to “expand their territorial control, usually either to meet an external military or diplomatic threat or to prepare for military or diplomatic aggression and aggrandizement.” This argument, though, does not tell us why states sometimes respond to threats by forming federations and at other times by forming alliances. Here we address this issue directly and use a formal model of alliance formation to illustrate our arguments. Briefly, that model assumes states have initial endowments of military and economic resources, where economic resources enter utility functions directly and military capability influences preference only insofar as it determines a state's ability to counter or make threats. State can divert economic resources to military spending, and alliances, in turn, are self-enforcing coalitions designed to augment a state's offensive or defensive capabilities. Federations, which serve the same ends as alliances, are coalitions that need to be enforced by the “higher authority” established when the federation is formed. Our assumption is that states form federations in lieu of alliances if and only if (1) a stable alliance partition does not exist or, if one exists, it is dominated by an unstable partition and (2) if the cost of the loss of sovereignty to each state in the federation is offset by the gains from joining it, relative to what that state secures as its security value.     

Vietnamese Economy at the Crossroads: New Doi Moi for Sustained Growth

Thanks to doi moi, Vietnam was successful in escaping the poverty trap and emerged as a lower middle‐income country in the late 2000s. From that time, however, the Vietnamese economy entered a new phase, which has been characterized by slow growth, weak international competitiveness, and macroeconomic instability. Apart from short‐term problems associated with the management of increasing foreign capital, the major factors accounting for the difficulties of Vietnam's current economic phase can be attributed to the Vietnamese style of the gradualist strategy of transition from a planned to a market economy, which protects state‐owned enterprises, and consequently to the failure to respond to the rapid rise of China. For further industrialization and sustained growth, Vietnam should embrace a new doi moi that follows the efficient type of gradualist strategy, with a special focus on new reforms of state‐owned enterprises and a policy that promotes the country' s dynamic comparative advantage.     

Labour Management as Development of the Integrated Developmental State in China

The application of the developmental state concept outside its birthplace in East Asia is generally unsuccessful. The culprit is the ‘laundry list’ method commonly seen in the literature. In this paper a ‘strategic capacity’ conceptualisation is used instead, with emphasis on its diverse institutional underpinnings. The paper demonstrates that the Chinese state's approach to industrial relations is integrated with its national development strategy and that crafting institutions of labour management is part of the state's effort at building up its strategic capacity for political, social and economic management. The study delineates the factors shaping labour management institutions, paying special attention to the communist heritage that sets China apart from other developmental states. As such, the concept of developmental state has much wider application.     

Do unions discourage economic activity?

Previous examinations of the influence of unions on economic activity fail to use a measure of unionization that varies both by state and industry. Such a failure introduces the possibility of serious specification errors, a possibility confirmed by comparing traditional estimates which suggest unions depress a state's economic activity with new estimates which reveal no such effect.     

The Role of State Fiscal Policy in State Economic Growth

Do state policy makers have the ability to affect a state's rate of economic growth? This article examines one possible source of growth and per capita output level disparities by studying the role that state taxation and public expenditure decisions play in fostering economic development. Using pooled annual U.S. state‐level data from 1972 to 1998, a fixed‐effects model is employed to examine the effects of changing tax rates on both state per capita output levels and growth rates. The results indicate that higher tax rates negatively influence short‐run state economic growth, which lowers state output levels. However, long‐run growth is unaffected by changes in state tax rates, even after adjusting for the effects of initial per capita output levels, state expenditures, and aid from the federal government. Nor do changes in state public spending rates and federal aid permanently alter state growth rates, implying that state fiscal policies have only transitory effects on state growth. (JEL H71, O40, R11)     

Labor Conflict and Foreign Investments: An Analysis of FDI in India

This paper analyzes patterns of foreign direct investment in India. We investigate how labor conflict, credit constraints, and indicators of a state's economic health influence location decisions of foreign firms. We account for the possible endogeneity of labor conflict variables in modeling the location decisions of foreign firms. This is accomplished by using a state‐specific fixed effects framework that captures the presence of unobservables, which may influence investment decisions and labor unrest simultaneously. Results indicate that labor unrest is endogenous across the states of India, and has a strong negative impact on foreign investment.     

DOES MARKET‐ORIENTED ECONOMIC TRANSITION ENHANCE ENTERPRISE PRODUCTIVITY? EVIDENCE FROM CHINA'S ENTERPRISES

Using a panel of China's enterprises from 1999 to 2007, this paper examined how market‐oriented economic transition affects the productivity of China's enterprises given the various stages of enterprises in the commercialization process and given the market segmentation among Chinese different regions. The main findings are that: (i) enterprises with higher degrees of commercialization have relatively higher productivity, whereas enterprises with higher degrees of market segmentation have relatively lower productivity; (ii) the commercialization process and market segmentation act indirectly affect productivity through enterprises' capacity to export, innovate and obtain business loans; and (iii) the indirect effects are found to be significantly different between the commercialization process and market segmentation, highlighting the effects of the market‐oriented economic transition on enterprises' productivity. This paper provides reliable enterprise‐level evidence regarding the sources and evolution of enterprise productivity during different stages of market‐oriented economic transition in China.     

Choosing the agent's group identity in a trust game with delegated decision making

Members of a given social group often favor members of their own group identity over people with different group identities. We construct a trust game in which the principal delegates the decision about an investment into a receiver to an agent who either favors the principal's or the receiver's group identity. When choosing the agent's group identity the principal faces a trade‐off between a loyal agent and an agent who might increase the receiver's willingness to cooperate. We solve for the principal's decision in a subgame‐perfect nash equilibrium for the two scenarios of a risk‐neutral and risk‐averse agent, respectively.     

The Impact of State Resource Allocation on Urbanisation in Socialist China

The issue to be addressed in this article is the effect of state resource allocation on Chinese urbanisation. Looking at the key areas of state expenditure, we point out that significant spending on the military and on bureaucratic organisations monopolised a substantial portion of the state's economic and human resources. Such an orientation of resource inputs has sufficed to maintain generally high rates of industrial growth at the expense of civilian interests and has led to a relatively comprehensive industrial structure with an emphasis on heavy industry. However, this pattern of resource allocation has seriously distorted the association between industrialisation and urbanisation as conventionally understood on the basis of Western experience. The allocation of state resources accounted for this irregular association by constraining the growth of non-agricultural employment on the one hand and politicising the acquisition of urban residence rights on the other in the process of economic change.     

An informational role of supermajority rules in monitoring the majority party's activities

There often exists a supermajority rule that enables the minority party to delay or prevent a vote on a bill. I construct a two‐period model consisting of a representative voter, self‐interested parties, and a media outlet. In the model, the majority party has an incentive to misrepresent the voter's optimal policy. I show that the minority party's attempt to block a vote (e.g., a filibuster) can signal this misrepresentation. Interestingly, the key is that the minority party and the mass media are complementary in creating the signal. Overall, the results suggest that supermajority rules could be beneficial even for the majority of voters.     

The regionalization of indian politics and its implications for economic reform

Is political decentralization an impetus for economic liberalism, or are state and local governments impediments to a rigorous reform process? This article describes India's federal system, the growth of regional parties and governments, the changing balance of power between India's state and central governments, and the deterioration of state administrations, then assesses the economic reform and human resource policies of the states. The factors which slow the pace of reforms (politically unstable governments, fiscal populism, organized local interests, patronage and rents for party and government officials) and those that push for reforms (fiscal deficits, the need for investments in infrastructures, and inter-state competition for private investment) are analyzed.     

国有股权能够为民营企业带来好处吗?——基于中国上市公司的实证研究

民营企业家参政所产生的政治关联效应已受到广泛关注,但民营企业中的国有股权是否也具有政治关联效应还有待进一步证实.文章以中国民营控股上市公司为样本,研究了国有股权在民营企业中的政治关联效应和作用机制.研究发现:民营企业中的部分国有股权能够为其发展获取更多的经济资源与发展机会,因为国有股权可以依靠其与政府的体制关联为民营企业的发展提供声誉担保;与此同时,这些融资便利与经济资源能够进一步提升民营企业的经营业绩.文章拓展了公司政治关联领域的研究文献,为进一步全面理解中国经济转型时期政治关联对企业的影响提供了一个新的视角.     

Capital Structure Premium in Multinational SOEs: Evidence from China

We investigate the relationship among multinational operations, ownership and capital structure using data from China's A‐share listed companies. We find that, in general, multinational enterprises (MNEs) have lower leverages than domestic enterprises (DEs). More importantly, we document a capital structure premium in China's multinational state‐owned enterprises (SOEs). Since the state supports multinational SOEs that promote overseas national strategy, these multinational SOEs will have higher credit availability and therefore higher debt–equity ratios. This study sheds light on the Chinese government's impact on firm's creditability.     

POTENTIAL STATE‐LEVEL CARBON REVENUE UNDER THE CLEAN POWER PLAN

In 2015, the U.S. Environmental Protection Agency issued the Clean Power Plan under which each state can set a mass‐based target to meet its assigned electric power sector carbon dioxide emission reductions. If it proceeds, states can design policies to meet those requirements and also raise revenue via a carbon tax or cap‐and‐trade program with auctioned permits. We calculate each state's potential revenue and demonstrate its significance. In 13 states, carbon revenue could replace all of corporate tax revenue. In addition, we collect budget projections from six key states to determine if and how carbon revenue can substantially reduce deficits. While such revenue is not free money, we discuss its advantages over use of distortionary taxation. Finally, we consider distributional aspects and potential external fiscal effects on federal revenue. (JEL H2, H3, H7, Q5)     

Religious and Economic Preferences: An Empirical Analysis of State Tax Rates and Public Spending

In an attempt to examine the role of religion and religious institutions in the formation of economic and political preferences, we empirically test the relationship between religious and economic variables in the context of the 50 US states. Specifically, we test whether changes in the religious composition of states over time influences state tax rates (public revenue), and state spending patterns (public expenditure). We use church membership rates and religious contributions as alternative measures of a state's religiosity level. The results report a weak relationship between state tax rates and the religiosity of the state population over time. However, a negative relationship was observed between religiosity and public welfare spending, and a positive relationship between religiosity and public education spending. Variations arise when Catholics are included in the analysis of public spending.     

The impact of Africa‐China's diplomatic visits on bilateral trade

This article documents that African leaders’ state visits to China could stimulate China's exports to Africa in capital intensive manufacturing goods. We further find that state visits significantly increase official aid and exports by state‐owned enterprises to African countries which contribute to the trade growth after state visits.