Lost Exceptionalism? Comparative Income and Productivity in Australia and the UK, 1861–1948*

Australia had one of the highest per capita incomes in the world in the late nineteenth century, although this exceptional position subsequently eroded over time. This paper compares national income and sectoral labour productivity in Australia and the UK between 1861 and 1948 to uncover the underlying sources of Australia's high income and the reasons for its subsequent relative decline. We find that the country's higher per capita income was due primarily to higher labour productivity, because labour force participation, although higher in Australia than in the USA, was lower than in the UK. Australia had a substantial labour productivity lead in agriculture throughout the period, due to the importance of high value-added, non-arable farming, and a smaller lead in industry before World War I. The early productivity lead in industry was largely based on the importance of mining, and disappeared as manufacturing became more important. There was little productivity difference in services. These results reaffirm the importance of Australia's successful exploitation of its natural resource endowments in explaining the country's high initial income.     

Corporate Governance and Financial Performance of Companies in Poland

The research presented in the paper is aimed at examining the relationship between the level of corporate governance and the financial performance of listed companies in Poland. The corporate governance degree is expressed by the outcomes of a rating of 2003 performed by Polish Corporate Governance Forum. The attempted models are of ordered multinomial type. Endogenous variable represents the rating outcome (A−, B+, B, B−, and C+), while the exogenous variables include various financial indicators evaluated on the basis of the 2002 financial statements. The estimated ordered logit models show that the level of corporate governance of companies in Poland is associated with their ability to cope with the financial distress, as expressed by the degree of liquidity, profitability and the financial leverage variables.     

Endogenous institutional change after independence

Independence from colonial rule was a key event for both political and economic reasons. We argue that newly independent countries often inherited sub-optimal institutional arrangements, which the new regimes reacted to in very different ways. We present a model of endogenous changes in property rights institutions where an autocratic post-colonial elite faces a basic trade-off between stronger property rights, which increases the dividends from the modern sector, and weaker property rights that increases the elite's ability to appropriate resource rents. The model predicts that revenue-maximizing regimes in control of an abundance of resource rents and with insignificant interests in the modern sector will rationally install weak institutions of private property, a prediction which we argue is well in line with the experience of several developing countries.     

Profits and politics: Coordinating technology adoption in agriculture

This paper examines the political economy of government-led coordination of economic activity in a simple two-sector model in which individuals' choice of agricultural technology affects industrialization. We demonstrate the existence of multiple equilibria; the economy is either characterized by the use of a traditional agricultural technology and a low level of industrialization or the use of a mechanized technology and a high level of industrialization. Relative to the traditional technology, use of the mechanized technology increases output but leaves some population groups worse off. We show that the distributional implications of choosing the mechanized technology restrict the possibility of Pareto-improving coordination by an elected policy-maker, even when we allow for income redistribution.     

Globalization and growth in the low income African countries with the extreme bounds analysis

The relationship between globalization and economic growth, especially in the poorer developing countries, is controversial. Previous studies have used single globalization indicators such as the ratio of exports plus imports to GDP. This paper uses a comprehensive measure of a globalization of Dreher (2006), which is based on measures of globalization of the economic, social and political sectors. Panel data estimates with data of 21 low income African countries show a small but significant positive permanent growth effects. The sensitivity of this growth effect is examined with the extreme bounds analysis (EBA). Contrary to the findings by Levine and Renelt (1992) that cross-country growth relationships are fragile, the effects of globalization and some other determinants of the long run growth rate are found to be robust by EBA.     

我国工业部门科技投入有效性比较研究

本文在建立系统的评价体系基础上,依据某种原则将工业部门细分,采用定量分析方法,对我国各工业部门的科技投入相对效率进行了横向比较,得出不同工业部门科技投入有效性的不同特点,从而将我国工业领域科技投入有效性的认识规律深入到了工业内部。     

Is corruption in China “out of control”? A comparison with the US in historical perspective

This paper compares corruption in China over the past 15 years with corruption in the US between 1870 and 1930, periods that are roughly comparable in terms of real income per capita. Corruption indicators for both countries and both periods are constructed by tracking corruption news in prominent US newspapers. Several robustness checks confirm the reliability of the constructed corruption indices for both countries. The comparison indicates that corruption in the US in the early 1870s, when its real income per capita was about $2800 (in 2005 dollars), was 7–9 times higher than China’s corruption level in 1996, the corresponding year in terms of income per capita. By the time the US reached $7500 in 1928, approximately equivalent to China’s real income per capita in 2009, corruption was similar in both countries. The findings imply that, while corruption in China is an issue that merits attention, it is not at alarmingly high levels, compared to the US historical experience. In addition, the paper articulates a theoretical framework within which the relationship between corruption and economic development can be understood. The model is used to explain the “life-cycle” of corruption in the development process–rising at the early stages of development, and declining after modernization has taken place. Hence, as China continues its development process, corruption will likely decline.     

Asymmetric effects of financial development on South-South and South-North trade: Panel data evidence from emerging markets

Using bilateral trade data in total and technology-and-skill-intensive manufactured goods for 28 developing countries that account for 82% of all developing country manufactures exports between 1978 and 2005, this paper explores the effects of financial development on the pattern of specialization in South-South and South-North trade. The empirical results using dynamic panel regressions and comprehensive sensitivity tests suggest that financial development in the South has an economically and statistically significant positive effect on the share of total and technology-and-skill-intensive manufactures exports in GDP, and total exports in South-South trade. In contrast, no such significant or robust effect of financial development is found in South-North trade. Overall, the positive effect of financial development is found to be asymmetric favoring South-South significantly more than South-North trade. In addition, financial development is found to be increasing technology-and-skill-intensive manufactured goods exports significantly more than total manufactured or merchandise goods exports.     

Testing convergence of European regions: A semiparametric approach

We provide a reappraisal of income convergence across European regions over the last two decades by using a semiparametric partially linear model to approximate the relationship between the average growth rate of GDP per capita and the initial GDP per capita. Estimation results point out both country heterogeneity and non-linearity in the convergence process. The findings suggest that low income regions, in particular those from new adhesion countries, diverge while medium income regions converge and that there is no evidence of convergence for high income regions.     

Nonlinear economic growth: Some theory and cross-country evidence

This paper aims to test the existence of different growth regimes, that is of different relationships between growth rate and income level. We propose a simple nonlinear growth model and test its empirical implications by estimating Markov transition matrices and stochastic kernels. We show that growth is indeed nonlinear: a first phase of slow or zero growth is followed by a take-off and, finally, by a phase of deceleration. We discuss the relevance of these results with respect to the issue of convergence and reversibility of development, in the light of models of structural change and technological diffusion.     

Cuba—Is the “Special Period” Really Over?

Since 1989, Cuba has struggled to recover from the loss of Soviet trade and subsidies. The Cuban government dubbed the period between 1990 and 1994 A Special Period in Peacetime in recognition of the 35% decline in GDP. Instead of restructuring its economy, the Cuban government used a bandaid approach that permitted self-employment, raised prices, legalized the dollar, and decreased government subsidies of state enterprises. Although growth resumed in 1994, the Cuban economy never fully recovered to pre-1989 levels of GDP. This paper discusses the investment, trade, and production problems that continue to plague the Cuban economy.