Liberalization of the financial markets in India

India has launched a major structural adjustment program, with a view to globalization. Since 1991, reforms have been set in motion in all sectors of the economy, resulting in dismantling of bureaucratic controls and infusion of private enterprise and competition. Inflows of foreign capital are being encouraged, while foreign mutual funds have been permitted to trade on the Indian Stock Markets. The streamlining of the Indian economy, which in the medium term has introduced considerable stability, is expected to position India as an important global player in the near future. Vaghul traces the growth and implementation of the reforms as they relate to Indian financial markets.     

Gradualism Versus Shock Therapy: (Re)Interpreting the Chinese and Russian Experiences

The concepts of gradualism and shock therapy are reconsidered in respect of the Chinese and Russian experiences. It is suggested that success in reform is determined not only by sharp and speedy measures for attaining macroeconomic financial stabilization, but also, more importantly, how rapidly a critical mass of genuine market forces and competition can be achieved in the microeconomic sphere. In contrast to the orthodox interpretation, it is concluded that the ‘weighted combination’ of macroeconomic and microeconomic reforms in China can be regarded as true ‘shock therapy’, which has brought the Chinese reforms to a successful outcome. In contrast, despite initial macro-financial shock, the Russian reforms have been slow and inconsistent and, for that reason, less successful than in China.     

The private sector in the Soviet Union and China

The private sector in the fields of agriculture, wholesaling and retailing, craft trades and light industry, already well-developed in the People’s Republic of China and a number of Eastern European countries, is now to be given a more significant role in the Soviet Union. Moscow’s economic reformers believe this will contribute to an improved standard of living, as has been the case in China during the economic reform which has now been underway since 1978/79. It is therefore tempting to compare the concepts underlying the reforms and the course they have taken in the two socialist “super-powers”, the key question being whether the Russians will achieve similar successes with their reforms, once all the teething troubles are overcome, to those of the Chinese.     

Export promotion in the context of technical cooperation

A large number of developing countries have introduced trade policy reforms in recent years. These have been supported by export promotion projects in the context of bilateral and multilateral development cooperation. The results of the advisory approach so far adopted have been disappointing on the whole, so a reorientation is now taking place in the design of export promotion. This article describes an alternative advisory approach by taking the Indo-German Export Promotion Project (IGEP) as an illustration.     

The changing economic order in China

Far-reaching changes in the People's Republic of China's economic and social policy have been decided and carried out since 1978. The following article analyses a number of selected aspects of the economic order to illustrate the direction the reforms are taking and the limitations to which they are subject.     

Market Reforms and Commodity Price Volatility: The Case of East African Coffee Market

The goal of this paper is to examine the impact of commodity market reforms on producer price volatility using evidence from the East African coffee market. The results, based on time‐varying volatility models and key summary statistics, show that coffee market reforms in the East African Community (EAC) are associated with changes in producer price volatility and volatility persistence at both country and regional levels. However, reforms were not the only cause of changes in price volatility. The study further shows that reforms had different effects on prices volatilities of Arabica and Robusta varieties of coffee grown in individual EAC countries. These findings have wider implication for commodity market reforms and producer price stabilisation policies in the EAC and coffee producing countries in sub‐Sahara Africa.     

Developing Countries in the WTO System: Applying Robert Hudec's Analysis to the Doha Round

In his 1987 Developing Countries in the GATT System, Robert Hudec concluded that the identity of developing countries in the GATT system was primarily a matter of their demanding non‐reciprocal and preferential treatment, developed countries responding grudgingly to those demands and that this situation had been unfruitful either to support developing country reforms or to discipline developed country restrictions aimed at developing countries. Hudec was pessimistic about the relationship becoming more productive, but his expression of despair offered a glimmer of hope: ‘There are those who believe that the GATT has become so committed to the current policy that the only way to change it would be to start a new organization’. A new organisation was started, the World Trade Organization, but has the WTO achieved what Hudec hoped a new organisation might? At the 1987–95 Uruguay Round, developing country leaders acted as Hudec had hoped. They used international rules and bindings as leverage to support their own internally‐driven reforms; to overcome generations of accumulated protection, to lock in reforms against the backsliding that had undone previous reforms. Dealing with the Uruguay Round's ‘unbalanced outcome’ and the overlapping ‘implementation problem’ have shaped the Doha Round, but the negotiations have misconceived and mismanaged both issues. Rather than seeking to identify their real economics, the negotiations have gone back to the traditional idea of special and differential treatment. Perhaps the largest cost of this mismanagement is that in many developing countries the unilateral momentum for liberalisation has waned. To the extent that the Doha negotiations have drawn attention away from the domestic issues that were the basis of developing country liberalisation – and enhanced the status of negotiators relative to the leaders who fought at home for reform – they have contributed to that waning.     

Friend or Foe? On the role of institutional reforms in the investment development path of Central and East European economies

Many existing studies on emerging markets and firms have concentrated on the separate effects of institutional reforms and quality of the institutional infrastructure for attracting inward foreign direct investment (FDI) and fostering outward FDI. We argue that both these perspectives should be considered in an interplay, as there are links between inward and outward FDI in a country's economic development, which is captured by the investment development path (IDP) concept. Moreover, while predominant attention has been paid to emerging markets, little has so far been done to evaluate the sustainability of the institutional development, including later post-transition stages. We extend the IDP with insights from the institutional theory and conduct a comparative analysis of the effects of institutional reforms on IDP paths of ten Central and Eastern European (CEE) post-communist European Union (EU)-members. We find that while most of the studied post-transition economies follow a quadratic relationship between the net outward investment (NOI) position and each country's economic development, the role of institutional reforms is not in all cases accelerating the movement through the stages of the IDP. We attempt to explain the ambiguous role of institutions in an ensuing detailed discussion of the investigated countries.     

Medical Malpractice Liability and Physician Migration

This paper uses national data on individual physicians and two control groups to provide evidence on the extent to which each of five medical malpractice reforms impacts the decision to move one's medical practice to another state. We find robust evidence that states that have implemented noneconomic damage caps experience less out-migration of physicians than states that do not have these reforms. In addition, we find some evidence that joint and several liability reforms and patient compensation funds also impact the migration decisions of physicians.     

Organizational Citizenship Behavior and the Public Service Ethos: Whither the Organization?

Public services worldwide have been subject to externally imposed reforms utilizing tools such as financial incentives and performance targets. The adverse impact of such reforms on a public service ethos has been claimed, but rarely demonstrated. Individuals within organizations work beyond their formal contracts of employment, described as Organizational Citizenship Behavior (OCB), to further organizational interests. Given New Public Management reform and the subsequent contextual changes in the way in which public sector organizations are managed and funded, the present study theorizes that OCB directed towards the organization may be ‘crowded-out’. This article tests the relationships between public service ethos and OCB and it presents empirical evidence from a study in England (n = 433) of the ability of each dimension of this ethos to predict OCB.     

从会计等式看产权理论在我国企业的运用

本文认为,会计等式在一定程度上反映了产权理论在企业中的运用状况。传统计划经济体制下的“企业”没有企业的本质属性,其会计等式只记录“企业”使用物质资料和物质资料在“企业”里的分布情况,国家是生产资料的完全所有者,没有产权的存在。现阶段的企业是市场经济的主体,有自己的生产经营权利,追求利润最大化,而组织活动本身又受社会主义市场经济条件下生产资料公有制的影响,其会计等式反映了一定条件下的产权关系,说明了产权理论在会计核算上的运用。文章指出,会计等式中体现的产权思想只是产权经济学的一部分,用会计等式和会计的语言说明生产要素所有者参与利益形成和分配过程的权益,即会计反映的是权力怎样计算为权益的。     

International briefing 15: Training and development in Austria

The system of primary, secondary, and tertiary education in Austria is largely regulated through federal laws. Especially on the tertiary level major reforms have been initiated during the last decade. Beyond that, vocational training, especially as part of apprenticeships, is shaped by and adapted to the structure of the Austrian economy, consisting mostly of small and medium sized enterprises. This type of job oriented training and development is strongly, although decreasingly, influenced by the system of social and economic partnership in Austria. In contrast, management training and post tertiary education is much more diverse and less regulated. Beside already ongoing educational reforms, pressures due to global competition will increasingly impact vocational training and development in the future.     

Chinese banking reforms in perspective: towards global alignment or national specificity?

The reforms of the banking sector in China conducted so far have been seeking to accomplish, simultaneously, two conflicting goals. On the one hand, the objective was to prepare Chinese banks for international competition and put them at the pace with the transformations observed in its overall economy. On the other, there is a social-driven agenda concerning employment and regional inequalities. Using principal component analysis, this article explores the impact of the ongoing reforms in the Chinese banking sector on the performance of individual banks. The results show that despite identical regulation, business practices can be dissimilar at the individual level. Taken collectively, the results also show the increasing influence of Western management standards in the Chinese banking sector.     

A Study of Management Attitudes in Chinese State-Owned Enterprises,Collectives and Joint Ventures

Since 1978 China has introduced a series of reforms that has gradually moved its economy away from planning and towards more market-based resource allocation. State-Owned Enterprises (SOEs) have been permitted to set market prices, retain profits after tax and employ factors of production much more freely than before. Private-sector firms have been allowed, and joint ventures with foreign firms encouraged. At the same time, continued political intervention in the management of enterprises may be dulling incentives for management to operate commercially. This study reports the results of research based on structured interviews with senior managers in 16 corporatized and non-corporatized SOEs, collective enterprises and joint ventures in Shanghai and Nanjing. The fieldwork was undertaken between October and December 1995, to shed light on the extent to which management attitudes had changed in recent years following the reforms, and to confirm whether there were noticeable differences in attitudes between managements in the various types of enterprises. The research also considers the current relationship between plant management and government bureaus, and management attitudes towards privatization.     

Why is Austria’s Pension System So Much Better Than Germany’s?

The pension systems in both Germany and Austria have undergone substantial reforms, though only one of the countries appears to have had success. Average earners in Austria will receive gross pensions equivalent to 78.1% of their average earnings, whereas in Germany they will receive just 37.5%. The authors argue that Germany has been left with a system that has abandoned the goal of protecting people's standard of living.     

Die Europäische Währungsunion: Viel reformiert,aber noch nicht am Ziel

Since the onset of the euro crisis, many aspects of the governance of the euro area have been reformed. Rules for budget control have been tightened, and oversight and resolution of banks has been centralised. Credit facilities have been created for member states who have trouble tapping financial markets. Moreover, the reform process is not over yet but can be expected to continue for another decade before details of a planned fiscal capacity will be implemented. Yet despite all these reforms, the euro area is still not crisis-proof. The permanent low rate of economic growth and the continuing lack of working macroeconomic coordination are particular reasons for concern.     

Corporate governance in emerging markets: A selective review and an agenda for future research

In this paper, we show how corporate governance reforms and research have been mutually reinforcing in emerging markets and propose a research agenda going forward. Acknowledging the by now broad recognition of corporate governance as a key development driver, we show how work on corporate governance in emerging markets has led research globally by focusing on the deep issues of ownership structures, property rights and organisational forms. Using the papers presented at the latest international conference of the Emerging Markets Corporate Governance Research Network, we illustrate how analyses of board structures, specifically gender diversity, has contributed to understanding of board dynamics and informed corporate governance reforms. Considering ongoing economic and socio-political trends, we conclude with a general research agenda for corporate governance in emerging markets.     

African equity markets : Testing Latin America's path

Equity Market opportunities and Sub-Saharan Africa have long been mutually exclusive propositions. However, recent developments are hinting at future profits to be reaped in the region. By year-end, over a dozen countries will have formal capital markets, and a handful more are in the process of setting up stock exchanges. Kleiman and Morrissey provide an overview of recent reforms and trends that will shape the region's capital markets into the next century.     

Tariff‐tax Reforms in Large Economies

This paper studies tariff‐tax reforms in a two‐region global New Keynesian model composed of a developing and an advanced region. In our baseline calibration, a revenue‐neutral reform that lowers tariffs in developing countries can reduce domestic welfare. The reason is that the increase in developing countries welfare due to higher output is dominated by the welfare losses stemming from the deterioration of the terms of trade. On the other hand, the reform increases output and welfare in the advanced countries and in the world as a whole. The effects that we highlight have not been studied in previous contributions to the literature, which looks at tariff‐tax reforms using a small open economy framework. Nominal rigidities have important implications for adjustment dynamics in our model. In the case of a ‘point‐for‐point’ reform, for example, price stickiness implies that the international dynamics of output is reversed compared to a revenue‐neutral reform.     

Tax reforms and equity in ACP countries

While the tax reforms which have been instituted as part of the Structural Adjustment Programmes in ACP countries primarily aim at simplifying tax systems and raising their efficiency, they are also intended to improve distributional equity. This article assesses the equity effects of taxation policies in two selected ACP countries and points out what scope still exists for taxation measures to improve distributional equity without impairing allocative efficiency.