Choosing sides in the trilemma: international financial cycles and structural change in developing economies

ABSTRACT

This paper analyzes the impact of international financial cycles on structural change in developing economies. It is argued that the impact of these cycles depends on the specific combination of macroeconomic and industrial policies adopted by the developing economy. The cases of Brazil and Argentina are contrasted with those of Korea and China. In the Asian economies, macroeconomic policy has been a complementary tool along with industrial policy to foster the diversification of production and capabilities. Inversely, in the case of the Latin American countries, long periods of real exchange rate (RER) appreciation, combined with the weaknesses (or absence) of industrial policies, contributed to the loss of capabilities and lagging behind.     

“Informing” technologies and the World Bank

The current study examines how the World Bank uses an assemblage of information generation and reporting practices, bounded by accounting/financial expertises, to attempt to influence the practices associated with administering education in Latin America. Starting from the premise that these “informing” technologies make the objects of governance knowable in terms of accounting and financial expertises, we consider how accounting practices embedded within lending agreements enable, translate and regulate behaviour. Focusing on the institutional field(s) of basic education, the study offers an in-depth analysis of 15 World Bank loan agreements from across the region, plus 25 interviews with field participants from a single Latin American country. We examine how the World Bank lending agreements install a variety of informing technologies across a network of agents in Latin America. We propose that such agreements can be viewed as technologies of governance in that they diffuse financial technologies to distant fields, re-structure the habitus of these fields, and serve to reaffirm the expertise of the Bank within these fields. In this way, the World Bank increases its legitimacy with other potential borrower countries and ensures its continuing influence.     

Rethinking the development agenda

This paper calls for a development agenda based on five majorpremises: (1) a more balanced form of globalisation based ona genuine respect for diversity; (2) a broad view of macroeconomicstability, which provides an adequate role for counter-cyclicalpolicies; (3) the need to complement macroeconomic stabilitywith active productive development policies; (4) strong socialpolicies and the mainstreaming of social objectives into economicpolicies to guarantee adequate linkages between economic andsocial development; and (5) the recognition that developmentinvolves broader human development goals.     

Socially responsible consumption: an application in Colombia

This study constructs a measurement scale for Socially Responsible Consumption in the particular context of Colombia. It uses a mixed qualitative and quantitative methodological approach, beginning with four focus groups and ending with a quantitative validation exercise employing Exploratory Factor Analysis. The result is a Socially Responsible Consumption measurement scale consisting of four dimensions that reflect paradigms found in the existing literature. These are, however, expressed differently in Colombia. In particular, Socially Responsible Consumption involves consumer behavior that favors corporate social responsibility practices and the rational consumption of resources and products while recognizing the importance of maintaining a healthy lifestyle through healthcare.     

Trade Liberalisation in Developing Economies: Modest Benefits but Problems with Productivity Growth, Macro Prices, and Income Distribution

Microeconomically, the case for liberalisation is dubious under increasing returns to scale and when firms can invest directly in productivity enhancement. Distributional effects of commercial policy changes can be regressive and large, but the 'rents' they generate can serve as a basis for effective policy intervention contingent on firms' performance. Macroeconomically, the case of liberalisation rests on Say's Law, which is not always enforced. Recent combined current and capital market liberalisations have been associated with strong exchange rates and high interest rates and output and productivity growth have positive mutual feedbacks which liberalisation may well suppress.     

Colombia’s macroeconomic challenges at the end of the supercycle of commodity prices

The end of the commodity boom presents major challenges for the Colombian economy. The major ones relate to the need to reduce the current account deficit and find new growth engines. A competitive real exchange rate is essential for objectives and requires stronger interventions in the foreign exchange market; these interventions also help to smooth out the trajectory of the inflation rate. Finally, although fiscal adjustment has been adequate, there are fiscal needs associated with the additional public sector spending demanded by the peace agreement and the need to correct the major structural tax imbalances generated by previous tax reforms.