The Dynamics of Technical Progress in Some Developing and Developed Countries

We calibrate a semi-endogenous growth model to study the transitional dynamic and the properties of balanced growth paths of technological progress. In the model, long-run growth arises from global discoveries of new ideas, which depend on population growth. The transitional dynamic consists of the growth rates of capital intensity, labor, educational attainment (human capital), and research and ideas in excess of world population growth. Most of the growth in technical progress in a large number of developed and developing countries is accounted for by transitional dynamics.

Assessing the Effectiveness of Vocational Education and Training in Economic Development

Education in general is considered and its effect on economic and human development is questioned via the Human Development Index criteria. Education as an investment to human capital is discussed. Secondly, the demand for highly skilled workers and the relation between employment and new technologies are analyzed. The high rate of unemployment of educated youth is a disadvantage for economic and social stability. The importance of vocational education in overcoming this unemployment problem is discussed. Third, the Turkish and German economies and education systems in particular are compared. In Turkey, there is an increase in the number of university graduates but also there is an increase in the number of unemployed educated young people. In this perspective school-based education, a dual system in which school-based education is combined with firm-based training and informal training is explained. The German system is investigated with a view to obtain clues for an efficient education system.

The Impact of Corruption on Economic Growth

Even though corruption is correlated to political and moral degradation, there is no consensus on the impact of corruption on economic growth. Although, theory leans to the view that corruption has negative impact on growth, still empirical evidence and counter arguments show that there might be positive implications for corruption. This paper compares the corruption impact on growth in 17 developed European countries vs. 15 developing MENA countries using a pooled OLS model and a random effects model for the period (1999-2012). This paper contributes to the literature by examining the impact of corruption on growth in scarcely examined countries in Europe and MENA. Also, the paper findings are intriguing because they show that the region, as a proxy to degree of development, significantly influences the effect of corruption on economic growth.

State-Owned Banks and Development

Thirty years of neoliberal restructuring have side-lined alternative financing practices, and propagated mainstream myths about state-owned banks. This chapter examines these neoliberal claims, arguing instead that state-owned banks can remain a crucial part of progressive, sustainable and democratic strategies for investments in long-term development and infrastructure. Drawing on past and present case studies, as well as the theoretical literature on finance, the chapter points to the potential to revive – and improve – state-owned banking as a viable option for financing public services and development. To this end the chapter dispels nine popular neoliberal claims about state-owned banks while discussing how state-owned banks have undergone neoliberal restructuring processes such as marketization and corporatization in ways that nonetheless challenge their status as ‘public' banks. To illustrate, the chapter looks at imperfect, but telling or inspiring, examples from Brazil, China, Costa Rica, India, South Africa, Turkey and Venezuela, among others.

Opportunities and Challenges for Development

This chapter aims to provide an analysis of compelling conditions which are faced by developing economies in the current phase of the globalization. Globalization provides opportunities for developing economies yet it also causes difficulties at the same time. Effects of globalization on developing economies depend largely on deliberate policies that must be followed by the governments and support of the people alongside public authorities in designing such public policies. For market operations cannot secure optimal results for developing economies, the fate of a developing economy cannot be fully left to private markets' mercy so that public intervention often becomes a necessity.

Trade and Industrial Policy for Development

This chapter looks at policies for industrialization in developing countries, considering changes that have taken place since the Second World War, including the rise and subsequent demise of the so-called Washington Consensus approach. It discusses import substituting industrialization, export development, trade liberalization and the impact of post-2000 new WTO rules on trade-related policy measures. It shows how the East Asian model of substantial government intervention in the economy has been followed by a number of successful countries, not just Japan, Korea and Taiwan, but also China and Vietnam.

Wither Convergence?

For the first time since the industrial revolution, emerging economies are the main driver of global economic growth. For all its significance, this cannot be taken as an indicator of global convergence, since it resulted essentially from the successful catching-up processes of just a few Asian countries over the last few decades, whilst the productivity and income of the bulk of the developing economies have lagged persistently behind those of the advanced economies. The former continue to have the potential to grow faster than the latter, but realizing this potential on sustainable basis makes it necessary to meet a number of increasingly stringent conditions. Grounds for optimism are considerably less solid today than was the case in the recent past. This is highlighted by the large number of countries locked-up in the ‘middle-income trap”. This chapter offers a fresh view of this phenomenon, examines the nature of the conditions required for the potential for catching-up of middle-income economies to be realized, and attempts to arrive at a realistic outlook on this matter.

The Relationship between Current Account Deficits and Unemployment in Turkey

In this chapter, we test the nature of the variety of empirical relationships between current account deficits and unemployment in Turkey over 2000Q1–2012Q1. Our working hypothesis in this paper is that the meager job creation in Turkey over 2000s is the direct symptom of a speculative-led growth environment (Grabel, 1995) together with an excessively open and unregulated capital account in the age of relatively cheap and abundant global finance. Based on the vector error correction model (VECM), we found that there is a unidirectional causality running from current account deficits to unemployment. Both Impulse Response and Variance Decomposition analyses are quite consistent with results of VECM. We interpret these findings as evidence of the structural characteristics of unemployment, reflected in output elasticities, being embedded under the deepening external fragility of the Turkish economy over the 2000s.

Recasting Strategic Opportunities and Challenges for Development in Saudi Arabia

Thanks in part to the current world economy's high demand for oil, Saudi Arabia's economy is cruising along at the present time; however, to make such a growth or development sustainable in the long term requires a transformation of the economy from a heavily oil-dependent one to a more diversified, self-sustaining and private sector-driven economy. Thus, this article focuses on the underlying structural, social and institutional problems or reform challenges of the economy. In so doing, the present article critically examines Saudi Arabia's economic development model, while crisply reassessing the government's recent major policy responses to its development opportunities and challenges. And it offers some tentative suggestions for freshly rethinking about Saudi Arabia's national long-term development strategy and its implementation.

Firm-Level Determinants of Foreign Investment and M&A Activity

The last decade is marked with acceleration of mergers, corporate restructuring and governance activities. M&A activity has been driven by factors such as technological change, globalization, free trade, deregulation, attempts to attain economies of scale, rise in entrepreneurship, and economic growth. Corporations need to adjust to the change in the environment and expand their markets to achieve growth and protection against volatile economic conditions. Firms can achieve international expansion through foreign direct investments (FDIs) which can take the form of cross-border acquisitions (brownfield investments) and Greenfield investments. This chapter covers an overview of the literature on the determinants of FDI forms of entry, and M&A activity followed with an empirical investigation of the firm-level determinants of foreign investment in Turkey with emphasis on cross-border acquisitions and Greenfield investments. Summary of the findings is followed with the economic implications of forms of FDI entry. The concluding remarks cover the implications of the results for policy makers.