Journal of Globalization and Development
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154
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Published By Walter De Gruyter Gmbh

1948-1837, 2194-6353

2022 ◽  
Vol 0 (0) ◽  
Author(s):  
Kartik Misra

Abstract Involuntary acquisition of agricultural land for setting up of Special Economic Zones (SEZ) in India benefited the elite at the expense of small farmers who were and are the dominant voting group. Consequently, such policies were met with fierce political resistance by farmer organizations across the country. However, these movements have a mixed record against land acquisition attempts by the state and large corporations. This paper presents a simple model of the political conflict between the elite and small farmers over land acquisition to show how the elite may mobilize resources to ensure that their economic interests are protected even in democracies where they are in electoral minorities. We test the predictions of our model using a new data set compiled on SEZ projects that failed to acquire land because of farmer agitations. We show that factors like inequality in land ownership (class) and hierarchies of caste hinder the ability of small and marginal farmers to successfully organize collective action against land acquisition. Further, the division of votes along caste and ethnic lines also dilutes the potential for successful farmer agitations against land acquisition. Finally, we find that historically marginalized communities also resist land acquisition even when they face greater caste-based discrimination in the traditional village economy.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Joseph Bitar ◽  
Martin Boileau

Abstract In the context of a managed float regime, we adopt the portfolio balance view to show the effects of the net foreign assets of an economy and its gross international reserves level on interest rate differentials. We argue that the interest rate differential can be explained by three components, where the components are the expected depreciation of the domestic currency, a default risk premium, and a portfolio balance premium. Our theoretical analysis suggests that the interest differential is a convex function of the level of gross international reserves. In particular, the differential and gross reserves are inversely related at low levels of reserves, but positively at higher levels. We evaluate our framework for the case of Lebanon. We find that the differential is inversely related to both net foreign assets and gross international reserves. These findings are then confirmed with data from Indonesia and Mexico.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Tetsuya Tamura ◽  
Natsuka Tokumaru

Abstract Research indicates that the labor share of the aggregate income has decreased steadily since the mid-1970s, i.e. when the globalization process began. This paper discusses the ways in which qualitative changes in globalization, coupled with increased offshoring, have changed industrial relationships. In our analysis, we consider a simple Nash bargaining model between employers and employees. Our model proposes the hypotheses that employees gain the power to increase their wages when employers do not have the option of offshoring. However, employees typically lose this power when employers possess an offshoring threat, culminating in wage deduction. Leveraging a panel set of data obtained from 18 OECD countries during the period 1975–2017, we have empirically confirmed these hypotheses by comparing the first phase of globalization—not characterized by an offshoring threat—with the second phase, which entails an offshoring threat. Our findings reveal that workers’ bargaining power, positively affects labor share in the first phase; however, it loses its effect in the second phase when offshoring exerts its negative effects on labor share. We conclude that a qualitative change in globalization with increased offshoring radically changed industrial relationship through the threat effect.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Thomas Stubbs ◽  
Alexander Kentikelenis ◽  
Rebecca Ray ◽  
Kevin P. Gallagher

Abstract Among the drivers of socio-economic development, this article focuses on an important yet insufficiently understood international-level determinant: the spread of austerity policies to the developing world by the International Monetary Fund (IMF). In offering loans to developing countries in exchange for policy reforms, the IMF typically sets the fiscal parameters within which development occurs. Using an original dataset of IMF-mandated austerity targets, we examine how policy reforms prescribed in IMF programs affect inequality and poverty. Our empirical analyses span a panel of up to 79 countries for the period 2002–2018. Using instrumentation techniques, we control for the possibility that these relationships are driven by the IMF imposing harsher austerity measures precisely in countries with more problematic economies. Our findings show that stricter austerity is associated with greater income inequality for up to two years, and that this effect is driven by concentrating income to the top 10% of earners while all other deciles lose out. We also find that stricter austerity is associated with higher poverty headcounts and poverty gaps. Taken together, our findings suggest that the IMF neglects the multiple ways its own policy advice contributed to social inequity in the developing world.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Gaurav Nayyar ◽  
Marcio Cruz ◽  
Linghui Zhu

Abstract “Premature deindustrialization” typically reflects the fact that the services sector has grown faster than manufacturing at lower levels of per capita income compared to the past. This paper, based on cross-country data, shows that the rising share of services is largely not driven by a statistical artifact whereby what was earlier subsumed in manufacturing value added is now accounted for as service sector contributions. Yet, this matters less for development opportunities because features of manufacturing that were thought of as uniquely special for productivity growth are also shared by some services. And the growth of these high-productivity services is not closely linked to a manufacturing base as it draws on both intermediate demand from other sectors as well as final demand from home and abroad. The prospect of services-led development in lower-income countries however, is limited by the fact that a given service subsector is unlikely to provide opportunities for productivity growth and job creation for unskilled labor simultaneously.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Nelson H. Barbosa-Filho

Abstract This paper presents a partial equilibrium model that integrates interest rate arbitrage with the balance-of-payments constraint to determine the real exchange rate. The sequential logic is the following: (i) carry-trade determines the term premium, with the spot rate showing greater volatility than the forward rate, (ii) uncovered interest rate parity determines the spot rate based on the real exchange rate consistent with a financial constraint, defined as a stable ratio of foreign reserves to foreign debt; and (iii) the trade balance consistent with the financial constraint determines the long-run real exchange rate for a given ratio of domestic to foreign income.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Serhan Cevik ◽  
Manuk Ghazanchyan

Abstract While the world’s attention is on dealing with the COVID-19 pandemic, climate change remains a greater existential threat to vulnerable countries that are highly dependent on a weather-sensitive sector like tourism. Using a multidimensional index, this study investigates the long-term impact of climate change vulnerability on international tourism in a panel of 15 Caribbean countries over the period 1995–2017. Empirical results show that climate vulnerability already has a statistically and economically significant negative effect on international tourism revenues across the region. As extreme weather events are becoming more frequent and severe over time, our findings indicate that the Caribbean countries need to invest more in adaptation and mitigation in order to reduce vulnerabilities.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Bilge Erten ◽  
Oliver Schwank

Abstract We revisit unconditional convergence within manufacturing with a focus on differences in technology intensity across industries. For Latin American and Sub-Saharan African economies, we observe that low-technology and medium-technology intensive industries experience a significantly slower convergence in comparison to high-technology intensive ones. In contrast, we find no evidence of a significant differential for low-technology industries’ convergence in Asian economies, and if anything, we see that medium-technology intensive sectors experience a faster convergence than high-technology industries. In developed economies, we observe that while low-technology industries experience a slightly slower convergence, medium-technology industries converge at similar rates to high-technology industries. We also find that these differences emerge during the period of increased global integration, which exposed developing economies to increased competition both from advanced markets and fast industrializers within the developing world. Finally, we show that differential convergence patterns are stronger after the peak of manufacturing employment share has been reached. We discuss the implications of these trends for the future of development policy making.


2020 ◽  
Vol 11 (2) ◽  
Author(s):  
Martin Rapetti

Abstract This paper offers a systematic survey of recent research evaluating the impact of the level and volatility of the real exchange rate (RER) on economic growth. Existing empirical work finds a positive association between RER levels and economic growth, especially in developing countries. This relationship appears to be driven by cases of overvaluation hurting and undervaluation favoring growth. RER volatility, in turn, has a negative impact on growth. Together with the review of the literature, panel growth regressions with the 9.0 version of the Penn World Table database are carried out to evaluate previous findings. The paper also surveys the literature studying the mechanisms that explain the positive growth effect of the RER. One of them emphasizes that an undervalued RER reduces macroeconomic volatility, favoring capital accumulation and growth. Another one stresses that a competitive RER stimulates capital accumulation in modern tradable activities, facilitating structural change and economic development.


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