Sidney J. Gray and Helen Kang
This chapter explores accounting transparency as an important aspect of corporate accountability. After defining accounting transparency and identifying factors that influence it, the chapter considers the debate between providers and users of accounting information on how transparent accounting information should be defined, measured, and reported. It also discusses the roles of international standard-setting organizations in promoting accounting transparency as well as measures of accounting transparency, including disclosure level and market reactions. Finally, it looks at future prospects for setting international accounting standards, paying particular attention to International Financial Reporting Standards.
Adapting Regulation to Globalization: A Typology of Approaches to the Internationalization of Regulation
With the progressive emergence of an open, dynamic, and globalized economy, the internationalization of rules has become a critical issue. Governments increasingly seek to exploit the benefits of globalization by eliminating unnecessary regulatory divergences and barriers and ensuring greater coordination of regulatory objectives. Intensification of global challenges, such as those pertaining to systemic risks (financial markets), the environment (air or water pollution), human health (COVID-19 pandemics) and safety, is also leading to growing regulatory cooperation efforts as a key component of risk management strategies across borders. Regulation increasingly transcends its domestic nature to become transnational and international through a wide variety of mechanisms. At the same time, concerns over the loss of sovereignty and perceived negative impacts of openness are constraining greater regulatory cooperation. This chapter explores the range of possible approaches to the internationalization of regulation and provides evidence on their use, merits, and challenges, building on OECD work on international regulatory cooperation.
Alfred E. Eckes
This article deals with the administration of trade policy. It examines the individuals, ideas, and institutions that shape the trade regulation process. It focuses on the rules-based global trading system (World Trade Organization) and how the United States and other leading nations implement their obligations. It also provides readers with extensive bibliographical information, so that they can learn more about technical aspects of this broad subject.
Mark R. Thomas and Marcelo M. Giugale
African economies did not accumulate serious debt until the 1980s, when unprecedented export credits and development lending combined with slowing exports to send debt ratios climbing. This build-up became exponential in the 1990s. Influenced by defaults elsewhere, particularly in Latin America, early discussions of debt relief for Africa emphasized attracting private capital rather than writing off debt outright. The original 1996 Heavily Indebted Poor Countries (HIPC) initiative reflected this gradualism; only upon its 1999 enhancement did Africa receive real relief. By 2005, and the announcement of the Multilateral Debt Relief Initiative (MDRI), HIPC relief approached US$40 billion. By 2014, African debt relief in total was of the order of US$120 billion, with tangible effects on economic stability and on anti-poverty spending. This newfound economic stability has in turn ushered in increased mineral exploration and discovery, with a resulting boom in spending and borrowing on international markets, which could yet lead to new debt distress.
This chapter examines the role of Development Banks (DBs) as national and regional financial institutions that provide medium- to long-term capital for investment in various sectors of the African economy, particularly those that private commercial lenders are unwilling/unable to reach. More specifically, it considers the case for and the historical roles of DBs in financing Africa’s economic development. After presenting the generic case made for DBs, the article traces the history of DBs in Africa and discusses policies and practices across the region since independence. It then analyses why the economic rationale for DBs has been apparently unsuccessful in the presence of bottlenecks such as rent-seeking and political patronage. The article also evaluates alternative sources of development financing before concluding with a summary of lessons that can be learned from Africa’s experience with DBs in terms of development economics.
This chapter discusses the experience of African countries with monetary unions, focusing on the CFA Zone where that experience has been the longest and the deepest history of integration. It briefly discusses how the intellectual legacy of colonialism led to distorted expectations and the neglect of the exchange rate—a crucial tool for improving the standards of living in open economies. It then provides the analytical framework for understanding why trade reforms did not yield positive results in the fixed exchange rate environment. The chapter also draws some lessons from that macroeconomics of masochism, which consists in pegging the exchange rate of small, poor economies to a strong currency. Finally, it reexamines the criteria for assessing the validity of monetary unions regardless of whether they peg their currency or not.
This article attempts to provide in a succinct way a road map for those wandering into the territory of agricultural policy and trade. It begins with a brief discussion of the linkages between domestic farm policies and trade policies and the implications of those linkages for world markets. The second section deals explicitly with the treatment of agriculture within the GATT and later the WTO, and considers the significance of the current Doha Round for improving trade rules and lowering protection. A third section considers the situation with respect to regional and bilateral trade agreements, where agriculture has been a reluctant player but has over time been influenced significantly by this trend toward regional solutions to trade problems. A final section gives some indication of where the trade policies and trade rules in agriculture may be heading.
Wandile Sihlobo and Johann Kirsten
South Africa is a semi-arid country with a weak resource base for agriculture which is also threatened by climate change and sporadic droughts. Through the adoption of modern technology, increased productivity growth and new export markets, South African commercial agriculture has shown dramatic growth over the last three decades. At the same time, the sector continues to be characterized by an extreme dualism between predominantly white commercial farmers and mainly black smallholder farmers, and many failed efforts to grow the sector in an inclusive and transformed manner. As a result, the country still has ‘two agricultures’. This chapter unpacks the structural characteristics of South African commercial agriculture based on a freighter-relation of the official statistics. This incomplete picture of the structural and geospatial dimensions of agriculture constrain any sensible policy design and support programmes to bring about a sustainable and transformed sector.
This chapter provides an overview of the agro-processing sector in the South African economy, focusing on the sector’s potential to contribute to inclusive growth through high value-added activities. The chapter shows that agro-processing industries have been the largest subsector of the manufacturing sector in the country since the 1970s, accounting for the largest share of both manufacturing output and employment. Apart from being the largest segment of the manufacturing sector, agro-processing industries have the potential to contribute to the broader national objective of transforming the structure of the economy through the creation of jobs and business opportunities for new small and medium enterprises on both sides of the agro-processing value chains. Employment creation potential lies in the fact that most agro-processing industries are labour intensive. Agro-processing industries, on average, use 40 per cent more labour per unit of capital relative to the manufacturing sector as a whole. However, the challenge is that several of the most labour-intensive agro-processing industries are experiencing declining or stagnating value-added, investment, and, most importantly, employment levels. Consistent and coordinated implementation of strategies which revive dynamism in labour-intensive industries is required to overcome this challenge.
Peter Quartey and Gloria Afful-Mensah
Some authors have stressed the importance of aid in boosting growth, given that poverty levels in most aid recipient countries (particularly sub-Saharan Africa) have continued to worsen in the presence of increasing aid, others have questioned the relevance of aid in enhancing growth. The chapter briefly looks at the trend in aid by the major donors to Africa and the aid architecture in Africa. This is followed by a presentation on the varying arguments in this controversial topic by looking at some issues raised in the development discourse. Given that aid is viewed as a “cultural good” in Africa such that some governments are even evaluated based on their ability to attract aid inflows, a clear consequence of the financial crisis is that many donors have sent signals of cutting down aid which obviously a wake-up call for aid dependent economies (particularly Africa) to look for alternatives sources of finance.
Tony Addison, Saurabh Singhal, and Finn Tarp
This chapter explains how official development assistance (ODA) can help achieve the structural transformation of African economies, and thereby inclusive growth, employment and peace. It begins by looking at research on the link between aid and economic growth and considers how aid can assist Africa better integrate into the global economy. It then discusses the role of aid in Africa’s development strategy after 2015 and argues that investing in more infrastructure, especially for regional economic integration, will make aid a useful instrument to improve both growth and equity across the region. The chapter also highlights the role of infrastructure in building climate change resilience before concluding with an assessment of the future role for aid to Africa.
Enrique Dussel Peters
This chapter focuses on the effects of Mexico’s export-oriented industrialization (EOI) strategy, which replaced the previous import-substitution approach. It argues that since the implementation of an export-oriented approach, GDP growth in Mexico has lagged behind much of Latin America. The country has maintained a trade surplus with the United States, but has had growing deficits with the European Union and Asia. Section 1 of this chapter examines the theoretical and policy proposal of the current EOI developed in Mexico since the late 1980s, also relevant for the implementation of NAFTA in January of 1994. Section 2 analyzes the general trends in the mentioned variables since EOI strategies took place, and particularly for its most export-oriented sector, manufacturing. In this general context, section 3 discusses the structural changes of a specific sector, the yarn–textile–garment commodity chain, in order to understand the conditions and challenges of a concrete sector. This chain will also be useful to understand the specificities of EOI to the United States and the characteristics of Mexican exports in terms of linkages, inputs, and learning processes. Finally, section 4 outlines conclusions and proposals for Mexico’s socioeconomy in the current context of an open and globalized economy.
Are the Geese Still Flying? Catch-Up Industrialization in a Changing International Economic Environment
Inderjit N. Kaur
This chapter examines literature on catch-up industrialization in the context of the experience of the Asian Pacific economies. It provides a summary of the “flying geese” or product cycle model of waves of industrialization and discusses three aspects of catch-up industrialization: shifting manufacturing from consumer to capital goods, increasing sophistication of production, and economy-level development . It discusses a possible new version of the flying geese model and highlights the increased importance of activity-level economies of scale as a result of the disaggregation of production into more specialized and geographically dispersed stages.
Hal Hill and Jayant Menon
This article aims to provide a stand-alone introduction to the Association of Southeast Asian Nations (ASEAN) economies, and traces ASEAN's evolution with a focus on its programs of economic integration. It also evaluates its past performance and, based on this, examines prospects for its future. The article is organized as follows. Section 2 provides an overview of the ten economies and the development of ASEAN as an institution. Section 3 examines ASEAN economic cooperation and integration with reference to merchandise trade, which was the principal focus of initiatives for the first quarter century. Section 4 then investigates a range of “trade plus” measures, including efforts to develop a broader range of closer economic relations both within and beyond the region, against the backdrop of expanded membership, the Asian financial crisis, the rise of China, and rapidly evolving regional commercial architecture. Concluding observations are presented in Section 5.
Peter Petri and Wendy Dobson
Asia is gradually changing the landscape of regional and global economic cooperation. Institutional reforms are underway to respond to its growing economic clout and pluralism. External expectations of Asian participation in collective goals are growing. But Asians have been major beneficiaries of the global economic system, and remain more comfortable with incremental change than with leading new initiatives or with enforcing global norms and rules. This reticence combined with reluctance of existing players to revamp governance structures in global institutions means that the existing order will continue to function. Economic cooperation in many areas, including new areas such as climate change, is therefore likely to be sluggish as countries face tradeoffs between their domestic priorities and the collective interest.
Eiji Ogawa and Chikafumi Nakamura
This chapter examines the behavior of the Asia Pacific region’s currencies through the lens of the global financial crisis of 2008-2009 and the global imbalances that have been a possible contributor to that crisis. It discusses the “savings glut” hypothesis and identifies the possible causes of global imbalances which include the behavior of asset prices and the U.S. fiscal deficits. It also considers the possibility of an Asian Currency Unit (ACU) or Asian Monetary Unit (AMU).
This chapter analyzes and draws lessons from the Asian financial crisis of 1997-1998. It discusses the underlying factors that led to the crises, the differences from the previous balance of payments crises, and the policies that were adopted to control the crises. These policy responses included changes in exchange rate policies, financial sector reforms and, in several cases, external support from multilateral agencies. This article highlights the benefits of adequate foreign exchange reserves and the dangers of overleveraging.
Ottmar Edenhofer, Christian Flachsland, Michael Jakob, and Kai Lessmann
This chapter analyzes global climate policy as the problem of transforming governance of the atmosphere from an open-access into a global commons regime. This involves several challenges. First, setting an atmospheric stabilization goal requires balancing risks of climate change and risks of mitigation. Second, limiting the atmospheric disposal space for carbon devalues fossil resources and creates a novel climate rent, thus raising distributional issues. Third, policy instrument choice needs to consider the supply side dynamics of global fossil resource markets. Fourth, global climate policy entails strong free-riding incentives. The article reviews incentives for unilateral action and policy instruments as well as alternative conceptualizations of the emissions game that may somewhat alleviate this collective action problem. Finally, the literature on fiscal federalism and fiscal decentralization is considered, promising novel perspectives on designing an efficient decentralized governance regime of the atmospheric commons.
This article reviews commercial policies in Australia, examining both long-term trends and recent developments. Australia is fortunate in having time series that are long and of excellent quality. Indeed, they are probably as good as those available in any other country. These enable analysists to track changes in commercial policies in detail and to describe the distribution of the rates of assistance across industries. The review given in this article covers trade in services as well as trade in goods and the international movement of capital and labor, and considers the style of policy-making.
Abstract: The importance of the financial sector is widely recognized by the public––who use and benefit from the products and services of the different financial industries––bank loans, insurance products, investments, and the payments system (to name a few). This chapter describes the different financial intermediaries, financial auxiliaries, and financial market infrastructure that comprise the sophisticated South African financial sector. Emphasis is placed on the banks whose liabilities (deposits) are uniquely the means of payment (money) and whose assets are loans to businesses, households, and the government. The role of banks is straightforward, but their basic fragility and risks they face in an uncertain world are complex. Failure of a major financial intermediary within the context of a deeply integrated system will have significant costs for the rest of the economy. For this reason, regulation tends to err on the side of caution, where stability is prioritized. This leads to a system where conservativism rules and profitability for the systemically important institutions is virtually assured. The chapter argues for greater awareness of the regulatory compromises given that the success of the sector is not costless to society.