Competing in Capabilities

In 2004 the United Nations University World Institute for Development Economics Research (UNU-WIDER) embarked on a large-scale research project on the ‘Impact of Globalization on the World’s Poor’ co-directed by Machiko Nissanke and Erik Thorbecke. The first conference was essentially conceptual in nature, meant to understand better the various mechanisms and channels through which globalization affects the poor either directly or indirectly. The other three conferences focused on each of the major regions of the developing world: Asia, Africa and Latin America. Theobjectivesofthisintroductionarethreefold:first,toreviewbrieflyhow the forces of globalization influence poverty in general; second, to describe and discuss the main transmission channels and mechanisms; and third to analyze the impact of globalization on Africa and present an overview of the six Africa case studies included in this issue. 1. The Impact of Globalization on the World’s Poor Globalization provides a strong potential for a major reduction in poverty in the developing world because it creates an environment conducive to fastereconomicgrowthandtransmissionofknowledge. 1 However,structural factors and policies within the world economy and national economies have impeded the full transmission of the benefits of the various channels of globalization for poverty reduction. In particular sub-Saharan Africa (SSA) hasbeenrelativelylessaffectedbytheforcesofglobalizationthanotherparts of the world. World income distribution continues to be very unequal and many poor countries particularly in Africa are stagnating. Moreover, there is much empirical evidence that openness contributes to more within-country

This paper analyzes the effects of changes in relative commodity prices on the distribution of income among factors of production in the context of two models of a simple, two-good economy. In the first model capital is treated as a specific factor in each industry, with labor mobile between industries. The assumption of specificity determines the direction of factor income changes, with magnitudes depending on substitutability between factors and on intensities of factor use within the two industries. In the second model, capital is viewed as a quasi-fixed factor. For the short run, this model is identical to the model first considered. For the long run, this model is identical to the Stolper-Samuelson model in which the direction and magnitude of factor income changes depend solely on relative factor intensities. The difference between the short-run and long-run determinants of changes in factor incomes gives rise to a conflict between factor owners' short-run and long-run interests.

Real Exchange Rates in Transition Economies

<p>Vietnam is an economy in transition that has encountered a great deal of obstacles and issues shifting to the market tract. Due to a lack of synchronized legal systems, and the legacy of stagnant economic development and low efficiency dating from the wartime, it has been even more difficult for Vietnam to adapt itself to the new context of globalization. Since Doimoi however, Vietnam has witnessed gradual but important changes in thinking and action. In order to apply the model of “socialist market-oriented economy” in practice, Vietnam enacted the Vietnam Competition Law (VCL) in 2004. After nearly a decade of being in force, the VCL (2004) has attracted lots of critique over its outdated and inappropriate content. In contrast, a number of comments from economic experts and academia still express supportive attitudes and highly appreciate the introduction of the law in 2004. Competition-related issues are now an important concern in the domestic market and the law has strengthened Vietnam’s integration into the regional and global economy. This thesis identifies the factors determining the promulgation of the VCL (2004). It argues factors came from both internal and external sites. Changes in economic political thinking and negative experience in the national economy for a long period are found to be the main forces for the promulgation from a domestic perspective. While entering a number of regional organizations like ASEAN and APEC and indirect pressure from application for entrance into the WTO and negotiation with the U.S. under the Bilateral Trade Agreement are the main forces from an external perspective. The thesis shows how both external and internal factors contributed to and interacted with each other in the enactment of the VCL (2004). It finds these forces were harmonized in a way that met Vietnam’s international obligations and desire for deeper integration with the global economy while also meeting the requirements of competition law in a transitional economy. These findings suggest further study on the process of harmonization of external and internal forces in the area of competition policy is needed to understand better the process of introducing competition policy in transitional economies.</p>

The role of transnational corporations (TNCs) in the former socialist countries, the ‘transition economies’, can be analysed from various perspectives. A political-economy perspective would look primarily at the political and socio-economic consequences of the policies of these key global actors for the transition economies with the aim of understanding how they influence, for example, income distribution. A trade-policy approach would reveal the impact of integration of the former socialist countries into the interconnected web of the global markets on the global trading regime and on changes in the international division of labour. An entrepreneurial perspective would include the specific motivations of the international firms in the region, how their production, marketing and management practices in the transition economies differ from those in other parts of the world, and also the cost-benefit analysis of their activities. A systemic approach would look at the role and contribution of the TNCs to the institutional transformation, both at the enterprise level and in relation to building state structures, and would scrutinize the contribution of the transnational sector to the economic modernization process of those countries. A macroeconomic approach would raise such issues as the role of foreign capital inflows in savings, investments, exchange rate movement and in the balance of payments. There is, of course, another dimension — looking at the international expansion of the new private firms in Central and Eastern Europe and in Russia, at their external internationalization. In fact, an organic integration of those countries into the global economy would imply not only the ‘inward internationalization’, meaning the foreign direct investments in their territory, but also the international expansion of their firms.KeywordsForeign Direct InvestmentHost CountryJoint VenturisForeign FirmTransition EconomyThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

It is argued that the development of small economic enterprises is vital for transitioning economy (Gibb 1993; Gibb and Haas 1996). Small businesses provide an outlet for many specialized workers to start their own firm, thus providing foundation for newly transitioning economy (Erutku and Vallee 1997). This philosophy has led to a very substantial growth of the micro-small business sector over the past half-dozen years (Charap, quoted in Gibb 1993, p.461), and this growth is the reason for the expansion of many new firms, particularly in the service sector (Gibb 1993). Tourism development is playing strong role in the service sector boom. Research suggests that the industry can be an area of high growth during economic transition, due to the low requirements of human capital needed to gain entry (Szivas and Riley 1999). Academics have become interested in studying the interaction among firms, both large and small. Network theory, as applied to the business world, views businesses as spatial nodes and the interactions between them as linkages. Most academic literature on this topic is focused on manufacturing. A very small literature exists on the use of networks in the service sector, and even less on the sector. The greater attention to the manufacturing sector in networking studies is probably due to the historical importance of manufacturing in global economic development (Roehl 1998). However, with the service sector playing more prevalent role in the global economy, research pertaining to service sector networks is growing (Afford 1998; Echtner 1995; Roehl 1998; Selin and Meyers 1998; Shaw and Williams 1998). Whereas manufacturing firms network mainly for the purposes of resource and product development, service firms tend to enter partnerships more for marketing and training purposes. Afford (1998), for example, focuses on how regional tourist boards seek to establish market position, and how they benefit from networking with other sectors of the industry. Selin and Meyers (1998) investigate network usage by examining regional public/private association between agencies and public land management bureau. The goal of this article is to combine the fields of small business behavior, transition economies, and development. Specifically the reorganization of the industry within transition economy and the usage of networks by small businesses will be analyzed in case study of the Slovak Republic. Geographic differences between these small businesses and their use of networks will be an underlying theme of this research. Tourism in East Central Europe in the 20th Century East Central Europe is currently in political and economic transition. The post-WW2 adoption, and in most cases the recent dismissal, of communist ideology, will be briefly discussed within framework. The century will be divided into three periods: pre-social tourism, tourism, and post-social tourism. According to Vuoristo (1981), demand for in East Central Europe was relatively low before the 1950s. This was in part due to low disposable income among the local population and lack of interest from outside the region. A few exceptions existed, however, such as the isolated spa resorts found in East Central Europe that catered to the wealthy west Europeans and nobility. Thus, during this period domestic was almost nonexistent, and international tourists were few and spatially concentrated in spa regions. During the communist era, tourism's potential was eventually realized, demanding need for the formation of state-controlled agencies to administer activities (Kreck 1998). Domestic tourism, which was stressed over international tourism, was seen as necessary activity for the working masses, and has been dubbed social tourism in the literature (Allcock and Przeclawski 1990; Hall 1993, 1991). …

India's behavior in the global economy has transformed considerably, consistent with its embrace of economic globalization and deregulation since 1991. Until then, India had practiced a type of economic engagement that Stephen Krasner (1985) characterized as structural conflict. Its capacity to tax citizens was dismal. Its trade as proportion of gross domestic product (GDP) hovered around 16% in the 1980s, impeding growth. And, economic resources were redistributed authoritatively rather than through trade. India, like many developing countries, was locked in economic conflict with the West until the 1980s. Since then, it has embraced global economic integration, contributing to surging economic growth. An economy that grew at an average of 3.5% between 1956 and 1975 has grown at more than 6% since 1980 and over 7% since 2004. India is one of the fastest growing economies in the world after China, and the gap between the two countries is shrinking. In this paper, I argue that the transition from structural conflict to what John Ruggie (1982) described as embedded liberalism is the key to India's tryst with globalization. Embedded liberalism has driven the country to make decisions to spur growth and welfare within a secure international environment. Whether or not the BRICS will evolve as a coherent group will depend to a great extent on the texture of Sino-Indian relations. While structural conflict characterized Third World behavior, especially that concerning the demand for a New International Economic Order, there was nothing inherently antithetical in India's state–society relations that impeded its embrace of the global economic order. Rather, if India was locked in structural conflict with a liberal economic order on a variety of trade and financial issues until the 1980s, it was because this was what the government considered the most prudent strategy of global economic integration. When the government viewed …

With the rise of China in the world economy, businesses from all over the world have moved to explore business opportunities in this market. Managing international business in a transition economy like China is a daunting challenge. Xiaowen Tian presents a practical guide to major managerial issues faced by foreign investors in the China market. These issues are analysed in the light of relevant theoretical models of international business, with reference to current management practices of transnational corporations operating in China. Featuring up-to-date case studies, figures, tables, and coverage of new and expanded topics, this second edition can be used as a textbook for undergraduate and postgraduate programmes in international business or other management disciplines, as well as in executive training programmes.

With the rise of China in the world economy, businesses from all over the world have moved to explore business opportunities in this market. Managing international business in a transition economy like China is a daunting challenge. Xiaowen Tian presents a practical guide to major managerial issues faced by foreign investors in the China market. These issues are analysed in the light of relevant theoretical models of international business, with reference to current management practices of transnational corporations operating in China. Featuring up-to-date case studies, figures, tables, and coverage of new and expanded topics, this second edition can be used as a textbook for undergraduate and postgraduate programmes in international business or other management disciplines, as well as in executive training programmes.

With the rise of China in the world economy, businesses from all over the world have moved to explore business opportunities in this market. Managing international business in a transition economy like China is a daunting challenge. Xiaowen Tian presents a practical guide to major managerial issues faced by foreign investors in the China market. These issues are analysed in the light of relevant theoretical models of international business, with reference to current management practices of transnational corporations operating in China. Featuring up-to-date case studies, figures, tables, and coverage of new and expanded topics, this second edition can be used as a textbook for undergraduate and postgraduate programmes in international business or other management disciplines, as well as in executive training programmes.

Trade and Industrial Policy of Transition Economies

Conclusions * South Asia, with a quarter of the world's population, a demonstrated weapons of mass destruction (WMD) capability, great economic potential, and chronic instability, can no longer be regarded as peripheral to U.S. global interests. * Achieving peace and stability, particularly in and between India and Pakistan, is the overarching U.S. interest in South Asia, and we need a well-considered, long-term strategy to pursue it. * The United States needs to avoid the episodic, single-issue pattern of its past interaction with South Asia. * Sustained, broad-based engagement, based on a thorough review of U.S. interests and regional realities, will preserve and enhance U.S. interests. * A presidential visit to all the major countries of the region could signal our commitment to long-term engagement focusing on Indo-Pakistani rapprochement, good governance, economic advancement, and sane management of the region's nuclear capabilities. With President Clinton's visit to South Asia, the forthcoming transition in the White House, and Indo-Pakistani relations in near crisis, a review of U.S. policy toward that region and options for the future is warranted. We need to reevaluate what our fundamental interests in South Asia are, because they have changed significantly from what they were when these countries gained independence at mid-century and especially since the end of the Cold War. South Asia is hardly a vital U.S. interest, but it has become much more important. The unchecked Indo-Pakistani arms race poses risks of nuclear conflict and undermines nonproliferation regimes in other regions; Afghanistan and Pakistan are grappling with forms of militant Islam that have global reach; and the stability and development of the region have an important impact on U.S. interests in China, the Persian Gulf, and Central Asia. We have to honestly assess where we have been right and wrong--know the history but not be its prisoner. The days are gone when we can afford to view the subcontinent as a backwater in our global strategy. U.S. Interests in South Asia The bedrock U.S. interest in South Asia has been and will continue to be peace and stability within and between the nations of the region (India, Pakistan, Bangladesh, Sri Lanka, Nepal, Afghanistan, Bhutan, and Maldives). If peace and stability prevail, the United States can make progress not only on nonproliferation, economic reform and development, trade liberalization, democracy/ governance, human rights, narcotics, terrorism, and World Trade Organization issues--indeed, on all of these issues, with enormous benefit for our vision of a prosperous, democratic South Asia integrated with the global economy. Without peace and stability, little can be accomplished on any front. South Asia Realities By focusing serially upon the Cold War, the green revolution, the quest for global and regional nonproliferation, and the importance of human rights over the last fifty years, we have had a distorted perception of the realities on the ground. The absence of an across-the-board approach has hampered the development and implementation of a coherent, successful policy in pursuit of U.S. interests. In any reconsideration of U.S.-South Asia policy--it is important that we begin with a reality check. * Tensions between the region's two largest countries, India and Pakistan, are high. Hostility over Kashmir--three wars in 52 years--holds the region hostage. Resolving Indo-Pakistani tensions is the sine qua non of long-term peace and stability. Both nations have nuclear weapons and delivery systems; neither will give them up. A confrontational approach by the rest of the world demanding renunciation of nuclear capability only aggravates the problem of achieving restraint, as demonstrated by our unsuccessful nonproliferation efforts set against the realities of internal and regional politics. …

Accounting for Skill Premium Patterns During the EU Accession: Productivity or Trade?

Energy security, climate change and food and water concerns are posing serious challenges to the management of international relations in an already turbulent world. These new developments—and the corresponding risk management strategies—will change the calculus of interests, powers and strategies for all actors, with significant impacts on the global political economy. Climate change action (such as targets for emissions reductions) will challenge the existing power structures, with the transition to a low-carbon economy creating new winners and losers in the global economy. Today, there is a fresh appreciation about the consequences of bad policy choices. Comparisons have been drawn between the fallout in the global financial system and the kind of risks that unmitigated climate change may bring. Even though the pressure on some resources may have eased since the onset of the global economic downturn in 2008, it is unlikely that the longer term trajectory has been reversed. This calls for renewed understanding and appreciation of the magnitude of risks foreseen. Multiple public goods need to be generated from the same production systems or sectors. In the context of climate change, international cooperation offers the only option that can best serve even narrowly defined national interests. Ensuring human security and peaceful relations among states in the decades to come will require short-term common action within the framework of long-term strategizing and visionary leadership as well as concerted efforts to deal head-on with worst case scenarios in our forecasting and policy planning.

This article addresses the concept of social capital: in particular, where social capital stands today, how it interacts with other factors in international development, and how it will contribute to economic growth and poverty alleviation in the future.