Economic policy

Globalisation forces all countries to become more competitive by shifting capital and labour to new economic sectors. However, while it is widely accepted today that proactive industrial policies are needed for such structural change, there is disagreement to what extent low and middle-income countries are also able to design and implement such policies without ending up with perverse incentives for investors and bureaucrats, the creation of rents and less allocative efficiency. This discussion paper looks at the experience of Egypt with industrial policies during President Mubarak’s last years in office. The country is a particularly interesting case to be studied because it looks back to a long history of very top-down industrial policies, while the last government before the revolution, which had been appointed by Mubarak 2004, embarked on a very different, much more market friendly course. The question is thus whether this government, which included a considerable number of big business people, was better able to promote structural change and thereby economic competitiveness without favouring well-connected groups of entrepreneurs at the expense of others.

The paper argues that Egypt’s new industrial policy adopted after 2004 was in fact less interventionist, selective and redistributive than earlier ones and oriented more towards demand, and that it boosted foreign direct investment, exports and economic growth. But this growth was neither pro-poor nor sustainable; it was mainly based on short-term effects and the export of primary goods rather than structural change and innovation. The new government was able to improve entrepreneurs’ access to finance, simplify tax rates and procedures and cut away red tape. But it did not succeed in raising the technology contents of Egyptian exports, firms’ business sophistication and technology absorption, and the level of applied research and innovation.

The main reason for this failure is that the business men in office apparently did not understand that many small and medium enterprises face very other problems than themselves and that the causes of these problems are too fundamental to be relieved just by a change in economic policies. These causes include significant deficits in the quality of education and training in Egypt, in the rule of law, in the transparency and fairness of administrative and judicial procedures, in private sector representation and in the availability of affordable land for production. In addition, the government missed to help overcome failures in the coordination of investors that typically prevent structural change.

Journal of Economic Perspectives-Volume 13, Number 3-Summer 1999-Pages 3-22 ... I n the 1960s, Africa's future looked bright. On the basis of Maddison's (1995) estimates of per capita GDP for a sample of countries, during the first ...

This paper analyses the determinants of transport costs for intra-Latin American trade over a period of six years (1999-2004). The data refer to yearly disaggregated (SITC 5 digit level) maritime trade flows on 277 trade routes. With this data set, a transport costs equation is estimated using linear regression analysis in a panel data framework. The first contribution to the

Introduction In the middle 3-4 months of 1994 interested observers and an expectant electorate were treated to regular accounts of progress in finalising the RDP White Paper (WP). Originally scheduled for release in mid-July, the WP was finally published on September 21 after many last minute differences, both within the Government of National Unity (GNU) and the ANC-alliance, were ostensibly settled. We were treated during this period to rumours of conflicts and tensions between 'pragmatists' and 'socialists' allegedly battling for the 'soul of the ANC; of policy differences between 'conservatives' and 'interventionists' in the GNU; of deep methodological and ideological differences between the two sets of economic modellers used by the government (the 'supply-side' Development Bank of Southern Africa/Central Economic Advisory Service (DBSA/CEAS) team on the one hand and the 'demand-led' Macro-Economic Research Group/National Inst...

Spatial price dispersion varies because of climatic fluctuations, marketimperfections, economic growth or economic policies. These variations areoften neglected in poverty studies.In this paper, we propose a simple simulation formula to assess the effecton poverty of a change in the spatial mean or spatial variance of price indiceswithout having to model each household situation. This approach constitutes aconvenient first step of the analysis of the impact of change in pricedistributions before more sophisticated investigation of causality structures andhousehold heterogeneity.

This paper presents and evaluates two interpretations of the eastern German labour market. These interpretations are called `wage gap’ and `innovation gap’. The former follows standard neoclassical thinking and regards high eastern German unemployment as the consequence of too high a wage level. The latter follows endogenous growth theory and regards a lack of product innovations as the main constraint on output and employment growth in the eastern German economy. The paper argues that the `innovation gap’ explains the facts much better than the `wage gap’. From this, the paper draws conclusions for economic policy: given the high interregional mobility of the workforce and the erosion of collective bargaining in eastern Germany, the wage level is not an appropriate policy instrument anymore. Instead, policy should aim at strengthening the innovative power of the eastern German economy by supporting research and development in the region.

En septiembre de 2007 se hizo evidente una grave crisis financiera en los países desarrollados debido a graves errores de política económica. Aun contra su propia ideología, los gobiernos no han escatimado medidas para reducir sus efectos, no han logrado contenerla y avanza hacia una recesión mundial de profundidad y duración inciertas. Ya ha producido cambios en los paradigmas teóricos y prácticos que han dominado la academia y la política en las últimas tres décadas. También tendrá fuertes efectos en los frágiles equilibrios económicos, sociales y políticos de los países en desarrollo, en particular de América Latina por su dependencia de la producción de materias primas, remesas y flujos de capitales externos que se están reduciendo rápidamente. La crisis llevará a una nueva relación Estado-mercado y a nuevos paradigmas con fuerte influencia keynesiana, y de ella nacerá una nueva oportunidad para América Latina si logra consolidar una nueva manera de gestionar su economía.

this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org. I.

This paper examines the struggle economists in interwar Australia faced in coming to terms with new ideas on economic philosophy and whether they, in fact, registered upon Commonwealth economic policy. After being unusually great in 1931, with the Premiers' Plan, the significance of economists waned as political complacency, brought about by the recovery itself, took over. Economists reasserted their influence,

To control supply and demand rice and increase income to farmer, Government assigned a rice purchasing policy. This study apply 2SLS model with time series data 1971-2009 to simulate and forecast the impact of rice purchasing policy on farmer welfare.
The responses of rice real price at farmers' level towards the changes of real price of government purchases and rice production is elastic in the long term. Demand off rice is significantly influenced by the price of rice, population, and demand for rice at t-1.
The increasing of rice purchasing price (HPP) on grain at 9.54% and 15% lead to an increasing of farmer's surplus IDR163,512,308,700 and IDR257,292,128,790.
Keywords: Rice Purchasing Policy, Income, Simulation, 2SLS, Farmers' Surplus Index

This paper aims to evaluate the relevance of different types of macroeconomic general equilibrium modelling for measuring the impact of economic policy shocks on the incidence of poverty and on the distribution of income. In the literature three approaches are identified. The first is ...

The recent revitalization of concern for environmental quality has generated many questions about the interaction between trade and the environment. Most of these questions have to do with the impact of environmental regulation on trade patterns and gains from trade. If a tradeoff is perceived, it is often argued that some intervention becomes appropriate: either a specific trade policy or the establishment of an international environmental standard. Present GATT policy then becomes an issue of debate. Should GATT revise its rules to accommodate the specific trade measures suggested? How can GATT ensure that the environmental objective is not a disguise for a trade barrier? Should GATT establish some international environmental standard with procedures to ensure compliance? The importance given to trade liberalization and exchange rate policy reform as part of adjustment for development has raised another set of questions: Is there a direct link between the removal of trade barriers...

This chapter critically questions the ‘naturalisation’ of recourse to the market, namely, the process by which market devices and financial techniques were established and became unchallenged and uncontroversial technical issues. The management of public debt in financial markets was initially one among many strate- gies, and market devices became a naturalised way of financing the state only after long ideological struggles and administrative change.
Drawing on sociological studies of the long-term effects that the development and legitimisation of technical instruments have on public policy,4 I analyse state financing techniques as the products of a histori- cal process, which varies across countries and institutional contexts. The apprehension of the sovereign debt problem cannot be reduced to measures such as debt-to-GDP ratios ; for political and institutional constellations do matter. Throughout history, there have been multiple, non-market, professional tools and administrative apparatuses, which financed public spending and deficits.

The paper reveals the mechanism of anti-inflationary policy of the John Major's conservative government in the UK in the 1992-1997. The author zeroed in on the political and economic innovations, as well as evaluating the effectiveness of the inflation targeting policy.
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В статье раскрывается механизм антиинфляционной политики консервативного кабинета Джона Мейджора в Великобритании в 1992-1997 гг. Основное место автор уделяет описанию политических и экономических новаций правительства, а также оценке эффективности нового курса.