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In a paper recently published in this journal [ 31 we have shown that the export performance of firms’ is positively correlated with their size; large firms tend to export a higher proportion of their output than do small firms. The theoretical explanation of this empirical finding was based on both the theory of monopoly and the theory of the firm facing uncertain demand. We assumed that foreign demand is more elastic and more risky than local demand. Large firms will export a higher proportion of their output since (a) their size gives rise to ‘excess’ output which is sold in markets where the demand curves are both low and elastic, and (6) they are more willing (or able) to assume the higher risks involved in exporting. The latter hypothesis was based on the assumption that firms are risk averse, and that their utility function is characterized by decreasing absolute risk aversion. In this paper we construct a similar model in order to analyse the effect on exports of firms following from the estab!ishment of trade blocks. Again, we distinguish among industries, but the main explanatory variable is the size of the firm. We show that in general smaller firms will react more vigorously to the creation of trade blocks than will large firms, i.e., they will sell a higher proportion of their total output and total exports in the protected markets. Section II contains the model. In Section III some empirical evidence on the relation between size and export distribution between protected and nonprotected markets is presented. The definition of a protected market in the context of this paper is questioned in Section IV, where we discuss and demonstrate alternative definitions. The paper concludes with some remarks on policy implications following from the model and the empirical findings.

This paper comprises a bald presentation of some results of an enquiry into the choice of technology in the sugar and footwear indutries in Ethiopia and Ghana, and a bold examination of some implications of these results. The baldness can be justified by the need for brevity and the fact that more complete results, more fully described, will shortly be available; the boldness by the desire to focus attention on a number of issues which can stand airing in provocative form. The paper is organized in three parts. The first provides a brief theoretical introduction (to help fix ideas); the second describes the research and presents the results; and the third considers some equations raised by the findings.

In this paper, I wish to defend the following hypothesis: the relative excess of labor that has traditionally characterized Latin American labor markets has been decreasing at least since World War II. The occupational situation, though still quite serious, has been improving considerably in most Latin American countries, not deteriorating, as is commonly regarded to be the case (the orthodox position).

After reviewing the distortions which inflation brought about in Brazil, the authors describe the indexing system which was introduced during the sixties to prevent such distortions and to build up a capital market. There follows an analysis of the impact of indexing on various types of savings instruments, on the distribution of credit and on the balance of payments. The last section of the paper deals with the effects of indexing on inflation, resource allocation, income distribution and the collection of adequate data.

The patent monopoly is abused when the economic and social objectives of the patent system are jeopardized by the behaviour of the patentee. The monopoly could be abused by: Insufficient disclosure of the invention; lack of use or inadequate use of the patented invention; and abusive practices in licensing agreements. The paper considers the legal remedies towards controlling abuses with especial emphasis on the compulsory licensing system. It shows that the compulsory licensing remedy has proved to be unsatisfactory and that a thorough re-examination of the subject, at the national and international levels, is called for, bearing in mind the needs of developing countries.

Economic development can be not only facilitated but its pace can be quickened by the appropriate development of the financial system. This paper indicates the broad contours of a set of financial policies essential for the evolution of a sound and well-integrated financial system and emphasizes the role of a central bank not only as a regulator but also as a promoter of such a system. It is strange that this dual role of central banks is not sufficiently appreciated by the international institutions like the World Bank and the International Monetary Fund.

Observers have argued that, although Bangladesh has not yet experienced the Green Revolution in any real sense, the Comilla co-operative experiment has been fairly successful not only in the adoption but also in the equitable distribution of the benefits of the new agricultural technology, and that the spread of the Comilla-like diffusion programmes can be expected to yield similar results in other parts of Bangladesh. This paper contends that the Comilla experience does not lend support to such optimism.

The increasingly popular strategy which postulates that a redistribution of income can automatically produce a higher level of employment and in turn, a better distribution of income, is discussed in this paper with special reference to the industrial sector. On the basis of data from Ecuador, Peru and Venezuela and utilizing a Leontieff type of model disaggregated by technological strata, the author concludes that the redistribution of income does not significantly affect employment in the industrial sector, since the two fundamental assumptions on which the positive results are expected are of doubtful validity. On one hand, the structure of consumption of industrial goods is inelastic to changes in income distribution and on the other, the production of wage goods does not necessarily imply the use of more labour intensive techniques. Given the need to improve the distribution of income, the author maintains that for such redistribution to be used to promote employment creation, special attention should be given to the direction of consumption of those benefited with the redistribution and to the channelling of the additional demand towards those establishments which use more labour intensive techniques.

When discussing technology and emplo);ment policies in China, it may be useful to look at China’s economy as being made up of three different sectors, which are the modern industrial sector, the rural industrial sector and the agricultural sector. The sectors are becoming more closely linked and interdependent with the ultimate goal of establishing a modern economy. However, for the time being, manpower policies and technology requirements differ widely between the sectors. This is due to a number of factors where limited foreign exchange resources, necessity to limit capital requirements, a desire to control urban migration, etc., all play a role. In order to better understand the relation between manpower and technology policies, a few aspects of the Chinese development-as it has emerged-will first be mentioned. This paper will further discuss the technology requirements of the Chinese economy and describe certain manufacturing technologies-cement manufacture, local industrial systems, development of local engineering industry and the rolling-bearing industry-with relevance to the rural industrial sector and the agricultural sector. Finally, some of the needed infrastructure technologies and social technologies are mentioned.

The belief is widely held that the distribution of income in India has become more unequal over the last fifteen years or so. lndia is sometimes cited as an instance of a ‘law’ of income distribution in the early stages of industrialization. The stronger assertion is also made that the percentage of the population living below an ethically or politically tolerable subsistence level has increased; and in the last few years thegreen revolution has been held to be one of the major causes of growing inequality. This paper is concerned with changes in income distribution or .poverty levels over time, rather than with analysis of the structure of income distribution or poverty at any point of time; the latter problems are dealt with in surveys giving more statistical details, particularly those by Bardhan 191, and Mukherjee, Bhattacharya and Chatterjce [ 431. Before analysing the Indian figures, we survey very briefly generalizations drawn from the experience of other countries, since these, rather than the statistics themselves, seem to have led to the belief that inequality has grown in India. 1

This paper is partly a review of an important new work by Professor G. L. Reuber and associates on the economics of private foreign manufacturing investment in less-developed countries (LDCs),’ and partly an attempt to examine some of the larger issues facing the study of such investment. Reuber’s book is an interesting and provocative one, and in this essay 1 shall concentrate on the first 250 pages which contain the analytical sections, and which constitute a vigorous defence of foreign investment in LDCs. The book also contains 5 appendices on its strucNre and distribution, the characteristics of selected projects, the interview procedure and the sources and definitions of the data. The analysis is based on published and unpublished information as well as on direct interviews with about 80 investing firms, and claims to be a major contribution to our knowledge in this field. Private Foreign Investment in Development is the first work which deals exclusively with the general problem of foreign investment in LDCs, and, as such, is destined to become a standard text in the field. The argument and methodology of the book seem academic and thorough, and its tone appears to be neutral and objective. The authors have, however, a large axe to grind: they are concerned to establish the benefits of foreign investment for LDCs, and to prove their case they summarily dismiss many valid criticisms of foreign investment; their conclusions are, moreover, derived from a set of value judgements which are not explicitly defined and which may be regarded as unacceptable by many groups affected by foreign investment. A review of this book may, therefore, serve as an appropriate place to discuss some of the basic values underlying the study of foreign investment. Part 11 uses a simple taxonomy to highlight some of the important elements on which different approaches to foreign investment are based; Part Ill evaluates Reuber’s work in terms of this taxonomy and in terms of his treatment of some specific issues related to foreign investment.

This paper argues that the aspects of the employment problem not taken into account by the conventional efficiency shadow wages used in social cost-benefit analysis is essentially distributional in nature. A poverty redressal index is then developed to take account of these distributional effects. It is a rough and ready measure which does not involve the specification of a full social utility function, and only requires very simple and probably generally acceptable value-judgments about income distribution. Hence, it may be a simple and practical way of taking some account of the important distributional dimensions of projects.