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The Labour government's new White Paper promises great changes in the British aid programme: re-focusing aid on poverty reduction, partnerships replacing one-sided conditionalities, and policy coherence so that the broad gamut of British policies in areas as diverse as agriculture, trade and investment are in line with the needs of international development. However, the Paper is stronger on broad policy statements than detail as to how to implement these strategies. Moreover, an examination of the history of British aid shows continuity to have been greater than change. Both Labour and Conservative governments have presided over cuts in UK aid, and so instead pointed to the high quality of British aid. But efforts to improve aid quality have been impeded by the use of aid to achieve political and commercial objectives. Whether the White Paper represents a break with the past cannot be determined by the Paper's brave rhetoric, but only by the future actions of the Department for International Development. © 1998 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

There is a widespread perception among academic researchers and aid practitioners alike that empirical cross-country analysis fails to find any significant link between aid flows and growth, and that aid is successful only when associated with good policies in the recipient countries. These positions do not stand up to careful scrutiny of existing studies. In this paper, we offer a re-examination of the literature on the aid–savings, aid–investment, and aid–growth relationships, and a comparative appraisal of more recent research contributions. Using an analytic framework for evaluating the empirical work, a coherent and positive picture of the aid–growth link emerges. There is a robust aid–growth link even in countries hampered by an unfavourable policy environment. Copyright © 2000 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Recent economic relations including foreign assistance scenario in Africa show expansion of China and India as emerging bilateral partners, competing with traditional countries in Europe and North America. The results of this paper found that the relationship of China and India with Zimbabwe has resulted in several challenges including increasing resource‐backed debt burden, exploitation of the natural resources, and flouting of constitutional, environmental, and labor provisions. The paper recommends that the Zimbabwean government must demand loans and investments that are contracted under clear terms and conditions, with parliamentary oversight and public scrutiny to avoid abuse by the elites. [ABSTRACT FROM AUTHOR]

Abstract: This paper reflects on the career contributions of Professor Chris Milner to the literature on international trade and economic development. As such, it not only provides an overview of a life's work, but also sets the context for the nine papers which follow. All of these were specially written for this Special Issue of The World Economy, and all relate to different areas that Professor Milner worked in. [ABSTRACT FROM AUTHOR]

This paper explores the empirical relevance of banking market structure on growth. There is substantial evidence of a positive relationship between the level of development of the banking sector of an economy and its long-run output growth. Little is known, however, about the role played by the market structure of the banking sector on the dynamics of capital accumulation. This paper provides evidence that bank concentration promotes the growth of those industrial sectors that are more in need of external finance by facilitating credit access to younger firms. However, we also find evidence of a general depressing effect on growth associated with a concentrated banking industry, which impacts all sectors and all firms indiscriminately. [ABSTRACT FROM AUTHOR]

In a distinguished career spanning more than four decades, Jagdish Bhagwati has made numerous contributions to both trade theory and trade policy analysis. The current paper focuses on Bhagwati's major contribution to the ongoing debate surrounding the influence of trade liberalisation upon economic development and its potential to alleviate poverty in the world's poorest economies. In order to highlight Bhagwati's contributions in these fields we focus on the arguments developed in two of his numerous landmark publications; first his seminal 1964 paper on the Pure Theory of International Trade and, second, his 2004 book entitled In Defense of Globalization. Although separated in time by some four decades we argue that these two publications, despite their very different characters, each demonstrate beyond doubt the significance of Bhagwati's work in improving our understanding of the true nature of international trade and its potential to address questions of global poverty. [ABSTRACT FROM AUTHOR]

The relationship between foreign aid and economic growth has been the subject of much controversy. A recent theme suggesting that aid promotes growth, but only in a good policy environment has ratchet up that debate. In this paper, we assess the importance of policy and aid in generating growth when the aid, policy, and growth relationship is nonlinear. This allows us to examine the varying effects of aid and policy in different data segments, which we do without imposing any particular structure on the underlying relationship. We find that policy is an important determinant of growth. We also find partial corroboration of the view that aid is growth enhancing in a good policy environment, and some evidence of diminishing returns to aid. These findings suggest that nonlinearities if not appropriately addressed fail to capture the detailed underlying dynamics and thereby mask some key features of the aid-policy-growth relationship. [ABSTRACT FROM AUTHOR]

Abstract: As the formal process of Brexit has already started, there is much uncertainty about Brexit's impacts on Britain's social, political and economic future. This paper examines the economic impact. After briefly discussing some significant EU treaties that serve as the background materials, it presents the key arguments advocated by the leave and remain camps. The economic impact depends critically on the negotiation outcomes. Aside from the debate on the divorce costs, there are numerous issues that must be negotiated, such as immigration, trade in goods, services, agriculture, fisheries and financial regulations. We discuss various scenarios of possible new trade regimes, resulting in different impacts on the UK economy. With each side having its bargaining chips to play, the trade‐offs between “give and take” in the negotiation game are analysed. Considering various strategic options, this paper urges rationality and cooperation, especially weighing both sides’ entwined economic interests, in addition to their mutual security, defence, environmental and world concerns. The potential gains and losses in the event where the UK contemplates new trade arrangements with the non‐EU countries are analysed in the Appendix. [ABSTRACT FROM AUTHOR]

The Colombo Plan and Point Four program were programs that provided technical and economic assistance to the newly independent countries of Southeast Asia. They represented Commonwealth and American attempts to promote economic development in the region. This paper will investigate how these policies, which were framed by US policy‐makers and academics, were adopted in Australia. In so doing, it will demonstrate the ways that development was perceived as an important consideration in the foreign policies of both Australia and the United States. It will also examine the place of these programs in the Cold War and postcolonial world of the 1950s. As this paper will show, the interaction of these factors would affect Australian foreign policy for decades to come, revealing much about the complex nature of the Australian‐American relationship. [ABSTRACT FROM AUTHOR]

This paper examines causal relationships between economic globalization, the three indices for product diversification of exports (Theil index, intensive margin and extensive margin) and economic growth in the unbalanced panel data framework in 139 countries over the period 1970-2010. We also consider the subgroup of the countries related to the income levels and run the panel Granger non-causality tests for heterogeneous panels. The empirical results indicate that there is a bidirectional causal relationship between economic globalization and economic growth. There is also a significant causal relationship that runs from all three indices for the diversification of exports to economic growth. After implementing various robustness checks, we observe that diversification of exports and economic globalization are positively related with economic growth merely in the upper middle economies. [ABSTRACT FROM AUTHOR]

There is strong evidence that innovation is a primary driver of a nation's economic growth. As Australia continues to compete in the global economy, it is imperative that businesses should be innovative to improve their performance. In this paper, we evaluate the status and main drivers of innovation in small businesses in the food sector in Australia. Discrete choice modelling and bootstrapping procedures are applied to a panel of firm‐level data collected through the ABS Business Characteristics Survey (2006–2007 to 2010–2011 for the Australian Bureau of Statistics' Business Longitudinal Database Confidential Unit Record File) to investigate the factors affecting the likelihood of small food businesses to innovate. Results show that businesses are more likely to innovate if they collaborate, have higher information and communication technology intensity, and use science, technology, engineering and mathematics skills. We also found that small food businesses, even at the subsector level, do combine different types of innovation when innovating. The propensity to innovate also increases for small businesses that have flexible working arrangements, face moderate‐to‐strong market competition, operate overseas and seek finance through debt and equity. The relative importance of these factors was found to vary between agricultural and nonagricultural food subsectors. [ABSTRACT FROM AUTHOR]

Recent years have seen a sharp growth in the number of regional agreements both concluded and under negotiation. This paper attempts to document and discuss this growth focusing on US, EU, Chinese, Indian and other agreements. The form, coverage and content of these agreements vary considerably from case to case. The paper asks why so many, why the variation in form, and why the recent acceleration. Implications for the trading system are discussed in a final section. [ABSTRACT FROM AUTHOR]

This paper presents a macroeconomic approach to monitoring progress toward achieving the Millennium Development Goals (MDGs) in Sub-Saharan Africa. At the heart of our framework is a macro model which captures key linkages between foreign aid, public investment (disaggregated into education, infrastructure and health), the supply side and poverty. The model is then linked through cross-country regressions to indicators of malnutrition, infant mortality, life expectancy and access to safe water. A composite MDG Indicator is also calculated. The functioning of our framework is illustrated by simulating the impact of an increase in foreign aid to Niger at the MDG horizon of 2015, under alternative assumptions about the degree of efficiency of public investment. Our approach can serve as the building block for Strategy Papers for Human Development (SPAHD), a more encompassing concept than the current ‘Poverty Reduction’ Strategy Papers. [ABSTRACT FROM AUTHOR]

This paper examines the dynamic implications of international trade in a two-sector overlapping-generations economy with endogenous growth. It analyses the global dynamics of this model for both a closed economy and a two-country world economy. It shows how international trade can cause the world economy to sort itself out into groups of fast and slow-growing economies and can also cause one country to catch up and overtake another's growth rate. U thus provides theoretical support for empirical papers which find that the world distribution of income is diverging. [ABSTRACT FROM AUTHOR]

The recent UK White Paper makes an admirable commitment to the idea of ‘partnership’, as the keystone of a new aid relationship with countries committed to poverty reduction and good governance. The concept is a difficult one, however, open to multiple interpretation. Genuine participation means joint ownership, with mutual rights and obligations; and it implies a contractual relationship, with procedures for redress in case of default. Other donors, notably the EU, have travelled this road with mixed success and much back-sliding. Can DFID learn from their experience? Can it devise its own institutional innovations to build true partnership? © 1998 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

In this paper, I explore the possibilities of linking and expanding existing sending and receiving countries' initiatives that mobilize immigrants to participate in the development process of their countries of origin in such a way as to advance two main goals of such initiatives: (1) to multiply their developmental impact in sending regions; and (2) to help increase the social and political capital of immigrants and immigrant associations, so as to facilitate both their role in the development of their countries of origin and also their integration in their host societies. In the paper, I will study the Mexican 3×1 programme and Spain's co-development model and explore the ways in which programmes such as these could be ideally linked and implemented, in diverse contexts, in a way that is advantageous to both sending and receiving societies. The paper is based on research conducted over the past 9 years with Mexican immigrant associations in the United States; on interviews with Mexican government officials in Mexico and the United States; and on interviews conducted in 2008 and 2009 in Spain. [ABSTRACT FROM AUTHOR]

This paper develops a two-period model in which the recipient faces borrowing constraint and the donor is a Stackelberg follower to address two important policy questions: (i) whether foreign aid can lead to the efficient level of capital investment in the recipient country and (ii) how does the form (e.g. budgetary transfers, capital transfer) and the timing of aid affect the recipient's financial savings and capital investment. It finds that the disincentive effect of the capital transfer on the capital investment by the recipient is larger than the budgetary transfers. It makes financial savings more attractive relative to the capital investment for the recipient. In the absence of capital transfer, the multi-period budgetary transfers not only lead to the efficient level of capital investment by the recipient, but also achieve the same allocation as under commitment. The capital transfer can lead to the efficient level of capital investment, but in this case, it completely crowds out the recipient's own capital investment. [ABSTRACT FROM AUTHOR]

The paper reviews the World Trade Organization's analysis of developments in China's trade policy during 2012-14. The review overlaps with the continuing Great Recession and with China's determination to foster a sustainable rate of economic growth. Developments in the country's trade policy include the launching of the Shanghai pilot free trade zone. China faces a series of trade policy-related challenges including the complex process necessary to internationalise the renminbi. [ABSTRACT FROM AUTHOR]

Anderson and vanWincoop developed what has become the standard framework for framing and interpreting empirical work using the gravity model. Their framework relies heavily on an assumption of symmetry among countries. For issues related to North-South trade, this assumption is problematic. In this paper, we develop an asymmetric extension of the Anderson-vanWincoop framework appropriate to the analysis of North-South trade, where Northern countries produce differentiated goods and Southern countries homogenous ones. In addition, we use an appropriately extended version of Baier and Bergtrand and Taylor linear expansion - thus permitting its estimation using (good old) OLS. The result is an empirical model that (i) is better suited to the analysis of North-South trade, (ii) is easy to estimate and compute comparative statics, not requiring a customised NLS routine and, given the way the South is included, (iii) provides a simple explanation of zero trade flows between some country pairs, a fact still not fully explained in the literature. As an illustration of its use, we examine the empirical link between foreign aid and trade. [ABSTRACT FROM AUTHOR]

China's economic development since 1978 is one of the most significant events in recent history. Many aspects of this development have been extensively analyzed in the published literature. However, the implications of China's growth for other countries have been relatively neglected. The present paper attempts to fill this gap in the literature. The paper first presents some facts on China's role in the world economy, and then measures the impact of China's growth on growth in the rest of the world in both the short term and the long term. Short-run estimates based on vector autoregression and error correction models suggest that spillover effects of China's growth have increased in recent decades. Long-term spillover effects, estimated through growth regressions based on panel data, are also significant and have extended in recent decades beyond Asia. The estimates are robust to the effects of global and regional shocks, changes in model specification, and sample period. [ABSTRACT FROM AUTHOR]

This paper examines the effect of foreign direct investment (FDI) on growth by focusing on the complementarities between FDI inflows and financial markets. In our earlier work, we found that FDI is beneficial for growth only if the host country has well-developed financial institutions. In this paper, we investigate whether this effect operates through factor accumulation and/or improvements in total factor productivity (TFP). Factor accumulation – physical and human capital – does not seem to be the main channel through which countries benefit from FDI. Instead, we find that countries with well-developed financial markets gain significantly from FDI via TFP improvements. These results are consistent with the recent findings in the growth literature that shows the important role of TFP over factors in explaining cross-country income differences. [ABSTRACT FROM AUTHOR]

Does the effect of international trade on income growth depend on the economy’s level of development? More specifically, is trade more beneficial to lower income economies? Does trade contribute to a smaller international income inequality? The present paper seeks to answer these questions by employing the empirical model of Frankel and Romer (1999 ), which shows trade increases income growth in a cross section of 150 countries. We find evidence in support of the hypothesis that international trade benefits the lower income economies more than it benefits the higher income economies. This finding is robust in the presence of control variables including distance from the equator and institutional quality. [ABSTRACT FROM AUTHOR]

The scope of the paper is limited by focusing on developing countries in the context of the world economy. We mostly consider the effects of globalization on income levels and a country's rate of economic growth. This focus is supported by studies (Ravallion; Bourguignon) that find that the level of income and expenditures across a continuum of household income categories is positively associated with economic growth, although wealthy households may benefit more than those with lower income. [ABSTRACT FROM AUTHOR]

The paper models the relationship between an aid-providing international financial institution (IFI) and an aid-receiving government whose economic policy choices are influenced by a domestic interest group. Two assistance schemes are evaluated: conditional aid in which the IFI makes assistance contingent on less- distorting economic policies and unconditional aid which is provided without such conditions. Conditional aid is shown to raise welfare of the receiving country and the world as a whole relative to unconditional aid. The paper also examines how conditional and unconditional aid schemes are influenced by the IFI's opportunity cost of providing assistance and the receiving government's political dependence on a domestic interest group. [ABSTRACT FROM AUTHOR]

This paper discusses the photographic representation of disaster in the minority world. It argues that the international image economy has a strong influence on the content of the images produced; this is demonstrated through the analysis of Mekanic Philipos's image as published in the UK at the end of May 2003. The paper critically analyses images of a recent trip by Bob Geldof to Ethiopia in relation to the trade of photographs of the majority world in the international image economy, the photographer's ethnicity, issues of power, ethics and style and a particular public face of development. Copyright © 2004 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Assessing accurately global economic conditions is a great challenge for economists. The International Monetary Fund proposes within its periodic World Economic Outlook report a measure of the global GDP annual growth, that is generally considered as the benchmark nowcast by macroeconomists. In this paper, we put forward an alternative approach to provide monthly nowcasts of the annual global growth rate. Our approach builds on a Factor‐Augmented MIxed DAta Sampling (FA‐MIDAS) model that enables: (i) to account for a large monthly database including various countries and sectors of the global economy and (ii) to nowcast a low‐frequency macroeconomic variable using higher frequency information. Pseudo‐real‐time results over the period 2010–16 show that this approach provides reliable and timely nowcasts of the world GDP annual growth on a monthly basis. [ABSTRACT FROM AUTHOR]

This paper provides a comprehensive assessment of structural change in the world economy. The analysis relies on a newly constructed dataset comprising 169 countries and covering the period from 1991 to 2013. Shapley decompositions are employed to evaluate the pace and pattern of structural change across regions and sub‐regions. Country‐level estimates are then used to conduct an original empirical exercise on the determinants of structural change. The results suggest that labor reallocations (structural change) have played a critical role in enhancing economic performance since the early 2000s, even if they remain comparatively less important than within‐sector productivity improvements. The widespread reallocation of labor from agriculture to the services sectors has been the key driver of structural change. Finally, we find robust evidence that the pace of structural change is significantly shaped by human and physical capital. The policy implication is that investments in education and economic infrastructure are crucial to accelerating structural change. [ABSTRACT FROM AUTHOR]

This paper investigates the business cycle co-movement across countries and regions since 1950 as a measure for quantifying the economic interdependence in the ongoing globalisation process. Our methodological approach is based on analysis of a correlation matrix and the networks it contains. Such an approach summarises the interaction and interdependence of all elements, and it represents a more accurate measure of the global interdependence involved in an economic system. Our results show (1) the dynamics of interdependence has been driven more by synchronisation in regional growth patterns than by the synchronisation of the world economy, and (2) world crisis periods dramatically increase the global co-movement in the world economy. [ABSTRACT FROM AUTHOR]

The article is a commentary on Chia S.Y. and Sussangkarn's "The economic rise of China: Challenges and opportunities for ASEAN." The paper focuses on the relation between China, as an economic giant and the ASEAN countries. Referring to the ASEAN-China Framework Agreement on Comprehensive Economic Cooperation, concluded in 2002, the writers present a thorough discussion of the Sino-ASEAN relation on purely economic terms.

Abstract: Both international and regional economics discuss borders as barriers to economic growth. They hamper trade flows between areas sharing an international border (a demand effect), as well as causing firms’ inefficiency because of the increase in production costs (supply side). In the theoretical and empirical discussions, no question has been raised on whether regional economies are able to set up compensation mechanisms, by replacing low endowments with high efficiency in the use of existing assets, or by compensating an inefficient use of internal assets with an efficient use of external ones. The reply to this question has normative implications. Empirical evidence on the universe of 1,398 European NUTS3 regions is presented and policy suggestions elaborated. [ABSTRACT FROM AUTHOR]

Abstract: In a context of rising protectionist rhetoric, this paper looks at the potential impact of trade wars initiated by a change in US trade policies. We use a static multicountry, multisector general equilibrium model to evaluate six modalities of three potential trade wars—for a total of 18 scenarios—between the USA and China, between the USA and Mexico, and a combination of the two previous conflicts. In each case, we evaluate various forms of trade retaliation by the US partner(s): the same level of import duty as the one imposed by the USA, an import duty that minimises welfare loss, a duty that minimises terms‐of‐trade deterioration, a duty that generates the same amount of collected revenue, and finally a Nash equilibrium. We conclude that there is no scenario in which the US government augments its domestic welfare or GDP. There may be sectoral gains in value added in the USA, but they are small and to the detriment of other sectors. While losses for China are relatively small, potential losses for the Mexican economy are significant. There are also free riders of these trade wars. Finally, the way in which trade retaliations are designed matters greatly. [ABSTRACT FROM AUTHOR]

Traditionally, China and North Korea have been described as 'blood brothers' because of their common socialist ideological ground. Since 2000 the basis of their relationship has shifted from one-sided economic support by China into strategic and mutual cooperation. In this paper, we analyse changes in their relationship by examining two specific points: first, China's growing investment and trade in North Korea, and second, close linkages of regional development strategies between the two countries. While the prevalent discussions around North Korea and its relations with China concentrate on geopolitical issues, this research shed more light on geoeconomic engagement between China and North Korea. This paper argues that it is crucial to grasp how China and North Korea perform geoeconomic calculations toward each other and how this affects geopolitical conditions. [ABSTRACT FROM AUTHOR]

Empirical research has generally attributed the dismal performance of Africa's economic growth to country-specific socio-economic and geo-political factors. This paper shows that while country-specific issues matter for Africa's economic growth, common global economic factors do matter as well. The importance of common global economic factors has been augmented by increased globalization, the introduction of the World Trade Organization and the current global economic crisis. Using system GMM panel data techniques that extend previous literature on Africa's growth, the estimation results provide new insights into the positive relationship between the world business cycle and the growth rates of African countries. Copyright © 2010 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Thailand's economy before 1940 was marked by remarkably low long-term real economic growth, unusually high levels of the population living in rural areas, and limited industrialisation and urbanisation. This paper examines reasons for the lack of diversification, looking in particular at industrial development. We emphasise Thailand's role in the world economy, sources of labour supply, and the concentration of industry in the capital Bangkok. The impact of the world depression of the 1930s on the Thai economy was only moderate, which obviated the need for state policies that might have prompted significant economic change. [ABSTRACT FROM AUTHOR]

This paper attempts, through a comparative analysis, to assess the significance of foreign direct investment to the growth and development of both China and India, from the period following the introduction of economic reform programmes, to the last few years. It suggests that foreign direct investment (FDI) has had a significant positive bearing on the Chinese economy and a considerably more moderate effect on that of India. This discrepancy is attributed, in particular, to the composition and nature of FDI, and the institutional framework within which FDI is received. [ABSTRACT FROM AUTHOR]

This paper re-examines the relationship between international capital flows and economic growth within the context of various ‘conditional factors’ that possibly have the potential to influence such relationships. It achieves this by employing panel data for 80 countries that cover 1976–2007. International capital inflow is broken down into foreign direct investments (FDI) and foreign portfolio investments (FPI). We find interesting evidence that only FDI has a positive effect on growth and that FPI has an unfavorable, if not negative, effect on growth. The conditional variables of banking liberalization, high-income level, twin crises, lower corruption, and human capital mitigate the positive impacts of FDI on growth. In contrast, the middle-income level and good shareholder protection have a positive effect. As concerns FPI, the level of financial liberalization, being in a Latin American region, the wealth of countries, and market governance all influence the way that FPI affects growth, whereas the conditional variables of twin crises and human capital do not influence the effect of FPI on economic growth. [ABSTRACT FROM AUTHOR]

This paper aims to identify the main causes of bilateral trade flows in OECD countries. The specific features of the study include the explicit introduction of R&D and FDI as the two important explanatory variables, conduct of unit root tests in the panel data framework and careful consideration of endogeneity. The main findings are that the levels and similarities of market size, domestic R&D stock and inward FDI stock are positively related to bilateral trade, while the distance, measured by both geographical distance and relative factor endowment, between trade partner countries has a negative impact. These findings lend support to new trade, FDI and new growth theories. [ABSTRACT FROM AUTHOR]

This paper examines the macroeconomic determinants of cross-border mergers and acquisitions (M&As). Using a panel dataset of bilateral M&A deal values for 101 countries for 17 years ranging from 1989 to 2005, we investigate both home and host-country factors that may play an important role in determining the size and direction of M&A flows. Overall, the empirical results suggest that legal and institutional quality and financial market development increase M&A volume across borders. The significant effect of institutions, however, may disappear for transactions between countries in similar stages of the development. [ABSTRACT FROM AUTHOR]

Trade barriers can lead to the disappearance of products and impose huge costs. Allowing for the realistic possibility that imported products are substituted by domestic varieties this paper finds that the cost of protection that allows for disappearance of products, the ‘Romer cost,’ is higher below a tariff threshold. This threshold depends on the substitutability of domestic for foreign products. This is important for developing countries where inferior technology leads to poor substitutability and traditional calculations underestimate the cost. Analysis of new varieties trade after the Indian liberalization supports the findings in the context of a developing country. [ABSTRACT FROM AUTHOR]

The objective of this paper is to quantify the potential gains in trade performance from the implementation of trade facilitation reform. The study applies a gravity model augmented with trade facilitation, regulatory quality and infrastructure indicators to assess the impact of trade facilitation and other trade-related constraints on export performance. Quantitatively, our results suggest that a 10 per cent improvement in trade facilitation would yield an increase in exports of about 5 per cent. Identical percentage improvements in the regulatory environment and in the quality of infrastructure provision would result in increases of 9–11 per cent and 8 per cent, respectively. The results confirm that while trade facilitation can contribute to improved export performance, improvements in the quality of the regulatory environment and the basic transport and communications infrastructure are equally or more important, in facilitating export growth. The conclusion is that trade facilitation alone is unlikely to result in a significant improvement in export performance. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

The paper applies an alternative approach to assess whether foreign aid promotes economic growth in developing countries, based on the concept of temporary growth accelerations suggested by Hausmann, Pritchett and Rodrik. In addition to aggregate aid, we differentiate between major aid categories, including grants, loans and so-called short-impact aid. It turns out that aid flows have a small but significantly positive effect on the conditional probability of growth accelerations. This result holds across different estimation methods. However, the significance of results crucially depends on the criteria applied to identify growth accelerations. [ABSTRACT FROM AUTHOR]

This paper examines a two-country dynamic general equilibrium model with status-seeking agents. We show that the introduction of status-seeking behavior brings about new properties in equilibrium dynamics. While there exists a continuum of steady states in the standard dynamic models, the present framework demonstrates that, under some conditions, there uniquely exists an incompletely specialized steady state, which is locally saddle-point stable. Therefore, catching-up and overtaking phenomena seen in economic development can be explained, and comparative statics analysis also is made possible. Our comparative statics analysis illustrates, for example, that trade pattern is determined in the Heckscher–Ohlin manner; the patient country acts just like a capital abundant one to export the capital-intensive good. Furthermore, as distinct from the existing literature, the present study shows that the existence of an incompletely specialized steady state can be ensured even if the two countries conduct different policies. [ABSTRACT FROM AUTHOR]

The question that drives this paper is: When can we expect firm upgrading by developing-country suppliers in global value chains will lead to improvements in labour conditions? To deal with this question we, (a) position firm upgrading in the global value chain approach, (b) investigate existing evidence and conceptualisations on how economic globalisation impacts on labour, and (c) develop some hypotheses on when we can expect firm upgrading and improvements in labour conditions to go together. We conclude that firm upgrading in developing-country suppliers in global value chains as a rule does not lead to improvements in labour conditions. Instead, the much broader and more forceful process of immiserising growth makes it very unlikely that workers in such relatively low-skilled production activities will enjoy improvements in labour conditions. Ethical sourcing may lead to improvements in labour conditions of core workers in final product manufacturers and key supplier firms, but it is as yet unclear to what extent such a business model can and will be disseminated. More generally, even though economic globalisation does selectively create new jobs, even labour conditions of core workers may be under pressure while the overall proportion of core workers appears to be declining. [ABSTRACT FROM AUTHOR]

This paper looks at the economic rise of China and its impacts and implications for the Association of South-East Asian Nations (ASEAN) region. The issues of complementarities and competitiveness of ASEAN and China in trade and investment and the opportunities and challenges arising from China's emergence and the ASEAN-China Free Trade Area are discussed. The message from China's emergence is clear and strong; it is that size does matter. To increase ASEAN competitiveness, the paper highlights the need for a deeper and more rapid economic integration of ASEAN in order to exploit scale economies. The important role of Japan in this process is highlighted. Finally the issue of ASEAN economic diversity is discussed. It is suggested that while ASEAN is fairly diverse, this should not be a critical stumbling block to a more rapid economic integration of ASEAN. [ABSTRACT FROM AUTHOR]

This paper briefly reviews the economic performance of China's economic reform starting in 1978, and which it presents personal views on the experiences of Korea's economic development and lessons for China's economic reform. The paper reviews the China-Korea economic relationship, and explores both the opportunities of China's economic development for Korea and the prospects for Bilateral Economic cooperation. It is estimated that the Chinese economy will maintain dynamic growth for the coming decade. The 2008 Olympic Games and the 2010 World Expo in China will provide further impetuses for Chinese economic development. China's huge market and its rapid economic growth can help the further recovery and development of the Korean economy. At the same time, the further development of the Chinese economy can benefit from financial, technical and managerial support from Korea. The complementarities between the industrial structures of China and Korea will surely push their future economic cooperation into a broader and deeper stage. Bilateral trade will enhance the competitiveness of both nations in the global market and help them achieve mutual prosperity and development. (Edited by Xinyu Fan) [ABSTRACT FROM AUTHOR]

This paper evaluates various channels through which foreign technology diffuses to the manufacturing sector of developing economies. These economies undertake virtually no own R&D, so they rely on foreign technology to a much larger extent than developed economies. We investigate the direct effect of foreign R&D, as well as technology embodied in imports of intermediate and capital goods and foreign direct investment, on the growth of total factor productivity and value added in the manufacturing sector of 32 economies during 1965–92. We find that foreign R&D typically has the biggest positive impact on domestic productivity and value-added growth. Imports of capital goods and foreign direct investment also play a similar role, but their effect is of smaller magnitude and is not always significant. [ABSTRACT FROM AUTHOR]

The World Economic Forum ( WEF) recognises in their recent global risk reports the need to better understand the dynamics of the global economic system, and in particular the interconnectedness in the system in order to better appreciate the possibility of both single and multiple risk events occurring. This paper applies a cladistics analysis technique to identify the commonality of identified characteristics across a sample set of the 2014 WEF global risks ( WEF 2014) as a basis for a new understanding of the linkages and potential evolution of the WEF risks. This approach shows strong potential to provide deeper insights into the nature and interdependency of global risks and in particular how this allows for more efficient management of these risks. [ABSTRACT FROM AUTHOR]