New Development Strategies: Beyond the Washington Consensus

321 Pages·2004·1.61 MB·English

by  Akira Kohsaka

New Development
Strategies
Beyond the Washington Consensus
Edited by
Akira Kohsaka
New Development Strategies
This page intentionally left blank
New Development Strategies
Beyond the Washington Consensus
Edited by
Akira Kohsaka
Osaka University
Japan
Selection, editorial matter and Chapter 1 © Akira Kohsaka 2004
Chapters 2–12 © Palgrave Macmillan Ltd 2004
All rights reserved. No reproduction, copy or transmission of this
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Designs and Patents Act 1988.
First published 2004 by
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ISBN 1–4039–2072–9
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Library of Congress Cataloging-in-Publication Data
New development strategies:beyond the Washington
consensus/edited by Akira Kohsaka.
p. cm.
“This book originated from the outcome of the international research
project on Development Policies Outlook conducted by JETRO Institute
of Developing Economies (IDE), Chiba, Japan for the fiscal years
2000–01”—P.
Includes bibliographical references and index.
ISBN 1–4039–2072–9 (cloth)
1. Developing countries—Economic policy. 2. Economic development—
Political aspects. 3. Globalization—Economic aspects—Developing
countries. I. Kohsaka, Akira.
HC59.7.N376 2004
338.9′009172′4—dc22 2003061147
10 9 8 7 6 5 4 3 2 1
13 12 11 10 09 08 07 06 05 04
Printed and bound in Great Britain by
Antony Rowe Ltd, Chippenham and Eastbourne
Contents
List of Tables vii
List of Figures viii
Notes on the Contributors x
Preface xi
1 New Development Strategies: Beyond the
Washington Consensus 1
Akira Kohsaka
Part I Markets, Governments and Institutions
2 Development Strategies for the Twenty-First Century 13
Dani Rodrik
3 Re-examination of Development Policies and Strategies:
Some Political Economy Lessons 39
Jeffrey B. Nugent
4 National Economies under Globalization: A Quest for
New Development Strategies 63
Akira Kohsaka
Part II Development Strategies under Globalization
5 Globalization and Development: A Re-examination
of Development Policy 87
Kaushik Basu
6 New Development Strategies under Globalization:
Foreign Direct Investment and International
Commercial Policy in Southeast Asia 115
Fukunari Kimura
7 Development Strategy and the Role of Government
Policies: Reconsidering the East Asian Experience 134
Koichi Ohno
v
vi Contents
Part III Policy Reforms and the Asian Financial Crisis
8 Political and Institutional Lessons from the Asian
Financial Crisis 155
Stephan Haggard
9 Re-examination of Korea’s Economic Adjustment
Policies since the 1997 Crisis 177
Yoon Je Cho
10 The Regulator’s Dilemma: Hedge Funds in the
International Financial Architecture 201
Barry Eichengreen
Part IV Transition to a Market Economy
11 Market Creation in Transition Economies: Reconstruction
of Production Linkages in Kazakhstan 231
Koji Nishikimi
12 Strategic Choices for China and Vietnam in the
Twenty-First Century 251
Dwight H. Perkins
Author/Name Index 272
Subject Index 277
List of Tables
4.1 International production, 1982–2000 70
4.2 Share of high-technology industries in
manufacturing value added and exports
in high-income economies, 1970–94 73
5.1 Merchandise exports as percentage of GDP, 1870–1995 88
5.2 Value of foreign capital stock in developing countries,
1870–1998 89
5.3 Globalization indicators, 1989–99 89
5.4 Per capita GDP, by region, 1000–1998 104
5.5 Per capita GDP, Asian countries, 1820–1998 104
5.6 Per capita incomes and quintile incomes,
selected countries 109
6.1 Dual track approach in development strategies:
the case of the SEA countries 117
7.1 Growth rates of four groups of industries in
Korea and Taiwan 139
7.2 Factor intensity of trade in korea, 1970–80 144
9.1 Interest coverage ratio and potential non-performing
loans, listed firms, 1995–99 180
9.2 Interest coverage ratio and potential non-performing,
loans, non-listed firms, 1995–99 180
9.3 Required evolution of the corporate, financial and
household balance sheets and Households 183
9.4 Balance sheets of the three largest investment trust
companies and three regional companies, 1997–99 187
9.5 Trust assets purchased for the top five chaebols,
as of 30 April 1999 188
9.6 Financing of non-financial firms: Composition, 1981–99 189
10.1 Largest hedge funds according to capitalization,
August 1998 205
10.2 Use of leverage as of December 1997 206
10.3 Monthly returns by investment style, August 1998 208
11.1 Land productivity, wheat, Kazakhstan, 1985–2000 237
11.2 Wheat production in Akmola province, 1996 238
vii
List of Figures
4.1 Trade shares of developing countries, by region,
1960–99 65
4.2 Net capital flows to developing countries, by region,
1970–2000 66
4.3 Per capita income, by region, (PPP) 1960–2000 67
4.4 Relative per capita real income, 1960–2000 68
4.5 Gross capital flows, by region, 1970–99 75
4.6 Degree of capital account liberalization, by region,
1970–98 77
5.1 Labour market equilibrium 96
5.2 Labour market equilibrium: small nation case 100
5.3 The international inequality game 107
6.1 The expansion of intraregional trade in intermediate goods
among the East Asian countries: machinery parts and
components, 1990–98 119
6.2 Welfare effects of infant industry protection 121
6.3 Fragmentation: an illustration 124
6.4 Agglomeration: an illustration 125
6.5 Location and internalization 126
6.6 Customs duty as a percentage of import value,
East Asian countries, 1988–98 128
7.1 Framework for dual industrial growth 142
9.1 Actual versus expected normal volume of investment
trust business, 1983–99 184
9.2 Growth of the financial sector, 1997–99 185
9.3 Interest rates of corporate bonds, time deposits,
and beneficial certificates, 1997–99 186
9.4 Interest rate movement and growth of investment
trust companies, 1997–99 186
9.5 Monetary aggregates, 1991–2000 190
9.6 Monetary multipliers, 1994–2000 191
9.7 Loan to deposit ratio, 1997–2000 191
9.8 Domestic credit, M3 and reserve money, 1991–2000 192
9.9 Return on and cost of capital investment, 1960–97 193
9.10 Interest rates: (a) 1964–91; (b) 1991–2000 194
9.11 Interest coverage and debt to equity ratios 195
9.12 Current account, 1991–2000 196
9.13 Capital flows, 1991–2000 196
viii
List of Figures ix
11.1 GDP in the CSB and CIS countries, 1989–99 233
11.2 Agriculture in Kazakhstan: (a) production;
(b) land productivity, 1991–97 236
11.3 TFP and farm size, wheat production, 1996 239
11.4 Equilibria in interlinked transactions 243