Showing papers on "Economic sector published in 2002"

Economic Freedom, Government Policy and the Trade-Off Between Equity and Economic Growth

Abstract: This study investigates the role that economicfreedom plays in economic growth and in the distribution in marketincome, the role of government policy in advancingeconomic progress and in promoting income equality, and the effectthat the rate of economic progress has on thedistribution of market income. Structural and reduced formmodels are estimated that reveal that economic freedompromotes both economic growth and equity, and that there is apositive but relatively small trade-off between growth andincome inequality.

The challenges of economic diversification through tourism: the case of Abu Dhabi

Abstract: In recent years, tourism has become a ubiquitous vehicle for economic development and diversification and, for many regions and countries both in the developed and less developed worlds, tourism has become an integral element of economic development policy. Even those countries that, in the past, have had neither the desire nor the need to seek alternative economic sectors increasingly have been turning to tourism as a potentially effective means of achieving economic growth and diversification. As this paper argues, however, the justification for using tourism as an agent of economic development must be treated with some caution. Focusing upon the case of Abu Dhabi, the oil-rich emirate that in recent years, and in common with other countries in the region, has been seeking economic diversification through tourism to counter instability in global oil prices, a number of challenges to tourism development are identified. These may be overcome collectively through significant investment in product and promotion but, as the example of Abu Dhabi demonstrates, tourism may not always be an easy or cost-effective means of achieving economic growth and diversification. Copyright © 2002 John Wiley & Sons, Ltd.

The Central Government‐Private Sector Wage Differential

Abstract: Since Ehrenberg and Schwarz (1986) there has been a plethora of articles investigating the relationship between public and private sector wages. This article examines part of this post 1986 literature by reviewing articles that examine central government-private sector wage differentials. In sum, most articles find that there is a premium paid to central government workers, although the premium has declined in recent years. In developing countries, however, the differential is usually negative. Women and minorities tend to do better in the public sector relative to their private sector counterparts. The evidence on union premiums between sectors is mixed, although the premium tends to be higher in the private sector. However public sector union workers do not do much better than private sector union members. The magnitude of all of the wage differentials discussed are sensitive to the estimation technique and data source used. The most common explanation for the public sector wage premium is economic rent accruing to government workers, although the public sector wage determination literature suggests that the differential is due to returns to political and ‘vote producing’ activities not relevant in the private sector.

Financial systems and economic modernization

Abstract: The most successful economies of modern, and perhaps earlier, economic history appear to have had “financial revolutions” that created innovative financial systems before they became leading economies. This suggests that good financial systems may have played a causal role in economic modernization. I identify the key institutional components of such financial systems. Using the United States and Japan as examples, I discuss how two financial revolutions occurred. Effective leadership on the part of strong-willed individuals was crucial in each case.

Understanding Urban Inequality: A model based on existing theories and an empirical illustration.

Abstract: In the debate on urban inequality, Sassen's theory on social polarization and Wilson's theory on spatial mismatch have received much attention. Where Sassen highlights the decline of the middle classes, Wilson focuses on the upgrading of urban labour markets. In this article we argue that both theories may be valid, but that they have to be put in a more extended theoretical framework. Of central importance are national institutional arrangements, membership of different ethnic groups and networks, and place-specific characteristics rooted in local socio-economic histories. As a first empirical illustration of our model, we use data on the labour markets of Amsterdam and Rotterdam and show that different forms of inequality can be found both in economic sectors and within ethnic groups. The model we present could be used both to reinteribatpret existing data and as an analytical framework for the analysis of different forms of urban inequality

Can public sector reforms improve the efficiency of public water utilities

Abstract: Privatization of public water utilities is increasingly being viewed as a strategic solution to the observed inefficiency of the water sector in developing countries. However the link between private ownership and efficiency is unclear in the water sector, given the monopolistic nature of the service and the need for public regulation. This study poses the question whether public sector reforms could improve the operational efficiency of water utilities as an alternative to privatization.Using Data Envelopment Analysis we find that neither the decentralization of the responsibility for water operations to the municipal level nor the establishment of an autonomous regulator had a positive impact on the efficiency of Mexican water utilities. We conclude that the enacted reforms should have been combined with reforms that introduce competition and reduce the informational asymmetries in the urban water sector.

Capital Account Liberalization and Financial Sector Stability

Abstract: This paper analyses the links between capital account liberalisation and other policies influencing financial sector stability. Drawing on country experiences, it develops an operational framework for the co-ordination of capital account liberalisation, particularly with structural policies to strengthen the domestic financial system.

Cotton sector strategies in West and Central Africa

Abstract: Cotton production is truly a success story in West and Central Africa. The region is now the second largest exporter of lint, after the United States, with a world market share of 15 percent. Despite its strong performance in the past, the sector is characterized by several institutional and structural weaknesses that jeopardize its viability in an era of increasing globalization of the cotton industry. The sector's future performance will also depend on the implications of cotton sector policies in major producing countries such as the United States, the European Union, and China. This paper examines how the above factors may affect future growth of the region's cotton industry. It also identifies the changes that are required to enable countries in the region to fully exploit the sector's significant growth potential.

Dissecting financial markets: sectors and states

Abstract: By analysing a large data set of daily returns with the maximum likelihood data clustering technique, we identify economic sectors as clusters of assets with a similar economic dynamics. The sector size distribution follows Zipf's law. Secondly, we find that patterns of daily market-wide economic activity cluster into classes that can be identified with market states. The distribution of frequencies of market states shows scale-free properties and the memory of the market state process extends to long times (∼50 days). Assets in the same sector behave similarly across states. We characterize market efficiency by analysing the market's predictability and find that the market is indeed close to being efficient. We find evidence of the existence of a dynamic pattern after the market's crashes.

The international applicability of "new" public management: Lessons from Turkey

Abstract: One of the central tenets of “new public management” is that it is universally applicable. Indeed the European Union advocates the adoption of such management approaches for countries seeking entry to the EU. This paper questions this position with reference to the introduction of change in public services in Turkey. From this study it is argued that management change in public services may be more to do with cultural factors which are embedded in the form of public administration of that country. One of the central factors of Turkish life is the state dominance over civil society, including the private sector. In the UK private sector values enter the public sector, whereas in Turkey public service values enter the private sector. The paper concludes that changes in public sector management have to consider the cultural factors of public services and management models cannot be imposed unchanged.

Market orientation in service

Abstract: The association between economic development and growth of the service sector seems indisputable. Although it is necessary to highlight that services are of a different nature from that of products, nowadays the latter are more and more penetrated by complementary services, given the circumstance that services themselves also include, occasionally, the use and consumption of products. Market orientation had been developed mainly in association with tangible products; therefore it is necessary to carry out a study where the evolution of the market orientation is reflected in the service sector independently from industrial sectors. That is why a historical summary of the evolution of market orientation on the service sector has been performed.

Foreign investment in Mexico after economic reform

Abstract: Introduction Since the mid-1980s the Mexican economy has undergone a process of deep economic reform designed to shift away from the more inward-oriented development model that Mexico had followed until then. The main purpose of these reforms was to privilege market mechanisms in economic activities, which meant reducing the state's direct and indirect involvement in the economy. Some of these economic reforms have been completed, some are still in process, and still others - those that encountered opposition - have not yet, or have only just, been implemented. Economic liberalization had varying effects on the behavior of economic actors and therefore on the evolution of various economic sectors and the Mexican economy as a whole. Liberalizing reforms were intended to have a strong impact on the investment process. Under the previous development model - import-substitution industrialization (ISI); the state played a fundamental role in directing investment; the reforms sought to shift that role by placing greater emphasis on domestic and foreign private investment, while at the same time orienting investment more toward exports and tradable activities and less toward non-tradable sectors. The expectation was that, as the reform process took its course and obstacles to free market operations were reduced, investment decisions would increasingly be based on market signals, thus increasing both efficiency in the use of the factors of production and the potential for economic growth. Mexico's liberalization process began in 1982, when collapsing petroleum prices and rising international interest rates highlighted the economy's vulnerability and the waning effectiveness of an importan import-substitution model characterized by high levels of protectionism and strong state participation. Those developments prompted the Mexican government to try to modulate the impact of international economic shocks, and they also paved the way for vigorous attempts to modify the country's development pattern. Liberalizing reforms sought to convert the private sector into the axis of economic growth, ideally making it able to operate competitively (without subsidies); in world markets. The main elements of this reform process included opening the domestic market to foreign trade, attracting foreign investment, deregulating the economy, privatizing public enterprises, signing the North American Free Trade Agreement (NAFTA);, and liberalizing financial markets. (1); The reforms'goals have been bolstered by a governmental commitment to continue stringent monetary and fiscal policies while eliminating preferential lending. These efforts, particularly by the late 1980s, transformed a nearly closed economy into one that is highly open to foreign participation in trade and investment. State involvement in the economy was curtailed sharply, as shown by the downsizing of the public sector and the substitution of market forces for state intervention in determining key variables such as interest rates, nominal exchange rates, and prices of basic inputs. In addition to their broad sweep and the speed with which they were implemented, the reforms displayed two other interesting features. The first is that they were largely accepted by key economic and political players. That is, the shift toward trade liberalization, the elimination of subsidies, and an expanded role for market forces in allocating funds did not encounter strong opposition from those who had benefited from the prior system of protection and subsidies, or from the workers and labor unions who were affected by productive restructuring and new conditions in the labor market. Even the currency crisis that erupted in December 1994 did not provoke a rejection of the new development model. In fact, in dealing with the crisis, the administration of President Ernesto Zedillo (1994-2000); reaffirmed its commitment to the reform process and to orthodox management of fiscal and monetary policy. Moreover Vicente Fox (2000-2006); - Mexico's first ever elected Presidential candidate not nominated by the Partido Revolucionario Institucional (PRI); - has stated his intention to extend the reform process. The second feature concerns the reforms' impact on economic growth. From 1983 to 1988, the Mexican economy was stagnant; from 1989 to 1994, per capita gross domestic product (GDP); grew by only 0.8 percent a year on average; and in 1995, more than ten years after the reform process was launched, per capita GDP dropped 9 percent in real terms, its largest decline in sixty years. The consensus among observers is that Mexico received an international financial aid package and achieved a speedy, though moderate, economic recovery in 1996-2000 largely thanks to the NAFTA, the productive apparatus's focus on foreign markets, and appropriate fiscal policy-all central results of the economic reform process. Despite the recovery, however, Mexico's economy has yet to show the high and sustained growth rates required to generate sufficient jobs to curb national unemployment and underemployment. Moreover, in 2001 Mexico's GDP once again stalled, falling 0.1%. The key role that capital formation plays in creating and expanding productive capacities, incorporating technology, and raising productivity makes it a fundamental factor in macroeconomic development. Yet despite its importance, there is little information available on the sectoral performance of capital formation in the Mexican economy. (2); In fact, empirical studies of investment in specific sectors have lagged behind the theoretical advances of recent years. Against this background, this chapter analyzes the effect that Mexico's liberalizing reforms have had on fixed capital formation at the aggregate level and in the industrial sector. (3); The period under study begins with the aftermath of the 1982 economic crisis and continues to 2000 and - when data was available - to 2001. The following four sections review, respectively, the behavior of aggregate investment and its relationship to the growth process; (4); trends and performance of foreign direct investment (FDI);, including the activities of in-bond processing plants (maquiladoras);; the behavior and determining factors of investment in manufacturing; and the impact of investment patterns on the manufacturing industry's structure and export performance. (1); Mexico's reforms are well documented; for an overview, see Aspe 1993; Lustig 1998; Ros 1991. (2); The available data on capital formation tend to be highly aggregated. (3); Commodity-producing sectors and public utility services are not included in this study. For a general overview of investment in these fields, see Mattar 2000. For the telecommunications sector, see Escobar de Medecigo 1999; on the electrical power sector, Rodriguez 1999; on highways and ports, Scheinvar 1999; and on the petroleum sector, Torres 1999. (4); The section on the behavior of aggregate investment partially draws on Mattar 2000 and the ones on investment in manufacturing, and its impact on the industry's structure and export performance are based on Moreno-Brid 1999.

The Evolution of Exchange Rate Regimes Since 1990 : Evidence From De Facto Policies

Abstract: This paper presents a monthly database on de facto exchange rate regimes that covers all IMF members since 1990. Information from IMF country reports and other sources, including exchange rate data, is utilized to determine de facto exchange rate policies. Countries are categorized based on these policies using the IMF nomenclature adopted in 1999. This approach ensures the forward compatibility of the database. The database is then used to examine whether the "bipolar view" of exchange regimes holds with de facto regimes. It is found that the proportion of countries adopting "intermediate" regimes has indeed been shrinking in favor of greater flexibility or greater fixity, especially for countries more integrated with international markets. Analyses based on Markov chains of regime transitions, however, provide (mixed) evidence against the bipolar view.

Identifying Linkages with a Cluster-based Methodology

Abstract: Although many methods for studying linkages between economic sectors exist, most methods only analyse the linkages between a specific sector and all other sectors, or the effects of all sectors on the economy as a whole. Cluster analysis may be helpful to analyse which sectors are strongly connected to each other, when no specific sector is given in advance. The present article reviews how cluster analysis contributes to the analysis of intersectoral linkages. Furthermore, it describes several possible identification methods of these clusters. After selecting the best method, the article provides an index that can be used to compute the degree of similarity between clusters in different regions, countries, or time periods.

Public-sector Employment Relations Reform under Labour: Muddling Through on Modernization?

Abstract: The year 2001 in the UK was dominated by the difficulties the Labour government confronted in developing a coherent programme of public-sector modernization. This review examines recent developments in the public sector, focusing on government attempts to involve the private sector and its continuing reforms of pay determination arrangements. It highlights the tensions that this programme of reform aroused as the government struggled to respond to recruitment and retention problems and widespread perceptions of public-sector "crisis".

Gender and Informal Sector Employment in Indonesia

Abstract: (2002). Gender and Informal Sector Employment in Indonesia. Journal of Economic Issues: Vol. 36, Papers From The 2002 AFEE Meeting, pp. 313-321.

Gender disparities in the kenyan labour market: implications for poverty reduction

Abstract: Parts one and two of this paper deal with conceptual issues and focus on gender mainstreaming into investment activities for increased women’s employment and poverty reduction. The central argument here is that the mainstreaming of a gender perspective into investment activities is necessarily a long-term process which involves the integration of gender issues in all national and sectoral policies and programmes. The key to gender mainstreaming is to make the process a collective responsibility. Some of the essential steps in this process are the production of gender disaggregated data, the establishment and strengthening of gender management systems, the commitment of senior management personnel to the goal of gender equality as a reflection of attitudinal and behaviour change at personal and institutional levels. The discussion in part three brings to the fore the issue of women’s education and training. Available data show gender and regional disparities in education and training at primary, secondary and tertiary levels. These data indicate women’s limited access to formal education and lower adult literacy rates which undermine their capacity to participate in the formal and informal labour market on an equal basis with men. Part four shows the link between women’s education, employment and poverty reduction. The analysis of gender participation in different sectors of the economy revealed some important patterns and trends. These include the fact that female labour force participation in the modern sector has remained below 30% over the last several years compared to men who hold a disproportionately larger share of the modern sector jobs. The majority of women are employed in the education and informal sectors. Those who work in the agricultural sector are usually engaged as casuals. Women’s overall lower level of education, limited skills, and access to productive, resources, heavy domestic workload, cultural attitudes and segregation of the labour market are some of the factors associated with their limited participation in the modern sector. Gender representation in the Kenyan civil service also shows gross under-representation of women in top management and policy-making positions. This gender disparity calls for an Affirmative and/or Positive Action to deal not only with increasing women’s participation in public and private sector institutions at all levels but also address the twin issue of women’s entitlements and cultural barriers which are at the root of their poverty and powerlessness. The low budgetary allocations to women’s programmes also reflect lack of political will, improper targeting and non-involvement of women in priority setting.

Centripetal Forces in China's Economic Takeoff

Abstract: This paper uses provincial time series data from the People's Republic of China to empirically investigate two propositions relating to economic development: (i) that economic takeoff – or an acceleration in economic growth – is associated with inflows of foreign direct investment (FDI), possibly through technological transfer; and (ii) that takeoff is accompanied, at least in the short term, by widening income inequality. The results indicate that FDI flows have increased the rate of convergence in per capita incomes across China's provinces. However, the pattern of FDI, which has gone mainly to the relatively wealthy provinces, has caused different provinces to converge toward different steady states.

Financial Liberalization: Does It Pay to Join the Party?

Abstract: Financial liberalization is a highly controversial policy. Despite the fact that almost all the regions of the world have undergone liberalization of their financial markets, its effect on the performance of different economic sectors remains a question. In our research, we find that financial liberalization reduces the cost of capital, boosting the relative growth rates of economic sectors that for technological reasons rely heavily on external (to the firm) finance. This result, however, depends on the quality of institutions supporting credit markets. The effects of financial liberalization are more notable in countries that have and enforce regulations to protect property rights. In this sense, the answer to the question in the title of the paper is not clear-cut. The impact of financial liberalization on growth depends on underlying institutional factors.

Analytical study of women’s participation in economic activities in Arab societies

Abstract: Outlines important changes in the role of women in Arab societies, particularly in urban areas. Considers what factors impede or contribute to women’s work in all economic sectors in an attempt to explain and determine the relationship between their activities and social, educational, economic, cultural and health factors. Suggests that findings are related to family size, fertility rates, illiteracy and population per nurse. Recommends increasing job opportunuties and more labour saving technology as ways to increase opportunity for Arab women.