Search

Begin New Search Publishing Institution Centre for International Governance Innovation

381. China's Role as a Trade Bridge for Expanding Regional and World Trade

Author:
Min Gong and Wenpu Li
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
To understand China's trade relations with the US, Japan, and South Korea, we estimate a vector autoregressive model (VAR) model to investigate the trade interactions among these four countries using data from the period of the first quarter of 1993 to the fourth quarter of 2005. We find substantial Foreign Direct Investment (FDI)-induced indirect trade from Japan and Korea to the US through China, and between Japan and Korea through China. These indirect trade flows lead to increases in China's trade deficit with Japan and Korea as well as China's trade surplus with the US. The indirect trade flows through China also indicate the importance of China's role as a trade bridge. From the viewpoint of world trade growth, as a trade bridge, China contributes to the stable growth of the regional and world economies. However, China's role as a trade bridge may negatively affect its long-run economic growth.
Topic:
Globalization, International Political Economy, and International Trade and Finance
Political Geography:
United States, Japan, China, Asia, South Korea, and Korea

382. The End of Monetary Dominance? How Crises Can Influence Monetary Policy Decisions and Institutions

Author:
Pierre L. Siklos
Publication Date:
11-2008
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
Has the global financial crisis made monetary policy more powerful, or it has exposed its limitations? For the most part, the answer is the former, at least today, but the outlook may not be so rosy. When the former British Prime Minister, Harold Macmillan, was asked what were the greatest challenges he faced, he replied: “Events, my dear boy, events.” We have certainly witnessed in the last year a series of events that are challenging policy makers as well as their beliefs about how monetary policy ought to be conducted in future. Indeed, these same events may come to haunt the monetary authorities, and we may well see a return to a period when monetary policy was subservient to a fiscal policy that steps in, ostensibly to impose order on an apparently unruly private sector. Central banks, among other players, appear to have unwittingly put in place the conditions necessary for what we can now confidently call the perfect storm of 2008. There were several observers who predicted that a train wreck was looming on the horizon. Indeed, perhaps most stunning of all, the Bank for International Settlements (BIS), created from the ashes of World War I and which quickly became the forum for central bank cooperation, a role it continues to fill to this day, had repeatedly warned about the troubles that lay ahead. “…these facts also suggest that the magnitude of the problems yet to be faced could be much greater than many now perceive” (BIS Annual Report, 2008: 9). The failure of central banks to act on these warnings may come back to haunt them in the near future.
Topic:
Economics, International Cooperation, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
Britain

383. Poverty Reduction and the Poverty Reduction Facility at the IMF: Carving a New Path or Losing its Way?

Author:
Ramesh C. Kumar
Publication Date:
02-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Since 1999, all concessional lending by the International Monetary Fund (IMF) must be targeted at poverty reduction. The paper critically examines the design and implementation of the IMF's poverty reduction initiative by focusing on the operations of the Poverty Reduction and Growth Facility (PRGF). The data relating to the lending activity of the facility, coupled with an econometric explanation of the size of a PRGF arrangement in terms of key macro-economic variables, reveal some surprises. Not only does the lending activity of the new facility not appear to be much different-in frequency, size or total lending-than that under the Structural Adjustment Facility or Enhanced Structural Adjustment Facility (SAF/ESAF), but the average lending to individual countries over the period 2000-2004 is also inversely related to the human poverty index. At a time when IMF is quickly losing its traditional clientele, such findings raise doubts about the fund's efficacy in administering development finance.
Topic:
Development, Economics, International Cooperation, Poverty, and United Nations

384. Regional Monetary Arrangements in ASEAN+3 as Insurance through Reserve Accumulation and Swaps

Author:
O.G. Dayaratna-Banda and John Whalley
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
East Asia is witnessing the emergence of an informal monetary system which focuses on self-insurance through own reserve accumulation and co-insurance through swaps. The former is concentrated in a small number of large countries (China, Japan, and Korea), while the latter involves informal monetary cooperation among monetary authorities in a large number of countries. The origins of this system lie in the Asian financial crises, and reflect concerns both to avoid repetition of similar events and any spread of further crises through contagion effects. This paper first characterizes and documents this emerging system describing how it works and what its objectives are, and then discusses its performance, its incompleteness, and assesses the system's ability to move towards deeper integration without adopting a single monetary authority as well as the impediments it faces. What is clear is that this type of system among individual countries is incomplete and falls well short of complete monetary integration, but at present it performs well even if it experiences a number of deficiencies. Most countries seem better off with partial reserve pooling, while incremental gains from higher degrees of pooling in the region tend to be small.
Topic:
Development, Economics, and Regional Cooperation
Political Geography:
Japan, China, Asia, and Korea

385. EU Commercial Policy in a Multipolar Trading System

Author:
Simon Evenett
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In recent years, the bipolar multilateral trading system of the post-war years has given way to a multipolar alternative. Although many specifics have yet to be determined, some contours of this new trade policy landscape are coming into focus and in this short paper I examine their implications for the European Union's external commercial policy. Particular attention is given to both the state of business-government relations and the propensity to liberalise under the auspices of reciprocal trade agreements by Brazil, India, and China; the potential new poles of the world trading system. I consider the likely consequences of these developments, plus factors internal to both the European Union and the United States, for the possible con-tent of future multilateral trade initiatives.
Topic:
Development, Government, and International Trade and Finance
Political Geography:
United States, China, Europe, India, and Brazil

386. After the MFA, the CCAs (China Containment Agreements)

Author:
O.G. Dayaratna-Banda and John Whalley
Publication Date:
05-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The post-Multi Fiber Agreement (MFA) trade regime in textile and apparel appears to be emerging in ways which are quite different from what had been widely anticipated before the termination of Agreement on Textiles and Clothing (ATC). Since the end of ATC, there has been growing and spreading set of trade restrictions targeted primarily at China, the largest shipper of textile and apparel, through a series of agreements that we term China Containment Agreements. We discuss the evolution of these agreements, their behavioural responses, and then draw their parallels to those under the older MFA. We argue that there is potential for these restrictions to prolong and grow, as well as spread to other products through the product-specific safeguards mechanism included in the conditions of China's World Trade Organization accession.
Topic:
International Relations, Economics, and Treaties and Agreements
Political Geography:
China and Asia

387. Sustainability of Economic Growth in India

Author:
Rajiv Kumar, Amitendu Palit, and Karan Singh
Publication Date:
05-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The robust performance of the Indian economy in recent years, with economic growth averaging 8.5%, has generated intense debate regarding India's future economic prospects. Indeed, the future of more than a billion people, many of whom still exist in degrading and unacceptable poverty and deprivation, depends critically on India's ability to grow fast at high rates. This paper, while examining the issue, argues that India's recent economic performance is a result of it's entering a virtuous circle of growth generated by some key structural drivers. The latter include a dynamic private sector, benign external environment and a wellfunctioning democracy. The paper also points out that high growth can be sustained only if necessary policies are adopted for removing binding constraints like poor infrastructure, stagnant agriculture and lack of fiscal space. The paper identifies education as the most critical sector requiring reforms, followed by public goods delivery and labour markets.
Topic:
International Relations, Development, and Economics
Political Geography:
India and Asia

388. Technology Upgrading and China's Growth Strategy to 2020

Author:
John Whalley and Weimin Zhou
Publication Date:
03-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
It is widely believed in China that in order to meet the target of tripling gross domestic product (GDP) per capita between 2005 and 2020, as set out in China's 11th five-year plan in 2005, a change in China's growth strategy from FDI promotion and export-led growth towards technology upgrading and higher productivity growth in manufacturing needs to occur. This paper seeks to evaluate the potential effectiveness of recent government initiatives to be taken to achieve these ends. In particular, plans these include increased educational spending, tax incentives, large research and development (R) projects, and changes to the regulatory environment. In measuring China's economic growth potential towards 2020, this paper employs an economic analysis of Total Factor Productivity and identifies the importance of continued domestic technical innovation.
Topic:
International Relations, Development, and Science and Technology
Political Geography:
China and Asia

389. Summitry from G5 to L20: A Review of Reform Initiatives

Author:
Peter I. Hajnal
Publication Date:
03-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Pressures to reform the Group of Eight (G8) have come from a variety of sources and perspectives, including academic analysts, practitioners, civil society, leaders of non-G8 countries, and even some of the G8 leaders themselves. Over its 32-year history, this elite forum of democratic industrialized countries has shown its ability to accommodate change, but it is rooted in an earlier era, and the growing power shift in global relations toward emerging market countries has not been reflected in either its scope or its membership. In recent years there has been a plethora of proposals to reform the club, from narrowing its brief to having it to coexist with a new and more representative body, and from membership expansion to complete abolition. To appreciate the full extent of this set of debates, this paper looks back at the origins of the summit and its intended architecture. It then reviews and analyses actual and proposed reforms over the summit's history, from early pressures to modify the original G5 through current attempts to move beyond the G8 to an Leaders' 20 (L20) or perhaps a group of 14.
Topic:
International Relations, Civil Society, Development, and Emerging Markets

390. Beyond the International Monetary Fund: The Broader Institutional Arrangements in Global Financial Governance

Author:
Tony Porter
Publication Date:
02-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
In recent years there has been an upswing in interest in the reform of the International Monetary Fund (IMF). In contrast to its earlier years, the IMF today exists in an international environment populated by a wide variety of public and private-sector international institutions that compete with and complement the work done by the IMF. A key factor in the IMF's performance and future prospects is its relationship with these institutions. This paper analyzes institutional developments in the IMF's environment, linking these with broader contemporary social trends, and drawing conclusions about the significance of these developments for IMF reform. These social trends include a shift from hierarchies to networks, A recognition of the socially-constructed character of knowledge and the growing importance of this knowledge relative to material resources, and a shift from a reliance on US hegemony to multilateralism. The paper argues that the IMF has taken some modest steps in its work to include these considerations and enhance its relationship with other institutions, but these elements need to be included in the process of IMF reform to a much greater degree.
Topic:
Development, Economics, Globalization, and International Trade and Finance