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1. International Finance and the Developing World: The Next Twenty Years

Author:
Tony Addison
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Much has changed in international finance in the twenty years since UNU-WIDER was founded. This paper identifies five broad contours of what we might expect in the next twenty years: the flow of capital from ageing societies to the more youthful economies of the South; the growth in the financial services industry in emerging economies and the consequences for their capital flows; the current strength in emerging market debt, and whether this represents a change in fundamentals or merely the effect of low global interest rates; the impact of globalization in goods markets in lowering inflation expectations, and therefore global bond yields; and the implications of the adjustment in global imbalances between Asia (in particular China) and the United States for emerging bond markets as a whole. The paper ends by noting the paradox that today we see ever larger amounts of capital flowing across the globe in search of superior investment returns, and yet the financing needs of the poorer countries are still largely unmet.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
United States, China, and Asia

2. Fiscal Policy for Poverty Reduction, Reconstruction, and Growth

Author:
Matthew Smith, Alan Roe, and Tony Addison
Publication Date:
06-2006
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
An effective state is able to mobilize revenue and spend it on infrastructure, services, and public goods that both enhance human capital and the well-being of communities (especially the poor), as well as stimulating investment and employment creation by the private sector. An effective state also manages public finance to ensure that macroeconomic balance is maintained—with policy neither too restrictive to discourage private investment and growth, nor too accommodative to create high inflation and crowd out private investment. Fiscal issues are therefore at the heart of the state's role in the development process and failure in this policy area—whether it is in taxation, public expenditures, or in managing the fiscal deficit and public debt—can quickly undermine growth and poverty reduction. Fiscal weakness can also be fatal to social peace when one or more ethnic, religious, or regional groups are taxed unfairly—or receives too little in the allocation of public spending.
Topic:
Debt, Development, Economics, and Poverty
Political Geography:
Africa and Asia

3. Development Policy: An Introduction for Students

Author:
Tony Addison
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper discusses development policy objectives, noting how these have changed over the years, with a more explicit focus on poverty reduction coming recently to the fore. It also examines the relationship between economic growth and poverty reduction. The paper then discusses how to achieve economic growth, starting with the caveat that growth must be environmentally sustainable, and moves on to the big question of the respective roles for the market mechanism and the state in allocating society's productive resources. The paper next discusses how economic reform has been implemented, and the political difficulties that arise. It concludes that getting development policy right has the potential to lift millions out of poverty.
Topic:
Development, Economics, and Politics
Political Geography:
United States

4. The New Global Determinants of FDI Flows to Developing Countries: The Importance of ICT and Democratization

Author:
Tony Addison and Almas Heshmati
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Foreign direct investment (FDI) has increased dramatically in recent years. However, the distribution of FDI is highly unequal and very poor countries face major difficulties in attracting foreign investors. This paper investigates the determinants of FDI inflows to developing countries, with a particular emphasis on the impact of the 'third wave of democratization' that started in the early 1980s and the spread of information and communication technology (ICT) that began in the late 1980s. These two global developments must now be taken into account in any explanation of what determines FDI flows. Using a large sample of countries, together with panel data techniques, the paper explores the determinants of FDI. The causal relationship between FDI, GDP growth, trade openness and ICT is investigated. The main findings are that democratization and ICT increase FDI inflows to developing countries. The paper concludes that more assistance should be given to poorer countries to help them to adopt ICT and to break out of their present 'low ICT equilibrium' trap.
Topic:
Democratization, Development, Economics, and International Trade and Finance

5. Income Distribution Changes and their Impact in the Post-World War II Period

Author:
Tony Addison, Giovanni Andrea Cornia, and Sampsa Kiiski
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper analyses the trends in within-country inequality during the post- World War II period, with particular attention to the last 20 years, on the basis of a review of the relevant literature and of an econometric analysis of inequality trends in 73 countries accounting for 80 per cent of the world's population and 91 per cent of world GDP-PPP. The paper suggests that the last two decades have been characterized by a surge in within-country inequality in about two-thirds of the developing, developed and transitional nations analysed. It also suggests that in those countries where the upsurge in inequality was sizeable or where inequality rose from already high levels, growth and poverty alleviation slowed down perceptibly. While this trend towards higher inequality differs substantially across countries in its extent, timing and specific causes, it marks a clear departure from that observed during the first 30 years of the post-World War II period during which, with the exception of Latin America and parts of Sub-Saharan Africa, a widespread move towards greater egalitarianism was noted in the majority of the socialist, developing and industrialized economies.
Topic:
Development, Economics, Emerging Markets, International Political Economy, and Poverty
Political Geography:
Latin America

6. A Global Lottery and a Global Premium Bond

Author:
Tony Addison and Abdur R. Chowdhury
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The world lottery market now amounts to at least US$126 billion in sales. World market sales for all gaming products (public, charitable and commercial) total some US$1 trillion, of which Internet gambling accounts for US$32 billion. This paper assesses the prospects for harnessing this large and growing market for the purposes of development finance by means of a global lottery and a global premium bond (with the successful UK scheme providing a model for the latter). Each has different strengths: the global lottery can add to the supply of grant finance for development, while the global premium bond could be an attractive savings instrument for ethical investors. The paper concludes that global versions of both a lottery and a premium bond are viable and complementary in mobilizing more development finance.
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
United Kingdom

7. By How Much Does Conflict Reduce Financial Development?

Author:
S. Mansoob Murshed, Tony Addison, and Abdur R. Chowdhury
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Financial development is vulnerable to social conflict. Conflict reduces the demand for domestic currency as a medium of exchange and a store of value. Conflict also leads to poor quality governance, including weak regulation of the financial system, thereby undermining the sustainability of financial institutions. Conflict therefore reduces the social return to financial liberalization and other financial-sector reforms. This paper presents a theoretical model integrating the effects of conflict and financial liberalization, and then tests the model on data for 79 countries. Using an explanatory variable that measures the intensity of conflict (from low to high) the results show that conflict significantly reduces financial development, and that this negative effect increases as conflict intensifies. The paper concludes that conflict reduction is essential if financial reform is to have its full benefit for development.
Topic:
Conflict Resolution, Development, Government, and Political Economy

8. Underdevelopment, Transition and Reconstruction in Sub-Saharan Africa

Author:
Tony Addison
Publication Date:
10-1998
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Reconstructing Africa's war damaged economies is an urgent task. This is especially so in a group of countries - Angola, Eritrea, Ethiopia, Guinea-Bissau, and Mozambique - which must also complete their economic and political transition from state socialism. Somalia, which shares their common history, must eventually be rebuilt. All of these countries must address their deep problems of underdevelopment and poverty. The challenges are therefore three-fold: to overcome underdevelopment, to make the transition from state socialism, and to reconstruct economies and societies.
Topic:
Democratization, Development, Economics, and Emerging Markets
Political Geography:
Africa, Mozambique, Ethiopia, Somalia, Angola, Eritrea, and Guinea-Bissau