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30th anniversary conference papers
China’s International Development Finance: Past, Present and Future
Authors
Jiajun Xu and Richard Carey
Abstract
China has emerged as perhaps the most globally significant development finance provider, going far beyond concessional foreign aid. With China’s initiatives to create and foster new multilateral finance institutions, and to work in terms of large economic landscapes in Africa, Eurasia and Latin America, it becomes important to understand how China’s own experience with rapid industrialization/urbanization processes and regional development is influencing its visions and financial instruments for development across the world. Our paper examines how China’s domestic development experiences have informed its approach to development finance abroad and explores what kinds of challenges and opportunities China will bring as it is moving to the centre stage of international development finance. We argue that a better understanding of China’s development finance abroad involves going beyond looking at linkages to commodity supply chains to focusing on China’s current large ambitions to move up the value chain through technology and innovation and to leverage its own necessary green growth revolution into a global role in a global green growth revolution, with its own advanced expertise and enterprises working at the frontier of development. To harness China’s growing financial power as a force for good, the world needs to take advantage of China’s proactive move to utilize tri-angular cooperation and multilateral development institutions.
Chinas-development-finance-past-present-and-future.pdf
The State, the Market and Development
Author
Joseph E. Stiglitz
Preview
The past 30 years have been an exciting time for development. There have been great successes--hundreds of millions of people moved out of poverty, led by the half billion reduction in poverty in China. The rates of growth attained by China, India, and several other countries have been unprecedented. We are witnessing the correction of an historical anomaly in which China and India, with some 40 percent of the world's population, had less than 10 percent of the world's income.
There have also been some notable failures, some widely expected, some a surprise. Communism failed to deliver on its promises, support for economies built on those principles waned, and countries that based their economy on them either faced an economic collapse or changed. On the other hand, the transition from communism to a market economy in the former Soviet Union and Eastern Europe has, for the most part, not gone well. In contrast, the transition in China and Vietnam has gone better than anyone anticipated. Africa experienced widespread stagnation in the first quarter century of the post-colonial era. More recently, there has been a race between population and poverty reduction: the percentage in poverty has gone down, but the absolute numbers of impoverished have increased.
The-state-the-market-and-development.pdf
Trade and Development 1985-2015
Author
Ronald Findlay
Preview
Trade and development has come a long way since 1985. The main difference is the increasing relative shift in global production from North to South resulting from the rapid rise of first China and then India after they both adopted more outward-looking policies in the decade and a half or so after about 1980. WIDER itself encouraged much of the research on North-South models that was popular at the time, with a Solovian neoclassical North being the “engine of growth” for the world economy as a whole, pulling the dualistic Lewisian economy of the South along with its demand for primary products and labor-intensive manufactures. Since the onset of the financial crises in the first decade of this century the northern engine has been notably slowing down, with what seems to be an exogenous downward shift in the rate of technical progress combined with a slackening of aggregate investment demand, recalling Alvin Hansen’s secular stagnation thesis of the forties and early fifties. Meanwhile China, after three decades of double-digit growth concentrated on the more traditional manufacturing sectors, has passed its “Lewisian Turning Point” in the opinion of informed observers, with the associated rising real wage and falling rate of profit reducing the growth rate to 7% or less. Global growth thus appears to be slowing down at both poles, with the adverse consequences spilling over in both directions. Central banks in the North have driven interest rates down close to zero, leaving no possibilities for further expansionary intervention, while fiscal policy has been crippled by the politically successful calls for austerity in both Europe and the United States.
Trade-and-development-1985-2015.pdf
The Economics of Peace in War-Torn Countries: The Historical Record and the Path Forward
Author
Graciana del Castillo
Preview
Since the fall of the Berlin Wall, the ‘economics of peace’—that is, ‘economic reconstruction’ or the ‘economic transition’ in countries emerging from Cold-War related conflicts and embarking in a complex transition to peace—required a new paradigm. One would think that with its stellar record of setting the stage for world peace, the Marshall Plan—the most successful reconstruction program of all times—could have provided the model for more recent experiences. Although the Plan holds some far-reaching lessons, it took place in a radically different political, security, social, and economic context.
The paper is organized as follows: Section I discusses differences between economic reconstruction in the present context and reconstruction in the past. It also discusses the dismal record of war-torn countries and reviews what is at stake if such record is not improved. Section II distinguishes between the economics of war, the economics of peace and the economics of development. Conflation between economic reconstruction and normal development, as well as delays in moving away from the underground war economy, have had tragic policy consequences for war-torn countries.
The-economics-of-peace-in-war-torn-countries-The-historical-record-and-the-path-forward.pdf
Toward Better Global Poverty Measures
Author
Martin Ravallion
Abstract
While much progress has been made over the last 25 years in measuring global poverty, there are a number of challenges ahead. The paper discusses three sets of problems: (i) how to allow for social effects on welfare, recognizing the identification issues involved; (ii) the need to monitor progress in raising the consumption floor above its biological level, in addition to counting the number of people living near the floor; and (iii) addressing the longstanding concerns about prevailing approaches to making inter-country comparisons of price levels facing poor people. Some suggestions are offered for operational solutions, building on past research.