Economics in a Changing World: Volume 4: Development, Trade and the Environment

323 Pages·1994·28.99 MB·English

by  Professor Edmar L. Bacha (eds.)

ECONOMICS IN A CHANGING WORLD
Volume 4: Development, Trade and the Environment
This is lEA conference volume no. II 0
ECONOMICS IN A CHANGING WORLD
Congress Editor: Anthony B. Atkinson
Volume 1 SYSTEM TRANSFORMATION: EASTERN AND
WESTERN ASSESSMENTS
Abel Aganbegyan, Oleg Bogomolov and Michael Kaser
(editors)
Volume 2 MICROECONOMICS
Beth Allen (editor)
Volume 3 PUBLIC POLICY AND ECONOMIC ORGANIZATION
Dieter Bos (editor)
Volume 4 DEVELOPMENT, TRADE AND THE
ENVIRONMENT
Edmar L. Bacha (editor)
Volume 5 CAPITAL AND LABOUR MARKETS AND
ECONOMIC GROWTH
Jean-Paul Fitoussi (editor)
Economics in a
Changing World
Proceedings of the Tenth World Congress of the
International Economic Association, Moscow
Congress Editor: Anthony B. Atkinson
Volume4
DEVELOPMENT, TRADE AND
THE ENVIRONMENT
Edited by
Edmar L. Bacha
in association with the
Palgrave Macmillan
© International Economic Association 1994
Softcover reprint of the hardcover 1st edition 1994
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First published in Great Britain 1994 by
THE MACMILLAN PRESS LTD
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and London
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ISBN 978-1-349-23460-8 ISBN 978-1-349-23458-5 (eBook)
DOI 10.1007/978-1-349-23458-5
First published in the United States of America 1994 by
Scholarly and Reference Division,
ST. MARTIN'S PRESS, INC.,
175 Fifth Avenue,
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ISBN 978-0-312-10738-3
Library of Congress Cataloging-in-Publication Data
International Economic Association. World Congress
(lOth: 1992: Moscow, Russia)
Economics in a changing world.
(I.E.A. conference volume; no II 0.)
Includes bibliographical references.
Contents: - v.3. Public policy and economic
organisation I edited by Dieter Bils-v. 4. Develop
ment, trade, and the environment I edited by Edmar L.
Bacha.
I. Economic policy-Congresses. I. Atkinson, A. B.
(Anthony Barnes).
HD73.1575 1994 330 93-1789
ISBN 978-0-312-10182-4 (v.3) CIP
ISBN 978-0-312-10738-3 (v.4)
10 9 8 7 6 5 4 3
06 05 04 03 02 01 99 98 97
Contents
Preface by Anthony B. Atkinson vii
The International Economic Association xii
List of Contributors xiv
Abbreviations and Acronyms xvi
Introduction Edmar L. Bacha xix
PART I ECONOMIC INTERDEPENDENCE AND
RISK INSURANCE
1 Multinational Firms in the Theory of International
Trade
Wilfred J. Ethier 3
2 Co-operation and Competition in International
Environmental Protection
Scott Barrett 34
3 Do the Poor Insure? A Synthesis of the Literature on
Risk and Consumption in Developing Countries
Harold Alderman and Christina H. Paxson 48
4 Open-Economy Macroeconomics: Theory without
Evidence?
Peter Spencer 79
5 Macroeconomics and Small Developing Economies:
A Policy-Maker's Perspective
DeLisle Worrell 98
v
VI Contents
PART II INTERNATIONAL CONSTRAINTS AND
DOMESTIC POLICY-MAKING
6 Capital Inflows to Latin America: The 1970s
and 1990s
Guillermo A. Calvo, Leonardo Leiderman and
Carmen M. Reinhart 123
7 International Constraints and Economic Policy-Making
in African Countries
M. I. Mah'moud 149
8 The Vulnerability of Inflation Stabilization to
External Shocks: A Case Study of Bolivia
Juan Antonio Morales 171
9 The Unorthodox Response of the South African
Economy to Changes in Macroeconomic Policy
Charles Harvey and Carolyn Jenkins 195
PART III ECONOMIC REFORM AND GROWTH
PROSPECTS
10 Trade and Industrial Policy Reform in Senegal:
1986-90
Eckhard Siggel 225
11 Issues in Structural Adjustment of the Indian Economy
Mihir Rakshit 258
12 The Prospects for China's Economic Development and
Reform in the 1990s
Luo Yuanzheng, Li Guanan and Sun Jian 279
13 The Future of the Mediterranean Basin
Michel Grenon 287
Preface
Anthony B. Atkinson
The World Congress of the International Economic Association held
in Moscow in August 1992 was the tenth in a series which began in
Rome in 1956 and which had been held most recently in New Delhi in
1986 and Athens in 1989. Each of the previous congresses has had its
distinctive features, but the Tenth Congress was undoubtedly special
because it took place against a background of historic changes in the
Russian economy and society. To quote from the letter sent by Jacques
Delors, President of the Commission of the European Communities,
which co-sponsored the Congress:
The former Soviet society is facing a period of enormous changes,
the results of which are of global significance. The huge and urgent
tasks to be accomplished call for a sound analysis of the process of
economic transformation, to be carried out by Eastern as well as
Western experts. The Tenth World Congress of the lEA will offer
the opportunity for them to have discussions together, start collab
oration and develop a common language.
Those who were present at the Moscow Congress will know that there
was indeed lively discussion of the choices facing Russian economic
policy, and that it provided first-hand insight into the problems of
transition to a market economy. The Congress represented an unpre
cedented opportunity for contacts, both formal and informal, between
economists from East and West.
At the same time, the 1992 Congress was not solely concerned with
the problems of economic transformation. Like the Ninth Congress in
Athens, it covered in principle all fields of economics. While the his
toric changes taking place in Russia and Eastern Europe were in the
forefront of everyone's mind, the Congress was not limited to this
subject. There were several reasons for this. The first is that, with a
meeting only every three years, it is important that all economists should
feel free to attend, whatever their fields of specialism. As my predecessor,
Amartya Sen, remarked in his Preface to the Athens Congress volumes,
vii
viii Preface
'it seems unreasonable to make economists of particular specialisation
wait many multiples of three years for their tum to come up'. Sec
ondly, while there were indeed important sessions on economic trans
formation, it was the hope of the Programme Committee that sessions
in all areas would be of interest to Russian economists and others
whose economies are in transition. Subjects such as Public Finance,
the Economics of Financial Markets, Business History and the Econ
omics of Health, just to take some examples, are very elevant to what
is happening in the Russian economy and in Eastern Europe.
Thirdly, the lEA is an international association, and while meeting
in Russia it was most important that we did not lose sight of the
economic issues which confront other parts of the world. It would be
easy for the economics profession to become immersed in the issues
of transition from communism to a market economy and to neglect
the enduring problems of Africa, Asia and Latin America. In this con
text I should draw attention to the sessions on the development prob
lems of Latin America, China, on economic policy with particular
reference to Africa, and on the Indian economy. The last of these
sessions was organized in honour of Sir Austin Robinson. Unfortu
nately he could not attend the Congress, but he continued to play an
active role in the Association's affairs, as he had since its creation
more than 40 years ago, before his untimely death in 1993.
The Congress proramme consisted of five plenary lectures (those
by Professor A. Blinder, Academician 0. Bogomolov, Professor B.
Grodal, Professor D. Patinkin and the Presidential Address), of four
panel sessions (chaired by Professor K. J. Arrow, B. Csik6s-Nagy,
J. Dreze and MrS. Wright), twenty-nine half-day sessions and seventeen
full-day sessions, with invited and contributed papers. The programme
was organized on a decentralized basis, as was perhaps appropriate in
the new Russian circumstances, with each session being organized by
one or two Programme Committee members. To them were sent the
more than 400 papers submitted, and they arranged for the Invited
Speakers. On the final programme were 67 invited papers and 241 con
tributed papers. Those taking part were drawn from more than 50 countries.
The full list of the Programme Committee is as follows:
A. G. Aganbegyan, Academy of National Economy, Moscow, Russia
B. Allen, University of Minnesota, USA
M. Aoki, Stanford University, USA
K. J. Arrow, Stanford University, USA
E. L. Bacha, Pontificia Universidade Catolica do Rio de Janeiro, Brazil
Anthony B. Atkinson ix
K. Basu, D,elhi School of Economics, India
0. Blanchard, Massachusetts Institute of Technology, USA
0. Bogomolov, Academy of Sciences, Moscow, Russia
D. Bt>s, University of Bonn, Germany
B. Csik6s-Nagy, Hungarian Economic Association
J.-P. Danthine, University of Lausanne, Switzerland
P. A. David, Stanford University, USA
A. S. Deaton, Princeton University, USA
J.-P. Fitoussi, Observatoire Fran~ais des Conjonctures Economiques,
Paris, France
M. Germouni, Rabat, Morocco
J. Le Grand, London School of Economics, UK
J.-M. Grandmont, Centre d'Etudes Prospectives d'Economie Mathema-
a
tiques Appliquees la Planification, Paris, France
L. Hannah, London School of Economics, UK
A. Heertje, University of Amsterdam, Holland
M. Hoel, University of Oslo, Norway
B. Holmlund, Uppsala University, Sweden
J. Humphries, University of Cambridge, UK
Y. M. Ioannides, Virginia Polytechnic Institute, USA
A. P. Kirman, European University Institute, Florence, Italy
A. Krueger, Duke University, USA
D. Kumar, University of Delhi, India
Y. Luo, Beijing University, China
M. I. Mah'moud, African Centre for Monetary Studies, Senegal
P. Maillet, University of Lille, France
J. Malcomson, University of Southampton, UK
E. Maskin, Harvard University, USA
J. Melitz, Institut Nationale de Ia Statistique et des Etudes Economiques,
Paris, France
P.-A. Muet, Observatoire Fran\!ais des Conjonctures Economiques, Paris,
France
I. Musu, Venice University, Italy
T. Negishi, University of Tokyo, Japan
L. Phlips, European University Institute, Florence, Italy
R. Portes, Centre for Economic Policy Research, London, UK
B. M. S. van Praag, Erasmus University, Holland
J. Sachs, Harvard University, USA
P. Saunders, University of New South Wales, Australia
C. Schmidt, Laboratoire d'Economie et de Sociologie des Organisations
de Defence, Paris, France