Globalization, Growth and Sustainability

332 Pages·1997·8.549 MB·English

by  Satya Dev Gupta, Nanda K. Choudhry (auth.), Satya Dev Gupta, Nanda K. Choudhry (eds.)

Globalization, Growth
and Sustainability
RECENT ECONOMIC THOUGHT SERIES
Editors:
Warren J. Samuels William Darity, Jr.
Michigan State University University of North Carolina
East Lansing, Michigan, USA Chapel Hill, North Carolina, USA
Other books in the series:
Magnusson, Lars: MERCANTILIST ECONOMICS
Garston, Neil: BUREAUCRACY: THREE PARADIGMS
Friedman, James W.: PROBLEMS OF COORDINATION IN
ECONOMIC ACTIVITY
Magnusson, Lars: EVOLUTIONARY AND NEO·SCHUMPETERIAN
APPROACHES TO ECONOMICS
Reisman, D.: ECONOMIC THOUGHT AND POLITICAL THEORY
Burley, P. and Foster, J.: ECONOMICS AND THERMODYNAMICS:
NEW PERSPECTIVES ON ECONOMIC ANALYSIS
Brennan, H.G. and Waterman, AC.: ECONOMICS AND RELIGION:
ARE THEY DISTINCT?
Klein, Philip A.: THE ROLE OF ECONOMIC THEORY
Semmler, Willi.: BUSINESS CYCLES: THEORY AND EMPIRICS
Little, Daniel: ON THE RELIABILITY OF ECONOMIC MODELS:
ESSAYS IN THE PHILOSOPHY OF ECONOMICS
Weimer, David L.: INSTITUTIONAL DESIGN
Davis, John B.: THE STATE OF THE INTERPRETATION OF KEYNES
Wells, Paul: POST·KEYNESIAN ECONOMIC THEORY
Hoover, Kevin D.: MACROECONOMETRICS:
DEVELOPMENTS, TENSIONS AND PROSPECTS
Kendrick, John W.: THE NEW SYSTEMS OF NATURAL ACCOUNTS
Groenewegen, John: TRANSACTION COST ECONOMICS AND BEYOND
King, J.E.: AN ALTERNATIVE MACROECONOMIC THEORY
Schofield, Norman: COLLECTIVE DECISION·MAKING: SOCIAL CHOICE
AND POLITICAL ECONOMY
Menchik, Paul L.: HOUSEHOLD AND FAMILY ECONOMICS
Gupta, Kanhaya L.: EXPERIENCES WITH FINANCIAL LIBERALIZATION
Cohen, Avi J., Hagemann, Harald, and Smithin, John:
MONEY FINANCIAL INSTITUTIONS AND MACROECONOMICS
Mason, P.L. and Williams, R.M.:
RACE, MARKETS, AND SOCIAL OUTCOMES
Gupta, Satya Dev: THE POLITICAL ECONOMY OF GLOBALIZATION
Fisher, R.C.: INTERGOVERNMENTAL FISCAL RELATIONS
Mariussen, A. and Wheelock, J.:
HOUSEHOLDS, WORK AND ECONOMIC CHANGE:
A COMPARATIVE INSTITUTIONAL PERSPECTIVE
Globalization, Growth
and Sustainability
Edited by
Satya Dev Gupta
St. Thomas University,
Fredericton, New Brunswick
Canada
with
Nanda K. Choudhry
University of Toronto
Toronto, Ontario
Canada
~.
"
Springer Science+Business Media, LLC
Library of Congress Cataloging-in-Publication Data
Globalization, growth and sustainability / edited by Satya Dev Gupta
with Nanda K. Choudhry.
p. cm. -- (Recent economic thought series ; 58)
Includes bibliographical references (p. ).
ISBN 978-1-4613-7844-0 ISBN 978-1-4615-6203-0 (eBook)
DOI 10.1007/978-1-4615-6203-0
1. International economic integration. 2. Economic development.
3. Regional economic disparities. 4. Sustainable development.
1. Gupta, Satya Dev. II. Choudhry, Nanda K. III. Series.
HF1418.5.G584 1997
338.9--dc21 97-15644
CIP
Copyright @) 1997 Springer Science+Business Media New York
Origina11y published by Kluwer Academic Publishers, New York in 1997
Softcover reprint ofthe hardcover Ist edition 1997
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system or transmitted in any form or by any means, mechanical,
photo-copying, recording, or otherwise, without the prior written permission of
the publisher, Springer Science+Business Media, LLC.
Printed on acid-free paper
To Sarita
CONTENTS
Preface XI
1. Globalization, Growth and Sustainability: An Introduction 1
Satya Dev Gupta and Nanda K. Choudhry
Liberalization and Growth 4
Regional Integration 6
Equity and Sustainability 9
Concluding Remarks 12
References 13
I. LlBERALIZA TION AND GROWTH
2. Trade Barriers and Economic Growth: Theory and Evidence 15
Jong-Wha Lee and Phillip Swagel
Theoretical Frameworks 17
Empirical Implementation 21
Data 22
Estimation Results 27
Conclusions 32
References 33
3. Trade Liberalization and the International Distribution of
the Gains from Growth 35
Francisco L. Rivera-Batiz
The Empirical Evidence on Trade and Growth 36
Trade and Growth: The Theoretical Linkages 38
Endogenous Technical Change and Economic Growth 39
Trade, Technological Change and Long-Run Growth 41
National Innovation Systems and Long-Run Economic Growth 43
The Impact of International Trade on Endogenous Growth 51
Summary and Conclusions 53
References 56
4. Trade Liberalization and Growth 61
David Greenaway, Steve Leybourne and David Sapsford
Modeling Exports, Trade Liberalization and Growth 62
Smooth Transitions Analysis 72
Model Estimation 74
Summary and Concluding Remarks 79
References 81
5. Trade Liberalization and Growth in Developing Countries,
1950~988 85
Bartholomew Armah
Growth and Trade Liberalization 87
Outward Orientation Measures in Selected Countries 90
The Granger Procedure for Detecting Causality 95
Findings 101
Conclusions 111
Appendix 113
References 114
II. REGIONAL INTEGRA TION
6. Regional Trading Blocs and Their Implications for
the Indian Economy 119
D. M Nachane and Lakshmi R.
EC and the NAFTA: General Considerations 121
Trading Arrangements 122
Generalized System of Preferences 125
Multifibre Agreement 127
EC Impact on India 129
NAFT A Impact on India 133
Trade Blocs in the South 137
Conclusions 139
References 141
7. Globalization, Free Trade and Economic Growth in Mexico 145
Hassan Bougrine
The Orthodox Model of Trade and Growth 147
The Alternative Explanation 148
Economic Performance in Mexico 149
Patterns of Foreign Investment in Mexico 151
Foreign Trade 154
Saving, Consumption, Employment and Wages 155
Economic Growth 157
Conclusion 159
References 159
8. Asia Pacific Economic Cooperation in the Changing
World Economy 161
Youn-Suk Kim
Historical Sketch of APEC 162
APEC's Open Regionalism 166
Asian Dimension 168
Flying-Wild-Geese Formation 171
Trade Liberalization within APEC 173
Conclusion 175
References 177
9. Trade and Foreign Direct Investment Linkages Among
APEC Economies 179
Ashfaq Ahmad and Someshwar Rao
Internationalization of APEC Economies 182
APEC Trade Linkages 185
APEC Investment Linkages 188
Interrelationship Between Trade and Investment Linkages 194
Conclusions and Policy Implications 198
Appendix 200
References 212
10. Succeeding in the Global Business Environment:
A Challenge for Small States In the Twenty-first Century 215
Betly Jane Punnett
The Global Business Environment 216
Characteristics of Small States 218
Small is Dangerous 219
Small is Beautiful 222
Strategic Solutions 224
Proactive Policies 227
Conclusions 228
References 229
111. EQUITY AND SUSTAINABILITY
11. Globalization and Sustainable Development 231
Meghnad Desai
Can Sustainable Economic Growth be Measured? 233
Market Prices as Appropriate Green Signals 235
Globalization 236
Conclusion 239
Appendix 240
References 241
12. Globalized Trade and Environmental Protection 243
Sohrab Abizadeh, Michael Benarroch, Wilson Brown
and Robert Fenton
Environment in Trade Theory 245
Trade, Development and Sustainable Growth 247
Environmental Damage and Trade: Empirical Evidence 249
Policy Issues 250
Conclusion 254
References 256
13. Global Market Relations and the Phenomenon of
Tropical Deforestation 259
Mohammed Dore, Mark Johnston and Harvey Stevens
Seven Econometric Models Explaining Deforestation 261
Global Market Relations and Endogeneity 266
Conclusion 270
References 271
14. What Is Sustainable Trade? 273
Patricia Perkins
Alternative Definitions of Sustainable Trade 274
Indicators of Sustainable Trade 285
Conclusion 290
References 294
15. Global Economic Integration and Justice:
A Capabilities Approach 299
George DeMartino
Harmonization and Its Discontents 300
An Internationalist Normative Principle 304
Capabilities Equality and the Integration Debate 307
The Social-Index Tariff Structure 309
Conclusion 312
References 313
Index 317
Contributors 323
PREFACE
Globalization is transforming the world at an accelerating pace. Integration of the
world continues, widening and intensifying international linkages in economic,
political and social relations. Liberalization of trade and fmance, lubricated by
revolutionary changes in information technology, has resulted in significant
economic growth at the global level. On the other hand, the process of globalization
is changing the nature of production relations, threatening the traditional roles of the
nation-state, and carrying with it far-reaching implications for sustainable growth,
development and the environment.
Although both developed and developing countries are actively
participating in this saga of globalization, nearly ninety countries, as the United
Nations' Human Development Report, 1996 indicates, are worse off economically
than they were ten years ago, leading to "global polarization" between haves and
have nots. The report further indicates that the gap between the per capita incomes
of the industrialized world and the developing countries, far from narrowing, has
more than tripled during the last thirty years. A majority of the countries benefiting
from globalization have seen a rise in inequality and poverty. This failure of market
driven globalization to distribute its benefits equitably led the United Nations to
proclaim 1996 as the International Year for the Eradication of Poverty (IYEP) and
the decade of 1997-2006 as the international decade for the eradication of poverty,
and to promote "people-centered sustainable development".
It is against this backdrop that nearly seventy leading scholars world wide
have come together to explore and analyze a variety of challenges facing the "global
village". Their research is contained in a set of three volumes. One volume, entitled
Dynamics o/Globalization and Development, examines the impact ofliberalization
in the fields of aid, fmance, capital, technology and management policies both at the
micro and macro levels. Another volume, The Political Economy o/Globalization
focuses on the issues arising from a political economy perspective on globalization,
including issues such as erosion of national sovereignty, increasing tensions
between North and South and between capital and labor, and possible roles of
international institutions in ameliorating the situation.
This volume focuses on the implications of both regional and global trade
liberalization and complementary macroeconomic policy reforms on growth, equity,
and sustainability. While considerations of growth, equity, and sustainability
permeate the entire volume, the studies have been classified in three sections
according to their particular focus. The studies contained in the first section focus