resource abundance and economic development

Upload: coffeedress

Post on 15-Oct-2015

22 views

Category:

Documents


1 download

TRANSCRIPT

  • 5HVHDUFKIRU$FWLRQ

    5HVRXUFH$EXQGDQFHDQG(FRQRPLFHYHORSPHQW

    ,PSURYLQJWKH3HUIRUPDQFHRI5HVRXUFH5LFK&RXQWULHV

    5LFKDUG0$XW\

    7KLV VWXG\ KDV EHHQ SUHSDUHG ZLWKLQ WKH 818:,(5 SURMHFW RQ (QYLURQPHQWDO([SRUWDQG+XPDQHYHORSPHQW3UREOHPVLQ1DWXUDO5HVRXUFH%DVHG*URZWK0RGHOV

  • ZKLFK LV GLUHFWHG E\ 3URIHVVRU 5LFKDUG 0 $XW\ 818:,(5 DQG 8QLYHUVLW\ RI/DQFDVWHU8.

    818:,(5JUDWHIXOO\ DFNQRZOHGJHV WKH ILQDQFLDO FRQWULEXWLRQ WR WKHSURMHFWE\ WKH*RYHUQPHQW RI 6ZHGHQ 6ZHGLVK ,QWHUQDWLRQDO HYHORSPHQW &RRSHUDWLRQ $JHQF\6LGD

  • 818:RUOG,QVWLWXWHIRUHYHORSPHQW(FRQRPLFV5HVHDUFK818:,(5$UHVHDUFKDQGWUDLQLQJFHQWUHRIWKH8QLWHG1DWLRQV8QLYHUVLW\

    7KH%RDUGRI818:,(5

    1RUD/XVWLJ+DUULV0XWLR0XOH6\OYLD2VWU\-XNND3HNNDULQHQ9LFH&KDLUSHUVRQ0DULDGH/RXUGHV3LQWDVLOJR*HRUJH9DVVLOLRX&KDLUSHUVRQ5XEHQ

  • LLL

    &217(176

    /,672)7$%/(6$1),*85(6 Y

    )25(:25 YLL

    $%675$&7 YLLL

    , 7+(&217(;7$1%$&.*52812)7+(5(6($5&+

    7KHXQGHUSHUIRUPDQFHRIWKHUHVRXUFHULFKHFRQRPLHV $EURDGHUJURZWKDFFRXQWLQJIUDPHZRUN

    ,, 1$785$/5(6285&((;32576,19(670(17$1(&2120,&*52:7+

    6W\OL]HGIDFWVRIQDWXUDOUHVRXUFHVDQGHFRQRPLFJURZWK 6DYLQJLQYHVWPHQWDQGWKHGHPRJUDSKLFWUDQVLWLRQ 3ROLF\HUURULQUHVRXUFHULFKFRXQWULHV

    ,,, $&&2817,1*)251$785$/&$3,7$/6867$,1$%/((9(/230(17

    0HDVXULQJWKHLPSRUWDQFHRIQDWXUDOFDSLWDOLQHFRQRPLFGHYHORSPHQW $FFRXQWLQJIRUWKHFRQVXPSWLRQRIQDWXUDODQGHQYLURQPHQWDOUHVRXUFHV *HQXLQHVDYLQJDVDPHDVXUHRIVXVWDLQDEOHGHYHORSPHQW

    ,9 +80$1&$3,7$/6.,//$&&808/$7,21$1,1&20(,675,%87,21

    1DWXUDOUHVRXUFHVDQGVNLOODFFXPXODWLRQ 6NLOODFFXPXODWLRQLQFRPHGLVWULEXWLRQDQGHFRQRPLFJURZWK

    9 +80$1&$3,7$/62&,$/$1,167,787,21$/&$3,7$/

    HILQLQJVRFLDODQGLQVWLWXWLRQDOFDSLWDO 0HDVXULQJVRFLDODQGLQVWLWXWLRQDOFDSLWDO 3DWWHUQVRIVRFLDODQGLQVWLWXWLRQDOFDSLWDODFFXPXODWLRQ

    9, 02(/62)5(6285&(5,&+$15(6285&((),&,(17*52:7+

    LYHUJLQJGHYHORSPHQWPRGHOVVHTXHQFHGLQGXVWULDOL]DWLRQYHUVXVVWDSOHWUDS

    0RGHOOLQJWKHSROLWLFDOHFRQRP\RIUHVRXUFHGULYHQJURZWK

  • LY

    9,, +,6725,&$/3(563(&7,9(215(6285&($%81$1&(

    0RGHOVRIORQJWHUPWUHQGVLQQDWXUDOUHVRXUFHVDQGJURZWK 3UHVKLVWRULFDOHYLGHQFH (PSLULFDOHYLGHQFHRISRVWVJURZWKFROODSVH

    9,,, 32/,&,(6)25,03529,1*7+(3(5)250$1&(2)5(6285&(5,&+(9(/23,1*$175$16,7,21(&2120,(6

    2YHUYLHZOHDUQLQJIURPSRVWZDUH[SHULHQFH 5HIRUPLQJGHYHORSLQJPDUNHWHFRQRPLHV 5HIRUPLQJWKHWUDQVLWLRQHFRQRPLHV

    ,; &21&/86,216

    5()(5(1&(6

  • Y/,672)7$%/(6$1),*85(6

    7DEOH &KDUDFWHULVWLFVRIVL[QDWXUDOUHVRXUFHHQGRZPHQWFDWHJRULHV

    7DEOH 3HUFDSLWDLQFRPHDQGHFRQRPLFJURZWK6\UTXLQ&KHQHU\DJJUHJDWHV

    7DEOH 6DYLQJVLQYHVWPHQWDQGQHWFDSLWDOIORZVWKUHH$VLDQUHJLRQV

    7DEOH 3HUFDSLWDZHDOWKE\PDMRUJOREDOUHJLRQ

    7DEOH *HQXLQHVDYLQJVUDWHVVHOHFWHGFRXQWULHV

    7DEOH 7\SRORJ\RISROLWLFDOVWDWHVDIWHU/DO

    7DEOH 6HTXHQFHGLQGXVWULDOL]DWLRQ7DLZDQ

    7DEOH 5HDOSHUFDSLWD*3JURZWKE\UHJLRQVDPSOHFRXQWULHV

  • YL

  • YLL

    )25(:25

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

    *LRYDQQL$QGUHD&RUQLDLUHFWRU818:,(5

    6HSWHPEHU

  • YLLL

    $%675$&7

    6LQFH WKH V WKH UHVRXUFHULFK GHYHORSLQJ HFRQRPLHV KDYH XQGHUSHUIRUPHGFRPSDUHGZLWKWKHUHVRXUFHGHILFLHQWHFRQRPLHV7KLVSDSHUH[SODLQVZK\DQGRXWOLQHVWKH UHIRUPV WKDW DUH UHTXLUHG LQ RUGHU WR DFKLHYH HQYLURQPHQWDOO\ DQG VRFLDOO\VXVWDLQDEOHUHVRXUFHULFKGHYHORSPHQW,WDUJXHVWKDWVWUXFWXUDOFKDQJHLQWKHUHVRXUFHULFK FRXQWULHV FDXVHV WKH WUDGHDEOH VHFWRU WR VKULQN YLVj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

  • ,7+(&217(;7$1%$&.*52812)7+(5(6($5&+

    7KHXQGHUSHUIRUPDQFHRIWKHUHVRXUFHULFKHFRQRPLHV

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

    TABLE 1CHARACTERISTICS OF SIX NATURAL RESOURCE ENDOWMENT CATEGORIES

    Resourceendowment

    Number ofcountries

    Cropland(Ha/hd)

    GDP1970($b)

    PCGDP1970($)

    PCGDPgrowth

    1960-90(%/Yr)

    PCGDPgrowth

    1970-93(%/Yr)

    Resource poor Large 7 0.15 21.05 196 3.5 3.7 Small 13 0.16 1.94 343 2.5 2.1Resource rich Large 10 0.56 22.99 574 1.6 1.3 Small Non-mineral 31 0.57 1.41 250 1.1 0.7 Hard mineral 16 0.66 1.23 304 0.8 -0.2 Oil exporter 8 0.44 2.01 831 1.7 0.8All countries 85 0.48 5.67 362 1.6 1.1

    Source: Auty (1997a), based upon UNCTAD data.

  •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

    ([SODQDWLRQVIRUWKHXQVDWLVIDFWRU\SHUIRUPDQFHRIWKHUHVRXUFHULFKFRXQWULHVKDYHEHHQVRXJKW LQ WHUPVRIERWK H[WHUQDO IDFWRUV DQG LQWHUQDO IDFWRUV 5DQLV7DNLQJ WKHH[WHUQDO IDFWRUV 5DQLV DGYDQFHV WKUHH K\SRWKHVHV )LUVW SULPDU\ SURGXFW H[SRUWVKHLJKWHQ LQFRPH LQHTXDOLW\ VR WKDW VRFLHW\HTXDWHV WUDGHZLWK WKH LQWHUHVWVRI WKH ULFK6HFRQG WKH XWFK LVHDVH HIIHFWV VHULRXVO\ ZHDNHQ WKH FRPSHWLWLYHQHVV RI WKH QRQERRPLQJ WUDGHDEOH VHFWRUV 7KLUG WKH SULFHV RI SULPDU\ SURGXFWV H[SHULHQFH KLJKHUYRODWLOLW\ WKDQ GR WKH SULFHV RI PDQXIDFWXUHG JRRGV FDXVLQJ JURZWK FROODSVHV LQ WKHDEVHQFH RI H[SRUW GLYHUVLILFDWLRQ 7XUQLQJ WR WKH LQWHUQDO FDXVHV WKHUH DUH DOVR WKUHHFRQWHQGLQJK\SRWKHVHV7KH\UHYROYHDURXQGWKHPLVPDQDJHPHQWRIWKHQDWXUDOUHVRXUFHUHQWV)LUVWWKHUHQWVGLYHUWDWWHQWLRQIURPWKHSURFHVVRIZHDOWKFUHDWLRQDQGLQWRUHQWVHHNLQJDFWLYLW\VHFRQGWKHUHQWVIURPQDWXUDOUHVRXUFHVVXSSRUWWKHLPSRUWVXEVWLWXWLRQSURFHVVORQJDIWHULWVFRQWULEXWLRQWRGHYHORSPHQWKDVFHDVHGWREHSRVLWLYHDQGWKLUGWKHUHQWVGLVWUDFWJRYHUQPHQWVIURPWKHQHHGWRGHYHORSKXPDQUHVRXUFHV,QIDFWDOOVL[K\SRWKHVHVFRQFHUQLQJWKHFDXVHVRIWKHXQVDWLVIDFWRU\SHUIRUPDQFHRIWKHUHVRXUFHULFKFRXQWULHVDUHFRPSDWLEOHZLWKHDFKRWKHU

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

  • JHQHUDOO\GLVDSSRLQWLQJUDWHVRIKXPDQDQGVRFLDOFDSLWDOIRUPDWLRQ":KDWUROHVGRWKHFORVXUHRIWKHHFRQRP\DQGWKHDVVRFLDWHGFUHDWLRQRIGLVFUHWLRQDU\UHQWVSOD\LQSROLF\IDLOXUH":KDW DUH WKH LPSOLFDWLRQV RI SROLF\ IDLOXUH IRU WKH VXVWDLQDEOH XVH RI QDWXUDOUHVRXUFHV":K\KDYH WKHVPDOOHU UHVRXUFHULFKFRXQWULHVJURZQVORZHU WKDQ WKH ODUJHURQHV RYHU UHFHQW \HDUV" ,V SROLF\ IDLOXUH PRUH OLNHO\ ZKHQ WKH UHVRXUFH UHQWV DUHFRQFHQWUDWHGRQWKHJRYHUQPHQWDVLQWKHFDVHRIWKHPLQHUDOHFRQRPLHVDQGWKHPLGLQFRPHWUDQVLWLRQHFRQRPLHV"

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

    $EURDGHUJURZWKDFFRXQWLQJIUDPHZRUN

    7KHQHRFODVVLFDOJURZWKPRGHOSUHVHQWVRXWSXWDVDIXQFWLRQRILQSXWVRIFDSLWDOODERXUDQGWHFKQRORJ\,WSUHGLFWVWKDWWKHORQJUXQUDWHRIJURZWKLVFRQVWUDLQHGE\WKHUDWHRIJURZWK RI WKH ODERXU IRUFH7KLV LV VR LI WKH SURGXFWLRQ IXQFWLRQ H[KLELWV GLPLQLVKLQJUHWXUQVWRFDSLWDOFRQVWDQWUHWXUQVWRVFDOHDQG]HURWHFKQRORJLFDOSURJUHVV,QLWVPRVWEDVLFIRUPWKHPRGHOLVH[SUHVVHGDV

  • PRGHO H[SODLQV EDUHO\ RQHWKLUG RI WKH GLIIHUHQFH LQ HFRQRPLF SHUIRUPDQFH EHWZHHQ(DVW$VLD DQG /DWLQ $PHULFD (IIRUWV WR UHPHG\ WKLV GHILFLHQF\ KDYH IRFXVHG ODUJHO\XSRQ HLWKHU WKH LQFRUSRUDWLRQ RI TXDOLWDWLYH FKDQJHV LQ WKH EDVLF LQSXWV RI WKH QHRFODVVLFDOPRGHO0DQNLZ
  •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

  • ,,1$785$/5(6285&((;32576,19(670(17$1(&2120,&*52:7+

    6W\OL]HGIDFWVRIQDWXUDOUHVRXUFHVDQGHFRQRPLFJURZWK

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

    TABLE 2PER CAPITA INCOME AND ECONOMIC GROWTH, SYRQUIN/CHENERY AGGREGATES

    Growth

    PC GDPNet

    investment ICOR Pop. PC GDPValueadded

    Labourprod. Years

    100-140 8 2.2 2.6 1.3 3.8 1.3 27140-280 10 2.3 2.8 2.0 4.8 1.7 35280-560 13 2.4 2.5 3.2 5.7 2.8 22560-1120 15 2.5 2,2 4.1 6.3 4.0 171120-2100 16 2.4 2.0 4.6 6.6 4.8 142100-3360 16 2.4 1.5 4.7 6.2 4.8 103360-5040 14 2.4 1.0 4.6 5.6 4.1 9

    Source: Syrquin (1986), 233.

    %XW DOO HOVH LV QRW HTXDO DQG WKH VL]H RI WKH PDQXIDFWXULQJ VHFWRU DOVR YDULHVV\VWHPDWLFDOO\ZLWKWKHQDWXUDOUHVRXUFHHQGRZPHQW7KHPDQXIDFWXULQJVHFWRURIODUJHFRXQWULHVJURZVWRDFFRXQWIRUDODUJHUVKDUHRI*3WKDQLQVPDOOHURQHV6\UTXLQDQG&KHQHU\ 7KHUHIRUH ODUJHU FRXQWULHV ZKHWKHU UHVRXUFHULFK RU UHVRXUFHGHILFLHQW KDYH D SURSHQVLW\ IRU IDVWHU JURZWK WKDQ WKHLU VPDOOHU FRXQWHUSDUWV

  •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

    6DFKVDQG:DUQHUDXVLQJWKHDYHUDJHVKDUHRIH[SRUWVLQ*3DVWKHLUPHDVXUHRIUHVRXUFHGHSHQGHQFHFRQILUPZLWKHFRQRPHWULFVDQHJDWLYHOLQNEHWZHHQUHOLDQFHRQQDWXUDOUHVRXUFHVDQGHFRQRPLFJURZWKDWDIRUWKH\HDUVVKRZWKDWWKHFURVVFRXQWU\DYHUDJHVKDUHRISULPDU\H[SRUWVLQ*3ZDVEXWWKDWDRQHXQLWVWDQGDUGGHYLDWLRQLQFUHDVHLQWKHVKDUHRISULPDU\H[SRUWVUHGXFHVWKHJURZWKUDWHRISHUFDSLWD*3E\DOPRVW7KLVILQGLQJGRHVQRWDSSHDUWREHVHQVLWLYHWRWKHLQFOXVLRQRI RWKHU YDULDEOHV LQ WKH DQDO\VLV RU WR FKDQJHV LQ WKH FKRVHQ PHDVXUH RI UHVRXUFHLQWHQVLW\ (OVHZKHUH 6DFKV DQG :DUQHU FRQILUP WKDW WKH XQGHUO\LQJ DGYHUVHHIIHFWRIDULFKQDWXUDOUHVRXUFHHQGRZPHQWRQSHUFDSLWD*3JURZWKLVLQGHHGUREXVW7KH\ VKRZ WKDW WKH ILQGLQJ SHUVLVWV DIWHU DGGLWLRQDO WHVWV WKDW FRQWURO IRU LQVWLWXWLRQDOTXDOLW\ WKH VKDUH RI LQYHVWPHQW LQ *3 WKH VKLIW LQ H[SRUWV SULFHV FRPSDUHG ZLWKLPSRUWSULFHVDGXPP\YDULDEOHIRUDUHJLRQDOHIIHFWWKHUHPRYDORIRXWOLHUVVXFKDVWKHRLOH[SRUWLQJFRXQWULHVDQGVSOLWWLQJWKHWLPHSHULRGLQWRWZRVHSDUDWHGHFDGHV

    $PRQJ WKHUHVRXUFHULFKFRXQWULHV WKRVHRI VXE6DKDUDQ$IULFDDQG WRD OHVVHUH[WHQWWKRVH RI /DWLQ$PHULFD KDYH SHUIRUPHG HVSHFLDOO\ SRRUO\XQFDQ ILQGV WKDWFRPSDUHG ZLWK RWKHU ORZLQFRPH UHJLRQV VXE6DKDUDQ $IULFDQ FRXQWULHV IDLOHG WRGLYHUVLI\ RXW RI VORZJURZWK XQSURFHVVHG SULPDU\ SURGXFW H[SRUWV LQWR IDVWHUJURZWKRQHV

  • $PHULFDKDVEHWWHUSURVSHFWVIRUUHVRXUFHEDVHGH[SRUWVKRZHYHU WKDQNVWRLWVKLJKHUOHYHO RI VNLOO DFFXPXODWLRQ 1HYHUWKHOHVV PRVW FRXQWULHV LQ WKDW UHJLRQ VWLOO IDLOHG WRDYRLGDJURZWKFROODSVHDIWHUWKHVHFRQGRLOVKRFN

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

    6DYLQJLQYHVWPHQWDQGWKHGHPRJUDSKLFWUDQVLWLRQ

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

    :LOOLDPVRQDUJXHVWKDWWKHQDWXUHRIWKHGHPRJUDSKLFWUDQVLWLRQFDQVLJQLILFDQWO\LPSDFWWKHUDWHRIVDYLQJ+LVVWDUWLQJSRLQWLVWKDWWKHFULWLFDOSRSXODWLRQSDUDPHWHUIRUJURZWK DFFRXQWLQJ LV QRW WKH FUXGH JURZWK UDWH DV XVHG LQ WKH QHRFODVVLFDO JURZWKPRGHO EXW UDWKHU WKH UDWH RI JURZWK RI WKH GHSHQGDQW SRSXODWLRQ +H VKRZV WKDW WKHZRUNHUGHSHQGDQW UDWLR WUDFHV WKUHH VWDJHV GXULQJ WKH GHPRJUDSKLF F\FOH HDFKZLWK DGLIIHUHQW LPSOLFDWLRQ IRU VDYLQJ DQG HFRQRPLF JURZWK )LUVW WKH GHSHQGHQF\ UDWLRGHWHULRUDWHV DV WKH VHFRQG VWDJH RI WKH GHPRJUDSKLF F\FOH KLJK ELUWK UDWH IDOOLQJPRUWDOLW\FDXVHVWKHQXPEHURIFKLOGUHQWRULVHLQSURSRUWLRQWRWKHZRUNIRUFH7KLVDFWVDVDGHSUHVVDQWRQHFRQRPLFJURZWKEHFDXVHHDFKZRUNHUPXVWVXSSRUWPRUHDQGPRUHSHRSOHDQGWKHUDWLRRIFRQVXPSWLRQWRVDYLQJULVHVRYHUZKDWLWZRXOGRWKHUZLVHEH%XWLQ WKH PLGGOH VWDJH RI WKH F\FOH DV SRSXODWLRQ JURZWK VORZV DQG WKH ZRUNIRUFHFRQWLQXHV WR H[SDQG WKH GHSHQGHQF\ UDWLR IDOOV DQG FRQIHUV D ERQXV IRU HFRQRPLF

  • JURZWK 7KLV LV EHFDXVH WKH UHVXOWLQJ LQFUHDVH LQ ZRUNIRUFH SDUWLFLSDWLRQ UDWHV DQGIDPLO\PHPEHULQFRPHQRWRQO\OLIWV WKHODERXULQSXWUHODWLYHWRWKHSRSXODWLRQEXW LWDOVRUDLVHVWKHVDYLQJUDWH7KHKLJKHUVDYLQJIORZVLQWRKLJKHULQYHVWPHQWLQRUGHUWRVHWXS QHZ VPDOOHU KRXVHKROGV DQG WR FUHDWH QHZ HPSOR\PHQW )XUWKHUPRUH KLJKHU WD[UHYHQXHV LPSURYH SXEOLF ILQDQFHV DQG OLIW SXEOLF VDYLQJ 0HDQZKLOH WKH VFDOH RIWUDQVIHUVUHODWLYHWRWKHSXEOLFILQDQFHVDOVRIDOOVDQGWKHUHIRUHVRWRRGRGLVWRUWLRQDU\WD[HV )LQDOO\ LQ WKH WKLUG VWDJH RI WKH GHPRJUDSKLF WUDQVLWLRQ WKH DJHLQJ RI WKHSRSXODWLRQLQFUHDVHVWKHGHSHQGHQF\UDWLRRQFHDJDLQDQGGHSUHVVHVWKHUDWHRIVDYLQJLQYHVWPHQW DQG HFRQRPLF JURZWK ,Q VXPPDU\ WKH PLGGOH VWDJH RI WKH GHPRJUDSKLFWUDQVLWLRQLVRQHRIIDVWHFRQRPLFJURZWKGXHEDVLFDOO\WRDIDYRXUDEO\ORZGHSHQGHQF\UDWLR ZKHUHDV WKH LQLWLDO VWDJH RI WKH WUDQVLWLRQ DQG WKH ILQDO VWDJH H[KLELW VORZHUHFRQRPLFJURZWK UDWHV$OO HOVH EHLQJ HTXDO WKH UHVRXUFHGHILFLHQW FRXQWULHV UHDS WKHJURZWKERQXVRIWKHPLGGOHVWDJHRIWKHF\FOHHDUOLHUWKDQWKHUHVRXUFHULFKFRXQWULHVIRUUHDVRQVJLYHQEHORZ

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

  • SULPDU\ VFKRRO HQUROPHQW E\ 0RUHRYHU WKH UDWH RI LQFUHDVH PD\ H[FHHG :RUOG%DQNE

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

    TABLE 3SAVINGS, INVESTMENT AND NET CAPITAL FLOWS, THREE ASIAN REGIONS (% GDP)

    Regions Savings Investment Current account gapEast Asia1955-59 13.9 18.8 -4.91965-69 24.0 25.1 -3.41975-79 29.7 30.0 -0.71985-89 34.0 28.3 5.3SE Asia1955-59 15.5 14.1 1.41965-69 16.2 19.0 -2.81975-79 26.8 29.7 -2.91985-89 28.3 28.2 0.1South Asia1955-59 10.4 12.8 -3.21965-69 9.5 13.4 -5.91975-79 11.0 16.4 -5.41985-89 10.0 18.8 -8.2

    Source: Higgins and Williamson (1997), 267.

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

  • WKURXJKDVORZHUSDVVDJHWKURXJKWKHGHPRJUDSKLFF\FOHDQGWKHPRUHFDSLWDOLQWHQVLYHQDWXUHRILQGXVWULDOGHYHORSPHQWLQVXFKFRXQWULHV$XW\

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

    3ROLF\HUURULQUHVRXUFHULFKFRXQWULHV

    6DFKVDQG:DUQHUEH[DPLQHWKHHIIHFWRISROLF\HUURUXVLQJWUDGHRSHQQHVVDVDSUR[\ IRU WKHGHJUHHRI VWDWH LQWHUYHQWLRQ7KH\QRWHD8VKDSHG UHODWLRQVKLSEHWZHHQWUDGH SROLF\ DQG QDWXUDO UHVRXUFH GHSHQGHQFH$V SULPDU\ SURGXFW H[SRUW GHSHQGHQFHLQFUHDVHV WUDGH SROLF\ ILUVW FORVHV EXW WKHQ RSHQV DJDLQ DW KLJKHU OHYHOV RI UHVRXUFHGHSHQGHQFH WKH WURXJK RI WKH 8VKDSH RFFXUV ZKHUH SULPDU\ H[SRUWV UHDFK RI*3 ZLWK PRVW /&V EHORZ WKLV OHYHO 6DFKV DQG :DUQHU DWWULEXWH WKLV 8VKDSHGHIIHFW WR IHDU RI XWFK LVHDVH E\ WKH JRYHUQPHQWV RI UHVRXUFHULFK FRXQWULHV 7KH\K\SRWKHVLVHWKDWWKLVIHDU OHDGVWRVWURQJHUSURWHFWLRQLVWSROLFLHV LQRUGHU WRVXVWDLQWKHIOHGJOLQJPDQXIDFWXULQJVHFWRU,QWHUHVWLQJO\WKHGRZQVZLQJRIWKH8VKDSHUHIOHFWVWKHGRPLQDQFHRIWKDWVHFWLRQRIWKHFXUYHE\WKRVHRLOH[SRUWHUVZLWKODUJHPLQHUDOUHVHUYHVWKDWODFNDQLQFHQWLYHWRGLYHUVLI\DZD\IURPGHSHQGHQFHRQDGHSOHWLQJPLQHUDODVVHW7KLVPD\H[SODLQWKHVXFFHVVRI&RQJRDQGDOVRRI%RWVZDQDZKRVHUHQWULFKGLDPRQGVKDYH JLYHQ WKDW FRXQWU\ PDQ\ RI WKH FKDUDFWHULVWLFV RI DQ RLOH[SRUWHU EXW ZLWK WKHDGGHGERQXVRIOHVVYRODWLOLW\LQUHYHQXHV

  •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jYLVWKHJURZWKLQWKHODERXUIRUFH

  • ,,,$&&2817,1*)251$785$/&$3,7$/6867$,1$%/((9(/230(17

    7KLVVHFWLRQILUVWDVVHVVHVWKHLPSOLFDWLRQVRIWKUHHGLIIHUHQWPHDVXUHVRIWKHGHSHQGHQFHRI DQ HFRQRP\ RQ QDWXUDO FDSLWDO ,W WKHQ EULHIO\ UHYLHZV ($5$ DQG HYDOXDWHV WKHFRQWULEXWLRQ WKDW JUHHQ DFFRXQWLQJ FDQ PDNH WR WKH DFKLHYHPHQW RI VXVWDLQDEOHGHYHORSPHQW)LQDOO\LWDGRSWVWKHJHQXLQHVDYLQJUDWHDVDSROLF\LQGH[IRUPRQLWRULQJWKHVXVWDLQDELOLW\RIGHYHORSPHQW

    0HDVXULQJWKHLPSRUWDQFHRIQDWXUDOFDSLWDOLQHFRQRPLFGHYHORSPHQW

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

  • DEDWHPHQW VWDQGDUGV7KH VWURQJ VHQVLWLYLW\RI WKH(.& WR SROLF\ YDULDEOHV 0RRPDZDQG8QUXK9LQFHQW LPSOLHV WKDW LQ WKH FRPLQJGHFDGHV LWV VKDSHPD\EHH[SHFWHGWRIODWWHQDQGVKLIWWRWKHOHIW)RUWKHSUHVHQWKRZHYHUWKH(.&VXJJHVWVWKDWWKH LQWHQVLW\ RI QDWXUDO UHVRXUFH FRQVXPSWLRQ LV OLNHO\ WR ULVH ZLWK ULVLQJ SHU FDSLWDLQFRPHXQWLOPLGLQFRPHOHYHOVDUHUHDFKHG

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

    TABLE 4PER CAPITA WEALTH, BY MAJOR GLOBAL REGION 1994

    RegionTotal wealth

    ($ per capita) (%)

    Humanresources

    (%)Produced assets

    (%) Natural capitalNorth America 326,000 76 19 5Pacific OECD 302,000 68 30 2Western Europe 237,000 74 23 2Middle East 150,000 43 18 39South America 95,000 74 17 9North Africa 55,000 69 26 5Central America 52,000 79 15 6Caribbean 48,000 69 21 11East Asia 47,000 77 15 8East + Southern Africa 30,000 66 25 10West Africa 22,000 60 18 21South Asia 22,000 65 19 16

    Source: World Bank (1998a).

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

  • GHYHORSPHQW WUDMHFWRU\ DQG LQ FRQGLWLRQLQJ WKH HIILFLHQF\ ZLWK ZKLFK ERWKSURGXFHG DQG KXPDQ FDSLWDO DUH GHSOR\HG 7KLV LV HVSHFLDOO\ WKH FDVH DW ORZHULQFRPHOHYHOV0RUHRYHUJURZWKLQPDQ\VPDOOHUUHVRXUFHULFKFRXQWULHVVHHPVWRKDYHEHFRPHHQYLURQPHQWDOO\XQVXVWDLQDEOHVLQFHWKHPLGV$WNLQVRQHWDO

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

  • $FFRXQWLQJIRUWKHFRQVXPSWLRQRIQDWXUDODQGHQYLURQPHQWDOUHVRXUFHV

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

    *HQXLQHVDYLQJDVDPHDVXUHRIVXVWDLQDEOHGHYHORSPHQW

    7KHPHDVXUHPHQWSUREOHPVPDNH LWXQOLNHO\ WKDW($5$ZLOO SURFHHGEH\RQGEHLQJD

    VKDGRZ DSSHQGDJH WR WKH 61$ (FRQRPLVW %XW ($5$ GRHV SHUPLW WKHHVWLPDWLRQ RI WKH JHQXLQH VDYLQJ UDWH ZKLFK 3HDUFH HW DO DUJXH LV WKH ILUVWFXUUHQWPHDVXUHRIWUHQGVWRZDUGVRUDZD\IURPVXVWDLQDELOLW\7KHJHQXLQHVDYLQJVUDWHLVGHILQHGDV

  • *6 *13&*U

    Q

    ( ^

    ZKHUH *6 JHQXLQHVDYLQJ& SULYDWHFRQVXPSWLRQ* JRYHUQPHQWFRQVXPSWLRQU

    GHSUHFLDWLRQRISURGXFHGDVVHWVQ

    GHSOHWLRQRIQDWXUDODVVHWV

    ( FXUUHQWHGXFDWLRQH[SHQGLWXUHV

    7KHLQFOXVLRQRIFXUUHQWH[SHQGLWXUHRQHGXFDWLRQLVDILUVWDSSUR[LPDWLRQWRPHDVXULQJLQYHVWPHQW LQ KXPDQ FDSLWDO 2QFH DJDLQ WKHUH LV QR FRQVHQVXV RQ WKH DSSURSULDWHILJXUH)RUH[DPSOHWKH%DQNRI%RWVZDQDDVVLJQVMXVWRQHWKLUGRIVXFKH[SHQGLWXUHWRKXPDQFDSLWDOIRUPDWLRQDQGDOVRLQFOXGHVLQLWVFDOFXODWLRQVRIJHQXLQHVDYLQJDVLPLODUUDWLRIRUKHDOWKH[SHQGLWXUH$XW\DQG0LNHVHOOIRUWKFRPLQJ

    $WNLQVRQ HW DO XVH DQ DPHQGHG YHUVLRQ RI HTXDWLRQ ^ ZKLFK LQ WKLV FDVHH[FOXGHVDQ\DGMXVWPHQWIRUHGXFDWLRQEXWGRHVDGMXVWIRUWKHYDOXHRI&2

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

  •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

  • ,9+80$1&$3,7$/6.,//$&&808/$7,21$1,1&20(,675,%87,21

    1DWXUDOUHVRXUFHVDQGVNLOODFFXPXODWLRQ

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

    HIIHFWV 0DWVX\DPD DYLHZHFKRHGE\6DFKV 6DFKV DQG:DUQHU QRWHWKDWWKHPDQXIDFWXULQJVHFWRUKDVVWURQJHUH[WHUQDOLWLHVIURPOHDUQLQJE\GRLQJWKDQHLWKHUWKHUHVRXUFHRUVHUYLFHVHFWRUVVRWKDWDUHVRXUFHERRPFDQORZHUWKHORQJUXQ JURZWK UDWH LI LW UHWDUGV GLYHUVLILFDWLRQ LQWR PDQXIDFWXULQJ ,Q DGGLWLRQ LIPDQXIDFWXULQJFRQIHUVKLJKHUZDJHV WKDQRWKHU VHFWRUVGRXSRQZRUNHUVZKRXSJUDGH

  • WKHLU VNLOOV WKHQ WKH DFFXPXODWLRQ RI KXPDQ FDSLWDO ZLOO SURFHHG IDVWHU LQ UHVRXUFHGHILFLHQWHFRQRPLHVWKDQLQUHVRXUFHULFKFRXQWULHV

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

  • HGXFDWLRQDOH[SHQGLWXUHZHUHVOLJKWO\KLJKHULQ.RUHDWKDQ0H[LFRLQEXWRYHUWKHQH[WWZHQW\\HDUVWKHOHYHORIH[SHQGLWXUHTXDGUXSOHGLQUHDOWHUPVLQ.RUHDZKHUHDVLWEDUHO\GRXEOHG LQ0H[LFR

  • WKHUHIRUH KHLJKWHQHG LQHTXDOLW\ FDXVHV VORZ JURZWK HLQLQJHU DQG 6TXLUH LGHQWLI\WKHGLVWULEXWLRQRIDVVHWVZHDOWKDVPRUHLPSRUWDQWWKDQLQFRPHGLVWULEXWLRQLQGHWHUPLQLQJHFRQRPLFJURZWK7KLV LVEHFDXVHDPRUHHTXLWDEOHGLVWULEXWLRQRIDVVHWVHQKDQFHVWKHFDSDFLW\RIWKHSRRUWRERUURZDQGVRPDNHVLWHDVLHUIRUWKHPWRDFTXLUHVNLOOV WKURXJKHGXFDWLRQ WRERRVW IDUPRXWSXW DQG WR HVWDEOLVKQHZEXVLQHVVHV0RUHVSHFLILFDOO\/LSWRQILQGVWKDWODQGUHGLVWULEXWLRQWUDQVIHUVUHVRXUFHVWRWKHUXUDO

    QHDUODQGOHVV DQG WKDW VPDOO IDUPHUV PDNH PRUH SURGXFWLYH XVH RI VFDUFH ODQG DQGHPSOR\ PRUH ODERXULQWHQVLYH PHWKRGV WKDQ ODUJHU IDUPV %LQVZDQJHU DQG HLQLQJHUFRQFXU

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

  • 9+80$1&$3,7$/62&,$/$1,167,787,21$/&$3,7$/

    7KHGHILQLWLRQDQGPHDVXUHPHQWRIVRFLDODQGLQVWLWXWLRQDOFDSLWDOLVVWLOODWDUHODWLYHO\HDUO\ VWDJH7KLV VHFWLRQ WKHUHIRUH WDNHV VWRFN RI WKH SURJUHVVPDGH DQG WKH HYLGHQFHSURYLGHGE\HDUO\HPSLULFDOVWXGLHV,WEHJLQVE\UHYLHZLQJGHILQLWLRQVRIVRFLDOFDSLWDO

    HILQLQJVRFLDODQGLQVWLWXWLRQDOFDSLWDO

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

    0RUHVSHFLILFGHILQLWLRQVRIVRFLDOFDSLWDO UDQJHIURPWKHQDUURZHVWFRQFHSWXDOL]DWLRQZKLFK VHHV LW DV WKH GHQVLW\ RI VRFLDO QHWZRUNV WKDW LQIOXHQFH WKH SURGXFWLYLW\ RI DFRPPXQLW\ 3XWQDP WKURXJK PRUH FRPSOH[ VRFLDO VWUXFWXUHV WKDW IDFLOLWDWHLQGLYLGXDO RU FRUSRUDWH DFWLYLW\ WR WKH EURDGHU FRQVLGHUDWLRQ RI VRFLDO DQG SROLWLFDOIDFWRUV ZKLFK PHGLDWH VRFLRHFRQRPLF DFWLYLW\ DW DOO OHYHOV ZLWKLQ D FRXQWU\ 7KHEURDGHVWGHILQLWLRQWKHUHIRUHHQFRPSDVVHVQDWLRQDOLQVWLWXWLRQVDVZHOODVORFDORQHVDQGHPERGLHV IRUPDOL]HG VWUXFWXUHV VXFK DV WKH SROLWLFDO UHJLPH OHJDO V\VWHP DQG HWKLFDOQRUPVLQDGGLWLRQWRILQDQFLDODQGHFRQRPLFLQVWLWXWLRQV7KHVHLQVWLWXWLRQDOIDFWRUVDUHRIPRVWLPSRUWDQFHWRWKHSUHVHQWVWXG\EHFDXVHRILWVFRQFHUQZLWKPDFURIDFWRUVUDWKHUWKDQPLFURRQHVZKHUHVRFLDOQHWZRUNVKDYHJUHDWHULPSRUW

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

  •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

    0HDVXULQJVRFLDODQGLQVWLWXWLRQDOFDSLWDO

    7ZRUHFHQWVWXGLHVKDYHDWWHPSWHGWRPHDVXUHVRFLDOFDSLWDOZLWKUHIHUHQFHWRWUXVWDQGFLYLFDVVRFLDWLRQVRQHDWWKHYLOODJHOHYHO1DUD\DQDQGWKHRWKHUDWWKHQDWLRQDOOHYHO .QDFN DQG .HHIHU 1DUD\DQ GHULYHV D VRFLDO FDSLWDO LQGH[ IRU7DQ]DQLDQ YLOODJHV XVLQJ WKH DULWKPHWLF DYHUDJH RI ERWK WKH QXPEHU RI JURXSV DQLQGLYLGXDO LV DVVRFLDWHG ZLWK DQG WKH FKDUDFWHULVWLFV RI WKRVH JURXSV $ SRVLWLYHUHODWLRQVKLSLVIRXQGEHWZHHQWKHLQGH[DQGYLOODJHH[SHQGLWXUHDVDSUR[\IRULQFRPHVXFK WKDW DRQH VWDQGDUGGHYLDWLRQ LQ WKH LQGH[RI VRFLDO FDSLWDO LV DVVRFLDWHGZLWK DQLQFUHDVHRIRUPRUHLQKRXVHKROGH[SHQGLWXUH%\FRPSDULVRQDVKLIWRIDVLPLODUPDJQLWXGH LQ WKH OHYHO RI HGXFDWLRQ WKH HTXLYDOHQW RI DOPRVW WKUHH \HDUV H[WUDLQVWUXFWLRQ UDLVHV LQFRPH E\ RQO\ 7HVWV RI WKH FDXVDO GLUHFWLRQ VKRZ WKDW VRFLDOFDSLWDO LQFUHDVHV LQFRPH DQG QRW YLFH YHUVD 7KH SRVLWLYH FRQWULEXWLRQ IURP VRFLDOFDSLWDO GHULYHV IURP D QXPEHU RI IDFWRUV QRWDEO\ WKH IUHHU GLVVHPLQDWLRQ RI \LHOGHQKDQFLQJ LQIRUPDWLRQ JUHDWHU UHDGLQHVV WR ZRUN LQ JURXSV RQ LQIUDVWUXFWXUHFRQVWUXFWLRQDQGHDVLHUDFFHVVWRFUHGLW0HPEHUVKLSRIYLOODJHDVVRFLDWLRQVQRWDEO\WKHFKXUFK EXULDO VRFLHWLHV DQG IDUPHUV JURXSV LV DQ LPSRUWDQW PHFKDQLVP LQ EXLOGLQJVRFLDOFDSLWDOLQUXUDO(DVW$IULFD

    .QDFNDQG.HHIHUKDYHDWWHPSWHGWRFRPSDUHVRFLDOFDSLWDOEHWZHHQFRXQWULHVDWWKHQDWLRQDO OHYHO7KH\ WDNH DV WKHLU LQGLFHVRI VRFLDO FDSLWDO WUXVW DQGFLYLF VSLULW DVZHOO DV FLYLF DVVRFLDWLRQV7KH\GUDZRQ:RUOG9DOXH6XUYH\ GDWD IRU 0(V DQG/&VWRWHVWWKHUHODWLRQVKLSEHWZHHQWKHVHWKUHHYDULDEOHVDQGHFRQRPLFJURZWK7KH\

  • DUJXH WKDW LQ WUXVWLQJ VRFLHWLHV OHVV UHFRXUVH ZLOO EH PDGH WR HLWKHU OLWLJDWLRQ RU WRFULPLQDOSURWHFWLRQ UDFNHWV LQRUGHU WRHQIRUFHFRQWUDFWV DV LVFRPPRQ LQSRVW6RYLHW5XVVLD EXW QRW LQ 3RODQG RU WKH &]HFK 5HSXEOLF IRU H[DPSOH ,Q WUXVWLQJ VRFLHWLHVRVWUDFLVPDQGVKDPHDUHWKHVDQFWLRQVWKDWSUHYHQWEDFNVOLGLQJZLWKLQDJUHHPHQWV7KHUHVXOWVRI WKHDQDO\VLV\LHOGKLJK WUXVW VFRUHV IRU6FDQGLQDYLD PHGLXPKLJK IRU%ULWDLQWKH86DQGWKH1HWKHUODQGVEXWORZIRU&KLOH0H[LFRDQG%UD]LO 7KHUH LV DOVR D YLUWXRXV FLUFOH HIIHFW KHUH EHFDXVH WUXVW DSSHDUV WR EHVWURQJO\SRVLWLYHO\DVVRFLDWHGZLWKERWK*3JURZWKDQGLQYHVWPHQWJURZWK

    &LYLF VSLULW LV RQO\ VOLJKWO\ OHVV VWURQJO\ DVVRFLDWHG ZLWK WUXVW *3 JURZWK DQGLQYHVWPHQW JURZWK+RZHYHU FRQWUDU\ WR 3XWQDP DQG1DUD\DQ .QDFNDQG.HHIHU UHSRUW OLWWOH HYLGHQFH RI EHQHILFLDO HIIHFWV IURP FLYLF DVVRFLDWLRQV7KLVPD\EHEHFDXVHDOWKRXJKFLYLFDVVRFLDWLRQVFDQHQKDQFHWUXVWSURGXFLQJ3XWQDP

    HIIHFWVWKH\FDQDOVRSURPRWHUHQWVHHNLQJEHKDYLRXUWKDWIXUWKHUVJURXSLQWHUHVWVDWWKHH[SHQVHRIWKHEURDGHUVRFLDOJRRG2OVRQHIIHFWV$QH[DPSOHRIWKHODWWHULVSURYLGHGE\ WKH GHOLEHUDWLRQ FRXQFLOV LQ -DSDQ DQG .RUHD WKDW DUH SUDLVHG E\ 6HUDJHOGLQ DQG*URRWHDUWIRUWKFRPLQJIRUIDFLOLWDWLQJFDSLWDODOORFDWLRQEXWZKLFKDSSHDUWRKDYHKDGWKH XQDQWLFLSDWHG GUDZEDFN RI EOXQWLQJ WKH VHQVLWLYLW\ RI LQYHVWPHQW WR ULVN DQGSURILWDELOLW\LQWKRVHFRXQWULHV

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

    7KH QDWLRQDO LQVWLWXWLRQV GHVFULEHG DERYH FDQ LQFUHDVH WKH HIILFLHQF\ RI HFRQRPLFH[FKDQJHV DQG KDYH SRVLWLYH WRSGRZQ HIIHFWV RQ WKH DFFXPXODWLRQ RI ORFDO VRFLDOFDSLWDO7KLVVKRXOGPDQLIHVWLWVHOILQWKHEXLOGLQJRIWUXVWDQGFLYLFUHVSRQVLELOLW\DWWKHORFDO OHYHO6XFKDSURFHVVZLOO OLNHO\HQWDLO WKHGHYROXWLRQRI ORFDOO\ LPSRUWDQW VRFLDODQGHFRQRPLFGHFLVLRQVWRORFDODXWKRULWLHV+RZHYHULQFDVHVRIH[WUHPHJRYHUQPHQW

  • IDLOXUHIRUH[DPSOHZKHQWKHUHLVDJURZWKFROODSVHORFDOVRFLDOFDSLWDOPD\DVVXPHDFULWLFDO DQG PRUH LQGHSHQGHQW UROH /RFDO VRFLDO FDSLWDO PD\ DOVR DVVXPH PRUHSURPLQHQFH LQ WKH HDUO\ VWDJHV RI GHYHORSPHQW ZKHQ DQ LQDGHTXDWH FRPPXQLFDWLRQQHWZRUN KDPSHUV ERWK ORFDO DQG QDWLRQDO LQWHUDFWLRQ ,WV DFFXPXODWLRQ LV OLNHO\ WR EHDVVLVWHGXQGHU VXFK FLUFXPVWDQFHV E\ RXWVLGH DJHQFLHV QRWDEO\ WKH1*2V2I FRXUVHOLNH QDWLRQDO LQVWLWXWLRQDO FDSLWDO ORFDO VRFLDO FDSLWDOPD\ DOVR GLVLQWHJUDWH DVZHOO DVDFFXPXODWH

    3DWWHUQVRIVRFLDODQGLQVWLWXWLRQDOFDSLWDODFFXPXODWLRQ

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

    TABLE 6TYPOLOGY OF POLITICAL STATES, AFTER LAL

    Autonomy Aims Variants ExamplesAutonomous Benevolent Monarchy Brunei

    Bureaucracy South KoreaPredatory Authoritarian Zaire

    Bureaucratic Peru 68-78Factional Democratic Consensual Botswana

    Polarized Jamaica 72-88Oligopolistic Plantocracy El Salvador

    Populist Argentina 45-90Source: Auty (1997a).

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

    DGHWHUPLQHGGHYHORSPHQWDOHOLWHLQ DZHDNDQGVXERUGLQDWHGFLYLOVRFLHW\ZKLFKFRQIHUV UHODWLYHDXWRQRP\WKDWLVGHSOR\HGE\

  • DSRZHUIXOFRPSHWHQWLQVXODWHGHFRQRPLFEXUHDXFUDF\LQ WKHHIIHFWLYHPDQDJHPHQWRIQRQVWDWHHFRQRPLFLQWHUHVWVZKLOH SROLWLFDO OHJLWLPDF\ LV FRQIHUUHG ILUVW E\ UHSUHVVLRQ DQG WKHQ E\ SHUIRUPDQFH

    .UDXVH %XW ORQJGHPRFUDWLF %RWVZDQD TXHULHV WKH QHFHVVLW\ RI WKLV ODVWFKDUDFWHULVWLF

    7KH DXWRQRPRXV EHQHYROHQW VWDWHV RI WKH UHVRXUFHGHILFLHQW (DVW $VLDQ 1,&V IDFHGSUHVVXUH IRU GHPRFUDF\ %XW WKH\ PLWLJDWHG VXFK SUHVVXUH DW OHDVW LQLWLDOO\ E\ WKHSXUVXLW RI UDWLRQDO ZHOIDUHPD[LPL]LQJ HFRQRPLF SROLFLHV 7KHLU VXFFHVV LQ WKLVREMHFWLYH HQKDQFHG WKH ORQJHYLW\ RI WKH UHJLPH DQG WKHUHE\ FDSWXUHG WKH EHQHILWV RISROLF\ FRQVLVWHQF\ FUHDWLQJ D YLUWXRXV FLUFOH 7KH FRQFHQWUDWLRQ RI SRZHU E\ WKHDXWRQRPRXV SROLWLFDO VWDWH LV GHSOR\HG WR FUHDWH LQVWLWXWLRQV WKDW LPSURYH WKHHIIHFWLYHQHVVRIHFRQRPLFWUDQVDFWLRQV7KLVWRJHWKHUZLWKDQH[LVWLQJVROLGIRXQGDWLRQRI ORFDO VRFLDO FDSLWDO IDFLOLWDWHG WKH UDSLG DFFXPXODWLRQ RI LQVWLWXWLRQDO FDSLWDODORQJVLGHSURGXFHGFDSLWDODQGVNLOO

    7KHIDFWLRQDOVWDWHLVFRQVWUDLQHGE\WKHQHHGWRDSSHDVHSROLWLFDOJURXSLQJV6XFKVWDWHVKDYH YDU\LQJ FRPELQDWLRQV RI DXWRQRP\ DQG REMHFWLYHV DQG WKH\ WHQG WR DFFXPXODWHLQVWLWXWLRQDO FDSLWDO PRUH VORZO\ WKDQ DXWRQRPRXV EHQHYROHQW VWDWHV ,Q WKH OHDVWIDYRXUDEOHFDVHVIRUH[DPSOHDSRODUL]HGGHPRFUDF\RUDSUHGDWRU\DXWKRULWDULDQVWDWHWKH\DUHOLNHO\WRGLPLQLVKWKHVWRFNRILQVWLWXWLRQDOFDSLWDO7KHWZRPDLQVXEJURXSVRIWKH IDFWLRQDO VWDWHDUH WKHROLJRSROLVWLF VWDWH LQZKLFK ORQJHVWDEOLVKHGSRZHUIXO HOLWHJURXSVPD\PDQLSXODWHWRNHQGHPRFUDFLHVDQGWKHGHPRFUDWLFVWDWH(DFKFDQXVHIXOO\EH IXUWKHU VXEGLYLGHG 7DEOH 7KH GHYHORSPHQWDO VWDWH LV XQFRPPRQ LQ /DWLQ$PHULFDDQGVXE6DKDUDQ$IULFD,Q/DWLQ$PHULFDODQGHGHOLWHVKDYHWHQGHGWRVXVWDLQSRZHU ORQJ DIWHU WKH DFKLHYHPHQW RI LQGHSHQGHQFH IURP WKH FRORQLDO SRZHUV :KHQWKRVH HOLWHVZHUH HYHQWXDOO\ GLVSODFHG LW ZDV RIWHQ E\ QHZ VHFWLRQDO LQWHUHVW JURXSV.XUHU DUJXHV WKDW WKH FOLHQWHOLVWLF UHODWLRQV RI WKH QHZ JURXSV XQGHUPLQHG WKHHIIHFWLYHQHVV RI JRYHUQPHQW FRUURGHG LQVWLWXWLRQV DQG DGYHUVHO\ DIIHFWHG ORQJWHUPHFRQRPLF JURZWK &RQVHTXHQWO\ WKH VXFFHVVRU VWDWHV WR WKH SODQWRFUDFLHV IDLOHG WRGHYHORSOHJLWLPDF\DIDFWWKDWLVUHIOHFWHGLQWKHORZWUXVWUDWLRVUHSRUWHGIRUWKDWUHJLRQE\.QDFNDQG.HHIHU

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

  • FRQGLWLRQHGE\ WKHQHHG IRUFRDOLWLRQEXLOGLQJDQG ODFNV FRKHVLRQEHFDXVH HDFKJURXSVHHNVWRERRVWLWVRZQLQWHUHVWVLUUHVSHFWLYHRIWKHLPSOLFDWLRQVIRUVRFLHW\DVDZKROH

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

    6XFK FRXQWHUSURGXFWLYH SROLFLHV GR DSSHDU WR EH PRUH FRPPRQ LQ WKH UHVRXUFHULFKFRXQWULHV /DQH DQG 7RUQHOO DUJXH WKDW FRPPRGLW\ ZLQGIDOOV LQ UHVRXUFHULFKFRXQWULHVDUHOLNHO\WRHQJHQGHUDQLQWHQVLILFDWLRQRIUHGLVWULEXWLYHDFWLYLW\WKHYRUDFLW\HIIHFW HVSHFLDOO\ ZKHUH JRYHUQPHQWV DUH ZHDN &RPSHWLWLRQ IRU UHQWV FDXVHV SXEOLFVXEVLGLHV DQG RWKHU IRUPV RI WUDQVIHU FRQVWUXFWLRQ SURMHFWV SXEOLFVHFWRU ORDQV DQGKLJKHUSXEOLFVHFWRUHPSOR\PHQWDQGRUZDJHV WRJURZIDVWHU WKDQ WKH LQFUHDVH LQ WKHZLQGIDOO7KLVORZHUVWKHUHWXUQWRLQYHVWPHQWDQGVORZVHFRQRPLFJURZWKDVRFFXUUHGIRUH[DPSOHLQ7ULQLGDGDQG7REDJR$XW\DQG*HOE

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

  • HIIHFWLYHWKDQ>LQIRUPDO@QHWZRUNVEHFDXVHWKH EHVWEX\HURUVHOOHUPD\QRWEHSDUWRIWKH QHWZRUN 6HUDJHOGLQ DQG*URRWHDUW IRUWKFRPLQJ ,WPD\ZHOO EH WKHUHIRUHWKDWGXULQJ WKHPLGGOH OHYHO VWDJHVRI WKHHFRQRPLF WUDQVLWLRQ WKH UHDOL]DWLRQRI UDSLGJURZWK DQG IXOILOPHQW RI ULVLQJ H[SHFWDWLRQV IRVWHUV WKH SRVLWLYH HYROXWLRQ RI VRFLDOFDSLWDO

    +RZHYHU.LOOLFNJRHVRQWRDUJXHWKDWDWKLJKLQFRPHOHYHOVLQVWLWXWLRQVPD\EHFRPHVR HODERUDWH DQG SRZHUIXO DV WR GDPDJH WKH HIILFLHQF\ RI UHVRXUFH XVH GXH WR 2OVRQ

    HIIHFWV,QDGGLWLRQDVQRWHGLQ6HFWLRQDVWKHQDWLRQDOSRSXODWLRQDJHVLWEHFRPHVPRUHUHVLVWDQWWRFKDQJHDQGWKHUDWLRRIZRUNHUVWRGHSHQGDQWVDOVRGHWHULRUDWHV6RFLDOFDSLWDOPD\DOVRGHFOLQHEHFDXVHRIWKHULVLQJRSSRUWXQLW\FRVWRIWKHWLPHLQSXWUHTXLUHGWRPDLQWDLQ VRFLDO JURXSV ,W VKRXOG EH QRWHG WKDW VRFLDO DQG LQVWLWXWLRQDO FDSLWDO FDQUHJUHVVDW ORZHULQFRPHOHYHOVDOVRDV LQ WKHIDFHRISURIRXQGVRFLRHFRQRPLFVKRFNVWKDWFDXVHVL]HDEOHQXPEHUVRILQGLYLGXDOVWRZLWKGUDZIURPFLYLOVRFLHW\

  • 9,02(/62)5(6285&(5,&+$15(6285&((),&,(17*52:7+

    6HFWLRQV,,9KDYHH[DPLQHGWKHUHODWLRQVKLSEHWZHHQWKHQDWXUDOUHVRXUFHHQGRZPHQWDQGSURGXFHGFDSLWDOQDWXUDOFDSLWDO VNLOODQG LQVWLWXWLRQDOFDSLWDO7KLVVHFWLRQRI WKHSDSHU GLVWLOV WKH LQVLJKWV IURP WKHVH UHODWLRQVKLSV LQWR PRGHOV RI UHVRXUFHULFKGHYHORSPHQWDQGUHVRXUFHGHILFLHQWGHYHORSPHQW7KHODWWHUSURYLGHVDXVHIXOFRXQWHUIDFWXDOWRWKHWUDMHFWRU\RIUHVRXUFHDEXQGDQWGHYHORSPHQW7KHPRGHOVDUHGHYHORSHGLQWZRVWDJHVWKHGLIIHUHQFHEHLQJWKHDGGLWLRQRISROLF\YDULDEOHVLQWKHVHFRQGVWDJHVHH

    LYHUJLQJGHYHORSPHQWPRGHOVVHTXHQFHGLQGXVWULDOL]DWLRQYHUVXVVWDSOHWUDS

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

    %XW WKHSURFHVVRI ULVLQJ UHDOZDJHVFDQRQO\FRQWLQXH LQ WKH UHVRXUFHULFKFRXQWU\ DVORQJDVWKHH[SDQVLRQLQ5ZLOOVXVWDLQLW ,WZLOOEHUHFDOOHGWKDW WKHJURZWKLQ1ZLOOFDXVHDQH[SDQVLRQLQWKHYROXPHRILPSRUWHGLQSXWVXVHGE\1:KHQ5FDQQRORQJHUH[SDQGDWDVXIILFLHQWO\UDSLGUDWHDUHDOGHSUHFLDWLRQRI WKHH[FKDQJHUDWH LVUHTXLUHG7KLVZLOOSXVKXSWKHFRVWRILPSRUWHGLQSXWVDQGFDXVHUHDOZDJHVLQ1WRGHFOLQH7KH

  •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

    ,Q FRQWUDVW DQ LQIORZ RI FDSLWDO LQWR 1 ZLWKLQ WKH UHVRXUFHULFK FRXQWU\ ODFNV WKHHIILFLHQF\LQFHQWLYHWKDWWKHUHVRXUFHGHILFLHQWFRXQWU\GHULYHVIURPWKHQHHGWRHQVXUHWKDW0UHPDLQVFRPSHWLWLYH7KHUHIRUHDVDFRQVHTXHQFHRIWKHXWFKGLVHDVHHIIHFWVRQ0LQWKHUHVRXUFHULFKFRXQWU\ZKHQWKHH[SDQVLRQRI5HYHQWXDOO\VORZVRUFHDVHVWKHFRQWLQXHG DFFXPXODWLRQ RI FDSLWDO UHTXLUHV HLWKHU D VKDUS GHSUHFLDWLRQ RI WKH UHDOH[FKDQJH UDWH DQG UHDOZDJHV DV QRWHG HDUOLHU RU HOVH UHFRXUVH WR IRUHLJQ ERUURZLQJ%XWWKHODWWHUPHUHO\SRVWSRQHVWKHUHTXLUHGH[WHUQDODGMXVWPHQWXQWLOWKHHPHUJHQFHRIGHEWVHUYLFHSUREOHPVILQDOO\IRUFHVUHIRUPV

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

  • 6DFKV PRGHOV WKLV RXWFRPH E\ DGGLQJ D IRXUWK VHFWRU HGXFDWLRQ ( WR KLVPRGHO

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

    0RGHOOLQJWKHSROLWLFDOHFRQRP\RIUHVRXUFHGULYHQJURZWK

    ,Q WKH GLVFXVVLRQ VR IDU DQ\ FORVXUH RI WKH HFRQRP\ FRPHV DERXW IURP WKH FKDQJLQJVWUXFWXUHRISURGXFWLRQGXHWRWKHIOXFWXDWLRQVLQ5DQG WKHDVVRFLDWHGVKULQNDJHRI0UHODWLYH WR1EXW WKH VDPHRXWFRPHPD\ UHVXOW IURPSROLF\ FKRLFH$QDXWDUNLF WUDGHDQG LQGXVWU\ SROLF\ FDQ EHPRGHOOHG E\ DVVXPLQJ WKH LQFHQWLYHV WDNH WKH IRUP RI DQLPSRUW WDULII0W

    WKDW UDLVHV GRPHVWLF SULFHV RI PDQXIDFWXUHG JRRGV 30

    DERYH ZRUOGOHYHOV,QWKHUHVRXUFHULFKFRXQWU\VXFKDSROLF\ZRXOGVKDUSO\UHGXFHWKHLQFHQWLYHWRH[SRUWPDQXIDFWXUHVDQGKDVWHQWKHVSHFLDOL]DWLRQRIWKHWUDGHDEOHVHFWRURIWKHHFRQRP\LQUHVRXUFHV

    ,Q WKH UHVRXUFHGHILFLHQW FRXQWU\ WKH FORVXUH RI WKH HFRQRP\ ZLOO DOVR UHGXFH WKHLQFHQWLYH IRU0 WR H[SRUW DQG VKLIW UHVRXUFHV LQWR 1 +RZHYHU WKH VPDOOHU VL]H DQGORZHUJURZWKSRWHQWLDORI5YLVjYLVWKHUHVWRIWKHHFRQRP\TXLFNO\PDNHVLWFOHDUWKDWWKHWUDQVIHUEXUGHQRIVORZPDWXULQJLQIDQWLQGXVWU\ZLOOEHGLUHFWO\LPSRVHGXSRQ0,WLVDOVRFOHDUWKDWWKHIUDFWLRQRIUHQWZLWKLQWKHUHYHQXHVWUHDPRI0LVOHVVWKDQLQWKHFDVHRI5VRWKDW0LVPRUHVHQVLWLYHWRWKHEXUGHQRIWUDQVIHUVLQFOXGLQJWKHSURYLVLRQRIIRUHLJQH[FKDQJH0RUHRYHU0FDQLOODIIRUGWRSD\WKHKLJKHUFRVWRI WKRVHLQSXWVWKDW LWPXVWQRZSXUFKDVHIURPSURWHFWHGGRPHVWLFSURGXFHUVDVDFRQVHTXHQFHRI WKHFORVXUH LQ WUDGH SROLF\ 7KH PDLQWHQDQFH RI VXVWDLQHG HFRQRPLF JURZWK WKHUHIRUH

  • UHTXLUHVWKHDEDQGRQPHQWRIWKHDXWDUNLFSROLF\HDUO\LQWKHUHVRXUFHGHILFLHQWHFRQRP\DQGPXFKHDUOLHU WKDQLQWKHFDVHRI WKH W\SLFDO UHVRXUFHULFKFRXQWU\ ,Q WKLVZD\ WKHGXUDWLRQRILQIDQWLQGXVWU\SURWHFWLRQDQGWKHVL]HRIWKHSURWHFWHGPDQXIDFWXULQJVHFWRUDUHERWKFRQVWUDLQHGLQWKHUHVRXUFHGHILFLHQWHFRQRP\,QIDFWRQO\VHFWRUVRIHPHUJLQJFRPSDUDWLYHDGYDQWDJHFDQEHVXSSRUWHGRQDQ\VFDOHLQWKHUHVRXUFHGHILFLHQWFRXQWU\DQGHYHQWKHQ WKHLUUDSLGPDWXUDWLRQ LV UHTXLUHG7KHVHFRQGLWLRQVDUHFRQVLVWHQWZLWKWKH VHTXHQFHG LQGXVWULDOL]DWLRQSXUVXHGE\ WKH UHVRXUFHGHILFLHQW(DVW$VLDQ FRXQWULHVDQG VXPPDUL]HG LQ 7DEOH GUDZLQJ XSRQ WKH H[DPSOH RI 7DLZDQ 7KLV LV ZK\ WKHUHVRXUFHGHILFLHQWPRGHOLVGHVLJQDWHGDVWKHVHTXHQFHGLQGXVWULDOL]DWLRQPRGHO

    TABLE 7SEQUENCED INDUSTRIALIZATION, TAIWAN 1950-90

    Index Stage 1 Stage 2 Stage 3 Stage 4Industry Stage ISI Labour-Intensive HCI Drive LiberalizationYears 1950-58 1959-71 1972-81 1982-91GrowthGDP Growth (%) 7.9 9.5 9.1 8.2I/GDP (%) 12.2 17.2 27.4 21.4ICOR 1.5 1.9 4.1 3.0Structure (% GDP) 1960 1970 1980 1990Agriculture 32.9 18.0 9.2 4.8Manufacturing 16.8 26.2 33.2 33.3 Light 11.1 13.3 12.4 9.6 HCI 5.7 12.9 20.8 23.7

    Source: Auty (1997c).

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

    *HOEHWDOPRGHOWKHSROLWLFDOSURFHVVE\ZKLFKWKHVWDSOHWUDSLVEURXJKWDERXW7KH\ PRGHO D UHVRXUFHULFK FRXQWU\ ZKRVH JRYHUQPHQW FUHDWHV XQSURGXFWLYH MREV LQSXEOLFDGPLQLVWUDWLRQDQGLQVWDWHRZQHGHQWHUSULVHV62(VLQRUGHUWRDOOHYLDWHXUEDQXQHPSOR\PHQW7KH\XVHD+DUULV7RGDURPLJUDWLRQPRGHODQGDVVXPHD VLQJOHXUEDQZDJH LQ WKH WKUHH XUEDQ VXEVHFWRUV ZKLFK FRPSULVH D SULYDWH VHFWRU D SURGXFWLYHSXEOLFVHFWRUDQGDQRQSURGXFWLYHSXEOLFVHFWRU7KHPRGHOSRVLWV WKDWDQH[RJHQRXVULVHLQWKHXUEDQZDJHFUHDWHVDZDJHJDSWKDWUDLVHVWKHSUHPLXPRQUXUDORXWPLJUDWLRQVRWKDWXQHPSOR\PHQWH[SDQGVLQWKHPRGHUQXUEDQVHFWRU7KHJRYHUQPHQWUHVSRQGVWRDGGLWLRQDO XUEDQ XQHPSOR\PHQW E\ LQFUHDVLQJ WD[DWLRQ ZKRVH EXUGHQ IDOOVGLVSURSRUWLRQDWHO\ RQ WKH SULYDWH VHFWRU LQ RUGHU WR LQYHVW FDSLWDO LQ WKH FUHDWLRQ RIDGGLWLRQDOXUEDQ MREV%XW WKLVSURFHVV LVVHOIGHIHDWLQJEHFDXVH LW UHQGHUVZRUN LQ WKHXQSURGXFWLYHSXEOLFVHFWRUSUHIHUDEOHWRIDUPLQJVRWKDWPRUHSHRSOHPLJUDWHWRWKHFLW\ZKHUH WKHLU XQHPSOR\HG SUHVHQFH LQWLPLGDWHV WKH JRYHUQPHQW IURP ZKLFK WKHXQHPSOR\HGUXUDOPLJUDQWVH[WUDFWVWLOOPRUHUHQW$VQRWHGLQ6HFWLRQ.UXHJHUHWDO

  • ILQGWKDWWKHIUDFWLRQRISULPDU\VHFWRUUHYHQXHH[WUDFWHGE\WKHJRYHUQPHQWVLQVXE6DKDUDQ$IULFDPD\KDYHUHDFKHG

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

    5RGULNPRGHOVDW\SLFDO$IULFDQHFRQRP\LQRUGHUWRJLYHVDQLQGLFDWLRQRIWKHSROLWLFDO GLIILFXOW\RI UHIRUPEDVHG RQ WKH VLPXODWLRQ RI WKH GLYLVLRQ RI UHYHQXHV+HDVVXPHVDWZRVHFWRUHFRQRP\HDFKVHFWRUSURGXFLQJDVLQJOHSURGXFWZLWKDGLIIHUHQWSURGXFWLRQIXQFWLRQQDPHO\DFDSLWDOLQWHQVLYHPDQXIDFWXUHGJRRG LQ WKHXUEDQVHFWRUDQG ODERXULQWHQVLYH DJULFXOWXUDO SURGXFW LQ WKH UXUDO VHFWRU 7KHUH DUH ILYH JURXSV LQVRFLHW\WKDWFRPSULVHIDUPHUVDQGLQIRUPDOVHFWRUXUEDQZRUNHUVZKRUHFHLYHWKHVDPHZDJHIRUPDOVHFWRUXUEDQZRUNHUVZKRUHFHLYHDZDJHSUHPLXPXUEDQHPSOR\HUVZKRJHQHUDWHSURILWVDQGJRYHUQPHQWRIILFLDOVZKRH[WUDFW UHQWV7KHVLPXODWLRQDVVXPHVDLPSRUWWDULIIDQGRIWKHZRUNIRUFHLQWKHUXUDOVHFWRU,W\LHOGVDGLVWULEXWLRQRIQDWLRQDO LQFRPH