Anil Hira

Measuring international electricity integration: a comparative study of the power systems under the Nordic Council, MERCOSUR, and NAFTA

Many regions of the world feel the pressure to interconnect electric power systems internationally. Regional integrations of the electricity sector have become part of free trade and common market initiatives, though the steps individual national jurisdictions take towards developing integrated systems vary. In this article, we review three regions concerned with common market initiatives and at different stages of integration processes that involve infrastructural, regulatory, and commercial decisions. First, we examine the North European countries in the Nordic Council, then countries in the Southern Cone of South America in MERCOSUR, and finally Mexico, the United States and Canada, linked under NAFTA. This comparative study highlights the potential, but also the many hurdles, that electricity sector integrations face. The study suggests a framework for measuring the level of electricity sector integration that could be applied to other regions.

Distributional effects of dollarisation: the Latin American case

Over the past two years Ecuador, El Salvador and Guatemala have adopted the US dollar as a legal currency in their countries. Several other Latin American countries, including Argentina, are currently discussing dollarisation. In this policy paper we look at the existing evidence for answers to two basic questions. First, under what general circumstances might dollarisation make sense? Second, are there clearly differentiated winners and losers from dollarisation and, if so, can we identify them, so that policy can take these political economy factors into consideration? Our review of the evidence demonstrates that there are consistent patterns of distributional effects, both positive and negative, from the choice of exchange rate regime. These effects are presently not considered in exchange rate policy decision making, but should be. While the effects are not as pronounced as those from major trade liberalisation agreements, they are significant. Ways to cushion the effects of exchange rate regime choice should be considered in the future by policy makers. Moreover, we find that dollarisation is embedded in the politics of the region. Dollarisation is often sold as a substitute for the deeper institutional reforms needed to improve economic performance and distribution in Latin America.

Should Economists Rule the World? Trends and Implications of Leadership Patterns in the Developing World, 1960-2005

This article examines more carefully the oft-made hypotheses that (1) “technocrats” or politicians with an economics background are increasingly common and (2) that this “improvement” in qualifications will lead to improvements in economic policy. The article presents a database on the qualifications of leaders of the worlds major countries over the past four decades. The article finds that while there is evidence for increasing “technification,” there are also distinct and persistent historical patterns among Asian, African, Middle Eastern, and Latin American leaders. Using statistical analysis, the article finds that we cannot conclude that leadership training in economics leads to better economic outcomes.

Does energy integrate

Amidst the international movement to privatize and deregulate electricity and gas sectors of economies, the question of the integration of those sectors has been somewhat underestimated. In fact, the integration of energy markets across boundaries is occurring. We examine this process in three regions: Europe, Central America, and South America. We analyze the forces driving integration in each area, and estimate the prospects for progress. We take a close look at Nordpool, which is now the most integrated market in the world, to see if it can serve as a model for other regions. We close with a set of conditions that we suggest are necessary for a successful international integration of energy markets.

The political economy of the global pharmaceutical industry

Purpose - The majority of the worlds population has limited access to needed medicines. The purpose of this paper is to explain why certain characteristics of the global pharmaceutical market have not served a large majority of potential consumers in the developing world. Design/methodology/approach - Through a political economy analysis of evolutionary and regulatory aspects of both supply and demand conditions for global pharmaceuticals, it can be understood why most of the worlds poor have limited access to basic medicines. The paper then turns to what avenues are available for improving access to medicines. An analysis of the chief proposed solutions, namely: pooled demand and relaxation of intellectual property rights, reveals their inadequacies. A third emerging avenue, the growing production of pharmaceuticals in the south, is examined through case studies of leading producers including India, China, and South America. Findings - While each of the three options offers potential benefits, none is adequate to solve the problem – a new, perhaps combinatorial, approach will be needed to ensure that a wider global market for pharmaceuticals can be created. Originality/value - The paper offers insights into the political economy of the global pharmaceutical industry.

Broken Windows: Why Culture Matters in Corruption Reform

Corruption, or misuse of public office for private gain, is continually in the headlines. From hunger strikes in India to scandals around defence procurement in Canada, attention to corruption is growing. Corruption has been linked to weak economic growth and development outcomes (Kulshreshtha, 2008, p. 558). Though the problems of corruption have led aid agencies to recognize the fundamental importance of good governance, progress has been halting. In fact, there are almost no cases of a developing (‘post-colonial’) country moving from a highly corrupt situation to one in which corruption is minimized. Civil service reforms and elections of pro-reform candidates seem futile to bring long-lasting results in countries as diverse as India and Argentina. Failing states from Afghanistan to Iraq reveal corruption to be a central issue. While the role of culture, often defined as shared beliefs, attitudes, values, norms and practices is recognized in the academic literature as an element of potential importance, to date it has not been incorporated into the design of aid programmes to reform civil services. In this collection, we examine why attempts to reform the civil services of developing countries have largely failed in good part because they focus on the formal and ignore the need to reform culture as well. Our case studies including Singapore, Hong Kong, Chile, Afghanistan, Swaziland, India and Nigeria span a wide range of failures as well as a few success stories and are based on strong author knowledge of the local context as well as field research.

Toward a Theory of Global Regime Governance

Economic decision making on an individual level has been dominated by long-standing theories of economic behavior, yet the theories of decision making in international trade remain underdeveloped and undertested. Without a systematic theory of decision making, it is difficult to develop a plan to diagnose and resolve current impasses in trade negotiations and with antiglobalization movements. This article suggests a way forward by building on recent theories of global governance and earlier theories of international regimes.

Understanding the Deep Roots of Success in Effective Civil Services

As discussed in the preface to this edition, there are three cases in the developing world which stand out in regard to corruption: Singapore, Hong Kong, and Chile. While all have had differing rates of economic growth and their own particular struggles with governance, they are the only consistently high performers over long periods of time. To better understand the roots of their success, this article compares the three cases with two other cases with perennial issues of corruption, Nigeria and Paraguay. Our analysis is organized around three basic categories. The first is to examine the personnel systems of each civil service and to see how reforms in recruitment and promotion—the main focus of aid agencies—have reduced corruption. The second is to examine sanctions for corruption in order to understand how they become real rather than just rhetorical. Civil service reform efforts so far have focused on the first two. Using the most similar/different comparative approach, we conducted field research in the three success cases and secondary research in all five. This in itself is revealing as comparing Chile to the East Asian cases has not been done before. We find similarities among the success and failures of the first two categories. Therefore, we must dismiss them as having limited effectiveness. Given such conditions are necessary but insufficient, we turn to a third category, namely the culture around civil services, finding there are clear contrasts in the culture of success and failure cases. Moreover, all three of the former countries were at one time rife with corruption, thus raising the key question of how they changed. If there are cultural inflection points that can be identified that line up with the transformation of dishonesty to honesty in our three success cases, Singapore, Hong Kong, and Chile, and cultural sticking points in the other cases, we can explain the failure of formal reform efforts. This suggests we need a new research agenda on cultural change as a part of future reform efforts.

Evolution of the South Korean wireless industry: from state guidance to global competition

Two of the leading wireless manufacturers, LG and Samsung, got their start from Korean state-sponsored efforts to support industrialisation in advanced technology. These efforts follow an evolutionary trajectory of heavy handed state ‘guidance’ to a more regulatory approach in line with change circumstances and events, including the companies’ success. While not without negative and idiosyncratic aspects, the South Korean experience in developing wireless champions points to a general strategy for state-private company relations for other developing nations. These include the importance of financial support, focused investments in human capital, and the interlinking of social capital networks around a common national purpose. As in the case of Nokia, the development of a specific sectoral strategy, the ability to absorb multiple failures along the way, and the embracing of a research and development strategy oriented towards global export success all suggest the importance of timing and learning featured in this edition.

Turning Privatization Upside Down: Petrobras as an Example of Successful State Capitalism

Abstract For more than the last three decades, conventional economic wisdom, the dominant policy advice, and lending have been based on a growing economic literature that seeks to demonstrate that liberalization and privatization lead to superior outcomes, including higher levels of investment, accountability, and technology development. However, a new wave of Latin American leaders in countries such as Venezuela, Ecuador, Bolivia, and Brazil, among others, have begun to reverse the movement toward foreign and private investors and reassert national control. Using the example of Petrobras, this article demonstrates that a “state capitalist” system offers the possibility for a new balance between efficiency and broader development goals.