Sherman Robinson

Trade policies and productivity change in semi-industrialized countries

The role of trade policies in increasing growth and efficiency has long been a major focus in the development literature. This paper examines the impact of different development strategies, especially export expansion and import substitution trade policies, on total factor productivity growth in the manufacturing industries. The analysis is based on recently developed data on sectoral total factor productivity in Korea, Turkey, and Yugoslavia, with Japan as a comparator. Our results indicate that there are important links between trade policies and industrial productivity performance.

Applied Methods for Trade Policy Analysis: Simple General Equilibrium Modeling

This chapter describes how to specify, solve, and draw policy lessons from small, two-sector,· general equilibrium models of open, developing economies. In the last two decades, changes in the external environment and economic policies have been instrumental in determining the perforxad mance of these economies .. The relationship between external shocks and policy responses is complex; this chapter provides a starting point for its analysis. . Two-sector models provide a good starting point because of the nature of the external shocks faced by these countries and the policy responses they elicit. These models capture the essential mechanisms by which external shocks and economic policies ripple through the economy. By and large, the shocks have involved the external sector: terms-of-trade shocks, such as the fourfold increase in the price of oil in 1973-74 or the decline in primary commodity prices in the mid-1980s; or cutbacks in foreign capital inflows. The policy responses most commonly proposed (usually by international agencies) have also been targeted at the external sector: (1) depreciating the real exchange rate to adjust to an adverse terms-of-trade shock or to a cutback in foreign borrowing and (2) reducing distortionary taxes (some of which are trade taxes) to enhance economic efficiency and make the economy more competitive in world markets. A minimalist model that captures the shocks and policies mentioned should therefore emphasize the external sector of the economy. Moreover, many of the problems and solutions are related to the relationship between the external sector and the rest of the economy. The model thus

TRADE ADJUSTMENT POLICIES AND INCOME DISTRIBUTION IN THREE ARCHETYPE DEVELOPING ECONOMIES

This paper explores quantitatively the macroeconomic and distributional impacts on non-oil producing, semi-industrial developing countries of external shocks originating in the world economy—in particular, rising costs of imports and shrinking export markets. The empirical analysis is done with a computable general equilibrium (CGE) model. The effects of the same external shock are modelled for three different archetype economies: a primary exporter, a manufacturing exporter, and a closed economy. Three different policy-adjustment regimes are considered: devaluation, premium rationing of imports (import licenses), and premium rationing in an environment with a fixed real wage for unskilled labor. By making simple assumptions about the way socioeconomic groups operate to influence decision-making, the paper also examines how the struggle between the gainers and losers is likely to affect the policy regime to be chosen.

The impact of trade policies on income distribution in a planning model for Colombia

This paper develops a multisector Computable General Equilibrium model to simulate the effects of trade on the distribution of income among socioeconomic groups defined both by the factors of production they own and the sector in which they work. The categorization of recipients includes landless rural labor, land owners, workers in the urban traditional sector, and workers in the organized sector and capitalists. Experiments are conducted with an application to Colombia, a primary-exporting economy. The results indicate that, for such an economy, outward-looking policies with increased primary exports are likely to be more detrimental for the distribution of income in the medium term than inward-looking ones.

A comparison of two models for income distribution planning

The results from two models developed to explore the relationship between policy instruments and income distribution in developing countries are compared. The BACHUE model is a long run economic demographic model of the Philippines, and the Adelman-Robinson model is a medium-term computable general equilibrium model of Korea. In spite of the differences in focus and design, the two models yield similar conclusions. The size distribution of income is exceeding stable. The relative position of various socioeconomic groups is more sensitive to the choice of economic policy than is the overall distribution. The agricultural terms of trade are the most important single target for policy intervention to improve income distribution. Migration is the most important demographic variable for income. Appropriate trade strategy can lead to significant improvements in the share and absolute incomes of the poor. Balanced, across-the-board policies are needed for effective antipoverty policy even more than for economic growth. 16 references.

Regional integration options for Central America and the Caribbean after NAFTA

Abstract From the adoption of NAFTA to the movement toward Mercosur, the entire hemisphere faces a wide range of options for choosing a new integration agenda, one that muse be able to provide for global competitiveness and equitable growth while being politically sustainable in both the United States and Latin America. In this article, we present a computable general equilibrium (CGE) model for analyzing the effects of alternative integration strategies in the United States, Mexico, Central America, and the Caribbean. The CGE model simulates the static and dynamic effects of alternative integration scenarios on production, income distribution, and the flows of trade, capital, and labor migration. The results point to a number of essential strategic choices that will have to be made in order to generate the most optimal regional outcome. Such an outcome will be possible if and only if: (1) the United States is able to overcome a domestic political economy debate on the distribution of the gains from trade which could then allow it to provide a strategic leadership role in the region, and (2) the Latin American countries in the region resolve an almost classic “prisoners dilemma” collective action problem. As a NAFTA partner with veto power, Mexico thus must make a key decision: to share the NAFTA market with its competitors or to block NAFTA accession and risk unilateral U.S. FTAs with Mexicos rivals and geopolitical neighbors.

Analysis of the European Food Industry

This report is based on a study assigned to the Centre for European Policy Studies (CEPS) by the European Commission’s Joint Research Centre, Institute for Prospective Technological Studies (JRC-IPTS) to investigate recent developments in the European food industry and the impact of foreign direct investment (FDI) and trade flows on the food industry in the EU-25. The report illustrates trends in and the structure of the European food industry. Past and possible future developments are analysed, identifying the drivers behind development of the food industry and assessing the impact on production, structures, farmers and trade. Another key feature of this report is to assess the impact of EU accession and of harmonisation of trade policy for agricultural commodities and processed agri-food products on both the EU-15 and the new Member States (NMS). How to obtain EU publications Our priced publications are available from EU Bookshop (http://bookshop.europa.eu), where you can place an order with the sales agent of your choice. The Publications Office has a worldwide network of sales agents. You can obtain their contact details by sending a fax to (352) 29 29-42758. The mission of the JRC is to provide customer-driven scientific and technical support for the conception, development, implementation and monitoring of EU policies. As a service of the European Commission, the JRC functions as a reference centre of science and technology for the Union. Close to the policy-making process, it serves the common interest of the Member States, while being independent of special interests, whether private or national. LF-N A -2247-E N -C