Suchergebnisse

There has been a sea change in the views of the economics
profession as well as economic policy-makers over the past decade or so
regarding the role of the government in the development process. Indeed,
it is now becoming conventional wisdom that government can no longer be
a dominant player in economic activities, but rather should restrict
itself to providing an "enabling" environment within which the private
sector can take the lead and flourish. More specifically, government
intervention in the economy has to be designed carefully so as to
support the private sector and not inhibit its development. The general
acceptance of this paradigm is evident in the steadily declining
importance of government activities in the economies of most of the
developing world. But does this new paradigm mean that government
investment has no role whatsoever in affecting growth in developing
countries? Reality is that public investment still represents a large
share of total investment in the majority of developing countries, and
the question is what role it plays in relation to private investment in
stimulating economic growth. The objective of this paper is to ascertain
empirically for a large group of developing countries the relative
importance of public and private investment in promoting and sustaining
growth.

The need for stabilization typically arises when a country
experiences an imbalance between domestic aggregate demand and aggregate
supply, which is reflected in a worsening of its external payments
position and an increase in the rate of inflation. To combat these twin
problems, policies are required that restrain domestic demand and, at
the same time, expand the production of tradeable goods, thereby easing
the balance of payments constraint. Policies to influence the aggregate
level or rate of growth of domestic demand and absorption, generally
labelled as "demand side policies", include the whole range of monetary
and fiscal measures, while the shifting of resources towards the
production of tradeables involves altering the country's real exchange
rate through devaluation. In general, monetary and fiscal policies and
exchange rate action are considered an integral, if not an indispensable
component of any stabilization programme.

In the past decade a combination of events caused the
international economic climate to become increasingly inimical to the
growth and current account prospects of most developing countries.
Worsening terms of trade, falling growth rates in industrial countries,
and sharp changes in the availability of foreign financing that were
accompanied by a dramatic increase in real interest rates on external
borrowing, made the problem of economic management very difficult for
policy-makers in the developing world. Adjusting to these shocks would
have typically called for fiscal and monetary restraint to control both
public and private spending, and more flexible exchange rate policy.
Such a strategy, for one reason or another, was not followed by a number
of developing countries, and consequently these countries experienced
falling growth rates, rising inflation, and current account deficits
that over time became unsustainable.

The role of interest rates in the development process has been
studied extensively in recent years. Following upon the seminal work of
McKinnon (1973), there have been a number of theoretical and empirical
studies examining the relationship between financial development and
economic growth, the effect of changes in real interest rates on savings
and investment, and more generally, the pros and cons of a
market-oriented financial system.1 Broadly speaking, there is now ample
empirical evidence supporting the original claim by McKinnon [10] that
there is a positive association between the degree of development of the
financial sector, resulting primarily from a freer structure of interest
rates, and the overall economic performance of developing
countries.

Intro -- Contents -- Preface -- Acknowledgment -- List of Abbreviations -- 1 Opening Address Alassane Ouattara -- 2 Trade Reforms and Regional Integration- An Overview Zubair Iqbal and Mohsin S. Khan -- Part I. Trade Reform, Macroeconomic Adjustment, and Growth -- 3 Trade Liberalization Michael Mussa -- 4 Trade Liberalization in Sub-Saharan Africa Robert Sharer -- 5 The Revenue Implications of Trade Liberalization Liam P. Ebrill and Janet G. Stotsky -- 6 Globalization: Implications for Africa Paul Collier -- 7 Why Is Trade Reform So Difficult in Africa? Dani Rodrik -- 8 Africa's Role in Multilateral Trade Negotiations: Past and Future Zhen Kun Wang and L. Alan Winters -- 9 Trade and Growth in Sub-Saharan Africa Benno J. Ndulu and Njuguna S. Ndung'u -- 10 Africa: Industrialization Strategy in the Context of Globalization Charles Chukwuma Soludo -- Part II. Regional Integration in Africa -- 11 Regional Integration: Lessons from Asia and the Western Hemisphere Gary Hufbauer and Barbara Kotschwar -- 12 Trade Policy and Regional Integration in Sub-Saharan Africa Ademola Oyejide -- 13 Beyond Trade: Regional Arrangements as a Window on Globalization Christian A. Francois and Arvind Subramanian -- 14 Regional Integration, Trade, and Foreign Direct Investment in Sub-Saharan Africa Ibrahim A. Elbadawi and Francis M. Mwega -- 15 Sub-Saharan African Experiences with Regional Integration Ernest Aryeetey -- 16 Regional Integration Arrangements in Southern Africa: SADC and SACU Trudi Hartzenberg and Gavin Maasdorp -- 17 Regional Trade Arrangements: The COMESA Experience Louis A. Kasekende and Charles A. Abuka -- 18 The Role of ECOWAS in Trade Liberalization Charles D. Jebuni -- List of Participants.