In this article, we survey a growing body of evidence showing the effects of trust on the wealth of nations. It is important to understand the mechanisms through which trust affects the wealth of nations. This article suggests that trust has effects on the wealth of nations mainly through five channels. These channels are: (a) investment in human and physical capital, (b) financial development, (c) public expenditures, (d) regulations and institutions and (e) the organization of firms.
Abstract Since the Global Financial Crisis (GFC) of 2008, the USA has changed its economic priorities and policy preferences in a concerted effort to bolster its weight in the global economy, reduce over-reliance on global supply chains, and create more employment within its borders. This change has become more apparent in the wake of the Trump presidency and the COVID-19 pandemic. Reviving the manufacturing industry through reshoring is now the main goal of US politicians. This article analyses the two strategies, in light of heightened technological competition with China, that the USA has brought into effect to reshore its factories from the People's Republic of China and so revitalise the American manufacturing industry. They are neo-protectionism and smart automation. Arguing that neo-protectionist policies and smart automation technologies are interrelated factors that have been used strategically to bring American multinational companies in China back to the USA, we examine whether or not these two strategies—each elements of the US–China tech war—can support the reshoring and revitalisation of the American manufacturing industry. We find that increased neo-protectionist measures and proliferation of smart automation technologies alone will not empower the USA sufficiently to consolidate its technological superiority over China, add impetus to its manufacturing investments, and create well-paying jobs for the broader segments of American society through the reshoring of manufacturing activities. To achieve these goals, the USA should instead implement an integrated policy framework that spans industrial policies to technology policies and tax policies to labour market policies. Otherwise, even though reshoring may gain a certain momentum, new industrial facilities will not expand productivity enough to raise the competitiveness of the US economy to satisfactory levels, and such investments might not provide enough new job opportunities to remediate socioeconomic problems.
Developing economies need foreign direct investments to complement domestic investment with a view to increase capital accumulation, productivity and growth rates. But, foreign direct investments (FDIs) may have costs in addition to the well-known benefits to the host country. Generating higher net benefits from FDI necessitates design and implementation of 'smart' investment policies by the host countries rather than the current orthodoxy of 'neutral' FDI policies, which is based on liberalizing the FDI inflows and aim to attract 'any' kind of FDI. In this article, we discuss such polices and how they relate to host country circumstances.
This book scrutinizes the last 15 years of exceptional growth in the Turkish economy, and presents a model for sustainable ongoing growth that has particular implications for other key emerging economies. The growth of the Turkish economy in the 2000's was based on two integrated fundamental factors: fixing deteriorating dynamics and implementing further reforms to stimulate economic activity. This basic formula led to pleasing rates of economic growth, fuelled particularly by domestic private investments along with revived consumption and exports. Driven by political stability established by single party governments in the post-2002 period, an improved economic outlook helped Turkey enjoy record levels of foreign investment, adding momentum to its growth story. The Turkish experience in the post-crisis period implies that in order to achieve a fast and - more importantly - sustainable onward growth, the economy needs a new generation of structural reforms that simultaneously heal fragility and vitalize economic activity. The papers in this book offer professional assessments and assistance - especially for policymakers, and present a new direction upon which the Turkish economy - and emerging markets - can progress successfully for a further 15 years.
