Suchergebnisse

This paper offers possible explanations for three generally observed facts about fiscal policy and development: (F1) The relative size of government increases as an economy develops, (F2) The rise in government and taxation are associated with rising or constant economic growth rates, and (F3) Today's developing countries have larger government sectors than did today's developed countries at similar stages of development. The explanations for these facts are based on the structural transformation from traditional (mostly agricultural) to modern (industrial and post-industrial) production, risi

International financial assistance (loans and grants) can potentially raise recipients' welfare in two ways, by affecting a direct resource transfer and by facilitating efficiency-enhancing reforms. In practice, barriers to reform limit the potential of assistance to deliver these two dividends. In this paper, we analyze assistance programs designed to ensure that recipient governments voluntarily adopt reforms and overcome barriers associated with: (i) the reaction of special interests to the prospect of reform; (ii) the possibility of default and political instability in the recipient countr

International Financial Institutions (IFIs) tie resource transfers to capital‐scarce countries to improvements in their economic policies and institutions. The objective of this assistance is twofold: to augment the recipient's capital base and to improve its allocation of resources. This paper offers a political‐economy explanation for the limited success of some of these loan programs. In our model, governments select policies under the influence of interest groups. Their capacity to absorb IFI loans and their reform efforts are both unobservable to the IFI. An optimally designed loan mechanism must create sufficient incentives – in the form of rewards and punishments – to counter the influence of interest groups on economic policy choices. The loan mechanism is, however, constrained in two ways: it cannot punish a country so severely as to threaten its political stability and it must remain affordable to the IFI. Whenever reform incentives are inadequate, a government will accept the loan but cheat on the implementation of reforms. If, on the other hand, the mechanism design is optimal, it might be so costly to the IFI that a well‐entrenched interest group can block the reform program. Nonetheless, the availability of properly designed loan mechanisms will push governments to implement partial reforms even if the optimal mechanism is too costly for the IFI.

Chapter 1. introduction -- Chapter 2. Two-Period Model of Government Investment -- Chapter 3. Politics and Corruption in the Two-Period Model -- Chapter 4. Overlapping-Generations Model of Growth -- Chapter 5. Fiscal Policy in the Overlapping-Generations Model. Chapter 5. Politics, Corruption, and Economic Growth -- Chapter 7. Corruption and Debt -- Chapter 8. The Political Economy of Policy Reforms -- Chapter 9. Conclusions.

Cover -- ASEAN: Financial Integration -- I. INTRODUCTION -- II. GROWTH, TRADE INTEGRATION, AND FINANCIAL INTEGRATION IN ASEAN -- III. TOWARD FURTHER FINANCIAL INTEGRATION IN ASEAN -- A. ASEAN: Financial Sector Liberalization: What is at Stake? -- B. ASEAN: Financial Sector Liberalization: Reform Initiatives -- C. ASEAN: Financial Sector Liberalization: Lessons from Europe -- D. ASEAN: Capital Account Liberalization: What is at Stake? -- IV. PROMOTING SAFE FINANCIAL INTEGRATION IN ASEAN -- V. CONCLUSIONS -- Appendix 1. Potential Capital Flows to ASEAN: The Sky is the Limit? -- A. Capital Flows to ASEAN in a Neoclassical Growth Model Without Adjustment Costs -- B. The Effect of Adjustment Costs and Frictions on Capital Flows to ASEAN Countries -- C. Capital Flows to ASEAN in a Model with Adjustment Costs -- References

On May 1, 2004, ten countries in Central, Eastern and Southern Europe will become full members of the EU. The parliaments and monetary authorities of the ten accession countries have already to a large extent adapted their legal and institutional structures to the new Europe-wide environment. The papers in this SUERF Study analyse from different perspectives the challenges to regulators, supervisors, Governments and central bankers that are related to safeguarding financial stability in a large economic union with financial markets that are open to global competition. The papers were presented in March 2003 at a seminar jointly organised by SUERF and the Central Bank of Malta.