Charles Gore of UNCTAD: Global Governance - Development Finance for LDCs
Gerry Helleiner of U Toronto - "Some Elements of Improved Global Financial Governance"
Vladimir Popov on devaluation as successful industrial policy to promote growth - very interesting. I propose a question he answers.
Charles Gore of UNCTAD: Global Governance - Development Finance for LDCs
Governance is rules, resources, and regimes (e.g. global poverty vs. global inequality)
"The triple crisis marks the end of an era. Business as usual is no longer possible. ... This is another Bretton Woods moment."
3 sets of ideas competing: Human development, Southern consensus (E. Asian and Lat America), Washington Consensus
The Southern consensus was misunderstood, so it was the MDG paradigm as a synthesis of human development and Washington Consensus
PRSP at its heart is Washington Consensus
What we want is Southern Consensus plus human development
The key element is employment. The international regimes should be designed to help develop productive capacities in LDCs: employ for poverty reduction
Finance is how to do that, so we should also be concerned with international intelligence architecture.
ODA can facilitate technology transfer (less than 5% currently). Ag research, extension, and training down. Industrial research etc is 0.
"The central development challenge is to create productive livelihoods for a rapidly growing labor force."
Aid must be innovative: catalytic way to promote technological progress of private Sector. Aid donors need to act like venture capitalists. 80% won't work, but 20% will be transformational.
"People like competition but not competitors"
Q: Three competing notions of governance: 1) policy coordination and coherence; 2) legitimacy; 3) global public goods.
A: Governance is a multi-level issue. What happens in each country depends on what happens in other countries. We need a strong state, but need multi-level governance. We need a strategic, incrementalist approach. What we talk about is not good governance, but good development governance.
Gerry Helleiner of U Toronto - "Some Elements of Improved Global Financial Governance"
The Bretton Woods twins (WB and IMF)are "incapable of reforming themselves."
In terms of trust and legitimacy, they fall far short. Above all, inappropriate leader selection and participation. Distrust of advice.
IMF used to defend itself: I'm not a development institution. Now we agree it isn't just as it tries to be.
No quick fix, but gradual change in desirable directions can work. 1) Decentralize financial power to regional and subregional bodies.
2) Merger between #IMF and #WB regional and subregional bodies
Regional bodies reflect needs and desires of their clientele better than WB or IMF. Greater local experience and legitimacy.
Why should a global institution be the go-to org for national or regional investments?
IMF role should be stronger than it is on global level: overall global liquidity and influence on system significant countries.
For Greece, IMF could join EU or other regional bodies
Weakness of WB and IMF an opportunity. 1-Other options have not been foreclosed for regional banks. 2-Conflict between WB and IMF would be less bad.
A: Governance is not just about institutions, but to the extent we do reform them we must work through nation state. This system is not sustainable: too much lack of legitimacy. Could work a lot better with incremental changes.
Vladimir Popov
The conventional view: China is a currency manipulator, driving US trade deficits
Prior to 1980s, US was world's creditor. Now it's debtor, now about 60% of GDP
Options: 1) Do nothing. $ will depreciate. Probably a hard landing with recession. 2) Press China to revalue yuan. Still painful for US
Usual discussion is soft landing or hard landing, and politically easier to sell if China moves
China leftist view: oppose accumulation of reserves. Chinese money develops US, should develops China. [He shows us a fascinating painting of Mao coming to get Chinese gold back from Pres. George Dubya, with fictional heroes of the Japanese war supporting him.]
China rightist view: reserves are a crucial part of Chinese growth model. reserves -> undervalue currency -> increase exports -> increase growth
Countries that accumulate reserves have growth. [DW - regression driven by three countries, Hong Kong, Botswana, and one other]
[Popov uses unexplained variation in reserves in #growthRegressions and it's significant. Claims this is policy change]
This model of development has capital flowing uphill.
[New hypothesis: If your graph shows a blob of countries and a handful of countries outside, the question is what is different in handful.]
Reserve accumulation will not continue forever. WTO restrictions means exchange rate protectionism is the only available tool.
My questions for Popov: Thank you for being brave enough to put up the only regressions in the conference. It means you get questions on them, though. 1) were the regressions still significant with Hong Kong, Botswana, and Singapore taken out? 2 - What is the correct counterfactual? The assumption is that supporting exports creates jobs and growth, and it's a fairly simple assumption that if you support an industry it will grow. Is the counterfactual that nothing would have happened without support for export? or that labor and capital are shifted over from other industries that would have grown just as much anyway? or somewhere between those extremes? And how much real additional growth do we get from supporting exports than from supporting nontradables or some other sector? Does a dollar of support to exports produce as much growth as a dollar of support to another sector?
A: Devaluations have always been used and never intended to be permanent. The devaluations during Depression Eichengreen has said were critical for recovery. The new part is that I claim devaluation can also have long term growth effects. Tariffs do not work in the same way: they contribute to growth only when good institutions are present. With poor institutions, tariffs don't work. Don't impose tariffs where they ask for them, but where they need them. It still works if you take out the three outliers. We account for counterfactuals by holding [usual suspects] constant. It would be interesting to compare Sierra Leone and Botswana.
No comments:
Post a Comment