NEW DIRECfiONS IN THE WORLD ECONOMY

NEW DIRECfiONS IN THE WORLD ECONOMY

Also by Bela Balassa THE HUNGARIAN EXPERIENCE IN ECONOMIC PLANNING THE THEORY OF ECONOMIC INTEGRATION TRADE PROSPECTS FOR DEVELOPING COUNTRIES CHANGING PATIERNS IN FOREIGN TRADE AND PAYMENTS (contributing editor) ECONOMIC DEVELOPMENT AND INTEGRATION TRADE LIBERALIZATION AMONG INDUSTRIAL COUNTRIES: Objectives and Alternatives STUDIES IN TRADE LIBERALIZATION: Problems and Prospects for the Industrial Countries (contributing editor) THE STRUCTURE OF PROTECTION IN DEVELOPING COUNTRIES EUROPEAN ECONOMIC INTEGRATION (contributing editor) ECONOMIC PROGRESS, PRIVATE VALUES, AND PUBLIC POLICY: Essays in Honor of William Fellner (contributing editor, with Richard Nelson) POLICY REFORM IN DEVELOPING COUNTRIES INDUSTRIAL DEVELOPMENT STRATEGY IN THAILAND THE NEWLY INDUSTRIALIZING COUNTRIES IN THE WORLD ECONOMY THE BALANCE OF PAYMENTS EFFECTS OF EXTERNAL SHOCKS AND OF POLICY RESPONSES TO THESE SHOCKS IN NON-OPEC DEVELOPING COUNTRIES (with Andre Barsony and Anne Richards) DEVELOPMENT STRATEGIES IN SEMI-INDUSTRIAL ECONOMIES TURKEY: Industrialization and Trade Strategy MOROCCO: Industrial Incentives and Export Promotion * CHANGE AND CHALLENGE IN THE WORLD ECONOMY *ECONOMIC INCENTIVES (contributing editor with Herbert Giersch) TOWARD RENEWED ECONOMIC GROWTH IN LATIN AMERICA (with Gerardo M. Bueno, Pedro Pablo Kuczynski and Mario Henrique Simonsen) ADJUSTING TO SUCCESS: BALANCE OF PAYMENTS POLICY IN THE EAST ASIAN NICS (with John Williamson) CHANGING TRADE PATIERNS IN MANUFACTURED GOODS: An Econometric Investigation (with Luc Bauwens) JAPAN IN THE WORLD ECONOMY (with Marc Noland) *Also published by Macmillan

NEW DIRECTIONS IN THE WORLD ECONOMY Bela Balassa Professor of Political Economy The Johns Hopkins University and Consultant, The World Bank M MACMILLAN

Bela Balassa 1989 Softcover reprint of the hardcover 1st edition 1989 978-0-333-48292-6 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 33-4 Alfred Place, London WClE 7DP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First edition 1989 Reprinted 1991 Published by MACMILLAN ACADEMIC AND PROFESSIONAL LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world British Library Cataloguing in Publication Data Balassa, Bela, 1928- New directions in the world economy. l. Developing countries. Economic development, compared with economic development in developed countries 2. Developed countries. Economic development, compared with economic development in developing countries I. Title 330.9172'4 ISBN 978-1-349-10590-8 ISBN 978-1-349-10588-5 (ebook) DOI 10.1007/978-1-349-10588-5

To Carol, Mara, and Gabor

Contents List of Tables Preface A Reader's Guide xiii XV :xvi PART I DEVELOPMENT STRATEGIES AND INTERNATIONAL TRADE IN DEVELOPING COUN TRIES ESSAY 1 THE IMPORTANCE OF TRADE FOR DEVELOPING COUNTRIES 3 Introduction 3 I Changes in Trade Flows during the Postwar Period 4 II Trade Orientation and Economic Growth 14 III Export Expansion and Economic Performance 21 Conclusions 27 ESSAY 2 POLICY RESPONSES TO EXOGENOUS SHOCKS IN DEVELOPING COUNTRIES 32 Introduction 32 I The Classification Scheme Applied 32 II External Shocks and Policy Responses to These Shocks in 1973--8 and 1978--83 34 Ill The Policy Measures Applied and Their Economic Effects 36 Conclusions 37 ESSAY 3 THE INTERACTION OF FACTOR AND PRODUCT MARKET DISTORTIONS IN DEVELOPING COUNTRIES 39 Introduction 39 I Effects of Product Market Distortions on Factor Markets 40 II Labor Market Distortions 44 III Capital Market Distortions 50 IV Effects of the Policies Applied 56 Conclusions 58 PART II POLICY CHOICES AND EXTERNAL CONSTRAINTS IN DEVELOPING COUNTRIES ESSAY 4 THE CAMBRIDGE GROUP AND THE DEVELOPING COUNTRIES 65 vii

viii Contents Introduction 65 I CEPG Policy Prescriptions for Developing Countries 65 II Experience with Outward and Inward Orientation 67 III Prospects for Developing Country Exports 70 IV The Policy Experience of Mexico 73 V The Policy Experience of Tanzania 76 Conclusions 81 ESSAYS 'DEPENDENCY' ANDTRADEORIENTATION 84 Introduction 84 I The Origins of Dependency Theory 84 II The Principal Tenets of the Dependency School 85 Ill The Presumed Deterioration of the Terms of Trade 87 IV Proposals for Delinking 89 V The Role of Foreign Capital 91 VI Effects on the Domestic Economy of Developing Countries 94 Conclusions 95 ESSAY 6 THE ADDING-UP PROBLEM 99 Introduction 99 I An Overall Constraint for Developing Country Export Expansion? 100 II The Sectoral Pattern of Trade in Manufactured Goods 102 III The Geographical Pattern of Trade in Manufactured Goods 102 IV Estimating Labor Coefficients 108 V The Prospective Effects of Manufactured Trade on Employment in Developed and in Developing Countries 115 Conclusions 120 PART Ill AGRICULTURE AND ECONOMIC DEVELOPMENT ESSAY 7 ECONOMIC INCENTIVES AND AGRICULTURAL EXPORTS IN DEVELOPING COUNTRIES I Modelling the Response of Exports to Price Incentives II Effects of Price Incentives on Exports III Effects of Price Incentives on Agricultural Exports IV Incentives and Export Performance: Country Experiences in the 1960-73 Period V Incentives and Export Performance: Country Experiences in the 1973-8 Period VI Incentives and Export Performance: 127 128 130 132 134

Contents ix Country Experiences in the 1978-81 Period 137 Conclusions 138 ESSAY 8 INCENTIVE POLICIES AND AGRICULTURAL PERFORMANCE IN SUB~SAHARAN AFRICA 140 I The Response of Exports to Price Incentives 140 II Alternative Policies and Export Performance 143 III Changing Export Market Shares: The Experiences of Four Sub~Sahara.n African Countries 146 IV Agricultural Policies and Performance in Tanzania and Kenya 148 V Agricultural Policies and Performance in Ghana and the Ivory Coast 149 Conclusions 151 ESSAY 9 AGRICULTURAL POLICIES AND INTERNATIONAL RESOURCE ALLOCATION 153 Introduction 153 I The Common Agricultural Policy and Levels of Self~sufficiency in the EEC 153 II Changes in Agricultural Protection in the Industrial Countries 154 III The Welfare Cost of Agricultural Protection in the Industrial Countries 156 IV Effects of Eliminating Agricultural Protection in the Developed Countries 157 V Incentive Policies in Developing Countries and the Possible Effects of Trade Liberalization 159 VI Incentive Policies in the European Socialist Countries and the Effects of Global Trade Liberalization 162 Conclusions 164 PART IV PUBLIC ENTERPRISE AND POLICIES IN A DEVELOPING COUNTRY: MEXICO ESSAY 10 PUBLIC ENTERPRISE IN DEVELOPING COUNTRIES: ISSUES OF PRIVATIZATION 169 Introduction 169 I Public Enterprises in the Manufacturing Sector of the Developing Countries 170 II Reasons for Privatization 172 III The Relative Efficiency of Public and Private Enterprises 174 IV The Status of Privatization in Developing Countries 176

X Contents V Prospects for the Future Conclusions 178 182 ESSAY 11 ECONOMIC PROSPECI'S AND POLICIES IN ME~CO 1~ Introduction 1~ I The Policies Applied in Periods of External Shocks, 1973-83 186 II Exploiting Mexico's Comparative Advantage in Manufactured Goods 194 III Policy Reforms for Structural Adjustment and Economic Gro~h 197 Conclusions 204 ESSAY 12 ME~ CO'S DEBT PROBLEM AND POLICIES FOR THE FUTURE 207 Introduction 207 I The New Agreement and Public Policies 208 II Policies for Improved Resource Allocation and Economic Gro~h 213 Conclusions 221 PART V REFORM EFFORTS IN SOCIALIST COUNTRIES ESSAY 13 THE 'NEW GROWTH PATH' IN HUNGARY 227 Introduction 227 I Adjustment Policies and the Debt Crisis 227 II Factors Affecting Hungary's Export Performance 232 III The Exchange Rate, Product Prices, and Competition 237 IV Factor Prices and Institutional Change 242 Conclusions 247 ESSAY 14 NEXT STEPS IN THE HUNGARIAN ECONOMIC REFORM 252 Introduction 252 I The Macroeconomic Situation 252 II The System of Incentives 255 III Labor Markets 257 IV The Volume of Investment and its Allocation 259 V Capital Markets 263 Conclusions 267 ESSAY 15 CHINA'S ECONOMIC REFORMS IN A COMPARATIVE PERSPECTIVE 271 Introduction 271

Contents I Agricultural Reforms and Performance II Industrial Reforms and Performance III Planning and Markets IV Competition and Profit Incentives V Price Reform VI Wages and Bonuses VII Macroeconomic Preconditions Conclusions xi 271 274 275 277 279 282 284 285 PART VI ECONOMIC POLICIES IN FRANCE ESSAY 16 FIVE YEARS OF SOCIALIST ECONOMIC POLICY IN FRANCE: A BALANCE SHEET 291 Introduction 291 I The Changing Course of Policies 292 II Wages and Prices 293 III Profits and Investment 294 IV Unemployment 295 V The Public Sector Deficit and the Fiscal Burden 297 VI Macroeconomic Policies and Foreign Trade 298 VII The Balance Sheet of Five Years of Socialist Government 299 VIII Policy Perspectives for the Future 300 Conclusions 303 ESSAY 17 INDUSTRIAL POLICY IN FRANCE UNDER THE SOCIALIST GOVERNMENT 305 Introduction 305 I The Declining Sectors: Coal, Steel, and Shipbuilding 306 II An Export Industry: Automobiles 309 III A High Technology Industry: Electronics 311 IV Government Support to Industry: R&D and Industrial Finance 313 Conclusions 315 ESSAY 18 FRENCH ECONOMIC POLICY AFfER MARCH 1986 319 Introduction 319 I What Was Accomplished? 319 II Macroeconomic Trends 322 III Factors AtJecting Exports 325 IV Prospects for the Future 328 Conclusions 330

xii Contents PART VII TRADE POLICIES AND MULTILATERAL NEGOTIATIONS ESSAY 19 THE EXTENT AND THE COST OF PROTECTION IN DEVELOPED- DEVELOPING COUNTRY TRADE 335 Introduction 335 I Protection in the Developed Countries 335 II Protection in the Developing Countries 347 Conclusions 351 ESSAY 20 LIBERALIZING TRADE BETWEEN DEVELOPED AND DEVELOPING COUN- TRIES 355 Introduction 355 I The Extent and Cost of Protection 356 II Approaches to Trade Liberalization 357 III Reducing Trade Barriers in Major Sectors 364 IV The Institutional Framework of Trade Liberalization 371 Conclusions 375 ESSAY 21 JAPANESE TRADE POLICIES TOWARDS DEVELOPING COUNTRIES 378 Introduction 378 I The Extent of Japanese Imports from Developing Countries, 1973 378 II Changes in Japanese Imports from the Developing Countries, 1973-83 380 III Practices Limiting Japanese Imports from Developing Countries 382 Conclusions 390 Index of Names 395 Index of Subjects 399

List of Tables 1.1 The geographical and commodity composition of exports, 1963, 1973, and 1984 6 1.2 The effects of developed country GDP and relative prices on their imports from developing countries, 1963-84 9 1.3 Exports by groups of developing economies, 1963, 1973, and 1980 12 1.4 Exports by selected developing economies 18 2.1 Balance-of-payments effects of external shocks and of policy responses to these shocks 33 2.2 GNP growth rates 34 3.1 Percentage distortions in labor and capital costs from various sources 42 3.2 Sources of potential increase in labor coefficients 43 5.1 US direct investment position abroad 92 6.1 Growth rates of manufactured exports of developing countries to developed countries 103 6.2 Manufactured exports of developing countries to developed countries, 1963 and 1983: eight industry groups 104 6.3 Regression results for employment-output ratios 110 6.4 Trade in manufactured goods between developed and developing countries 112 6.5 Employment effects of trade in manufactured goods 114 6.6 Employment effects in manufacturing trade, 1983-93: Industry breakdown 118 6.7 Employment effects in manufacturing trade, 1983-93: Country breakdown 120 7.1 Regression equations for export output ratios in developing countries 129 7.2 Regression equations for agricultural exports in developing countries 131 7.3 Export growth rates, 1960-73 133 7.4 Changes in export market shares: the newly industrializing countries 136 7.5 Changes in export market shares: country groupings 137 8.1 Regression equations for export-output ratios in sub-saharan African countries 141 8.2 Regression equations for agricultural exports in sub-saharan African countries 142 8.3 Changes in export market shares in sub-saharan African countries 144 xiii

xiv List of Tables 8.4 Changing export market shares: Tanzania, Kenya, the Ivory Coast, and Ghana 147 9.1 Ratios of domestic to world market prices in the major developed countries, 1980-82 156 9.2 Effects on developing countries of a 50 percent decrease in OECD tariff rates, 1975-7 158 9.3 Effects of trade liberalization on trade and welfare 161 9.4 Effects on world trade shares of global liberalization of agricultural trade, 1985 163 10.1 Relative shares of public enterprises in the manufacturing sector 171 10.2 The status of privatization in developing countries 180 11.1 Balance-of-payments effects of external shocks and of the policies applied: Mexico 187 11.2 Changes in real exchange rates in Mexico 189 11.3 Changes in export market shares in Mexico 191 13.1 Real exchange rates in Hungary, 197~6 233 16.1 The profitability of nonfinancial enterprises 295 19.1 Post-Tokyo round tariff averages in the major developed countries 336 19.2 Pre- and post-tokyo round tariffs for twelve processing chains 338 19.3 Relative shares of imports subject to nontariff measures, May 1985 341 19.4 Relative importance of manufactured imports from developing countries 343 19.5 Effects of some major VERs in developed countries 346 19.6 Nominal protection coefficients for agricultural products, 1980-82 347 20.1 Trade in industrial commodity groups between developed and developing countries in percentages 363

Preface Policy makers in developing countries face important challenges during the rest of the century and beyond. The choice of development strategies will largely determine the direction in which these economies will be moving in the future. In making this choice, the governments of the developing countries can learn from the experience of other countries in the developing world as well as from the experience of developed and socialist countries. The essays of this volume aim to assist in the making of policy choices. The essays of Part I examine the effects of alternative development strategies in the developing countries. They are followed by the essays of Part II that raise the question if external constraints would limit choices among these strategies. The essays of Part III focus on a long-neglected sector, agriculture, which should play an important role in the growth process in most developing countries. In turn, the essays of Parts IV to VI analyze issues of privatization and the experience of Mexico; evaluate the reform efforts of two socialist countries, Hungary and China; and examine recent policy changes in a developed country, France. Finally, the essays of Part VII review issues relating to trade and trade negotiations between developed and developing countries. The essays have been prepared as policy advisory reports for individual governments, presented at international conferences and seminars, or written for the World Bank. All the essays have been published, or are scheduled to be published, in professional journals and collective volumes. Permission for publication to all concerned is acknowledged in the Reader's Guide to the volume. Apart from the essays of Part VI and Essay 21, all the essays have been prepared in the framework of a consultant arrangement with the World Bank. I am indebted to Shigeru Akiyama for excellent research assistance. Special thanks are due to Norma Campbell who performed the task of typing the manuscript, including its many revisions, with devotion and at a high level of professional competence. I wish to express my appreciation to government officials, businessmen, and economists in the individual countries for helpful discussions. However, I am alone responsible for the opinions expressed in these essays that should not be interpreted to reflect the views of particular governments or the World Bank. Washington, DC BELA BALASSA XV

A Reader's Guide The volume begins with a discussion of the importance of international trade for the developing countries. Essay 1 further examines the impact of trade orientation on economic performance in these countries, drawing on evidence in the periods preceding and following the quadrupling of oil prices. The existence of a positive relationship between exports and economic growth is also established in the essay. 1 Essay 2 provides additional evidence on the impact of trade orientation on economic performance. The essay analyzes the external shocks developing countries suffered in the 1974-8 and 1979-83 periods and examines their policy responses to these shocks. It further indicates the superior performance of outward-oriented as compared to inward-oriented countries. 2 Inward orientation introduces distortions in product markets. Such distortions will affect factor markets and vice versa. Essay 3 examines distortions in labor and capital markets in the developing countries and their interaction with distortions in product markets under alternative development strategies. Information is also provided on the adverse effects of factor market distortions on the efficiency of resource allocation and employment in the developing countries. 3 The three essays of Part I on development strategies and their economic effects are followed by the essays of Part II that raise the question as to whether external constraints limit policy choices for the developing countries. The essays show that concerns with external constraints have been much exaggerated. The adherents of the Cambridge Group have claimed that economic growth in the developed countries is unlikely to be sufficiently rapid to generate the desired rates of industrial expansion in the developing countries through exports. Essay 4 documents the unfavorable effects of the resulting policy prescriptions for industrialization behind high protection in Mexico and Tanzania. The essay also disproves some pessimistic views as to future export prospects for the developing countries. 4 Essay 5 provides a critical appraisal of the tenets of the dependency school. According to this school, international trade leads to unequal exchange between developed and developing countries to the detriment of the latter. The essay shows that, rather than stunting their economic growth, international trade has contributed to favorable economic performance in the developing countries. 5 Essay 6 provides a detailed examination of the view, according to which the widespread application of outward-oriented policies would encounter market constraints in the developed countries. The essay provides evixvi

A Reader's Guide xvii dence on the predominance of domestic supply over foreign demand factors in the expansion of developing country exports. It also concludes that continued rapid growth of the manufactured exports of these countries would not cause serious adjustment problems in the developed countries while permitting the emergence of new exporters in the developing world. 6 The essays of Part III deal with a long-neglected sector, agriculture, which should play an important role in the growth process in most developing countries. Essay 7 shows that exports in general, and agricultural exports in particular, strongly respond to price incentives. It further indicates that outward-oriented countries had a far better export performance in regard to agricultural exports, just as for merchandise exports, than inward-oriented countries. 7 The methodology employed in Essay 7 is applied to sub-saharan Africa in Essay 8. While the popular view has been that the exports of sub Saharan African countries respond less to price incentives than those of countries at higher levels of development, the opposite conclusion is obtained. This conclusion applies to exports in general and to agricultural exports in particular, when the latter appear more responsive to price incentives than the former. Evidence is further provided that in sub Saharan Africa market-oriented countries gained, and interventionist countries lost, export market shares that, in turn, affected their economic growth. 8 Agriculture is considered in a world-wide context in Essay 9. The essay shows the desirability of lowering agricultural protection across-the-board. It recommends that this be done in the framework of the Uruguay Round of multilateral trade negotiations and suggests particular procedures for the negotiations on agriculture. 9 Part IV begins with Essay 10 on the experiences of developing countries with privatization. It notes that while at one time developing countries considered public enterprise as the mainstay of economic development, there has been an increasing disillusionment with public enterprise in recent years and proposals have been made for privatization in various areas. However, for privatization to succeed, certain policy conditions need to be met, including a shift towards outward orientation and increased competition. 10 These policies are of particular relevance to Mexico where privatization is an important issue. Essay 11 indicates that the policies applied in the period 1973-82 had unfavorable effects in Mexico and examines policy reforms that can reverse these unfavorable changes. Apart from privatization, these reforms relate to exchange rate policy, trade policy, and foreign direct investment.u Essay 12 focuses on short-term economic issues in Mexico. It reviews the policy conditions of the July 1986 agreement on the rescheduling of the Mexican debt, with particular attention given to the tax system, public

xviii A Reader's Guide service prices, and current public expenditures. The essay further returns to the question of public enterprise and discusses the need for monetary reform in Mexico. 12 Part V is devoted to the reform experiences of two socialist countries: Hungary and China. These experiences assume considerable interest in view of the Soviet reform efforts proposed under Gorbachev. But they also have an interest for developing countries, several of which have followed policies that resemble those applied in socialist countries. Essay 13 notes that the exigencies of reducing Hungary's external debt and the requirements of the reform effort repeatedly came into conflict after 1978 and, more often than not, this conflict was resolved in favor of the former objective. This involved limiting the firms' freedom of action, both through binding regulations and through case-by-case interventions, with adverse effects on Hungary's economic performance. 13 Essay 13 makes recommendations for renewing the Hungarian reform effort. Essay 14 extends these recommendations to improving the operation of labor and capital markets. The essay further suggests the need for reducing consumption and increasing investment, with the reallocation of investment from energy and heavy industry to light industry and engineering. 14 Essay 15 reviews the economic reforms introduced in China after 1978 and analyzes the performance of agriculture and industry following the reforms. It further makes recommendations for extending the reform effort while establishing macroeconomic equilibrium in China. The essay places the Chinese reform in a comparative perspective, with particular attention given to the Hungarian experience that predates the reform in China by a decade. 15 The French experience, described in the essays of Part VI, offers an interest to developed countries and developing countries alike. The developed countries may learn that expansionary policies in a single country cannot be sustained. The developing countries may learn about the adverse consequences of a socialist experiment in a market economy. Essay 16 provides an evaluation of five years of socialist economic policy in France. It is shown that while the socialist government abandoned its excessively expansionary policies, the competitiveness of industry continued to deteriorate and productive investments in 1985 were below the 1980 level. Yet, new investments would have been necessary for structural change as French industry was losing export market shares. 16 Essay 17 focuses on the industrial policies of the French socialist government. In accordance with its expansionary stance after May 1981, the government set high targets for the coal and steel industries that soon proved to be unrealistic. At the same time, providing for the increased financial needs of declining sectors limited the availability of funds for the expansion of high-technology activities. Nor did the nationalized firms

A Reader's Guide xix become the vanguard of modern technology as had been assumed. 17 The program of privatization adopted by the new majority in France not only reversed the nationalizations of 1981 but also a part of the nationalizations of 1945. Essay 18 explains that the new government further accelerated the process of price and foreign exchange liberalization and introduced greater flexibility in labor regulations. However, in the absence of a devaluation of sufficient magnitude, the competitiveness of French industry did not improve, resulting in continued losses in export market shares. The essay make recommendations for policy changes that would reverse these tendencies and contribute to the acceleration of economic growth in France. 18 Part VII of the volume returns to the question of trade policies. Essay 19 provides evidence on the cost of protection in developed and in developing countries. It is shown that this cost burdened primarily the countries imposing the protective measures themselves and that, protection in the developed countries notwithstanding, developing country exports to these countries increased to a considerable extent. 19 Essay 20 suggests that trade between developed and developing countries should be an important focus of the Uruguay Round of multilateral negotiations. The essay considers the scope, content, and modalities of negotiations between the two groups of countries, with special attention given to the need for reciprocity on the part of the newly-industrializing countries that have seen their exports rising at a rapid rate. 20 Essay 21 considers a special case, that of Japan. The essay shows that Japan fell increasingly behind other developed countries in providing markets for developing country exports. This is explained by informal measures of import protection applied in Japan. The essay presents evidence of Japanese protection on imports from newly-industrializing countries, drawing on information provided by the governments of these countries. 21 NOTES 1. This essay was presented as an invited paper at the Conference on the Role and Interests of the Developing Countries in Multilateral Trade Negotiations, held in Bangkok, Thailand in October-November, 1986, under the auspices of the World Bank and the Thailand Development Research Institute. It was published in Banca Nazionale del Lavoro Quarterly Review, XL (1987) pp. 437-70. 2. Essay 2 was presented as an invited paper at the December 1985 Meetings of the American Economic Association. It was published in the American Economic Review, Papers and Proceedings, LXXVI (1986) pp. 75-8. 3. Essay 3 was prepared as a Background Paper for the 1987 World Development Report. It was published in World Development, a publication of Pergamon Press Ltd, XVI (1988) pp. 449-63.

XX A Reader's Guide 4. This essay was first published in The World Economy, the quarterly journal of the Trade Policy Research Centre, London, VIII (1985) pp. 201-18. 5. Essay 5 was published in The World Economy, IX (1986) pp. 259-74. 6. Essay 6 was prepared as a Background Paper for the 1988 World Development Report. It is scheduled for publication in Banca Nazionale del Lavoro Quarterly Review. 7. Essay 7 was presented as an invited paper at the Eighth Congress of the International Economic Association, held in New Delhi, India in December 1986. It will be published in the Proceedings of the Congress. 8. This essay was prepared as a Background Paper for the 1986 World Development Report. It is scheduled for publication in World Development. 9. This essay was presented as an invited paper at the Vth European Congress of Agricultural Economics held in Belatonszeplak, Hungary in August-September 1987. It was published in the Journal of Policy Modeling, a publication of Elsevier Science Publishing Co., X (1988) pp. 249-64. 10. Essay 10 was presented as the Bohm-Bawerk Memorial Lecture in Innsbruck, Austria in June 1987 and at the 43rd Congress of the International Institute of Public Finance, held in Paris in August 1987. It will be published in the Proceedings of the Congress. German translation in Wirtschaftspolitische Blatter 5 (1987) pp. 699-713. 11. This essay was presented as an invited paper at the Conference on Industrial Organization, Trade and Investment in North America held in Merida, Mexico in December 1985. It will be published in the Proceedings of the Congress. Spanish translation in Medio Siglo de Financiamento y Promoci6n del Comercia Exterior de Mexico. II Essayes Commemorativos (Mexico, DF: Banco Nacional de Comercio Exterior - El Colegio de Mexico, 1987) pp. 185-204. 12. This essay was presented as an invited paper at the International Congress of the North American Economics and Finance Association, held in Montreal, Canada in July 1986. It was published in the Proceedings of the Congress, Rodrigue Tremblay (ed.), Issues in North American Trade and Finance (Montreal: North American Economics and Finance Association, 1986) pp. 11-30. 13. Essay 13 was presented as an invited paper at the 9th U.S.-Hungarian Roundtable held in Berkeley, California in June 1985. It was published in Banca Nazionale del Lavoro Quarterly Review, XXXXVIII (1985) pp. 347-72 and in the Proceedings of the Roundtable, J. C. Brada and J. Dobozi (eds), The Hungarian Economy in the 1980s: Reforming the System and Adjusting to External Shocks (Greenwich, Connecticut: JAI Press, 1988), pp. 3-32. 14. This essay was presented as an invited paper at the loth U.S.-Hungarian Roundtable, held in Budapest, Hungary in December 1986. It will be published in the Proceedings of the Roundtable. 15. Essay 15 was presented at an invited paper at a Conference on Chinese Economic Reform held in Alden House, New York in September 1986.1t was published in the Proceedings of the Conference in the Journal of Comparative Economics, XI (1987) pp. 410-26. 16. Essay 16 was published in The Tocqueville Review, VIII (1985/1986) pp. 269-84 and, in French translation, in Commentaire, IX (1986) pp. 62-71. 17. This essay was presented as an invited paper at the December 1984 Meetings of the American Economic Association. It was published in the American Economic Review, Papers and Proceedings, LXXV (1985) pp. 315-19 and, in French translation, in Commentaire, VIII (1985) pp. 579-88.

A Reader's Guide xxi 18. Essay 18 was published in The Tocqueville Review, IX (1986/1987) pp. 311-24 and, in French translation, in Commentaire, X (1987) pp. 377-415. 19. This essay, written jointly with Constantine Michalopoulos, was published in the Journal of World Trade Law, XX (1986) pp. 3-28. 20. Essay 20, written jointly with Constantine Michalopoulos, was published in Dominick Salvatore (ed.), The New Protectionist Threat to World Welfare (Amsterdam: North-Holland, 1987) pp. 482-504. 21. This essay was presented as an invited paper at the Second United States - Asia Conference, held in New York, NY in September-October 1985. It was published in the Journal of International and Economic Integration I (1986) pp. 1-19 and in the Proceedings of the Conference, M. Dutta (ed.), Asia-Pacific Economics: Promises and Challenges (Greenwich, Connecticut: JAI Press, 1987) pp. 49-68.