新结构经济学课件.ppt

Kuznets LectureNew Structural Economics: A Framework for Rethinking Development,Justin Yifu LinChief Economist and Senior Vice Presidentthe World BankMarch 1, 2011,1,A,Kuznets LectureNew Structura,Overview of Presentation,Why do we need to rethink developmentThe New Structural EconomicsIndustrial Policy and Growth Identification and Facilitation: An application of new structural economics,2,A,Overview of PresentationWhy do,WHY DO WE NEED TO RETHINK DEVELOPMENT,3,A,WHY DO WE NEED TO RETHINK DEVE,Economic Crisis and Crisis in Economics,4,A,Economic Crisis and Crisis in,How has economic development theory evolved?,Successful East Asian Tigers: Export Promotion,China, Vietnam and Mauritius: Dual-track approach to transition,5,A,How has economic development t,World Bank has been in the process of rethinking economic development,Export Orientation and Market Friendly Government,Openness; Macro stability; High rates of saving Committed, credible & capable government,No one-size fits all,6,A,World Bank has been in the pro,THE STRUCTURAL ECONOMICS,7,A,THE STRUCTURAL ECONOMICS7A,IntroducingNew Structural Economics,Application of neoclassical economic approach to understand changing economic structure in developmentProvides a consistent framework for the five stylized facts of Growth Report as well as the findings from the East Asian Miracle and Lessons from the 1990sContributes to new theoretical and policy insights for economic development,8,A,IntroducingNew Structural,IntroducingNew Structural Economics,Sustainable income growth is the foundation for poverty reduction and developmentSustainable income growth is a recent phenomenon,The sustainable income growth is a result of continuous technological innovation as well as structural change,9,A,IntroducingNew Structural,Industrial Structure in New England, 1900s,10,A,Industrial Structure in New En,Industrial Structure in New England, 1600s,11,A,Industrial Structure in New En,Industrial Structure in New England, 1800s,12,A,Industrial Structure in New En,New Structural Economics (NSE): Key Concepts,The main hypothesis: Industrial structure is endogenous to endowment structureInitial Endowments (determine the economys total budgets and relative factor prices at time t)Comparative advantageOptimal industrial structure (endogenous).Dynamics: Income growth depends onUpgrading of endowments Upgrading industrial structure “hard” and “soft” infrastructureFollowing comparative advantage is the best way to upgrade endowment structure and to sustain industrial upgrading, income growth and poverty reduction.,13,A,New Structural Economics (NSE),New Structural Economics (NSE): Key Concepts (2),Firms maximize profitschoice of technology and industries based on relative factor pricesNeed for competitive market systemIndustrial upgrading needs toSolve coordination problemsAddress externalities Need for a facilitating state,14,A,New Structural Economics (NSE),NSE and The Growth Commissions Stylized Facts,Policy Recommendation from NSEFollowing comparative advantage : ConditionsMarket economy Facilitating StateThe results:Openness and advantage of backwardnessCompetitiveness and strong external as well as fiscal accounts: fewer home-grown crises and larger scope for countercyclical fiscal policies.Large economic surplus and high returns to investment: high rate of savings and investment.The NSEs recommendations are consistent with the East Asian Miracles findings.,Growth Report Stylized Facts: #4 #5,#1,#2,#3,15,A,NSE and The Growth Commission,“No one size fits all” then “What size fits what?”New theoretical insights from the NSE:,New structural economics emphasizes that countries at different levels of development have different optimal industrial structures, firm sizes, capital requirements and nature of risks, therefore, many institutions and policies should be different accordingly and have different policy insights compared to the old structuralism and neoclassics: Financial institutions:Old structuralism: Direct government mobilization and allocation of financial resources.Neoclassics: Financial liberalization and development of modern big banks and equity marketNew structural economics: Optimal financial structure will be different depending on level of development. For low-income countries, small, local financial institutions should be the core of financial structure; and big banks and equity market will play increasingly important role as the firm size and risks increase with the level of development.Fiscal stimulus:Old structuralism: Keynesian stimulus, using tax and expenditure policies to offset business cycles.Neoclassics: Ricardian Equivalence, warming against the use of fiscal stimulus.New Structural economics: Beyond Keynesianism, using public investments to invest in productivity-enhancing, bottleneck-releasing infrastructure projects as countercyclical measures.,16,A,“No one size fits all” then “W,THE INDUSTRIAL POLICY &GROWTH IDENTIFICATION AND FACILITATION,17,A,THE INDUSTRIAL POLICY &GROWT,The desirability and failures of Industrial Policy,Economic development is a process of continuous process of industrial upgrading and structural transformation. The state should play a facilitating role in the process.Industrial policy is a necessary instrument for the state to play the facilitating role Contents of coordination will be different, depending on industries. The governments resources and capacity are limited. The government needs to use them strategically.The sad fact is that most governments in the developing world used industrial policies but failed, the reason was:Attempt to develop industries that went against comparative advantageThe firms in the industrial policys targeted sectors were non-viable in competitive markets and required government policy supports for their initial investment and continuous operations. The supports were implemented through price distortions. As a result, planning and administrative allocations were required.This led to rent-seeking, directly unproductive profit seeking, and soft budget constraints.,18,A,The desirability and failures,The existing approaches for industrial development and their drawbacks,The existing practices:Business environmentThe goal is to introduce a whole set of the first-best institutions The issues are:The government may not have the capacity to introduce all those changesThe first-best institutions may be different at different stage of developmentNo identification of industries with latent comparative advantages and no compensation for the first moversGrowth DiagnosticsThe goal is to remove binding constraintsThe issues are:Binding constraints are endogenous to industriesIt relies on survey of existing firms. Many of them may be in industries where the country has no comparative advantages.No firms will be in the new industries that the countries have latent comparative advantageAim before fire: For an industrial policy to be successful, it should target sectors that conform to the economys latent comparative advantage:Firms will be viable and the sectors will be competitive once the government helps the firms overcome the coordination and externality issuesBut how to pick the sectors that are the economys latent comparative advantages,19,A,The existing approaches for in,What Can Be Learned From History,Historical experiences show that successful countries industrial policies, in general, targeted dynamic industries in successful countries with a similar endowment structure and somewhat higher per capita income:Britain targeted the Netherlands industries in the 16th and 17th century, its per capita GDP was about 70 % of Netherlands.Germany, France, and USA targeted Britains industries in the late 19th century, their per capita income were about 60 to 75 % of Britains per capita GDPIn Meiji restoration, Japan targeted Prussias industries, its per capita GDP was about 40% of Prussias. In the 1960s, Japan targeted USAs industries, its per capita GDP was about 40% of USAs per capita GDPIn the 1960s-1980s, Korea, Taiwan, Hong Kong, and Singapore targeted Japans industries, their per capita income was about 30% of Japans per capita GDPIn the 1970s, Mauritius targeted Hong Kongs industries, its per capita income was about 50% of Hong Kongs.In the 1980s, Ireland targeted information industries, its per capita income was about 45% of the USAs.In the 1990s, Costa Rica targeted memory chip assembly and testing, its per capita GDP was about 40% of that of Taiwan, which was the main economy in this sector. Unsuccessful industrial policies in general target industries in countries where their per capita GDPs were less than 20 per cent of those targeted countries.A new approach for industrial policy: Growth identification and facilitation,20,A,What Can Be Learned From Histo,Step 1: Identifying sectors with latent comparative advantage,Find dynamic growing countries with a similar endowment structure and with about 100% higher per capita income. Identify tradable industries that have grown well in those countries for the last 20 years as the potential targets of industries for upgrading or diversificationSimilar to Hausmanns idea of jumping to nearby trees, but easier to implementConsistent with FDI research suggesting technology transfer is easier when domestic and foreign firms are closer to each other on the technological frontier (Blomstrom, Kokko),21,A,Step 1: Identifying sectors wi,Step 2: Removing constraints for existing firms.How?,See if some private domestic firms are already in those industries (of which may be existing or nascent). Identify constraints to quality upgrading, further firm entry, and reduction of transaction costs (hard and soft infrastructure). Take action to remove constraintsMethods:Value-chain analysisGrowth Diagnostics (Hausmann, Rodrik, and Velasco (2008)Investment Climate Assessments (World Bank)Successful ExamplesChile: wineEcuador: cut flowers,22,A,Step 2: Removing constraints f,Step 3: Seek FDI or organize New Firm Incubation Programs,In industries where no domestic firms are currently present, seek FDI from countries examined in step 1, or organize new firm incubation programs.Famous examples of FDI:garment sector in BangladeshTextile industry in MauritiusMemory chip assembly and testing in Costa RicaElectronics and other consumer products in ChinaInformation industries in IrelandLaura Alfaro and Andrew Charlton, in a paper in the Journal of International Economics, show that:Many countries promote FDI selectivelyTargeted sectors grow fasterFamous example of incubation programs:Taiwan-Chinas Hsingchu Science-based Industrial Park for the development of electronic and IT industriesFundacin Chiles demonstration of commercial salmon farming,23,A,Step 3: Seek FDI or organize N,Step 4: Scale up private firms self discovery,In addition to the industries identified above, the government should also pay attention to spontaneous self discovery by private enterprises and give support to scale up the successful private innovations in new industriesExamplesIndias information industryEthiopias cut flower exportsPerus asparagus exports,24,A,Step 4: Scale up private firm,Step 5: Create zones or industrial parks, and encourage industrial clusters,In countries with poor infrastructure and bad business environment, special economic zones or industrial parks may be used to overcome these barriers to firm entry and FDI and encourage industrial clusters.Examples:Chinas special economic zonesMauritius export process zoneEnormous Increase in Number of Zones World Wide: from 29 in 1975 to 3500 in 2006!The zones will be successful only if the industries targeted by the zones are consistent with the comparative advantages of their economies,25,A,Step 5: Create zones or indust,Step 6: Provide limited subsidies to compensate for externalities,The need for subsidizing pioneer firms Information externality of success and failureAsymmetry of gain of success and loss of failure The governments in developed countries compensate pioneer firms by:PatentsSupports for basic researchMandateGovernment procurementExcept for patents, the other supports are sector specificThe government in a developing country can compensate pioneer firms in the listed identified in step 1 withTax incentives for a limited periodDirect credits for investmentsAccess to foreign exchangesAs the governments support is only to compensate for information externalities, the support can, and should, be limited both in magnitude and time.,26,A,Step 6: Provide limited subsid,