Trends in Pension Reform in the Russian Federation: A Bbrief Overview

The purpose of this paper is to briefly summarize the main trends in the pension reform process which has been carried out in the Russian Federation since the collapse of the USSR in 1991. The Russian Federation and the other former Soviet Republics, currently CIS (Commonwealth of Independent States) countries, having undergone a transition from centrally planned to open-market economies, face a common challenge: the need to adapt their social security programmes to new political, economic and social realities.     

Trade sophistication in developing countries: Does export destination matter?

We investigate whether exports to developed economies stimulate export sophistication (represented by UNCTAD’s index of export similarity) in developing countries. Results from fixed-effects estimations suggest that exporting to developed economies enhances the sophistication of exports in the exporting country but there are diminishing returns to this effect. We also find non-linear effects from FDI and income on export sophistication with the effect of income exhibiting diminishing returns which suggests that the gains from exporting to developed economies are higher for lower-income countries; i.e., as income increases, the gains taper off. We discuss the policy implications of these results.     

Transmissions of real economic shocks across the Pacific Rim economies

We use Asian International Input–Output Tables 1995 in measuring trade dependencies of 10 Pacific Rim economies within a regional general equilibrium model. We develop two sets of metrics in measuring the trade dependencies of the economies. First, we use final demand elasticity of exports in measuring the sensitivities of the economies in the model to autonomous changes in the final demand in any other economy in the region. Second, we use a final-demand-weighted index of export elasticities that are induced by variations in the final demand vector of any economy in the model as indicators of the strength of the shocks transmitted across countries.The estimated coefficients have important policy implications. First, these coefficients identify the most vulnerable sectors of the economies in terms of the export/import dependency. Second, these coefficients may be readily used in bilateral and regional trade negotiations. Using these coefficients, policy makers can provide mutual trade concessions in dampening the effects of real and financial shocks transmitted from the trading partners.     

Democracy and poverty: The implementation of social reforms in the countries of central and eastern Europe

Why has the political and economic transformation in Russia and central and eastern Europe been accompanied by deteriorating living standards? Many of the reform programmes have contained social elements, but these have been neglected in the implementation process. Certain barriers to change – mental, cultural, political and economic – have made the implementation difficult. Russia and central and eastern Europe have to pass through a problematic dual transformation, from authoritarianism to democracy and from centrally planned economies to market economies. Experiences from Latin America show that such transitions are virtually impossible. The social results from the transformations in central and eastern Europe have been disappointing, which has been documented by scholars in this field. Nevertheless, if the political and economic transformation processes continue, the prospectes for the future are relatively bright. But there is also a negative scenario with authoritarianism and civil war as endpoints. A more cautious transition to a market economy might improve social welfare and living standards.     

The provision of complementary pensions: Objectives, forms and constraints

In all former centrally planned economies, the question of how to restructure old-age income provisions and open the way to non-governmental, complementary pension schemes is being posed. This paper deals with four main areas of that problem. First, the various objectives of public and complementary schemes are discussed. The paper argues that without a broad consensus among the major interested parties there is a considerable danger that envisaged objectives will not be achieved. The second section reviews the main forms of complementary pension scheme and discusses the central characteristics of occupational and personal schemes. The third section addresses two critical policy areas: the kind of regulations that may be required in order to enforce the social and economic objectives; and the likely social and economic implications. On the basis of experience in OECD countries and the specific situation in countries in transition, the final section offers some tentative conclusions for Czechoslovakia, the main one being that during the initial phase of economic transition preference should be given to a simple defined contribution plan. Such a complementary scheme would be consistent with the lack of developed financial markets and the privatization plan of the government and require neither a great number of highly trained accountants and actuaries nor the comprehensive set of regulations a defined benefit plan is likely to dictate.     

A model for the coordination of recovery policies in the OECD region

The paper presents a world econometric model of the LINK type, which is then applied to the study of the recovery prospects of the OECD economies. Specifically, several policy packages coordinated at the international level are assessed for the period 1978–1980.The model includes country specific macroeconomic structures for eight developed economies, and different type structures for five additional developing countries. The obvious policy and behavioral differences that exist between these two groups of countries are highlighted through the specification, in one case, of demand-oriented Keynessian models able to capture short-term cyclical phenomena. The supply orientation with several resource gaps (savings, foreign exchange, etc.) prevails for the developing economies. The two sections after the introduction review broadly the main modeling features of the project, including the international comparison of structural parameters. In the following sections several policy experiments are attempted. The underlying behavioral assumptions stress the community of interest that prevails among OECD economies. These experiments consider the case of stimulative policies adopted in (1) the United States alone, (2) three engine countries (United States, Federal Republic of Germany, and Japan), and (3) several developed countries that are part of the OECD system. Other experiments assume additional policy packages to correct present current account imbalances. The general conclusion of the study is that the prospects for economic recovery in the OECD area depend to a crucial extent on the ability of the member countries to agree on policies able to make the major economic indicators of each economy converge toward levels that are domestically manageable and mutually supporting.     

北京都市型工业发展研究

都市型工业是现代大都市经济体系中的重要组成部分。北京市都市工业在解决城市人口就业方面发挥着明显的作用,但是因为发展滞后以及各种新兴产业的兴起,其角色正在被弱化。本文利用2004年、2008年北京市经济普查数据进行分析,发现企业产品附加值低、缺乏规模经济效应、布局分散难以形成聚集经济效应等是北京都市型工业目前面临的问题。对此,本文提出政府应从加强规划引导、加大政策扶持力度、加快园区建设步伐来促进北京市都市工业发展的建议。     

An international trade model to capture linkages among supply-constrained economies

The development of a country's domestic and international markets depends on its own actions as much as on those of its trading partners. The study of market linkages is thus vital for policy making. Borrowing from the conceptual framework of Leontief's input-output analysis and from the national accounts equation, this paper presents a new model to calculate multilateral trade multipliers while minimizing data requirements. The novelty of the approach consists in the column-wise (supply-oriented) normalization of trade as opposed to the row-wise (demand-oriented) normalization that prevails in the literature. The explanatory power of the model has been successfully tested on data that refer to 1973–1974. Divergence from reality inevitably reflects the great fluidity that characterized trade during that period. Although most successful when applied to trade among supply-oriented economies (such as those of socialist or developing countries), at present empirical tests have been run only for a handful of OECD and OPEC countries.     

The experience of the EEC Eurolink Project in modeling bilateral trade linkage equations

Following the basic philosophical approach of the LINK Project, which links various national econometric models built in different countries, the Commission of the European Communities has succeeded in linking the full-size quarterly econometric models of the four major European countries. The Eurolink Project is being extended to cover the other EEC countries as well as the United States, Canada, and Japan. The results reported in this paper are part of this larger project which attempts to link the EEC member economies in a trade and capital flows econometric model and explain the transmission of interdependent economic fluctuations from country to country. In the present study, the interconnection between the various economies is represented by bilateral trade flows only. Flows of invisibles and of financial capital are not completely studied and are not yet ready to be included in this report.The theoretical structural model with its bilateral trade supply and demand functions and the technique employed for the construction of bilateral import and export price indices are presented. Estimation results are shown and discussed with emphasis on their use for the analysis of international trade and for policy decision making.     

Does multiculturalism help immigrant youth engage in school? Multicultural paradox in the welfare state

Research thus far has presented inconsistent findings regarding the effect of multiculturalism on the integration of immigrant youth; however, few studies have focused on making sense of these inconsistencies and further developing research in this field. In the current study, we focus on the possibility that policy arrangements for social welfare may condition the effect of multiculturalism in different directions. Specifically, we hypothesize that the policy mix of generous welfare spending and strong multiculturalism may not aid in the acculturation of immigrant youth in the host country. Cross-national multilevel data from 28,879 immigrant youth in 29 countries were analysed. The results indicate that immigrant youth show higher school engagement in countries with stronger institutionalised multiculturalism. However, this pattern varies depending on the social welfare policies of individual countries. When strong multiculturalism is combined with generous welfarism in a country, it does not positively affect the school engagement of immigrant youth. These findings align with our speculation that multiculturalism is likely to work better in liberal economies than in generous welfare states.     

Dynamics of the Welfare Mix in the Republic of Korea: An Expenditure Study Between 1990 and 2001

Although non-State sectors have played an important role in people's welfare, their expenditures have usually been excluded from social policy studies when measuring the welfare efforts of a nation. This article experiments with a new approach synthesizing welfare mix research using an expenditure study as a tool and applies the model to the Korean case. It presents the following major findings: first, the welfare system of the Republic of Korea has presented a genuine welfare mix in which the role of non-State sectors has been of immense importance; and second, the dynamics of the welfare mix since 1997 have been largely due to the growing role of the State in social welfare, both directly and indirectly. Based on these findings, this article ultimately urges the necessity of the welfare mix approach in comparative social policy research.     

Does inflation targeting lower inflation and spur growth?

Over the last few decades several countries have turned to inflation targeting as a policy choice for instilling stability into their economies. Prior studies have shown that inflation targeting has reduced inflation in those countries without significantly impacting GDP. This study seeks to improve upon these results by identifying the impact of timing on the policy decision as well as its impact as related to specific regions of the world. The focus is on developing countries across six regions. We find significant regional variation in developing countries in our sample in terms of the direction of changes in inflation following a switch to the inflation targeting policy. Moreover, although the impact of inflation targeting on real GDP is minimal overall, there is a statistically significant increase in real GDP among developing countries in certain regions only, namely, Europe, Latin America, and the Middle East.     

R&D in a post centrally-planned economy: The macroeconomic effects in Poland

Half a century of centrally planned policy in the Central and Eastern European countries resulted in outdated technologies, inefficient allocation of resources and low productivity. Following the end of communism there was a fifteen year process of transition which ended in 2004 with eight post-communist countries joining the European Union (EU) of which Poland was the largest. As part of the EU these countries now face the challenge of the common EU strategy Europe 2020, which has set the target of achieving R&D expenditure to GDP ratio (called the R&D intensity) of 3% by 2020 for the Union as a whole in an effort to increase the competitiveness of the region. Poland, like the other post-communist countries, faces a lower target of R&D intensity, set at 1.7%. Nevertheless, the challenge is immense, since the country is still at only half that level and has little experience in developing policies to help achieve it. In this paper we tested two possible policy options to achieve the target: (1) to increase government expenditures on R&D and; (2) to provide tax relief on R&D to businesses. The method applied to assess the options is a recursive dynamic computable general equilibrium (CGE) model for Poland with an explicit link between productivity and R&D stock. The results show that achieving the R&D intensity target via the use of tax relief is 2.5 times more costly to the government budget, but it has a greater impact on the economy in terms of a higher GDP growth. Tax relief proved efficient in the short run while in the long run the government expenditure policy provides better value for money.     

The effectiveness of monetary policy in small open economies

This paper examines the relative effectiveness of the use of direct and indirect monetary policy instruments in Barbados, Jamaica and Trinidad and Tobago, by estimating a restricted Vector Autoregressive model with Exogenous Variables (VARX). The model captures the dynamic interaction of the key sectors in the economy and it accounts for the fact that the banking system in those countries is characterized by high levels of excess reserves. Also, the study assumes that the central bank conducts monetary policy using a Taylor-type rule, and it evaluates the effects of a reserve requirement policy. The results show that although a positive shock to the policy interest rate has a direct effect on commercial banks’ interest rates, there is a weak transmission to the real variables. Furthermore, an increase in the required reserve ratio is successful in reducing private sector credit and excess reserves, while at the same time alleviating pressures on the exchange rate. The findings therefore indicate that central banks in small open economies should consider using reserve requirements as a complement to interest rate policy, to achieve their macroeconomic objectives.     

Global policy optimization and the exchange-rate regime

The international coordination of macroeconomic policies is apt to be imperfect. Therefore, exchange-rate regimes can be compared by asking whether they allow individual governments to achieve their national objectives without coordination. This question is pursued in a model containing two large industrial countries and many small less-developed countries. The model starts and ends in a stationary state, and governments are well behaved; they do not try to push their economies away from long-run equilibrium. But they have views about the appropriate path back to equilibrium following a shock and use their monetary policies to reach it. When both large countries do so independently, they can wind up in a less than optimal situation, and coordination is needed to extract them from it. The character of the outcome depends on both the nature of the shock and the exchange-rate regime. But pegged rates dominate floating rates in several cases, in that they obviate the need for coordination, and floating rates never dominate pegged rates. Thus, floating rates do not facilitate decentralized policy making but call for coordination more frequently than do pegged rates.     

Viet Nam: The development of national health insurance

Since 1987, Viet Nam has been moving from a centrally planned to a market economy. The public sector became weaker, and public resources were no longer sufficient to respond to all healthcare needs. The government then recognized the need for cost-sharing, and in August 1992 issued a national Health Insurance Decree calling for compulsory health insurance for salaried workers in both the public and private sectors. Voluntary membership for dependants, farmers and the self-employed was also encouraged from the start. Currently, the number of insured persons reaches almost 9.5 million. Future challenges include the extension of coverage, especially to the low-income rural and urban population, modification of provider payment methods so as to enhance cost-containment, and organizational development in general.     

FDI in China and global production networks: Assessing the role of and impact on big world players

How can countries successfully engage in global production networks? We provide a Computable General Equilibrium analysis of the impact of FDI on global production networks in Textiles, Chemicals, Electronics and Machinery, dividing the world economy in six regions (China, East Asia, Japan, EU28, the U.S. and the group of Emerging and Developing Economies). Interestingly for the policy maker, although the four sectors have contrasting production technologies, their Chinese exports and imports still follow a similar trend: East Asia and Japan are Chinese main intermediate suppliers while the US, Europe and the Emerging and Developing Economies play more the role of final markets. FDI inflows have benefitted China and we quantify by how much they have raised Chinese wages, GDP, national income and export competitiveness. By contrast, being an intermediate supplier or playing mostly the role of big final market in the network is not enough to succeed in your integration with China. The extent of the (positive or negative) effects is very much related to whether the structure of production (i.e., sectors’ weight in GDP) of the different economies is similar to (and therefore more easily crowded out by) Chinese booming sectors.     

Does Difference Make a Difference in Financial Planning for Risk?

Current policy‐making assumes people perceive and respond to financial risk in a uniform and rational way. This research sought to investigate whether social and cultural differences along the dimensions of disability, sexuality, faith and ethnicity influence attitudes to money and approaches to planning for possible financial risk eventualities. Eighty in‐depth interviews with individuals committed to different faiths (Muslim and Christian), disabled people, gays, lesbians and bisexuals, and members of black and minority ethnic groups (black and Asian) were conducted in 2005/2006. Mainstream cultural reference points were dominant in respondents’ accounts; however, difference was also found to be more determining in some areas than has previously been documented. The article explores the impact of these relationships on financial planning and draws out the policy implications of the different elements of difference on financial planning. The study argues that socio‐cultural approaches to risk need to be better understood at the policy‐making level.     

Commodity market stabilization: A comparison of simple and optimal intervention strategies in the world copper market

With the publication of the Brandt Report, international commodity policy has again become an important issue. Commodity stabilization agreements have been proposed as a means of stabilizing producers' incomes and/or redistributing wealth to less developed economies. This paper examines, in the context of a single market, the extent to which prices can be stabilized, the potential costs of such a scheme, and whether this redistribution would be achieved. By comparing the bandwidth rules that have been proposed with optimal stabilization rules, we find that significant stabilization is possible but expensive and that bandwidth rules are likely to prove inadequate because they cannot anticipate.     

Efficiency in natural resource usage: A comparison of market central planning policies

The foreign trade structure of Czechoslovakia is examined to explain the intensive absorption of natural resources in centrally planned economies (CPEs). A comparison with Austria using input-output pricing models indicates that imports are the main source of this foreign trade bias. This is traced to a bias in technology and domestic preferences towards natural resource products. It is concluded that pricing in CPEs should reflect the resulting scarcities.