Studies in Globalization and Economic Transitions Keith Griffin STUDIES IN GLOBALIZATION AND ECONOMIC TRANSITIONS Also by Keith Griffin ALTERNATIVE STATEGIES FOR ECONOMIC DEVELOPMENT THE DISTRIBUTION OF INCOME IN CHINA (editor with Zhao Renwei) THE ECONOMIC DEVELOPMENT OF BANGLADESH (editor with E A G Robinson) THE ECONOMY OF ETHIOPIA (editor) FINANCING DEVELOPMENT IN LATIN AMERICA (editor) GLOBALIZATION AND THE DEVELOPING WORLD (with Azizur Rahman Khan) GROWTH AND EQUALITY IN RURAL CHINA (with Ashwani Saith) HUMAN DEVELOPMENT AND THE INTERNATIONAL DEVELOPMENT STRATEGY FOR THE 1990s (editor with John Knight) IMPLEMENTING A HUMAN DEVELOPMENT STRATEGY (with Terry McKinley) INSTITUTIONAL REFORM AND ECONOMIC DEVELOPMENT IN THE CHINESE COUNTRYSIDE (editor) INTERNATIONAL INEQUALITY AND NATIONAL POVERTY LAND CONCENTRATION AND RURAL POVERTY PLANNING DEVELOPMENT (with John Enos) THE POLITICAL ECONOMY OF AGRARIAN CHANGE POVERTY AND LANDLESSNESS IN RURAL ASIA (editor with Azizur Rahman Khan) POVERTY AND THE TRANSITION TO A MARKET ECONOMY IN MONGOLIA THE TRANSITION TO EGALITARIAN DEVELOPMENT (with JejfreyJames) UNDERDEVELOPMENT IN SPANISH AMERICA WORLD HUNGER AND THE WORLD ECONOMY Studies in Globalization and EconomIc Transitions Keith Griffin Professor of Economics University of California Riverside First published in Great Britain 1996 by MACMILLAN PRESS LTD Houndmills Basingstoke Hampshire RG21 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library ISBN 0-333-66987-8 (hardcover) ISBN 0-333-66988-6 (paperback) First published in the United States of America 1996 by ST MARTIN'S PRESS, INC., Scholarly and Reference Division 175 Fifth Avenue New York N.Y 10010 ISBN 0-312-16224-3 Library of Congress Cataloging-in-Publication Data Griffin Keith B Studies in globalization and economic transitions I Keith Griffin p cm Includes bibliographical references and index ISBN 0-312-16224-3 I Economic policy Social policy Economic assistance Economic development Economic conversion International economic relations I Title HD87.G75 1996 337 dc20 96-17558 CIP © Keith Griffin 1996 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 pemlitting limited copying issued by the Copyright Licensing Agency 90 Tottenham Court Road, London WI P 9HE Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages 10987654321 05 04 03 02 00 99 98 97 96 or Printed and bound in Great Britain by Antony Rowe Ltd Chippenham Wiltshire To my uncle, Martin Cherkasky, whose energy, enthusiasm and commitment are an inspiration This page intentionally left blank Contents List of Figures and Tables x Preface xi List of Abbreviations Introduction PART I xiii GLOBAL PROSPECTS AND POSSmlLiTIES Global Prospects for Development and Human Security 21 Objectives Prospects Poverty Demography Conclusion 21 25 27 29 32 Foreign Aid after the Cold War 34 The Economic Justification for Foreign Aid Foreign Aid and the Rate of Growth Foreign Aid and the Composition of Expenditure Aid and Distributive Issues Foreign Aid and the State The Future of Foreign Aid A Future for Official Non-Development Aid 37 41 47 53 55 57 66 Globalization and Development Cooperation: A Reformer's Agenda 72 A New Framework for Development Cooperation A New Basis for Financing Aid Disbursements under a Negative Income Tax Payment for Services Rendered Compensation for Damages Conclusions 74 79 84 88 91 98 vii viii Contents Regulating World Markets in a Liberal Global Erooo~ 1~ Regulating Freer Trade Labour Standards and Environmental Protection Turning Knowledge into a Commodity The Freedom of Private Capital Movements and Foreign Aid Regulating Flows of Human Capital Deregulating the Global Market for Low-Skilled Labour Regulation in Whose Interests? 104 108 111 113 116 117 119 PART II NATIONAL POLICIES DURING TRANSITIONS Domestic Policies in Developing Countries and their Effects on Employment, Income Inequality and Poverty Growth and Employment Physical Capital Formation Human Capital Formation The Labour Intensity of Production The Informal Sector Guaranteed Employment Economic Security in Poor Countries The Distribution of Productive Assets Summary and Conclusions The Transition to Market Guided Economies: Lessons for Russia and Eastern Europe from the Chinese Experience (with Azizur Rahman Khan) Macroeconomic Financial Stability Growth and Investment Property Relations and Industrial Reforms Income Distribution and the Social Safety Net Conclusions Appendix: Simultaneous versus Sequential Reforms during Periods of Systemic Change 125 128 131 133 134 137 138 140 142 145 150 154 158 164 170 180 185 Contents The State, Human Development and the Economics of Cocaine: The Case of Bolivia 192 Maintaining Macroeconomic Equilibrium Alternative Development Priorities Cocaine and the Informal Sector Policy Alternatives 194 195 199 203 Observations on Economic Policy in Post-Revolution Nicaragua Appendix: Economic Policy in Nicaragua: A Response to the Debate PART III 12 215 222 THE TRANSITION IN CENTRAL ASIA: THE CASE OF UZBEKISTAN 10 Development, Culture and Social Policy in Uzbekistan 11 ix 231 From Basic Needs to Human Development Human Development as an Objective Human Development as a Means Components of a Strategy Culture and Development 232 233 234 236 239 The Macroeconomic Framework and Development Strategy 248 The Importance of Price Stability during the Transition Strategic Prices and an Efficient Composition of Investment The Resumption of Growth Summary 251 Social Protection 272 Poverty Unemployment Compensation Pensions Protection of Women and Children Summary 273 276 278 279 281 Index 253 261 269 283 Social Protection 281 the highest priority, however, is measures to reduce the extraordinarily high incidence of anaemia among women and children Anaemia probably is due to nutritional deficiencies and in particular to an inadequate intake of one or more micronutrients More research, followed by public action, is needed urgently The NGOs we have consulted feel very strongly about this and the government ought to respond SUMMARY In this chapter we have concentrated on just four areas of social protection which we regard as central These are (i) measures to relieve poverty, (ii) a programme to provide productive employment for workers who otherwise would be unemployed, (iii) a pension scheme to ensure the elderly enjoy a minimum level of economic security and (iv) programmes to provide protection to women and children We have deliberately kept the list short in order to highlight priorities If Uzbekistan can alleviate the worst forms of poverty, guarantee a job to everyone who desires one, and provide security to everyone in their old age it will have created a foundation of social protection that should enable it to effect the transition from a centrally planned to a social market economy without creating intolerable hardship and distress If, in addition, Uzbekistan can establish a good family planning service and provide other measures to protect the well-being of women and children, it will ensure that the next generation inherits a country of which they can be proud Notes Michael Kaser and Santosh Mehrotra, The Central Asian Economies After Independence (London: Royal Institute of International Affairs, 1992), p.35 See UNDP, Social Policy and Economic Transformation in Uzbekistan (Tashkent, April 1995), Ch 3 Ibid., Ch 4 For details of the scheme see World Bank, Uzbekistan: Adjusting Social Protection (Washington, DC, 20 December 1994), pp 28-3I Ibid., p 28 See Chapter II See Chapter 11 and UNDP, Social Policy, Ch See Keith Griffin and Terry McKinley, Implementing a Human Development 282 The Transition in Central Asia: The Case of Uzbekistan Strategy (London: Macmillan, 1994), pp 90-5, and Ehtisham Ahmad, Jean Dreze and Amartya Sen (eds), Social Security in Developing Countries (Oxford: Clarendon Press, 1991) World Bank, Uzbekistan, Table 5.1, p 58 10 Ibid., Ch 11 Ibid., p 61 Index Note: 'n.' after a page reference indicates the number of a note on that page abortion 30 Afghanistan 37, 56, 245 Agency for International Development (AID), US 54 age structure, changes in 31, 32 Agricultural Bank, Uzbekistan 257 agricultural sector Bolivia 198 foreign aid 40 market-guided economies, transition to 173, 179, 188 protection 26 reforms, China 153, 162, 169, 171, 175 regulating world markets 107 Uzbekistan 259, 260, 266-7, 276 aid see foreign aid aid fatigue 64 Algeria 216, 221, 222, 245 Allende regime 40, 218 Alliance for Progress 35 anaemia, Uzbekistan 281 Angola 40, 68n.13, 216 anti-dumping measures 106, 107 Arabic script 243 Aral Sea 259 arbitrage 169 Argentina 52, 85, 118 arms trade 106 asset distribution 142-5, 147 China 173 market-guided economies, transition to 172, 173-4, 182 Uzbekistan 265 Australia 118 Austria 69n.21 balance of payments Nicaragua 226 Uzbekistan 253-4, 261 Bangladesh foreign aid 48-9, 85 Grameen Bank 135, 138 growth 26 guaranteed employment 138 water reform 143 banking system, Uzbekistan 255-7 Barraclough, Solon 215 Berne Convention on copyrights 112 'big bang' see 'shock therapy' birth rates 29-31 Uzbekistan 280 black market, Uzbekistan 254 Bokhari, Al 244 Bolivia 9-11, 192-4 alternative development priorities 195-9 cocaine and informal sector 199-203 credit schemes 136 foreign aid 45, 46, 51, 55 gUaranteed employment 138 macroeconomic equilibrium, maintaining 194-5 policy alternatives 203-14 reform process 151 bond market, China 156 Bosnia 24 Botswana 69n.20, 85, 103 Bowles, Samuel 144 brain drain 116-17, 127 Brazil 52, 60-1 breast feeding 30 Brown, Reginald J 68n.14 Buddhism 30 Bukhara 244 Bulgaria 157, 159, 160 Burkina Faso 54 Burundi 54 283 Index 284 Bush, George 59 Canada 21, 69n.22, 118 capability approach, poverty 28 capital flight 51-2 Cassen, Robert 55, 68n.16 Catholicism 30 celibacy 30 Central Bank, Uzbekistan 256 child labour 109 Chile 40, 218 China classification 69n.20 economic security 142 female infanticide 30 foreign aid 42, 45, 46 growth 2, 26, 131, 173; and poverty 148n.12 guaranteed employment" 138 human development 133 and internal fragmentation 103 knowledge flows, restrictions 111 land reform 143 liberation 34 physical capital formation 131 reform strategy 8-9, 11, 221, 266; growth and investment 159-63; income distribution and social safety net 170-80; lessons from 150, 152-3, 180-3, 185, 190; macroeconomic financial stability 155-7, 158; property relations and industrial reforms 164-70 regulating world markets 104 savings 39 choices and human development 26 civil servants 51 Clarke, Kenneth 130 Clinton administration 130 coca economy, Bolivia 10-11, 194, 199-201 development priorities 195 policy alternatives 203-14 size 201-3 collectivization 162 Colombia 204, 206, 208 communes 162 communications and national sovereignty 119 compensation development cooperation 73-4, 91-8, 99 labour migration 117 market-guided economies, transition to 179 Nicaragua 216 unemployment, Uzbekistan 276-8 contraception 30, 280 Contras 12-13, 2119, 220, 224, 226 cooperation, development 4-5, 72-4, 98-100 aid financing 79-84 compensation for damages 91-8 disbursements under a negative international income tax 84-7 new framework 74-9 services rendered, payment for 88-91 cooperatives 140, 147 Nicaragua 219 copyright legislation 111, 112, 127 corruption Bolivia 207, 211 China 169 Costa Rica 142 credit allocation 132-3 China ,156 labour intensity of production 135-6 Nicaragua 12, 219 Uzbekistan 14, 256, 257, 258 Croes, Edwin 219 Csaba, Laszlo 185-7, 188, 189, 191 Cuba economic security 142 financial management 218 foreign aid 35, 37, 40, 60 culture 239-41 Uzbekistan 13-14, 240, 241-6 currency reform, Bolivia 195 currency restrictions 103 Index Cyrillic script 243 Czechoslovakia 157, 159, 160 death rates 176, 178 debt burden 4, 48, 64-5 debt crisis 129 decolonization 103, 125 decriminalization, drug trade 105 Bolivia 205, 210-14 defence, Nicaragua 219 Delors, Jacques 130 democratization and political control 184n.17, 189 Uzbekistan 246 demography and human development 29-32 pension programmes 141-2 Uzbekistan 279-80 Denmark 44, 69n.21 deregulating world markets, low skilled labour 117 development Bolivia 193, 195-9, 209 cooperation 4-5, 72-4, 98-100; aid financing 79-84; compensation for damages 91-8; disbursements under a negative international income tax 84-7; new framework 74-9; services rendered, payment for 88-91 and culture 239-46 foreign aid human see human development Uzbekistan 13-14 disaster relief 66, 79 discrimination Bolivia 193 and development cooperation 73, 92, 98-9; labour migration 98, 101n.15 Uzbekistan: foreign exchange market 255; mahalla system 274-5 domestic policies in developing countries 6-8, 125-8, 145-7 economic security 140-2 employment: and growth 128-31; guaranteed 138-40 285 human capital formation 133-4 informal sector 137-8 labour intensity of production 134-6 physical capital formation 131-3 productive assets, distribution of 142-5 Dreze, J 237 drug trafficking 104-5 see also coca economy, Bolivia dual pricing system, China 167-70 East Germany 34 see also Germany economic growth economic security in poor countries 140-2 Ecuador 192 education 235 Bolivia 196 and labour migration 116, 117 Uzbekistan 248 efficiency credit 135 and human development 25, 238 regulating world markets 120 simultaneous versus sequential reforms 187-9 Egypt 46, 59, 63, 68n.8 elderly people see pension programmes electricity 193 EI Salvador asset distribution 144 foreign aid 40, 45, 46, 54 sustainable development 23 emergency aid 66, 79 Emergency Social Fund, Bolivia (FSE) 198-9 emigration see migration employment' Bolivia 10, 197-9 China 168, 170, 171 and growth 128-31, 146 guaranteed see guaranteed employment and human development 27, 31-2, 237 Uzbekistan 15, 257, 263 286 Index energy Bolivia 193 Uzbekistan 260-1 entrepreneurship, China 163 environmental protection development cooperation 5, 89 human security 2, 22 regulations 6, 108, 109-11 equity credit 135 and development cooperation 73, 99 and human development 238 regulating world markets 120-1 Ethiopia, foreign aid economic justification 37, 40 future 60 and growth 45, 46 state 56-7 ethnicity 23 European Bank for Reconstruction and Development 58, 76 exchange rates and foreign aid 50, 52, 75 labour intensity of production 136 regulating world markets 103 Uzbekistan 254, 255 family planning programme, Uzbekistan 280 fertility rates influences 29-31 trends 29 finance capital, Uzbekistan 255-7 financial stability 154-8, 181 Finland 44, 69n.21 fishing industry 110-11 Fondo Social de Emergencia (FSE) 198-9 foreign aid 3-4, 34-7 Bolivia 203, 205, 209 and development cooperation 74-5, 79-84 distributive issues 53-5 economic justification 37-41 and expenditure composition 47-53 future 57-65; non-development aid 66-7 and growth rate 41-7 and human development 26, 32-3 regulating world markets 114-15 and state 55-7 Uzbekistan 248, 254 Foreign Assistance Act (US, 1974) 54 foreign borrowing, by China 156 foreign direct investment 39, 113 foreign exchange gap 50 foreign exchange market, Uzbekistan 253-5 foreign trade policy 153-4 France 4, 34, 35, 36, 68n.10 freedom, cultural 241 freer trade, regulating 104-8 full employment 128 Galbraith, 1.K 38 General Agreement on Tariffs and Trade (GATT) intellectual property rights 112, 127 possibilities 25, 26 regulating world markets 102, 106-7, 112, 120 Germany economic activity, expansion of 129 foreign aid 4, 58, 69n.22 growth 130 see also East Germany; West Germany Ghana 85, 151 Gini coefficient China 174, 176, 177 Uzbekistan 273 Gintis, Herbert 144 global commons 110 gold industry, Uzbekistan 249 Gonzalez, Katherine 222, 224 government expenditure, and human development 237-8 Grameen Bank, Bangladesh 135, 138 grant element, foreign aid 44 Index Greece 34 Group of Seven (G-7) 59-60 growth Bolivia 194 Chinese reform strategy 9, 159-63, 173 development cooperation 72-3 domestic policies in developing countries 128-31, 145 and economic security 142 and foreign aid 41-7,50,75 human development 25, 26-7, 134, 231 market-guided economies, transition to 158-64, 171, 179, 181 Nicaragua 12, 215, 220 simultaneous versus sequential reforms 187-9; Uzbekistan 14,250,251; and guaranteed employment 259; and price stability 252; resumption of 261-8, 269 guaranteed employment Bolivia 199 China 171 domestic policies 138-40, 146-7 and human development 239 Uzbekistan 259, 267-8, 277-8, 279 Guatemala 23, 56, 144 Gupta, K 42 Hadith 244 Haiti 40-1,56, 101n.16, 145 health services 175-6, 183 Helleiner, Gerry 72 Honduras 56, 144 Hong Kong 189-90 Horrell, S 42, 48, 49 'hot' money 121-2n.1 household responsibility system 153, 162 housing, Uzbekistan 264-5 Hudson, H 42, 48, 49 human capital 234-6 and asset distribution 144 Bolivia 10 and development 22 ° 287 domestic policies 7, 133-4, 145, 146 labour migration 95, 116-17, 126-7 Uzbekistan 249 human development 2-4, 32-3, 231-3 and asset distribution 144 Bolivia 10, 192, 193-4, 209, 214; alternative development priorities 195 culture 239-40, 241 demography 29-32 domestic policy 133-4, 136 economic security 142 foreign aid 39, 40, 51, 61, 75-6 as a means 234-6 as an objective 233-4 objectives of 21-5 poverty 27-9 prospects 25-7 strategy components 236-9 Uzbekistan 13 human security 2, 22-5 Hungary 157, 159, 160 hyperinflation Bolivia 194 Nicaragua 12, 225, 226 Russia 158 illiteracy and literacy Bolivia 193 Uzbekistan 243, 248 immigration see migration import licences, Uzbekistan 254 incentives, structure of 236-7 income distribution 22-3 China 170-80 Uzbekistan 14 income inequality global: future 2; intellectual property 112; labour migration 93, 118; trends 27 national: asset distribution 142, 144; Bolivia 193, 195; China 9, 148n.12, 173, 174-5, 177-8, 182-3; guaranteed employment 139; human capital formation 134; labour 288 Index income inequality cont migration 93, 94, 116, 118; market guided economies, transition to 173, 178-9, 182; physical capital formation 131; Uzbekistan 252, 273 income levels Bolivia 10, 192, 194-5 Ecuador· 192 Uzbekistan 248, 250-1 income poverty 28 India· classification 69n.20 decolonization 103 economic security 142 foreign aid 38, 41, 42, 45, 46; development cooperation 85 growth 2, 26, 131 guaranteed employment 138, 139 physical capital formation 131 regulating world markets 104 savings 39 Indonesia credit schemes 136 foreign aid 35, 45, 46 growth 2, 26 guaranteed employment 138 physical capital formation 131 industrial reforms, China 153, 164-70 infanticide, female 30 infant mortality rate Bolivia 192 China 176, 177-8 infirm people see pension programmes inflation Bolivia 10, 194 emphasis on 128 and foreign aid 52 macroeconomic policy market-guided economies, transition to 181; China 154-5; Russia and Eastern Europe 157-8 Uzbekistan 249, 250, 252, 269; and wages 258, 259 see also hyperinflation informal sector Bolivia 195, 199-203 domestic policies 7, 137-8, 146 Nicaragua 226 information revolution 130 intellectual property 112, 127 interest rates and foreign aid 50, 52, 75 labour intensity of production 134-5 Uzbekistan 256-7 inter-governmental transactions 88-91, 98 International Fund for Agricultural Development (IFAD) 60 International Labour Organization (ILO) 6, 109, 232 International Monetary Fund (IMF) 102, 129, 250 international tax development cooperation 4, 80-4, 98; disbursements 84-7 regulating world markets 115 investment Bolivia 195, 205 Chinese reform strategy 9, 159-63 domestic policies in developing countries 131-2, 146, 147 foreign aid 47, 49-50 foreign direct 39, 113 human development 133-4, 234-5 labour intensity of production 136 market-guided economies, transition to 158-64 Nicaragua 12,215,217-18, 220, 225 Uzbekistan 252, 253-61, 262 Iraq 53 Ireland 84 irrigation Bolivia 198 Uzbekistan 259 Irvin, George 219 Islam 247n.7 Uzbekistan 244-5 Islam, M.A 42 Israel 45-7, 59, 63, 84 Index Italy 34, 44, 69n.21, 69n.22 Jadid movement 244 Japan abortion 30 economic activity, expansion of 129 economics and politics of systemic change 189 empire, collapse of 34 foreign aid 4, 44, 45, 59, 69n.22; development cooperation 80 growth 130 human development 133 and international fragmentation 103, 125 land reform 143 regulating world markets 104 technology and skills acquisition 39 jobless growth 129-30 Jolly, Richard 79 Kennedy, John F 35 Kenya 56 Killick, Tony 101 knowledge as a commodity 111-12, 127 Korean War 35 Kurile Islands 59 labour intensity of production 134-6 labour mobility 31-2, 93-8, 116-18 labour standards 5-6, 108-9 Lamont, Norman 129 land reform 143, 172 China 173 and human development 239 Nicaragua 217, 219, 224 Uzbekistan 266, 267 language, Uzbekistan 243-4 Latin script 243 Lenin, Vladimir Ilyich 215, 221 liberalism development cooperation 5, 72-3,99 289 economic and political, dissonance between human development 25, 26, 29; labour market 31-2 regulating world markets 5-6, 102-4; freer trade I04~8; human capital flows 116-17; interested groups 119-21; knowledge as a commodity 111-12; labour standards and environmental protection 108-11; low-skilled labour, deregulation of global market 117-18; private capital movements and foreign aid, freedom of 113-15 Liberia 56, 62 life expectancy Bolivia 192 Uzbekistan 248, 279-80 literacy see illiteracy and literacy living standards see standards of living Maastricht Treaty 129 macroeconomic equilibrium, Bolivia 194-5 macroeconomic financial stability 154-8, 181 macroeconomic policy effects 6-7 Uzbekistan 14, 248-51, 269-70; growth, resumption of 261-8; price stability, importance of 251-3; strategic prices and efficient investment 253-61 mahallas 15, 274-6 Malaysia 42, 85 marijuana 202, 206-7 market-guided economies, transition to 8-9, 150-4, 180-3 growth and investment 158-64 income distribution and social safety net 170-80 macroeconomic financial stability 154-8 property relations and industrial reforms 164-70 simultaneous versus sequential 290 Index market-guided economies cont reforms 185-7; economics and politics of systemic change 189-91; growth and efficiency 187-9 marriage, rules and conventions 30 Marshall Plan 34 Mauritania 69n.20 Mexico 52, 65, 101n.16, 151 migration development cooperation, compensation for damages, 93-8 and human development 31-2 regulating and deregulating 116-17 Uzbekistan 249, 267 military spending 24, 52-3, 57, 67n.1 money supply, China 156 Mongolia 30, 37, 60 Morisset, Jacques 48 Mosley, Paul 42, 48, 49 most favoured nation 107, 112 Mozambique 40, 216, 222 multi-fibre agreement 107 multi-lingualism, Uzbekistan 243-4 Muslim Brotherhood 244 nationalism, upsurge of 24 nationality question, Uzbekistan 241-2 nationalization, Nicaragua 216 national sovereignty 119-20 natural capital 22, 234-5 natural gas industry, Uzbekistan 260 Netherlands 35, 69n.21, 69n.22 'new economic policy' Bolivia 194, 195 Soviet Union 221 New Zealand 69n.21 Nicaragua 11-13, 215-21, 222 asset distribution 144 coherence of economic strategy 225-6 control of economy 223 foreign aid 40, 56 hyperinflation 226 initial conditions 222-3 sustainable development 23 workable mixed economy 223-4 Nigeria 45, 46 non-development aid, future 66-7 non-tariff barriers 106, 107 North Korea 35 North Vietnam 35 Norway 69n.21, 69n.22 nuclear weapons, destruction programmes 5, 89-90 oceans 110-11 official development assistance (ODA) 67n.2 oil industry 105 Uzbekistan 248-9, 260-1 oil shocks 65, 128 open economic relations 25 Operation Safe Haven 11 Organization for Economic Cooperation and Development (OECD) 63, 67-8n.5 overinvestment 159 Painter, James 11 Pakistan 2, 26, 56, 103 Panama 212 patent legislation 111, 112, 127 peace dividend 59, 62 peace-keeping operations 24 pension programmes 7, 141-2, 147 Uzbekistan 15-16, 278-9 Peru 204, 208 petroleum and petroleum pro~ucts 105 Philippines 40, 42, 52, 54 physical capital domestic policies 7, 131-3, 136, 145, 146 and human development 22, 134, 234-5 inequalities 126 labour migration 95 regulating world markets 113-14 Uzbekistan 255-7 Please effect 51 Point Four programme 34 Poland 58, 157, 173 growth and investment 159, 160 291 Index political culture, Uzbekistan 245-6 political reform 180 political refugees 66, 79 pollution 110 population growth Bolivia 192 trends 2-3, 29-31 Uzbekistan 249, 250, 280 poverty asset distribution 142-3, 147 Bolivia 192, 193, 204, 209, 213; alternative development priorities 195 Chinese reform strategy 9, 148n.12, 171, 173, 178, 182 defining 27-9 development cooperation 79, 88 economic security 141, 147 extent foreign aid 75-6; distributive issues 53-5; economic justification 38; future 63-4; and state 56 and human capital formation 134 and human development 231-2 intellectual property 112 labour intensity of production 135, 136 market-guided economies, transition to 172, 173 Nicaragua 216, 218, 226 and physical capital formation 131 Uzbekistan 15, 251, 267, 273-6 poverty line 28 power and culture 240-1 price structure China 8-9, 167-70 deflationary policies 129 and foreign aid 50, 75 and growth 162-3 labour intensity of production 134, 145 macroeconomic financial stability 154, 158 market-guided economies, transition to 182 Nicaragua 219 physical capital formation 132 simultaneous versus sequential reforms 188 Uzbekistan 14, 250, 251-3 primary commodities 107-8, 129 primary education 196 prison labour 109 private capital movements 113-14 private sector Chinese reform strategy 9, 153, 162-3, 170, 173, 181 and human development 25-6 investment 132-3 market-guided economies, transition to 172 Nicaragua 217, 218, 224, 225 simultaneous versus sequential reforms 188 Uzbekistan 262-4, 269 privatization China 162-3, 164, 165-6, 181-2 emphasis on 133 literature 186 Russia and Eastern Europe 164, 174, 182 and 'shock therapy' 166 simultaneous versus sequential reforms 187 Uzbekistan 264-6, 269 productive assets, distribution of 142-5, 147 profits China 167, 168 Uzbekistan 266 property relations 164-70 protectionism 26, 106, 107 public expenditure, and human development 237-8 public health programmes 90 Uzbekistan 280-1 public works programmes 138, 147 Bolivia 199 Uzbekistan 259, 268, 269, 277-8 quotas 103 Uzbekistan refugees 254-5 66, 79 292 Index Registan Square 244 regulating world markets 5-6, 102-4 freer trade 104-8 human capital flows 116-17 interested groups 119-21 knowledge as a commodity 111-12 labour standards and environmental protection 108-11 low-skilled labour, deregulation of global market 117-18 private capital movements and foreign aid, freedom of 113-15 religion, Uzbekistan 244-5 religious fundamentalism 24 religious institutions 30 rent-seeking activity 172 China 169 research and development 112 reservation wage 143 Ricciardi, Joseph 222, 223, 225 Riddell, Roger 42, 79 Robinson, Joan 48 Romania 157, 159, 160 Russia 4, 27, 157-8 market-guided economy, transition to 180, 181 Sachs, Jeffrey 186 Samarkand 244 Sandinista regime 11-13, 215, 216, 220,222-6 foreign aid 40 savings Bolivia 195 capacity 39 China 159-61 development cooperation 76 and foreign aid 48-50, 51, 74 Nicaragua 218, 219, 225 Uzbekistan 256-7 Schultz, Theodore 234 secondary education 196 security economic 140-2 human 2, 22-5 national, Nicaragua 219 Selassie, Haile 56 self-employment, Bolivia 195, 199 Sen, Amartya 233, 237 sequential reform 186-7 economics and politics of systemic change 189-91 growth and efficiency 187-9 service sector 107 services rendered, payment for 88 sewage system, Bolivia 193 Shahrani, Nazif 247n.7 Shenzhen 154 shocks 99 'shock therapy' 185, 186, 238-9 Bolivia 10 and privatization 166 Russia and Eastern Europe 159 simultaneous reform 186-7 economics and politics of systemic change 189-91 growth and efficiency 187-9 Singapore 42, 180, 189 Smith, Adam 37 social conflict 144-5, 154, 190 social deprivation approach, poverty 29 social policy 234, 246, 272 Uzbekistan 13, 264 social protection domestic policy 140-1 and population growth 31 Uzbekistan 14-16, 281; pensions 278-9; poverty 273-6; unemployment compensation 276-8; women and children 279-81 social services, China 9, 164-5, 166, 170-80, 183 soft budget constraint 171 Somalia 56, 57 Somoza regime 215, 216, 220, 224 South Commission 61-2, 63, 64 South Korea asset distribution 144 foreign aid 35 guaranteed employment 138 human development 134 land reform 143 reform process· 151, 180, 189 Index South Vietnam 35, 56 sovereignty, national 119-20 Special Economic Zones, China 154 Sri Lanka 142 stability, financial 154-8, 181 stabilization programmes Bolivia 10, 11, 194 Uzbekistan 14, 251-3 standards of living and birth rates 30 Nicaragua 220 Uzbekistan 251,261,274 state and foreign aid 55-7 and human development 26 Nicaragua 216-18 role 145; and size 7-8 systemic change, economics and politics of 189 threats to 23-4, 127-8 sterilization 30 stock markets 156 strategic prices 253-61 structural adjustment 75, 129, 186 structural reforms, and human development 238-9 subsidies China 174, 175 market-guided economies, transition to 179 Nicaragua 218 regulating world markets 106, 107 Uzbekistan 257, 260, 261 Sufism 244-5 sustainable development 22-3 Sweden 69n.21, 69n.22 Switzerland 80 Taiwan asset distribution 144 foreign aid 34 human development 134 land reform 143 reform process 180, 189 Tajikistan 245 Tanzania 51, 54 293 tariffs 25 regulating world markets 6, 103, 106, 107 Uzbekistan 254 tax international see international tax national: Bolivia 194; China 165; and foreign aid 49, 79-80 technical assistance 38, 77-9 technology barriers 74 terms of trade China 171, 175 Nicaragua 12, 218 Uzbekistan 248, 249, 260, 261, 267 tertiary education Bolivia 196 and labour migration 116, 117 Thailand 42 Tibet 30 trade-related intellectual property rights (TRIPs) 112 trade restrictions 6, 26 transport Bolivia 196-7 and national sovereignty 119 Truman, Harry S 34 Tullis, LaMond 11 Tunisia 85 Turkestan Soviet Socialist Republic 242 Turkey 34 unemployment Bolivia 195 and growth 130 and inflation 128 labour migration 96 market guided economies, transition to 172 Uzbekistan 15, 257, 258-9, 268; compensation 276-8 UNESCO 247n.5 UNICEF 232 Union of Soviet Socialist Republics foreign aid 56-7, 58, 59-60 growth 158-9, 160 inflation 157 294 Index USSR cont and international fragmentation 103 'new economic policy' 221 regulating world markets 103-4 social conflict 190 and Uzbekistan 248, 253, 280; energy prices 260-1; nationality question 241-2; political culture 245-6 United Kingdom debt write-off 129 economics and politics of systemic change 189 food rationing 151 foreign aid 34, 35, 36, 69n.22 growth 130 knowledge flows, restrictions III privatization 187 United Nations culture and development 247n.5 development cooperation 80 Development Programme (UNDP) 233; future 60; technical assistance 38, 77-9 foreign aid 36, 43, 67n.3; distribution 54-5; future 60, 62,63 full employment 128 human development 232-3 security 24 United States of America and Bolivia 10, 11, 207, 212, 213 capitalism, construction of 189 economic activity, expansion of 129 foreign aid 4, 34, 35, 44, 100n.6; distribution 47, 54; future 59, 62-3, 69n.22; and state 56-7; strategic considerations 67n.2 free trade 125 growth 130 human development 27 labour migration 118 labour standards marijuana 202, 206-7 and Nicaragua 13, 219, 221n.2, 223, 226 oil prices 261 privatization 187 regulating world markets 106 savings 39, 49 wage levels 129 untied foreign aid 44 Uzbekistan development, culture and social policy 13-14; from basic needs to human development 232; culture and development 240, 241-6; human development as a means 235; human development as an objective 234; strategy components 236, 237-8 macroeconomic framework and development strategy 14, 248-51, 269-70; growth, resumption of 261-8; price stability, importance of 251-3; strategic prices and efficient investment 253-61 social protection 14-16, 281; pensions 278-9; poverty 273-6; unemployment compensation 276-8; women and children 279-81 Venezuela 52 venture capital 133 Vietnam 8, 37 war 35, 103,216, 222 violence 23, 24 voluntary export restraints voting rights 189 107 wages asset distribution 142, 143 Bolivia 194 China 174 and human development 27, 134 and inflation 128-9 labour intensity of production 135 and labour migration 118 Nicaragua 226 Uzbekistan 257-9, 277 Index Wahabism 244 water Bolivia 193 reform 143 Uzbekistan 259-60 Weeks, John 222-3, 224-6 welfare state 144 West Germany 34, 129 see also Germany women Bolivia 193, 196 emancipation 3, 31 fertility 30, 31 guaranteed employment 139 investment in 133 Nicaragua 216 poverty, capability view of 28 Uzbekistan 279-80 295 World Bank deflationary policies 129 development cooperation 76, 79 foreign aid 55, 60, 63-4 growth 262 human development 232 pension programmes 279 regulating world markets 102 World Commission on Culture and Development 247n.5 World Trade Organization 93, 102, 120 Yugoslavia, former Zaire 40, 56 Zambia 85 Zimbabwe 45, 46 190 ... disappearing and national economies are merging into a single and increasingly integrated world economy In the process, the economic significance of individual states is diminishing National economic. .. Data Griffin Keith B Studies in globalization and economic transitions I Keith Griffin p cm Includes bibliographical references and index ISBN 0-312-16224-3 I Economic policy Social policy Economic. . .STUDIES IN GLOBALIZATION AND ECONOMIC TRANSITIONS Also by Keith Griffin ALTERNATIVE STATEGIES FOR ECONOMIC DEVELOPMENT THE DISTRIBUTION OF INCOME IN CHINA (editor with Zhao Renwei) THE ECONOMIC