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Lessons from International Experience
No full textIn the aftermath of the global financial
crisis, policymakers around the world are focusing once
again on government debt sustainability. In China,
subnational government debt is an important part of total
government debt, and therefore deserves the attention that
policymakers have paid to the topic. Subnational debt has
played an important role in financing China’s impressive
infrastructure that is the envy of the world. And
subnational debt was instrumental in the economic stimulus
that China so effectively staged after the global financial
crisis, through which China maintained high levels of
economic activity. This e-book starts with a summary and
presentation of the Chinese perspective on this subject of
subnational debt in session one. Session two introduced some
international cases which are highly relevant to the current
situation in China. Session three brought these
international case studies and experts’ perspectives
together to arrive at syntheses that narrowed down key
issues which China needs to consider going forward in
subnational debt management and restructuring. The
roundtable discussion among international and Chinese
experts on the way forward for China in session four
provided an illuminating discussion of this issue. The
author hope that this will inform specific policies that
will be formulated to help local governments in China manage
their subnational debts
Factors that affect short-term commercial bank lending to developing countries
Full text linkDeveloping countries rely on short-term trade credits for imports of several essential consumer goods, including medicines and basic food supplies. The credits also facilitate export-related transactions. The mechanisms commercial banks use to provide trade credits to developing countries are complex and costly. Even a temporary break in the flow of short-term credit can seriously hurt a country's business. But since short-term trade credits can be structured so that they involve a few risks to a bank and at the same time are very costly to the debtor, they are generally the last forms of credit to be cut and the first to be reestablished in debt-distressed developing countries. To gauge the likelihood of continued short-term trade related financial flows to developing countries, the authors examined the factors that affect short-term commercial bank loans. They studied relevant data over time for seven countries for which data were available: Argentina, Brazil, Egypt,India, Kenya, Mexico, and Turkey. They found that : a) countries with greater growth prospects get more short-term credit; b) short-term credits are usually meant to finance countries with significant trade deficits; c) higher levels of external indebtedness are generally coupled with higher levels of short-term indebtedness to commercial banks; and d) country-specific factors affect the volume of short-term lending to a country.Financial Intermediation,Banks&Banking Reform,Economic Theory&Research,Strategic Debt Management,Financial Crisis Management&Restructuring
Are portfolio flows to emerging markets complementary or competitive?
Full text linkIncreasing portfolio investment flows to emerging markets in the past few years have led to fears of a sudden reversal of these flows and possible portfolio switching (from one emerging market to another) among foreign investors. To assess the sustainability of such portfolio flows, the author examines econometrically whether portfolio investment flows to one region in the developing world are significantly related to those going to another region. This question has important policy implications for policymakers in developing countries who, in considering domestic policy reforms to attract foreign portfolio investment, want to ascertain whether financial flows from abroad are coming from an increasing pool of investible resources in the industrial world or whether they represent the same funds chasing different high-yield securities as emerging markets change. In other words, does a sort of"adding-up"constraint apply to these flows - do they function as substitutes or not? Or could these flows be complementary? The author analyzes new quarterly World Bank data on gross portfolio investment flows for eight emerging markets (India, Indonesia, Korea, Thailand, Argentina, Brazil, Chile and Mexico) for the period from the first quarter of 1989 to the second quarter of 1993. Results indicate an inverse relationship between total portfolio flows to emerging Asian stock markets and those to Latin America. This negative relationship holds for both debt portfolio flows and equity portfolio flows. There has been a surge of portfolio flows to developing countries in the 1990s, but developing countries must compete for those flows. In the long term, portfolio flows to well-performing countries will be sustained because of improved creditworthiness and proportionately greater investor interest. Increasing the pace of reform in an emerging stock market is essential for sustaining portfolio flows.Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,International Terrorism&Counterterrorism,Financial Intermediation
An evaluation of the international debt crisis: The case of Mexico, 1973-1989
No full text"Recent debates on the external debt situations of the heavily indebted developing countries have focussed on the existence of a ""Debt Laffer Curve"" in these countries and the need for debt reduction in order to alleviate their debt servicing difficulties. In addition, the diversity of commercial bank creditors of the heavily indebted countries and differences in their motivations for dealing with their debtors, partly due to the tax, accounting and regulatory regimes in the host country of each creditor bank, has called for the need to formulate a debt reduction ""package"" consisting of a market-based menu of options for each developing country debtor.""This study begins with an overview of the trends in external indebtedness of the developing countries, in general, and those in Latin America, in particular. A detailed evaluation of an economy that allegedly suffers from a debt overhang problem, i.e. Mexico, is provided. Thereafter, the optimization problem faced by a policy maker in a country with a debt overhang situation is evaluated on the basis of an inter-temporal welfare maximizing model. The optimum level of investment in such an economy is directly influenced by the amount of debt relief and ""New Money"" that is granted by commercial bank creditors. There are several factors which influence the ultimate mix of options banks may grant a country in order to attain the required amount of debt relief. The theoretical framework is extended to incorporate some of these factors in order to compare the attractiveness of each option of a debt reduction package on the basis of a common benchmark. Two options representing the two extremes in the market-based menu of options, namely a debt buyback and a concessional rescheduling of existing loans, are specifically evaluated. Finally, the existence of a debt overhang in Mexico is econometrically examined and policy recommendations provided."Made available in DSpace on 2011-05-07T12:25:12Z (GMT). No. of bitstreams: 2
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Going Beyond Counting First Authors in Author Co-citation Analysis
Full text linkThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
Growth Diagnostics for a Resource-Rich Transition Economy : The Case of Mongolia
No full textThis paper uses a growth diagnostics
approach à la Hausmann, Rodrik, and Velasco (HRV) to
identify the most 'binding' constraints to private
sector growth in Mongolia - a small, low-income,
mineral-rich, transition economy. The approach of applying
the HRV methodology is useful in those cases where a lack of
data prevents us from estimating shadow prices to identify
the most 'binding' constraint to growth. We find
that although Mongolia is not liquidity constrained and has
grown rapidly in recent years, economic growth has been
narrowly based. Investment has flowed mainly into a small
number of firms operating in mining and construction. The
low level of private investment in sectors outside mining
and construction has been due to low returns - a result of
costly and unreliable transportation services; lengthy and
complex transit procedures, including customs and trade
rules; distortionary taxes; coordination failures, at both
domestic and international levels; and growing corruption.
Poor financial intermediation is also a problem that has
kept the cost of finance high, although lower than in
previous years. Alleviating these binding constraints will
ensure that Mongolia maintains the path towards sustained,
broad-based growth
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