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Quality of Bureaucracy and Open-economy Macro Policies

Quality of Bureaucracy and Open-economy Macro Policies
Author: Chong-En Bai
Publisher:
Total Pages: 52
Release: 2000
Genre: Administrative agencies
ISBN:

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Bureaucratic quality in terms of the level of corruption varies widely across countries, and is in general slow to evolve relative to the speed with which many economic polices can be implemented such as the imposition of capital controls. In this paper, we study the possibility that quality of bureaucracy may be an important structural determinant of open-economy macro-policies, in particular, the imposition/removal of capital controls, and financial repression. We first derive a model that delivers such a result. Bureaucratic corruption translates into reduced ability by the government to collect tax revenue. Even if capital control/financial repression is otherwise inefficient, as long as the government needs the revenue for public goods provision, it would have to rely more on capital control/financial repression. For all countries for which we can obtain relevant data, we find that more corrupt countries are indeed more likely to impose capital controls, a pattern consistent with the model's prediction. The result of this paper suggests that a premature removal of capital controls mandated by outside institutions could reduce rather than enhance economic efficiency.


Quality of Bureaucracy and Open-economy Macro Policies

Quality of Bureaucracy and Open-economy Macro Policies
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Publisher:
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The National Bureau of Economic Research, Inc. (NBER) presents an abstract of the June 2000 working paper entitled "Quality of Bureaucracy and Open-economy Macro Policies," written by Chong-En Bai and Shang-Jin Wei. The full text of the paper may be purchased online. This paper develops a model that shows the importance of bureaucracy as a structural determinant of open-economy macroeconomic policies. The authors find that a premature removal of capital controls mandated by outside institutions could reduce economic efficiency.


The Quality of Bureaucracy and Capital Account Policies

The Quality of Bureaucracy and Capital Account Policies
Author: Chong-En Bai
Publisher: World Bank Publications
Total Pages: 40
Release: 2001
Genre: Administracion publica
ISBN:

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The extent of bureaucracy varies extensively across countries, but the quality of bureaucracy within a country changes more slowly than economic policies. The authors propose that the quality of bureaucracy may be an important structural determinant of open economy macroeconomic policies - especially the imposition or removal of capital control. In their model, capital controls are an instrument of financial repression. They entail efficiency loss for the economy but also generate implicit revenue for the government. The results show that bureaucratic corruption translates into the government's reduced ability to collect tax revenues. Even if capital controls and financial repression are otherwise inefficient, the government still has to rely on them to raise revenues to provide public goods. Among the countries for which the authors could get relevant data, they find that the more corrupt ones are indeed more likely to impose capital controls, a pattern consistent with the model's prediction. To deal with possible reverse causality, they use the extent of corruption in a country's judicial system, and the degree of democracy, as the instrumental variables for bureaucratic corruption. The instrumental variable regressions show the same result: more corrupt countries are associated with more severe capital controls. The results suggest that as countries develop and improve their public institutions, reducing bureaucratic corruption over time, they will choose to gradually liberalize their capital accounts. Removing capital controls prematurely when forced by outside institutions to do so could reduce rather than improve their economic efficiency.


The Role of Parliament in Curbing Corruption

The Role of Parliament in Curbing Corruption
Author: Rick Stapenhurst
Publisher: World Bank Publications
Total Pages: 280
Release: 2006-01-01
Genre: Political Science
ISBN: 0821367242

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In most countries, parliament has the constitutional mandate to both oversee government and to hold government to account; often, audit institutions, ombuds and anti-corruption agencies report to parliament, as a means of ensuring both their independence from government and reinforcing parliament's position at the apex of accountability institutions. At the same time, parliaments can also play a key role in promoting accountability, through constituency outreach, public hearings, and parliamentary commissions. This title will be of interest to parliamentarians and parliamentary staff, development practitioners, students of development and those interested in curbing corruption and improving governance in developing and developed countries alike.


How Does Political Instability Affect Economic Growth?

How Does Political Instability Affect Economic Growth?
Author: Mr.Ari Aisen
Publisher: International Monetary Fund
Total Pages: 30
Release: 2011-01-01
Genre: Business & Economics
ISBN: 1455211907

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The purpose of this paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, we find that higher degrees of political instability are associated with lower growth rates of GDP per capita. Regarding the channels of transmission, we find that political instability adversely affects growth by lowering the rates of productivity growth and, to a smaller degree, physical and human capital accumulation. Finally, economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect.


Militants, Criminals, and Warlords

Militants, Criminals, and Warlords
Author: Vanda Felbab-Brown
Publisher: Brookings Institution Press
Total Pages: 191
Release: 2017-11-28
Genre: Political Science
ISBN: 0815731906

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" Conventional political theory holds that the sovereign state is the legitimate source of order and provider of public services in any society, whether democratic or not. But Hezbollah and ISIS in the Middle East, pirate clans in Africa, criminal gangs in South America, and militias in Southeast Asia are examples of nonstate actors that control local territory and render public services that the nation-state cannot or will not provide. This fascinating book takes the reader around the world to areas where national governance has broken down—or never really existed. In these places, the vacuum has been filled by local gangs, militias, and warlords, some with ideological or political agendas and others focused primarily on economic gain. Many of these actors have substantial popularity and support among local populations and have developed their own enduring institutions, often undermining the legitimacy of the national state. The authors show that the rest of the world has more than a passing interest in these situations, in part because transborder crime and terrorism often emerge but also because failed states threaten international interests from trade to security. This book also poses, and offers answers for, the question: How should the international community respond to local orders dominated by armed nonstate actors? In many cases outsiders have taken the short-term route—accepting unsavory local actors out of expediency—but at the price of long-term instability or damage to human rights and other considerations. From Africa and the Middle East to Asia and Latin America, the local situations highlighted in this book are, and will remain, high on today's international agenda. The book makes a unique contribution to global understanding of how those situations developed and what can be done about them. This title is part of the Geopolitics in the 21st Century series. "


Law and Macroeconomics

Law and Macroeconomics
Author: Yair Listokin
Publisher: Harvard University Press
Total Pages: 281
Release: 2019-03-11
Genre: Law
ISBN: 0674976053

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After 2008, private-sector spending took a decade to recover. Yair Listokin thinks we can respond more quickly to the next meltdown by reviving and refashioning a policy approach, used in the New Deal, to harness law’s ability to function as a macroeconomic tool, stimulating or relieving demand as required under certain crisis conditions.


Monetary Policies for Developing Countries

Monetary Policies for Developing Countries
Author: Mr.Haizhou Huang
Publisher: International Monetary Fund
Total Pages: 30
Release: 2003-09-01
Genre: Social Science
ISBN: 1451859333

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This paper examines the role of corruption in the design of monetary policies for developing countries in a framework of fiscal and monetary interaction and obtains several interesting results. First, pegged exchange rates, currency boards, or dollarization, while often prescribed as a solution to the problem of a lack of credibility for developing countries, is typically not credible in countries with serious corruption. Second, the optimal degree of conservatism for a Rogoff (1985)-type central banker is an inverse function of the corruption level. Third, either an optimally designed inflation target or an optimal-conservative central banker is preferable to an exchange rate peg, currency board, or dollarization.


Brookings Papers on Economic Activity, 2000

Brookings Papers on Economic Activity, 2000
Author: William C. Brainard
Publisher: Brookings Institution Press
Total Pages: 404
Release: 2000-12-01
Genre: Business & Economics
ISBN: 9780815705819

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Published twice a year, BPEA offers authoritative, in-depth research on economic development for economists, government officials, and members of the financial and business communities. For nearly thirty years, BPEA has been an indispensable source for scholars and policymakers seeking objective analysis of major macroeconomic issues. " Social Security Reform and National Saving in an Era of Budget Surpluses" by Douglas W. Elmendorf and Jeffrey B. Liebman " E-Capital: The Link between the Stock Market and the Labor Market in the 1990s" by Robert E. Hall " Real Estate and the Macroeconomy" by Karl E. Case " The Economic Consequences of Disappearing Government Debt" by Vincent Reinhart and Brian Sack " Financial Market Implications of the Federal Debt Paydown" by Michael J. Fleming " Tax Smoothing Implications of the Federal Debt Paydown" by George J. Hall and Stefan Krieger