Altruism, Trade Policy, and the Optimality of Foreign Aid

There are many studies in the literature that deal with the welfare effects of income transfers between nations in a general equilibrium setting. An important impetus for this extensive literature was the demonstration of the transfer paradox; that the donor country could actually gain from a transfer of income to another, and that the recipient could lose as a result of the gift. The reason for this paradoxical result is that the transfer gives rise to a terms-of-trade effect that may be especially beneficial to the donor and detrimental to the recipient. Subsequently, many papers have established conditions under which this paradox will or will not occur. Early work by Samuelson (1954) was followed by demonstrations of paradoxes by Gale (1974), Ohyama (1974), Brecher and Bhagwati (1982) and Bhagwati, Brecher and Hatta 1983, 1985, and Dixit (1983)) among others.1 More recently, many studies have examined whether or not foreign aid — tied and untied — can be welfare improving for both the donor and the recipient (see, for example, Turunen-Red and Woodland (1988), Kemp and Wong (1993), Schweinberger (1990), Hatzipanayotou and Michael (1995), Lahiri and Raimondos-Moller 1995, 1997, Djajić, Lahiri and Raimondos-Møller 1996a, 1996b, and Lahiri, Raimondos-Møller, Wong and Woodland 1997.2

Competition for aid and trade policy

This paper considers the optimal allocation of a given amount of foreign aid between two recipient countries. It is shown that, given consumer preferences, a country following a more restrictive trade policy would receive a smaller share of the aid if the donor country maximises its own welfare in allocating aid. If, on the other hand, the donor country allocates aid in order to maximize the sum of the welfare of the two recipient countries, the result is just the opposite. Finally, we analyze the situation where the recipient countries compete with each other for the given amount of aid. It is shown that this competition tends to lower the level of optimal tariffs in the recipient countries.

Monitoring the impacts of trade agreements on food environments

The liberalization of international trade and foreign direct investment through multilateral, regional and bilateral agreements has had profound implications for the structure and nature of food systems, and therefore, for the availability, nutritional quality, accessibility, price and promotion of foods in different locations. Public health attention has only relatively recently turned to the links between trade and investment agreements, diets and health, and there is currently no systematic monitoring of this area. This paper reviews the available evidence on the links between trade agreements, food environments and diets from an obesity and non-communicable disease (NCD) perspective. Based on the key issues identified through the review, the paper outlines an approach for monitoring the potential impact of trade agreements on food environments and obesity/NCD risks. The proposed monitoring approach encompasses a set of guiding principles, recommended procedures for data collection and analysis, and quantifiable ‘minimal’, ‘expanded’ and ‘optimal’ measurement indicators to be tailored to national priorities, capacity and resources. Formal risk assessment processes of existing and evolving trade and investment agreements, which focus on their impacts on food environments will help inform the development of healthy trade policy, strengthen domestic nutrition and health policy space and ultimately protect population nutrition.

The Trans-Pacific partnership: Brunei, trade, and human rights

The Prime Minister of Australia, Tony Abbott, has said that ‘Australia is Open for Business’. His trade and investment minister, Andrew Robb, has vigorously pursued bilateral trade agreements with neighbours, South Korea, Japan, China, and India — as well as the regional trade agreement, the Trans-Pacific Partnership. Such trade activity raises questions about the relationship between trade policy and human rights. If we are open for business, should we be open for business for countries engaged in human rights abuses? Should enter into trade agreements, which could have an adverse upon human rights? The Trans-Pacific Partnership highlights a range of problems with Australia’s treaty-making process. One important issue is the question of the relationship between trade and human rights.

Correcting trade distortions in a small open economy

This paper considers the second-best strategy of correcting a wide variety of trade distortions in a small open economy with perfect competition in all markets. Using the tools of duality, we obtain some general properties of the structure and the levels of the optimal taxlsubsidy rates. The paper also analyzes the welfare effects of unilateral piecemeal trade policy reforms when some of the quota distortions—imposed by the foreign countries—are unalterable. It is shown that the merits of unilateral trade policy reforms that are emphasized in the literature crucially depend on the absence of unalterable foreign imposed quotas.

Critical Systems Theory: A Political Economy of Language, Thought, and Technology

An emergent form of political economy, facilitated by information and communication technologies (ICTs), is widely propagated as the apotheosis of unmitigated social, economic, and technological progress. Meanwhile, throughout the world, social degradation and economic inequality are increasing logarithmically. Valued categories of thought are, axiomatically, the basic commodities of the “knowledge economy”. Language is its means of exchange. This paper proposes a sociolinguistic method with which to critically engage the hyperbole of the “Information Age”. The method is grounded in a systemic social theory that synthesises aspects of autopoiesis and Marxist political economy. A trade policy statement is analysed to exemplify the sociolinguistically created aberrations that are today most often construed as social and political determinants.

Commercial Law in East Asia

The shift of economic gravity towards East Asia requires a critical examination of law's role in the Asian Century. This volume explores the diverse scholarly perspectives on law's role in the economic rise of East Asia and moves from general debates, such as whether law enjoys primacy over culture, state intervention or free markets in East Asian capitalism, to specific case studies looking at the nature of law in East Asian negotiations, contracts, trade policy and corporate governance. The collection of articles exposes the clefts and cleavages in the scholarly literature explaining law's form, function and future in the Asian Century.

Export subsidies and foreign capital inflows

The welfare effect of a foreign capital inflow in an economy which practises an export-oriented trade policy is examined. The latter takes the form of optimally designed export subsidies, minimizing the welfare costs of existing import tariffs. Under the practice of this policy, an inflow of foreign capital is shown to have anambiguous welfare effect. An empirically relevant condition for welfare improvement is derived and discussed.

Cultural diversity, cultural networks and trade : international cultural policy debate

This article sketches some of the ways in which the language and concepts of cultural diversity are being taken up internationally. The debate has been driven in part by concerns about the treatment of cultural goods, services and knowledge in trade agreements. But it also involves larger questions about the role of the state, the role of non-state actors in domestic policy formation, and the shape and function of international policy communities comprising both state and non-state actors. The extent of the discussion of cultural diversity internationally is described through new formal and informal cultural networks and work towards an international instrument for cultural diversity to lay our ground rules for international trade, cultural exchange and policy principles to guide governmental responsibilities. The article concludes with analysis of some of these new networks, and investigates why Canada has been so prominent in these international efforts.

Harmonising procurement policy environment - identifying key themes towards the development of a conceptual model

Capital works procurement and its regulatory policy environment within a country can be complex entities. For example, by virtue of Australia’s governmental division between the Commonwealth, states and local jurisdictions and the associated procurement networks and responsibilities at each level, the tendering process is often convoluted. There are four inter-related key themes identified in the literature in relation to procurement disharmony, including decentralisation, risk & risk mitigation, free trade & competition, and tendering costs. This paper defines and discusses these key areas of conflict that adversely impact upon the business environments of industry through a literature review, policy analysis and consultation with capital works procurement stakeholders. The aim of this national study is to identify policy differences between jurisdictions in Australia, and ascertain whether those differences are a barrier to productivity and innovation. This research forms an element of a broader investigation with an aim of developing efficient, effective and nationally harmonised procurement systems. Keywords: capital works, procurement policy reform Acknowledgement: The research described in this paper carried out by the Australian Cooperative Research Centre for Construction Innovation.

Infinite-horizon policy-gradient estimation

Gradient-based approaches to direct policy search in reinforcement learning have received much recent attention as a means to solve problems of partial observability and to avoid some of the problems associated with policy degradation in value-function methods. In this paper we introduce GPOMDP, a simulation-based algorithm for generating a biased estimate of the gradient of the average reward in Partially Observable Markov Decision Processes (POMDPs) controlled by parameterized stochastic policies. A similar algorithm was proposed by Kimura, Yamamura, and Kobayashi (1995). The algorithm's chief advantages are that it requires storage of only twice the number of policy parameters, uses one free parameter β ∈ [0,1) (which has a natural interpretation in terms of bias-variance trade-off), and requires no knowledge of the underlying state. We prove convergence of GPOMDP, and show how the correct choice of the parameter β is related to the mixing time of the controlled POMDP. We briefly describe extensions of GPOMDP to controlled Markov chains, continuous state, observation and control spaces, multiple-agents, higher-order derivatives, and a version for training stochastic policies with internal states. In a companion paper (Baxter, Bartlett, & Weaver, 2001) we show how the gradient estimates generated by GPOMDP can be used in both a traditional stochastic gradient algorithm and a conjugate-gradient procedure to find local optima of the average reward. ©2001 AI Access Foundation and Morgan Kaufmann Publishers. All rights reserved.

Distribution trade sector output and productivity performance : a case study of Singapore and Hong Kong 2001-2008

This paper employs the industry of origin approach to compare value added and productivity of Singapore and Hong Kong's Distribution Trade Sector for the period 2001-2008. The direct comparison between these two economies was motivated by the statements of the Singapore government: Its services sector, especially in Retail Trade, lags behind Hong Kong's productivity levels. The results show that since 2005, Singapore's Distribution performance in terms of labour productivity was below Hong Kong's level, which was largely due to poor performance in its Retail Trade sector arising from an influx of foreign workers. Results from total factor productivity (TFP) between these two economies also suggest that Hong Kong's better performance (since 2005) was largely due to its ability to employ more educated and trained workers with limited use of capital. The results suggest that polices that worked in Hong Kong may not work for Singapore because its population is more diverse which poses a challenge to policy-makers in raising its productivity level.

Introduction: Culture, trade, services

Ben Goldsmith and Christina Spurgeon introduce the special 'Culture, trade, services' issue of Media International Australia.