The inverse domino effect: are economic reforms contagious?

This article examines whether a country's economic reforms are affected by reforms adopted by other countries. Our theoretical model predicts that reforms are more likely when factors of production are internationally mobile and reforms are pursued in other economies. Using the change in the Index of Economic Freedom as the measure of market-liberalizing reforms and panel data (144 countries, 1995–2006), we test our model. We find evidence of the spillover of reforms. Moreover, consistent with our model, international trade is not a vehicle for the diffusion of economic reforms; rather the most important mechanism is geographical or cultural proximity.

Post-neoliberal electricity market ‘re-reforms’ in Argentina: Diverging from market prescriptions?

This paper focuses upon the policy and institutional change that has taken place within the Argentine electricity market since the country’s economic and social crisis of 2001/2. As one of the first less developed countries (LDCs) to liberalise and privatise its electricity industry, Argentina has since moved away from the orthodox market model after consumer prices were frozen by the Government in early 2002 when the national currency was devalued by 70%. Although its reforms were widely praised during the 1990s, the electricity market has undergone a number of interventions, ostensibly to keep consumer prices low and to avert the much-discussed energy ‘crisis’ caused by a dearth of new investment combined with rising demand levels. This paper explores how the economic crisis and its consequences have both enabled and legitimised these policy and institutional amendments, while drawing upon the specifics of the post-neoliberal market ‘re-reforms’ to consider the extent to which the Government appears to be moving away from market-based prescriptions. In addition, this paper contributes to sector-specific understandings of how, despite these changes, neoliberal ideas and assumptions continue to dominate Argentine public policy well beyond the postcrisis era.

Winners and losers from industry reforms in the developing world: experiences from the electricity and mining sectors

The reform of previously state-owned and operated industries in many Less Developed Countries (LDCs) provide contrary experiences to those in the developed world, which have generally had more equitable distributional impacts. The economic reform policies proposed by the so-called 'Washington Consensus' state that privatisation provides governments with opportunities to raise revenues through the sale of under-performing and indebted state industries, thereby reducing significant fiscal burdens, and, at the same time, facilitating influxes of foreign capital, skills and technology, with the aim of improving operations and a "trickle-down" of benefits. However, experiences in many LDCs over the last 15-20 years suggest that reform has not solved the problem of chronic public-sector debt, and that poverty and socio-economic inequalities have increased during this period of 'neo-liberal' economics. This paper does not seek to challenge the policies themselves, but rather argues that the context in which reform has often taken place is of fundamental significance. The industry-centric policy advice provided by the IFIs typically causes a 'lock-in' of inequitably distributed 'efficiency gains', providing minimal, if any, benefits to impoverished groups. These arguments are made using case study analysis from the electricity and mining sectors.

The implications of the 2003 Common Agricultural Policy reforms for land use and landscape quality in England

The assessment of the potential landscape impacts of the latest Common Agricultural Policy reforms constitutes a challenge for policy makers and it requires the development of models that can reliably project the likely spatial distribution of land uses. The aim of this study is to investigate the impact of 2003 CAP reforms to land uses and rural landscapes across England. For this purpose we modified an existing economic model of agriculture, the Land-Use Allocation Model (LUAM) to provide outputs at a scale appropriate for informing a semi-quantitative landscape assessment at the level of ‘Joint Character Areas’ (JCAs). Overall a decline in the cereal and oilseed production area is projected but intensive arable production will persist in specific locations (East of England, East Midlands and South East), having ongoing negative effects on the character of many JCAs. The impacts of de-coupling will be far more profound on the livestock sector; extensification of production will occur in traditional mixed farming regions (e.g. the South West), a partial displacement of cattle by sheep in the upland regions and an increase in the sheep numbers is expected in the lowlands (South East, Eastern and East Midlands). This extensification process will affect positively those JCAs of mixed farming conditions, but it will have negative impacts on the JCAs of historically low intensity farming (e.g. the uplands of north-west) because they will suffer from under-management and land idling. Our analysis shows that the territorialisation between intensively and extensively agricultural landscapes will continue.

Segmenting the Italian coffee market: marketing opportunities for economic agents working along the international coffee chain

Globalization, either directly or indirectly (e.g. through structural adjustment reforms), has called for profound changes in the previously existing institutional order. Some changes adversely impacted the production and market environment of many coffee producers in developing countries resulting in more risky and less remunerative coffee transactions. This paper focuses on customization of a tropical commodity, fair-trade coffee, as an approach to mitigating the effects of worsened market conditions for small-scale coffee producers in less developed countries. fair-trade labeling is viewed as a form of “de-commodification” of coffee through product differentiation on ethical grounds. This is significant not only as a solution to the market failure caused by pervasive information asymmetries along the supply chain, but also as a means of revitalizing the agricultural-commodity-based trade of less developed countries (LDCs) that has been languishing under globalization. More specifically, fair-trade is an example of how the same strategy adopted by developed countries’ producers/ processors (i.e. the sequence product differentiation - institutional certification - advertisement) can be used by LDC producers to increase the reputation content of their outputs by transforming them from mere commodities into “decommodified” (i.e. customized and more reputed) goods. The resulting segmentation of the world coffee market makes possible to meet the demand by consumers with preference for this “(ethically) customized” coffee and to transfer a share of the accruing economic rents backward to the Fair-trade coffee producers in LDCs. It should however be stressed that this outcome cannot be taken for granted since investments are needed to promote the required institutional innovations. In Italy FTC is a niche market with very few private brands selling this product. However, an increase of FTC market share could be a big commercial opportunity for farmers in LDCs and other economic agents involved along the international coffee chain. Hence, this research explores consumers’ knowledge of labels promoting quality products, consumption coffee habits, brand loyalty, willingness to pay and market segmentation according to the heterogeneity of preferences for coffee products. The latter was assessed developing a D-efficient design where stimuli refinement was tested during two focus groups.