Crowding-out and Crowding-in Effects of Government Bonds Market on Private Sector Investment (Japanese Case Study)

This paper reviews the relationship between public sector investment and private sector investment through government expenditures financed by government bonds in the Japanese economy. This study hypothesizes that deficit financing by bond issues does not crowd out private sector investment, and this finance method may crowd in. Thus the government increases bond issues and sells them in the domestic and international financial markets. This method does not affect interest rates because they are insensitive to government expenditures and they depend on interest rates levels in the international financial market more than in the domestic financial market because of globalization and integration among financial markets.

Determinants of government consumption expenditure in developing countries : a panel data analysis

The paper focuses on the recent pattern of government consumption expenditure in developing countries and estimates the determinants which have influenced government expenditure. Using a panel data set for 111 developing countries from 1984 to 2004, this study finds evidence that political and institutional variables as well as governance variables significantly influence government expenditure. Among other results, the paper finds new evidence of Wagner's law which states that peoples' demand for service and willingness to pay is income-elastic hence the expansion of public economy is influenced by the greater economic affluence of a nation (Cameron1978). Corruption is found to be influential in explaining the public expenditure of developing countries. On the contrary, size of the economy and fractionalization are found to have significant negative association with government expenditure. In addition, the study finds evidence that public expenditure significantly shrinks under military dictatorship compared with other form of governance.

The foundation of the Mexican welfare state and social security reform in the 1990s

Before 1982 Mexico's welfare state regime was a limited conservative one that put priority on the social security of organized labor. But following the country's debt crisis in 1982, this regime changed to a hybrid liberal model. The Ernest Zedillo government (1995-2000) in particular pushed ahead with liberal reform of the social security system. This paper examines the characteristics and the policy making of the social security reforms in the 1990s. The results suggest that underlying these reforms was the restructuring of the economy and the need to cope with the cost of this restructuring. The paper also points out that one of the main factors making possible the rapid execution of the reforms were the weakened political clout of the officialist labor unions due to their steady breakdown during the 1990s and the increase in the monopolistic power of the state vis-a-vis the position of labor during the negotiations on social security reforms.

Transformation and continuity of the Argentine welfare state -- evaluating social security reform in the 1990s

Beginning after World War II, Argentina institutionalized a limited conservative corporatist welfare state where occupation-linked social insurance held a central position and social assistance had a residual character. This was called a limited conservative corporatist welfare state, because the huge population within the informal sector was excluded from the main system. A populist government supported by trade unions and the economic model of import-substituting industrialization were the background for the formation of this type of welfare state. During the 1990s, elements of a liberal regime were added to the Argentine welfare state under the reform carried out by the Menem Peronist government. However, social insurance reform and labor reform were not as drastic as the economic reform. They still retained a certain continuity from the traditional systems. The government intended to carry out more drastic social security and labor reform, but was unable to do so due to the legacy of corporatism of the Peronist government.

Cuba's social policy after the disintegration of the Soviet Union -- social development as legitimacy of regime and its economy effectiveness

Since the disintegration of the Soviet Union, Cuba has experienced a severe economic crisis, and the country's social policy has played an important role in showing the people a raison-d'etre for the revolution. This role has become even stronger in recent years, as internal and external actors demand political reforms and economic liberalization. This article first examines the Cuban government's use of social development to counter the demands for changes. It then looks at the extent that government social policy contributes economically to improving the Cuban living standard. The article demonstrates empirically how the leadership emphasizes their social accomplishments whenever demands for change come, and then shows that after the suspension of Soviet aid, Cuban social policy has been able to provide services mainly by relying on human capital and reducing quality materially because of the shortage of foreign reserves. This has limited the economic effectiveness of the services.

Chapter 5 Industrial Policy, Structure, and Locations during the Transition toward a Market-oriented Economy in Myanmar

This paper examines Myanmar's industrial policy, structure, and locations during the transition from a centrally planned economy to a market-oriented one throughout the 1990s and up to the present. After the military government assumed power in 1988, it abandoned the socialist centrally planned economic system and began instituting a market-oriented one through a series of liberalization and deregulation measures, although most of which have stalled since 1997 and remain half-way implemented. Against this background, it is rather surprising that the impact of these new policies of international trade, finance, regulations, licensing and ownership requirements on industrial structure and location in Myanmar has been poorly documented and examined to date. Some key issues to understanding the impact and effectiveness of the market-oriented policies during the last two decades in Myanmar remain to be answered: Have the new trade and industrial policies changed the industrial structure and organizational behavior in Myanmar? Have they improved the performance of Myanmar's industrial sector? Have they had any impact on industry location in Myanmar? This paper reviews the series of liberalization programs implemented under the military government?the State Law and Order Restoration Council (SLORC) and the State Peace and Development Council (SPDC)?and assesses their impact on industrial structure and its spatial distribution.

Gacaca and DDR : the disputable record of state-building in Rwanda

State-building is currently considered to be an indispensable process in overcoming state fragility: a condition characterized by frequent armed conflicts as well as chronic poverty. In this process, both the capacity and the legitimacy of the state are supposed to be enhanced; such balanced development of capacity and legitimacy has also been demanded in security sector reform (SSR), which is regarded as being a crucial part of post-conflict state-building. To enhance legitimacy, the importance of democratic governance is stressed in both state-building and SSR in post-conflict countries. In reality, however, the balanced enhancement of capacity and legitimacy has rarely been realized. In particular, legitimacy enhancement tends to stagnate in countries in which one of multiple warring parties takes a strong grip on state power. This paper tries to understand why such unbalanced development of state-building and SSR has been observed in post-conflict countries, through a case study of Rwanda. Analyses of two policy initiatives in the security sector - Gacaca transitional justice and disarmament, demobilization, and reintegration (DDR) - indicate that although these programs achieved goals set by the government, their contribution to the normative objectives promoted by the international community was quite debatable. It can be understood that this is because the country has subordinated SSR to its state-building process. After the military victory of the former rebels, the Rwandan Patriotic Front (RPF), the ruling elite prioritized the establishment of political stability over the introduction of international norms such as democratic governance and the rule of law. SSR was implemented only to the extent that it contributed to, and did not threaten, Rwanda's RPF-led state-building.