Democratization and Financial Reform in Taiwan: The Political Economy of Bad-Loan Creation

This study shows that many bad loans now burdening Taiwan's financial institutions are interrelated with the society's democratization which started in the late 1980s. Democratization made the local factions and business groups more independent from the Kuomintang government. They acquired more political influence than under the authoritarian regime. These changes induced them to manage their owned financial institutions more arbitrarily and to intervene more frequently in the state-affiliated financial institutions. Moreover they interfered in financial reform and compelled the government to allow many more new banks than it had originally planned. As a result the financial system became more competitive and the qualities of loans deteriorated. Some local factions and business groups exacerbated the situation by establishing banks in order to funnel funds to themselves, sometimes illegally. Thus many bad loans were created as the side effect of democratization.

Business Cycles of Non-mono-cultural Developing Economies: The Case of ASEAN Countries

Based on analyses of actual data, we reveal that many Asian developing economies own economic structural features of "non-mono-cultural economy" and the "large primary good sector", which have not been discussed in developing economies RBC literature. We also examine the input-output tables to develop a model reflecting actual developing economies' structures. Referring to the analyses, we construct RBC models of ASEAN countries. Based on the model, we find that approximately half of GDP volatility is attributable to domestic productivity shocks, and the remaining half is attributable to price shocks.

Transformation of the Rice Marketing System and Myanmar's Transition to a Market Economy

Creating a rice marketing system has been one of the central policy issues in Myanmar's move to a market economy since the end of the 1980s. Two liberalizations of rice marketing were implemented in 1987 and 2003. This paper examines the essential aspects of the liberalizations and the subsequent transformation of Myanmar's rice marketing sector. It attempts to bring into clearer focus the rationale of the government's rice marketing reforms which is to maintain a stable supply of rice at a low price to consumers. Under this rationale, however, the state rice marketing sector continued to lose efficiency while the private sector was allowed to develop on condition that it did not jeopardize the rationale of stable supply at low price. The paper concludes that the prospect for the future development of the private rice marketing sector is dim since a change in the rice market's rationale is unlikely. Private rice exporting is unlikely to be permitted, while the domestic market is approaching the saturation point. Thus, there is little momentum for the private rice sector to undertake any substantial expansion of investment.

Family Business in Peru: Survival and Expansion under the Liberalization

It is argued that joint stock companies would be transformed from family firms to managerial firms with their development in size and scope. Such managerial firms would have many small shareholders; hence the ownership and management of the firm would be separated. However, in many developing countries including Peru, family businesses, in which families control both ownership and management, still play an important role in the national economy. After the liberalization of economy, which started in Peru in the 1990s, the national market has become more competitive due to the increase in participation of foreign capitals. To secure competitiveness, it is indispensable for family businesses to obtain management resources such as financial, human and technological resources from outside of the families. In order to do so without losing the control over ownership and management, Peruvian family businesses have incorporated companies with distinct characteristics to the extent that they can secure the control over ownership and management inside of their group. While keeping exclusive control of companies in traditional sectors, they actively seek alliance with other families and foreign capitals in competitive sectors. The management of companies with different degrees of control allows them to survive in today's rapidly changing business environment.

Analogous Cycles with Lagged Co-movement: U.S. and East Asian Business Cycles

In selected East Asian economies, the behavior of detrended macroeconomic variables was found to be similar to that observed in the postwar U.S. economy. Consumption and investment are highly procyclical while the balance of trade and the price level are counter-cyclical in most of them. Labor productivity is procyclical in general. The high coherence between U.S. GDP and that of the East Asian economies suggests that business cycles in terms of frequency are also similar between the United States and East Asia. However, the GDP and consumption of East Asian countries do not necessarily co-move well with current U.S. and Japanese GDP and consumption, while East Asian consumption tends to co-move more with lagged U.S. and Japanese consumption.

NEW ROLE OF COOPERATIVES IN ETHIOPIA: THE CASE OF ETHIOPIAN COFFEE FARMERS COOPERATIVES

Since 1991, policies of economic liberalization in Ethiopia have been effective in releasing the economy from rigid state control. At the same time, they have also exposed Ethiopian people to domestic and international free market competition. In African countries, the retreat of governments from rural development due to economic liberalization policies has led to the re-evaluation of the role of cooperatives. Since 1999, in Ethiopia, several coffee farmers cooperative unions have been established to support peasants who are handicapped by their lack of negotiating power in the global economy. Coffee cooperatives have become market-oriented and are now relatively democratic compared to the former Marxist cooperatives of the previous regime. Thus far, these coffee cooperatives have provided higher profits to coffee farmers than have private traders. The actual volume of purchase, however, is limited　due to financial constraints. Because of this, the majority of cooperatives continues to rely on conventional marketing channels rather than on unions. Considering their weak financial condition, it is too early to judge the sustainability of the cooperatives because international prices have been high recently, and it is not yet clear how they would survive a downward international price trend.

International real business cycles : a re-visit

It is well known that several quantitative properties of international real business cycle models with are at odds with the data. First, the cross-country correlations are much higher for consumption than for output, while in the data the opposite is true (the BKK puzzle). Second, cross-country correlations of employment and investment are negative, while in the data they are positive. This paper quantitatively shows that preferences with a zero income effect on labor supply help generate a correct cross-country correlation in employment even without any restrictions on financial markets. In a bond economy, a zero income effect in labor supply, combined with time-to-build investment, can generate a positive cross-country correlation in investment, and the BKK puzzle is also resolved when the inter-temporal elasticity of substitution in labor supply is low.

Platforms, network effects and small business dynamics in China : case study of the Shanzhai cell phone industry

This paper seeks to argue the significance of platforms on emerging markets through a case study of the Shanzhai cell phone industry in Shenzhen, China. In this industry, value chains are being driven by both the technology platforms and the market platforms. The former include MTK baseband chipset, and so-called Shared PCBA and Shared Mould. The latter include the North Huaqiang Market and the Purchasing and Money Platform. Technology platforms greatly reduced the technological barriers to entry for independent design houses and system integrators, while market platforms markedly improved their poor marketing and purchasing abilities. Due to factors such as social networks, supporting industries, informality and platform governance, strong network effects have been exhibited in the two types of platforms, which have not only fostered numerous start-ups, but have also led to effective exploitation of emerging markets.

State-business relations in the smaller gulf monarchies -- the role of business actors in the decision-making process

The Arab monarchies of the Gulf have been undergoing striking socio-economic changes caused by the ending of the rent-based welfare state model on which they had largely relied since the 1950s. In this perspective, this paper aims at examining the comparative role of local business communities in affecting the orientations and the outcomes of the policies implemented during the period of high oil prices in the 2000s. This paper pays a special attention to the impact of the Arab Spring on the state-business relations in two of the smaller Gulf monarchies (Bahrain and Oman).