Essays on openness, economic integration, and *growth

This dissertation examines the relationship between the degree of openness to international trade and the level of growth experienced by a country. More precisely, it explores how trade liberalization and economic integration can lead to specialization in production, affect national levels of welfare, productivity, and competition and at the same time reinforce deflationary efforts. A large part of this investigation is carried out using industry-level data from Spain. ^

Integration of Colombian refugees in Costa Rica : an ethnographic approach to the refugees' legal, economic, and social experiences

This qualitative study, based on interviews to 17 refugee families, attempts to identify the reasons behind the lack of integration of Colombian refugees in Costa Rica. The model of Immigrant Modes of Incorporation and the studies of Alejandro Portes and Julia Sensenbrenner about the sources of social capital on migrant communities provided the theoretical framework used to identify the roots of the integration challenges. The findings suggest that Costa Rican policies towards the reception and integration of Colombian refugees are exclusionary. The host labor market is marked by sentiments of xenophobia towards the sample population while reported cases of persecution in the country also inhibit this population's economic integration. The lack of social capital sources contributes to inhibit this community's development, despite their participation in informal networks. There were signs of collective action. Yet, the refugee community fails to come together, while it also seems alienated from the community of Colombian entrepreneurs in Costa Rica.

Structure of international cooperation in trade, investment and environment

This dissertation analyzes the obstacles against further cooperation in international economic relations. The first essay explains the gradual nature of trade liberalization. I show that existence of asymmetric information between governments provides a sufficient reason for gradualism to exist. Governments prefer starting small to reduce the cost of partner’s betrayal when there is sufficient degree of information asymmetry regarding the partner’s type. Learning about partner’s incentive structure enhances expectations, encouraging governments to increase their current level of cooperation. Specifically, the uninformed government’s subjective belief for the trading partner being good is improved as the partner acts cooperatively. This updated belief, in turn, lowers the subjective probability of future betrayal, enabling further progress in cooperation. The second essay analyzes the relationship between two countries facing two policy dilemmas in an environment with two way goods and capital flows. When issues are independent and countries are symmetric, signing separate agreements for tariffs (Free Trade Agreements-FTA) and for taxes (Tax Treaties-TT) provides the identical level of enforcement as signing a linked agreement. However, linkage can still improve the joint welfare by transferring the slack enforcement power in a case of asymmetric issues or countries. I report non-results in two cases where the policy issues are interconnected due to technological spillover effect of FDI. Moreover, I show that linking the agreements actually reduces enforcement when agreements are linked under a limited punishment rule and policy variables are strategic substitutes. The third essay investigates the welfare/enforcement consequences of linking trade and environmental agreements. In the standard literature, linking the agreements generate non-trivial results only when there is structural relation between the issues. I focus on institutional design of the linkage and show that even if environmental aspects of international trade are negligible linking the agreements might still have some interesting welfare implications under current GATT Rules. Specifically, when traded goods are substitutes in consumption, linking the environmental agreement with trade agreement under the Withdrawal of Equivalent Concession Rule (Article XXVIII) will reduce the enforcement. However, enforcement in environmental issue increases when the same rule is implemented in the absence of linkage.

The Argentine Dilemma: “Vulture Funds” and the Risks Posed to Developing Economies

Post-crisis Argentina is a case study of crisis management through debt restructuring. This article examines how Argentina negotiated the external debt in the wake of the sovereign default in December 2001 and now confronts challenges posed by holdout creditors—the so called “vulture funds”. It argues that debt restructuring has put a straitjacket on the national economy, making it virtually impossible for healthy growth short of a break with the international economic order. While Argentina has successfully restructured a $95 billion debt with an unprecedented “hair cut” (around 70% reduction in “net value of debt”), a sustainable growth appears out of reach as long as reliance on the government debt market prevails. In this cycle, the transmission belt of financial crisis to developing countries is characterized by the entry of highly speculative players such as hedge funds, conflicts of interests embedded in “sovereign debt restructuring” (SDR) and vulnerabilities associated with “emerging market debt”.

The Caribbean Court of Justice: An investigation of the impact of elites on its creation and present structure as it relates to original jurisdiction

The primary focus of this dissertation is to determine the degree to which political, economic, and socio-cultural elites in Jamaica and Trinidad & Tobago influenced the development of the Caribbean Court of Justice's (CCJ) original jurisdiction. As members of the Caribbean Community (CARICOM), both states replaced their protectionist model with open regionalism at the end of the 1980s. Open regionalism was adopted to make CARICOM member states internationally competitive. Open regionalism was also expected to create a stable regional trade environment. To ensure a stable economic environment, a regional court with original jurisdiction was proposed. A six member Preparatory Committee on the Caribbean Court of Justice (PREPCOM), on which Jamaica and Trinidad & Tobago sat, was formed to draft the Agreement Establishing the Caribbean Court of Justice that would govern how the Court would interpret the Revised Treaty of Chaguaramas (RTC) and enforce judgments. ^ Through the use of qualitative research methods, namely elite interviews, document data, and text analysis, and a focus on three levels of analysis, that is, the international, regional, and domestic, three major conclusions are drawn. First, changes in the international economic environment caused Jamaica and Trinidad & Tobago to support the establishment of a regional court. Second, Jamaica had far greater influence on the final structure of the CCJ than Trinidad & Tobago. Third, it was found that in both states the political elite had the greatest influence on the development and structure of the CCJ. The economic elite followed by the socio-cultural elite were found to have a lesser impact. These findings are significant because they account for the impact of elites and elite behavior on institutions in a much-neglected category of states: the developing world.^

Trinidad multinationals and their effect on caribbean regionalization

The purpose of the thesis was to first, document the expansion of Trinidad's business sector and then to probe the implications of this expansion on Caribbean regionalization. The variables analyzed were physical expansion, technology and development and community involvement. The methodological approach used first, a theoretical approach based on the New Regionalism Approach (NRA) which best accounts for non-state actors (multinationals) and their role in the scheme of regionalization. Second, interviews were conducted with leaders of the major multinationals in Trinidad to ascertain their opinion on the role of multinationals in the regionalization process. Based on the case studies analyzed, namely Royal Bank Group of Companies and Trinidad Cement Holdings Limited, the findings of the thesis indicate that Trinidad multinationals are helping the process of Caribbean regionalization and consider themselves regional rather than national entities. It can be concluded that the growth of Trinidad multinationals will continue to be integral to the economic integration of the region.