Sachs, Jeffrey D., and Andrew Warner, "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, 1 (1995), 1--95.  Home/Search   Document Not in Database   Summary   Related Articles   Check

....they have shown that after adjusting for the simultaneity bias, ordinary least squares does not overestimate the impact of openness on productivity. These results lend support to the many cross country studies that have shown that trade and trade liberalization lead to increased growth (e.g. Sachs and Warner [1995], Dollar [1992] Edwards [1993] 17 Keller [1998] offers an opposing view. 42 The approach that appears most appropriate is emphasized by Romer [1994] He argues that proper modeling of the impact of trade protection on the reduction in the number of available varieties is crucial to ....

....of this magnitude correspond to a permanent increase in the growth rate of between 0.4 and 1 . A policy induced change in the growth rate of this magnitude is quite plausible in the context of the actual long term per capita growth rates over the 25 30 year period beginning in 1962. For example, Sachs and Warner [1995] estimate that open economies have grown about 2.45 faster than closed economies, with even greater differences for open versus closed economies among developing countries. They note that trade liberalization is often accompanied by macro stabilization and other market reforms, and their open ....

Sachs, J. D., and Warner, A., "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, 1995, 1-117.

....International Studies, Geneva 1 Introduction Most early empirical studies, e.g. Krueger (1978) found a clear positive link between openness and growth. Recent research, however, has questioned the robustness of the relationship. For instance, Harrison and Hanson (1999) show that the often cited Sachs and Warner (1995) findings do not, as claimed, provide evidence for an openness and growth link. Rodriguez and Rodrik (1999) confirm the Harrison Hanson critique and provide similar demonstrations of the fragility of other trade and growth results. This paper combines a bit of theory and a bit of econometrics to ....

Sachs, J. and A. Warner, (1995) "Economic reform and the Process of Global Integration", Brookings Papers on Economic Activity, no. 1, pp 1-118.

....and fauna in all parts of the world. Environmental integration through MEAs involves the harmonization of national environmental policies, standards, legal codes, property rights structures, and other regulatory arrangements, as well as the creation of supranational environmental regulations 3 (Sachs and Warner, 1995; Lawrence, 1995; Cooper, 1994) At the domestic level, harmonization alters the ability of agricultural sectors to attract and or retain resources and investment funds. Compliance with each new agreement tends to increase production costs, shift relative factor prices, and, thereby affect ....

Sachs, J.D. and A. Warner. 1995. "Economic Reform and the Process of Global Integration." Brookings Papers on Economic Activity 1: 1-95.

.... claim that adverse resource depletion and environmental degradation effects of trade policy reform will be 3 See, for example, the theoretical reasons presented in Grossman and Helpman (1991) and the rapidly growing empirical evidence presented by Baldwin (1992) Dollar (1992) Edwards (1992) Sachs and Warner (1995), Harrison (1996) and USITC (1997) and the references therein. 6 substantial, but very few empirical studies have sought to test that hypothesis. On environmental degradation, the following section suggests a way to examine how the changes in the aggregate level of output, the composition of ....

Sachs, J.D. and A. Warner (1995), `Economic Reform and the Process of Global Integration', Brookings Papers on Economic Activity 1: 1-118.

.... per capita gross national product in 1980 and 1995, LGNP15 is the growth rate of GNP between 1980 and 1995, LIFEXP is life expectancy at birth in 1980, FDIstock is the value of the per capita foreign capital stock in 1980, OPENSW is a dummy variable representing an index of openness created by Sachs and Warner (1995) and equal to 1 for open economies and equal to 0 otherwise, LATAM is another dummy variable equal to 1 for latin american countries and equal to 0 otherwise. LGNP 80 , LIFEXP and FDIstock are expressed in logarithms. All regressors are referred to the year 1980. Definitions and sources of data ....

Sachs J.D., Warner A. (1995), " Economic Reform and the Process of Global Integration ", Brooking Papers on Economic Activity, n.1, 1-118.

....undertake such preliminary data characterisation, leaving more formal testing of the robustness and specification of these relationships for further work (see Cameron, Proudman and Redding (1998b) The analysis proceeds in two stages. In the first, we adopt an approach similar to that employed by Sachs and Warner (1995) in the cross country convergence literature and combine the information contained in the different measures of openness by making use of simple group characteristics. In particular, we make use of the statistical technique of discriminant analysis to sort sectors into groups on the basis of their ....

....effects of international spillovers of ideas, increased market size and enhanced product market competition will dominate. In this case, one would expect to see international openness positively correlated with rates of economic growth (as in many cross country growth analyses, see for example, Sachs and Warner (1995) or Proudman, Redding and Bianchi (1998) However, what the preceding analysis does make clear is that international openness is multi faceted and its relationship with rates of economic growth is unlikely to be straightforward. 3 Quantifying international openness in the United Kingdom 3.1 ....

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Sachs, J and Warner, A (1995), `Economic Reform and the Process of Global Integration' Brookings Papers on Economic Activity, 0, 1, pages 1-95.

....other components of income. We use the Penn World Tables estimates of per capita income in 1960. These correct for international differences in the cost of living. We measure the natural resource endowment by the share of primary exports in GDP, this being the proxy for natural resources used by Sachs and Warner (1995). Taxable capacity, thus proxied, also enters as the incentive for rebellion, conditional upon the probability of victory, so that its net effect on the probability of war need not be monotonic. We have proposed that a proxy for the benefits of secession is the size of the population. Now ....

Sachs, J. D. and Warner, A. (1995). `Economic Reform and the Process of Global Integration', Brookings Papers on Economic Activity, Iss. 1, 1-118.

....initial levels of income and low levels of investment in human and physical capital, the nations of Africa still under perform their counterparts in other regions. In efforts to account for Africa s idiosyncratic economic performance, researchers have explored two sets of factors. Some, such as Sachs and Warner (1995), stress the limitations of Africa s natural endowment. Others, such as Easterly and Levine (1995) explore the impact of neighborhood effects and ethnic diversity. Of even greater relevance to this project, Collier et al. 1998) seek to eliminate the African dummy by including measures of ....

....that follows, we discuss the politics underlying these policies. And in doing so, we introduce several forms of political analysis. Trade Policy Echoing the earlier research on the harmful effects of protection (Bhagwati 1991, Krueger 1996) recent research into the determinants of growth (Sachs and Warner 1995) highlights the significance of trade (but see Rodrik 1999) Natural barriers to trade, such as distance from major markets or restricted access to ports, appear to reduce rates of economic growth. So too do adverse policies. Policies are chosen by governments. And several recent papers provide ....

Sachs, J. and A. Warner (1995). "Economic Reform and the Process of Global Integration." Brookings Papers on Economic Activity 1: 1-1 18.

.... the imbalances between benefits and contributions in the traditional system, whether by raising retirement ages, adjusting contribution rates, or placing greater restrictions The most recent study for Latin America is Easterly, Loayza, and Montiel (1996) Other recent works on a world level are Sachs and Warner (1995) 10 and Thomas and Wang (1995) Many studies have focused on how trade liberalization affects growth. See for example, Dollar (1992) Lee (1993) Edwards (1993) and Easterly et al. 1993) Edwards (1995) discusses different areas of reform in Latin America and summarizes the research evaluating ....

....for example, Dollar (1992) Lee (1993) Edwards (1993) and Easterly et al. 1993) Edwards (1995) discusses different areas of reform in Latin America and summarizes the research evaluating their main effects. See for example, Dollar (1992) Lee (1993) Edwards (1993) Easterly et al. 1993) and Sachs and Warner (1995). 11 15 on access to pensions. In this fashion, the reforms have at least partially corrected the financial imbalances of the traditional systems, and by establishing new pension funds, they have opened a new channel for broadening real and financial saving. An Index of Structural Policies ....

Sachs, J. and Warner A. (1995). "Economic Reform and the Process of Global Integration", Brookings Papers of Economic Activity, 1:1995, pp. 195.

....will provide a basis for understand ing the future growth prospects of the Latin American countries. 4. 1 The Basic Empirical Framework The basic empirical framework is based on an extended version of the neoclassical growth model, as described by Barro (1991, 1997) Barro and Lee (1994) Sachs and Warner (1995), Radelet, Sachs and Lee (1997) This model predicts conditional convergence of income, as described in section 2, implying that a country with a lower initial income relative to its own long run (or steady state) potential level of income grows faster than a higher income country over time (see ....

....goods, larger markets, and advanced technologies. An economy s openness to international markets can be represented by various measures including tariff rate and black market premium of exchange rates, or indicators of trade policy regimes. We use the openness measurement constructed by Sachs and Warner (1995). This index is calculated as the fraction of years during the period that the country was considered to be open to trade and thus sufficiently integrated with the global economy. The evaluationof the country s openness is made on the basis of four dimensions of trade policy: average tariff rates, ....

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Sachs, J. and A. Warner (1995), "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity 1(August): 1-118.

....a much more modest growth of labor intensive manufacturing industries. Also during the 1990s, the economics profession was gaining a new appreciation for the impact of geography and natural resource endowments on patterns of economic development, spurred in large part by the influential paper by Sachs and Warner (1995b) which documented their finding that resource poor economies often vastly outperform resource rich economies in economic growth, even after accounting for other determinants of economic growth. These were not, of course, the first authors to point out this inverse relationship between resource ....

....instability Natural Resource Endowments are Associated with Slower Economic Growth Although our dataset was developed with the aim of exploring issues surrounding the distribution of income, we begin with some results on economic growth. This is useful to confirm that the results reported in Sachs and Warner (1995a, 1995b) and Gallup and Sachs (1998) are generally supported in our somewhat different dataset, and to explore a couple of dimensions of the story that these otherwise more comprehensive studies did not discuss. The data set that was used for the chapter was generated from annual data from a variety of ....

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Sachs, Jeffrey D. and Andrew M. Warner (1995a) "Economic Reform and the Process of Global Integration", Brookings Papers on Economic Activity, 1995(1), pp. 1-118.

....initial levels of income and low levels of investment in human and physical capital, the nations of Africa still under perform their counterparts in other regions. In efforts to account for Africa s idiosyncratic economic performance, researchers have explored two sets of factors. Some, such as Sachs and Warner (1995), stress the limitations of Africa s natural endowment. Others, such as Easterly and Levine (1995) explore the impact of neighborhood effects and ethnic diversity. Of even greater relevance to this project, Collier, Hoeffler et al. 1998) seek to eliminate the African dummy by including ....

....section that follows, we discuss the politics underlying these policies. And in doing so, we introduce several forms of political analysis. Trade Policy Echoing the earlier research on the harmful effects of protection (Bhagwati 1991, Krueger 1996) recent research into the determinants of growth (Sachs and Warner 1995) highlights the significance of trade (but see Rodrik 1999) Natural barriers to trade, such as distance from major markets or restricted access to ports, appear to reduce rates of economic growth. So too do adverse policies. Policies are chosen by governments. And several recent papers provide ....

Sachs, J. and A. Warner (1995). "Economic Reform and the Process of Global Integration." Brookings Papers on Economic Activity 1: 1-1 18.

....words, one must assume that the underlying model of the political system is much less a democratic model and much more a model of political influence and interest groups. 5.2 Natural Resources Another potential culprit of Latin America s low growth is, paradoxically, its resource abundance. Sachs and Warner (1995b) have shown that natural resource abundance, as measured by the share of primary exports in GDP, have a robust negative association with economic growth. Latin America s share of primary exports at an average of 15 , is higher than that of East Asia (2.4 ) or of OECD countries (7.5 ) although ....

....high fiscal deficits are strongly associated with subsequent increases in the inflation rate. 5.6 Trade Policy The effect of trade policy on economic growth is one of the most contentious areas of the modern growth literature. On the one hand, a number of authors (see for example Dollar, 1992, Sachs and Warner, 1995, Edwards, 1998, and Ben David, 1995) claim that policy induced trade barriers are positively related to economic growth. However, Rodrguez and Rodrik (1999) have disputed the findings of these papers, pointing to a series of methodological shortcomings in them which severely bias their results. ....

Sachs, Jeffrey, and Andrew Warner, "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, 1995:1, 1-118.

....cost discipline through import competition and the drive to export. Openness measured by the ratio of trade to GDP is simply not appropriate for the case of Arab countries. Most Arab countries have high trade ratios reflecting partly the nature of their factor endowment. Following the work of Sachs and Warner (1995), we adopt the definition of openness, SOPEN, reported in Sachs and Warner (1997) Openness purports to the fraction of years during the period 1970 1990 in which the country is rated as open according to the following criteria: a) Non tariff barriers covering less than 40 percent or more of ....

Sachs, J.D. and A. M. Warner (1995), "Economic Reform and the Process of Global Integration," Brookings papers on Economic Activity, 10-1-118.

....or an increase in the latter s rate of expansion is not clear, however. The former is still worth something, but it is the latter that really matters. There is widespread belief that openness, fairly broadly defined, stimulates growth, although the most commonly cited studies e.g. Dollar (1992) Sachs and Warner (1995), Edwards (1998) have received pretty rough treatment recently from Rodriguez and Rodrik (1999) Moreover, these studies include open trade (the result of trade liberalisation) as only one of several indicators of openness and one which generally seems to weigh rather lightly in the overall ....

Sachs, J. and Warner, A. (1995) "Economic Reform and the Process of Global Integration Brookings Papers on Economic Activity; v.0 n.1 1995, 1-95.

....trade regime or 1 The literature on the role of international trade in the East Asian development are vast. A full scale review of the literature is out of the scope of this essay. For a survey, among others, see Edwards (1993) and Krueger (1995) Based on cross country regression analysis, Sachs and Warner (1995) argue that poor countries will tend to catch up rich countries if and only if they are open. 2 See Amsden (1989) 3 active government interventions, those empirical results were the ones weakening the basis of the debates. 3 For example, Krugman asserted, based on Young and Kim and Lau s ....

....ratio, with 14.2 and 10.7 , respectively, and Singapore and Korea had the lowest ratio, with 1.3 and 3.0 , respectively. Another policy variable is openness to the world economy. The openness variable used here is the fraction of years the economy was open to trade between 1950 and 1990, from Sachs and Warner (1995). In this measure, an economy is considered as open if it satisfies all of the following five criterion: 1) average tariffs are lower than 40 percent, 2) quotas and licensing cover less than 40 percent of total imports, 3) the black market premium is less than 20 percent, 4) it is a ....

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Sachs, Jeffrey D., and Andrew Warner. 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity 1:1-95.

....seriously worsened income distribution before adopting the contrary view. Controversy rages about the link between trade liberalisation and growth. There is a widespread belief that openness, fairly broadly defined, stimulates growth, although the most commonly cited studies e.g. Dollar (1992) Sachs and Warner (1995), Edwards (1998) have received pretty rough treatment recently from Rodriguez and Rodrik (1999) Moreover, 8 these studies include open trade (the result of trade liberalisation) as only one of several indicators of openness and one which generally seems to weigh rather lightly in the overall ....

Sachs, J. and Warner, A. (1995) "Economic Reform and the Process of Global Integration Brookings Papers on Economic Activity; v.0 n.1 1995, 1-95.

....initial levels of income and low levels of investment in human and physical capital, the nations of Africa still under perform their counterparts in other regions. In efforts to account for Africa s idiosyncratic economic performance, researchers have explored two sets of factors. Some, such as Sachs and Warner (1995), stress the 1 We thank Philip Keefer and Delphin Rwegasira for helpful comments on an earlier draft. Framework Paper on Political Economy Page 2 limitations of Africa s natural endowment. Others, such as Easterly and Levine (1995) explore the impact of neighborhood effects and ethnic ....

....section that follows, we discuss the politics underlying these policies. And in doing so, we introduce several forms of political analysis. Trade Policy Echoing the earlier research on the harmful effects of protection (Bhagwati 1991, Krueger 1996) recent research into the determinants of growth (Sachs and Warner 1995) highlights the significance of trade (but see Rodrik 1999) Natural barriers to trade, such as distance from major markets or restricted access to ports, appear to reduce rates of economic growth. So too do adverse policies. Policies are chosen by governments. And several recent papers provide ....

Sachs, J. and A. Warner (1995). "Economic Reform and the Process of Global Integration." Brookings Papers on Economic Activity 1: 1-1 18.

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Sachs, Jeffrey D., and Andrew Warner, "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, 1 (1995), 1--95.

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Sachs, Jeffery and Andrew Warner. 1995. "Economic reform and the process of global integration." Brookings Papers on Economic Activity 1: 1-118.

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Sachs, Jeffrey and Andrew Warner (1995), "Economic reform and the process of global integration," Brooking Papers on Economic Activity 1.

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Sachs, Je#rey, and Warner, Andrew. Economic Reform and the Process of Global Integration. #################################, vol. 1 (1995): 1-118.

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Sachs, J.D and A. Warner (1995), "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, p. 1--118.

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SACHS, J.D. and A. WARNER, (1995), "Economic Reform and the Process of Global Integration", Brookings Papers on Economic Activity, 1.

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Sachs, Jeffrey and Andrew Warner. "Economic Reform and the Process of Global Integration." Brookings Papers on Economic Activity. No. 1 (1995), 1-118.

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