Transcript Nuovo decreto del ministro concernete modifiche al

based on Chapter 4:
Steve Dowrick and J. Bradford DeLong,
Globalization and Convergence
Convergence: a static approach
globalization/market integration vs
convergence
 today we experience economic
globalization …
… yet we do not clearly see convergence
outside OECD countries
how to spread convergence? In search
for the “secret ingredient”
Convergence: a static approach
the failing predictions of neo-classical
models
the raw reality of facts: divergence
during 20th century
growth and convergence: a matter of
point of view
absolute vs relative terms
Convergence: a static approach
Convergence Club: comparative approach
factors defining membership:
a) GDP per capita/per worker
b) industrial development (structural change)
joining in the “club” (but leaving it as
well): life membership is not granted
first results: free-trade as a pre-condition
to enter the club
Historical trends of convergence
the birth of the Convergence Club
(1820-1870)
industrialization: the trigger and the
best indicator
around 1850 a small group follows UK:
Belgium and USA North East Coast
States
Historical trends of convergence
the first era of globalization (18701914)
main features: second IR and transport
Revolution
the club expands to
Western offshoots
Western Europe
Japan
Historical trends of convergence
extended interwar years (1914-1950)
apparent paradox: a phase of
increasing convergence during a
period of market dis-integration
new members:
Soviet Union
majority of S. America
possibly: some African colonies
Historical trends of convergence
the second era of globalization (19502000)
an expansion in the size of convergence
club:
OECD countries fill the gap (golden age)
East Asian Tigers (1960s-1970s)
Finally China and India (1980s)
but also drop-outs
Historical trends of convergence
but also drop-outs:
Former Soviet-Union
big parts of S.America
all African economies
it is an unexpected trend
… and suspect number one are economic
policies
Historical trends of convergence
History unveils a compex pattern in the
relation between market integration and
convergence:
The effects of globalization can be selective
(1870-1914)
The relation can be in inverse proportion
(1914-1950)
The geography of convergence can change
over time (1950-2000)
Supporting convergence
studying divergence to support
convergence
conditional convergence
neo-classic economists: the world
is converging (Robert Barro)
Supporting convergence
the paradox: Mozambique
converging to USA?
self-evident findings:
“bad” demography and education
“bad” institutions
low investments
actual divergence vs conditional
convergence
Supporting convergence
likely blockages to convergence:
- poverty trap
- lack of education and human
capital, inability in absorbing
technology
- inefficiency of labour
Supporting convergence:
openness
another ingredient in the “mixer”:
globalization-openness-convergence
Sachs and Warner’s indicators:
(1) tariff rates over 40%;
(2) NTBs on 40% of imports or above;
(3) socialist economy;
(4) state monopoly on main exports;
(5) black market
Supporting convergence:
openness
Sachs and Warner’s findings (1970-89):
strong convergence among open
economies in terms of income (GDP per
capita)
no convergence among closed
economies in terms GDP per capita
2.5% year growth if one country opens
Analytical study of convergence
First analytical examination for the
1960-1998 period on a sample:
109 countries
GDP per capita
countries grouped on average income
test: variance measures dispersion
= divergence
Analytical study of convergence
 results (tab. 4.1):
divergence occurrs in each group
except for the richest 19 countries
1960-1980
 main cause is the failure of the
poorest to match the growth of the
richer countries
Analytical study of convergence
Second analytical examination for
the 1960-1998 period on a sample:
96 countries
convergence interacting with:
(1) openness; (2) + income; (3) +
investments; (4) + population
testing the impact of openness on
convergence with regressions
Analytical study of convergence
 results 1960-1980 (tab. 4.4):
(1) openness lifts per capita GDP (cp. fig.
4.5)
(2) openness tends to be more important
for poor countries
(3) investment rates and demography
matter
Analytical study of convergence
 results 1980-1998 (tab. 4.4):
(4) openness less important (cp. fig. 4.6)
(5) openness less beneficial for poor
countries than previous interval
(6) investment rates and demography
matter more than before
(7) education begins to matter in this
interval
Analytical study of convergence
1960-1998 period, overall results:
(1) divergence rather than
convergence, especially for low
income economies
(2) openness is correlated to
economic growth but not always
to convergence
Supporting convergence
Factors of divergence:
low income;
low investments;
lack of education;
population increase.
Historical trends of
convergence: a conclusion
No evidence of a direct relation
globalization/convergence
Opennes does not seem to be the one
solution for the “great divide”
Pre-industrial “traps” main blockades
to convergence for poorest countries
A good news: the picture changes if we
consider world population