39978 2004 Public Disclosure Authorized ABCDE Annual World Bank Conference on Development Economics Europe Public Disclosure Authorized Economic Integration and Social Responsibility Public Disclosure Authorized Edited by François Bourguignon Pierre Jacquet Public Disclosure Authorized Boris Pleskovic Economic Integration and Social Responsibility Annual World Bank Conference on Development Economics—Europe 2004 Economic Integration and Social Responsibility Edited by François Bourguignon Pierre Jacquet Boris Pleskovic THE WORLD BANK Washington, DC © 2007 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail [email protected] All rights reserved 1 2 3 4 :: 10 09 08 07 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. 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Contents ACKNOWLEDGMENTS vii INTRODUCTION 1 François Bourguignon and Pierre Jacquet Northern Agricultural Policies and World Poverty: Will the Doha “Development Round” Make a Difference? 9 Kevin Watkins Migration Flows: Political Economy of Migration and the Empirical Challenges 91 Kevin H. O’Rourke and Richard Sinnott COMMENT Devesh Kapur 115 Of Patents and Genes: Flows of Knowledge and Intellectual Property Rights 121 Claude Henry COMMENT Jean O. Lanjouw 132 International Capital Flows: A Blessing or a Curse? 139 Graciela L. Kaminsky Resolution of Sovereign Debt Crises: The New Old Framework 173 Richard Portes Innovative Sources for Development Finance: Global Public Economics 191 Anthony B. Atkinson COMMENTS Adrian Wood 208 Paul Bernd Spahn 212 vi | CONTENTS Promoting Entrepreneurship: What It Means, and What It Means for the Middle East and North Africa 219 Florence Eid The Business Environment and Enterprise Performance in Transition: Evidence from a Large-Scale Survey 245 Steven Fries, Tatiana Lysenko, and Sašo Polenac Vive la France! French Multinational and Human Rights 275 Ariel Colonomos and Javier Santiso Natural Resources, Development and Conflict: Channels of Causation and Policy Interventions 323 Paul Collier Attenuating the Vulnerability to Price Shocks Through Aid 337 Patrick Guillaumont, Sylviane Guillaumont Jeanneney, Pierre Jacquet, Lisa Chauvet, and Bertrand Savoye Scaling Up: A Development Strategy for the New Millennium 351 Robert Picciotto Acknowledgments The planning and organization of the 2003 conference was a joint effort of the Agence française de développement (AfD), the Conseil d'Analyse Économique (CAE), and the World Bank, and was hosted by the Ministry of the Economy, Finance and Industry of France and the Ministry of Foreign Affairs of France. We wish to thank World Bank staff members Leita Jones (Partnerships and Capacity Building), Stuart Tucker (Office of the Publisher), and Mark Ingebretsen (Office of the Publisher) for their hard work in pulling this volume together. Unless otherwise noted, professional affiliations identified in this volume are as of the time of the conference, May 15–16, 2003. Introduction FRANÇOIS BOURGUIGNON AND PIERRE JACQUET How to analyze the impact of globalization? What is the effect of rich countries’ poli- cies on developing ones? How to redefi ne the development agenda and scale-up the aid effort? These were the broad questions addressed by the 2003 European Confer- ence on Development Economics (ABCDE-Europe) jointly organized in May by the World Bank and the French Development Agency under the title “Economic Integra- tion and Social Responsibility.” To address these broad questions, the conference focused on some of the problematic features of globalization and discussed the global impact of developed countries’ policies in a number of crucial areas for developing countries, such as farm trade, migrations, the protection of intellectual property, and capital fl ows. It also highlighted the role and responsibilities of the private sector. This volume, organized in twelve chapters, opens with the fi ve plenary session papers that were at the core of the discussion and focuses on fi ve crucial issues and policy challenges: agricultural trade, migration fl ows, intellectual property rights, the costs and benefi ts of international capital fl ows, and options for sovereign debt restructuring. The seven remaining chapters offer a collection of selected papers dis- cussed in the parallel workshops held during the conference. They cover a wider range of issues, from the role and responsibilities of private actors and the compo- nents of the business environment to the sources of development fi nance and the relationship between commodity resources and development to the issue of “scaling up”—namely, the possibility of intensifying the volume and impact of development aid. Some of the papers are followed by comments from one or two discussants. In chapter 1, Kevin Watkins shows how industrial countries’ farm policies under- mine the potential contribution of agricultural growth to poverty reduction in develop- ing economies. The European Union (EU) and the United States stand as the primary offenders. Farm support in rich countries artifi cially boosts outputs and translates into export subsidies and restrictions to market access. As a result, farmers in the François Bourguignon is senior vice president and chief economist at the World Bank. Pierre Jacquet is deputy director of the French Institute of International Relations (IFRI) and professor of international economics at the Ecole Nationale des Ponts et Chaussées. Annual World Bank Conference on Development Economics—Europe 2004 © 2007 The International Bank for Reconstruction and Development/The World Bank 1 2 | FRANÇOIS BOURGUIGNON AND PIERRE JACQUET developing countries face high trade barriers and are undercut in global markets. The World Trade Organization (WTO) rules provide poor countries with limited protec- tion against Northern agricultural subsidies. Although industrial countries agreed to cut support to agriculture, Watkins claims that they have consistently violated the spirit of that agreement by resorting to a form of authorized decoupled support that in fact still increases production. The author goes as far as to suggest that even forms of support defi ned as nondistorting or “decoupled” eventually have an impact on production and include implicit export subsidies. He therefore recommends that the Doha Round should prohibit all direct and indirect export subsidies and accelerate market opening in industrial countries. Incidentally, Watkins’ strong criticism chal- lenges one of the key features of the EU thinking on CAP reform, namely the use of forms of decoupled support, including “multifunctional” payments to farmers in exchange for land maintenance and environmental protection. Chapter 2 focuses on a different kind of barrier. Dealing with the political econ- omy of migration fl ows, it discusses whether globalization might once again go into reverse because of attitudes regarding international migration. In their paper, Kevin O’Rourke and Richard Sinnott show how fears that infl ows of unskilled workers would increase inequality led to the erection of immigration barriers in the New World in the late nineteenth century. While noneconomic factors do not appear to have played an independent explanatory role in such a setback to globalization, the authors’ statistical analysis of individual voter attitudes toward immigration in the late twentieth century suggest that nationalism or chauvinism nowadays are also associated with more hostile attitudes toward immigrants. In his comments, Devesh Kapur questions the authors’ description of the interplay between economic and noneconomic factors to explain hostility toward immigrants and is not convinced by their conclusion about the relative importance of economic factors in the nineteenth