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(V7 12/12 09:29) UNU/J J-9746 Kohli PMU: WSL 10/10 AC: WSL 7/11/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. IFC IFC_P (IFC) States, markets, and just growth (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. i) (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. ii) States, markets, and just growth: Development in the twenty-first century Edited by Atul Kohli, Chung-in Moon, and George Sørensen United Nations a University Press TOKYO u NEW YORK u PARIS (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. iii) ( The United Nations University, 2003 The views expressed in this publication are those of the authors and do not necessarily reflect the views of the United Nations University. United Nations University Press The United Nations University, 53-70, Jingumae 5-chome, Shibuya-ku, Tokyo, 150-8925, Japan Tel: þ81-3-3499-2811 Fax: þ81-3-3406-7345 E-mail: [email protected] (general enquiries): [email protected] http://www.unu.edu United Nations University Office in North America 2 United Nations Plaza, Room DC2-2062, New York, NY 10017, USA Tel: þ1-212-963-6387 Fax: þ1-212-371-9454 E-mail: [email protected] United Nations University Press is the publishing division of the United Nations University. Cover design by Jeon-Marie Antenen Printed in the United States of America UNUP-1076 ISBN 92-808-1076-6 Library of Congress Cataloging-in-Publication Data States, markets and just growth : development in the twenty-first century / edited by Atul Kohli, Chung-in Moon, and George Sørensen. p. cm. Includes bibliographical references and index. ISBN 92-808-1076-6 1. Developing countries—Economic conditions. I. Kohli, Atul. II. Moon, Chung-in. III. Sørensen, George. HC59.7 .S7585 2003 330.917204—dc21 2002154101 (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. iv) Contents Listoftablesandfigures............................................. vii Noteonmeasurements............................................... ix Introduction. ....................................................... 1 Atul Kohli Globalization, democracy, and just growth: Some emerging general concerns .................................................. 7 1 Globalization and liberalization: The impact on developing countries . ....................................................... 9 Barbara Stallings 2 Democracyanddevelopment:Trendsandprospects............ 39 Atul Kohli 3 Meetingthechallengeofpovertyandinequality................. 64 Mick Moore and Howard White Regional perspectives ................................................ 95 4 Latin America in the global economy: Macroeconomic policy, socialwelfare,andpoliticaldemocracy........................... 97 Robert R. Kaufman v (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. v) vi CONTENTS 5 East Asia: Development challenges in the twenty-first century . 127 Yun-han Chu 6 States, markets, and the limits of equitable growth: The Middle EasternNICsincomparativeperspective........................ 164 Ziya O¨ nis¸ 7 Democracy,growth,andpovertyinIndia........................ 193 Atul Kohli and Rani D. Mullen 8 Pragmatic neo-liberalism and just development in Africa . 227 Dickson Eyoh and Richard Sandbrook Conclusion:Theprospectsforjustgrowth.......................... 258 Chung-in Moon and Georg Sørensen Acronyms............................................................. 277 Listofcontributors................................................... 279 Index.................................................................. 283 (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. vi) List of tables and figures Table 1.1 Developing-country share of world trade and capital flows,1980–1998........................................ 11 Table 1.2 Net long-term resource flows and net transfers to developing countries, 1970–2000. ................. 15 Table 1.3 Short-term versus long-term finance to developing countries, 1991–2000. ............................... 16 Table 1.4 Composition of net long-term finance to developing countries, 1970–2000. ............................... 17 Table 1.5 Regional patterns of net long-term capital flows to developing countries, 1970–2000. ................. 18 Table 1.6 Net short-term capital flows during recent financial crises..................................................... 24 Table 1.7 Percentage share of long-term capital flows to developing countries by region, 1970–2000 . .......... 25 Table 1.8 Net concessional flows to developing countries, 1990– 2000. ................................................ 27 Table 2.1 Annual GDP growth in major developing countries withatleast10yearsofdemocracy.................... 60 Table 3.1 Annual rate of economic growth required to reduce the number of poor (assuming distribution-neutral growth).................................................. 71 Table 3.2 Inequality (Gini coefficient) by region, 1960s–1990s. 71 Table3.3 Incomepovertybyregion.............................. 74 vii (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. vii) viii LIST OF TABLES AND FIGURES Table 3.4 Prevalence of undernourishment in developing countries................................................. 75 Table 3.5 Distribution of countries according to poverty- reduction performance and degree of democracy. 82 Table 3.6 Subjective rating of PPA influence on policy.......... 87 Table 4.1 Net private capital flows and stock-market capitalization,1990–1998............................... 102 Table 4.2 Index of market reform in Latin America, 1970–1995 103 Table 4.3 Growth in GDP and GDP per capita, 1990–1994 and 1995–1999 . ...................................... 104 Table 4.4 Social expenditures in Latin America, 1990/1991– 1996/1997................................................ 111 Table 5.1 Economic statistics of selected East Asian developing economies . ...................................... 130 Table 6.1 Middle Eastern NICs: Growth performance, per capita incomes, population size, and manufactured exports................................................... 167 Table 6.2 Middle Eastern NICs in comparative perspective based on real GDP per capita, Human Development Index,andGinicoefficients ............................ 168 Table6.3 IncomeinequalityinMiddleEasternNICs............ 170 Table 6.4 Export and foreign trade performance of the Middle Eastern NICs in comparative perspective (1997) . 175 Table 7.1 Some basic growth data, 1950–2000 . ................. 206 Table7.2 Patternsofcapitalformation,1980–2000.............. 213 Table 8.1 Africa: Basic macroeconomic indicators, 1965–1996. 235 Figure 3.1 Relationship between income and human development............................................. 68 Figure 3.2 Virtuous and vicious circles in economic growth and humandevelopment.................................... 69 Figure 3.3 Proportion of children under 5 years of age who are undernourished . ...................................... 75 Figure 3.4 Social indicators improve with income – but Africa underperforms (scatter plot of life expectancy against incomepercapita)...................................... 76 Figure3.5 Numberofpeoplebelowthepovertyline............. 80 Figure 6.1 Domestic-savings performance of the Middle Eastern NICsincomparativeperspective....................... 173 Figure 6.2 FDI performance of the Middle Eastern NICs in comparativeperspective................................ 174 Figure8.1 Pragmaticneo-liberaldevelopmentstrategy .......... 230 (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. viii) Note on measurements In this volume: 1 billion ¼ 1,000 million 1 trillion ¼ 1,000 billion 1$ ¼ 1 US dollar ix (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. ix) (V7 12/12 09:30) UNU/J J-9746 Kohli AC: WSL 7/11/02 AC2: WSL 9/12/02 (UNU10s) (156Â235 mm) TimesL (.01).3.04.05 pp. i–x FM_P (p. x) Introduction Atul Kohli Third world countries enter the twenty-first century with four to five decades of experience along a variety of developmental pathways. Al- though much has been achieved, the results have also been sobering. Long gone are the heady days of anticolonial nationalism and of hopes of the ‘‘South’’