Blockchain Papers

Winston Moore, Jeremy Stephen

No abstract is available for this record.

Vrajlal K. Sapovadia

No abstract is available for this record.

falah Hassan Thuwaini

No abstract is available for this record.

C. P. Chandrasekhar

Conceptual discussions on development alternatives often tend to swing between extremes. This is true, for example, when the discussion centers on inward versus outward oriented strategies, open versus regulated capital accounts or centralized versus decentralized decision-making. Such ‘extremism’ affects actual decision-making as well. But more often than not, ground realities and/or pragmatism induced by circumstances forces policy to lag behind advocates of change when economic transitions occur. Moreover, institutions and policy instruments that are seen as typical of one kind of regime often persist, even if in differentiated or changed form and serving different objectives, when the policy environment varies or changes. But the element of similarity or continuity is substantially different across geographies and time. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Ashima Goyal

After experiencing stagnation for much of the post-independence period, India has shown considerable dynamism in processes and outcomes since the mid-eighties. The post-reform Indian Economy has defied established economic patterns and in the process created a few paradoxes. This book aims to identify policies, institutions and incentives that have worked, and constraints that have emerged in India's growth prospects. More than underdevelopment, the book analyses the bottlenecks that emerge as change occurs, to minimize the chances of being trapped into the dated habits of thought. It takes opportunity from rapidly transforming Indian economy to analyse out-of-equilibrium behaviour and understand the dynamics of non-conventional growth path. Contributors to this volume - Aradhna Aggarwal is Senior Fellow, National Council of Applied Economic Research, New Delhi; Rukmini Banerjee is at ASER Centre and Pratham, New Delhi, India; Sanjay Banerji is Professor at University of Nottingham, United Kingdom; Laveesh Bhandari is Head of Indicus Analytics; Rekha Bhangaonkar is Research Associate at School of Management, IIT-Bombay; Rajesh Chakrabarti is Professor, Indian School of Business, Mohali Campus, India; Romar Correa is Reserve Bank of India Professor of Monetary Economics at the University of Mumbai; Ashwini Deshpande is Professor, Delhi School of Economics, Delhi; Mahendra Dev is Director (Vice Chancellor) at Indira Gandhi Institute of Development Research; Meghna Dutta is a doctoral research scholar in economics at the Centre for Studies in Social Sciences, Calcutta; Krishna Gangopadhyay is a freelance economist based in Delhi; Ashima Goyal is Professor at IGIDR, has published widely on institutional and open economy macroeconomics, international finance and governance and has participated in research projects with ADB, DEA-GOI, GDN, RBI, UN ESCAP and WB; Raghabendra Jha (PhD Columbia, FWIF) is Rajiv Gandhi Chair Professor of Economics and Executive Director at Australia South Asia Research Centre, Australian National University; Shikha Jha is Principal Economist at Asian Development Bank, Philippines; Pram Jit is lecturer at Delhi School of Economics, Delhi, India; K.J. Joseph is at Centre for Development Studies, Thiruvananthapuram, India; Kale Sumita is Chief Economist at Indicus Analytics, New Delhi; K. Kanagasabapathy is Director, EPW Research Foundation, Mumbai; Saibal Kar is Faculty of Economics at the Centre for Studies in Social; Renu Kohli is Lead Economist, DEA-ICRIER Research Programme on G20, New Delhi; Kiran Kumar is ICSSR Doctoral Fellow, Centre for Development Studies, Thiruvananthapuram, Kerala, India; Nagesh Kumar is Chief Economist of the Economic and Social Commission for Asia; Sushanta Mallick is Professor at Queen Mary University of London, London; Sriit Mishra is Associate Professor at IGIDR; Arup Mitra is Professor of Economics at the Institute of Economic Growth, Delhi; Deepak Mohanty is Executive Director, Reserve Bank of India, Mumbai, India; Rahul Mukherji is Associate Professor in the South Asian Studies Programme at the National University of Singapore; Rupayan Pal is Associate Professor, IGIDR, Mumbai, India; Shruti Pandey is Research Officer with EPW Research Foundation, Mumbai; Vijaylaxmi Pandey is Associate Professor at Indira Gandhi Institute of Development Research; Abhay Pethe is Chair Professor at the Vibhooti Shukla Centre of Urban Economics and Regional Development, Department of Economics, University of Mumbai, Mumbai; Rohit Prasad is Associate Professor of Economics at MDI Gurgaon; T.R. Raghunandan currently advises state governments, international organizations, NGOs, and research institutions on decentralized public governance and anti-corruption; A.V. Raja is Professor at University of Hyderabad, India; T.T. Rammohan is Professor of Finance and Economics at IIM Ahmedabad; Bandi Ram Prasad is President, Financial Technologies Knowledge Management Company Limited, Mumbai, India; Francis X. Rathinam is Senior Fellow at Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India; Bibhas Saha is Senior Lecturer at the University of East Anglia, England; Jayati Sarkar is Professor at the Indira Gandhi Institute of Development Research, Mumbai, India. She is the editor of the Journal of Interdisciplinary Economics; Subrata Sarkar is Professor at the Indira Gandhi Institute of Development Research (IGIDR), Mumbai, India; Gita Sen is Professor of Public Policy at the Indian Institute of Management Bangalore; Anurag Sharma is Senior Research Fellow in Faculty of Business and Economics, Monash University, Australia; Parthasarathi Shome is Adviser to the Finance Minister of India; Soumyen Sikdar is currently Professor of Economics at IIM Calcutta; Ram Singh is Professor, Delhi School of Economics, Delhi, India; Siddharth Sinha is Professor, Indian Institute of Management Ahmedabad, India; P.V. Srinivasan is Evaluation Specialist at the Asian Development Bank; S. Sriraman is Walchand Hirachand Professor of Transport Economics, Department of Economics, University of Mumbai; Vaidehi Tandel is a PhD scholar at the Department of Economics, University of Mumbai; Wilima Wadhwa is at ASER Centre, New Delhi, India and University of California, Irvine.

Cameron Harwick

Though Bitcoin currently enjoys a healthy niche, the aspirations of many in the project are grander: to supplant the existing regime of fiat currencies with cryptocurrencies, and to do so outside of normal political channels. Its primary practical obstacle is its purchasing power volatility, arising from a rigid money stock in the face of wide swings in demand. Nevertheless, the historical example of gold, another (much more successful) money commodity with a more or less rigid supply, illuminates the institutional prerequisites for purchasing power stability, economic efficiency, and sustained growth – namely a market of financial intermediaries whose liabilities denominated in the base money themselves circulate as media of exchange. This paper discusses potential benefits and hurdles to establishing financial intermediation in cryptocurrency, as well as the possibility of managing the money supply to create a stable purchasing power cryptocurrency without the need for intermediation at all. Such schemes ultimately require an existing market of intermediaries in order to provide any benefits, the emergence of which governments are for the moment well-positioned to prevent.

Meilė Jasienė, Arvydas Paškevičius, Ieva Astrauskaitė

Searching for alternative source of bank financing, the view on capital market is taken. Recent research on capital market issues are arranged into four dimensions: theory and assumptions of efficient capital market, government’s role in it, other distortions and global interrelatedness. Main investigations are decentralized and visualized in “theoretical eight” model. Conclusions made on the diversity of interpretation of market efficiency, strongly expressed demand of information symmetry, soft actions of governments and the value of foreign performance in domestic markets. Furthermore, new approach to the classification of countries by their maturity in capital market is argued. The state of art of 2009-2012 of bond market and government debt is briefly described.

Nicholas A. Plassaras

This Comment examines the potentially destabilizing effects of emerging digital currencies on the international foreign currency exchange market. Specifically, it examines "Bitcoin," a decentralized, partially anonymous, and largely unregulated digital currency that has become particularly popular in the last few years. This Comment argues that the International Monetary Fund, the institution responsible for coordinating the stability of foreign exchange rates, is ill-equipped to handle the widespread use of digital currencies in the foreign currency exchange market It highlights the inability of the Fund to intervene in the event of a speculative attack on a currency by Bitcoin users. This Comment concludes by suggesting two interpretations of the Fund's incorporating document, the Articles of Agreement, that would allow it to intervene in the event of such an attack.

Conor Desmond

No abstract is available for this record.

Claire Barraud

Cette thèse cherche à savoir si la méthode décentralisée, officiellement mise en avant dans la gestion des crises de la dette souveraine depuis leur origine, est non seulement réalisable, mais également efficace en termes de répartition équitable du fardeau de la dette. Nous définissons en effet un processus de restructuration efficace comme une procédure de courte durée (inférieure à un an) et qui respecte les besoins des deux parties prenantes au contrat. Si du côté des créanciers, la décote ne doit pas être abusive, du côté du débiteur, la dette doit redevenir soutenable, au sens à la fois économique et social du terme. Le terrain d'analyse des processus de renégociation de la dette se concentre exclusivement sur les économies d'Amérique Latine, dans la mesure où elles représentent les débiteurs ayant enregistré le plus grand nombre de défauts au cours de l'histoire. À travers une méthode pluridisciplinaire, nous défendons finalement la thèse selon laquelle l'échec des différents processus de restructuration est directement subordonné à l'iniquité du partage du fardeau de la dette, laquelle fait suite à un déséquilibre des pouvoirs de négociation inhérente au cadre de gestion décentralisée. Notre posture macroéconomique et notre démarche inductive induisent un cadre d'analyse socio-économique, lequel fait appel à un approfondissement historique, en termes d'économie politique, mais également à une étude basée sur la psychologie sociale. La thèse est structurée autour de deux parties, elles-mêmes subdivisées en deux chapitres. La première partie s'attache à comprendre les origines et les modalités de prévention et de gestion des crises, ainsi que leurs échecs. Elle conjugue de fait l'observation empirique et les soubassements théoriques de la décentralisation. De fait, le premier chapitre fait état, au vu de la double responsabilité à l'œuvre dans le déclenchement et l'enlisement dans la crise, de l'échec de la méthode décentralisée sur le long terme. En effet, non seulement la décentralisation apparaît inapplicable, puisqu'une tierce partie est systématiquement contrainte d'intervenir, mais elle ne permet pas non de plus de répartir équitablement les coûts de la crise. Le second chapitre cherche consécutivement à comprendre pourquoi ce processus de restructuration est néanmoins maintenu. L'économie politique de la décentralisation montre alors que le choix entre la régulation et le « laissez-faire » ne tient pas tant à des critères d'efficacité économique qu'à des considérations idéologiques et politiques. La deuxième partie de cette thèse propose symétriquement des pistes de réflexion afin de pallier les principaux écueils relevés lors des différents épisodes de défaut et de restructuration. Ainsi, si le troisième chapitre répond au second, le quatrième fait écho au premier. En effet, le troisième chapitre montre que la décentralisation ne peut aboutir en raison non seulement de ses écueils techniques, mais surtout de la nature des deux parties au contrat. L'immunité souveraine ayant été relativisée dans les deux premiers chapitres, il s'agit ici d'analyser le fonctionnement des marchés selon une méthode alternative au concept d'efficience. C'est la raison pour laquelle nous faisons appel aux préceptes de Keynes (1936) et de son analyse en termes psychosociaux, que nous approfondissons au travers du courant de la finance comportementale. Une telle étude révèle ainsi l'incapacité des créanciers à s'organiser de bonne foi, laquelle représente pourtant la condition sine qua non de la réalisation et de l'efficacité de la méthode décentralisée. Par conséquent, le dernier chapitre de ce travail conclue sur la nécessité d'un revirement en faveur d'une approche plus centralisée, laquelle inclut une tierce partie neutre, compétente et institutionnalisée.

Claudia Dziobek, Miguel Alves, Majdeline El Rayess, Carlos Gutierrez Mangas · 5 authors

A useful but little known feature of the IMF’s Government Finance Statistics Yearbook (GFSY) is the information on the structure of governments. Institutional tables, included in the GFSY, provide detail on the central, state, and local levels of governments, social security, and extrabudgetary units. We refer to the main levels of government as GL1, GL2, and GL3 in ascending order of institutional coverage. We present maps of the various levels of government for 74 countries to illustrate the usefulness of this database and make it more accessible to users. The maps provide information about how centralized or decentralized government finances and employment are and their size relative to the overall economy. Government map data facilitate the monitoring of fiscal policy and fiscal rules.

Saime Kayam

In this paper, I consider two heterogeneous economies that engage in a currency union. The small economy adopts the currency of the large and is highly dependent on its wealthier partner for trade. The effects of a currency union, deficit financing and institutional restraints on inflation are analyzed in a dual economy with different wage-setting mechanisms. In the model, Northern Cyprus is the small economy and Turkey, being the only country that acknowledges it as an independent state is its larger partner. Features of the labour markets determine the wages. We make a conjecture that wage determination in Northern Cyprus (NC) is conducted with reference to centralized-bargaining and that decentralized bargaining sets the wages in Turkey (TR). Hence, the differences in wage-setting procedures cause a dual labour market. In order to incorporate monetary dependence into the analysis, we let the Turkish central bank to decide on the economic policy measures, in this case the inflation rate and unemployment. The institutional restraints such as economic sanctions increase the inflexibility in the NC and cause shocks to affect the economy more. In order to compensate for the losses that might be endured by the government in NC, TR finances the budget deficit of NC. Therefore, TR government needs to consider the burden of this financing issue.

Iraj Saniee, Ulrich Barth

Man-made self-organizing systems date back to antiquity; for example, elaborate water clocks found from Alexandria (Ctesibius's clepsydra) to Seoul (King Sejong's Chagyongnu) were designed to keep constant rates or strike at regular time intervals without human adjustment. More modern examples include Watt's centrifugal governor, Black's negative feedback amplifier, and Nyquist's stability test, which enabled engineered systems to stabilize themselves. These and numerous innovations in control theory and engineering optimization have contributed much to modern communications technology. But there is a need for advances in both methods and applications beyond what has been achieved in the precise settings of mechanical, electronic, and optical switching and transmission towards the self-management and control of large-scale systems with many interacting and semi-autonomous components. Natural phenomena may be a guide for us, a model for self-organized decentralized systems. Spontaneous magnetization, crystallization, lasers, and superconductivity are examples of structural self-organization in physics where cohesive behavior emerges from initial disorder. In self-assembly and auto-catalytic networks in chemistry, molecules organize themselves in well-ordered arrangements without external action, and in biology, we observe highly complex coordinated action as in the folding of proteins, homeostasis, and flocking.

Samuel Penkar, Prakash Deo

INTRODUCTION The expectation is that in the next two decades, China and India will turn into super-powers and industrialized nations. The analysis in this paper will help in understanding how each country's corporate setup works and will help in evaluating the investment potential in the buying of stocks of firms of each country in their various industry sectors. This study contains a literature review followed by the results of the study. The study utilizes a three step top to bottom analysis; macroeconomic analysis followed by industry analysis and lastly with company analysis. The various tables and figures are attached to the end of the article. LITERATURE REVIEW Hu and Honghua (2002) compare key measures of strengths between China and India. These measures include GDP, ratio of long-term economic growth expectation in the world's total, average years of education, and the ratio of exported goods and services in the world's total. The authors conclude that China is far ahead of India. Husain and Harris (2009) compare and contrast broader aspects of the political, economic, and sociocultural climates within the two countries. Kalish (2007) and Zhao (2007) draw similar conclusions based on detailed comparisons and the risks and opportunities of doing business in each country. Wu (2007) compares the service sector growth in China and India and analyzes the determinants of growth in services with an econometric model. He finds that role of services in both China and India has been rising, with China starting from a lower base. Srinivasan's (2004) exhaustive study on comparison of economic performance between China and India identifies key differences and similarities, the underlying causes of success and failures and concludes that China and India have a lot to gain, both from trading with each other and cooperating in the WTO. Maddison (2002) reveals that although India forged ahead of China until the outbreak of the First World War, since 1980, China has forged much farther ahead. Rwaski (2001), Srinivasan and Bardhan (1974), Deato and Kozel (2003), Park and Wang (2001) discuss the sources of estimates of economic performance in China and India, and their frailties. Bahl and Martinez-Vazquez (2003) argue that China's governance is much decentralized than indicated by the government and therefore, it is hard to predict the effect of greater decentralization on China's future fiscal health. Battacharya and Patel (2002) note that the Indian economy suffers from a large and increasing role of the government. Bosworth and Collins (2007) point out the weak and strong performances of India and China in various sectors and conclude that both economies should be able to sustain their growth. While a wealth of literature exists on evaluation of these two countries from a macroeconomic perspective, there exists a gap in the finance literature, specifically, a perspective for potential investors in trying to determine where to place their investment funds. In this article, we examine the valuation issues that an investor needs to consider when investing in china and India. By and large the finance literature advocates a three-step (also known as top-down) valuation process. The first step includes evaluation of general macro-economic factors which influence a country's economy. These factors include fiscal and monetary policy of countries, political conditions. The second step involves identification and assessments of an industry environment in a country's economy. It includes labor skills and relations, capital-labor and business cycle-industry inter-relationships, demographics, scope of the industry and its competitive environment to gauge business risk. The final steps comprise of individual firm analysis in an industry. We use this three-step framework to evaluate and compare the valuation environment in China and India. THE ECONOMIES We deploy Goldman Sachs version of the three-step process, which includes examination of GDP as the key component of a country's economy. …

Hui Zhan

By comparing the development of some typical nation's intergovernmental financial relationship,the decentralized states are on the way to centralization,while the centralized states are going to the opposite.The factors include the political system,the process of industrialization and the growth of market.China's intergovernmental financial relationship should be based on our political system,modest centralization and modest decentralization and asymmetric allocation of powers and responsibilities,to ensure the dominance status of the central finance and full exercise of the local governments.

Desislava Stoilova

This study is intended to examine the influence of the current worldwide financial and economic crisis on financial decentralization process in Bulgaria and identify the answers of the central and lo-cal governments to the critical situation in the context of specific conditions of the national economy and the stage of financial decentralization reform. Analysis is focused on dynamics of the main mac-roeconomic indicators, based on fact figures for the period 1990–2009 and forecast for the period 2010-2011, and its impact on the public finance. The most important actions, taken by the national government to consolidate the crisis are described and evaluated on the base of their effects on the lo-cal finance. A comparison is made between the loss of Bulgarian economy in the beginning of transition (1991-1993), during the financial crisis in 1996-1997, caused by credit crunch and series of bank bankruptcies, and the current financial and economic crisis. Finally, some conclusions and pol-icy recommendations are outlined, intended to improve crisis management in Bulgaria both on the national and local level.

Anton Korinek

No abstract is available for this record.

Masahiro Kawai, Peter A. Petri, Elif Şişli‐Ciamarra

The global economic crisis refocused attention on the governance of international economic institutions (IEIs). This study uses the analytical framework of club theory to highlight structural obstacles to reform in international macroeconomic management, development finance, trade, and financial stability. The authors argue that reforms currently being discussed - for example, in voting power in the International Monetary Fund and the World Bank - are important, but not sufficient to make IEIs adaptable to the demands of a rapidly changing world economy. The authors propose transforming IEIs by shifting more decisions from the global to sub-global level. Partially decentralized decision making already exists in some policy areas (for example in regional development banks) and could expand and improve the provision of international public goods.

María J. Nieto, Garry J. Schinasi

European finance is becoming increasingly cross-border, while the European architecture for safeguarding financial stability - including decision-making processes for providing financial-stability public goods - have remained decentralized with some explicit mechanisms for coordination across countries. Policy makers are aware of the limitations of the existing institutional setting, but opinions on how to proceed, including on burden sharing, are lining up along national and regional political lines with less attention paid to European needs. This paper applies the 'economics of alliances' to examine these European policy challenges. The paper establishes benchmarks for assessing the ability of Europe's existing institutional architecture to efficiently allocate resources to safeguard the EU financial system against systemic threats to stability, such as the insolvency of a pan European bank.

Jason A. Kirk

Abstract Jason A. Kirk is a lecturer in the International Relations Program at the University of Pennsylvania. Notes The author wishes to thank the following for their comments on earlier versions of this essay: Sunila Kale, Peter Kingstone, and four anonymous reviewers and the editorial staff at India Review. This essay draws upon research conducted for a dissertation on subnational World Bank lending and the federal politics of economic reform in India. The analysis has benefited greatly from feedback from a number of people on various aspects of the larger project, including Tom Callaghy, Rudy Sil, Rahul Mukherji, Francine Frankel, John Echeverri-Gent, Tulia Falleti, and Douglas Verney. Responsibility for any factual or analytical errors rests with the author. 1. Author's interview with Joëlle Chassard, World Bank country coordinator for India, July 17, 2002, Washington, DC. 2. In India, the Bank's state adjustment loans legally specify the Government of India as "borrower," with the relevant state as "beneficiary" to receive the rupee equivalent of the Bank's dollar-denominated loans. This is a country-specific arrangement reflecting the Indian central government's preference for control over foreign loans to states. In contrast, in Brazil, where state governments enjoy more liberal borrowing privileges, they can be the "borrower" on World Bank loans so long as the federal government provides a sovereign guarantee (required by the Bank's Articles of Agreement). Article 293, Clause Three of the Constitution of India asserts the center's control over states' international borrowing: "A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government." Since all states have outstanding debt to the center, in practice this clause means they must seek its express permission to borrow from outside the territory of India. 3. Author's email correspondence with James Manor, Professor, Institute of Development Studies, Sussex, UK, September 16, 2002. 4. Author's interview with Joëlle Chassard. 5. Author's interview with Edwin Lim, World Bank country director for India (1996–2002), July 14, 2003, Osterville, Mass. 6. Caste politics in AP are complex and cannot be adequately addressed here. For detailed analyses, see Rama S. Melkote, "Andhra Pradesh: The Reform State and its Dilemmas," paper presented at a workshop on State Politics in India in the 1990s: Political Mobilization and Political Competition, organized by the Developing Countries Research Centre, University of Delhi, and London School of Economics, December 16–17, 2004, New Delhi; Atul Kohli, "The NTR Phenomenon in Andhra Pradesh: Political Change in a South Indian State," Asian Survey Vol. 28, No. 10 (October 1988), pp. 991–1017; and K. C. Suri, "Democratic Process and Electoral Politics in Andhra Pradesh," Overseas Development Institute Working Paper No. 180 (September 2002). 7. N. Chandrababu Naidu with Sevanti Ninan, PlainSpeaking (New Delhi: Viking/Penguin Books India, 2000), p. 17. 8. This poll has been cited in a number of sources, and referred to by Naidu himself in public speeches. See for example Lloyd I. Rudolph and Susanne Hoeber Rudolph, "Iconisation of Chandrababu: Sharing Sovereignty in India's Federal Market Economy," Economic and Political Weekly, May 5–11, 2001. 9. Karli Srinivasulu, "Regime Change and Shifting Social Bases: The Telugu Desam Party in the 12th General Election," in Ramashray Roy and Paul Wallace, eds., Indian Politics and the 1998 Election (Thousand Oaks, CA: Sage Publications, 1999), p. 210. 10. For a more detailed discussion of Naidu's conversion, see Sumantra Sen and Francine Frankel, eds., "Andhra Pradesh's Long March Towards 2020: Electoral Detours in a Developmentalist State," Doing Business in India: Political, Social and Cultural Overview (Philadelphia: Center for the Advanced Study of India, University of Pennsylvania, Spring 2005). The author provided research assistance and served as associate editor for this publication. 11. Author's interview with Duvurri Subbarao, finance secretary, Andhra Pradesh (1993–98), September 26, 2002, Washington, DC. 12. Sen and Frankel, eds., "Andhra Pradesh's Long March Towards 2020," p. 4. For a more detailed discussion of the Malaysian model, see Toby Huff, "Malaysia's Multimedia Super Corridor and its First Crisis of Confidence," Asian Journal of Social Science Vol. 30, No. 2 (June 2002), pp. 248–70. 13. The Vision 2020 document asserts that "knowledge-led growth" in fields such as IT services, biotech, and pharmaceuticals – along with other select "growth engine" sectors such as agro-industry, mining, and tourism – would by 2020 permit the state to achieve "a level of development that [would] provide its people tremendous opportunities to achieve prosperity and wellbeing and enjoy a high quality of life." See Government of Andhra Pradesh, Andhra Pradesh: Vision 2020 (Hyderabad: State Secretariat, January 1999). 14. Author's interview with Edwin Lim. 15. World Bank, India – Andhra Pradesh: Agenda for Economic Reforms, January 16, 1997. 16. Author's interview with Edwin Lim. 17. National Sample Survey data, cited in C. P. Chandrasekhar and Jayati Ghosh, "The Continuing Possibilities of Land Reform," http://www.macroscan.com/the/food/nov04/fod231104Land_Reform.htm. 18. K. Srinivas Reddy, "Extremist Resurgence," Frontline: India's National Magazine, October 11–24, 2003. The term Naxalite comes from the radical movement's origins in Naxalbari, West Bengal, in the late 1960s. 19. See for example, World Bank, "World Bank to Assist Human Development Needs in India's Lead Reforming State," News Release No. 98/1850/SAS, June 25, 1998. 20. "Booting Up in Andhra Pradesh: The State Election to Watch in India," The Economist, September 11, 1999; emphasis added. 21. Loraine Kennedy, "The Political Determinants of Reform Packaging: Contrasting Responses to Economic Liberalisation in Andhra Pradesh and Tamil Nadu," author's manuscript, p. 42. This paper was published as a chapter in Rob Jenkins, ed., Regional Reflections: Comparing Politics across India's States (New Delhi: Oxford University Press, 2004). The World Bank is only a minor actor in Kennedy's analysis of AP (and it did not have a focus state relationship with Tamil Nadu during the period she describes), but she suggests that its loans "have contributed to locking the state government into [its] pro-reform stance by creating constraints, in the form of conditionalities." In actual practice, the Bank was more lenient in its enforcement of conditionalities in AP than in Karnataka, as the analysis here shows. 22. "He Knows His Friends, Foes, and Priorities," The Economic Times of India, October 8, 1999. 23. This argument is also advanced in James Manor, "Explaining Political Trajectories in Andhra Pradesh and Karnataka," in Jenkins, ed., Regional Reflections: Comparing Politics across India's States. 24. Author's interview with Montek Singh Ahluwalia, Director, Independent Evaluations Office, International Monetary Fund, July 2002, Washington, D.C. 25. Celia W. Dugger, "Even the Poor Pay Heed to the Esoterica of India's Riches," The New York Times, September 10, 1999. 26. Though under "first-past-the-post" rules, the vote shares translated into 91 seats for Congress, 180 for the TDP, and 12 for the BJP (of the Assembly's 294 seats). 27. Manor, "Explaining Political Trajectories in Andhra Pradesh and Karnataka"; Suri, "Democratic Politics and Electoral Process in Andhra Pradesh." 28. This point is made in V. Sridhar, "The Neo-liberal Consensus," Frontline: India's NationalMagazine, April 23, 2004. 29. See for example Jos Mooij, "Smart Governance? Politics and the Policy Process in Andhra Pradesh, India," Overseas Development Institute Working Paper No. 228 (October 2003). 30. World Bank, "India: Power Sector Reform in Andhra Pradesh," Participation in Macroeconomic Policies: Case Studies, http://www.worldbank.org/participation/web/webfiles/indiapower.htm. 31. Rajen Harshe, "Stakeholder Participation in Andhra Pradesh Reform Process," draft report submitted to the World Bank as an internal document (2001); shared with the author by Rajen Harshe, August 2002. 32. World Bank, "India: Power Sector Reform in Andhra Pradesh." 33. R. J. Rajendra Prasad, "WB Chief's Remarks General: Gov't.," The Hindu, September 6, 2000, http://www.hinduonnet.com. 34. Syed Amin Jafri, "AP House Rocked by World Bank Official's Statement," Rediff.Com, September 5, 2000, http://www.rediff.com. 35. The power minister, K. Subbarayudu, did not score high marks for public relations when he retorted that copies of the documents were available on the Bank's website, since this defense only invited an opposition rejoinder about the government's technological elitism and lack of concern toward poor citizens. 36. Remarks by BJP floor leader Indrasena Reddy as reported in V. Sridhar, "Brutal Crackdown," Frontline: India's National Magazine, September 16–29, 2000. 37. "Riding Two Horses" (editorial), The Hindu, June 4, 2000. 38. Lionel Messias, "World Bank Praise for AP," Gulf News, November 10, 2000. 39. Even in 2000, before the drought, AP had accounted for 385 of 480 cases reported across India. Though analysts attribute these tragedies to multiple factors, state policies were substantially implicated in a recurring scenario: indigent and lacking access to formal credit, many of the victims had taken on large personal debts to local moneylenders in order to purchase fertilizer, pesticide, and other inputs – the prices of which, like power tariffs, increased as Naidu's government withdrew subsidies to meet its fiscal adjustment targets. 40. "Electricity Might Determine the Fate of TDP," Indo-Asian News Service, April 16, 2004. 41. Sen and Frankel, "Andhra Pradesh's Long March Towards 2020," p. 23. 42. As opposed to other factors, such as a delayed expression of public indignation at the communal violence in Gujarat in 2002, which took place on the party's watch. 43. World Bank, Unlocking Andhra Pradesh's Growth Potential: An Agenda to Achieve the Vision 2020 Growth Targets, August 2004. Accessible via http://www.worldbank.org. 44. Subhomoy Bhattacharjee, "World Bank May Cut Off State Loans," Rediff.com, August 9, 2004. 45. "Heels Over Head: YSR turn pro-World Bank," The Economic Times, May 18, 2005. 46. K. V. Kurmanath, "Pace of Reforms Has Slackened in Last One Year: World Bank," Business Line, May 4, 2005. 47. Author's interview with B. K. Bhattacharya, former Chief Secretary, Government of Karnataka, August 2002, Bangladore. 48. Parvathi Menon, "Loan as Lever," Frontline: India's National Magazine, November 19, 2004. 49. "A Blend of Reforms Needed," The Statesman, November 9, 2000; see also "India: State's 'Admirable' Plans Praised," The Hindu, November 10, 2000. 50. Parvathi Menon, "Karnataka's Agony," Frontline, August 18–31, 2001. 51. "India: Cabinet Decides against Power Tariff Hike," The Hindu, September 14, 2001. 52. "Karnataka: Subsidy Bill may Torpedo Fiscal Correction Plans," The Hindu Business Line, April 19, 2002. 53. S. L. Krishna, budget speech delivered to the State Assembly on March 21, 2002, http://www.kar.nic.in/finance/bud2002/part-a.htm. 54. Divya Sreedharan, "WB Loath to Release Funds for Reforms in Power Sector," The Hindu, May 5, 2003. Carter succeeded Edwin Lim after his retirement from the Bank in September 2002. 55. "VRS Scheme has had a Negative Impact – Study," The Hindu, December 26, 2003. 56. "Krishna May Become IT CEO Again," The Economic Times, May 17, 2004. 57. "Rs. 72.84 Cr Revenue Surplus Budget for Karnataka," The Financial Express, July 20, 2004. 58. "Control Fiscal Deficit to Ensure Rapid Progress," The Hindu, August 5, 2004. 59. Subir Roy, "'I Want to Show that Good Politics is also Good Economics'," Business Standard, August 11, 2004. 60. "World Bank Happy with Reforms Process," The Hindu, January 26, 2005. 61. Author's interview with Sumir Lal, World Bank external affairs officer, August 11, 2003, New Delhi. 62. "World Bank to Back Investment Lending in Tamil Nadu," The Hindu Business Line, May 19, 2005. 63. The basic guidelines state that states must fulfill four conditions: first, devise a medium-term fiscal framework to limit the fiscal deficit to less than 3% of GSDP and achieve a zero revenue deficit within 3–5 years; second, contain subsidies, especially in the power sector; third, raise user fees for services; and fourth, improve governance and reduce administrative costs. 64. World Bank, India: Country Assistance Strategy 2005–08 (Washington, DC: The World Bank, 2004). 65. World Bank, Assessing Aid: What Works, What Doesn't, and Why (Oxford: Oxford University Press for the World Bank, 1998). 66. On this, see for example Jonathan Rodden, "Federalism and Bailouts in Brazil," in Jonathan Rodden, Gunnar S. Eskeland, and Jennie Litvack, eds., Fiscal Decentralization and the Challenge of Hard Budget Constraints (Cambridge: The MIT Press, 2003), pp. 213–48. 67. For a review, see M. Govinda Rao, "Incentivizing Fiscal Transfers in the Indian Federation," Publius: The Journal of Federalism, Vol. 33, No. 4 (Fall 2003), pp. 43–62. 68. Lloyd I. Rudolph and Susanne Hoeber Rudolph, In Pursuit of Lakshmi: The Political Economy of the Indian State (Chicago: The University of Chicago Press, 1987), pp. 1, 13, 3.

Daniel Verdier

The previous chapter established that centralized countries registered relatively high levels of financial agglomeration. Without regulatory and legislative power, local governments in centralized countries could not – nor did they want to – stop center banks from opening a branch on every local “Main Street.” The reasoning, however, rested on an autarkic model – one without an international dimension. This chapter brings the international dimension into the picture, asking whether it ran parallel to or mitigated the process of agglomeration at work in the domestic economy. Theory and historical evidence both suggest that internationalization happened simultaneously with agglomeration, and more markedly in centralized than in decentralized countries. Consider a country with two regions – the basic model of chapter 2. Graft onto it another country with a similar structure. Allow capital to flow freely between regions of a same country but not across countries. Burden the exchange of financial products with information asymmetry so that the losses incurred are lower between two financial cores than between a given core and a foreign periphery. The rationale for this differential in asymmetric information is that nineteenth-century foreign investors had an overwhelming preference for large, central, visible assets in foreign countries – mostly government bonds – over small, peripheral, and unfamiliar ones. It is reasonable to expect from such a model that the core–periphery pattern within a country and the degree of internationalization of the financial sector in that country would be mutually reinforcing.

Fang Wang

China's WTO Entry will bring both opportunity and challenge to Chinese finance. To meet the new situation, Chinese finance must find a new way of development: relax the restrictions of financial annex, cancel the system of decentralized management progressively, give energetic support to developing and improving financial medium stups, improve the circulate funds guarantee system of medium and small enterprises, encourage new financial ideas, enhance the profit ability of banks.

Uk Heo, Alexander C. Tan

South Korea and Taiwan have similar experiences as to political and economic development, i.e., rapid economic growth and democratization. However, the 1997 financial crisis experiences were quite different South Korea was hit hard by the crisis whereas Taiwan was barely touched. Why were the experiences different between South Korea and Taiwan? We argue that economic fundamentals were differential leading up to the crisis. More importantly, the differences in the pace of financial liberalization and the method that South Korea financed its growth particularly in the 1990s were much different than Taiwan's. We also argue that the differential impact of the crisis on the two countries can be attributed to the institutions of their respective political economy, decentralized vs. concentrated industrial structure, and interest group structure that helped in the creation of an autonomous state. Given the dominance of SMEs (small and medium sized enterprises) and the state's control of critical resources along with dispersed and weak interest group structures, economic technocrats in Taiwan were able to employ tough pre and post‐crisis policies to maintain Taiwan's economic viability, whereas South Korea was not able to.

Daniel Verdier

Moving Money analyses the influence of politics on financial systems. Daniel Verdier examines how information asymmetry and economies of scale over time have created a redistributional conflict between large and small banks, financial centres and their peripheries, and he discusses how governments have attempted to arbitrate this conflict. He argues that centralized states have tended to create concentrated, internationalized, market-based and specialized financial systems, whereas decentralized states have favoured dispersed, national, bank-based and, with a few exceptions, universal systems. Verdier then sets out to uncover the sources, political and economic, of cross-country variation in financial market organization, examining 15 to 20 OECD countries from 1850 onwards