Journal Issue
Finance & Development, September 1976

Book notices

International Monetary Fund. External Relations Dept.
Published Date:
September 1978
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Louis J. Walinsky (editor)

The Selected Papers of Wolf Ladejinsky: Agrarian Reform as Unfinished Business

Published for the World Bank, The Oxford University Press, New York, N.Y., U.S.A., 1977, xi + 603 pp., $22.00, $10.95 (paperback).

This volume contains the most important writings of Wolf Ladejinsky, a leading expert on agrarian reform who died in 1975. In addition to the 62 papers that have been reproduced in full, the volume contains a chronological bibliography of 142 papers by Ladejinsky.

I can think of no one who has written as fully about the need for the adjustment of land tenure systems as has Ladejinsky. From the mid-1930s until 1975, Ladejinsky devoted himself to the problems of land reform in East and South Asia, and such related factors as agrarian policy, agricultural and developmental strategy, institutional barriers such as lack of credit, shortcomings of extension work, insecurity of tenure, high population density, exorbitantly high rentals, and usury.

The selected writings are presented under the following headings: I. The Washington Years, 1935 to 1945; II. The Tokyo Years, 1945 to 1954; III. The Vietnam Years, 1955 to 1961; IV. the Ford Foundation Years, 1961 to 1964; and V. The World Bank Years, 1964 to 1975.

The first group of papers—written in Washington between 1935 and 1945—are based on the study of primary sources and the reports of agricultural attachés at United States embassies abroad.

Most of the later papers are based on La-dejinsky’s 30 years of experience in East and South Asia. They cover his field work, personal observations, and interviews with tenants, owner-operators, landlords, and landless agricultural laborers. The papers on “Land Reform” (the last of the Ford Foundation Years series) and “Agrarian Reform in India” (the first of the series written for the World Bank) are of especially high quality. Both should be read by economists concerned with the problems of landlords, tenants, and agricultural laborers.

Ladejinsky made his reputation on his contribution to the implementation of a successful land reform in Japan in 1945. The defeat of Japan in 1945 enabled General MacArthur and his staff to insist on the drafting of an effective land-reform bill and to establish the necessary Land Commissions, which were backed by the Occupation Forces and successfully implemented the land reform. During the years he spent in Japan, Vietnam, Taiwan, and India, Ladejin-sky’s expert services were frequently requested in other Asian countries, notably the Philippines, Indonesia, Nepal, and Iran, although in none of these countries was he able to duplicate the striking success that he had achieved in Japan and in Taiwan.

Land reform involves a multitude of measures, such as drastic redistribution of land, abolition of absentee land ownership, low permissible retention (low ceiling) for resident landlords, genuine security of tenure, written and registered rental contracts rather than oral contracts, low rentals for tenants, easy credit, land consolidation, and more. Each country has its own problems.

In the case of India the problems differ also from state to state. The Planning Commission can only recommend reform measures; the laws have to be written by the legislatures of the various states. The Planning Commission’s reform policies or guidelines are not binding upon the states.

In his work on these problems, Ladejinsky concentrated on learning about local situations through the inhabitants rather than the authorities. Dozens of field trips in many different countries followed the same pattern. Ladejinsky, accompanied by an interpreter and possibly an official who knew the area well, would spend usually eight to ten days in the field. He would interview the people involved in farming—the agricultural laborers, the tenant farmers, the owner-tenants, the owner-cultivators, and the landlords—as well as district and local officials, and representatives of cooperative banks and marketing agencies.

It was this intensive experience that led Ladejinsky to offer this summation of the problems involved in his work: “Agrarian reforms are difficult to attain. In most cases land redistribution or putting land securely under the control of a nonowner are acts by a government imposing upon the landowners economic and legal terms unpalatable to them. In effect, such policies if carried out are revolutionary acts (my italics) which pass property and redistribute income, political powers, and social status from one group of society to another. To the extent that legislative assemblies are still dominated by land-propertied classes, it is not difficult to see why both the enactment of appropriate legislation and its enforcement present formidable problems. It may be concluded that land reform has not only powerful economic implications but commences essentially as a political question, running head-on into a fundamental conflict of interests between the ‘haves’ and the ‘have-nots’” (p. 371).

This collection of Ladejinsky’s excellent papers will be read by students of land reform who either wish to learn how land reform was implemented in Japan and Taiwan or who want to discover the obstacles which prevented the realization of land reform in other countries. This scholarly work should find its way into the library of every agricultural and development economist.

Karl J. Pelzer, Professor Emeritus, Yale University

Robert W. Oliver

International Economic Cooperation and the World Bank

The Macmillan Press, London, England, 1975, xxii + 421 pp., $25.

Marc Nerfin (editor)

Another Development: Approaches and Strategies

The Dag Hammarskjold Foundation, Uppsala, Sweden, 1977, 265 pp., SKr 80.

These two books complement and contrast each other. Robert Oliver’s book is a major work, the definitive study of the initiation and evolution of the international governmental economic cooperation that resulted in the creation of the World Bank as a key instrument. Marc Nerfin’s book is a collection of papers on proposed new social values in rich countries, and equality, basic needs, and national economic experience in five poor countries. It is mainly important as an example of current critiques of and reform proposals for the existing systems. Both books are concerned with the problems of a period when it is clear only that major changes are necessary but it is not obvious what specifically needs to be done, and the future can still be changed by new ideas, negotiations, and politics.

Oliver’s book should be required reading for all persons concerned with international economic problems. It makes clear the genesis of most of the fundamental assumptions about international economic cooperation that we now take for granted without realizing that they were not always part of the natural order of things. For example, the very idea of permanent organized cooperation by governments in economic matters is historically quite new. As Oliver shows, at the end of World War I most government leaders could not even conceive of such an idea. In most of the interwar decade the only significant attempts to try to handle some of the economic and financial problems resulting from World War I through international cooperation were made by central banks (organizations which, we tend to forget, at that time were still privately owned). Because of the absence of cooperation, the European countries were not able to recover to the 1913 levels of production until 1925, and four years later the Great Depression began. During the Hobbesian world of the 1930s, countries trying to save themselves had no compunction in using whatever weapons of economic warfare were available—among these weapons were bilateral trade and clearing arrangements, for instance, which, as developed by Schacht for Nazi Germany, brought smaller nations under the direct economic exploitation of the larger.

The economic disasters of the 1920s and 1930s led to World War II and convinced the United States and British governments that a new international economic order (in today’s terms) had to be created and could not be left to chance. It is here that Oliver’s book and Nerfin’s book offer a striking contrast. Nerfin’s contributors neither agree on analysis nor are able to offer a pragmatic program. In the negotiations reported by Oliver, H.D. White of the U.S. Treasury and J.M. Keynes of the British Treasury were able to get agreement on an analysis of what the major international economic problems were and on what organizational and policy steps could be achieved to handle the problems.

It is worth noting that several of the international economic problems now high on the agenda for international discussion were identified by the Bretton Woods founders but had either to be put aside or the first solutions are now no longer satisfactory. For example, Oliver points out that the first drafts of the Bank’s charter specifically provided that the Bank might organize and finance two other international organizations to stabilize commodity prices and to help countries develop their mineral resources.

The Bank was named a “bank” because it was originally intended to have the potential to develop into a super-central bank through issuing its own banknotes. One of the questions, then, as now, was the voting power of the less developed countries in the international finance organizations. The battle, then, however, was whether they should have any voice at all. Keynes called this “… the absurd proposition of debtor countries being responsible for international investment.” Representation for the developing countries went through only on the stubborn insistence of the U.S. Treasury that all nations, borrowers and lenders alike, should be represented on the governing board.

This period is also fascinating in its evocation of many other issues currently in the news: the original provision that the World Bank keep its accounts in a unit other than the U.S. dollar; the original intention that the Bank, with an initial capital of $10 billion, would be empowered to lend many times that amount (this was dropped after the New York Times, among others, editorialized “… how could we be sure of loaning thirty to fifty billions around the world with any prospect of its being repaid?” (Oliver, p. 160)); the U.S. Treasury insisting, over bitter British opposition, on a salary scale that provided the Bank President with a salary three times that being received by the Secretary of the Treasury himself.

While the founders of the World Bank had to create an order that made possible an unprecedented period of world economic growth, the contributors to Nerfin’s book can base themselves on what has been accomplished and point to its inadequacies and unpleasant by-products. This is not difficult—one can point to the two thirds of mankind who still have to benefit from the spread of modern economic development, and cite the inequalities and the injustices prevalent in national and international economic orders. But then Nerfin’s contributors need to come up with practical proposals and policies and, here, rhetoric in most cases substitutes for concreteness. (Ahmed Ben Salah, however, is quite concrete: he wishes to resume the task of socializing the Tunisian economy according to the program he was following when he was ousted and arrested in 1969.)

The theme that is followed by most of Nerfin’s authors is the importance of satisfying basic needs in the developing world and creating simpler life styles in richer countries. The paper on Mexico by Cynthia Hewitt de Alcantara is, in fact, entitled: “Mexico: A Commentary on the Satisfaction of Basic Needs.” Beyond this, however, the authors begin to vary, if not contradict each other. Jacques Berthelot states that his “… study is intended to contribute to the identification of the deep roots of the crisis in the world capitalist system” (p. 90). Johann Galtung (deliberately?) disposes of Berthelot by the perceptive comment: “… the feeling of an impending crisis may be almost a defining characteristic of western civilization, one of those things that moves people into action, mobilizes new forces and for that reason contributes to the generally expansive nature of western civilization in general and western capitalism in particular” (p. 106).

Over 30 years after the creation of the postwar economic order, it seems clear that some major changes need to be made. Even the very success of that system has created problems: the rapid rates of economic growth that have benefited some nations, groups, or regions more than others have awakened these others to demand a greater share, and made age-old poverty, disease, deprivation, and insecurity now more intolerable to bear. The unevenness of changes in the relative economic and financial strengths of nations has put strains on existing arrangements, whether exchange rates or contributions and voting power in international organizations.

Nerfin’s book is a useful but hardly seminal contribution to a lasting solution of these problems, while Oliver’s book is a prerequisite to any intelligent participation in the debate.

Andrew M. Kamarck

W. M. Corden

Inflation Exchange Rates and the World Economy: Lectures on International Monetary Economics

University of Chicago Press, Chicago, III., U.S.A., 1977, 160 pp., $11.

In his newest book W.M. Corden, like the successful national government in his model, achieves several objectives simultaneously. He provides a concise yet comprehensive outline of international monetary economics for those unfamiliar with the literature, while at the same time raising a number of provocative questions of interest to specialists. He gives a convincing synthesis of the recently elaborated monetarist theory of the balance of payments with the targets-instruments approach developed in the 1950s and 1960s to analyze payments disequili-bria. Finally, he relates his model to the most important international economic issues that have arisen since 1971.

Corden’s “basic model” does not per se contain any new elements, but the analysis he develops has features of special interest. His emphasis on the effects of current account adjustment on income distribution is especially timely: he shows that downwardly rigid real wages will in all likelihood prevent elimination of a current account deficit. In incorporating the monetarist adjustment mechanism into his model, Corden shows that this mechanism is insufficient to produce adjustment if money wages are rigid downward; moreover, even if adjustment does come about via the monetary process, exchange rate policy may make the adjustment less painful. This analysis, together with the introduction of capital movements into the model, leads into a penetrating discussion of how to define properly “the balance of payments problem.”

The first of the policy issues to which Corden applies his model is the question of whether a floating exchange rate regime tends to be more inflationary than one of fixed rates. After carefully analyzing, by means of a Phillips curve model, why national rates of inflation tend to converge under fixed exchange rates, Corden concludes that “inflation-prone” countries are prone to run higher rates of inflation, and “inflation-shy” countries lower rates of inflation, under floating than under fixed exchange rates. In discussing the related issue of whether inflation has been “exported” by the United States, Corden argues that other countries could have taken measures—such as permitting appreciation of their currencies—which would have resulted in less inflation than has actually transpired.

Corden next discusses the impact of the oil price increases on the general price level, economic activity, and the volume of international liquidity. The initial terms-of-trade effect on income and output is carefully distinguished from the results of policy reactions by the non-OPEC countries. The outcome of this meticulous analysis is that the deflation of 1974—75 can only be partly explained by the initial impact of the oil prices. Corden interprets the rise in international reserves as an increase in official liquidity offset by a decrease in liquidity in the private banking sector (owing to the riskier maturity structure of its assets and liabilities).

The last topic considered is why European monetary integration has failed thus far and whether a case can still be made for it. Developing his previous analysis of inflation under fixed and flexible exchange rates, Corden shows that the higher rates of inflation and the resulting increases in differences between national inflation rates has weakened the basis for monetary integration, but that, if monetary stability were restored, monetary integration might bring the area as a whole closer to an optimum rate of inflation. He discards the “snake” and certain proposals that have been made as “pseudo-unions” which give rise to speculative capital movements rather than providing a viable basis for the coordination of financial policies.

Professor Corden is one of those economists who rarely, if ever, makes a slip, and this book is no exception. However, the conclusions he comes to based on his Phillips curve model might have to be qualified by the recognition that the inflation-unemployment trade-off is not stable over the longer run, especially not when inflation is protracted and high. Another small correction is that Robert Mundell and Arthur Laffer are not, as Corden suggests, the originators of the notion of a “ratchet effect” operating on domestic prices under floating rates: the argument has been made much earlier by others—Robert Triffin, for instance. But these cavils are not important. Corden’s balanced and lucid account of recent theoretical and policy controversies is illuminating for the layman and specialist alike.

Anthony Lanyi

Other books received

Charles E. Lindblom

Politics and Markets: The World’s Political-Economic Systems

Basic Books, Inc., New York, New York, U.S.A., 1977, xi + 403 pp., $15.

A broad-gauged economic-political comparative analysis of the workings of the Russian, United States, and Chinese systems in a searching examination of the options facing the world community. The author regards questions about government-market relations to be at the core of both political and economic analysis for planned and market-oriented systems. The work aims to dissect and to compare the fundamental characteristics of the dominant systems in the world economy today.

Yair Aharoni with Clifford Baden

Business in the International Environment

Westview Press, Boulder, Colorado, U.S.A., 1977, x + 245 pp., $20.

This casebook, designed primarily for classroom use, draws on business management experience in Europe, Asia, Latin America, and the Middle East as well as in the United States.

P.C.I. Ayre

Finance in Developing Countries

Frank Cass and Co., Ltd., London, England, 1977,174 pp., $22.50.

A collection of essays which first appeared in a Special Issue on Finance in Developing Countries in the Journal of Development Studies.

William G. Tyler

Issues and Prospects for the New International Economic Order

D.C Heath and Company, Lexington, Massachusetts, U.S.A., 1977, v + 195 pp., $17.

A collection of papers presented at a 1976 conference at the University of Virginia, mostly by academic economists and political scientists, which focuses on topics in the debate on North-South relations, including financial and trade relations; aid, resource transfers, and external indebtedness; commodities; and the role of multinational corporations.

Stephen F. Frowen, Anthony S. Courakis, and Marcus H. Miller

Monetary Policy and Economic Activity in West Germany

Halsted Press, New York, New York, U.S.A., 1977, xvii + 249 pp., $35.

Empirical studies, primarily by European academic economists, on the conduct of policy in the Federal Republic of Germany and on the response of the economy to monetary factors. Most of the papers were originally presented to a conference on German monetary developments at the University of Surrey.

Rodney Wilson

Trade and Investment in the Middle East

Holmes and Meier, New York, New York, U.S.A., 1977, xii + 152 pp., $18.

An attempt to analyze recent trends in Middle East trade and investment and to consider their implications for the region and for the world economy.

Sanjaya Lall and Paul Streeten

Foreign Investment, Transnationals and Developing Countries

Westview Press, Boulder, Colorado, U.S.A., 1978, ix + 280 pp., $25.

A critical appraisal of the role of multinational corporations in meeting the needs of the majority of poor people. A body of new data on the effects of multinational corporations on six countries (Colombia, India, Iran, Jamaica, Kenya, and Malaysia) is presented.

Elihu Katz and George Wedell

Broadcasting in the Third World: Promise and Performance

Harvard University Press, Cambridge, Massachusetts, U.S.A., 1977, xvi + 305 pp., $15.

Broadcasting is among the most underutilized aids to development in an age when almost all developing countries have radio broadcasting facilities and many have acquired television technology from the industrialized world. The authors of this book are experts in the fields of sociology and communication, and adult education, respectively. They provide a general survey of the organization and scope of broadcasting activities in over 90 developing countries and assess the role of the medium in the fields of education and economic development. Finally, they suggest ways in which broadcasting could be allowed to develop and be better utilized for development purposes.

Raymond G.F. Coninx

Foreign Exchange Today

Halsted Press, New York, New York, U.S.A., 1978,167 pp., $9.95.

An introduction to the technical aspects of the foreign exchange market by a commercial banker for the practical needs of commercial firms.


Balance of Payments Manual, Fourth Edition; pp. xvi + 203; $4.00

(in English; French and Spanish editions in preparation)

This fourth edition of the Manual continues the series of handbooks that have been issued by the Fund to guide member countries in making their regular reports on the balance of payments, as required by the Fund’s Articles. The Manual contains recommendations that form the basis for the balance of payments statements regularly made available by the Fund in its major statistical publications in this field, the Balance of Payments Yearbook and International Financial Statistics. It also provides, for the general reader, discussion at length of balance of payments concepts and of such topics as residence, coverage, timing, valuation, and conversion. This new edition includes a great deal of new material added since the previous edition was issued in 1961. In effect, it is a new handbook rather than a revised version of the third edition.

Surveys of African Economies, Volume 7: Algeria, Mali, Morocco, and Tunisia

pp. xxii + 374; statistical tables and index; $5.00; $2.50 to university libraries, faculty, and students (in English; French edition in preparation)

The seventh volume in this series covers three northern countries in Africa—Algeria, Morocco, and Tunisia, known as the Maghreb countries—and one landlocked country in West Africa—Mali. Algeria is dependent on the production of petroleum and natural gas, Morocco has large phosphate rock resources, Tunisia’s major exports include petroleum, phosphates, and olive oil, while Mali is almost wholly dependent on its primary sector, comprising mainly agriculture and livestock. In general, the years 1970–74 are covered, although there is some information for 1975. The subjects dealt with include investment and production; economic development and planning; prices, wages, and employment; government finance; money and banking; balance of payments, trade, and foreign debt; and exchange and trade controls.


Government Finance Statistics Yearbook, Volume 1, 1977;

pp. 278; $10.00; $4.00 to university libraries, faculty, and students.

The Monetary Approach to the Balance of Payments:

A Collection of Research Papers by Members of the Staff of the International Monetary Fund. 1977. pp. x + 290. $4.00

The International Monetary Fund, 1966–1971: The System Under Stress

by Margaret Garritsen de Vries. 1977.

Vol. I: Narrative, pp. 699, $11.00; Vol. II: Documents, pp. 339, $6.00; $15.00 the set.

Address orders and inquiries to The Secretary, International Monetary Fund, Washington, D.C. 20431. U.S.A.

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