Change and Challenge in the World Economy
St. Martin’s Press, New York, 1985, xxviii + 483 pp., $29.95 (cloth).
This collection of essays is concerned with the question of what kinds of policies promote growth and help countries adapt to external disturbances. Balassa’s dominant theme is that the removal of market distortions is the key to better economic performance. He elaborates on this proposition in two or three early essays, then documents it in a number of country vignettes. The briefness of nearly all the essays means, inevitably, that important arguments tend to be asserted rather than demonstrated. Nevertheless, it is not hard to agree that the effective harnessing of incentives through the efficient functioning of markets can make an important contribution to growth with external stability.
Dennis T. Yasumoto
The Manner of Giving
Strategic Aid and Japanese Foreign Policy
Lexington Press for the East Asian Institute, Columbia University, Lexington, MA, USA, 1986, x + 147 pp., $22.00
The Japanese are different. When others talk of “aid fatigue” and budgetary constraints, their Government pledges, not once but three times (in 1977, 1981, and 1985), to double aid flows. Their public actively supports this trend. Domestic criticism harps not on the amount but the quality of aid, for example the relatively low ratio of aid to GNP (0.32 percent in 1980), and the proportion of tied to untied and bilateral to multilateral aid. This book attempts to explain the politico-economic reasons behind the increase in Japanese aid, and assesses the contribution of a global aid strategy to Japan’s expanding foreign policy goals.
Dilip K. Das
Migration of Financial Resources to Developing Countries
St. Martin’s Press, New York, 1986, xix + 263 pp., $29.95.
Financial links among countries have become as integral to the world economy as trade in goods and services. This overview, apparently designed for the general reader, opens with a review of international capital transfers until World War II. Three chapters on the evolution of different types of “aid” flows are preceded by a brief review of theory on the contributions of savings and foreign resource inflows to growth, and an introduction to the developing countries and their place in the world economy. Das’ businesslike account of the developing countries’ changing relationships with the international capital market notes the dramatic growth of their borrowing from banks—from $7 million (18 percent of their total financial inflows) in 1970 to $44 billion (45 percent of total inflows) in 1983. The last chapter describes the evolution of the multilateral financial institutions, but is disproportionately long and detailed for a book otherwise introductory in its approach. Can one assume, for example, that a reader who needs an introduction to the Green Revolution (p. 47), and will be content with a half-page account of the two-gap model (p. 26), will want to be told that an annual service charge of 0.75 percent is payable in convertible currencies to meet the administrative costs of IDA credits? The book is a worthwhile attempt to come to grips with a large and very timely subject. However, the author has not been well served by his publishers: the copyediting is so careless as to cast doubt on the accuracy of the data as printed.
Grantley W. Walrond and Raj Kumar
Options for Developing Countries in Mining Development
St. Martin’s Press, New York, 1986, xv + 190 pp., $29.95 (cloth).
This book provides useful background material on the main issues developing countries face regarding the exploitation of their mineral resources. The authors focus their analysis on the legal framework and the fiscal regimes required to attract foreign investors. Their discussion of mineral development agreements is particularly valuable since it provides a useful reference source for those interested in the subject. The study compares the experiences of six developing countries (Botswana, Papua New Guinea, Malaysia, Sierra Leone, Tanzania, and Zambia) and two states in developed countries (Quebec in Canada and Western Australia). Although most of the issues that the book addresses are common to many developing countries, the inclusion of solely Commonwealth countries somehow limits the validity of some of its conclusions when applied to developing countries with very different cultural backgrounds.
John Maxwell Hamilton
Main Street America and the Third World
Seven Locks Press, Washington, DC, 1986, xii + 184 pp., $9.95 (paper)
News media play an important role in shaping public opinion on economic relations between industrial and developing countries. This book, a project of the Society of Professional Journalists of the United States, presents news stories by local US media that illustrate the interdependence of the United States and the Third World. The news stories, and results of subsequent opinion surveys to measure their effects, indicate a strong latent interest in information about the Third World among readers and television viewers. Mainly for journalists and general readers, this book could also guide officials in explaining economic interdependence to broad audiences.