Competition and the World Economy: Comparing Industrial Development Policies in the Developing and Transitional Economies
Wilson, Peter, Journal of Southeast Asian Economies
Competition and the World Economy: Comparing Industrial Development Policies in the Developing and Transitional Economies. By Francisco Sercovich et al. Cheltenham, UK: Edward Elgar, 1999. Pp. 450.
This substantial book is a collaborative effort between seven authors and aims to update and review new trends and challenges in manufacturing competitiveness and industrial policies in developing countries and economies in transition. It is addressed to policy-makers in the broadest sense, including policy formulators and practitioners and policy consultants, specialists and analysts in the private and public sectors and academia as part of a broader UNIDO initiative to develop a policy dialogue, "comparing practices, developing common indicators and criteria for assessment, agreeing on common rules and calibration systems and setting up an interactive information network and management system for data" (p.3). It hopes to make information on policy developments in the area of industrial policy more accessible, transparent and comparable, and to promote awareness of policy matters connected with industrial development. In particular to reassess the role of industrial development policy in a more open market-driven international environment where private investment plays a key role.
The book is divided into three parts. Part I introduces some key issues that underlie current concerns of policy makers, such as international best practices, policy convergence and policy benchmarking. Part two takes up a number of specific themes associated with the concept and measurement of manufacturing competitiveness and related policies, the incidence of financial factors and the implications of the "new" macro/ micro dichotomy for cross-country replicability. Part three, which constitutes the bulk of the book, then addresses the specific experience of countries and regions and lessons therefrom.
The first two chapters are important since they set the framework for the remainder of the book but unfortunately they lack a certain amount of cohesion, with the result being something of a hotchpotch of theory and practice. This was, as the authors readily confess, partly because the original manuscript was completed before the East Asian financial crisis of 1997 and subsequent Russian default and the collapse of the Brazilian currency. This necessitated a hasty re-assessment of the impact of globalization on best practices and policy convergence.
On the positive side, Chapter 1 presents a descriptive comparative analysis of best practices and benchmarking case studies and a country classification (using pre-crisis criteria) which is used throughout the book dividing those countries (excluding very small ones) which are not yet advanced developed countries into four categories: newly opened economies such as Brazil and India, newly industrializing economies such as Singapore and Malaysia, economies in transition including China and the Czech Republic, and a rump of less developed countries with a strong African presence. This has the curious side-effect of making the newly industrializing economies synonymous with the faster growing Asian countries since it contains the Asian "tigers" of Singapore, South Korea, Hong Kong and Taiwan together with the ASEAN countries of Indonesia, Malaysia, the Philippines, and Thailand. Chapter 2 discusses competitiveness policy benchmarking with detailed case studies ranging from the Netherlands to Malaysia, and an Annex which could, perhaps, have been integrated into the text providing details of a UNIDO survey on development policy.
Less convincing in these first chapters is the (hastily revamped) discussion of the impact of globalization on best practices and policy convergence and the rather cursory and selective treatment of the productivity and income convergence literature. Little mention is made of the World Bank growth regression literature on conditional convergence, the contrasting results of the time-series and cross-section convergence studies, and the differences between the "new" and "old" theories of growth. …