Globalisation and trade: implications for exports from marginalised economies, edited by Oliver Morrissey and Igor Filatotchev. (London: Frank Cass, 2001, pp. 215, £35.00 h/b)

✍ Scribed by John Thoburn

• Book ID: 102351770
• Publisher: John Wiley and Sons
• Year: 2002
• Tongue: English
• Weight: 31 KB
• Volume: 14
• Category: Article
• ISSN: 0954-1748
• DOI: 10.1002/jid.877

✦ Synopsis

This volume consists of seven papers and a substantial introductory chapter by the editors. The collection's immediate focus is on how 'marginalized' countries can participate in global growth by expanding exports, and why sub-Saharan African countries in particular (and also countries of the former Soviet Union) have found it so difficult to do so.

Many African countries have liberalized their trade regimes and removed the anti-export bias generated by overvalued real exchange rates and tariffs favouring production for the domestic market. Yet exports, especially of manufactures, generally have been slow to develop. Doubts have been raised in the work of Adrian Wood and others (e.g. Wood and Berge, 1997) even as to whether Africa has any comparative advantage in manufactures exports at all, since African countries generally have low ratios of labour (and especially skilled labour) to natural resources. Mans So ¨derbom and Francis Teal's chapter uses a panel set of micro-data for firms in the 1990s in Ghana-one of the most liberalized of African countries-to investigate the determinants of manufactures export growth, including versions of Wood's hypotheses. They also compare their results with less extensive data for Cameroon, Kenya and Zimbabwe. They show exports to be concentrated in the largest firms (over 100 employees), which are also the most capital-intensive. Large firm size is also a determinant of export propensity in the case of the former Soviet Union, though Trevor Buck, Igor Filatotchev, Natalia Demina and Mike Wright are pessimistic about domestic economic reform generating much export expansion.

Among the four countries in the So ¨derbom and Teal piece, only Zimbabwe has developed exports of garments, the archetypal-labour intensive manufacture. Further work on Zimbabwe is presented in Adrian Wood and Kate Jordan's chapter. Their question is why Zimbabwe exports a higher proportion of manufactures, and Uganda a lower proportion, than would be predicted from crosscountry regressions based on the country's human and natural resources (Wood regards capital as internationally mobile and not therefore a determinant of comparative advantage). Zimbabwe's exports to Africa, which are substantial, have a higher proportion of manufactures than its exports to outside the continent, suggesting an appropriate pattern of international specialisation. Both countries are landlocked, but the transport and communications infrastructure of Zimbabwe is much superior. Whereas Uganda in 1972 expelled the Asians who ran much of the country's manufacturing, thereby losing vital expertise, Zimbabwe encouraged immigration of people with skills. Zimbabwe also actively promoted (initially import substituting) manufacturing, though the authors seem reluctant to conclude that this supports arguments for infant industry protection. It also would have been interesting to have had them evaluate the arguments presented by Carmody (1998) that Zimbabwe's problems with manufacturing and manufacturing exports in the 1990s could be traced to inappropriate patterns and sequences of trade liberalization and structural adjustment. Instead, they simply attribute the problems to an underlying lack of competitiveness.

Further material on the export-restraining effects of high transport costs-yet again with Uganda as the case study-is provided in the chapter by Chris Milner, Oliver Morrissey and Nicodemus Rudaheranwa. This neat and convincing paper converts transport costs into the equivalents of nominal and effective rates of tariff protection (ERP). The ERP-equivalents, when added to actual ERPs due to trade restrictions, raise the implicit taxation on average exports by more than three fold compared with that due to trade restrictions alone.

Constraints on manufactures export expansion do not solely consist of supply problems caused by infrastructural bottlenecks. Institutional remoteness from world markets as well as physical