A Comparative Analysis of Twenty-Eight Transition Economies in Europe and Asia

Two senior World Bank economists provide a broad comparative overview of transition economies, covering the former Soviet Union, East Central Europe, China, and Vietnam. In the process, they assess the experience of each of the 20 European and 8 Asian countries up to 1996, focusing on the wide variation in exposure to economic and political liberalization and distinguishing growing and recovering economies from the lagging. Based on recent measures of key macroeconomic indicators, the authors' classification and analysis embrace the impact of specific factors (e.g., different duration and intensity of reforms; exposure to regional tensions) on economic growth and inflation. Also included in the study is a comparison of inter-industry linkages and macroeconomic feedback in Russia and China. 9 figures, 8 tables, 25 references. Journal of Economic Literature, Classification Numbers: P21, P41, P51, P52.     

Regional Wage Inequality in China, 1996-2010

This paper examines regional wage inequality in China between 1996 to 2010, subdividing that time span into a period of increased wage inequality during 1996-2002 and one of stable to decreasing inequality for 2003-2010. Based on the interplay between wage levels and wage growth, the authors develop a typology whereby China's provinces can be assigned to either peripheral, emerging, lagging, or leading regions. The particular characteristics associated with each type of wage region, and the factors underlying shifts of particular provinces from one category to another between the two periods, enable them to identify specific causes for the reversal (after 2002) of the trend toward increasing wage inequality (the causes especially reflect wage patterns in the mining and energy industries, information and communication technology industries, and foreign-invested enterprises). The recent wage convergence involves instances of both interior provinces advancing from the "emerging" to the "leading" wage category as well as the decline of a few "leading" coastal provinces to "lagging" status.     

Analyzing Regional Inequality in Post-Mao China in a GIS Environment

Regional inequality in China has attracted considerable scholarly attention, but the use of geographic information system (GIS) techniques for rigorous analysis remains limited. This paper utilizes recent data and GIS and spatial statistical techniques to analyze changing patterns of regional inequality in China from 1978 to 2000. It also identifies the changing clusters of regional development in China. We illustrate that regional inequality in China is sensitive to development trajectories of the provinces, and that conventional measures of regional inequality mask geographical clustering. Patterns of change are explained by both contextual and regression analyses. Journal of Economic Literature, Classification Numbers: F21, G32, P31. 16 figures, 3 tables, 30 references.     

Regional Inequality of Industrial Output in China, 1952 to 1990

This paper examines regional inequality of industrial output in China from 1952 to 1990. This study reveals that regional inequality was widespread when socialist China was established in 1949. It was reduced in the 1950s as a result of the efforts to develop the interior through the implementation of the First Five Year Plan (1953–57). After that, regional inequality persisted for one-and-a-half decades due mainly to the poor economic returns of the defence-oriented "Third Front" programme, decentralization, the reorientation of development policies, and the incidence of disruptive political events. Since the launch of economic reforms in 1978, interregional inequality among the eastern, central and western regions has gradually increased. However, interprovincial inequality decreased. The relative decline of the traditionally rich provinces (three municipalities and the northeastern industrial bases) has contributed to the decline of interprovincial inequality. Meanwhile, favourable state policy, local initiatives and foreign investment and trade have stimulated the growth of the coastal provinces of Jiangsu, Guangdong, Shandong, Zhejiang and Fujian, leading to more rapid coastal development and the increase of interregional inequality. The emerging new map of regional development is important to the understanding of regional inequality in post-Mao China.     

Regional Inequality in the EU: How to Finance Greater Cohesion

After outlining the overall scale and evolution of European Union (EU) public expenditure, this paper examines the mechanisms driving the allocation of Cohesion Policy resources. The analysis reveals the extent to which the outcome of the policy's principle- and formula-driven allocation mechanisms is modified by precedent and politico-economic considerations. In particular it shows that the consequent per capita final financial allocations (the intensity of aid) are greatest not for the poorest areas: up to 84% of EU GDP per head, aid increases as income increases. The analysis also emphasizes the on–off nature of the EU policy. In the light of these results a series of simulations are carried out. Attention is given first to a more economically sensitive treatment of transition regions, whose relative growth results in shifts from one category to another and to a mechanism capable of providing differentiated support to all disadvantaged regional economies. Attention is then given to ways of ensuring that final allocations are inversely proportional to income, and that most aid is concentrated on the most disadvantaged areas (Section 5). In the conclusions attention is paid to guidelines which might apply to the reform of the EU Cohesion Policy.     

Party Ideologies and Regional Inequality: An Analysis of Party Manifestos in Japan

ABSTRACT

Regional inequality within Japan has been a key political issue in Japanese politics throughout the entire postwar period. In this analysis, we examine how Japanese parties have positioned themselves on the question of regional inequality, focusing on how the party system response has been shaped by ideas and ideologies. The article analyses two 15-year periods separated by a quarter of a century (1960–75 and 2000–15) during which regional inequalities became a particularly salient and pressing issue. We compare institutional and socioeconomic contexts, broader governing ideas, and policy responses to this issue by major parties in their election platforms (manifestos). We find that party ideology and broader paradigms continued to shape party responses to regional inequality during both periods.     

Patterns of Participation and Representation in a Regional Water Collaboration

Regional collaboration has become a popular means to manage shared resources and address cross-jurisdictional boundary issues. The question of who participates in the process, who directly affects decisions, and who benefits from those decisions is critical for understanding the broader value created by regional collaborations. We apply a variety of text mining techniques to meeting minutes to measure how stakeholder participation evolved over nine years of an Integrated Regional Water Management collaboration. We observe that a diverse set of organizations representing differing interests participated to some extent in the process. However, a minority of organizations attended regularly, while most attended sporadically and/or only attended outreach events. Verbs used to describe interaction varied across meeting types, displaying egalitarian patterns of interaction among participants in core leadership meetings and more one-way interaction among attendees of outreach meetings. We then estimate whether participation affects the likelihood of receiving funding through the IRWM program. Participants who attended the core group meetings most regularly were most likely to receive funding for their projects, suggesting that uneven patterns of participation matter for the substantive value created by the collaboration.     

Regional Polarization under Transition: The Case of Slovakia

This paper analyses trends in regional polarization in Slovakia on the NUTS II and NUTS IV levels for the period 1985–2002 from the neo-classical and polarization approaches to regional development. Development of disparities in regional incomes was examined via an econometric model. The model was based on extensive datasets from Slovak districts for the period 1985–2002. It identified unemployment rates, urbanization rates, shares of population with university degree and share of foreign investors in total enterprises as major factors behind regional divergence. Strong polarization between Bratislava and the rest of the country was the most remarkable feature of regional development after 1989.     

Plant Scale, Industry Agglomeration, and the Outlook for Regional Employment in Central European Economies

A common outcome among Central European transition economies is the significant variation in regional unemployment rates, a condition symptomatic of allocative inefficiency in the labor market. Several studies attribute such variation, at least in part, to large vertically integrated industrial complexes erected during the period of central planning, and in turn to subsequent employment adjustment that operates to the disadvantage of local workers during transition. In this study I provide a test of this hypothesis by examining the correlates of local employment change at the outset of reforms, and specifically adjustment triggered by extreme variation in local plant size and scale externalities.     

The Dynamics of Regional Disparities in Central and Eastern Europe during Transition

This paper examines the evolution of territorial imbalances in per capita income in the Central and Eastern Europe regions between 1990 and 2001. In order to overcome the limitations of conventional convergence analysis, we have combined a non-parametric approach that allows us to study the dynamics of the entire cross-section distribution, with a series of theoretical results and measures taken from the literature on personal income distribution. The results obtained show an overall reduction in regional inequality over the study period. This process has been compatible with the simultaneous presence of between-country convergence and within-country divergence. Likewise, we have observed a reduction in the development gap between the sample regions and Western Europe. In any event, the polarization of the distribution under consideration has decreased, while the registered level of intra-distribution mobility is relatively low. Furthermore, the analysis highlights the important role played in explaining the distribution dynamics by factors such as the national component, spatial location, productive structure, agglomeration economies and the percentage of gross domestic product devoted to investment.     

The Territorial Impact of the Knowledge Economy: Intangibles and Regional Inequality in Great Britain

Knowledge-based activities are an important source of national and regional competitiveness. In the UK and other European Union countries knowledge industries represent not only one of the fastest growing sources of new jobs, but also account for an increasing share of Gross Value Added (GVA) and exports. Nonetheless, there are also indications that the actual importance of the knowledge economy still remains understated. Within the conventional System of National Accounts, expenditure on intangible assets, such as research and development or human and organizational capital, is not considered either as part of GVA or as investment. In the UK, Marrano et al. (2009 Marrano, M. G., Haskel, J. &; Wallis, G. (2009) What happened to the knowledge economy? ICT, intangible investment and Britain's productivity record revisited, The Review of Income and Wealth, 55(3), 686–716. doi: 10.1111/j.1475-4991.2009.00344.x[Crossref], [Web of Science ®] , [Google Scholar]) report increased market sector GVA figures by as much as 13% in 2004 after treating intangibles as investment. Considering that expenditures on intangibles vary considerably across regions, it is likely that the territorial impact of this aspect of the knowledge economy has remained largely unreported so far. Spatial inequalities in the investment in intangibles should result in sharper inequalities in regional output. This paper aims to address this issue, first by adjusting the UK regional GVA series for investment in intangibles and second by exploring the trends in regional economic convergence during the period 1991–2004.     

Geographical Leadership Mobility and Policy Isomorphism: Narrowing the Regional Inequality of Social Spending in China

The link between geographical leadership mobility and policy isomorphism is rarely discussed in the extant literature. We argue that the geographical leadership mobility encourages local executives to converge their development experiences in their original working jurisdictions and their current positions. The distinct Chinese political personnel system provides an ideal environment that allows researchers to examine the isomorphic effects of geographical leadership mobility. This research builds a dataset of local social spending between 1998 and 2011 as well as a database of the leadership mobility history of provincial executives in China. Results of the spatial panel analysis (SPA) demonstrate that the geographical leadership mobility (i.e., horizontal, top-down, and bottom-up) of governors stimulates the regional isomorphism of provincial education and health care spending. The empirical findings affirm the effectiveness of the effort of the Chinese central government in narrowing the regional inequality of social welfare provision through the geographical mobility of local leadership.     

Trading Spaces: Imagining and Positioning the 'New' South Africa within the Regional and Global Economies

The end of apartheid has precipitated rapid rethinking of South Africa's position in relation to the rest of Africa and the global arena. Whereas a substantial literature already exists on the country's evolving post-apartheid foreign policy, this article offers one of the first critical analyses of its emerging external economic relations. Although clearly the economic giant of the Southern African Development Community, South Africa does not perform as well on all economic and social indicators as many people, especially South Africans, believe. South African businesses' perception of, and experiences in, the rest of Africa are assessed in relation to emerging patterns of trade and investment there. Selected advertisements and associated imagery deployed by firms in support of their strategies are analysed in the context of domestic transformation and the opening of new horizons abroad. South African foreign direct invest-ment (FDI) is increasingly diversified, both sectorally and geographically, although large firms dominate the profile. South African-based transnational corporations are also becoming increasingly influential global players. FDI and development aid inflows to South Africa, and in relation to the rest of Africa, are analysed and their implications explored. Far Eastern investment rose fast as part of a growing global inflow until 1997/8; more recent figures are disappointing. This reflects political and security concerns, as well as vulnerability to rapid flow reversal in the increasingly important portfolio investment market.