Journal of International Commerce, Economics and Policy

We show that new trade restrictions implemented since the onset of the global financial crisis have had — in the limited products targeted — a strong distortionary impact on trade. Their aggregate impact is modest, however, as most countries have resisted a widespread resort to protectionism. Looking ahead, sustained high unemployment, uneven growth, and an unwinding of government stimulus measures suggest that protectionist pressures may rise. Continuing and further enhancing monitoring of all protectionist measures will help, but the surest way to avoid such a downside scenario is to tighten multilateral trade commitments by completing the World Trade Organization (WTO) Doha Round.

The decline in world trade volume in 2009 was the worst since the Great Depression. The United States (US) spread the global recession as a major source of external demand. US import and export data are examined to understand the repercussions, particularly for developing economies divided into preferential and non-preferential trading partners. A key finding is that US trade with preferential partners contracted faster than with non-preferential partners. Case studies of autos and textiles provide insights. A new global trade deal may be the way forward as the US will have to expand net exports to restore growth.

This paper examines the impact of improved trade facilitation measures and institutional capacity in a set of economies in transition Europe. Our results suggest that behind-the-border barriers play an important role in determining bilateral trade flows (controlling for the effects of tariffs, development levels, distance, and regional characteristics of exporters and importers, among other factors). For European Union (EU) members that joined the Union in 2004 and less developed and candidate members raising capacity in port efficiency and information technology infrastructures halfway to the EU-15 average, trade could expand by US$49 billion and US$62 billion respectively. In the context of the economic crisis and fragile recovery, as well as efforts to strengthen Europe integration, efforts to facilitate trade with investments to raise capacity in trade facilitation should be considered as part of policy steps going forward.

India and Israel have raised over US$35 billion by tapping into the wealth of their diaspora communities. These diaspora bonds represent a stable and cheap source of external finance, often when countries lost access to international capital markets. For diaspora investors, these bonds offer the opportunity to help their country of origin while also providing an investment opportunity. The potential for diaspora bonds is significant for many countries with large diasporas abroad. However, diaspora bond issuance from countries with weak governance and high sovereign risk may require support for institutional capacity building and credit enhancement from multilateral or bilateral agencies. Haiti, for instance, could raise several hundred million dollars by issuing diaspora bonds provided a guarantee structure is created to build trust in the country's public institutions.

Food prices in international markets spiked upward in 2008, doubling or more in a matter of months. Evidence is still being compiled on policy responses over the following two years, but new time series estimates of government intervention for the previous five decades allow insights into past policy responses to price fluctuations and spikes. This paper reviews the distortionary impacts of policies used by governments attempting to stabilize their domestic food markets. It then focuses on policy responses in the mid-1970s, as reflected in domestic prices and various annual indicators of distortions to producer and consumer incentives, before drawing out some policy lessons.

This paper provides a new empirical analysis on the effects of fiscal decentralization on economic growth with the inclusion of a state allocative efficiency factor in the growth model. Using Indonesia as a case study, this study aims to reveal whether the state allocative efficiency will impact growth through better allocation of public goods. Following a two-stage empirical method, the expenditure efficiency of Indonesia's 26 state governments over a 10-year period (1996–2005) is constructed by using Data Envelopment Analysis (DEA) and a panel data regression is utilized in the growth model. The results indicate that although fiscal decentralization provided a greater incentive structure for state governments to become more efficient in allocating fiscal resources, it did not always lead to robust growth due to rising regional disparities particularly in the level of development and resource capacities.

To make Asia more economically sustainable and resilient against external shocks, regional economies need to be rebalanced toward regional demand- and trade-driven growth through increased regional connectivity. The effectiveness of this connectivity depends on the quality of hard and soft infrastructure. Of particular importance in terms of soft (facilitating) infrastructure that makes hard (physical) infrastructure work are the facilitating institutions that support connectivity through appropriate policies, reforms, systems, procedures, and through promoting effective coordination and cooperation. Asia has many overlapping subregional institutions involved in national and regional energy, transport, and telecommunications infrastructure connectivity. However, these institutions are characterized as being less effective, informal, and lacking a clear and binding system of rules and policies. To build seamless Asian connectivity, Asia needs an effective, formal, and rules-based institutional framework. The paper presents a new institutional framework for Pan-Asian connectivity together with the organizational structures of two new regional institutional mechanisms, namely the Pan-Asian Infrastructure Forum and the Asian Infrastructure Fund.