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For many countries rich in oil, gas and minerals, development remains an elusive goal. The rich get richer, the poor stay poor, inequality rises, economies stagnate, corruption flourishes and conflict deepens. The Extractive Industries Transparency Initiative (EITI) has helped to direct attention towards this sector, which has traditionally been shrouded in secrecy. It is one of the international “soft law” tools supported by the international development community to curb corruption and help resource-rich countries benefit from the revenues from their soil. However, corruption indicators show that EITI countries are not really improving their scores. Does this suggest that there should be a scaling down of expectations about what the EITI could deliver or can it be made more effective? This paper highlights deficiencies in the way the EITI works and makes recommendations that seek to increase the effectiveness of this initiative.

The Extractive Industries Transparency Initiative (EITI, www.eitransparency.org) aims to improve transparency and accountability by the full publication and verification of company payments and government revenues. The revenues flowing from natural resources extraction are huge. EITI is one of the international soft-law tools most supported by the international community to curb corruption and help the 3.5 billion people – half the population of the planet – living in resource-rich countries to benefit from the sale of their natural resources. Almost six years after the initiative was launched, the results are elusive for several countries. Figure 1 below shows that governments’ public endorsement of the EITI principles does not, on average, improve the perception of corruption levels in their countries. Moreover, according to the World Bank Worldwide Governance Indicators, corruption control in EITI countries is worse than in non-EITI resource-rich countries. EITI countries’ scores deteriorated between 2002 and 2007. While these corruption indices are not limited to extractive industries, given their importance in the countries concerned, one would expectmore visible improvements in these indicators.

Real-time data are analysed for information on the Chilean monthly economic activity indicator IMACEC and what it indicates of the final GDP, defined as the growth rate that has been subject to at least two annual revisions. Data are presented and revisions analysed briefly. Mincer-Zarnowitz tests suggest that forecast rationality is rejected with respect to the three-month IMACEC growth rate as a nowcast of the first released quarterly GDP, as well as the first published GDP as a nowcast of the final GDP.
An out-of-sample nowcasting analysis was conducted using only data which were available in real-time. The results show that small models nowcast better than less parsimonious ones. The evidence from the empirical study suggests no improvement in the nowcasting performance when historical data are supplemented with the first monthly IMACEC of the quarter. On the other hand, when two monthly observations IMACEC are available, the root mean squared nowcast error (RMSNE) decreases by 24%, and a further decline of 33% is obtained when the third monthly observation of the quarter is published. Both of these advances are statistically significant. No further improvement is obtained with the publication of the first release of the quarterly GDP.

JEL classifications: C89, E17
Keywords: Real-time data, data revisions, nowcasting

Due to the substantial rise in the share of Emerging Markets (EM) in foreigncurrency debt markets during the nineties, country risk in EM has become an issue of increasing concern for both new bond issues and rescheduled non-performing loans. However, as recent episodes show, financial volatility has tended to leave those countries more prone to contagion effects and balance-of-payments crises. Consequently, international bond investors have required higher risk premia to balance the risk-return equation. In order to make Emerging Markets less vulnerable to external shocks, exchange-rate corner solutions such as dollarisation have been proposed. One of the main arguments put forth by the dollarisation supporters is the expected decrease in sovereign spreads, as currency risk will no longer hold. According to this “optimistic” view, which also relies on a credibility spillover effect, such a decrease could begin improving solvency weaknesses while boosting economic growth ...

This paper examines whether the growth in agricultural trade of 69 countries between 1996 and 2006 has taken place at the intensive or the extensive margin. The paper addresses the questions: have agricultural exports during this period expanded more through the intensive margin (more exports of established goods to traditional partners) or through the extensive margin (new trade flows in new products and/or to new partners)? At the intensive margin, do richer countries export greater volumes, or do they receive higher prices for their goods? At the extensive margin, are new trade flows the result of an expanded variety of products or the result of exporting established products to more destinations?

This paper studies the development of indigenous insurance institutions set up to help cover the high costs of funerals, using evidence from rural areas in Tanzania and Ethiopia. Many of these institutions tend to co-exist within the same community and are based on well-defined rules and regulations, often offering premium-based insurance for funeral expenses, as well as, in many cases, other forms of insurance and credit to help address hardship. The paper argues that the characteristics and inclusiveness of these institutions make them well placed as models to broaden insurance provision and other development activities in these communities. In Ethiopia, there is some encouraging experience with using these institutions, as reviewed in this paper. However, the paper argues that their fragility as institutions is well illustrated by current pressures related to HIV/AIDS, as well as by their apparent resistance to engage more broadly with NGOs and government agencies. As a ...

Extended Producer Responsibility (EPR) is a policy approach that makes producers responsible for their products along the entire lifecycle, including at the post-consumer stage. This policy paper summarises the current consensus on the EPR policy approach.

By taking stock of what's known and well established in the literature, it aims to foster a common understanding of the EPR approach and to provide guiding principles for its successful implementation. This paper makes a valuable contribution to an increasing number of policy debates and processes that are ongoing, both at national and international levels, in areas such as plastics, electric and electronic waste and textiles.

France has seen a marked deterioration in its export performance in the last 10 years or so. Previous empirical research pointed out that weak export performance was due to i) vigorous domestic demand; ii) lower mark-ups due to head-to-head competition with Germany; iii) low non-price competitiveness of French export goods; iv) offshoring of entire production processes (especially in the automobile sector); and v) difficulties of French manufacturing firms to reach critical size for exporting. This paper adds an additional explanation to this list. We argue that resource reallocation from the exporting to the construction sector triggered by fast rising property prices hindered France to meet world export demand vis-à-vis its products. Our econometric analysis shows that the resource reallocation argument helps explain French export performance between the early 2000s and 2007, unexplained by traditional models. This result is confirmed for a set of OECD countries that experienced a marked decline in their export performance and sustained real-estate boom after 2000.

This paper examines the effects of exports on employment in China, Indonesia, Japan and Korea. It draws on input-output data for the period from 1995 to 2009 to estimate the effects on each industry's employment (i.e. direct effects) and on other industries' employment through intra-industry linkages (i.e. indirect effects). There are four major findings. First, at the aggregate level, the implied employment from exports increased in China, Japan and Korea. Second, at the industry level, exports and the shares of implied employment from exports increased in machinery-related industries such as Machinery (NEC), Electrical and Optical Equipment, and Transport Equipment in China, Indonesia and Korea. Third, although more than 80% of exports in the four study countries are from manufacturing industries, the employment effects are not limited to manufacturing industries. A significant number of workers in non-manufacturing industries depend upon manufacturing exports through vertical inter-industry linkages. Non-manufacturing industries account for between 40% and 60% of the implied employment from exports. Finally, in 2009, the share of implied employment from Chinese final demand exceeded that from the US final demand in both Japan and Korea. An implication of the overall results is that even in cases where an industry is not particularly directly export-oriented, the industry may still be subject to potential effects – positive or negative – of changes in export demand.

This paper examines the role of exports in skill upgrading in the Korean manufacturing sector during the 1990s utilizing a unique plant-level panel data set. The empirical results indicate the important role of exports on relative employment on skilled versus unskilled workers. The main findings are as follows. Firstly, this paper documents the significant degree of skill upgrading that occurred during the 1990s in the Korean manufacturing sector. Secondly, a large part of the increase in the aggregate non-production employment share was due to the �\within. effect, rather than the �\between. effect. This tendency becomes stronger when we use plant-level, rather than industry-level data. Thirdly, most of the �\within. changes were accounted for by the skill-upgrading of exporters, especially those exporters that were either R&D active or large. This is suggestive of the positive interactive effects between exporting and R&D expenditure in skill upgrading. Fourthly, regression analysis shows that both the �\within. and �\between. components of skill composition changes at plant level are strongly and positively correlated with exporting activities, while R&D expenditure is correlated only with the �\within. components.

Although fragile states account for 15% of the global population they only contribute about 2% of exports. Trade is widely believed to be an important determinant of development. This paper analyses the challenges and opportunities faced by fragile states in their bid to diversify their economies and to break into export markets. Currently most of these countries benefit from preferential market access agreements and can export to OECD countries duty free and quota free. However, the trade schemes differ across OECD member countries; fragile states would benefit from their harmonisation. The current schemes also do not provide access for all goods – some agricultural products are excluded. OECD countries should open their markets to all goods from fragile states. Compliance with stringent OECD standards on animal, food and plant safety can also be an obstacle for exporters. Specific aid and technical assistance could help to address this problem. However, the paper also finds that domestic policies in the fragile states themselves are often the binding constraint for potential exporters. Specific “soft” industrial policies can therefore also help to overcome the main challenges of breaking into export markets: these include focusing on one specific task in the production chain, creating clusters of industries in one area, and building the capacity needed to enter the global market.

Governments may decide to control the export of unprocessed raw materials hoping that this will promote local downstream industries. There is scant empirical examination of the actual outcomes of such policies put in place. This paper describes use of export control measures by four minerals-rich African countries and looks for effects on activities downstream from the extractive sector that may be attributed to these measures. The measures studied are export taxes, non-automatic export licensing requirements and outright export bans. The industries are manganese in Gabon, lead in South Africa, copper in Zambia and chromite in Zimbabwe.

For the empirical analysis the Revealed Comparative Advantage (RCA) index is calculated tracking over 20 years the relative global performance of the local mining and processing industries, for the specific minerals studied. The effect of the restrictive measures is investigated by way of identifying structural breaks in the level of the RCA index, for both the raw mineral and related processed products.

The results suggest that use of export restrictions as a tool for stimulating local mineral processing does not pay off. There was no improvement in the revealed comparative advantage of processed products presumed to benefit from export controls on the raw material. Moreover, the measures may have undermined the overall performance of the industries in some of the cases studied because the relative export performance of the mined minerals deteriorated.

Barriers to trade come in a variety of forms. This paper examines one such barrier, export restrictions, and how it impacts trade and global supply in selected strategic metals and minerals. The metals and minerals examined in the paper are of particular interest for a number of reasons: they are generally geographically concentrated in a few countries, many are used in the production of high-technology goods in strategic sectors and there are few substitutes for these raw materials given the present state of technology. For all these reasons, importing countries are dependent on a reliable supply of these raw materials. Export restrictions may be applied for a number of reasons: protection of the environment, preservation of natural resources, protection of downstream industries, or as a response to a number of different market imperfections. This paper examines the motivations for using export restrictions and finds varying impacts on trade and global supply. In one case, the export restrictions put into place did not fulfill their objective of environmental protection. In another, the presence of export restrictions in one country put pressure on other exporters to apply restrictions suggesting the potential for competitive policy practices in restricting exports. In a third case study, export restrictions were seen to impact investment decisions by potential suppliers worldwide by introducing an added element of risk in the industry. The impact of export restrictions on strategic metals and minerals are exacerbated in many cases because producing countries have a quasi-monopoly on supply. Since these metals and minerals are essential in the production of some high-technology products and are not easily replaceable in the medium term, industry participants in some importing countries are concerned about future access at sustainable prices.

Demand for non-renewable natural resources is forecast to rise steadily over the coming decades. Underlying trends of long-term rising demand and falling supply of mineral resources will inevitably increase pressure on prices and intensify competition for scarce resources. This can create a substantial opportunity for development for minerals-rich countries. However, as suggested by the “resource curse” debate, broad-based economic development based on the extractive industries is far from assured. History suggests that not all countries, in particular many of those outside the OECD area, have benefitted economy-wide from their mineral resources: good governance and good policies are essential to benefit from their huge potential growth.

Some countries have successfully regulated their mining sectors without resorting to highly distortive policies such as export restrictions. One such country is Botswana. This paper examines some of the policies in place in Botswana that have contributed to the governance and management of its substantial minerals sector. Lessons are drawn for minerals-rich countries keen to manage their raw materials sectors for increased economy-wide growth.