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Economic Rationales Noneconomic Rationales - Prevent unemployment - - Protect infant industries - - Promote industrialization - Improve position compared.

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... konulu sunumlar: "Economic Rationales Noneconomic Rationales - Prevent unemployment - - Protect infant industries - - Promote industrialization - Improve position compared."— Sunum transkripti:

1 Economic Rationales Noneconomic Rationales - Prevent unemployment - - Protect infant industries - - Promote industrialization - Improve position compared to other countries Rationales for Governmental Intervention - Preserve national identity - Maintain spheres of influence - Deal with unfriendly countries - Maintain essential industries

2 INFANT- INDUSTRY ARGUMENT Government supports emerging (infant) industries:  When there is a potential comparative advantage that cannot be realized in the short run due to foreign competition.

3 In 1792, Alexander Hamilton presented first. From World War II until the 1970s many developing countries attempted to accelerate their development by limiting imports of manufactured goods to foster a manufacturing sector serving the domestic market. INFANT- INDUSTRY ARGUMENT

4 Objective Objective is to become more competitive over time with reduction in unit cost by realizing: - The economies of scale - Learning by doing ( Greater worker efficiency ) Objective

5 How does government support emerging industries : How does government support emerging industries :  First Option Using tariffs, import quotas to foreign companies Briefly, making entry barriers high. INFANT- INDUSTRY ARGUMENT Results  Disincentive for managers to adopt innovation  Consumers pay high pricesExamples  The U.S. and Germany had high tariff rates on manufacturing in the 19th century,  Japan had extensive import controls until the 1970s.

6 How does government support emerging industries : How does government support emerging industries :  Second Option Subsidizing the infant industry INFANT- INDUSTRY ARGUMENT Result  Consumers prices are not increased, but taxpayers pay for the subsidy

7 INFANT- INDUSTRY ARGUMENT Analysis Problem with identifying right industries: Protecting manufacturing does no good unless the protection itself helps make industry competitive. Pakistan and India Examples Pakistan and India have protected their heavy manufacturing sectors for decades and have recently begun to develop significant exports of light manufactures like textiles.

8 INFANT- INDUSTRY ARGUMENT Analysis Problem of Time Consistency: When should the protection start and finish? South Korea Example: In the 1980s South Korea became an exporter of automobiles, whereas in the 1960s its capital and skilled labor were still very scarce.

9 Market Failure Justifications for Infant Industry Protection INFANT- INDUSTRY ARGUMENT 1.Imperfect Capital (Financial) Market If a developing country does not have a set of financial institutions that would allow savings from traditional sectors (such as agriculture) to be used to finance investment in new sectors (such as manufacturing), then growth of new industries will be restricted. 2. Appropriability Argument Firms in a new industry generate social benefits for which they are not compensated (e.g. start-up costs of adapting technology).

10 INDUSTRIALIZATION ARGUMENT United States 42,000 United Kingdom 38,624 Germany 33,854 Russia 5,349 Turkey 5,062 Brazil 4,320Country GDP ($) Per Capita Source: International Monetary Fund, World Economic Outlook Database, September 2006 Developed Economies Emerging Economies

11 Emerging economies use protection to increase their level of industrialization because of industrial countries’ economic success and experience Brings faster growth than agriculture Brings in investment funds Diversifies the economy Brings more price increases than primary products do INDUSTRIALIZATION ARGUMENT

12 Shifting from Agriculture to Industry Use of Surplus Workers  Demand of workers and social issues  Agricultural sector may be overlooked  Government must decide which industry to protect when subsidizing  Self-sufficiency problem in terms of agricultural production

13 INDUSTRIALIZATION ARGUMENT Shifting from Agriculture to Industry Promoting Investment Inflows  If a country seems as a very attractive, profitable market, import restrictions may even increase foreign direct investment and employment.

14 INDUSTRIALIZATION ARGUMENT Shifting from Agriculture to Industry Diversification  Shift the dependence from a few agricultural products to a few industrial products

15 INDUSTRIALIZATION ARGUMENT Shifting from Agriculture to Industry Greater Growth for Manufactured Products  Prices of raw material and agricultural commodities do not rise as fast as prices of finished goods Terms of Trade

16 Objective increase the ratio Px/Pm ( = to make imports cheaper) Restrictive trade policy can improve country’s terms-of trade and thus increase its welfare if country is developed. Terms of trade for emerging economies may deteriorate because: - demand for primary products grows more slowly - cost savings passed on to consumers INDUSTRIALIZATION ARGUMENT Shifting from Agriculture to Industry Terms of Trade

17 Import Substitution Export Promotion vs The strategy of encouraging domestic industry by limiting imports of manufactured goods The strategy of encouraging domestic industry by limiting imports of manufactured goods. Many less-developed countries have pursued this strategy. Latin American countries in 1950s and 1960s Many countries that have pursued import substitution have not shown any signs of catching up with the developed countries. India between 1950s and 1970s. Import-substituting industrialization generated: - High rates of effective protection - Inefficient scale of production - Higher income inequality and unemployment Rapid economic growth by promoting export industries, an approach known as export-led development. “Gang of Four” S. Korea, Hong Kong, Singapore and Taiwan have achieved remarkable success by promoting export industries for which export markets should logically exist.

18 “Gang of Four” S. Korea, Hong Kong, Singapore and Taiwan have achieved remarkable success by promoting export industries for which export markets should logically exist. Export Promotion Rank Country Exports (Million $) 1 Germany 1,016,000 2 U.S.A. 927,500 3 China 752,200 9 Hong Kong 286, South Korea 277, Singapore 212, Taiwan 185,100 List of Countries by Export Source: The World Factbook accessed in February 2006.

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20 Balance of Payments Adjustments  Ticaret hesapları ülkelerin Ödemeler Dengesi açısından oldukça önemli olduğundan, hükümetler serbest piyasalardaki ihracat ve ithalat hareketlerini kontrol edebilmek için birçok girişimde bulunurlar.

21 Comparable Access or “Fairness”  Karşılaştırılabilir Erişim’in bakış açısından; yüksek üretimin maliyetleri büyük ölçüde düşürdüğü (economies of scale ya da learning effect) endüstrilerde, rakip pazarlara eşit erişim hakkına sahip olmayan üreticiler, maliyet rekabeti açısından bir dezavantajla karşı karşıyalar.

22 Price – Control Objectives İhracat Kısıtlamalarıİthalat Kısıtlamaları

23 İhracat Kısıtlamaları  Dünya fiyatlarını yüksek tutabilir  Kaçakçılığı önlemek için daha fazla kontrol gerekebilir  Kısıtlanan malların yerini tutabilecek mallara yönelme olabilir  Yerli mal arzını yükselterek bu malların fiyatlarını düşürebilir

24 İhracat Kısıtlamaları... (devam)  Üreticileri, ürettikleri malları arttırmaları için daha az teşvik edebilir  Yabancı firmaların üretimini ve satışını ülkeden kaçırabilir

25 İthalat Kısıtlamaları  Yerli üreticiyi fiyat düşürme (dumping) yoluyla sektör dışına bırakmayı önleyebilir  Diğer ülkelerin kısıtlamalarını kaldırmak için güçlü bir anlaşma yolu sağlayabilir  Yabancı üreticileri fiyatlarını düşürmeye zorlayabilir

26 Dumping  Firmalar bazen Dumping adı altında maliyetin veya kendi ülkelerinin fiyatlarının altında ihraç yaparlar.  Dumping yapılmasının nedeni, diğer türlü yurtdışında bir pazar yaratamamasıdır.

27 Optimum – Tariff theory  Bir yabancı üretici, mallarını alan (ithal eden) ülkenin koyduğu vergiler yüzünden fiyatlarını düşürebilir.  Böyle bir durumda kazançlar üreticiden malları alan ülkeye kayar.

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29 Non – Economic Rationales  Temel endüstrilerin korunması  Dost olmayan ülkelere kargo/nakliyelerin önlenmesi  Etki çevrelerinin idare edilmesi  Ulusal kimliğin bozulmasını önleyecek aktivitelerin desteklenmesi

30 Temel endüstrileri korumak  Bir ülke barış zamanında yerli, varolması zorunlu, esas endüstrilerini korumalıdır ki savaş sırasında yabancı kaynaklara bağımlı olmasın. Essential – Industry argument

31 Temel – Endüstri’leri korumak  Hangilerinin temel, zorunlu endüstri olduğunu belirlenmeli  Altenatifler ve maliyetler incelenmeli  Politik sonuçları göz önüne alınmalı


"Economic Rationales Noneconomic Rationales - Prevent unemployment - - Protect infant industries - - Promote industrialization - Improve position compared." indir ppt

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