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Peter A.G. van Bergeijk
Peter A.G. van Bergeijk
Since the 1980s it had been fashionable to suggest that there was little that individual countries could do in the face of global economic forces, and any attempt to pursue independent policies would be doomed to failure. ‘Even China’, it was often said, was embracing the global free market. The idea that developing countries, such as India, could promote their own developmental interests by sheltering behind exchange controls or national planning had been swept away along with the Berlin Wall. In the globalized economy of the twenty-first century, it was argued, national governments had to go with the flow of global markets. As the 2008 international financial crisis was breaking, the global strategy firm Oxford Analytica held one of its usual daily analysis sessions, but open to those attending its annual conference. The chair briefly summarised the unfolding global crisis, and then went round the table asking the various national experts to report. Despite the consensus referred to above, the reports did not paint a picture of a uniform globalised market to which each country related in the same way. The US and UK had been referred to in the opening statement, being very much at the centre of whatever it was that had caused the worst economic crisis since the 1930s. But when the expert on Brazil was called, he reported that the socialist President Lula had kept its financial sector rather independent of the global markets. Next India, and here too it was reported that it actually hadn’t opened itself up to the global market quite as much as might have been thought. Then China, where, it was reported, the Communist Party had maintained rather a firm grip.
Peter A.G. van Bergeijk
Peter A.G. van Bergeijk
Selwyn J.V. Moons
The author reviews 32 studies published between 1985 and 2012 that report 963 economic diplomacy coefficients by means of a meta-analysis. The meta-analysis shows (and corrects for) the influence of empirical design choices, the dependent variable under investigation and instruments of diplomacy used, on reported economic diplomacy coefficients. The reported results show that study characteristics and the instrument of diplomacy used in primary studies influence the reported outcome significantly. The meta-analysis shows that economic diplomacy research on average judges critically on the sign and significance of the lower ranked diplomatic establishments (consulates and export promotion agencies) and individual activities organized with the diplomatic network (trade missions and state visits). These establishments and activities are significantly more likely to report negative coefficients and less likely to deliver positive significant coefficients.
Marcio Cruz, Daniel Lederman and Laura Zoratto
The number of export promotion agencies (EPAs) has increased substantially over the past decades. The authors describe the characteristics of EPAs around the world, using a novel database from the World Bank, in collaboration with the International Trade Centre in Geneva, covering the 2005–10 period. Most agencies are public-private institutions and have focused on assisting exporters in understanding and finding markets for their products. Several went through at least one type of institutional change in the short period between 2005 and 2010. EPAs spend more on small and medium firms, on established exporters (instead of new/occasional exporters or non-exporters), and on the provision of marketing services (e.g., trade missions) and export support services (e.g., training, technical assistance). Reviewing the recent literature, they find evidence of positive contributions of EPAs around the world in raising exports, through both, intensive and extensive margins of trade.
Désirée M. van Gorp
Defining business (corporate) diplomacy as the management of interfaces between a global company (both SMEs and multinationals) and its multiple non-business counterparts and external constituencies, Désirée van Gorp, discusses how businesses have become important political actors that experience a growing responsibility to respond to global challenges. Discussing the Volkswagen emission scandal, the PUMA safe program and the Avaaz movement, the author distinguishes business diplomacy from spinning and issue management, discusses how local industry and international standards can be important building blocks of sustainable development chains and highlights the role and potential of civil society movements. The author argues that future research in business diplomacy needs to be inter-disciplinary and align the literature on business diplomacy in the fields of international relations and international (business) economics. It is important to incorporate the issue of how technological innovation impacts on the interfaces relevant to companies operating in internationally fragmented value chains.
Research on the determinants and effects of China’s economic diplomacy is still in its infancy but is expected to gain in importance with China’s ongoing rise in the global economy. The author reviews the literature on the linkages between the bilateral political climate, economic diplomacy and international trade. The existing scholarly work suggests that the state of bilateral political relations plays an important role for trade with China. Since research suggests that political tensions adversely affect diplomatic activities between countries and that diplomatic exchanges promote trade, economic diplomacy is a likely channel linking the bilateral political climate to trade. Foreign governments’ positions on Taiwan and Tibet, for example, can determine the geography of state visits, the network of embassies and bilateral trade volumes. The chapter proceeds with a discussion as to why economic diplomacy should be more pivotal in economic exchange with China than with Western market economies.
Arjan de Haan and Ward Warmerdam
The authors describe China’s development aid and analyse the economic and diplomatic determinants of the evolution of the Chinese aid system. China’s modern aid combines project aid, grants and loans, debt relief (but not budget support), humanitarian aid, human resource development and technical assistance. There are a growing number of Chinese initiatives, including its aid programme in Africa. Most recently, the 13th National People’s Congress in March 2018 announced the establishment of a separate international development cooperation agency, directed by the State Council. De Haan and Warmerdam discuss the impact of changing global economics on China’s foreign aid, the way it is used as its ‘soft power’, and how China contributes to the UN and Sustainable Development Goals, while it has gradually enhanced its position in international finance. They show how these issues are important for understanding the impact of Chinese aid and the way China’s aid is embedded in its broader political and economic international relations.