This thesis investigates the impact of financial liberalisation policies on finance-growth relationship and financial crises. Analysis of recent trends and economic performance of financially developed and stable economies raises at least two very important questions that seem to have strong analytical connections. The first question is associated with the link between financial development and economic growth and the second question focuses the possible association between the policies of financial liberalisation and financial vulnerability. In this thesis we aim to shed light on some of the aspects that have gained so much attention from academics and policy makers during the last two decades. First we address whether excessive liberalisation has caused financial development to lose its effectiveness in generating economic growth. We employ a dynamic panel data analysis for 88 countries over the period of 1973 to 2005. Our index for the financial sector liberalisation covers seven aspects: credit controls and reserve requirements, interest rate controls, entry barriers, state ownership, policies on securities markets, banking regulations and restrictions on capital market. We use a comprehensive financial development indicator constructed through principal component analysis of five different indicators: bank private credit to GDP ratio, liquid liability to GDP ratio, deposit money bank assets to total bank assets ratio, deposit money bank assets to GDP ratio, and bank credit to bank deposit ratio. The results indicate that the positive effect of financial development on long-run growth continues to decline as the financial sector becomes more liberalised. Our results are robust to changes in the financial development indicators and the dis-aggregation of the financial liberalisation index. Second, we examine the possibility for an optimal sequence of financial sector reforms that may reduce an economy’s vulnerability to financial crises. We construct a distance measure from the countries that followed a more gradual approach and liberalised their capital account at a later stage. Our analysis shows that the experience of the countries that delayed or followed a very gradual approach for the liberalisation of their capital accounts have high level of implications to those countries that allowed for shock approach or liberalised their capital account before bringing reforms in other sectors.

In capital-scarce low income economies, the lack of attractiveness to private foreign investment implies that the only readily available source of external financing for economic development has to come from foreign aid which normally comes with an altruistic motive. However, despite long history of aid-giving to low income countries and especially Sub-Saharan Africa, evidence of effectiveness of such assistance has remained debatable, particularly with the dominance of cross-country studies in such enquiry. With yet no existing country study for Sierra Leone, a typical aid dependent country, this research investigates the relationship between donor intervention (in their aid disbursement) and the development outcomes of economic growth and poverty reduction in the country. In conducting such an enquiry, the study proposed three objectives. The first examines the relationship between aid and economic growth. The second objective investigates the relationship between aid and poverty reduction considering two variants of poverty reduction: improvement of pro-poor growth and aggregate human welfare. The final objective assesses the effect of domestic politics on aid’s effectiveness in improving human welfare. Arising from a pluralistic analytical framework involving a triangulation of econometric estimation approaches complemented with qualitative enquiry, the study finds that aid to Sierra Leone is significant in promoting economic growth in the country. In terms of the impact on poverty, the results show that foreign aid to Sierra Leone has significantly improved long-run pro-poor growth in the country, but this impact could not be confirmed in the short-run. With respect to the other strand of poverty, the study finds that though aid may have not improved human well-being in Africa, it is found to significantly improve human development in Sierra Leone, though the evidence could not support its reduction of infant mortality rate as a second indicator of human well-being. Finally, for the investigation of the link between aid, politics and human development in Sierra Leone, the study finds that though aid is significant in directly improving human development in the country, yet pro-democratic politics (as against autocratic regimes) can also be good a policy option for aid‘s impact on human development in the country. Accounting for disaggregation bias of foreign aid, the study finds that whilst grants seem to consistently improve economic growth, pro-poor growth and human welfare, the study could not find strong evidence to suggest that technical assistance and loans likewise improve economic development the country. The impact of food aid on pro-poor growth is found to be moderate in conformity with the study’s hypothesis. Concluding from the analysis, it is evident in the case of Sierra Leone that the supplemental theories largely hold that foreign aid is vital in the promotion of a country’s economic development. Hence, the intervention of donors in the economy of Sierra Leone has not seemed to be in vain, but has rather proved to be largely useful. It implies that Sierra Leone’s persistent poverty characterisation amidst notable donor presence and participation in the country’s economy has little to do with the fact that foreign aid has not been effective in promoting the country’s economic development, but it may however be that the magnitude of the effect may not have been that high to completely eradicate poverty. The study’s identification of the most effective types of aid as well the realisation of political stability and democracy for enhanced effectiveness of aid in the country could be crucial if the economic significance of foreign aid is to be improved in Sierra Leone.

This thesis explores two important aspects of growth, namely the roles of financial development and inequality. The recent literature has indicated that both the finance-growth and inequality-growth relationships are complex and not well captured through conventional linear regression analyses. Thus, most of the existing empirical literature focuses on marginal or direct growth effects, ignoring the role of possible factors, conditions and thresholds that may alter our thinking about how financial development or inequality may affect economic growth. Further, it ignores the presence of outliers, especially in cross-sectional analyses which may hinder our understanding of these relationships. Therefore, Chapter 1 addresses the issue of outliers in finance-growth literature and provides a robust sensitivity analysis of some past studies and an updated data set. Chapter 2 focuses on whether R&D plays a role, potentially as a proxy for an omitted variable, for growth and whether it has important interactions with financial development. Chapter 3 then examines the role of inequality for growth, allowing the effects to differ depending on the level of human versus physical capital accumulation.The cross-sectional analysis of Chapter 1 employs the robust regression methods of median quantile regression and least trimmed squares. It shows that the findings of past studies are sensitive to outlier observations. Further, we find that the positive effect of financial development on growth disappears and even becomes negative once we use our extended data set of 86 countries over the period 1997-2006. This last finding is consistent with Rousseau and Wachtel (2011). Moreover, we investigate whether our understanding of the finance-growth relationship can further be improved by introducing a measure of R&D into the standard analysis. We note that our measure of R&D has a strong positive effect on growth and may proxy the role of an omitted variable which is highly correlated with economic growth.Chapter 2 also uses R&D and investigates its interaction with conventionally measured financial development. It employs a variety of panel data techniques for a panel of 36 OECD and non-OECD countries to show that the relationship between financial development and economic growth is not straightforward; rather, it is conditional upon the level of innovation or R&D. Further, we find that a high level of technological innovation or R&D is associated with a weak or negative effect of financial development on economic growth. It is also noted that R&D is associated with financial innovation and the results suggest that countries with a high level of R&D may have less regulated financial systems which can adversely affect the finance-growth relationship.The third chapter explores the relationship between inequality and growth in the context of a unified empirical approach suggested by the theoretical model of Galor and Moav (2004). Based on that model, we construct a new measure, the human capital to physical capital ratio, which is used to study threshold effects in the inequality-growth relationship. Methodologically, we use threshold regression with instruments, developed by Caner and Hansen (2004), which allows us to endogenously identify the threshold human capital to physical capital ratio that alters the inequality-growth relationship. Using data on 82 countries, our results show that there exist significant threshold effects, with a level of the human capital to physical capital ratio below which the effect of inequality on growth is positive and significant, whereas it is negative and significant above it. We also test the robustness of our results using different measures of the human capital to physical capital ratio. These results are consistent with the theoretical predictions of Galor and Moav (2004).

This thesis focuses on the effects tax havens have on both developed and developing countries. The work is presented in four chapters. The first chapter builds a framework of the subject by focusing on tax havens and the issues they create. A brief history of tax havens is discussed and essential statistics are presented. The second chapter discusses the effects tax havens have on developing countries. The link between transfer pricing and tax havens is also analyzed. The third chapter identifies the effects tax havens have on developed countries and its role in the financial crisis. The last chapter explores the current fight against tax havens and their likely impact in the future.

The thesis focuses on theoretical and empirical analysis of economic growth and its implications for economic and social development of the Least Developed Countries (LDCs). The thesis proceeds from the assumption that economic growth is the necessary (but not sufficient) condition for economic, social and human development of societies and nations. In context of the LDCs, this assumption can be modified: it is assumed that it has been the low average rate of growth in the long-run that is associated with the complex social and economic issues of LDCs. The primary objective of the thesis is to verify this association within the LDCs, then to investigate factors that have been the major determinants for economic growth in (African) LDCs. From the perspective of theory the thesis is grounded in theories and models of economic growth that are crucial for researching factors of growth and its implications for development. The thesis focuses also on in-depth analysis of the LDCs both from the classification and statistical perspectives. The latter one is based on comparisons with selected groups of states within the World economy.

This diploma thesis studies the influence of trade liberalization on the sources of the economic growth of Brazil. The theoretical part of this work presents some definitions of economic growth and characteristics from two basic economic growth models: the Solow model and the endogenous growth model. Regarding trade liberalization, some international trade theories are presented in this thesis, including the basis of protectionist measures, which are frequently implemented around the world. The practical part of this work analyzes the course of the Brazilian economy throughout different periods, where the GDP growth rate, sources of economic growth and the presence of protectionist policies are taking into account. Later on, the thesis reviews the trade liberalization process that Brazil experimented in the 1990s and how this process influenced the performance of the Brazilian GDP. For long time, the topics of positive effects of free international trade and the unavoidable globalization process have been on the table. Brazil enjoys conditions that are given for economic success. However, the question is whether Brazil will manage to make full use of these favorable conditions and handle the obstacles that come up along the way to its development, while enforcing free international trade and promoting its full liberalization aiming to positively influence economic growth.

The aim of this thesis is to analyze existing approaches to providing development assistance and participation of developing countries in international trade and assess both developing and commercial cooperation between the Czech Republic and Southeast Asia. The first chapter is the theoretical part of the thesis, which is focused on the theories of economic development and growth of underdeveloped countries. The second chapter deals with the openness of the markets of Southeast Asia. The main part consists of the analysis of international development cooperation and trade relations between the Czech Republic and this region.

This thesis evaluates the convergence within the European Union, focusing on the old Member States compared to the new ones. The theoretical part deals with the background of convergence and other theories explaining economic growth. The following section assesses the macroeconomic indicators work within the community and an important determinant of economic performance of individual countries, as measured by GDP per capita in purchasing power parity, and the HDI index. The analytical part of the thesis examines the conditional convergence or divergence of each block based on the method Barone Sala i Martin, using regression analysis. This work also examines the coefficient of variation, sigma and beta convergence of the various blocks. Finally, evaluate the level and rate of convergence of the Czech and Slovak Republic at NUTS level 3

This thesis examines the effect of the government expenditure structure on the economic growth. The objective is to determine which components of public expenditures are growth enhancing and which growth retarding. The theoretical model is set into the endogenous growth framework and describes the growth mechanism of productive and unproductive government expenditures. The growth impact of public spending composition is analysed for 18 European countries from 1996 to 2012. The empirical part is based on the panel data analysis. The empirical findings suggest that reallocating public resources towards education and health can promote growth. Whereas, higher expenditures on spending and defence are likely to be growth-retarding.

This study agrees that the creation of SEZs in Côte d'Ivoire is a good strategy to attract FDI, promote transfer of technology and develop the trade capacity of the country. It has the positive effect of contributing to improve the performance of the domestic industry. Besides, the new industries will create job opportunities and produce a sustainable economic growth. However, the fact that Côte d'Ivoire is party to RTAs in the sub-region like WAEMU and ECOWAS frameworks reduces the potential export market within the region for the SEZs based companies. In addition, the investors in SEZs could be faced with trade barriers induced by the divergent trade rules under RTAs. That could make the would-be investors reluctant to invest in Côte d'Ivoire, and induce them to choose another country to invest in. In the light of the need for investors to deal with clear and predictable rules, this investigation argues that the multiplicity of regional and divergent regulations governing goods from SEZs could be source of confusion and concerns, and eventually, it could impact negatively on SEZs programmes implementation in Côte d'Ivoire. / Dissertation (LLM)--University of Pretoria, 2014 / gm2015 / Centre for Human Rights / LLM / Unrestricted