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Thesis (M.B.A.)--Boston University / PLEASE NOTE: Boston University Libraries did not receive an Authorization To Manage form for this thesis or dissertation. It is therefore not openly accessible, though it may be available by request. If you are the author or principal advisor of this work and would like to request open access for it, please contact us at open-help@bu.edu. Thank you. / 2999-01-01

This thesis studies the integration of South Africa into the global economy. It uses a structural dynamic factor model approach, instead of the well known structural vector autoregressive method, as it accommodates a large panel of time series variables characterized by a number of series significantly larger than the number of observations available. South African economic cycles show some comovement with cycles of its trading partners. But the synchronization with major trading partners has declined over time due to structural reforms initiated by the post-apartheid government. A new monetary regime, trade and financial openness, an increase in political stability together with reduced uncertainty have outweighed South African output comovement with the rest of the world. Shocks from advanced economies (the US and the EU) and East Asian countries, especially demand shocks, affect domestic variables significantly. The main channels are business and consumer confidence, trade variables, interest rates, and the exchange rate. Although South Africa comoves with Latin American countries, trade and financial linkages are still very weak. The level of development, perceptions of economic agents, and fluctuations of advanced economies (the US and the EU) are the main reasons contributing to the synchronization of their variables. South Africa’s position in Africa as economic leader starts to produce results leading to output synchronization with some of its partners’ from SADC. Similar to the Latin American scenario, the main reason is that the two sides share the EU as primary trading partner. Because of the vulnerability of the South African economy, policymakers must pay a particular attention and monitor closely developments in the global economy. In the same line, they should promote policies that enable the country to have access to international markets. Given the interdependence with the rest of the world, policymakers should monitor closely the performance of the global economy. Nevertheless, idiosyncratic features of the South African economy do play a role in the explaining fluctuations in economic activity. Hence, policies that lead to a structural transformation of the domestic economy are necessary. Reforms that allow labor market flexibility; promote competition; and support human capital formation through education, are imperative. / Doctor Francisco Nadal De Simone Professor Daniel Marais

D.Phil. (Economics) / This thesis presents a discussion of the economic integration between South Africa and the economies of Brazil, Russia, India and China, the so called BRICs. The thesis analyses four channels of interdependence: trade, investment, business cycle and the increasing importance of shocks originating from China. It makes significant and original contributions to the empirical literature by employing several econometric techniques. In the first two cases, a global vector autoregressive (global VAR) model is used to analyse the trade and foreign direct investment (FDI) linkages between South Africa and the BRIC countries over the period 1995-2009. The results show trade linkages between these economies whose magnitude differs between countries. Shocks from each BRIC country are shown to have considerable impact on South African real imports and output. However, there is no evidence of FDI linkages between these economies. This shows that the notable performance of the BRIC economies are not transmitted to the South African economy by FDI flows, but rather through the exchange rates for some countries and trade for the others. In the third application, the nature of co-movement between South Africa and the BRIC countries is examined by applying the dynamic factor model to a set of 307 macroeconomic series over the 1995-2009 period. Particularly, the extent of co-movement between the cyclical component of real output across South Africa and the BRICs is assessed. The results show significant degree of co-movement between South Africa and the BRICs over the business cycle and the long-run, although the magnitude of the co-movement differs with each country. In terms of the lead and lag relationships across South Africa and the BRIC countries, the study ends that only India leads South Africa over the cyclical period. The findings suggest that the first two factors are BRICS (Brazil, Russia, India, China and South Africa) factorswhile the third factor can be considered a United States factor. The last application investigates, using a factor model estimated with quarterly data from 1995 to 2009, how China’s shocks are transmitted to BRIS (Brazil, Russia, India and South Africa). The results show that China’s supply shocks are more important than its demand shocks. Supply shocks produce positive and significant output responses in all BRIS countries. However, their extent is significant only for short horizon in India. Positive demand shocks from China have positive and significant extent on Brazil’s and South Africa’s output only. The intensity of economic relationship and channels of transmission of shocks are different between China and BRIS. The results based on the variance share of the common component suggest that South Africa and Russia are linked intensively to China, while Brazil and India have only moderate linkages with China. International trade is an important channel for the transmission of shocks across China and BRIS countries indicating that supply and demand shocks in China do not have similar extent on the BRIS countries and therefore they require different policy responses.

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Regional integration is not a new phenomenon but has become an increasingly important topic of political research with the continued expansion of the European Union as well as an increased number of regional organizations around the globe. This paper will seek to use both Europe and East Asia as illustrations in order to better comprehend the driving forces behind integration as well as why some regions are further integrated than others. The purpose of this research is to achieve a better understanding of what causes regional integration in hopes of developing a more inclusive theory. More specifically, it aims to see how integrated the region of East Asia is, in particular when compared to Europe. Through comparing the two regions and analyzing factors in both Europe and East Asia as determined by current integration theory, this research aims to achieve a better understanding of the driving forces behind regional integration as an international phenomenon. My research is an attempt to tie together the multiple existing theories of regional integration with the goal of creating a more cohesive and measurable theory. With an increased understanding of regional integration, we will be better able to both explain and predict integration in both Europe and East Asia, as well as other, less integrated regions around the world.

published_or_final_version / Comparative Asian Studies / Master / Master of Arts

The Immigration issue was, during quite long period of time, a disputable concern within the European territory. European countries, as many others, require a certain degree of qualified immigration, due to developments of the labour market. Along with the issues of immigration and migration, the matter of immigrant’s integration is becoming the focus point of consideration for the European Union as a whole, its single Member States and various other international organizations. The matter of integration has been imbedded in immigration policies because of the discovery that migration of labour throughout Europe, which was considered to be an interim feature for EU’s Member States, has transformed to the permanent one. Another reason is the fear that badly integrated immigrants might become an extraordinary problem for the population’s majority.

This thesis explores the origins and evolution of European integration through the lens of classical realism. Classical realism, as an approach to International Relations, has had little to say about one of the most fascinating and politically important developments in the post-war international system, namely the effort by Western European states to integrate economically from the 1950s onwards. Grounded in classical realism’s ontology of power and the desire by states to secure autonomy and exert influence in the international system the thesis argues that a combination of military power, economic power, and power over opinion can explain the main contours and dynamics of integration. At the core of the argument is the idea of ‘Three Europe’s’ – Protected Europe, Confederated Europe, and a Europe of States – which have coexisted in a stable equilibrium for most of the post-war era. Protected Europe is grounded in both the military power and capacity of the United States and the national interest of the United States, remarkably static from 1945 onwards, to play a hegemonic role within the European military and security sphere. It was Protected Europe that created the military security and stability necessary for Western European states to pursue economic integration. It altered the guns versus butter trade-off and permitted Western European states to invest more in their welfare states. Most importantly if resolved the security dilemma that had existed between the most powerful states on the continent, France and Germany, and created a context in which their interaction shifted to one of intensive cooperation. The product was Confederated Europe. The logic at the core of Confederal Europe was a desire by France to bind Germany, and consent by the Germans to be bound. This was done for a variety of reasons. Internally the concern was to exert as much control over Germany as possible and Germany’s long-term national interest – to secure normalisation, independence, and reunification – complemented this urge. Externally the concern was to secure autonomy in the global economic system and to project power and influence within that system. But the components of the confederation remained distinct nation states and thus a Europe of States existed in an often uneasy tension with Confederal Europe. The fault line between a supranational economic structure and a political structure still tied to the states created intermittent tensions and political earthquakes that have punctuated the history of post-war Europe. However, throughout the period the European masses formed a permissive consensus vis-à-vis integration and, given the rather limited and technical nature of the confederation, this minimised the inherent tension between Confederal Europe and the Europe of States. All three Europe’s are, at the beginning of the twenty-first century, in a state of flux. The decline in the relative power of the United States, and the rise of new challenges in the Asia-Pacific, has triggered a strategic pivot away from Europe and a weakening of the commitment to Protected Europe. How Europe will manage this shift remains unclear but a more prominent European leadership role in NATO or a rejuvenated and more focused European security and defence policy seem necessary. The historical balance between a France that wished to bind and a Germany that consented to be bound has shifted palpably. More willing to act as a ‘normalised’ power in the European system, Germany has emerged as a clearly dominant actor and this will require a shift in the diplomatic practices of a European system that has become used to France leading and Germany both following and supplying the supporting economic power. If Confederal Europe is to survive it must accept stronger German leadership. Finally the permissive consensus at the mass level is being eroded as European integration touches upon ever-more salient policy spheres. This means that the power of the idea of Europe has to be strengthened and entrenched more firmly, thus diluting the prominence of the Europe of States, or integration must retrench to bring its competences back into line with its legitimacy.

This research is aimed at assessing SADCC in relation to the degree to which it has accomplished its own aims, regional economic integration and reduction of dependency. The study has relied on and used the dependency theory which holds that the development in a peripheral capitalist system is a continuous process of dispossessing the less developed countries of their raw materials in favor of maintaining the advancement of the capitalist countries. In short, neo-colonial dependence view of underdevelopment attributes a large part of the Third World's continuing and worsening poverty to the existence and policies of the industrial capitalist and socialist countries and their extensions in the form of small but powerful elite groups in the less developed countries. The research came with the following findings and conclusions. That SADCC countries have been integrated into the capitalist system due to the European colonization. That despite the efforts of SADCC and their proclaimed goals of economic integration and self-reliance, the SADCC region has not reduced dependency but rather there is a new dependency on other external countries. SADCC's committed strategies have not produced self-reliance and economic integration in the region due to the structure and activities of SADCC. In order to correct this imbalance and dependency, few options are possible. SADCC should embark upon the socialist mode of development because socialist methods will diminish the degree of dependency as in the case of Cuba. Intra-regional trade should be encouraged to bring about some form of transaction flows and economic integration. Establish appropriate ways of encouraging agricultural productivity in order to alleviate the shortage of food problems in the region and adopt capital accumulation methods.