Policies facilitating firm adjustment to globalization

Bernard Hoekman and Beata Javorcik

No 3441, Policy Research Working Paper Series from The World Bank

Abstract: The authors focus on policies facilitating firm adjustment to globalization. They briefly review the effects of trade and investment liberalization on firms, focusing on within-industry effects. They postulate that governments'role in supporting the process is to (1) ensure that firms face"right"incentives to adjust, and (2) intervene in areas where market failures are present. Their main message is that while many policies could be adopted to address market failures, they need to be carefully designed and implemented in a stablemacroeconomic environment. An institutional infrastructure that supports the functioning of modern markets is most important. Proactive support policies of whatever stripe should be subject to cost-benefit analysis, based on the existence of an identified market failure, and monitored for performance and cost effectiveness. Transparency and accountability are critical in ensuring that interventions accomplish their intended objectives rather than being vehicles for rent seeking.

Keywords: Labor Policies; Economic Theory&Research; Decentralization; Environmental Economics&Policies; Health Economics&Finance; Economic Theory&Research; Health Economics&Finance; Banks&Banking Reform; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies (search for similar items in EconPapers)
Date: 2004-11-01
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Policies Facilitating Firm Adjustment to Globalization (2004)
Working Paper: Policies Facilitating Firm Adjustment to Globalization (2004)
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