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Article
Publication date: 2 March 2015

Naeem Akram

Over the years most of the developing countries have failed to collect enough revenues to finance their budgets. As a result, they have to face the problem of twin…

Abstract

Purpose

Over the years most of the developing countries have failed to collect enough revenues to finance their budgets. As a result, they have to face the problem of twin deficits and to rely on external and domestic debt to finance their developmental activities. The positive effects of public debt relate to the fact that in resource-starved economies debt financing (if done properly) leads to higher growth and adds to their capacity to service and repay external and internal debt. The negative effects work through two main channels – i.e., “Debt Overhang” and “Crowding Out” effects. The purpose of this paper is to examine the consequences of public debt for economic growth and investment for the Philippines.

Design/methodology/approach

The present study examines the consequences of public debt for economic growth and investment for the Philippines during the period 1975-2010, by using autoregressive distributed lag technique.

Findings

The results reveal that in the Philippines, public external debt has negative and significant relationship with economic growth and investment confirming the existence of “Debt Overhang effect”. But due to insignificant relationships of debt servicing with investment and economic growth, the existence of the crowding out hypothesis could not be confirmed. The domestic debt has a negative relationship with investment and positive relationship with economic growth.

Research limitations/implications

First and foremost implication of the study is that heavy reliance on external debt must be discouraged. Therefore, in order to accelerate economic growth, developing countries must adopt those policies that are likely to result in reducing their debt burden, and it must not be allowed to reach unsustainable level. In the case of domestic debt, the present study finds that investment is negatively affected by domestic debt due to the crowding out effect; yet real GDP has a positive relationship with domestic debt. Thus, if policy makers want to use domestic debt as a tool to stimulate real GDP then it must keep an eye on the consequences of domestic debt on the investment.

Practical implications

First and foremost implication of the study is that heavy reliance on external debt must be discouraged. Therefore, in order to accelerate economic growth, the Philippines must adopt those policies that are likely to result in reducing their debt burden, and external debt it must not be allowed to reach unsustainable level. In the case of domestic debt, the present study finds that investment is negatively affected by domestic debt due to the crowding out effect; yet real GDP has a positive relationship with domestic debt. Thus, if policy makers want to use domestic debt as a tool to stimulate real GDP then it must keep an eye on the consequences of domestic debt for on the investment.

Social implications

It also follows from the estimation results that population growth rate is harmful for the economic growth. So in order to stimulate the growth performance, it must adopt effective population control policies. Similarly, since openness and investment are growth enhancing so there is need for the trade and investment supportive policies.

Originality/value

From the review of literature on the issue, it can be broadly summarized that most of the studies are on the relationship of external debt and economic growth, neglecting domestic debt entirely or mentioning it in the passing. Second, most of these studies have been conducted by using panel data. However, as the different countries vary in socio-economic conditions so it is better to conduct the country specific study. The present study is an attempt to fill these gaps in the existing literature.

Details

International Journal of Social Economics, vol. 42 no. 3
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 11 May 2015

Oludele Akinloye Akinboade and Emilie Chanceline Kinfack

The purpose of this paper is to empirically report the findings on the relationship between financial sector development, economic growth and of millennium development…

Abstract

Purpose

The purpose of this paper is to empirically report the findings on the relationship between financial sector development, economic growth and of millennium development goals (MDGs) for poverty reduction, education and health development in South Africa.

Design/methodology/approach

The autoregressive distributed lag bounds testing technique was applied to two indicators of financial development, economic growth and four indicators of MDGs.

Findings

Economic growth and MDGs jointly cause financial development. Similarly, economic growth and financial sector development jointly cause the attainment of MDGs. The attainment of MDGs such as increased per capita expenditure on food and education as well as economic growth jointly cause financial development.

Practical implications

The findings highlight the complexity of the relationship between financial development, economic growth and MDGs. It is essential that the government of South Africa pursue a three track strategy of promoting financial sector development, economic growth and MDGs. The development of one strategy causes and is caused by the development of the other two.

Originality/value

Relationships between financial development, economic growth and MDG targets are unsettled in the literature. This paper studies the link between the three variables in South Africa. Hence, the contribution of this study is to enrich the understanding of this important field in the context of an important African country.

Details

International Journal of Social Economics, vol. 42 no. 5
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 3 June 2014

Biman Chand Prasad

The purpose of this paper is to provide a detailed comparison between Fiji and Mauritius and points out why Fiji which was better than Mauritius in the mid-1980s has…

Abstract

Purpose

The purpose of this paper is to provide a detailed comparison between Fiji and Mauritius and points out why Fiji which was better than Mauritius in the mid-1980s has fallen behind.

Design/methodology/approach

The paper uses recent literature on why countries fail economically and qualitative analysis and statistical evidence where necessary to compare the two countries.

Findings

During the first decade of independence, Fiji's economy grew at a rate of more than 5 per cent per annum. However, its economic prosperity was disrupted by the military coup in 1987. As a small island nation, Fiji's economic progress has been dismal and this can largely be attributed to the political instability created by the coups. Small island states like Mauritius has had uninterrupted growth rates in the same period and as a result has delivered significant improvement in the quality of life of its people.

Research limitations/implications

Fiji could not become the Mauritius of the Pacific and points due to the lack of political stability and inclusive economic and political institutions.

Social implications

Fiji could improve the quality of life of its people if it addresses the institutional constraint and it can learn from Mauritius.

Originality/value

Comparing Fiji, a small island nation like Mauritius and pointing out clear lessons not only for Fiji but also other small island nations in the Pacific.

Details

International Journal of Social Economics, vol. 41 no. 6
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 4 December 2017

Kenneth Bruce Taylor

The purpose of this paper is to present and explore the deleterious socioeconomic consequence of six interrelated trends upon the sustainability of the personal portion of…

Abstract

Purpose

The purpose of this paper is to present and explore the deleterious socioeconomic consequence of six interrelated trends upon the sustainability of the personal portion of America’s social contract.

Design/methodology/approach

Neoclassical economic growth theory is used to frame the discussion of the trends in significant variables. This paper is a general review and draws on widely available data and academic insights of scholars.

Findings

This detailed examination leads to rejection of ergodicity and concludes that the existing social contract is unrealizable and unsustainable in present form for all but a shrinking minority of citizens.

Research limitations/implications

The conclusion is robust but tentative since the trends reviewed are not fixed and may deviate from existing trend lines given undetermined government policies and unforeseeable technological developments.

Originality/value

The paper examines the origins and implications of six adverse systemic trends, highlighting the fact that existing policy prescriptions lack understanding of – and/or scale to comprehensively address – a growing existential threat to the Liberal Tradition’s entrenched social contract.

Details

International Journal of Social Economics, vol. 44 no. 12
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 27 July 2012

Bing Wang

The purpose of this paper is to reargue the great controversies surrounding marketization, by the concept of intrinsic value and to give a panorama of China's…

Abstract

Purpose

The purpose of this paper is to reargue the great controversies surrounding marketization, by the concept of intrinsic value and to give a panorama of China's marketization and social development during last 30 years.

Design/methodology/approach

The concept of intrinsic value is elaborated, and marketization and closely linked concepts such as price, wealth, happiness, freedom, etc. are reargued. An intrinsic value account (IVA) is constructed and the enhancement and weakening of some intrinsic values could be clearly shown. A panorama of China's marketization and social development is exhibited by IVA.

Findings

The basic point of this paper is that social development is a concept with strong but implicit ethical assumption and should be explicitly based upon intrinsic value. Without concrete definition and consensus on intrinsic value, it will face great disputes on judging human history as social development or social degradation. Market is not only an objective value‐neural system, but a subjective moral entity. China's maketization has enhanced economic value greatly, but suffered great loss by other intrinsic values.

Practical implications

IVA could be a practical instrument to evaluate social development and clarify the possible academic controversies on market. The arguments of China's marketization experience could be of benefit to other developing countries.

Social implications

This paper could encourage people, particularly policy makers, to consider their value assumptions, value priority, some basic concepts in market, and what human kind is really pursuing.

Originality/value

The paper shows that IVA could be a new instrument to better evaluate social development, similar to the National Income Account or National Happiness Account.

Details

International Journal of Social Economics, vol. 39 no. 9
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 8 July 2014

Mark Findlay and Si Wei Lim

What seems like a new social anthropology of global regulation is an endeavour much too grand for this paper, even though it has much merit. To contain the analysis which…

Abstract

Purpose

What seems like a new social anthropology of global regulation is an endeavour much too grand for this paper, even though it has much merit. To contain the analysis which follows, the discussion of social embeddedness will be restricted to a comparison of markets which retain some local or regional integrity from those which have become largely removed from cultural or communal social bonds. An example is between markets trading in goods and services with a consumer base which is local and subsistence, and markets in derivative products that are inextricably dependent on supranational location. The paper aims to discuss these issues.

Design/methodology/approach

North World regulatory principle operates within consolidated state frameworks, dislocated market societies and reflects socially disembedded productivity relationships. The same could be said for dominant economic regulatory scholarship. More recent efforts to develop critical analysis of South World regulatory problems and answers have consistently remained connected to the referent of the regulatory state. This paper questions the utility of such a comparative conviction in a global governance reality wherein South World regulatory environments are largely subject to North World state interests and multi-national opportunism fostered by disaggregated, often dysfunctional, domestic states.

Findings

If, as in many South World contexts, the state is dysfunctional or destructive in translating regulatory principle, then what are the social bonds which advance the integrity of regulatory principle, and what of externalities which work to draw culturally located principle towards a more hegemonic regulatory project? Could appreciating the relationship between regulatory principle and social bonding be exhibited in degrees of market embeddedness? Might the reimagining of regulatory principle be possible by reflecting on motives and outcomes for regulation that have other than wealth maximization as core value? The paper answers these conjectures as a basis for empirical research.

Research limitations/implications

In the spirit of regulatory anthropology it is not helpful to remain immersed in some strained geographic regulatory dichotomy, employing some good state/bad state polarity. Neither World exists in regulatory isolation. International regulatory organizations ensure this through their Western/Northern development models, and perpetuate post-colonial influences over South World development agendas. That said, there are two regulatory worlds, and hybrids between. Despite this, regulatory principle is not immune from cultural forces and social bonding. The paper addresses various dualities in order to propose a new way of viewing South World regulatory paradigms.

Practical implications

The framework for analysis will enable a repositioning of critical scholarship and regulatory policy away from the model frameworks of consolidated states and towards the real regulatory needs and potentials of the South World.

Social implications

Through applying the analytical technique of social embeddedness above market community paradigms this analysis offers a novel approach to exploring economy in contexts where markets are not dislocated and products are not fictitious. In this way the contemporary materialist economic crisis can be viewed against principles of sustainability rather than growth, productivity and exchange.

Originality/value

The paper draws upon established scholarship regarding market embeddedness and social bonding but unique in applying this to a South World void of regulatory discourse set free of comparison with inappropriate regulatory state referents.

Details

International Journal of Social Economics, vol. 41 no. 7
Type: Research Article
ISSN: 0306-8293

Keywords

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Article
Publication date: 8 February 2016

Masudul Alam Choudhury

A methodological study of religion including moral, ethical, and social values and economics takes us into the search, discovery, and establishment of a formal…

Abstract

Purpose

A methodological study of religion including moral, ethical, and social values and economics takes us into the search, discovery, and establishment of a formal epistemological premise. Social economics is now studied as a methodological investigation of evolutionary and embedded systems integrating the moral, social, and economic systems. Thus an integrated theory of religion representing the realm of moral and social values and economics is formalized. The paper aims to discuss these issues.

Design/methodology/approach

The author writes on the conjoint methodological perspective of the integrated domain of religion and economics. A formal ontology of the unified field of religion and economics is established in such an inter-causal and organically unified realm of moral, social, and economic values. A phenomenological model of the unified worldview that applies to a systemic concept of “everything” emerges. This methodology and the immanent phenomenological model relating to it convey the principle of inter-systemic organic symbiosis by a unique and universal worldview.

Findings

The systemic integration between religion and economics is formally studied within the immanent system methodology that formalizes inter-disciplinary symbiosis. The result is a new formal model of integration between religion and social economics.

Research limitations/implications

Empirical work can further expand the scope of the paper.

Practical implications

Immense social, ethical, and cross-cultural implications emanate from the study.

Social implications

The morality and ethical implications of religious values are imputed in the formal model and implications of the social economy.

Originality/value

The paper is of an original nature in establishing the episteme and formalism of integration between ethical and moral values of religion into the structure of the social economy. From this both a theoretical rigor as well as logical formalism can be drawn.

Details

International Journal of Social Economics, vol. 43 no. 2
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 8 May 2017

Valentin Cojanu

Criticism directed at neoclassical economics has failed to replace it with a similar grand theory. The authors argue that one possible explanation may lie in the failure…

Abstract

Purpose

Criticism directed at neoclassical economics has failed to replace it with a similar grand theory. The authors argue that one possible explanation may lie in the failure of economists to formulate an opinion as to the philosophical foundations of the author’s object of study. The paper aims to discuss this issue.

Design/methodology/approach

The argument proceeds in two steps. First, the authors review the prevailing philosophical view of “the self-interest theory (S)”, which is one of the most powerful constituents of today’s economics, and social theorizing in general. Second, the authors present a reasoning framework in which rationality becomes intelligible within a schema of integrating the self’s external and internal conditionalities into a unified view of human reasoning.

Findings

Self-interest has been supposed to give the authors direction about what, concretely, to do, but, on the way, the authors have learned that defining rationality is necessarily a life-dependent process. The conflicts of reasons call for a revised S according to which rationality implies consistency among a person’s competing behavioural drivers rooted in three ontological realms, natural, social, and cultural.

Originality/value

First, understanding the purpose of one’s actions in rational terms demands redirecting attention from outcomes in terms of utility, profits, or welfare to a social profile of a rational person, with real life coordinates in space and time, as well as the personal histories of that individual. A change in explaining aspirations leads, and this is the second implication, to change in defining the meaning of economic (or social) behaviour. Decision making is not necessarily a process of virtuously selecting the best available options, but assessing and acting according to the opportunity of choice; it is not about freedom of choice, but about the degree of freedom a person is willing and is able to take advantage of.

Details

International Journal of Social Economics, vol. 44 no. 5
Type: Research Article
ISSN: 0306-8293

Keywords

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Article
Publication date: 13 April 2015

Faridul Islam and Saleheen Khan

– The purpose of this paper is to examine the dynamic relationship among immigration rate, GDP per capita, and and real wage rates in the USA.

Abstract

Purpose

The purpose of this paper is to examine the dynamic relationship among immigration rate, GDP per capita, and and real wage rates in the USA.

Design/methodology/approach

The paper implements the Johansen-Juselius (1990, 1992) cointegration technique to test for a long-run relationship; and for short-run dynamics the authors apply Granger causality tests under the vector error-correction model.

Findings

The results show that the long-run causality runs from GDP per capita to immigration, not vice versa. Growing economy attracts immigrants. The authors also find that immigration flow depresses average weekly earnings of the natives in the long-run.

Originality/value

The authors are not aware of any study on the USA addressing the impact of immigrants on labor market using a tripartite approach by explicitly incorporating economic growth. It is therefore important to pursue a theoretically justified empirical model in search of a relation to resolve on apparent immigration debate.

Details

International Journal of Social Economics, vol. 42 no. 4
Type: Research Article
ISSN: 0306-8293

Keywords

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Article
Publication date: 13 June 2016

M. Nusrate Aziz and Osman Bin Mohamad

The purpose of this paper is to identify some well-set instruments in Islam that can efficiently alleviate poverty, solve social problems and reduce social inequality…

Abstract

Purpose

The purpose of this paper is to identify some well-set instruments in Islam that can efficiently alleviate poverty, solve social problems and reduce social inequality through a new operational framework called “Islamic social business (ISB)”.

Design/methodology/approach

This is a conceptual research that is based on Al-Quranic principles as well as contemporary social welfare philosophies, such as, augmented stakeholder theory, social enterprise and social business. Al-Quran, Al-Hadith and existing traditional and Islamic literature are consulted for this study.

Findings

The study proposes an efficient system of Islamic wealth sourcing and management to make the process of poverty alleviation sustainable. Other social problems for disadvantaged people, such as, health-, shelter-, literacy- and environmental-related issues are also addressed in the proposed system. The study identifies the inefficiency in the current practices and makes some propositions that are in conformance with Islamic principles and implementable by Islamic institutions all over the world. The authors propose a theoretical framework and operational propositions for ISB.

Practical implications

In following this study, social policymakers, Islamic financial institutions, Islamic social enterprises and Islamic charity organizations will find organized guidelines to initiate “new entities” or “reshape existing entities”.

Social implications

The study will be effective in solving social problems, alleviating poverty and reducing social inequality.

Originality/value

This is the first study that identifies all the potential Islamic sources of funding and the efficient management thereof through ISB. The study also proposes an ISB model and makes several propositions for different types of ISB.

Details

International Journal of Social Economics, vol. 43 no. 6
Type: Research Article
ISSN: 0306-8293

Keywords

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