Deconstructing the BRICs: Structural Transformation and Aggregate Productivity Growth
Health is an indispensable public good. At the national level it has been manifested in the BRICS governments’ commitment to scale up health financing, though to a different degree. At the global level it is evidenced by the international community progress on the three health-related Millennium Development Goals. However despite successes in fighting infectious diseases, child and maternal mortality, old risks persist and new challenges emerge, resulting from the 2008 financial crisis, current slack economic growth and growing economic inequality. The BRICS face these challenges and have begun cooperation on health issues. It is important that they build their emerging health agenda recognizing these challenges, committing to develop sustainable policy solutions, and cooperating with other actors to promote effective health governance for change. To explore how the BRICS contribute towards global health governance the article first considers the BRICS cooperation (its institutionalization, discourse, and engagement with other international institutions) with a focus on health issues. The authors then look into the BRICS members’ national health systems, challenges and goals. The article concludes with expectations of the BRICS future health agenda and its implications for global governance.
The global economic and political landscape is undergoing profound changes as the world enters a period of rapid transformation development strategies or adjusting their existing ones with greater prominence given to the role of innovation in the leading and underpinning development to strengthen their strategic arrangements for innovation⁃driven development, in a bid to improve their international competitiveness and seize the initiative in global competition Science, technology and innovation (STI) are recognized as the golden key to the door to growth In this trend of the times, the BRICS countries are spearheading the development of developing countries and attracting international attention with their highly innovative and distinctive development strategies Meanwhile, the BRICS as a bloc has become an exemplar of STI cooperation of developing countries.
As the rotating chair of BRICS in 2017, China will host the 9th BRICS Summit in Xiamen in September In the lead⁃up to the summit, the Ministry of Science and Technology of China (MOST) hosted the 5th BRICS Science, Technology and Innovation Ministerial Meeting in Hangzhou in July, where BRICS STI ministers had in⁃depth discussions and reached wide consensus on topics including STI policy, cooperation in priority areas, and co-funding for multilateral research projects The BRICS Action Plan for Innovation Cooperation and the Hangzhou Declaration
To support the work relating to BRICS STI cooperation under the Chinese presidency, China Science and Technology Exchange Center (CSTEC), as entrusted by MOST, established a High Level Expert Group of leading professionals The High⁃level Expert Group complied theBRICS Innovative Competitiveness Report 2017, in collaboration with the science and technology sections of Chinese embassies in other BRICS countries and STI think tanks in other BRICS countries Based on the latest available data, the Report of the BRICS STI cooperation, and presents country and thematic studies on the STI development of BRICS countries.
The Report consists of four parts, with a total of 12 sub⁃reports Part I two general sub⁃reports: an analysis report which evaluates and forecasts the national innovation competitiveness of BRICS countries and their STI cooperation and strategic priorities; and a research report on the priority areas BRICS STI cooperation for win⁃win results This part evaluates the comprehensive national innovative competitiveness of the BRICS countries since 2001 and forecast their innovative competitiveness in the next five years It also assesses the current status and progress of China's STI cooperation with other BRICS countries, and identifies priority areas of BRICS STI cooperation, support for BRICS countries to strengthen their national innovation competitiveness Part Ⅱ presents six country reports, which evaluate, analyze and forecast of the national innovation competitiveness of the BRICS countries and studies of their STI cooperation within the BRICS framework Part Ⅲ presents four thematic reports, which focus on the four thematic areas to STI, including digital economy, inclusive finance, energy, and agriculture, elaborate the STI development and potential of the individual BRICS countries in those areas, and provide valuable inputs for the BRICS countries' national innovation competitiveness Part IV contains appendixes, including an introduction to the related indicator system BRICS STI cooperation.
The modern concept of modernizing Russia somehow reproduce the history of the theory of innovation. The theory of innovation in its development has gone through a least 3 stages. In the first phase (1910 - first half of the 40s) to the forefront issues of understanding the nature of innovation and their role in the development of society over time (long, medium and short periods), the relationship of innovation and long cycles conditions. This period is associated with the names of J.A.Schumpeter, M.I.Tugan-Baranovsky and N.D. Kondratieff. The second stage in the development of innovation theory (second half 1940 - first half of the 1970s) is characterized by the increased role of macroeconomic analysis, in turn, he has at least two substages: the first of which was dominated by the ideas of neo-Keynesians, on the second-neoclassical. The third stage of development of the theory of innovation began in the mid-1970s and proldolzhaetsya to the present. It is characterized by an offensive alternative approach to macroeconomic theory. With a certain degree of conditionality is also possible to distinguish two substages. The first (second half of the 1970s - early 1990s) is characterized by the emergence of new ideas drawn from evolutionary theory, institutionalism (the theory of the firm) and management (innovation management). In the second substage (mid 90s) innovations studied by the methods of systems analysis. The authors are increasingly focused on issues of comparative studies: a comparative analysis of innovation policy in different countries, study the ways and means of forming an effective innovation systems. In the report it is critically considered not only the official point of view, but also M. Porter, K. Ketels work “Competitiveness at the Crossroads: Choosing the Future Direction of the Russian Economy”. Also «The forecast of innovative, technological and structural dynamics of Russian economy till 2030» and RAND Corporation report “The Global Technology Revolution 2020: Trends, Drivers, Barriers, and Social Implications” are analyzed. In this paper institutional preconditions and possibilities of application of the concept of social market economy in the 21st century Russia were analyzed. Basic elements of social market economy are personal liberty, social justice, and economic efficiency.
Effective property rights protection plays a fundamental role in promoting economic performance. Yet measurement problems make the relationship between property rights and entrepreneurship an ambiguous issue. As an advancement on previous research in this paper we propose a new approach to the evaluation of the security of property rights based on direct measures that overcomes some limitations of previous studies. We apply this new metrics to a survey of manufacturing firms in Russia to identify the economic effects associated with the lack of property protection in a transition economy. Our analysis supports the view that there is a close relationship between institutions, property rights and economic growth. Our findings confirm that redistributive risks provide a depressing effect on investment and innovative activity of manufacturing enterprises and potentially result in a huge loss in efficiency and economic growth, which in other institutional settings could have been avoided.
This is the second volume in a series of five books bringing together the results of intensive research on the national systems of innovation (NSI) in the BRICS countries – Brazil, Russia, India, China, and South Africa. This book analyses the co-evolution of inequality and NSI across the BRICS economies. Inequality and Development Challenges argues that inequalities (assets, access to basic services, infrastructure, knowledge, race, gender, ethnicity, and geographic location) that go beyond the aspects of income, must be factored into development strategies since the benefits of innovation are not distributed equally. It combines original and detailed data, making this book an invaluable resource for researchers and scholars in economics, development studies and political science, as well as policymakers and development practitioners interested in the BRICS countries.
In this paper we study convergence among Russian regions. We find that while there was no convergence in 1990s, the situation changed dramatically in 2000s. While interregional GDP per capita gaps still persist, the differentials in incomes and wages decreased substantially. We show that fiscal redistribution did not play a major role in convergence. We therefore try to understand the phenomenon of recent convergence using panel data on the interregional reallocation of capital and labor. We find that capital market in Russian regions is integrated in a sense that local investment does not depend on local savings. We also show that economic growth and financial development has substantially decreased the barriers to labor mobility. We find that in 1990s many poor Russian regions were in a poverty trap: potential workers wanted to leave those regions but could not afford to finance the move. In 2000s (especially in late 2000s), these barriers were no longer binding. Overall economic development allowed even poorest Russian regions to grow out of the poverty traps. This resulted in convergence in Russian labor market; the interregional gaps in incomes, wages and unemployment rates are now below those in Europe. The results imply that economic growth and development of financial and real estate markets eventually result in interregional convergence.
The economic crisis has uncovered three negative Russian tendencies that created institutional obstacles for market economy growth during the last decade: deepening of raw materials specialization, wear and tear of the equipment, gap in scientific and technical progress, and strengthening of the government. To stop these negative tendencies and overcome economic crisis it is necessary to reform developed institutes.
The major problem of the Russian economy is its low performance level. Overcoming development gap in comparison with developed countries will become possible only with the help of innovations. This means that process of generating and using Schumpeterian-type innovations should become the key factor of economic development. It is necessary to note that innovative activity of businessmen can be present in various forms. Depending on existing game rules business activity can get not only productive (J. A. Schumpeter’s creative destruction), but also unproductive (rent seeking) orientation.
The “Concept 2020” analyses the global challenges which Russia faces in its development that amplify high level of social inequality and regional differentiation, preservation of barriers to conducting enterprise activity, weak interrelation of education, science and business, absence of necessary competition in various markets and low level of social capital development. Under these conditions, as A. Gerschenkron wrote, the government becomes the leading factor of economic modernization, and it is its representatives that try to shape the concept of long-term socio-economic development of the country.
It is supposed that gross national product growth will be provided, mainly, by means of priority development of labour productivity and large capital assets investments. Our calculations show they considerably advance growth of productivity and gross national product, and that will lead to increase in a capital intensity of production and falling yield on capital investment. The arising gap between export and import, according to authors of the Concept, will be covered by the accruing inflow of foreign capital.
However the main drawback is the mechanism of maintaining economic growth. Defining concrete aims of development is an important, but an insufficient condition. The institutional mechanism of private sector development stimulation is not developed at all. Meanwhile, sharp increase of expenses on social sphere will raise the question about budget spending. It can be reached either by increase in taxes or by public sector expansion.
In the report it is critically considered not only the official point of view, but also Porter M., Ketels K. “Competitiveness at the Crossroads: Choosing the Future Direction of the Russian Economy”, «The forecast of innovative, technological and structural dynamics of Russian economy till 2030», and RAND Corporation report “The Global Technology Revolution 2020: Trends, Drivers, Barriers, and Social Implications” devoted to tendencies of development of 16 technologies in 29 countries and other forecasts.
In this paper we analyze institutional preconditions and possibilities of application of the concept of social market economy in the 21st century Russia. Basic elements of social market economy are personal liberty, social justice, and economic efficiency.
Personal liberty assumes trust strengthening between agents, development of guarantees of private property, and regular economic policy promoting freedom.
With social justice present market economy promotes social development and strengthens middle class. Democracy will allow to break administrative barriers and to create public control. Social justice also includes address support of vulnerable regions of Russia.
Economic efficiency should be directed towards creation and maintenance of competitive order, strengthening of antimonopoly activity and improving fair entrepreneur’s image. This will make Russia more attractive for workers from abroad and help it develop integrative relations with neighboring countries.
All these measures will raise economic efficiency while creating preconditions for a fast overcoming of the crisis and increasing the well-being and the acceleration of economic development of Russia.
Institutions affect investment decisions, including investments in human capital. Hence institutions are relevant for the allocation of talent. Good market-supporting institutions attract talent to productive value-creating activities, whereas poor ones raise the appeal of rent-seeking. We propose a theoretical model that predicts that more talented individuals are particularly sensitive in their career choices to the quality of institutions, and test these predictions on a sample of around 95 countries of the world. We find a strong positive association between the quality of institutions and graduation of college and university students in science, and an even stronger negative correlation with graduation in law. Our findings are robust to various specifications of empirical models, including smaller samples of former colonies and transition countries. The quality of human capital makes the distinction between educational choices under strong and weak institutions particularly sharp. We show that the allocation of talent is an important link between institutions and growth.
One of the basic factors of economic growth in the information knowledge - based economy is the innovation component determined by the level of intellectual capital usage. Of the specifics in the usage of intellectual capital is that the cost evaluation of intellectual resources on the macro-level as a factor of economic growth is extremely difficult and there are more evaluation possibilities on the micro-level. The risk's estimation based on making use of discount theory.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.