CSR in Management Research

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This view is nicely reflected in the designation of the international institutions providing assistance to developing countries. One is called the World Bank—a bank because the key thing that has been taken to be needed is finance. And that is what banks are supposed to provide. Thinking about development has changed and with it thinking about the role of finance. 5 Keys to long-term economic growth include measures like employment creation. But if it is the case that countries in their attempt to attract foreign investment pursue macroeconomic policies that make it impossible to create employment, they will not grow economically.

One way of looking at the problem is that there is a basic proposition that the sum of the trade surpluses has to equal the sum of the deficits. Thus, if China and Japan insist on having surpluses, the rest of the world must be in deficit. This means that if one country decides to reduce its deficit, that deficit has to show up somewhere else—deficits are like hot potatoes. That explains in some sense why we have had one crisis after another in recent years. If Thailand and Korea have crises, they want to get rid of their deficits.

I do not doubt that there were very good reasons for abandoning import substitution strategies. But we have to learn from both the failures of ISSs and the failures of reform strategies. We have to try to find out why and when each of these strategies work and why and when they fail. Tariffs do cause distortions, but all forms of taxation are distortionary. The key Development dilemmas 18 question is how to use the distortions associated with taxation to promote development rather than to arrest it.

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