Corporate finance Essay Example | Topics and Well Written Essays - 1500 words - 1

Corporate finance - Essay Example Business firms generally find difficulty in raising capital for their further expansion.In the case of very big business projects,the founder alone cannot meet the firm’s initial capital requirements.Under such circumstances,companies issue shares of specific value to the general public with intent to raise capital for meeting business operation expenses. Share price refers to the price of a single share that company issues for subscription. While taking decision on share subscription, an investor compares the share price with company’s financial statements. If a company cannot raise an attractive surplus from its operation, it cannot fix a high price for its shares. It is observed that the market stature of a company has a direct impact on its share price. Every firm aims at maximizing its share value by improving profitability. Empirical evidences suggest that share prices may be affected by an array of factors. Share price is mainly categorized into two such as inter nal and external variables. This paper will explore how these factors affect share prices. Internal variables affecting share prices Internal variables are the strengths or weaknesses of a business which may largely affect the share prices more than any other factor. Profitability, leverage, size, bonus issue, and warrant exercise are the main internal variables that influence the share price to a large extent. They are described below in detail. 1. Profitability Obviously, the ultimate objective of every business is wealth maximization. Therefore, an investor is always curious about the economical status of the company in which he wishes to invest. A firm’s audited financial statements prepared at the end of the fiscal year give vital information to investors and other shareholders. An investor mainly considers the company’s total revenue, expenses, and profitability so as to assess its current market position. For making an investment decision, an investor may give h igh emphasis on the firm’s Earning Per Share (EPS) that represents rate of return on a share at the end of the financial year. In other words, when the EPS rises, investors are more likely to invest with the company. 2. Leverage Leverage is a business term that indicates the amount of money borrowed to finance the purchase of assets; and it can be determined by calculating Debt-to-equity ratio. Although leverage is beneficial for the company to promote growth through the purchase of assets, a high leverage would raise high risks including the drop of share price. An investor would never like to purchase the assets of a company that owes huge debts to other entities because investors are less likely to support a risky venture. Hence, a low leverage may benefit the business to maximize its share price. For instance, as Chatterjee (2011) reports, the Reliance Communications have recently cut down share price target for December by 49 percent to 82 rupees mainly as a result of hi gh leverage. 3. Size Fernando, Gatchev, and Spindt argues that the size of the firm can directly influence the share price; an increase in firm’ size causes a proportional increase in share price and vice versa. Generally, it is believed that huge firms would have abundant potential financial sources that can be effectively employed to meet different business needs. Similarly, large sized firms would probably maintain many potential market segments which would assist the firm to confront with difficulties in times of business contingencies. Moreover, large firms would be well established in the market and therefore, they can keep stable market demand to some extent regardless of the changes in market trends. These factors offer a minimum profit guarantee to investors even if the business faces unexpected losses. Schutts points out that Wal-Mart’s large size has assisted the firm maintain its share price steadily. 4. Bonus issue Bonus issue indicates the act of issuing additional shares to the firm’

Beuaty Essay Example | Topics and Well Written Essays - 250 words

Beuaty - Essay Example Whats interesting is that in this poem, Shakespeare doesn’t glorify the beauty of the mistress or anything remotely connected by using elaborate metaphor. He doesn’t make any comparisons with his love for Venus either. He reflects on the ordinary beauty and the humanity associated with a mortal in his love. He feels that the aforementioned attributes are very important. He makes a deliberate attempt to use those typical metaphors of love poetry in the opposite context. (TimeOut) On the other hand the poem Beauty by Tony Hoagland is the poet’s reflection of his sister and her obsession with meeting some arbitrary standard of beauty. The poet explains how the medicines that she was taking were adversely affecting her natural beauty. He feels that she carries with herself the â€Å"burden† of looking beautiful. The poet reflects on the concept of beautiful musingly. He is bewildered with those women who are obsessed with appearance and attractiveness and have it on their mind always. He draws a contrast between what his sister was going through with the beauty of nature during spring time. Later on when she finally gives up on the idea of trying to look beautiful or reach that arbitrary standard of beauty, she feels a lot more relieved and free. He feels that even the new found freedom is beautiful too in its own right. In a gist the poem implies that we often get too caught up reaching a certain standard of beauty and once that effort relinquishes or becomes a burden, it is wiser to let go of it. Both the poems depict a very practical account of beauty perception today. While Shakespeare’s poem is a sonnet in which he claims his love for a dun mistress to be just as extra-ordinary as it could have been for any other goddess who is better than her, Tony’s poem is a reflection of women’s race to look beautiful and then how they finally find solace from it. While Shakespeare’s poem reflects on the traits of his

Oil And Gas Industry Essay Example for Free

Oil And Gas Industry Essay Petroleum in one form or other has always been the most useful natural resource of man. More than four thousand years ago, Herodotus, a Greek historian of 5th century B. C. E and Diodrus Siculus, a historian of Agyrim Sicily in C A 90 B C– C A 30 B C discovered that Babylon were using Asphalt black substance found in Petroleum during the construction of the walls and towers of Babylon. In 1410 AD, native Americans were harvesting the oil for medicinal purposes. It was in 1859, in the quite farm country of North Western Pennsylvania that the drilling of the first most important crucial oil well took place. This well began to be known as the Drake Well after the name of Colonel Edwin Drake, the man who gave the idea of drilling the well for commercial use. This was the first phase of the history of Oil Industry, which gave new lease to our lives. (The Paleontological Research Institution, The History of Oil) Today, the Oil and Gas Industry has touched every sphere of our lives. It is the most depleted and yet the most used natural resource by the economies all around the world. With the increase in new explorations and technological developments, the natural oil and gas production is increasing at the rate of two billion cubic feet a day, and currently Devon Energy is one of the largest and independent oil and gas producers in the United States. Based in Oklahoma City, it is supplying three percent of the gas consumed in North America and producing 600,000 barrels of oil a day. The company is also drilling more than 2000 oil wells every year in North America in an area stretching from the Gulf of Mexico to the northernmost reaches of Canada. (O G Next Generation Oil and Gas, 2007) There are many unpredictable reasons, like over all economic growth, continuous development in technology, change in energy prices, change in weather patterns and public policy decisions which led to the changes in the levels of production and in demand and supply. According to Energy Information Administration projections from 2007 to 2030, the total production of domestic liquid embracing crude oil, natural gas plant liquids, refinery processing gains and other refinery inputs, is expected to see a tremendous increase. The reason behind the increase is the growth in refinery processing and other refinery inputs. It is projected that this growth will compensate any predicted reduction in crude oil production after 2017. This increase in the production owes to some extent to the high tech oil recovery methods, the increase in the production in the deep waters in Gulf of Mexico, higher resource assumptions for the Bakken Shale formation in the Williston Basin. (Energy Information Administration, 2007) As per the AEO2007 reference case, the total domestic natural gas production including the supply of supplement natural gas reflects an increase from 18. 3 trillion cubic feet in 2005 to 21. trillion cubic feet in 2022. (Energy Information Administration, 2007) This clearly shows that in-spite of the factors that have led to the increase in the energy prices since 2000, the growing influence of developing countries on world-wide energy requirements, enactment of legislation and regulations in the United States, the rising need for the alternative source of energy and the need for the energy technologies did not hamper the growth of Oil and Gas Industry. United States of America is one of the largest economies in the world with the per capita Gross Domestic Product to be $43,500. The Central Intelligence Agency, 2007). The economy of America depends on the crude oil for fuels to be used in the transportation purpose. Seeing the current economic scenario and increase in the demand for the fuel, the demand for the light oil production all over the world is expected to increase and will reach to the point where supply of the oil will going to be far less than the demand. This will result in the imbalance in the supply and increase in the price of oil and fuel especially for military and strategic purposes. More than 60 per cent of the fuel requirements of United States of America is met by imports and at this current state of affairs, United States of America have to bear the cost at price level of $55/Bbl could be increased twice, from 9. 9 MM Bbl/d to nearly 20 MM Bbls/dby2025. (Online Edition) As the imports will increase, there is every possibility that America could face price shocks, supply disruptions, and fuels shortages. According to the EIA/AEO estimates, the average import price of oil from 2005 to 2020 could make United State Gross Domestic product to reduce by more than $ 1. 1 trillion. The department of Energy and the honorable President of America suggested that the need of the hour is to rely on the domestic sources for the increase in the liquid supplies. (Online Edition) And the best source is the production of Shale Oils; converted into liquid fuels, provide fuel for the transportation of military and civilian purposes. Currently the Oil shale resources can be found in Colorado, Wyoming and Utah and hope is on the anvil that with the efforts of the Government, industry and other stakeholders, the oil shale production can reach 2 MM Bbl/D by 2020. The prices of the Crude Oil which have been showing an increase since last two months is expected to reach at the pinnacle of its monthly average price in August. The RAC of crude oil in 2007 is estimated at the rate of 64. 86 per barrel as compared to $ 60. 23 per barrel in 2006 and in 2008 is expected to be 68. 75 per barrel. This increase is due to the tight world oil supply and demand balance. 2007 can witness the increase in the total gas consumption by 4 percent and the LNG imports can go up to 850 bcf, which would be a record in upper scale. This is clear from the fact that despite the increase in the demand of bio-fuels and other non-hydroelectric renewable energy sources and subsequently the construction of new nuclear power plants, the Oil and Gas Industry is expected to supply same 86-percent share of the total U. S. primary energy in 2030, which they were giving in 2005 Year after year, there has been very less growth in retail sales to just 3. 2% year in April whereas there has been increase in the gas stations. Because of the growth of wholesale energy prices to 3. 4 per cent, the Producer Price Index (PPI) increased to 0. % in April. Due to the increase in oil prices and stable demand, there was a trade deficit by $6 billion. (Pod cast Directory, 2007). According to Chicago Fed’s annual Automotive Outlook Symposium, the economic growth in 2007 is seen to be slower than in 2006, with inflation and the unemployment rate increased. The prices of the Energy also increased in the middle months of 2006, but after that they fell, at an average of $60 per barrel in the fourth quarter. This led to the increase in inflation by 1. 9 per cent as measured by the Consumer Price Index (CPI), which is less than 3. per cent than previous year. (Strauss Engel, 2007) This phrase â€Å"Oil flows the Nation grows† is evidently true when it comes to Oil and Gas. The increase in the price of Oil also increases the over all Consumer Price Index, especially in September 2005, which was 1. 2 per cent, highest in 25 years. The increase in imports of energy increases the trade deficit, on the average the increase in oil prices to 10 per cent leads to 150,000 Americans to lose their jobs, and over and above we have to loose between $80 billion and $160 billion in economic growth. In September 2005, it was estimated that 40 percent increase in gas prices reduced the total domestic consumption by 0. 4 percent and the GDP fell to an estimated 0. 9 percent. In fact even the Consumer spending was reduced. But there is an increase in the profits among the major players in Oil and Industry. Only in the beginning of 2005, the five largest oil companies were making profits of $52. 2 billion, which was less in 2004, only $39. 5 billion. (Democrats Policy Committee, 2005). The study on the impact of Oil Price by An International Energy Agency in 2004 revealed that the repercussions of the high prices on economy will be minimum and this proves to be as High oil prices became most important macro economic variable. It is apparently quite clear that with the new technologies are in the offing, the Oil and gas Industry will strike more. The earnings from the Industry are being invested in new technology, new production, and environmental and product quality improvements to meet the requirements of Generation next. According the Oil Gas Journal estimates, the Industry spends $85. 7 billion in 2005, whereas in 2004 it spend just $80. 7 billion in 2004 and in 2003 $75. 5 billion. (Cavaney, 2006). The threat to the Oil Industry is from the alternative sources of energy like bio fuels and other non-hydroelectric renewable energy sources and subsequently the construction of new nuclear power plants, yet the Oil and Gas Industry is expected to supply same 86-percent share of the total U.  S. primary energy in 2030, which they were giving in 2005. (Energy Information Administration, 2007). As the study above reveals that though the production of oil and gas is on the increase but it is not able to meet the demand and to maintain a balance between the demand and supply, The Government and Energy department is taking initiative to increase in the Shale Oils for liquid fuels.

Economic Governance for Crisis Prevention

Economic Governance for Crisis Prevention 1.0 INTRODUCTION The proposed research attempts to identify the critical components of economic governance in four Asian countries namely Malaysia, South Korea, Thailand and Indonesia. The study by employing in-depth case study analysis seeks to analyze the economic governance practices in these countries and its relationship to their economic growths. The study then attempts to investigate the links between economic governance and the Asian financial crisis in 1997, and the roles the economic governance could have played in the recovery process since the above countries had somehow recovered at somewhat different speed. Based on the identified components of economic governance considered imperative for sustainable and resilient economy, the study will develop an index namely Economic Governance Quality Index capturing the score of governance parameters by the countries during the booms and slumps of their economies throughout the period under study. Finally, the components of economic governance wil l be employed in panel data analysis to empirically determine their significance towards economic growth. Its findings then will be of significance in crisis prediction and prevention methods in which the identified key governance parameters are the core ingredients. 2.0 BACKGROUND Good governance is perhaps the single most important factor in eradicating poverty and promoting development. Kofi Annan, former Secretary General of the United Nations. The concept of governance has assumed a more central focus and been given key attention not only by the officials from the United Nations Development Program, the World Bank and the International Monetary Funds, but also from the policymakers in especially developing countries, aids donors, and regional organizations of economic cooperation as well as academics fraternity. Since the beginning of 1990s, there is a strong indication of growing emphasis that good governance, together with democracy and protection of basic human rights, is indispensable for sustainable economic growth. Economic development cannot be achieved without the development of good governance, which is composed of competence and honesty, public accountability, and broader participation in discussion and decision making on central issues. In addition to traditional view of governance which is on the public governance, there is also a notable increase in the endeavors to grasp the concept of governance in a multi-d imensional perspective which includes economic governance. The relationship between governance and development is thus studied from diverse angles, especially in the vein of economic transformation, macroeconomic management and prevention of crisis as well as structural reforms. The Asian financial crisis in 1997 had somehow exposed the vulnerability of the once high-performing countries in the region, whose lack of governance practices was said as the main cause of the severe affects. 3.0 STATEMENT OF THE PROBLEM The Asian economies success was once dubbed the Asian Miracle, and a model to be emulated by other developing countries seeking higher growth. The success had introduced a growth model with emphasis on policies of setting the prices right, liberalizing the economy and the private sector as the engine of growth. When financial crisis struck the Asian countries in 1997, and looking at the devastating effects the countries in the region had experienced following the malaise, many however started to raise questions whether the quality of governance practices in these countries had somehow contributed to the crisis. Furthermore, the fact that South Korea and Malaysia had somehow recovered rapidly from the crisis compared to Indonesia and Thailand has sparked off interests on what roles good governance could have played in the recovery process. Hence, good governance has become a topic widely studied in the aftermath of the crisis. The discussions center on two main perspectives; firstly, the absence of good governance has been perceived as a MAJOR CAUSE of the crisis, and secondly, an inference is made that good governance is IMPERATIVE for durable and resilient economy. This study hence sets out to empirically identify and ascertain the governance parameters and their significance towards crisis prevention. Since the study focuses on economic governance, and to avoid constant repetition, the word governance used in this proposal should be taken in the context of economic point of view, unless explicit reference to other perspective of governance is relevant. 4.0 RESEARCH QUESTIONS This study will attempt to answer the following questions: What are the economic governance parameters presumed as crucially importance for sustainable and resilient economy? How to capture the score of economic governance practices in the East Asian countries during the period under study? How would the significance of governance parameters be empirically ascertained for the purpose of crisis prediction and prevention? 5.0 RESEARCH OBJECTIVES The study hypothesized that good governance is imperative for sustainable and resilient economy, and the absence of such would result in increased vulnerability of the economy towards declining into crisis. Therefore, the objectives of the study are: To identify the parameters of economic governance crucial for resilient and sustainable economy. To develop an index of Economic Governance Quality capturing the score of economic governance practices by the East Asian countries during the period under study. To empirically ascertain the significance of economic governance parameters towards growth via a dynamic estimation model whose findings then would be of importance for crisis prediction and prevention. 6.0 SIGNIFICANCE OF THE STUDY It would be interesting to investigate what makes good governance and how do they link to economic growth in the four selected Asian countries. Furthermore, it would be crucially important to examine, from the governance perspective, how could the countries once considered by many as the fastest growing economies in the region were severely affected by the Asian crisis in 1997. Notwithstanding that, the fact that South Korea and Malaysia had made a more swift recovery than the other affected countries, it would therefore be interesting to analyze how the governance practices in the different countries facilitated the recovery process. The findings from this study are expected to provide a significant contribution to the existing governance literatures especially from the economic perspective since it attempts to discover the critical components of economic governance that are imperative for sustainable and resilient economy. Policy makers not only from the countries under study but also from other developing countries may utilize the findings of the study to evaluate their economic governance practices and be able therefore to make necessary adjustments and required changes with the objectives of registering better growth and strengthening the economy against any possibility of future crisis. The researchers from world organizations and academic community may also be interested with the findings since the study attempts to develop a new feasible dynamic estimation model to analyze the relationship between the components of economic governance and growth, of which they could use as a basis for their future research undertaking in the similar field. In addition, the findings could also stimulate and facilitate them to search for additional approaches to counter or justify the results of this study. 7.0 LITERATURE REVIEW Good governance has become a topic widely debated by academicians and economic communities especially in the aftermath of the Asian financial crisis in 1997. The discussions in this context center on two main perspectives; first, the absence of good governance has been perceived as a major cause of the crisis, and the second prognosis is drawn by inference, namely, that good governance is imperative for durable development (Lam, 2003). Therefore, to have a better understanding of the governance, this section discusses definitions and indicators of the governance, its relationship with the economic growth, how it links to the crisis and its roles in the recovery process, and finally how could these governance factors be used for crisis prevention. 7.1 Definitions and indicators of governance Definitions and indicators of governance can be found in numerous literatures. A top-down approach is best used to understand the concept of governance, where a general or broad definition of governance will be firstly explored before moving on to a more specific definition. The World Bank continuously updates key governance indicators in its regular publication of Governance Matters, a governance study encompassing many aspects like political, social, economic, legal and moral. Meanwhile, the International Monetary Funds (IMF) has been doing a great deal of works in an effort to promote governance in the financial sector management through Financial Sector Assessment Programs (FSAPs) which include regulatory, risk management and aid management. 7.1.1 Broad definition of governance From the viewpoint of United Nations Development Program (1997), the definition of governance is the exercise of economic, political administrative authority to manage a countrys affairs at all levels. It comprises mechanisms, processes and institutions, through which citizens and groups articulate their interests, exercise their legal rights, meet their obligation and mediate their differences. Good governance is, among other things, participatory, transparent and accountable, effective and equitable, and it promotes the rule of law. It ensures that political, social and economic priorities are based on broad consensus in society and that the voices of the poorest and the most vulnerable are heard in decision-making over the allocation of development resources (Abdellatif, 2003). In its report, Governance and Sustainable Human Development in 1997, the UNDP acknowledges the following as core characteristics of good governance, i.e. participation, rule of law, transparency, responsiveness, consensus orientation, equity, effectiveness and efficiency, accountability, and strategic vision. A report by the World Bank (2006) entitled Governance Matters V covering 213 countries and territories since 1996 until 2005, presented the latest version of the worldwide governance indicators, namely voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption. Meanwhile, Inada (2003) discussed the governance in Indonesia where the word governance is translated as Tata Pemerintahan. It however has different meanings covering different agendas from political systems to corporate governance. They includes political democratization, reorganization of police and the military, curing the problems of corruption, collusion, and nepotism (KKN), justice reform system, decentralization, financial management, corporate governance, and state-owned enterprise reforms. Shimomura (2003) in his case study of governance in Thailand adopted pluralist democracy, accountability, transparency, predictability, and openness in the manner of exercising power, rule of law, effective and efficient public sector management, prevention of corruption, and prevention of excessive military expenditures as the standard definition of good governance. 7.1.2 Governance from economic perspective According to Dixit (2006), economic governance consists of the processes that support economic activities and economic transactions by protecting property rights, enforcing contracts, and taking collective actions to provide appropriate physical and organizational infrastructure. These processes are carried out within institutions, formal and informal. He described that the field of economic governance studies and compares the performance of different institutions under different conditions, the evolution of these institutions, and the transitions from one set of institution to another. Meanwhile, Huther Shah (1998), Gonzalez Mendoza (2001) and Mahani (2003) defined governance as a multi-faceted concept, encompassing all aspects of the exercise of authority through both formal and informal institutions in the management of resources. In other words, governance is: An exercise of economic power in the management of resource endowment of a country done through mechanisms, processes, and institutions through which citizens and groups can articulate their interest, exercise legal rights, meet their obligations and mediate their differences. According to Mahani (2003), indicators of economic governance are: Macroeconomic management à ¢Ã¢â€š ¬Ã¢â‚¬Å" fiscal management, level of government debt, unemployment and inflation. Investment à ¢Ã¢â€š ¬Ã¢â‚¬Å" size and trend of foreign and domestic investments, capital flows and allocation of resources. Trade regime à ¢Ã¢â€š ¬Ã¢â‚¬Å" trade orientation, export and import performance and balance of payment position. Financial sector management à ¢Ã¢â€š ¬Ã¢â‚¬Å" the banking sector and capital market. Exchange rate regime. Private sector participation à ¢Ã¢â€š ¬Ã¢â‚¬Å" privatization and corporate governance. Social development à ¢Ã¢â€š ¬Ã¢â‚¬Å" income distribution and level of poverty. Lanyi Lee (1999) studied on various aspects of economic governance, that is, the way in which economic life is governed and regulated à ¢Ã¢â€š ¬Ã¢â‚¬Å" which does not mean solely governance by the government. They first discussed the political basis of economic governance which is in their view crucial for the way in which different aspects of economic governance operate. The other aspects include the governance of macroeconomic policy making, and the interrelated issues of financial and corporate governance. From political perspective, they argued that economic governance in a market economy consists partly of direct control or indirect influence exerted by the government and of governance exercised within markets themselves on the other part; but even self-governance by markets operates within the legal, judicial and regulatory framework that has been erected and is supported by the government. The optimum role of government in this context is market-augmenting government. Furthermore, they defined macroeconomic governance as the political and administrative processes by which macroeconomic policies are formulated, implemented, and evaluated. They argued that technically the same policies can be carried out with equal effectiveness by either an autocratic or a democratic government. An autocratic government, if supported by well-trained technocrats, is likely to come up with first-class macroeconomic governance. Nevertheless, there may be factors that over time lead to deterioration in the quality of these policies in an autocratic government, as well as problems in the ability of such governments to adjust policies in response to changes in economic circumstances. The working definition of governance used for financial and corporate governance depends on the key distinction between principals and agents. In this context, they defined governance as the legal and institutional arrangements governing the behavior of an economic entity, by which owners, creditors, markets and the government compel or induce agents to behave according to the interests of the principals, or those of the broader society. In this regard, two key elements of governance are discussed. First, there is the structure of incentives and rules facing agents with regard to such matters as granting and terminating lending, bankruptcy, the rights of boards of directors, compensation structure, and the termination of employment. Second, there is the structure of the information flow from agents to principals, that is, the rules and incentives affecting accountability, transparency and disclosure of information. In both cases, the government plays a key role in setting the rules by which private actors operate. Meanwhile, Das Quintyn (2002) in their study on the role of regulatory governance in crisis prevention and crisis management have identified four main components of the regulatory governance practices, namely independence, accountability, transparency and integrity. The study explored the quality of regulatory governance based on the financial system evaluations under the Financial Sector Assessment Programs (FSAPs). Introduced in May 1999, FSAPs is a joint effort by the IMF and World Bank aims to increase the effectiveness of efforts to promote the soundness of financial systems in member countries. Supported by experts from a range of national agencies and standard-setting bodies, works under the program seek to identify the strengths and vulnerabilities of a countrys financial system; to determine how key sources of risk are being managed; to ascertain the sectors developmental and technical assistance needs; and to help prioritize policy responses (IMF the World Bank, 2005). Regulatory governance applies to those institutions that possess legal powers to regulate, supervise and/or intervene in the financial sector, which include agencies like central bank, sectoral regulators and supervisors, deposit insurance agencies, and in systemic crisis situations, restructuring agencies and asset management companies. Regulatory agencies need a fair degree of independence from the political sphere and from the supervised entities to achieve good regulatory governance. Agency independence increases the possibility of making credible policy commitments and improves transparency and stability of the output. Independence goes hand in hand with accountability. Accountability is essential for the agency to justify its action against the background of the mandate given to it. Independent agents should be accountable not only to those who delegated the responsibility à ¢Ã¢â€š ¬Ã¢â‚¬Å" the government or legislature à ¢Ã¢â€š ¬Ã¢â‚¬Å" but also to the public who fall under their functional realm. Transparency in monetary and financial policies refers to an environment in which objectives, frameworks, decisions, and their rationale, data and other information, as well as terms of accountability, are provided to the public in a comprehensive, accessible, and timely manner. Global integration of financial markets and products require greater degree of transparency in monetary and financial policies, and in regulatory regimes and processes, as a means of containing market uncertainty. Increased transparency supports accountability, protect the independence and eventually increase commitment to prudent behavior and risk control in the financial business. The final component of regulatory governance is integrity which reflects the mechanisms that ensure that staff of the agencies can pursue institutional goals of good regulatory governance without compromising them due to their own behavior, or self-interest. Independence, accountability, transparency and integrity interact and reinforce each other. Independence and accountability represent two sides of the same coin, while transparency is a vehicle for safeguarding independence and key instrument to make accountability work. Transparency also helps to establish and safeguard integrity. 7.2 Governance relationship with development and growth Economic governance is often studied through its role in the promotion of growth. This is done by setting policies, incentives and institutions that create an environment conducive to sustained stable growth through efficient management of a countrys resources. It means managing a countrys resources in a way that is accountable to, and representative of, the community; transparent, that is, open and predictable; and efficient and equitable in terms of the use, and distribution of, resources. Hence, good and effective governance requires government policies that encourage and efficiently manage investment and economic growth, support a fair and efficient public sector, strengthen the rule of law, protect human rights, and foster public participation and representation in decision making. Among the many studies that have examined the economic governance and growth nexus is such as that of Barro (1997). He studied the concept of growth based on the conditional convergence hypothesis which centers on the speed of economic growth in a country towards its steady-state level. He had empirically identified that more schooling, better health, lower fertility rate, less government consumption relative to GDP, greater adherence to uncorrupted rule of law, improvements in terms of trade changes, and lower inflation all go hand-in-hand with faster economic growth. Furthermore, he also explored on the interplay between economic and political development, and found that there is nonlinear relationship between democracy and growth. According to his findings, in countries with low levels of political freedom, a marginal increase in political freedom is associated with an acceleration in growth. However, at high levels of political freedom, a marginal increase in political freedom is associated with a slowing in growth. Huther Shah (1998) also studied the relationship between governance and growth and found that countries that practiced good governance have also enjoyed high growth. They developed a governance index featuring four sub-indices, i.e. citizen participation index (CP), government orientation index (GO), social development index (SD) and economic management index (EM) and each of the sub-indices has several components. For the Economic Management index, its components are outward orientation, central bank interdependence, and debt-to-GDP ratio which were used to assess trade policy, monetary policy and fiscal policy respectively. Gonzalez Mendoza (2001) argued that Southeast Asia provides ample evidence that there is a remarkable connection between administrative guidance and economic upturn. They compared the average growth rate of national output during the last decade against the quality of country governance and found that the high-performing economies à ¢Ã¢â€š ¬Ã¢â‚¬Å" Singapore and Malaysia à ¢Ã¢â€š ¬Ã¢â‚¬Å" have the edge in public management. Those left behind, such as the Philippines and Indonesia, have poor management structures. A study by Inada (2003) on Indonesia governance showed the importance of political stability and effective economic management as key elements for sustainable economic development among many governance factors. Bordo (2007) provides a good qualitative analysis on the possible determinant of emerging market crises from the perspective of balance sheet approach, which then put at center stage the importance of financial development. Though he never mention the word governance itself, he outlines the deep institutional determinants of financial development à ¢Ã¢â€š ¬Ã¢â‚¬Å" including the governance parameters such as the rule of law, protection of property rights, political stability, and representative democracy à ¢Ã¢â€š ¬Ã¢â‚¬Å" towards achieving financial stability. He further conjectures about the ways countries learn from their financial crises to improve their institutions and grow up to financial stability. 7.3 Governance link to crisis and roles in recovery process Lanyi Lee (1999) presented a strong case that governance issues were important in the East Asian crisis. They hypothesized that transparency and accountability in macroeconomic policymaking, in the operation of the financial system, and in corporate governance do serve to lessen a countrys vulnerability to financial crises and to strengthen the ability to deal with crises when they occur. They also hypothesized that a democratic political system, in which leaders are held accountable to their electorate by both direct election of the executive and an elected legislature à ¢Ã¢â€š ¬Ã¢â‚¬Å" as well as by an independent judiciary and a free press and civil society à ¢Ã¢â€š ¬Ã¢â‚¬Å" is less likely to collapse in the face of economic and financial difficulties than is a country run by an autocratic government, which imposes severe restraints on the public expression of opinion and dissemination of information. On the political basis of economic governance, they have suggested a hypothesis regarding the kind of political regimes likely to produce an effective, growth-enhancing, market-augmenting government. It is the type of political regime that is especially effective in the early stages of economic development may be less suited to fostering the creation of a full-fledged, sophisticated market economy at a later stage. They argued that there certainly seems to be some indications of this in the Asian experience, where authoritarian regimes fostered rapid growth when these economies were at relatively low income levels, but seems to be evolving toward more democratic models to deal with demands for greater market autonomy. They however suggested that even if a case can be made for the desirability of democratization as a market economy becomes more sophisticated, the varied historical examples warrant the need to find out more about the conditions under which either an autocratic or a democratic government can be market-augmenting, or not. They further highlighted that it would be useful to find historical examples of, and develop plausible scenarios for, the transition from discretionary (an autocratic government) to arms-length (a democratic government) approaches to state economic governance, and to define the most effective ways in which the international community might assist with this transition. Furthermore, they believed that empirical work on macroeconomic governance would need to tap into the huge literature on macroeconomic policies and their effect, and link existing work with variables that reveal the quality of governance. Unfortunately, such variables are hard to quantify; but perhaps a classification of regimes together with a classification of the way macroeconomic policy is organized, could yield ways of exploring the relationships between the political and administrative variables, on the one hand, and the more familiar economic variables on the other. In other words, it would be interesting to look how the macroeconomic policies are formulated, implemented and evaluated through the governance perspective, to understand whether adherence to, or lack of, the governance practices could influence the outcome of the macroeconomic policies, as well as to determine conditions that would lead to good quality policies which would eventually identify the appropriate type of market-augmenting government as the market economy progresses. Besides, they also made preliminary attempts to trace the relationship between empirical indicators of financial and corporate governance with some governance variables that have been developed by others. They however suggested that one needs to look more carefully, perhaps through case studies, at the realities of financial and corporate governance in particular cases and the linkage between indicators of these types of financial and corporate governance with the more carefully articulated classification of political regimes. Specifically with regard to the adjustment of most severely affected countries to the Asian crisis, they suggested that it would be interesting to examine the reasons why recovery in Korea has been more rapid than in the Indonesia and Thailand. Similarly, it would also be interesting to investigate Malaysias speedy recovery from the crisis even though the country did not subscribe to the IMF recovery prescriptions. Mahani (2003) highlighted that after the rapid recovery of the Asian economies in 1999, discussion of the causes of the crisis has been centered on the quality of economic governance in these economies. The East Asian economies success was at one time a model to be emulated by other developing countries, but after the 1997 financial turbulence, doubts were raised about the quality of economic governance in these Asian countries. Questions were raised whether the governance in these economies contributed to the crisis when countries like Indonesia, Malaysia, Thailand and South Korea experienced sharp economic contraction during the crisis. She further highlighted that questions on the quality of governance centered on the issue whether or not the same economic governance that produced high growth also weakens the economies and makes them vulnerable to external shocks, whether the economic governance fails to avoid market failures in pursuing its high growth strategy, whether the conditions for good governance always the same irrespective of the stage of economic development, and whether the crony capitalism a result of the governance failure since it was among the widely acknowledged factors contributing to the crisis. To know whether economic governance had made the economy vulnerable to a crisis, it is crucially important to examine the causes of the crisis and to link them with the economic weak points. Was the crisis due to the imprudent economic management or due to external factors? Although external factors have been recognized as the key cause for the crisis, domestic shortcomings were also responsible for deepening or aggravating the impact of the crisis. Furthermore, Malaysias own crisis remedies and the rejection of the IMFs standard crisis solutions open the debate on what is good economic governance. She argued that the 1997 Asian experience showed the economic governance framework by the IMF and the World Bank has some weaknesses, namely unfettered short term capital flows, lack of long-term and broader macroeconomic objectives when growth is driven by the private sector, and minimal attention given to socioeconomic issues such as income distribution. The rapid recovery by Malaysia and Korea, which adopted different strategies shows that there are alternative ways to respond to a crisis, implying that there is also no single definition of economic governance. Policy flexibility arising from good economic governance before the crisis made it possible to Malaysia to take response measures specially tailored to its need and situation, and rejecting one-size-fits-all prescriptions by the IMF. 7.4 Governance roles in crisis prevention The rapid pace and spread of globalization pose stiff challenges to economic governance as new criteria and developments may impose a heavier governance burden on the government and economy. One of the biggest challenges is the increasingly volatile international flow of capital that makes economic governance much more difficult as economic fundamentals are not the only factors that determine performance. Global integration also limits the choice of measures that are available to a country in making its response. Yet good governance is essential for sustained economic growth. The challenge is to determine what good governance consists of under these changing conditions. Ever better economic management is called for, to preserve economic resilience and prevent external shocks from turning into crises. Thus, a close and critical evaluation of the new economic governance parameters and institutions is essential. 8.0 OVERVIEW ON THE STUDY OF GOVERNANCE 8.1 Development of the study of governance Inada (2003) outlined the development in the study of governance over the last 10 years which can be categorized into several types: Identifying factors of governance: what factors are the governance factors that affect the performance of the economies of developing countries? Example à ¢Ã¢â€š ¬Ã¢â‚¬Å" World Bank (1992) documented such factors as accountability, transparency, predictable legal framework, efficiency of the public sector, etc. Categori Economic Governance for Crisis Prevention Economic Governance for Crisis Prevention 1.0 INTRODUCTION The proposed research attempts to identify the critical components of economic governance in four Asian countries namely Malaysia, South Korea, Thailand and Indonesia. The study by employing in-depth case study analysis seeks to analyze the economic governance practices in these countries and its relationship to their economic growths. The study then attempts to investigate the links between economic governance and the Asian financial crisis in 1997, and the roles the economic governance could have played in the recovery process since the above countries had somehow recovered at somewhat different speed. Based on the identified components of economic governance considered imperative for sustainable and resilient economy, the study will develop an index namely Economic Governance Quality Index capturing the score of governance parameters by the countries during the booms and slumps of their economies throughout the period under study. Finally, the components of economic governance wil l be employed in panel data analysis to empirically determine their significance towards economic growth. Its findings then will be of significance in crisis prediction and prevention methods in which the identified key governance parameters are the core ingredients. 2.0 BACKGROUND Good governance is perhaps the single most important factor in eradicating poverty and promoting development. Kofi Annan, former Secretary General of the United Nations. The concept of governance has assumed a more central focus and been given key attention not only by the officials from the United Nations Development Program, the World Bank and the International Monetary Funds, but also from the policymakers in especially developing countries, aids donors, and regional organizations of economic cooperation as well as academics fraternity. Since the beginning of 1990s, there is a strong indication of growing emphasis that good governance, together with democracy and protection of basic human rights, is indispensable for sustainable economic growth. Economic development cannot be achieved without the development of good governance, which is composed of competence and honesty, public accountability, and broader participation in discussion and decision making on central issues. In addition to traditional view of governance which is on the public governance, there is also a notable increase in the endeavors to grasp the concept of governance in a multi-d imensional perspective which includes economic governance. The relationship between governance and development is thus studied from diverse angles, especially in the vein of economic transformation, macroeconomic management and prevention of crisis as well as structural reforms. The Asian financial crisis in 1997 had somehow exposed the vulnerability of the once high-performing countries in the region, whose lack of governance practices was said as the main cause of the severe affects. 3.0 STATEMENT OF THE PROBLEM The Asian economies success was once dubbed the Asian Miracle, and a model to be emulated by other developing countries seeking higher growth. The success had introduced a growth model with emphasis on policies of setting the prices right, liberalizing the economy and the private sector as the engine of growth. When financial crisis struck the Asian countries in 1997, and looking at the devastating effects the countries in the region had experienced following the malaise, many however started to raise questions whether the quality of governance practices in these countries had somehow contributed to the crisis. Furthermore, the fact that South Korea and Malaysia had somehow recovered rapidly from the crisis compared to Indonesia and Thailand has sparked off interests on what roles good governance could have played in the recovery process. Hence, good governance has become a topic widely studied in the aftermath of the crisis. The discussions center on two main perspectives; firstly, the absence of good governance has been perceived as a MAJOR CAUSE of the crisis, and secondly, an inference is made that good governance is IMPERATIVE for durable and resilient economy. This study hence sets out to empirically identify and ascertain the governance parameters and their significance towards crisis prevention. Since the study focuses on economic governance, and to avoid constant repetition, the word governance used in this proposal should be taken in the context of economic point of view, unless explicit reference to other perspective of governance is relevant. 4.0 RESEARCH QUESTIONS This study will attempt to answer the following questions: What are the economic governance parameters presumed as crucially importance for sustainable and resilient economy? How to capture the score of economic governance practices in the East Asian countries during the period under study? How would the significance of governance parameters be empirically ascertained for the purpose of crisis prediction and prevention? 5.0 RESEARCH OBJECTIVES The study hypothesized that good governance is imperative for sustainable and resilient economy, and the absence of such would result in increased vulnerability of the economy towards declining into crisis. Therefore, the objectives of the study are: To identify the parameters of economic governance crucial for resilient and sustainable economy. To develop an index of Economic Governance Quality capturing the score of economic governance practices by the East Asian countries during the period under study. To empirically ascertain the significance of economic governance parameters towards growth via a dynamic estimation model whose findings then would be of importance for crisis prediction and prevention. 6.0 SIGNIFICANCE OF THE STUDY It would be interesting to investigate what makes good governance and how do they link to economic growth in the four selected Asian countries. Furthermore, it would be crucially important to examine, from the governance perspective, how could the countries once considered by many as the fastest growing economies in the region were severely affected by the Asian crisis in 1997. Notwithstanding that, the fact that South Korea and Malaysia had made a more swift recovery than the other affected countries, it would therefore be interesting to analyze how the governance practices in the different countries facilitated the recovery process. The findings from this study are expected to provide a significant contribution to the existing governance literatures especially from the economic perspective since it attempts to discover the critical components of economic governance that are imperative for sustainable and resilient economy. Policy makers not only from the countries under study but also from other developing countries may utilize the findings of the study to evaluate their economic governance practices and be able therefore to make necessary adjustments and required changes with the objectives of registering better growth and strengthening the economy against any possibility of future crisis. The researchers from world organizations and academic community may also be interested with the findings since the study attempts to develop a new feasible dynamic estimation model to analyze the relationship between the components of economic governance and growth, of which they could use as a basis for their future research undertaking in the similar field. In addition, the findings could also stimulate and facilitate them to search for additional approaches to counter or justify the results of this study. 7.0 LITERATURE REVIEW Good governance has become a topic widely debated by academicians and economic communities especially in the aftermath of the Asian financial crisis in 1997. The discussions in this context center on two main perspectives; first, the absence of good governance has been perceived as a major cause of the crisis, and the second prognosis is drawn by inference, namely, that good governance is imperative for durable development (Lam, 2003). Therefore, to have a better understanding of the governance, this section discusses definitions and indicators of the governance, its relationship with the economic growth, how it links to the crisis and its roles in the recovery process, and finally how could these governance factors be used for crisis prevention. 7.1 Definitions and indicators of governance Definitions and indicators of governance can be found in numerous literatures. A top-down approach is best used to understand the concept of governance, where a general or broad definition of governance will be firstly explored before moving on to a more specific definition. The World Bank continuously updates key governance indicators in its regular publication of Governance Matters, a governance study encompassing many aspects like political, social, economic, legal and moral. Meanwhile, the International Monetary Funds (IMF) has been doing a great deal of works in an effort to promote governance in the financial sector management through Financial Sector Assessment Programs (FSAPs) which include regulatory, risk management and aid management. 7.1.1 Broad definition of governance From the viewpoint of United Nations Development Program (1997), the definition of governance is the exercise of economic, political administrative authority to manage a countrys affairs at all levels. It comprises mechanisms, processes and institutions, through which citizens and groups articulate their interests, exercise their legal rights, meet their obligation and mediate their differences. Good governance is, among other things, participatory, transparent and accountable, effective and equitable, and it promotes the rule of law. It ensures that political, social and economic priorities are based on broad consensus in society and that the voices of the poorest and the most vulnerable are heard in decision-making over the allocation of development resources (Abdellatif, 2003). In its report, Governance and Sustainable Human Development in 1997, the UNDP acknowledges the following as core characteristics of good governance, i.e. participation, rule of law, transparency, responsiveness, consensus orientation, equity, effectiveness and efficiency, accountability, and strategic vision. A report by the World Bank (2006) entitled Governance Matters V covering 213 countries and territories since 1996 until 2005, presented the latest version of the worldwide governance indicators, namely voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption. Meanwhile, Inada (2003) discussed the governance in Indonesia where the word governance is translated as Tata Pemerintahan. It however has different meanings covering different agendas from political systems to corporate governance. They includes political democratization, reorganization of police and the military, curing the problems of corruption, collusion, and nepotism (KKN), justice reform system, decentralization, financial management, corporate governance, and state-owned enterprise reforms. Shimomura (2003) in his case study of governance in Thailand adopted pluralist democracy, accountability, transparency, predictability, and openness in the manner of exercising power, rule of law, effective and efficient public sector management, prevention of corruption, and prevention of excessive military expenditures as the standard definition of good governance. 7.1.2 Governance from economic perspective According to Dixit (2006), economic governance consists of the processes that support economic activities and economic transactions by protecting property rights, enforcing contracts, and taking collective actions to provide appropriate physical and organizational infrastructure. These processes are carried out within institutions, formal and informal. He described that the field of economic governance studies and compares the performance of different institutions under different conditions, the evolution of these institutions, and the transitions from one set of institution to another. Meanwhile, Huther Shah (1998), Gonzalez Mendoza (2001) and Mahani (2003) defined governance as a multi-faceted concept, encompassing all aspects of the exercise of authority through both formal and informal institutions in the management of resources. In other words, governance is: An exercise of economic power in the management of resource endowment of a country done through mechanisms, processes, and institutions through which citizens and groups can articulate their interest, exercise legal rights, meet their obligations and mediate their differences. According to Mahani (2003), indicators of economic governance are: Macroeconomic management à ¢Ã¢â€š ¬Ã¢â‚¬Å" fiscal management, level of government debt, unemployment and inflation. Investment à ¢Ã¢â€š ¬Ã¢â‚¬Å" size and trend of foreign and domestic investments, capital flows and allocation of resources. Trade regime à ¢Ã¢â€š ¬Ã¢â‚¬Å" trade orientation, export and import performance and balance of payment position. Financial sector management à ¢Ã¢â€š ¬Ã¢â‚¬Å" the banking sector and capital market. Exchange rate regime. Private sector participation à ¢Ã¢â€š ¬Ã¢â‚¬Å" privatization and corporate governance. Social development à ¢Ã¢â€š ¬Ã¢â‚¬Å" income distribution and level of poverty. Lanyi Lee (1999) studied on various aspects of economic governance, that is, the way in which economic life is governed and regulated à ¢Ã¢â€š ¬Ã¢â‚¬Å" which does not mean solely governance by the government. They first discussed the political basis of economic governance which is in their view crucial for the way in which different aspects of economic governance operate. The other aspects include the governance of macroeconomic policy making, and the interrelated issues of financial and corporate governance. From political perspective, they argued that economic governance in a market economy consists partly of direct control or indirect influence exerted by the government and of governance exercised within markets themselves on the other part; but even self-governance by markets operates within the legal, judicial and regulatory framework that has been erected and is supported by the government. The optimum role of government in this context is market-augmenting government. Furthermore, they defined macroeconomic governance as the political and administrative processes by which macroeconomic policies are formulated, implemented, and evaluated. They argued that technically the same policies can be carried out with equal effectiveness by either an autocratic or a democratic government. An autocratic government, if supported by well-trained technocrats, is likely to come up with first-class macroeconomic governance. Nevertheless, there may be factors that over time lead to deterioration in the quality of these policies in an autocratic government, as well as problems in the ability of such governments to adjust policies in response to changes in economic circumstances. The working definition of governance used for financial and corporate governance depends on the key distinction between principals and agents. In this context, they defined governance as the legal and institutional arrangements governing the behavior of an economic entity, by which owners, creditors, markets and the government compel or induce agents to behave according to the interests of the principals, or those of the broader society. In this regard, two key elements of governance are discussed. First, there is the structure of incentives and rules facing agents with regard to such matters as granting and terminating lending, bankruptcy, the rights of boards of directors, compensation structure, and the termination of employment. Second, there is the structure of the information flow from agents to principals, that is, the rules and incentives affecting accountability, transparency and disclosure of information. In both cases, the government plays a key role in setting the rules by which private actors operate. Meanwhile, Das Quintyn (2002) in their study on the role of regulatory governance in crisis prevention and crisis management have identified four main components of the regulatory governance practices, namely independence, accountability, transparency and integrity. The study explored the quality of regulatory governance based on the financial system evaluations under the Financial Sector Assessment Programs (FSAPs). Introduced in May 1999, FSAPs is a joint effort by the IMF and World Bank aims to increase the effectiveness of efforts to promote the soundness of financial systems in member countries. Supported by experts from a range of national agencies and standard-setting bodies, works under the program seek to identify the strengths and vulnerabilities of a countrys financial system; to determine how key sources of risk are being managed; to ascertain the sectors developmental and technical assistance needs; and to help prioritize policy responses (IMF the World Bank, 2005). Regulatory governance applies to those institutions that possess legal powers to regulate, supervise and/or intervene in the financial sector, which include agencies like central bank, sectoral regulators and supervisors, deposit insurance agencies, and in systemic crisis situations, restructuring agencies and asset management companies. Regulatory agencies need a fair degree of independence from the political sphere and from the supervised entities to achieve good regulatory governance. Agency independence increases the possibility of making credible policy commitments and improves transparency and stability of the output. Independence goes hand in hand with accountability. Accountability is essential for the agency to justify its action against the background of the mandate given to it. Independent agents should be accountable not only to those who delegated the responsibility à ¢Ã¢â€š ¬Ã¢â‚¬Å" the government or legislature à ¢Ã¢â€š ¬Ã¢â‚¬Å" but also to the public who fall under their functional realm. Transparency in monetary and financial policies refers to an environment in which objectives, frameworks, decisions, and their rationale, data and other information, as well as terms of accountability, are provided to the public in a comprehensive, accessible, and timely manner. Global integration of financial markets and products require greater degree of transparency in monetary and financial policies, and in regulatory regimes and processes, as a means of containing market uncertainty. Increased transparency supports accountability, protect the independence and eventually increase commitment to prudent behavior and risk control in the financial business. The final component of regulatory governance is integrity which reflects the mechanisms that ensure that staff of the agencies can pursue institutional goals of good regulatory governance without compromising them due to their own behavior, or self-interest. Independence, accountability, transparency and integrity interact and reinforce each other. Independence and accountability represent two sides of the same coin, while transparency is a vehicle for safeguarding independence and key instrument to make accountability work. Transparency also helps to establish and safeguard integrity. 7.2 Governance relationship with development and growth Economic governance is often studied through its role in the promotion of growth. This is done by setting policies, incentives and institutions that create an environment conducive to sustained stable growth through efficient management of a countrys resources. It means managing a countrys resources in a way that is accountable to, and representative of, the community; transparent, that is, open and predictable; and efficient and equitable in terms of the use, and distribution of, resources. Hence, good and effective governance requires government policies that encourage and efficiently manage investment and economic growth, support a fair and efficient public sector, strengthen the rule of law, protect human rights, and foster public participation and representation in decision making. Among the many studies that have examined the economic governance and growth nexus is such as that of Barro (1997). He studied the concept of growth based on the conditional convergence hypothesis which centers on the speed of economic growth in a country towards its steady-state level. He had empirically identified that more schooling, better health, lower fertility rate, less government consumption relative to GDP, greater adherence to uncorrupted rule of law, improvements in terms of trade changes, and lower inflation all go hand-in-hand with faster economic growth. Furthermore, he also explored on the interplay between economic and political development, and found that there is nonlinear relationship between democracy and growth. According to his findings, in countries with low levels of political freedom, a marginal increase in political freedom is associated with an acceleration in growth. However, at high levels of political freedom, a marginal increase in political freedom is associated with a slowing in growth. Huther Shah (1998) also studied the relationship between governance and growth and found that countries that practiced good governance have also enjoyed high growth. They developed a governance index featuring four sub-indices, i.e. citizen participation index (CP), government orientation index (GO), social development index (SD) and economic management index (EM) and each of the sub-indices has several components. For the Economic Management index, its components are outward orientation, central bank interdependence, and debt-to-GDP ratio which were used to assess trade policy, monetary policy and fiscal policy respectively. Gonzalez Mendoza (2001) argued that Southeast Asia provides ample evidence that there is a remarkable connection between administrative guidance and economic upturn. They compared the average growth rate of national output during the last decade against the quality of country governance and found that the high-performing economies à ¢Ã¢â€š ¬Ã¢â‚¬Å" Singapore and Malaysia à ¢Ã¢â€š ¬Ã¢â‚¬Å" have the edge in public management. Those left behind, such as the Philippines and Indonesia, have poor management structures. A study by Inada (2003) on Indonesia governance showed the importance of political stability and effective economic management as key elements for sustainable economic development among many governance factors. Bordo (2007) provides a good qualitative analysis on the possible determinant of emerging market crises from the perspective of balance sheet approach, which then put at center stage the importance of financial development. Though he never mention the word governance itself, he outlines the deep institutional determinants of financial development à ¢Ã¢â€š ¬Ã¢â‚¬Å" including the governance parameters such as the rule of law, protection of property rights, political stability, and representative democracy à ¢Ã¢â€š ¬Ã¢â‚¬Å" towards achieving financial stability. He further conjectures about the ways countries learn from their financial crises to improve their institutions and grow up to financial stability. 7.3 Governance link to crisis and roles in recovery process Lanyi Lee (1999) presented a strong case that governance issues were important in the East Asian crisis. They hypothesized that transparency and accountability in macroeconomic policymaking, in the operation of the financial system, and in corporate governance do serve to lessen a countrys vulnerability to financial crises and to strengthen the ability to deal with crises when they occur. They also hypothesized that a democratic political system, in which leaders are held accountable to their electorate by both direct election of the executive and an elected legislature à ¢Ã¢â€š ¬Ã¢â‚¬Å" as well as by an independent judiciary and a free press and civil society à ¢Ã¢â€š ¬Ã¢â‚¬Å" is less likely to collapse in the face of economic and financial difficulties than is a country run by an autocratic government, which imposes severe restraints on the public expression of opinion and dissemination of information. On the political basis of economic governance, they have suggested a hypothesis regarding the kind of political regimes likely to produce an effective, growth-enhancing, market-augmenting government. It is the type of political regime that is especially effective in the early stages of economic development may be less suited to fostering the creation of a full-fledged, sophisticated market economy at a later stage. They argued that there certainly seems to be some indications of this in the Asian experience, where authoritarian regimes fostered rapid growth when these economies were at relatively low income levels, but seems to be evolving toward more democratic models to deal with demands for greater market autonomy. They however suggested that even if a case can be made for the desirability of democratization as a market economy becomes more sophisticated, the varied historical examples warrant the need to find out more about the conditions under which either an autocratic or a democratic government can be market-augmenting, or not. They further highlighted that it would be useful to find historical examples of, and develop plausible scenarios for, the transition from discretionary (an autocratic government) to arms-length (a democratic government) approaches to state economic governance, and to define the most effective ways in which the international community might assist with this transition. Furthermore, they believed that empirical work on macroeconomic governance would need to tap into the huge literature on macroeconomic policies and their effect, and link existing work with variables that reveal the quality of governance. Unfortunately, such variables are hard to quantify; but perhaps a classification of regimes together with a classification of the way macroeconomic policy is organized, could yield ways of exploring the relationships between the political and administrative variables, on the one hand, and the more familiar economic variables on the other. In other words, it would be interesting to look how the macroeconomic policies are formulated, implemented and evaluated through the governance perspective, to understand whether adherence to, or lack of, the governance practices could influence the outcome of the macroeconomic policies, as well as to determine conditions that would lead to good quality policies which would eventually identify the appropriate type of market-augmenting government as the market economy progresses. Besides, they also made preliminary attempts to trace the relationship between empirical indicators of financial and corporate governance with some governance variables that have been developed by others. They however suggested that one needs to look more carefully, perhaps through case studies, at the realities of financial and corporate governance in particular cases and the linkage between indicators of these types of financial and corporate governance with the more carefully articulated classification of political regimes. Specifically with regard to the adjustment of most severely affected countries to the Asian crisis, they suggested that it would be interesting to examine the reasons why recovery in Korea has been more rapid than in the Indonesia and Thailand. Similarly, it would also be interesting to investigate Malaysias speedy recovery from the crisis even though the country did not subscribe to the IMF recovery prescriptions. Mahani (2003) highlighted that after the rapid recovery of the Asian economies in 1999, discussion of the causes of the crisis has been centered on the quality of economic governance in these economies. The East Asian economies success was at one time a model to be emulated by other developing countries, but after the 1997 financial turbulence, doubts were raised about the quality of economic governance in these Asian countries. Questions were raised whether the governance in these economies contributed to the crisis when countries like Indonesia, Malaysia, Thailand and South Korea experienced sharp economic contraction during the crisis. She further highlighted that questions on the quality of governance centered on the issue whether or not the same economic governance that produced high growth also weakens the economies and makes them vulnerable to external shocks, whether the economic governance fails to avoid market failures in pursuing its high growth strategy, whether the conditions for good governance always the same irrespective of the stage of economic development, and whether the crony capitalism a result of the governance failure since it was among the widely acknowledged factors contributing to the crisis. To know whether economic governance had made the economy vulnerable to a crisis, it is crucially important to examine the causes of the crisis and to link them with the economic weak points. Was the crisis due to the imprudent economic management or due to external factors? Although external factors have been recognized as the key cause for the crisis, domestic shortcomings were also responsible for deepening or aggravating the impact of the crisis. Furthermore, Malaysias own crisis remedies and the rejection of the IMFs standard crisis solutions open the debate on what is good economic governance. She argued that the 1997 Asian experience showed the economic governance framework by the IMF and the World Bank has some weaknesses, namely unfettered short term capital flows, lack of long-term and broader macroeconomic objectives when growth is driven by the private sector, and minimal attention given to socioeconomic issues such as income distribution. The rapid recovery by Malaysia and Korea, which adopted different strategies shows that there are alternative ways to respond to a crisis, implying that there is also no single definition of economic governance. Policy flexibility arising from good economic governance before the crisis made it possible to Malaysia to take response measures specially tailored to its need and situation, and rejecting one-size-fits-all prescriptions by the IMF. 7.4 Governance roles in crisis prevention The rapid pace and spread of globalization pose stiff challenges to economic governance as new criteria and developments may impose a heavier governance burden on the government and economy. One of the biggest challenges is the increasingly volatile international flow of capital that makes economic governance much more difficult as economic fundamentals are not the only factors that determine performance. Global integration also limits the choice of measures that are available to a country in making its response. Yet good governance is essential for sustained economic growth. The challenge is to determine what good governance consists of under these changing conditions. Ever better economic management is called for, to preserve economic resilience and prevent external shocks from turning into crises. Thus, a close and critical evaluation of the new economic governance parameters and institutions is essential. 8.0 OVERVIEW ON THE STUDY OF GOVERNANCE 8.1 Development of the study of governance Inada (2003) outlined the development in the study of governance over the last 10 years which can be categorized into several types: Identifying factors of governance: what factors are the governance factors that affect the performance of the economies of developing countries? Example à ¢Ã¢â€š ¬Ã¢â‚¬Å" World Bank (1992) documented such factors as accountability, transparency, predictable legal framework, efficiency of the public sector, etc. Categori

Symbols in The Rime of the Ancient Mariner by Samuel Taylor Coleridge E

In this essay, I will be examining some of the symbols in Samuel Taylor Coleridge's poem, 'The Rime of the Ancient Mariner.'; Symbols were very important in this poem. Without the symbols, 'The Rime of the Ancient Mariner'; would be simply a poem about an old mariner who is telling a story about killing a bird to a guest at a wedding. Of course, anyone who reads the poem can see that there is more to it than just a simple telling of a story.   Ã‚  Ã‚  Ã‚  Ã‚  The first symbol in the poem is the wedding that the guest and the Mariner are at. This is a highly significant detail, because Coleridge could have made the story telling take place at any setting, but he chose a wedding. Why? A wedding is a very religious, very happy occasion. Weddings in and of themselves symbolize new beginnings and happiness. The reason that Coleridge decided to have this horrid tale told at a wedding could be for any number of reasons. I feel that the setting was chosen because of the new beginnings implied. As the Mariner tells his tale, the guest is held captive and when the story is done, the guest becomes essentially a new man and goes off to live the rest of his life. Had the tale taken place at a funeral, the heavy feeling of ending would have destroyed the symbolism of new beginnings. Ending of life, of happiness, of everything. If this had happened, then the fact that he rose the next day would not have been as significant. Therefore , the wedding is a very important symbol throughout the poem.   Ã‚  Ã‚  Ã‚  Ã‚  The albatross is another significant symbol throughout the poem. It first appears in the first section of the poem, and it is a symbol of good omen for the sailors. The albatross is a white bird, which is probably the reason why many Christians of the time saw it as a holy symbol, which made it a good omen. In this poem, the albatross symbolizes good fortune. When the Mariner kills the albatross, for absolutely no reason, the good fortune that has come upon the ship leaves. Symbolically, the Mariner did not kill a simple seabird, but an omen of good fortune and luck, which is why all of the bad things happen to the sailors and the Mariner. The albatross goes from being a symbol of god fortune to one of guilt when it is hung around the Mariner's neck as a sign of what he has done. 'Instead of the cross, the Albatross About my neck was hung.';   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  (ln. 142-43) This macabr... ... albatross, the blood that the Mariner sucks in order to announce the ship, the game between Death and Life-In-Death, the penance that the Mariner serves, and the cyclic nature of the poem are only a few of the symbols that add meaning and depth to the poem. If it were not for the symbols, the poem would simply be the story of a Mariner telling his tale to a hypnotized wedding guest, and then the poem would have no meaning to anyone. As it is, 'The Rime of the Ancient Mariner'; is a poem with great depth and meaning, with a lesson that can apply to everyone. When reading this poem, the reader can feel much like the wedding guest, entranced and hypnotized. This is because of the symbols. Even if the reader of the poem does not consciously perceive the symbols in the verse, the subconscious mind will catch them and understand the intrinsic meaning. The symbols in 'The Rime of the Ancient Mariner are therefore the part of the poem that makes it so intense. Works Cited Coleridge, Samuel Taylor. "The Rime of the Ancient Mariner. In Seven Parts" (1817 text) in Samuel Taylor Coleridge: A Critical Edition of the Major Works. Ed. H J. Jackson. Oxford: Oxford University Press, 1985.

Self Discovey in King Lear Essay -- History, Renaissance, Galileo, Cat

Throughout recorded history, humans have deemed themselves superior to all other living creatures. The Bible, arguably the most influential work of literature extant, demonstrates human superiority in the excerpt, "Let us make man in our image...let them rule over the flesh of the sea and the birds of the air, over all the earth." This notion of superiority was especially evident during the Renaissance, a period categorized by the rebirth of thinking and knowledge. The Renaissance, which lasted from about 1300 to 1600, brought advances in science that clashed with traditional viewpoints on life and the universe. Galileo Galilei, an Italian physicist, mathematician, and astronomer, with evidence from Copernicus' works, proposed a heliocentric model of the universe; that is, a model in which the planets revolve around the sun. The Catholic Church opposed Galileo's ideas, claiming that Bible verses placed the earth at the center of the galaxy; this further supports the notion of human eminence. Galileo was placed on trail in 1633 for heresy and imprisoned for the remainder of his life. Galileo's imprisonment demonstrates the stronghold the church had on society, even during the Renaissance. Equanimity, compliance, and human superiority were tenets supported by the Catholic Church; dissent and individualism were not. Renaissance authors, such as William Shakespeare, seemed to protest human superiority and Stoicism. In King Lear, one of Shakespeare's especially famous works, the main character from which the play gains its namesake embarks on an emotional journey of self-discovery. The play commences with Lear, the reigning King of England, preparing to divide his kingdom. Lear has three daughters: Regan, Goneril, ... ... 39-year old man from California, slaughtered his family in an attempt to receive a sizable inheritance. Lyle and Erik Menendez, also from California, ended the lives of their parents in pursuit of an upper-class lifestyle. These individuals valued money over familial ties; King Lear originally valued power and compliance over his own blood. The self-discovery of King Lear exemplifies the fact that humans are far more valuable than money or power in attempt to set an example for humanity. These lessons still ring true in more modern times; famed psychiatrist Sigmund Freud warned against accepting flattery as genuine and giving away one's possessions during his or her lifetime. Lear's self-discovery came too late to save his daughters; the play seems to encourage humanity to have its own self-discovery before it disavows its Cordelias in the pursuit of niceties.

Human Trafficking in Brazil

Following more than three hundred years under Portuguese rule, Brazil gained its independence in 1822, maintaining a monarchical system of government until the abolition of slavery in 1888. Shortly after – in 1889 – the military declared itself in control of the country as a republic. Brazilian coffee exporters politically dominated the country until populist leader Getulio Vargas rose to power in 1930. He is called the â€Å"Father of the Poor†, because of the fact that he brought social and economic changes that helped modernize the country.By far the largest and most populous country in South America, Brazil underwent more than a half-century of populist and military government until 1985, when the military regime peacefully gave up power to civilian rulers. Brazil continues to pursue industrial and agricultural growth and development of its interior. Utilizing vast natural resources and a large labor pool, it is today South America's leading economic power an d a regional leader, one of the first in the area to begin an economic recovery.Highly unequal income distribution and crime remain pressing problems. Human trafficking in Brazil, in international and internal forms, is still a phenomenon within Brazil. Secretary National Justice Paul Abram warns, â€Å"This is because one of its features is the invisibility of victims and denial of recognizing oneself as such. This is why we focused on awareness campaigns and the national network to support the victims. † Although Brazil banned slavery its 1888 Golden Law, forced labor of thousands of workers occur daily which is helping drive the economy.The Government of Brazil does not fully comply with the minimum standards for the elimination of trafficking; however, it is making significant efforts to do so. The Countries that registered the highest incidences of victims of human trafficking were the Suriname (which works as a route to the Netherlands), with 133 victims, followed by Sw itzerland with 127, Spain with 104 and Germany with 71. UNODC estimates indicate that sexual exploitation is the most common form of trafficking (79%), followed by forced labor (18%), reaching, especially children, adolescents and women.The Brazilian government has maintained efforts to prevent human trafficking in partnership with state governments, international organizations and NGOs. Authorities gathered extensive civil society and federal, state, and local government input to draft a second national plan for 2012-2016, as the first national plan ended in January 2010. The Ministry of Labor publishes a â€Å"dirty list,† which publicly identifies individuals and corporate entities the government has determined to be responsible for trabalho escravo and is subject to civil penalties.Authorities continue to investigate sex and labor trafficking crimes, but data collection on trafficking prosecutions and convictions continued to be a challenge. Government-provided specialize d shelter and services for victims of all forms of trafficking victims remained inadequate. Authorities continued to partner with civil society and international organizations to raise awareness about sex trafficking and trabalho escravo. During the International Symposium for Combating Human Trafficking, held in Goiania on May 14 and 15 many topics regarding the fight against human trafficking were put in place.During the symposium, Mr. Bo Mathiasen, regional representative of UNODC, stressed the importance of having a legal basis, backed by enforcement action to combat human trafficking. Mathiasen stated, â€Å"We know that human trafficking is one of the cruelest forms of organized crime and it is not possible to move forward in the fight against it without a solid and comprehensive legal basis, capable of providing the necessary tools to rigorously punish the entire chain of criminals involved. It is only possible to fight transnational organized crime if criminals have the per ception that there is a real risk of being punished. The UNODC Regional Office for Brazil and the Southern Cone, together with the Brazilian National Justice Council and the National Secretary for Justice have committed to collecting and distributing information regarding all judicial action in Brazil on human trafficking through the UNODC global Human Trafficking Case Law Database. It is expected that by the end of 2012 at least 50 Brazilian judicial will document proceedings in the UNODC Case Law Database. This is a step in the right direction for Brazil to begin to combat this chronic issue.