Export Seminar May 9, 2006 Howard Pack Professor of Business and Public Policy, Economics, Management The Wharton School The University of Pennsylvania

Experience of earliest export led economies Korea, Taiwan, Singapore, Hong Kong Macro correct, inflation, real exchange rate, inputs at international prices. Not all planks of the Washington Consensus were followed. Mild export incentives Some efforts to pick sectors, may have made a minor but positive contribution to growth.

Newer Country Experiences China – heavily reliant on township and village enterprises and marketing by overseas Chinese China – role of MNCs in special economic zones – technology and marketing – automatic insertion into producer or purchaser supply networks

Indian software Private sector led with large role for Indian expatriates, particularly in Silicon Valley. –Growth based on very large domestic education base –Many of these graduates had emigrated or were employed below capacity –Idiosyncratic circumstances galvanized the sector. –Y2K problem –Conversion to euro –Initial Response - “body shopping” rather than innovation. –Critical role played by expatriates – often in Silicon Valley. –Hewlett-Packard partly financed satellite that was critical. –Government quite late undertook policies that recognized success and attempted to facilitate more but has nevertheless been of minor importance. –But publicly financed education was of critical importance

Other histories and interpretation Causation vs. ratification – all products or a few Chilean agricultural products – salmon, off-season fruits and vegetables – wine. Measures of efficiency of such choices – domestic resource costs, exports not benefiting from subsidies

New Complexities role of investment climate – behind the border regulations – are these important? evidence from India, China, and earlier Indonesia, Korea, Taiwan – investment climate far from perfect but export success choice of products based on comparative advantage – efficiency measures – DRC (domestic resource costs), non- subsidized exports. Static versus “dynamic” comparative advantage role of private versus public actors role of education – interaction of education, technology inflow Critical importance of production and/or purchasing networks