Developing Alternatives Fall 2008 Web

8/8/2019 Developing Alternatives Fall 2008 Web

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Network-ceNtric DevelopmeNt

lagng en and

Sa lnags f Gh

DevelopiNG AlterNAtiveSu 12 ssu 1 fa 2008


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A N o n Dn

by Ulrich F.W. Ernst

A N v f en Dnby Cesar A. Hidalgo and Ricardo Hausmann

vau Ns: mbzng kndg f pgss

by Bryanna Millis

lnng U: A pans ps n h en lnags

ha Sha Dn

by Gary Kilmer

png cn n a N indusy: th Fnana S

by Stijn Claessens

Sa, h Fna Fn? H Gsa Nng can H

tag Dn innns

by Robert Bouvier, Ioana Bouvier, Erin Goodnough, and Andrew Ross

Sa Ns and Da tansns

by Joseph Siegle

N cns n Fghng h Sad f infus Dsas

by Ulrich F.W. Ernst

coNteNtS

DAi washngn, 7600 wsnsn Anu, Su 200, Bhsda, mD 20814 USA

t: +1 301 771 7600 .da.

DAi eu, Su 440, Suhban Hus, Ba pn rad, lndn Se1 7SJ, Und kngdt: +44 (0) 207 420 8600 .da-u.

1

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Guest Editor: Ulrich F.W. Ernst

Series Editor: Steven OConnor

Copy Editor: Peg Hausman

Designer: Joanne Kent

Cover photo by Dan Rathbun, DAI

Since 1970, DAI has explored

alternative paths to develop-

ment. DAI generates ideas

through research, shares

these ideas with the

development community

through publications, and

tests the ideas in the crucible

o development projects.

Developing Alternatives

provides a orum or DAIs

proessional sta and

collaborators to expose their

ideas to a wider audience.

Articles treat issues otopical interest and aim at

promoting broad discussion.

The opinions and interpre-

tations presented are those

o the individual authors and

do not necessarily refect the

views o any government or

donor agency. Reproduction

o the contents is permitted

with an acknowledgment

o the source. We solicit

and encourage comments

rom DAI sta as well as

rom DAIs clients and

collaborators.


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1

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A n e t W o r K o p t i C o n D e v e l o p M e n tby Ulrich F.W. Ernst

The ubiquity o networks

i xaa ay ha a huma ca

ad cmc ac ac

wk wh h ddua, u,

ad ack a b mh. e

rb Cu had, add h Ma

Fday, h aua uc wk h

ad. i ac, mcu c, -

a aquac d cha, c h

ba, aa ym, cc ca,aca am ac, ad cu h

Wd Wd Wb cu wk. A h

ucu ca b dcbd m c

(d) ad d (ka). Bu h cc

wk my a ay--u mah,

d ay h udad ad ac-

wh wk, acuay maa hm?

t u, h aw ca: c ya ( ay

ju h a dcad ), wk ccha mad mdu . U wk

cc, w ca mak b h -

c ha ha cmc, ca, ad ca

dm, ad a ha kwd

hacd mac. nwk-cc hk a

amac aach ha byd uy

cc aca.

Why ha h b uch a ad dm

wk ach? Bam h . B h

ad h , ac huma acd ca. F xam, wh iwa sa

C Byc rya ad na g dd h

ah-bak udy h ad hybd

c am h wk iwa am h

ay 1940, hy d wha am mm-

bd abu wh hy had h a

ad hw much ck hy u h ma.

th , ca, a cuuy acc-

b am wh yu ca dcy ma-

u hw may d (ka) a acua

ha, ad hw hy a ud. Yu ca udy

h ac a m, ad h.

From random to scale-ree networks

th u cc udad

wk back a cu. p

18h-cuy Kb (w Kaad, rua)

uh a u a u: wa b

a h bd k h wad h cy wh h h h p

r whu c hm wc? th

c mahmaca lhad eu mad

h bm by ad mah

w ad ad h w ha c ad

h bd a d. H ud h cy ad

bd a ah. Wh ha, h hwd ha

ay wud ha a a a wc

h bd. th c Kb

a bu ah bd ad, , ach bdhad b cd y c h ccu.

th udm ah hy duy abhd,

h much had. Bu h 1950 ad

1960, uch a pau ed ad Ad

ry, ad Aa ra, d ah ad

xamd h bha ka am h

d abhd arandom: h md, ach

d ha uhy h am baby b c-

cd ay h d. radm wk ha

ha a hu xam

a- wk, bu a wk d dm-

a adm ka. gahc xmy,

had a ad c, w a-

h ac h baby abh a

cc.

A maj bakhuh wk cc

ccud h a 1990 wh Duca Wa

ad s sa (1998) kchd h ma-


4/56

wd md. thy hwd ha ka

bw hb dcucud

b ud a w-ccd wk a-

a dac by a w adm k-

a cc m h cu. thk

cmc cu a Mcha p kd

mak a ba au cha, xam.

Wh h ma-wd md, wk cc

k a a acca ac. A udd a, dyamc wk, k h ,

bcam ca ha h wa h adm

abu h ka. vc wh hay ac

d m ua, ad aacd m

dh ch ch, Ab-l

Baab ha. (Yu w c ha may

h am acad wh wk cc

ha a Huaa fa; uc ha h

ah ca h ch chad

h h d aac adua ud mHuay, ad . e , h dac

Huaa am ma a u.)

nwk c ud ha wk a

chaacd by a w c wh k-

ah hubad a hu majy wh y

a w ka. th wk bcam kw

a cawk. th . s

h a aa wk m acua

(chdud) fh. Udad h wk

ad h hub (by um ad cay)

ca ud ac , whh

bud m adcacy wk a

ducy ba au cha, whch

bcm au wk.

Wh h ad h wk dd

a abay h aay wk

bha, adac cmu chy a

bd h dm cmuaa c-

mc. A-bad md, wh a

dw ca bhaa u ha

h ac wh h ddua ad

u, duc aca

cmc wk. i ac, mua ha b

a maay h aay x wka w, much h cha mahmaca,

uch a rck Du (2007).

But dont take our word or it

th wk cc w byd a

m aadm h xa a-

u u wd. i h c bk TheGlobal

Brain (2007), sah namba ad Mhab

sawhy x h adma a

a ad ma a wkd wd, uh wk-cc a. thy c a

acca aca h w aach

ha ak adaa dbud ma

fw ad dc mak:

l nwk-cc cmu: a d

a d cmu, u daa cmu-

(cud dk) cmu-

bm by bak hm dw

ma bm ad h a

ccd cmu.l o-uc wa dm: am-

m a a ha dd ad d

lux (a a ym) ad ha c-

ad d hcad aca.l nwk-cc waa: h ay w

dc, dd by h U.s. Dam

D, bad h ha bu

wk ahcay dd may

o h xaa h Mdc wa h amymaa acum. Cd h ah F maa, acua h h ah bw au am (h ha hMdc)h Mdc amy m ha ha uch u.

Adad m Jack (2008)

Figure 1. Florentine Marriage networks andthe rise oF the Medici

pucc

Accau

saa

pa

rd

Babad

Bch

tabu

lambguada

Ab

g

s

pu

Caa

Mdc


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3

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evelop

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er

nA

tives

c w aa a ma adaa

waa adaaa h m a a-

m-cc aach.l nwk-cc a: ay ad

h d c ad uy cha ma-

am bu, h m ha a b

acad wh h cc au au wk. i ha w acqud bad

ma, mm ud chaaby

wh wk-cc waa.l nwk-cc : a cc ad

bu cym ad ua a-

a, abh h -

ucu ha cc d a

a cmay bu cym ad u-

h d au ca c

(namba ad sawhy 22). Cc, xam, ha d mauacu a-

wha ca h nwkd vua

oaa.l nwk-cc adcacy: wk-ccy

ca adcacy u a cuca

h m dc am ad a

maam md a aach wh

h ddua aca a a a cd-

ad wk. tycay mwd by Wb

2.0, mmb h wk ady ha

ma m c dy cama u. th wk ab-

y ca u uc ad qucky h

cu ca a fxby uu

u, cduc mu cama

muauy (wh ay w uc),

ad dc ad u

a my ma. A whch, a namba

ad sawhy , b a m

udcaby ha w h aby cu-

uch ca cama cy (23).th mca maa cy m

adcacy u a wu.

This issue oDeveloping Alternatives

sm h m wk ha bd

h maccmc wk wh add

wh mccmc aach cm-

ada cc ad cmaa-

adaaha b d by a u

ach a h Uy n Dam ad

h Kdy sch a Haad Uy. th

ac h u, by Ca Hda ad

rcad Hauma, d a m h

ach ha k a h duc ac ha

, h aam ha d u ddua cu uad h x -

. rah ha my h cc a wh

add, Hda ad Hauma aach c-

a h a h-dma ad-

ca, wh uad u abud

bu wh duc a may xcd h a

aby m h cmy. th d-

uc ac a xc d quy,

acua c add a mca dm

h uad dcu.

Byaa M w u wh a ac ha k

ba au cha ad wk (d mak

aay) h bac cmc cu cc

ha a caacy h duc

d. lk cmc ad ma fw

a bad cx ky h ac

udad ah, cu

h au cha, ad a.

th x ac, by gay Km (a DAi cau

wh am xc a Ch pay aa jc) add a d ay m h

dm ac c. Fcu

h aac jc k

u ma duc ba au cha, h

h u bud ah.

A a muua dy uma duc-

may a b xd by h a d-

bu, ad h a may ha h ma

duc a w b uab m a-

dad quay ad quaya aac j-c ca bd h a ad bud a wk

ah.

th x ac, by sj Ca, da wh h

mca cm cy h aca

c c wh cd h wk

chaac may h c dd.

nwk duaday ccy

aadha b chaacd by hh a


6/56

m, bu w maa c add

ah cum. Wh a aa c a

au uch wk du, h a-

y cmx. Wh h ac wa w, h

ba aca mdw wa y ca;

h ac mak ad a h

wd cma c aca uaad h mca dd ad d-

cm.

th x ac, by DAi x ahc

ma ym, hhh h a

Wb 2.0 cmb ahc ad ca -

ma ac ad j ac. i a

ua h x aca ahc

ad dm-a ma. th u-

ma ac, by Jh s, da h

ca wk m dmcac d-

m. Fay, a ac by Uch e xamh u wk cc udad h

ad cau da ad h mua-

a ca hm.

reFerences and Further reading

Baab, Ab-l. 2003. Linked: How Everything Is Connected to Everything Else and What It Means orBusiness, Science, and Everyday Lie. nw Yk, n.Y.: pum. (sd duc, w accby.)

Bhd, sa, ad H g schu (d.). 2003. Handbook o Graphs and Networks: From theGenome to the Internet. Whm, gmay: Wy-vCH. (A ad h chca d.)

Du, rck. 2006. Random Graph Dynamics. Cambd s saca ad pbabc Mahmac.Cambd, U.K.: Cambd Uy p. (n h mahmacay a ha.)

Fu, vc K., Wam K. Fu, ad Yam (Jy) Wd. 2007. Competing in a Flat World: Building Enterprisesor a Borderless World. U sadd r, n.J.: Wha sch pubh. (th xc ad h wk cha l & Fu, whch ha bcm h wd maj x u whuw a acy.)

Jack, Mahw o. 2008. Social and Economic Networks. pc, n.J.: pc Uy p.

(txbk wk aay.)

nauy, Aa (d.). 2003. Innovations in Financial and Economic Networks. Chham, U.K./nham,Ma.: edwad ea pubh. (Hay cmuaa cmc ad a-bad md.)

namba, sah, ad Mhab sawhy. 2007. The Global Brain: Your Roadmap or Innovating Faster andSmarter in a Networked World. U sadd r, n.J.: Wha sch pubh. (A ma wk-cc a.)

nwma, Mak, Ab-l Baab, ad Duca J. Wa (d.). 2006. The Structure and Dynamics oNetworks. pc, n.J.: pc Uy p. (r maj cbu wk cc,wh ma da .)

pahaad, C.K., ad M.s. Kha. 2008. The New Age o Innovation: Driving Co-Created Value Through GlobalNetworks. nw Yk, n.Y.: Mcgaw-H. (rfc h d uc bay ad wk wh dduacum ca w au.)

rya, Byc ad na C. g. 1943. th Du Hybd sd C tw iwa Cmmu. RuralSociology8:1524.

thu, tha (d.). 2005. Economics o Interfrm Networks. kmk d Ka n. 4. tb,

gmay: Mh sbck.

Wa, Duca, ad s sa. 1998. Cc Dyamc sma-Wd nwk. Nature 393,440442. (A ma a.)


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A n e t W o r K v i e W o F e C o n o M i CD e v e l o p M e n t

by Cesar A. Hidalgo and Ricardo Hausmann

Cloth or wine?

D h y duc a cuy x ma

ubqu cmc mac? t ak

a xam m h 19h-cuy cm

Dad rcad, d ma Ba ca

ch ad pua w h ubqu

dm h cuy? th ma x

dm cmc hd ha d

ma, u ha duaa ca

xa ha ad accad wh(r-rda 1943; Hchma 1958;

Mauyama 1992). Y, ack ma md,

maam cmc hy ha mad

h da. iad, cu dma h

u w aach xa cu a

caa.

th aach cu h a -

whch cu duc ac-

(hyca caa, ab, ad, k humacaa, aucu, ad u) ad h

whch h ac a dd

duc d d ( Fam ad Fad

1991). Hc, cu ca d

ha a ay ab ad ad, wh

ch cu ca d ha u m

huma ad hyca caa ad dmad b

aucu ad u. Accd h

md, h d a whch ach ac (hyca

caa, ay, k) accumuad umay

dm h cha h y duch cuy ch x. Udy h

md h aum ha h away x

m cmba d huh whch h

ac ca b xd. thu, c -

a ac dwm, h acua duc a

cuy duc cay cquc uu

cmc mac.

th cd aach mha chca

dc (rm 1990) ad h d

b cmmd wh a hy wha may

bhd h dc ad hw hy may

m. th w dma hh

a md rm ad h quay add

Ah ad Hw (1992) ad gma ad

Hma (1991)aum a cuum d-

uc m chca ac. Accd

h hk, h away a hy m

adacd duc ha cu ca m a

hy uad h chy. th wd d-

uc abacd away ad d wh hk-

abu ucua ama ad wh.

Bu h au h duc d ay

uma dm h a ad d

dm? th abac m h ac

duc adad cmc hy

a ac a, bu a aua cquc

h ack aaab dcb hm. ia c a, Hauma, Hwa, ad rdk

(2007) cad h duc ac u

cmc dm by duc

a -dma aabh h-

ca h chaaca duc. thy

hw ha, c h cuy a

dm, h a h a hca-

x bak, h a ubqu

wh. Hw, a -dma caa

dc h duc ac may uyaccu h ch ucu ad a d-

uc ada cc cca cmc

dm. H w au a wk w

dcb duc ad ad uma

au ac uch dm (Hda

a. 2007).


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A network view o economic development

taday, cmc dm ha b

maud huh a h aad aab,

may dmc duc (gDp), adjud

by w ucha ay. Y, a a cc,

dm ha away b acad wh

a ca dy ha ca b caud

by uch aa. A h huma bdy d,

c da u, muc, b,

ad h c y. smay, a a d,

d du ad duc a b.

A h hah a cmy y bad

wah k a h hah a chd

y bad wh. A m uacd w

dm hud cca ud-

ad hw a d d du

ad duc, ah ha y dc hwhy accumua caa. Bu hw d w dcb

uch a cmx c?

A gDp w dm ca b a a

am add. Wh h c uch a

mah, a a dm maud

by k a h h add ccu,

ad h duc ad c ha

awd h. Dm, hw,

may b a -dma a h cuu. A aa mah wud -

a a aa huh a ud ad-

ca ah ha cmb u a add, ach

ay ad c mua ad ca h

ach w duc ad c. W ca

h adca wh a wk.1

i ac, wk a hyca

adca a ubquu; a xam a

h ubway ma h hhway wk. Ad w

ca ua hw a wk w cmc

mh k huh a xam d by h

w h wd d Jad Damd

Guns, Germs, and Steel (1997). Damd u-

a mac a aca w ba

dm, m u a hu ad

ah huh h hy a ad

ama dmca ad byd. W dcu-

md ad ch wh ac ad acd, h

bk dcu h hy may u

cmc ducuch a wha, bay, k,

fax, ad cad hw hw u wd wa

had by a w ca ha had b h h ac a h h m. th ca-

dd am cm ab

hm duc a uu ha awd ddu-

a ca a, ay, d buauca.

Cquy, h b dmad h h-

b, hycay ad/ cuuay, ad amd

u wd m a myad dd amy

u a w a, dma ca.

Bu why dd m h adacd caa h h? t ak m

Damd aum, c cma cha

wh ud bu ay wh aud, dm-

cad a ad ama ca du m ay

hy a a w ha hy a h

uh. sc euaa a a xa ad

u a a-w ax, a a

cud a ay ac h c. Hw,

Aca ad h Amca a d a h-

uh ax, h a w aa wh ma

aud ha cud ady ha w a a ad ama. A a cquc, m

duc w aaab h euaa ha

h Amda ad Aca.

W ca u a wk w dm

dcb Damd xaa uch da-

y. Fu 1 ahcay h duc

adca acd by u ac. Ca

w by dc ducha , dm-

ca a ad ama. th duc uawd hm ca m cmx duc,

uch a am, , ad wa. Y a

ca ad quay d a h

duc ac. euaa ua had acc

a bad u bcau h

a ba whch hy cud xm ad

1 th aach a m w, a wa ud by h 18h-cy sw mahmaca lhad eu abac ad h amu Kb bd bm. i ac, h hwd ha h bm had u.


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7

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h ha a. thy dd w-

du a, xam, uch a wha ad

bay, u ama ha w ay ay

dmca, uch a a, h, ad cw.

euaa uacad a a h

duc ac wh may d w c

ach hw ab xad qucky . o h h had, ca cad h

Amca w cad a much a a

h duc ac, wh duc du wa

md by ahca ca. th md

h cmc dca ay Amca

ca ad, cquy, h aby

jum uh duc h duc ac.

Cu abu h au h k cc

d duc ca b ahd by ka hw duc a dcd ad dc-

d by d ua. sm jum, k

h dmca a, ca qu m-

a chca mm ( h ca,

a)mm ha h d

h dm ( h ca, h dmca-

a ad um). e ac m,

k bw m duc du w

d by chy. i h ca, m

duc du may b

ccd ach h by

u/uu ah, uch

a fax ad ad .

Y a hd way whch duc

may b ccd may

qud aucu, ucha h ud wha

ad bay. A wk w

dm d qu

a uqu d a k:

ah, qu acc a a

aab aum h ac

ha h a k cc

m duc ad h;

k huh whch kwd,

u, ad wk ca fw;k ha may b ad by

da dy.

Exploring the network

i a c a, w hwd ha b

u x daa udy dm a a

du c a wk (Hda a.

2007). t d h, w cad a mau

dac bw a a duc bad h baby ha hy w xd by h

am cu. th m mhd awd u

cuc a wk wh w hwd ha

cu d dy by d d-

uc ha a c h duc ac h

hy aady x. i h wd, h wk

hw mca aca (ac cu)

d x ducma u h

m m au uad. i a

m m duc ah wh h

duc cu ha a m h a duc h cc u. i ha

ubca, w md u dcu by c-

ca ca whch h duc ac

xd ad cu ad , whch a ad

aum h m ca. W hwd ha

by ma cu ac y d

u dca bcau hy a

a y d dac m h duc.

g h ucu h duc ac day,

n: lk a ccay accua.

Figure 1. sketch oF the GUNS, GERMS, AND STEEL product space

Americas

Eurasia

Llama

Potatoes

Maize

Garments

Wool

Flax

Barley

Wheat

Leather

Linen

Cow Pig

Goat

Lamb

Apples

Pears

Grapes

Fur

Grapes


10/56

m cu ca y ach h

dm jyd by ch cu hy a

ab jum dac ha a qu qu

h hca cd (Fu 2). i h wd,

h away ha m y a

.

Figure 2. network representation oF the 19982000 product space

Fishing

Oil

Vegetables

Garments

Iron/Steel

Machinery

Chemicals

AnimalAgriculture

Electronics

Mining

Vehicles

Forest Products

Vegetable Oils

Fruit

Petroleum

Node Color

Raw Materials

Forest Products

TropicalAgriculture

AnimalAgriculture

Cereals

LaborIntensive

CapitalIntensive

Machinery

Chemicals

Link Color(proximity)

Node Size(millions o dollars)

f >0.65

f >0.55

f >0.4

f


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9

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evelop

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th a may way whch h aay ca

b xdd. i may b udy h

duc ac m a ab c. o

cud a duc bad h may

h ab k qud mak hm. th wud

aw cma xcha kd wk. A

w duc ca m ay b dd u ab k ma h ud mak

x duc. o cud a udy h a-

mby ab bw du a

wk y adju cha h dmad

h k.

th duc ac m, a w

duc ad w way mak d d-

uc a ducd. C h w m

x, b mad ch cu, b ambd cu. C h

c w ubquu. th aw

a xcha ma ha wa hh

umaab. D h dm mak

a had cu am hm-

?

W ca a udy h bu a cmy

bad h duc ac ad

aby m .2

th a ju m h u ha cud b

umad huh udy md by a wk

c. such aay w au

da a cuy bm ad cha a cy

ay. t d h y, w w d d-

y wk chqu ad cc dd

h bach cc ad ada hm

cmc. Adday, w w d d

w chqu ad cay cmc

qu ad ca a cmm aua bdw da ad m ada aach. A

a daa bcm m cmm, w

h ca wk ma, a hy a

uu way u w wa daa.

Our own skepticism

D a cmh dc h

wd cmy a a wk a ak

qu may md ad may ya, ad y

m w jud uu. Bu a

wk dc h cmy bud

ca kcm. Fm a hca c,

u ha cmc dm hud

b a a du c a

wk a udbak a ha

cmc cud b udd u caa uc-

ad da cacuu. W ha

u nwa w cmc, d by

l Waa ad Wam say J ad c-

ud by pau samu ad h, qu

u aum ha h cmy ca b b

dcbd by k umca qua aduca ah bw hm. M u

ha aum bcau w mad ;

w hd a c hm. ou aach

d cm aa ada

mahmaca mhd bu cmm hm,

by ca ha ca b ud udy

dm m a d c.

th a uaa ha h a

aach w b uu, ju a h w uaa h b u cacuu

ad hycay d qubum c

dcb cmc a h b h a

cuy. th h ba udd w

ha b ad by uh ach.

Acknowledgments

W wud k hak Ma Wjcchwk

h d h mauc.

2 Hauma, rdu, ad Wa (2008) hw ha h a cuy h duc ac y ac hd a whch c m cmc c.


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0

Reerences

Ah, ph, ad p Hw. 1992. A

Md gwh thuh Ca Duc.

Econometrica 60 (2): 323351.

Damd, Jad. 1997. Guns, Germs, and Steel:

The Fates o Human Societies. W.W. n &Cmay.

Fam, H., ad M.J. Fad, d. ad a.

1991. Heckscher-Ohlin Trade Theory. Cambd,

Ma.: Mit p.

gma, g M., ad ehaa Hma.

1991. Quay ladd h thy gwh.

Review o Economic Studies 58 (1): 4361.

Hauma, rcad, Ja Hwa, ad Dardk. 2007. Wha Yu ex Ma.Journal

o Economic Growth 12 (1): 125.

Hauma, rcad, Facc r. rdu,

ad rd Wa. 2008. gwh Ca.

i Cam rha, Ad vac, ad Ca

vh, d. Money, Crises, and Transition: Essays

in Honor o Guillermo Calvo. Cambd, Ma.:

Mit p.

Hda, C.A., B. K, A.-l. Baab, ad r.

Hauma. 2007. th pduc sac ad i

Cquc ecmc gwh. Science

317 (Juy 27): 482487.

Hchma, Ab o. 1958. The Strategy o

Economic Development. nw Ha, C.: YaUy p.

Mauyama, K., 1992. Acuua pducy,

Cmaa Adaa, ad ecmc gwh.

Journal o Economic Theory58 (Dcmb):

317334.

rm, p.M. edu tchca

Cha. 1990.Journal o Political Economy98

(5, ii): 71102.

r-rda, pau. 1943. pbm iduaa ea ad suh ea

eu. Economic Journal 53 (Jusmb):

202211.


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v A l U e n e t W o r K s : M o B i l i z i n gK n o W l e D g e F o r p r o g r e s s

by Bryanna Millis

Toward network-centric development

lad cmc hk ha ad

c ha m cm ad c

kwd a h d c bhd cmc

wh. A-rb-Jacqu tu, a cm-

ay Adam smh, bu w w b

h ubca The Wealth o Nations, ad-

cad c h Fch m

a-hd h cmy (ad acd

hm a M). tu d u a h cmc . ru aa

h a wdm h md-18h cuy,

h bd ha au dbu aby quay,

ad h way h aw u ad k a cu-

day ha kwd (chy)

c a xhaub uc: gu

ad am makd k d a m. th

m yu ak u, h m ma yu w .

i k maam cmc a m mbac h cc, bu day dcu

hk ay hca am cmc

wh wh kwd accumua, kw-

d ha, ad a d not ccuy

c a. th am hd bu a-

y bk ha cu m h acca cha-

mak w. thca

wh md mha h (d-

u) ach ad dm a h d

wh. Much h c au da

wh quay add, wh du w by h x u h duc add;

a c cbu, gda ad Cama

(2008) my quay-add wh md

x h cy mca a cmy

wh du ha d h a -

a. Ad cu ach h duc ac

add a hd dm h aay, cu-

hw h xmy duc ca

ac h khd uad ( Hda

ad Hauma ac h u).

Wcm adac h hca

d u udad mac c

bu d udac

m h cm mac -

a aa. t d uch acca

udac, w d udad hw cm-

cay ma kwd ad, hw

had, ad hw ad. th ha b

may da wh h qu a-

cay, m dua cmx ad acuua

ubc aay cu dm ad

h cu mha udad ba

au cha. th ca u dm

way whch cmc ad chca cm-

muca fw am ad -

m ac mua bh bu ad

cy a. th xcha a h

md ma ahc aa, a cmccu, cad u-dw ah

a hachcay ucud ba au cha.

ecmc ad ma ka am

mwhh ma bu ba c-

cm a wk ha ca au by

m dm ad cmc

wh. such ka d a value network, a

cc ha md ay m h d

c ad uy cha maam, ad udy wk-cc a. th au

wk cc daw u udad

cu hy, a du, ad

hw ma fw a ac uc-

u ba au cha. s huh h

h au wk, cmc acy

ju a xcha d ad c, bu

a xcha cmcay auab ma-

m cum, cm, duc,


14/56

2

ad u h c, a w a c

u aa, ach u, ad

m bd.

Cma a cay u wk ma-

am uu a ad bud dyamc

cc bw h , u-, cum, ad h a d

maxmum au a h ccd

(namba ad sawhy 2008, 21). p

h cu ad ba au cha aach,

mawh, a cay ca h

ha ad ca ka ha d h

aa md. Bud h dm,

h au wk a a:

a a bd bw h cu ad ba

au cha cc ad ca a ac-ca c hw a d ad

amd huh hub ad k, uma

hw a ah ac h ac

du, bh wh u ad a ba

bu c. Wh h bu a-

u dc h w wk-cc

aad wk cha a h

ma bud ad-hc au cha ha m

cum dmadau wk aach

dm m ca a m fx-

b amwk m bu ad cya, ad hby u a c

cm.

Innovation lows in clusters and value

chains

th cua a h au wk

cc u d. o h a w cu

cmc hk, chca cha

h dm ad a kwdha m a ha a ca u

udad hw cmc au cad

ad cm md. Y wh h

mac kwd a w wdy

cd, acc h md ad mcha-

m by whch ma fw ca u

cad cm ma udud.

F xam, w kw ha a ay a ca

a ma m d mak

duc a h au cha, bu a

caay h c-au-cha ah

ma u. e bu, h mchac

a ma y udd (ahuh

w a a adac ac hk-

h d) ad h haky udadcay hd cmc dm .

i a, h aby a fw y

fc u a hw bud u

ma cha u ha h h -

ma h h a h h m.

Cluster theory explores links among frms

i 1890, Ad Maha xudd h hy

dua dc h Principles o Economics,

w hw kwd w adby caa, whch u mmd m

cca aua huma uc. H

bd ha h xmy ad du

d au b m ad du.

i add h w c d duc-

ac, h hh ducy cad

u, ad h w c aa,

ad mm machy,

c ad h a aa h

bu ha h m my dcud: ma a a w da, ak u by

h ad cmbd wh u h

w; ad hu bcm h uc uh

w da.

Figure 1. porters diaMond Model For thecoMpetitive advantage oF nations

FactorConditions

Firm Strategy,

Structure, andRivalry

Related andSupportingIndustries

DemandConditions

Government


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evelop

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lt

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nA

tives

i 1990, Mcha p ucd Maha

dua dc a cmc cu, a

ca ud ad a ummay cha-

The Competitive Advantage o Nations.

A dcbd by p, dua cu a

md by ahc u ccd

cma ad acad u. Cum ducy by cua u-

a, ad a ud

by h ahc xmy cmmay

ad cm m wh aby cmmu-

ca ac--ac h ah

ad, by x, ca u ( M

ad McDad 1992). Cu ycay d

acay m, aud aua, huma,

kwd-bad uc, uch a B

bchy cu sc vay. thm a uccu cu h -cd

xam naa vay w, a cu d by

h a ch ad mak ch-

qu rb Mda, bu a ad by a

u uay m ad abuda

aua uc.

Bu m cu acua

ha m wh mxd ucc. Why?

th U.s. Acy iaa Dm

(UsAiD)-ud udy, Cluster Initiatives in

Developing and Transition Economies (K,

ldq, ad s 2006), hhh -

a a, cud ucy ad

aach aac, ad u h

d m h mau uc-

c. i add, wh cu aca -

ma fw wh ahc ca, h

udamay ua cu cmm h

aby uu ma fw wh h

ud h cu. rc ach hw hah hy -a au h cu-

may acuay c udad da ah

ha dma w . i h ay 2000,

p ackwdd h wak ad ud

ha u ddua cu a wkd wh

h m whch w da mh h

ym, a cud b ymd. Ah

acua h cu md uy-d

au: wh a ach h 1970

ad 1980 (H ad Uback 1979; H,

1988) d h ma u

cum d w cc, h cu

md d accu h cca dback

m buy (acuay aa buy,

h cu dmc mak cu). th

cha ac may m ach bamakm aa mak -

ad ah ad m ba quay

adada adquay addd

cu hy.

Value chain analysis adds the link to global

markets

Accd UsAiD au cha aach, a

acuad by h Mc Dm

oc, au cha cma h u a ac ad c qud b a d-

uc c m cc a a

mak (Camb 2008). vau cha aay

a hw a duy wk a cuy

ubaa , cud h a ad

xa ac h au cha ad h

qum d mak. th ma

ud dy h k

a h cha, duc aac c, ad

a ccha w mak h a d-uc m cm h wd mak.

Source: http://www.microlinks.org/ev_en.php?ID=25439_201&ID2=DO_

TOPIC

Figure 2. gloBal enaBling environMent

Exporters

Buyers

Wholesalers

Input Suppliers

NationalRetailers

Sector-SpecifcProviders

CrosscuttingProviders

Financial(Crosscutting)

End Markets

vca lka

Supporting Markets

Halka

Global Retailers

Producers

Global Enabling Environment National Enabling Environment

Vertical Linkages

National Enabling Environment

Global Enabling Environment


16/56

4

th ba au cha amwk add

m h a h cu md: au

cha aay d by dmad cd

h d makay by buy ba

a a cyd huh a

m cha au cha duc, -

c, ad aa. Fuhm, aucha aay mha h m

c (h bu m) a h -

aa, aa, ad dua , a w a

u c, aac c, ad a-

h a h cha ha fuc ducy.

i h yd a uacd w h

cad h mac u ac-

a h fw d h d mak ad

ma back duc.

i acc, hw, h a au h au

cha amwk m ma. Wh h

ca fw duc ad ma a w

d, h md wak ud-

ad ha fw, cud ac

wh u c ad ka bw d-

d au cha. Fuhm, m ma

h md adquay add h a-

m kwd ad a bw h

au cha ad ad akhd.

Bh h cu ad ba au cha md

ha ma aayc au, ad a hy ha

ud m bh hy ad ac-

c, ach ha bu a m h

h. tak a, hw, h ad-

quay md h mudma ah

ad mudca fw ma dd

d cad ducy. th cd-

a, am h, a buh h h

au wk.

Connecting the dots with value networks

th au wk mad u d kd

by a h ca ad by wak

h wk, cud h a h

ba . vau wk h d a

md huh whch ca h h

h cu ad au cha amwk wh

h h m dm a

du. t mak c u h cc,

hw, ma udad h cm-

h wk, hw ma fw,

ad hw au cad. i h ua ab,

m Ab-l Baab 2002 bk Linked:How Everything is Connected to Everything Else

and What It Means or Business, Science, and

Everyday Lie, Duca Wa ad s sa

dma hw a cc d, h ,

bcm a wk, h h, huh h

add ju a w k. thy hw hw a

ca cu (hbhd, ca

u) ca b ud a wk by h

add a w c ka ha hm

h. th ka duc h umb

bw ach d. each d a cacu h y a w k away m ay

h d h wk. th ca u

ad c-ka accu h ma wd

au ca ad cmc wk.

Nodes and links

smy u, d ca b ju abu ay y

aa, m, ddua a ch

wk, wh k a h ah bw

h d. Abu cc d kmay ac hw, ad hw cy, ma

w fw. F xam, d wh a uuuay

a umb k h d bcm

hub. A hub may b a duy x a

umba bu aca. Wh ma-

ach hub m ky fw ady

huhu h wk.

Figure 3. watts and strogatz Model


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1

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tives

th kd k a ma. A Mak ga

d u h 1973 ac, th sh

Wak t, ca wk a mad u

ad wak k, fc h a

h ddua ah. ga

ud ha wh cm a w

ma, wak a acuay m m-a ha , bcau by cc

aa cu y kd d, hy

cay da, cac, ad w m d

a h wk. F xam, a

m ky a abu w jb u

m acquaac ha d d. o h

h had, a e r hwd Diusion

o Innovations, k bw ddu-

a u a m c u

ha a a acuay add, du h bd u ad cdc am k

d. r dcu h cha

a am cmmuca hah -

ma ad cmmu, xam:

h x ha a a wd a ud

wh ca cqucwh

mhd may b cay aah

cmmda a ky b add,

h du c bak dw.

More than one kind o value

i h ac rcu h vau nwk,

kwd maam cua va A

d w may y au wh h

wk, wha h ca ab ad a-

b au. th m cmc au

m h d, c, u, ad

ad aac cmmy maud au

cha aay; h a au m

kwd ad b, wh kwd

cma chca u ad a,bu c ad a, ad uy

ad dmad cd, wh b cud

u, ca u, ad h y ca

ad ca adaa. Wh h ma

ha ab au ay a huma ac-

wdy cd, h aby d-

m am mak u h awa

a bhd.

Value networks in action

ecmc dm am k ud-

ad ad m h ca ha hd h

a c aby d bu cy.

such ca may b h u mak a-

u, adqua huma ad aca uc,

wak hyca kwd-bad aucu,

a uu uay m, h

ac. Dm am ay

add a h cahy ha a

mada cu a ca kdbu hy am

d h a mac h uc

xdd. tak a au wk aach

udad ad add duy c-

a y bad h a aa-

ab h ac: by b udad

h wk cad by k dmc cuwh ba au cha, hw ma ad

a a dud huh h wk,

ad h w ab au, ac

ca dy w aach d -

ad cm dm cha.

The champion as a network hub

sku wk cha ca ca ad-hc

au cha d cc d. th

xc l & Fu h am addma h w h aach -

uay (Fu, Fu, ad Wd 2008). Fu 4,

adad m h bk, ua h c:

a cc cum d, h

wk cha ch am h u

u accd aaab caacy ad

th nwk: U su

Fabc Cu sw packa& dy

scccum

d

Figure 4. network orchestration


18/56

6

h chaacc ca a ad-hc au

cha this particular order. th cha

b h um h d, a w

a maa h wk quad u-

.

pahaad ad Kha (2008) ak h a uh, c ca h l & Fu -

wk h c. i h w, h cum

ad h u c-ca au by wk-

h. th u ma h hub

acc uc ad a bay, bu ach

ddua cum d d, ad cum

ac u h uc m h dmad,

hby cbu au ca. pahaad

ad Kha c xam m acadmc u-

(tuva) a chy (Apd) ad --a ym (nCr). Fay,

m h am a ach, namba

ad sawhy (2008) u ha ba uc-

cu a a a ca, -

cay ma , ad hw h h

wk-cc a, xmd by h

uc wa.

i a h ca, h h wk

cha u ha a m

ba mak adad ad d mmd-a cum dmad. Wh h au wk,

h m ddua ahuba d kd

a acuay a umb h dbu a

hub ha acy aca mak h da

cc cay m bu -

c ma fw. i cmc d-

m jc, h jc may ay h ,

ca ka ha may b m, h-

h d ac a hub h cmy,

aca h dm w a-h ha may a bcm -ua. i

cca ha h hub ccuy, cm ccuy,

a u d bud h cay

ah ad k d ha may ha

b a ka h a.

th ab au u ad ca u

udd a ac ah ha ac

way cmc wh am. ruay

m a k a m-mdd

a m, wh ca hhd

cha ad wk w m uca

cau. Y wh a m-mdd adcacy

a a cay cm jc

ucc, by ma uc. W mu

a udad h w ucu ha hw h ddua ab a a ma-

ad da. Ad w mu ak accu ay

d udy ah u ha

h m c uaab c a

u ad am a .

A u ha a du au cha

h am du bw -

m h cha. pduc ad c,

xam, w ah a cm h u b xacd m h

au hy add. M m a ha

ah ha bha a cm a um

am, ac h au cha wud d b

d muuay ma u. F h m

ach h ccu, may ak h

a jy ud ad wh h wk

a aa ddua. i m ca, ha

aa mh b a bu aca.

th uc aca cy a hub, a

ac j d k h au cha,a w a a c m b d

h m. A cmc dm

am k u ad h h

aca m h aby

au cha mmbudad hm a

hub may xad h way whch am

mak u h a.

i um, h au wk a m cm

amwk huh whch udad hwm ac h ba cmy ad wha

ak b cm. By bud x

h dua cu ad ba au

cha, cmc dm am ha

mbac h au wk cc ca h

dy may ay h

wk cha, ad u h bud

ah ad u huh whch wk

k w cm cy am kwd.


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tives

Reerences and urther reading

A, va. 2000. rcu h vau n-

wk.Journal o Business Strategy21 (4) (Juy

Auu): 2935.

Baab, Ab-l. 2003. Linked: How Every-

thing Is Connected to Everything Else and What It

Means or Business, Science, and Everyday Lie.

Cambd, Ma.: pu.

Camb, ruh. 2008. th vau Cha Fam-

wk. UsAiD B pa. Wah, D.C.:

ACDi/voCA. h://yu.cm/43ubu

Fu, vc, Wam Fu, ad Yam (Jy)

Wd. 2008. Competing in a Flat World: Building

Enterprises or a Borderless World. U sadd

r, n.J.: Wha sch pubh.

gda, pa e., ad luca zama. 2008.

th imac idua pcy Quay-

ladd gwh Md. B.E. Journal o Macro-

economics 8 (1), Ac 1.

ga, Mak. 1974. Getting a Job: A Study

o Contacts and Careers. Cambd, Ma.: Ha-

ad Uy p.

ga, Mak. 1973. th sh Wak

t.American Journal o Sociology78 (6):

13601380.

gma, g M., ad ehaa Hma. 1991.

Quay ladd h thy gwh. nBer

Wk pa n. W3099, Auu.

H, Chh t., ad Jam M. Uback, d.

1979. Technological Innovation or a Dynamic

Economy. nw Yk: pam p.

K, Cha, ga ldq, ad jas. 2006. Cluster Initiatives in Developing

and Transition Economies . sckhm: C

say ad Cm. h://yu.

cm/3m24jj

Maha, Ad. 1890. Principles o Economics.

F d. ld: Macma ad C.

MacKwh, ty. 2007. Social Networks: Evolu-

tion o the Marketing Paradigm. AMaC lmd.

h://yu.cm/3md2m7

M, edw s., ad Jh F. McDad, d. 1992.

Sources o Metropolitan Growth. nw Buwck,

n.J.: ru Uy C Uba pcyrach.

Mu-D im Cma Ady s-

c h Wd Bak gu (FiAs). 2007.

Moving Toward Competitiveness: A Value Chain

Approach. Wah, D.C., Auu. h://

yu.cm/6ku8

namba, sah, ad Mhab sawhy. 2008.

TheGlobal Brain: Your Roadmap or Innovating

Faster and Smarter in a Networked World. U

sadd r, n.J.: Wha sch pubh.

pad, J, ad Aa ryad. 2006. Fm

vau Cha vau nwk: ih Mb

oa. European Management Journal 24

(23): 128141. h://yu.cm/4229

p, Mcha p. 1990. The Competitive Advan-

tage o Nations. nw Yk: Bac Bk.

p, Mcha p. 2000. lca, Cm,

ad ecmc Dm: lca Cu agba ecmy. Economic Development Quar-

terly14 (1) (Fbuay): 1534.

pahaad, C.K., ad M.s. Kha. 2008. The

New Age o Innovation: Driving Co-Created Value

Through Global Networks. nw Yk: Mcgaw-

H.

r, e. 2003. Diusion o Innovations.

5h ed. nw Yk: F p.

H, ec. 1988. The Sources o Innovation.

nw Yk ad oxd: oxd Uy p.

h://wb.m.du/h/www/uc.hm

Wa, Amy Ca. 2008. th Cu Aach

ecmc gwh. Bu gwh ia

tchca B n. 7. Wah, D.C.: Wd-

ma Aca, ic., smb. h://yu.

cm/3jkqj


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Wd ecmc Fum. 2006. Global Competi-

tiveness Report 20062007. nw Yk: paa

Macma. h://yu.cm/ywb

Wdwad, Dua. 2005. p Cu

say vu idua ta. Uy

suh Caa, Juy 1.


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l i n K i n g U p : A p r A C t i t i o n e r sp e r s p e C t i v e o n t H e e C o n o M i C l i n K A g e s

t H A t s H A p e D e v e l o p M e n tby Gary Kilmer

A a cmy w, bcm ca-

y ccd, bh ay ad ac

bd. i cu, uch ka d

b a. A d h cmc cum,

ma am ad u a

h ma c, ycay cd ca,

aa mak. thy a uab c h

acc dd u, h a mak.

th aby acc au-add ch-

ad aa makcmudd

by wak ca aach hm h

w u h cmmca add. Abu

mak w, ad ac ( c-

u) m u mak ad aca

ua mak -m a dcu

mb. sma duc mu a wh

cd a hy d hm day--day.

i ca, h mwha a aca

a duy ha h b d bu

h a aa aa cmy, wha cm ca ad adqua caa

a. thy ha b acc h ma

bak ym ad ca, a a ccy,

k fuc h maa -

m ha m ac hm. thy ac ma

a w, hw. ohad c may b hh

c mak h amu maa

hy ca duc hm, h x

a -hu dbu ym may b m

ha hy ca cy ua.

F ac cmmca k bw h

a ad ma aca a duy ca

h b adaau bh a. F

h ma-ca a, h k ca u

md ducy ad m ady acc

dd duc u. thy b m a

m ab mak h duc, ad hy

jy ducd c h x bu

k h mak. th a m b-

m a m ab uy qud aw

maa, m-hd duc, h u

c hy d whu cmm h

w aca ad huma caa h duc-

. each d ca ak adaa h a

h h h a wh

m w wak.

i h d abu, wh i ha b

m d, careully orged and closely tended

ac j ma-ca am ad -

u wh h a cua ha b-

d bh d. th am c ca ay

h am bu, hadca duc,

ad h aa.

Conceptual models and practical

demands

Md h cmc ad hka am cmc ac abud, a-

cua h ha k cc ma ad a

c ad dbu. n a,

cu dm wa h fa h mh

h wd dm. Cd

by acadmc ad cakd ay ja,

u, ad cha, h cc wa add by

may ach a ady aw u d-

m wh. subc dm wa a

dc, bu h d acuua cm-

c cc uy cha aay a a way

udad hw ay a duy ac

add au a duc ad b mak.

vau cha aay w h , d-

a uu amwk ah, , ad

aay h am ma.

th aach a auab h x ha

hy xa cmmca ac ad dy

ky h u wh


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mbac h m a a a

ab dm . Bu hy a add ay

cmxy ha a udd by h

m, ma ad a ak, ha mu mak a

wk acc. th cmx ca d

m h a, bm-u, bck-

ad-ma aach ha a qud b abu a cha. Wha h ccua

md m h m ma ac

bu ucc: u aby m-

m h da wh h c h x

ma m whch hy

ha c.

ec ka bud qu a accua

ad cmh udad ca

dm ad cmmca a ad mub cad u wh h m md by h

a. Wha h c mh b -

ca, cmc, ad uay cd w

mhw h m mau h a

wd ha h hy c cm

abh duc c.

Upstream and downstream linkages

exam c ka abud h

wd ac. i wha i hk a huam md, a umb ma-ca

uw d duc a c-

a x. Whu h ka, h

ma duc wud ack acc c

ac x mak. ouw duc

ca d a u h ad m duc

c (mk ch, xam, hk

cch) aum h fw duc

huh h a m abhd x cha-

. th ka w mak u- h ma am/uw ad ab h

a m x cm ca.

i h dwam md, a a may

y mcu dbu

duc. nwa ubh dk

b c cam mauacu w

y a umb d u

h wd b dbu h duc.

th dach a dd cac-

, h by chc ack m dab

y h c maad by h

a m d a ady fw duc.

th aam, cu, b bh d.

th ma m whm i ucha my wa

ach m acay hu wh h uy wa a a. th ubh w b

hamd my u ad ay ca umb

h cau a h cd u bu

d m wad ma a h

day c ad ba.

i h md h ay cay k-

d a ca d u a ba

ua hb. idd, ka

aam h a m ky uc-cd wh ach ay a k a w

. pam wh k ha b bu

a h bh m ha b aby

uccu. ida Baak-Aka (

ah) am h 1980, xam,

wa my xc ack ha cca m

cd -, a y a

m-md aa ba h

Baak (ad m) ju a, ad

by way a b h.

Eective linkages demand trust

eu u a dcu

(ad mm dwh h) m

ca ay ad h h m h

ca k ha a d abh-

ma ka h ay. Wh d-

m ac d u ha hy

j h aca uu cy

cha h ay umb c, haach uaccab wh

am wa dd h bu ad

wh du ud ud h

am bu jud.

i may ca (cay bu xcuy

h cu h m s U), h

a ad a a ca h

y ka bh d. each ay


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ycay uca u a h had

h h, a a h cacua mcha-

m ha ca duc h d bd u

h da ad u acc ha uch a da

ca b a w-w. o quy cu

h aum ha a w, h h

mu cay .

thu, ma ad mdum-d bu a-

a uca aca mak

cha wh qu quh m

c. gam mak ad wa duc-

Ama, xam, abh

h w h y h duc, h

adama b ha y h mak

h wa wud ad h dwa. i kw

Ama bk wh abhd hw hy buqu ah ha dbu h

duc huh Ya umab mak

bcau h bd hy wud adua h

duc wh hy m h . H cud

y a h ay cd h d-

uc m bh cum. tha a uh

way w a bu.

The conditions or successul linkages

ey da uqu, ju a y cmay,y duc, ad y ca ad cmc

m d. s w hud b ca-

u abu cb h cd uc-

cu ka bud. Ay aac h

c hud cu h h aca

a h ka ah b m h

ddua d ad h cc qum

a mak. r ddua bu

a ad uw am a hh y,

cmmd by aac aca c duc, -ha had, acka-

, c c, ad h dca ad

dm cmmca ah wh

aa aa buy. A fxb ad

cx-d aach a.

tha caa uad, my xc wh may

d y ka dm wk

u h a ac cay h

dm uccu cmmca ka:

l shad cmmca bjc;l pcd muua b ad a;l shad cmmm mak h ka uc-

cu;l Cay dd h, b, ad

h macac; adl taa maam.

Shared commercial objectives

Bh a mu b d wad h mak.

i h ca a x m ghaa,

xam, h ackhu a/x

ad h ma-ca uw mu a ha

h bjc maxm -m u bh. tha am m d a

buy wh h quay ad quay u hy

wa, accd h ad chdu. i y

ay cmmd h bjc, wh h

h m d cd-ad

duc ha ca b d wh, u-

cha m ma duc y wh w

duc a h, h h ah ca

uccd. sadada, cmmuca,

ad dcaby a cca h ca. Aa mu u h am duc ym,

cda h a ad ha chd-

u u a ady fw duc, a

aym ad cd ym ha aca h

wk ach, ad ay uy awa h ba-

ad h.

th had cmmca bjc ca b m

dcu ach h d mak ha

aa a aca. i h h -

a xam, aca am ay hm b x. th duc

ach h d mak dcy. i h ca

ma c xab a, hw-

, m ky ha y h c

ha h d mak md. th

am a my w ma a

h c. i b m dcu

cc h am h d


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quay adada, ha chdu, ad

h -ha had qum ha

u a mh duc c. sc h

d mak dc, am ay

a h duc quay adad.

tha ad, Bh Amca tbacc Cmay

(BAt) aa ha d h bm h bacc am aa, by c ad ca

cmmuca wh cacd bacc am,

cud wh h cad u

ad cah aym a ha m.

Perceived mutual beneit and airness

each aca mu ha h h w

a m m b h am ha u

(whch aa b h ky h ucc

h BAt am). equay ma, h

ay ca b ha h h mhw b

ak adaa by h h. e i am

ad wh my u m h da, i may b

uhay i hk ha ah ay b

a m.

Wh h a may ca xa

ma duc by h a ad m h-

cad a, h a a may ac

wh cm udad maka ad uudd uc. i kw

Ama bk wh ha had ha hy

Amca umak Us$10 $12

kam, xam, ad wh a h

dd a b d ha h wd mak c

buk hy a uc c $2. i hy

cud ju cu u h mddm wh a cha-

hm, hy , hy cud a 80 90

c ha a c hm. educa

qud cay aca ud-ad h wh au cha.

Shared commitment to making the linkage

successul

A a mu b quay cmmd h uc-

c h ka, ad ha ucc mu b

udd ad m. i abu, h

a uccu ka ha b h u a

a m a h u ma hb

by hm a uw, huh

h duc h uw wa

a maay ma h a m -

aby. i a uccu uw ka, ma

am b by a a mak a

caab d hm wh duc u

hy qu duc m aby; h aa b m xadd acc h

acuu duc dd m ma-

k cha c caacy.

s ah ca ad u h

ac aau m cwby (wh y u

uw d h c xcha

h uy ad ay duc

cd h ba). th ky wd h

ah. n y d h w d dach h maxm h w b, bu

hy kw ha hy d ach h ad acy

wk h ah. A m

had k mu b bu h ah.

smm c a c dw du

ac byd h ay c. A a

mu h da wh a cmm udad-

hw h w b b. ohw,

h had cmmm h ka w

u h u ch h ym.

Wh h a m uw a

a ca aw maa bcau

ma-ca duc m c ha

a-ca duc, h chac uc-

c a b, a h BAt uw chm.

tbacc a ab- c b cuad

by ma am. sma-am ca a b m

c h duc ma ad c

uch a a, aa, aka, u h

a a w ad ab xd -ca aca caa mcha a.

Clearly deined rights, responsibilities, and

sanctions

A cmm bm ghaa, ida,

Ama, ad h cu wh i ha

wkd ha h da ka ah

a dcumd a way ha ca, cm-


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h, ad udadab a a. A

a x may a d cd

am wh duc u a cd ba

wh h uw d h c

h x wh mau. Bu h abc

a dad am, am d kw

xacy wha u w b ud, a whac hy w b dd, ad wha cd

m. thy may uy udad wh h

x wa h c b had,

wh w d h ha ad a h

c a ackhu. i may b uca

wha ad a a dmadd, wha

c w b ad hm, wha bcm

u ha d m x quay adad.

A m - w-a am ca dah ma m ad a h ba

cu h ah. th y ac

may uch a am ma

wh h da. th wh may b

m ca hca ha a, bu ma

h, ad d a ba h w

a wk h. Accdy, cuca

ha ca ac b ad ay ay ha

d cm h d am. oc

h ka abhd ad aud by a a-

, h m ac ca b xcum uu aca.

F may c, h dm a uw

duc ba w aac h buy, -

cay x c uch a a, wh

umu x h ma-am

duc a m wh dmad u h

uy hy c. smay, h ca BAt

bacc duc ida, uch chm

aac a wh y c ma amcmmd BAt hm a b

h-m a. i Ama, day c

cma ad ma c cm

h aw maa hy d ay h mak

ba. i h ca, h a m mu

u ha h uw wk a

ud away by h buy.

i m hhy ucud ada cuu,

may b dcu h a m ad h u-

w a a qua ad h u

a. vy , hw, my d a

w xam h muua b ha accu

m ca dcuma uh umu

h bac.

Transparent management

taacy a h ka ah. i

ay d h h baac bw ha-

ad c cda bu ma-

ac wh ka a. e

c cca ma may b cud

a c, a uc. th m-

a c h bh a mak

h da h bu hy ha cmm

ady aaab h a. th x

mu k uw cd cu ad aa-

ab c. ouw mu a ha

acc da uch a x c, a

c, u c, ad a. i

quay ma ha uw b h

da wh h ad m m h u

duc u, bm cud du

duc, h da hy mh b d.

Development assistance as a linkage

catalyst

th au ab, aa ah

bw ma duc ad c

x cay uay cd.

i 2002, wh i ad ak Ama

ac abu h d d

ad cmh uw cac wh

h ma am hy d aw ma-

a, i wa d, th cay Ama.

i kw my u ad hy w d wha i

hm. A h m, ma am w k

mak h duc. nw h ua

d: c caacy ha xadd ad

h c a cm ay

ma am duc. A ay a 2004, w ba

h dm m udmay,

ab adqua, uw uy cac.


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nw, m h cma w wkd wh

Ama ha akd aac d-

a ab uw uy wk, cud-

aam d h am wh

duc u. i h d, h cmc

h ua ha u h a h. ou

a dm a wa - h da h a bw h

w ca. i d u cdby h

c, w h h a ak h

wad ca a da ha cmab bh

d.

May dm jc a dd

ca mak u ma am

u. lka a a c

d h ma d h d ay,acaby, mauacu, ad mak y-

m qud b a uccu aca h

ma ch mak. th a-

h cay a c h h ch

ch. lk u h h ma, w-

u, am m h ducy by a-

b acc aa cd ad h

qud duc u. th am am

ca, wh hy a ady (ad wh aa

aac), ca a aca caab

h j c adh h duy.


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Dimensions o competition in inancial

networks

A h c, cm xcd

d a aca c, a bh

h quay aca duc ad h ccy

h duc. Cm a fuc

acc aca c ad xa ac

m ad huhd, hby adac c-

mc wh. i ac, mak aca ym

m ad cab huh w ba y ad x ha ay d a d-

uc da, m c-c aca

mda, m accb aca c,

ad hacd aby.

Y xc cm ca udm a-

ca aby, uh h aa uda

c wad bak. Byd h uda

aum, h ca a cm cy

aca c a udd h wmac network properties h -

duc, dbu, ad cum uch

c. i duc, a xam h ca

ad u ma wk; dbu,

h u aumac mach (AtM); ad

cum, h a xa ck

xcha ad h ama c

qudy (a acc caa m qud-

y a).

t m cm aca makqu a udad h ca -

h mak, acua h xc

may wk ac. Cm cy

h aca c a bhd ha may

h c, ad may cu y

m m aca c dm a-

, ad a a ahuh. th a

x h dua cha maa ab-

y ad cua cm a c ha

p r o M o t i n g C o M p e t i t i o n i n A n e t W o r Ki n D U s t r Y: t H e F i n A n C i A l s e C t o r

by Stijn Claessens

Network Industries

nwk c cmmay d adk. nwk du a ycay chaac-d by a xd c (bud h wk)ad w maa c (add mcum).tha cmba m ca- u ca duc: wh a m, h aa c cum (duc) dc a m cum j h

wk.

Hw, wha ay ma a cau ca cum: h m cu-m (d) j h wk, h a hau ach u (u yu ach c,wh au umm). By j h wk,ach cum ca wk xah b m h xa hwk whu ha cma h wu.

tada wk du cud aad,

a, h c, ccy, badca. th w adad , cu,h . Ad h ua wkcc cmab d ha haa cmm chca am, a nchaecmd d hm, uch a vHs ay, a cmu u Wdw w-. Cmm adad a cay ma wk du.

owh h hyca wk, c h adad, ca ma xc ad c dcma. th cy

ha h away b ua ad cua cm, wh h am hchcay b. sj Ca ack a h mca wk au h aca c duy ha w a cha ua wdwd, buacuay ua a cmad d cu.

F a d ummay h u, ec-md (2006) www...


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xhb bh h hyca au a wk

(d, k, ad hub) ad h cmc -

wk du.

Wha ca abu cm h aca

c? Ad hw d cm ma? i

add h qu, uu c-d h dm:

l Financial sector development: i h ym

m dd, d d b a-

ca duc c? i m c,

wh w-c aca mda? Ad

c m cm bchmak?l Financial sector access: D a cm-

m acc ac, acuay

ma m ad ddua?l Financial sector stability: D a cm-

yd a m ab, c-,

m bu aca ym ha maa

aca y?

New challenges or competition policy in

inancial networks

The evolving fnancial services industry

Faca c du a cha ady.

D by h ma ba, baa,a bak aca u,

chca , ad h cad m-

ac wk, w cm ay a

ky h cha. Bh h Ud sa

ad h eua U (eU) ha achd

a ad ad cm a h a-

ca c a a u dua, wh

hacd cm ha md aca

mda. ta cm ad d-

cu ha d u h acac Ca ad ea eu ad la

Amcaa d a. M h

cm cy a d may

ada ma hac cm, uch

a m y ba ba duc

c.

Hw, ha b u. i 2007, h

eU wd cm a bak ad

ud a aa mcha ad -

cha aym cad wk, ba

y h mak aym ym ad

cd , bac cum mb-

y, ad duc y. o h a dcad,

may m ha qud au a

aym wk ay dd by bakwh a a b ad ad aaab

a cum. sma mau may b dd

day m h ba. gm

ua mada a ay d ca b

quay cay caa mak u

a ad ad c ma a w a a

.

Cm a cha, a w

cm cy cha makmuch a wha ad caa

makwh cm ha b

ad b m acc ad c ha

b a. th cda aca c

du, h mc ba ay, h

ca m ma chy

ad bad am cay a cy

ad a ca, ad h c a uk

c mak dcu u u cm.

i u, ud cm whu

ua ad u may ad mu h mak, ad cy mau m

c cm a ay.

i ac, h m dc ha h

ca cm may ha wd dw

c h ay 2000 (Bkk ad sdjk 2007).

Cau cud cay hh xd c ad

a uk c h duc wha

aca c, my by ca

m ad ca adaa. exa,ay -ac h ad aym

u mb h, ca mak h ad

w ch xhb cca ma .

i cum ac, wch c may ha

cad: aumac aym a cay

kd cc bak accu umb,

xam, cum ca ad d ay

cha d.


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Addressing access barriers

icad cm ca ha ad mac

acc ac m ca b-

w, cay d cu ad

m mak. i h cu, ua

wak ad hh d quay may

my hh ba acc huhd

ad ma ad mdum-d (sMe).

Bucad mak a: a (a-

a) bak cca a ca

h had, cum h h. th

m mdd m ha mak ucu

cm may sMe. th qu a a

whh b ma ym ad a m

fxb cac m ca bd h

a bw h w mak m ad

acc sMe.

May cu ha mad m cm

a y. Bu d a y cum

aca c ha ay. e

h m dd cu, wh ud a-

ca u ad aucu, h d

c cm cum ad a

c a ha h aca c

m. Wh mak u m

cy cm ha ma a, m d ha a .

Cm cy h aca c a

kd h bjc ma d-

m ac:

l mak mak wk b a a c-

um (mm cad u

bu cduc);l c ddua cum; ad

l h cum ba h a bm aca c ( xam,

huh ma ad duca),

whch bad h cc cum

c.

Network barriers to competition

Faca c h u a

a umb wk, aym,

dbu, ad ma ym. nwk

chaacc my ba y ad hby

cmca h aca cm cy:

l lm acc h aym ym

bak ca wk ba h a-

ca u.l

AtM ym ad h dbu wkd b md bak y aaab

bak aca u a hh c.l Acc cd daa ad h ma

bw ad h c md

(a ub ) cumb bak.l nwk xa, uch a h ama-

c qudy, may ccu, cay

caa mak.l owh ad ac ucu a a

u. i may ck xcha, da

mak, ad h ma ad aa, xam, wh ad ac uc-

u a cha m muua -

wh (wh w w), ca -

b ba.l td cud ca a (cay

caa mak, wh w h a

ad ym wh ca ad -

m) ad a muau ha cda-

h ac h aca c

c.

each h au h c may a

acm bha.

Cm cy a cd wh h

ac ha mak ad duc d ha

bcm m dcu. th cay ba

au aca mak may udm h

c a cm cy dd

aa mak y. o h duc d,

ak ju xam, dc bw h

mak c (uch a cmay-

dd a) ad a maa-

m c (uch a 401[k] a h Ud

sa) a dwd. May ca a

bh way ad, dd ax u a ham-

d bw h w, w d . Ad wh may

aca u d (a) bak-

ad h aca c, h buday


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bw bak ad bak aca u

ha bud.

oh wk u ca a ac h cm-

m aca c .

F xam, h cm ucu h

cmmuca mak may ac h mak -ac, a h ca mb h ay-

m.

Implications or competition policy in the

inancial sector

Three approaches

th d aby ha away d cha-

cy mak cha cm

cy h aca c duy, ad adcha h duy y xacba h

cha. th a ay u, bu c-

cm cy ay h

ay cmmay aach u ha:

l y ad x u aw cab ma-

k m aca u;l h ay d ac aca c -

d ad duc , hby ab

c aca cm; ad

l h ua m ( xam, ay-m ym ad cd buau) c-

ab.

th aach ha c ad w

ma h c cm cy

aca a w a h c. Bu

uc m w cha.

Leveling the playing feld

th cd aach ma hamaam aca c d (bak, u-

ac cma, ud, a maa-

m, ad ), mak (aa, a,

ad ba), ad ucay qua y

duc d by bak, uac, caa

mak d. Hama k qua

uay am duc ha d h

am ucay. Ham ax, ca-

a adquacy qum, aacy ad

dcu u, ad h ac c ad

duc m cm, ua-

y aba, ad ca duc dc h

a uay bud b by duc.

th mc cmx aca duc ha

add au mak ad u mak

h d a cmm uay aach ah m .

Wh uay dc ac aca

d ha dmhd, hy x,

m ub m. sm hm may b du

ah ddc; xam, m duc

md a uac duc bu aduay

bcam a duc. sm duc a

kd aym ym, whch may m

acc am d. Dc may a bcau ka wh h cmc

c, uch a c d-

uc qua a duc. Fay,

may aca duc a budda chck-

accu may cud a, aym, ad

cd, xammak had u

qua uay bud.

A h am m, dc uay

am may w b jud uda

cum c ud. e ach acy ay d h a cc-

uay ad accay dcu. th a cu-

aach, whch ay ac, hu may

ha m m. A duc ad cum

a acd wh uay dc, u

hama w.

Hw, h ac aach a a

k: ca a ac h bm, a h

a uad am bcm h m,ad h d bby aab

am. th k a a m ac

aach by auh ad cm a-

c, bu w ha d . e , ac

cud qu b daa c ad c a

h ddua duc ad mak h

aaab ab u aca c

mak h ca.


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Ensuring contestability o the institutional

environment

A ua m cab ay

d d ha u acc a u

a cc aca c duc ad

dbu cha, cud wk c

uch a aym ad chck ym, cd

buau. th u hud a b ay ad

umy cd, ad cy ud. such

qum a cdd bac m h

wk du wh m a duc ad

d ccmmuca, y,

wau cmm wk.

Ach caby qu h mua

ad aca adad, acua

wk cmaby. sadad a ad c-da bm m chy chc

ad h cum ca whh h cc

chy w b wdad. rducd uc-

ay w h k cum ck- ad

d u ad. i aca c, a d

xam h c ha b h scy

Wdwd ibak Faca tcmmuca

(sWiFt) c aac aa ay-

m, add 1977.

Hw, adad may a c u mak

a chc, acua c cac u

u j m ha wk. such -

ca ad h dmac a a

wk, wh m dad wk

a cum chc cud -

a. Acm bha ca h ay

w. pcy mak hu ac ad bw

m cca ma mak dm

by u mua adad,

h had, ad h h had mua- cm ad ma h c

cumb.

Regulation o networks

Fay hcad cm c ha

b add h wk du. F

xam, m a cm, h w-

h maam h wk ha

b aad m h c.

Acc c ad h c wk -

c a quy ubjc m ua-

y w. pcy mak, my dd

cu, ha b ab uaa acc

huh mcham uch ua c b-

a, um c u a u duc c ky uu, ubd,

ad h c. th aach may

a ay h aca c wh a

wk . F xam, aym

c, adad um c u cud

aca bad acc.

Institutional arrangements

ec cm cy w qu w

ua aam. gay, h bdyb cm cy hud

b b uda h. i may

cu, hw, by cm

cy wh h uda auhy, ca-

a cfc (Ca ad Hama

2002). B cda, ad aby c-

da, cm cy uc

bak ad bak aca u,

xam a adab. D uc-

hd h budu k cay cm cy aay.

lkd ha u h qu

u mu uy ac. sm

cu ha md wad u-

y auh, whch umaby cud duc

ucay dc a m mu

uay m. oh ha chad a

acy wh u h ymc aby ad

uda h a aca u

(bak, uac, ad ud), bu y ah acy u mak c-

duc. i m ac, h by

ymc aby wh h ca bak, ad

w aa ac a u uda

ad mak cduc. Y h cu, uch a

h Ud sa, ha mad cha ad

maa aa ad mm mu

uda bak, cu mak, ad

uac u.


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A ay h ua aam

u m c aca c

? rach ack, ad h aw

w ha ma uca ay ca, h d-

cuy abu. e wh h a

uy auhy, h d uay ha-

ma ac c duc may -. Cm u m bh duc

ad u ad h bby h w b m

ky d hama. A m amd

ucu ua ad u may w

ma a , c h aca -

c du a a au

uay cha, ad ac cm

wh ach h fuc.1

Harmonization across bordersFaca wk xd byd bd.

iua chc cuy may ha

ac h d ba ham-

a. th cha hama ac

mak, aady a cmx udak wh

cu, w cu b cmudd ac

bd. th eU xc ud h ac-

y dd ca a mak aca

c. rqu umy ua

huh au dc uc.icc wh ad bw a

a, ad adju h cy aa ak much

m ad . t ju yca xam:

may dd cu, bak a

ac bd whu ba, bu qudy

u ad d--a- ac a

ad aay. th a aa ca

ad cc c da wh

aca cy2cc wh cm-

mca. Bak m m cu

1 obuy, h ba hhy cx- ad cuy-dd, ad may h dm h u. Fxam, wh aca u ad wak ua, a a fuc a cud ad mcu ax ad w-c adad, wh ha a cm bu m k aca aby. i hm, cau h ua may ad -k by (cd) aca u, bu wh md k.

2 Ahuh qudy maam may b d cay by h bak hm cuy, bach baka ycay b c qudy u m h ca h ca bak. shud h had bak bcm ,hw, h hm cuy auh a b, whch ca hm m uc h wh baka.

3 th Hdah dx a dca h amu cm am m a duy. ra m 0 10,000, y ad h cm.

may ha m u acc h ca

ay ha bak m h cu.

iaa adad ha bu ha

hama ac bd. pmuad

by aa uch a h Ba Cmm

Bak su, h iaaoaa scu Cmm,

h iaa Aca iuac

su, ad h Cmm paym

ad sm sym, h adad m

h uda a a bdy aw.

sm h adad a m ha

u ach a mmum cmm

dma am x aa qu-

m, wh h acuay byd x

aa qum (Ba ii). Ahuh hadad a uay ad mma

h cu hm, m hm

ca b u. Ada bad-bad, ba

c ddua cuy ccumac

wh a cmm amwk ha dcu.

s, h c w ac h cm

adca.

Assessing the level o competition

Mau ycay ud a h (ack) cmuch a h Hdah

dx,3 cca dx bak

bach wh a ahc aaw

md uy a w dcad a, ad a

w m cha h aca

c. Hw, h m hcad aay-

ca ad mca dd mau

cm h du a had ay

aca c. th uca duc

uc aca c, h dcy


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tives

4 pdyck (2007) dcu h au u buh by h U.s. Dam Juc aa va ad MaCad 1998.

duc ad bud c, h wak-

ad ay daa h duy, ad h

c wk ay cmca

h ak.

e bak, h m ada aca

c whch uab daa a aaab, m h ada dua aa

au, uch a a-huh cc,

ha uwdy. th dcuy ay

h md umb ba, c m

qu a a 50 bak-ya ba.

sc h umb bak wh d aca

ma ma may mak, cay

d cu, cma h d

cm m cky. U daa m

a a am cu, uch a h eU 15,ca h dcu, uch a daa cmaa-

by.

nwk au a ca cm-

cy u. i a aym cad mak,

xam, w-dd wk c x,

c a --c wk a m

auab bh cadhd ad mcha. th

ad cmx maum u, whch

h cd cad du d a

xam.

Cd cad ca b ud by d a-

ca u ud a cmm bad am

(va ad MaCad mak u 85 c

h mak). o hy ca b cd, ay

ym, uch a Amca ex. paym

cad aca a -ua aa-

, d h cay aucu

aac ad cc ad cmm

a u. va ad MaCad, whch aha m had ac huh cmm

mmbh, ud qu xcuy; ha ,

mmb cud j a wk. th ba-

cm wa dcad a h eU,

ad h Ud sa h cu ha cd

h maj cd cma aw bak

cm cd cad.4 th acd c

hw m d cu h cd

cad du, hw, hhh h mcaad ccua bm mau cm-

wk-y c.

Wh h bm d a cm-

ad d cy ma

dau, hy a umuab. Fcu

c cc duc aca

ucwha a h chad c-

um a duc c ddua

mum aym?ca dh h cm ucu. th cm-

ucu a fcd h c

ad aaaby u cay duc

aca c. D a y aca u-

ha acc h am ba h a

aym ym? Aa, h y ma

hud b b dcd uch ha u ca

ac .

ConclusionsCm cy h aca c

acy, ay du h ack adqua

maum ad aay cm. Much

h cu au a mac

a aca ym ucu ad ua-

y m, bu d ma mau

h cm. Ad ada mau

may b mad. F xam, bak ym

cca may ac cm.

sym wh a bak y ad whw y ad acy c d b

m cm, cm ha contestability


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2

dm c cm. th cab-

y w cm , hw, h

ycay ad.

Byd dcum h d cm-

, h a may h cha ad

qu h aa. Fm a h adbw aca ym mac, acc

ac, aby, ad wh. th ad

bh hca u ad mca cha-

. Y a m u aca cm-

c aca c du

dd. Wh adaa a cay, much

ca ad m c aady adad

may h du, cay wk du-

. Auh ca a ay hac h

aaaby daa ha u w ha hma dd a h c d-

aca c. Fay, h ad ac

cha aca c du m a

d ma a ad adju cm -

c ad cdu m.

Reerences and urther reading

Bah, Jam r., gad Ca J., ad r

l. 2001. th rua ad su

Bak Aud h Wd: A nw Daaba. iIntegrating Emerging Market Countries into the

Global Financial System, dd by rb e. la

ad rchad H, 183241. Bk-Wha-

pa Faca sc. Wah,

D.C.: Bk iu p.

Baum, Wam J., Jh C. paa, ad rb D.

W. 1982. Contestable Markets and the Theory

o Industry Structure. sa D, Ca.: Hacu

Bac Jach.

Bck, th, A Dm-Ku, ad r

l. 2006. Bak Cca, Cm,

ad C: F ru.Journal o Banking and

Finance 30: 15811603.

Bkk, Jacb A., ad laua sdjk. 2008. How

Banking Competition Changed over Time. DnB

Wk pa n. 167. Amdam: D nd-

adch Bak. h://yu.cm/54ab

Ca, ea, ad ph Hama. 2002.

Competition and Stability: Whats Special About

Banking? eCB Wk pa n. 146, May.

h://yu.cm/4w

Ca, sj, A Dm-Ku, ad Hay

Hua. 2001. Hw D F ey AcDmc Bak Mak?Journal o Banking

and Finance 25: 891911.

Ca, sj, gy Db, Daa K-

b, ad luc la. 2003. th gw

imac nwk Fac ad i ec

Cm. i Innovations in Financial and

Economic Networks, dd by Aa nauy.

nham, Ma.: edwad ea pubh,

110135.

Cuckhak, D. 2000. Competition in UK Bank-

ing: A Report to the Chancellor o the Exche-

quer. rw Bak sc h UK.

Ca, nwch, UK: th say oc.

h://62.164.176.164/6298.hm

Daach, eca, pam gua, ad thy

t. 2008. F Bak p Cu:

thy ad edc. Journal o Finance 63 (5):

21232160. A iMF Wk pa n. 06/18.

Wah, D.C.: iMF. h://yu.cm/4dywecmd, ncha. 2006. pubc pcy

nwk idu. nwk, ecc

Cmmc, ad tcmmuca iu.

h://yu.cm/4kd

pdyck, rb s. 2007. gac, iu-

ac rc, ad Cm paym

Cad nwk. Mit sa rach pa n.

4651-07. Aaab a ssrn: h://.cm/

abac=996722sua, rajd. 2007. F ey ad

Bak Cm.Journal o Financial Econom-

ics 84 (2): 502528.


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evelop

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nA

tives

s p A C e , t H e F i n A l F r o n t i e r ? H o Wg e o s o C i A l n e t W o r K i n g C A n H e l p

t A r g e t D e v e l o p M e n t i n t e r v e n t i o n sby Robert Bouvier, Ioana Bouvier, Erin Goodnough, and Andrew Ross

Space in development thinking

th ma hk cmc w uy

awa ha wh mh abac,

bu a hm d a ac. i h 1890,

Ad Maha xd h mca ca-

mua chca . (th

aac Maha dua dc

a Mcha p cmc cu 1990

k ju abu a cuy.) Y h ay w

cmc dm h 1960, 1970,ad 1980 mda a u dway

aa dm. F xam, h dx W.W.

rw 1990 hy, Theories o Economic

Growth rom David Hume to the Present, ha

y ac ca. i wa ma-

y cmc ah, uch a Jha

Hch th h ay 19h cuy

Ad Wb h ay 20 h, wy abu h

aa dbu cmc acy. tday,

much h a hca ad mca

wk ma h dma cmc ahy.

Y c h ay 1990, cm ha bu

cach u. i a 1998 a h Wd Bak,

pau Kuma wd h wk ha cm

had d h 1990 h ahy

dm. rac a cu

quay h ac ca baa,

h ad cm uch a Jy sach

ad h cau a 2001 ac Scientifc

Americanamd ha ahy ma-. th h ha ud h way

ma cmc. A a xam a bad

hhca w, Jad Damd 2005 u

Guns, Germs, and Steel, dcud by Hda

ad Hauma h um, hay

h aa dm aay -m

dm a. Wh m b-

ha camd h dah dac

(Cac 1997), ahc xmy ma

a ma ac cmc dm

ad w b cd by h w

Wb 2.0, a h ac x.

A h am m a ac mak a cm-

back dm hk, wb-wk

bcm a xu h dm cm-

muy. Cc h ac a ah-

cay dd dm cmmuy aud a

c ha bca m

ca cmc wh, m mcy

ad ad , ad adac

ach dm a. eay wk

aca, y m ada ma

cmmuca, cudd h kd ay wa-

ym ha ca d ha

m caa a am. Ac,

ddua ad cc akhd, ma

bu, aca u, ad

ca a cbu ad a m ca adh wk wh a acua m-

, whh a bu a, acc

ca c, cy a. Adac

cmmuca ad wb ch a

ab cc wh uch ca wk

ad ca w u a h c

bu ad dm bjc. t ak

ju hyhca xam, ma a cmmu-

y a abh a cd, k

a a , ad bu a a ca wk u cud cum.

A cay wk am

d b a ca -

wk adac dm a. th

ac w add a cad m ca

wk ha cc by duc a

w dm, ac. Udad wh h

au ac a cad h bhyca ad


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4

h m aa. Ad xad -

cmmuca k h ma ha

ca-cc ma wdy ad qucky.

th a Da eahh ha w

ca u a a ay da

ua ayad ac h 1990 (

xbx). sc h, h uaa ccha bcm a bu cmmac, ma-

d w-dma aca uch a

MaQu, Yah! Ma, g MatM,

ad h-dma b a-

ca uch a g eahtM, Mcvua

eahtM, ad nAsA Wd Wd. A h

ccmc adca cca a-

aaab uc, maa c, ad

cda . th aach a

w ad m ca huma ka

cad ca wk.

Digital Earth: rom vision to (virtual) reality

th dm ahcay bad -

wk aca ha muauy cu-

ad ad b cuad by h xad

aaaby ma ad ahc ma.

rmy d daa, cud hh-u

a ma, d a a amwk

DAi ahc daa a ad aayca a ha b cy dcbd by h U.s. Acy iaa D-m (UsAiD) Adma oc a a ca, cm, ad cc way b h d h dk.

Figure 1. Mapping usaids gloBal developMent alliances


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3

D

evelop

ingA

lt

er

nA

tives

ha xc a a ua cdu

k cmmu ac h b.1

Hw, h aaaby ca-cc

ma a ay. W may b ab

hu h m c h wd, bu

w ay ha d ma wh h wha hy d, a daa , ay, h

acc ca c. i m cmc

dm, xam, w wud wa

kw whh adqua cu c (a-

a, u, caa, ad h duc

u) a ady aaab a cm c.

Wha a h uud uc ada

c, uch a mb duc,

aac cum? F may h aa

wh a ycmc ad ca

a m uy dd, h kd ma-

y ack. Bu w aach ad

ch a cm h cu by ca

wk ha a, u, ad ha ma-

. imay, h ad bcm a h da.

The rise o geosocial networking

rad adac hadwa ad wa ha

ud h a uy ac um

xcha ma ad a

ac. th h ca wbWb 2.0 a

k hm. i a cmba

ha ca u cc wh ach

h, abh ah, ad acc ac-

ca ma abu h cmmuy, a ach

c, a , a bu a, wha

ak h acy. th udy h ca

ima, xam, a yu chd aDa eah xhb a a ca muum. A d- a had-mud day, h eah a aa m ac. U a daa , h m, u hh ad hh u, c, h , cu, c, ad

ay ddua hu, , ad h auaad ma-mad bjc. Ha ud a aa h a h d x, h akh qua a mac ca d huh a3-D uaa h a. o cu, a y h may kd daa wh whch hca ac. U h ym c ccaab, h ab qu ma ad c, dbu a ad ama c,a-m wah, ad, ca buda, adua. sh ca a ua h ma

ma ha h ad h ud a hwd ha ccd a a h gloBe jc.th ma ca b amy ud wh hda ma a daa. sh ca m -ma may h bjc h by u hdaa cck a hyk. t a hamy aca Yw naa pak, xam, h a h c hk h y,b, ad bh h ha h ha ju adabu. i ac, h ca w h a uay ma h b h a h muum h hmw.

Vice President Al Gore, in a speech at the

Caliornia Science Center, Los Angeles, Caliornia,

January 31, 1998

1 rc h maa ay cc cmmca duc, c, c, h u ay ad, m,

ca am ma u y ad hud b cud a a dm, cmmda, h uch am bw DAi ad ah ay.

Figure 2. the gloBal connection project

National Geographic hah dayd g eahtM aa h gba Cc pjc, a j am bwnAsA, Ca M Uy, National Geographic, adg.


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6

wb a cay w ad cud b,

dca, wk, rss d, ad ma a-

ca. th ca wb mm xcd

w a a makab d h x w ya.

th wd aaaby da ma, cmbd

wh h xad uch ma ay c-um ccu, muy u

wha w a h ca ca wk,

wh a mha . smy u, Wb 2.0

aca a cay awa ha a-

hy ay a ma ca wk.

Wh md cmmuca by

bd ahc dac, aa awa

add a w dm ca wk by c-

c ad uc a ua wd. A

w w wal, H, gyps, adh waw ubcb d h

d a h-dayd da ma ad

ay wk wh hm. thy ca xcha

ma h, aua, ad

ac by ac. Ad hy ha b c by,

hy ca aa m.

th ca ad (u) ma

huh ca wk a w c-

c. Caba ma ha b aud

c h ad ma hm. Wha w h ama aay ma h

-wb ca ca ad mak aaab

ad ad achab m. th m

h dm way byd d a

d ad aa a uch, h aby ack

a cum ad ca-bad

c. th acay au ca

wk h u, a ba ca, h

fw da.

id a ca wk, ma ad acad

ma, cum c, h, d,

w, ad k uc ca d c-

um wh xaday h a

ccu a a ca. e da

ma am aw u cbu h

kwd abu a cc hm-

, h abh a cmmuy ca

ad aa ac wh ca yh aa-

ab ma abh cc,

ah, my mak b md

dc. lca-bad ca wkaady aw hbhd ach, c-

c c ad h . th

ima Cmm m Maya/rha lab,

xam, ud wh a ucc dy

ca huma c (Ahy Cuy, pA,

h://www.humac.). sm ca

wk aca u my d daa

ack hma a aa ba,

u ma ud by u. A m

xam a da dc aca ha a u wk ba -

cd daa mc acy huh grss.2

Tools or development: practical examples

or the geo-web

thuh mau, h -wb d-

m aady h. th U.s. Acy

iaa Dm (UsAiD) oc

gba Dm Aac (gDA)wh

m mb m, bu,ad c cy dm by

ubc-a aac u aa

dy cu ubc-a ah

ahcay (Fu 1). Dd by DAi,

h w ab UsAiD m a, gDA/

Wah a, ad a a aud

h wd acc ah ma by

c ahca . i h ac,

ca wk d a am

UsAiD m a ad a aac a- cc wh h gDA ad a h

wha cma, ac, ad c a

acad wh cc bu a a

ca. Da ma aw h -

a hmac daa ay, wh uch daa

a aaab. Dd h aaaby ad

2 s www.. ad h wb h o gaa Cum (www.www.aa.) addah h adac mad cc ad c dm-a ma huh ca wk.


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3

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evelop

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nA

tives

i suh Aca, ach, d, adaua uc maam ac a ua aa am ha xc ad h cha adca Maaw. UsAiD/MaawCmmuy pah suaab ruc

Maam, mmd by DAi, xamcha h dbu mmb wdad b a ca ad ad maama. s h://.daba./a.

accuacy h daa dd by h ca

wk, m cud aua a bu-

u a hy a h x

hyca aucuad, ch, ad

ha h huma ad ma

uc a cd ca.

i ida, UsAiD Cmmuy-Bad Aa

ifua C pjc my ca

wk a d cx: aa fua

uac ad ad ubak . DAi

ha dd a y am ha

cca, m- ma wh h ca

aa fua cmmuy acc. A uqu

ac h am aby a

abua ma m au a daa

uc ha ycay u d daa maa-m adad. Daa daa uc ca b

kd ad uay dayd bad xmy

a cc -cad , uch a a ama

huma aa fua ubak. th m

ca wk aw a

ac u a ua b, cda-

am ca d ad ab h

xcha w ad adc m h -

a m ca.

The uture o geosocial networking

gca wk ha h a d

mucad cmc dm ad -

ma ca b. i ky,

xam, ha hahcay d cawk w u ca cu u ad

cmmu, a u ac a ad

m a bad ba ca u

a ba chy am. i uch ca,

a-m ma dy ym kd

ca cmmu acc y buy -

cu mhy a dyamc ad

ac ma mdum ha w ha h m-

a ad h mm dm.

A ca wk cad ech mypac, d-d by h Cab pjc, wh m u-

m h naa scc Fuda, a

m m h uu ca

wk. ech mypac dcbd a a ,

a-m ca wk aca ha cm-

b w- ad h-dma ma (h

Mc vua eah b ma) wh a -

-- ( --) wk d.

i w aw u ca ua hbhd,

ha ma d acua ca, ach cum, whu huh a ca

. th Cab pjc ha wkd wh h

ova Fuda auch a jc cad

iCt4D uaaby du

a aa wk ca ac-

Figure 3. avian inFluenza preparedness

A xam hw aaab huma uc (a d c da x) cad wh 5 m aubak (d d).


40/56

8

bad da a bu aud ca

kwd ba (Fu 4).

i a m acu ma a Da eah

cma ca wk ad a-

cad ma uc, ad mad aaab mb h, whch a cuca h d-

wd, h a ack ad

aucu. nwk mmb u may

cbu a c uch a m-

ma, cxua daa, ad/ aa daa

ay. A dm ac, w ha

y bu cach h uac wha ca b

d wh h caaby.

Reerences

Cac, Fac. 1997. The Death o Distance:

How the Communications Revolution Is Changing

Our Lives. Cambd: Haad Bu sch

p.

M.F. gdchd, th U Ca Da eah,

International Journal o Digital Earth 1 (1): 3142.

h://yu.cm/4d7w

g, K., ad K. Cak.

2007. i g eah, D-

a eah? D a v.

i pcd h Fh

iaa symum

Da eah, Bky, Ca.,

Ju 58.

vc H. 2008. Why

g-sca nwk Ma-

: th Uca vua

ad ra Wd ra-

h. Numinous Nonsense

wb, May 13. h://

yu.cm/5k

2006. Ahy Cuy

Ma Daa a Aay sc: MAYA D H

lba ram Daa

Ca Cmmu Aud

shad ima. Ino-

world 46 (nmb 13): 20.

h://yu.cm/35du7

Kuma, pau. 1998. th r gahy

Dm. pa ad h Aua

Wd Bak Cc Dm ec-

mc, Wah, D.C., A 2021. h://yu.cm/4mkb

rw, W.W., ad Mcha Kdy. Theorists o

Economic Growth rom David Hume to the Pres-

ent: With a Perspective on the Next Century. nw

Yk: oxd Uy p, 1990. h://yu.

cm/46y

sach, Jy D., Jh l. gau, ad Adw D.

M. 2001. th gahy py ad

Wah, Scientifc American (Mach): 7075.

Figure 4. echo Myplace, a geosocial networking application


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tives

s o C i A l n e t W o r K s A n DD e M o C r A t i C t r A n s i t i o n s

by Joseph Siegle

Transitions without social networks

Bau ay cm md wh hk

h ba dmcacy mm. Y

a h s U dd wad du,

Bau wa d m a ea

eu dmcac a. o -

ca a had md h a 1980 ud

glasnost ad had bu cha h u

Baua Cmmu pay. A Cmmu

pay ad w dcdd ad cd u h ad putsch Mcw

Auu 1991, ad saa

shuhkch wa cd d h a-

am ad had a smb. H

cdd ad Bau a ah ca

, c c b, ad mak-

d cmc m.

A wh h -ca a, Bau

dud a ha cmc cac,

fa, ad bchd aa. th m

Cmmu pay caad ua -

ac cha h shuhkch m

wh cu ad aa c

Mcw. lack a ud dmcac ca-

ad ch c cy wk ha

cud cu h auad ac, shuhkch

wa cay ad ad cd m c

Jauay 1994. sx mh a, Axad

lukahk wa cd d. H -

ud c c, aad ky -m h cmy, hud dd

wa, ad d aa w

abhd h aam ad Ca Bak.

Dmc c ac w cud

ad c b d. tw bady fawd

da c a, ca wk ma

amd ad lukahkwdy add

a eu a dcaa w h

day.

Colored revolutions: the promise and

shortcomings o nascent social networks

i h a 1990 ad ay 2000, dmcacy

adca ga, sba, Uka, ad

a x Kyya d cd-

ab dnetworks ca

m, daw h xc ad u

abhd dmcac. Bud a

h h uccu ac h

Cmmu m ea gmaywhchcumad h ca h B Wa

h wk d c ad ch-

qu uad by h

Cauw waa, g sha.

oaaay, h mm fcd a

wk-cc aach ha chwd ca-

d ucu ad d a acca fxby ad

mauaby ha hd c wh am

ac.

th y h wk wa

o, whch ayd a ky h Bud

ru ha buh abu h dwa

sbda M m sba ocb

5, 2000. o, a u m-mdd yu

, camd 100,000 d mmb.

W u ad m h ac (-

a aa ad cmmuca ucu)

h muda (ca ay a). Wh sba

2000 u wa cd ( camd h

mk h Bud ru a h m mmab d m a day-

whch bud a ljuba

k, ckamd J, d u h ad

chad h bud sba a ),

d a w, c aach a

dmcac ac. i h ya ha wd,

ma ca ayd u ga (Kmaa,

h r ru), Uka (pa, h oa


42/56

0

ru) ad Kyya (KK, h tu

ru).

th dmcac ad quy a cky ,

huh, cay ac wh dmcac

m ad c cy wk a m-

. th amah h cd uha b xc. th aaa

pm M za Mach 2003

by a ua uma wh h

M m da a u back h

m c sba. i ga, Mkha

saakah, a w 96 c h

da 2004 w h r

ru, mbakd u m. Bu

h ac ackd. By nmb 2007,

huad had ahd ca tb dmad h a. H

dd wh a a, a a mcy,

ad a mda backu. i Uka, h w m

m ad ad m a h oa

ru ha b ckd a cay

acmu ba w ha ha hd u

a u Cmmu pay. Kyya tu

ru d c Ca Aa ad

ha cha wa h a, bu ay huam

a way ca h.

Solidarno: the power o a resilient social

network

pad xc fc ah c

m h cum dmcac a. i

h cuh wk k

1976, Cmmu pay u ab-

hd h Wk D Cmm h

h d by h m.1 t adac

h , a udud wa cad,h ca u h dd ubc

ac h md ph a. th cd

d h ma h dd

aa, wh hhy dad ada

ad ahc ca. C aca

ad am w adyu a

aay ca ad cmc wk ha

hd a h ua ad u h

m m. i wa m h backd

ha h sday mm md ad wa

cay cd 1980.

i h w dd c,

ga Wjcch Jauk, ad h may

m, dcad maa aw Dcmb

1981. thuad w ad ad a mad

100 w kd. A cuw wa ud,

dd aa w bad, ad

mda ad ducaa u w cd

cd. o h ac , Jauk amb

had ad : sday wa bad ad cud ay a ca .

Y pad ad c cy wk

dd w. iad, hy cud h u-

ddc by maa a bad

udud mm. Wh h -

m cd h ca h, sday

mad h ma c m p. th

ama cud u 1988, wh d-

a cmc cdcud wh h

d byglasnostd h -m cmm wh sday ad ad

wd wk ca u. A a h da,

sday ad h dd mm

w ad, a w ab

c m a ucm aamay

c, ad c cy wa awd a

y. th dc umh dd cad-

da Ju 1989 d a sday-d ca

m ad h abhm aam-

ay dmcacy. Fu da c a,pad ha dubd caa cm ad a

mmb d ad h eua U

ad nAto.

1 F a m dad backud pad a, Mcha Bhad (1993).


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2

Social networks build trust

Dmcac y u a a x ha

d h ym m. C mu

ha uc cdc h y ad

uay a ca c, xam,

hy a wa u h ad m h c-

a cada ac u c-

ad huh h ba bx. Wh h

cd d hd, c w aad

ad dud wh h dmcac c.

smay, a ha hy mu b cd a

ma hy a , dmcac ad-

y c u hm wh hy

uu c ad wh h h

majy ad aca h cc u

whch dmcacy dd. A c, h,

dmcacy a cmac, bad u, bw c ad h ad.

paca wk h bud u.

i d muuay wad ah

bw dduabd ha ca c-

dc ad cmmm a cy. Ha

wk aw c m d ahc

aa, hc u, cm ca, -

ca ua cm h aud had

. th c-u ka cad h c a muy ma bud-

a had aa dy. i h way, ca

wk a h ha bd a cy h.

imay, a aca bud u: hy

may uu acha cma ad

b ad ay dmcac .

exam cud h Ku Kux Ka, h maa,

xaa aamay aca, aca

yamd chm.

Ca ca wk -dmcac c qu m a

c a aca ad ak a.

suac ad m ma ha

auh c b way wha hy ha. A

h w rb puam ad h ha

hw, hw, ()bud h ca -

wk cca -m ca hah ad

y. na wh ca ch

d b m ab, b cmcay,

ucb cm ad c, ad ub-

jc w cu (puam 1993).

Networks ensure accountability

nwk a dmad by a

u bu qu buy- m may ddu-

a ad aa. pw ycay dudad adh ubjc chck ad baac.

Bcau ad mu cu h aa ad

u h cuc, hy ha c-

uu h cc ah ha

a aw a ada. Accuaby,

u, ha a mda c h a

ca mm, ma dc wad

adcam.

Acc ma a dab au accuaby. ima ad aacy

ad aw ddua a hw w ad

a d h jb. Mmb a wk a

m ky b w-md ad ab c-

a ady dm h

dc makad ada accdy. th

u ad h a aumy ach

ddua u a wk mak wk

da aaa ucu du m

a.

sca wk y u ma

fw wh a cy bu a aw mmb

b m ady m h a kw-

d, xc, ad uc m ud h

cuy. B acc ma h

h adaa h chd w uc-

u. lka h ud wd a a

awa duc ah

ay wu cha. exa

a, m, ca h abu haa aucac m mh wa x

hd w h ac a cay aa-

d . Cy, ac abu

wha ha a da cuy

bu ccd aa u. tha

why dcah zmbabw ad Buma ha

bad m aa , cay h

mda.


45/56

4

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evelop

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tives

Some lessons learned

exam h ah bw h xc

wk ad dmcacy dcu bcau

h aucy cmaab c-aa daa

aca. D aca ad accu-

dc am hm x

cha. o cmm xy h ch

acaa a cy d u.

C c wh hh u a

m ky aca ad j aca

au y. lauchd 1981, h Wd

vau suy w c 80 cu ad m

80,000 cau ma -

a au, aud, aca aca-

, ad u a m 200 qu. th

daa aw a aay h ah

bw u ad dmcacy, h a bdd by h Fdm Hu dmcacy dx.

th ah bw dh ca

u ad ubqu uccu dmcaa-

aa aaby ( Fu 1).3

C cm, dmca c-

ha had hh u 1990 ha

aad cay dmcacy c,

aa, 2005. F xam, Buaa,

Mxc, pad, ad suh Ka a cd h qua h ak u 1990. thy

ach ubquy cd h 10 c

h Fdm Hu dx 2005. Cy,

dmca uch a Ba, rmaa, ad

tuky cd bw h mda h u

ca 1990, ad ak a w dmcacy

15 ya a.

th a cd h c kbw h ch acaa ad h

quay ad duaby dmcacy ac -

ca m iay amuy dcumd by

rb puam. C cm, c

h iay ha dd aca -

uay mmbh aa a much hh

a ha c uh iay. th a-

a w ycay caa ad cuua

u, uch a cc cub, cha c,

hk cub, ay cc, ad l Cub.Cmmu wh hh aca aca

a had hh a wa adh

ah dca ma acc ad

am cmmuy aa. th u-

a mac a m

c wh a ch acaa wa a

ua dd by a aby am

cab m, m my aa aua

bud, ad m x ad

c dy day ca c, hah cc,

acuua a. Acaa dy wa aa b dc ua mac

ha h cmmy cd xaa d

ac uch a ca aby, duca,

ubaa, aby, ca ay.

C h c w a a m

ad wh h ca m; hy had

m dc cac wh h ca m

a ad h dcu dd

cu u ubc ah ha

qu a h ( c, jb, ad ).

Cac bw ca ad c

uh iay, ca, dd b m

yca c-a ah. pdcaby,

c acaay ch cmmu-

3 Dmcacy maud u h Fdm HuAnnual Survey o Political Rights and Civil Liberties. th Fdm Hu

dx a a aua a bw 2 ad 14 y cuy h wd.

suc: Wd vau suy; Fdm

Documents

Developing Alternatives Fall 2008 Web