The Local Partnership Public

skilled leadership and recognition are key determinant to deal with complex local political structure UN, 2004.

B. Win-win Partnership

Pa tl i espo se to the iti s a gu e t that C“‘ is ostl , the usi ess ase i easi gl e a e a formidable cornerstone for securing business commitment to CSR. The business case suggested that usi ess a epta e of so ial espo si ilit i a ia l esults i a i - i situatio fo oth usi ess and its stakeholders. As a result, the business case successfully moved CSR from the realm of altruism or morality to the realm of rational economic business decision making. Although findings from empirical research have yet to incontrovertibly support this approach, its appeal has remained enduring both in the business community and in academia Idenydia, 2007. For the purpose of gaining further knowledge on the functioning of cross -sector partnerships a framework for evaluation of partnerships has been developed. It is suggested that process as well as results are focused upon in the evaluation of partnerships. Drawing upon network theory a number of e aluatio pa a ete s elated to a to s st ategies a d the deg ee of olla o ati e ad a tage s i e tia is proposed for analyses s of partnership processes. With regard to outcomes, evaluation parameters relating to both developmental and business outcomes are included in the framework. With this broad perspective the framework allows for critical analyses of the actual win-win potential of partnerships Jorgensen, 2006. 1.6.3. CSR and International Business Theory The mainstream of the international trade theory is trying to answer the nagging question of whether globalization is good or bad. The earlier theory tends to encourage more countries to participate in international trade with a premise that the more likely it to benefit from an open economy, resulting in improving its prospects for rapid socio-economic expansion at home. In the recent years, the widespread discontent with international trade goes well beyond the protest movements that have attracted the attention of the world. Stiglitz 2002 points out that the powerful force of globalization brings up mismanagement, and then millions have not enjoyed its benefits and millions more have even been made worse off. The subject matter points out some issues about international trade interaction among sovereign countries are ranging from the pattern of trade to the trade strategy. Those theories become premises for the policies of the World Trade Organization which aims to promote fair and free trade. On the other hand, there was another field that considered industrial organization aspects of trade and trade policy in partial equilibrium and descriptive analysis. There were discussions of how policy influenced foreign ownership and attempts to measure the scale and market power inefficiencies caused by restrictive trade policies Markunsen, 2002. The papers try to reconcile aspects of regionalism and institutionalism approaches and to discover the pattern of the international trade theory. With the benefit of hindsight, this endeavors to exposit some major issues for integrating the disparate parts into a more unified and coherent theory. A. Classical International Trade Theory The earliest trade theory came from David Hume, a Scottish philosopher. The publication titled Of the t ade of ala e o e ed i , a ouple ea s efo e Ada “ ith pu lished the Wealth of Nation. Hume questioned the British trade policy which tried to promote capital a ou t su plus du i g the out eak of Napoleo i Wa s. Whe the B itai s u e t apital account surplus was greater than its financial account deficit, the gold as the international reserve at the time matched the balance, followed by the inflation Krugman and Obstfeld, 2003. It initiated the trade theory which is associated with foreign exchange theory which perhaps can trigger a question whether the US dollar will keep weakening until the next decade. Some basic ideas about benefits from international trade came up in the early nineteenth century. At the time, the English economist David Ricardo introduced the trade term of international differences in labor productivity, called Comparative Advantage Theory. One of the most influential, but still controversial, is trade patterns to an interaction between the relative supplies of national resources such as capital, labor, and land one side and the relative use of these factors in the production of different good on the other Krugman and Obsfeld, 2003; Brakman, 2006. This theory manages to set a strategy to what commodity an economy should produce. If a product specialization takes place in a country which is in line with the comparative advantage, they can reap the benefits of the gains from specialization in terms of achieving higher total production and welfare levels. Specialization is remarkably high in exporting manufactures, as in many other areas in economics. The distribution is remarkably skewed. Easterly et al, 2009 concluded that export success is mainly driven by technological dispersion, which also explains high levels of specialization. Developing countries export less products to fewer destinations, which helps explaining this. Exporting to more destinations exposes a country to more demand shocks that are uncorrelated with technological dispersion. Therefore, as a country penetrates more markets with more products, demand shocks from those markets and for those products account for a larger percent of variation and hence concentration in exports. On the other hand, there has been much dispute over the gains of international trade. First, there is a critic that free trade is beneficial only if a country is strong enough to stand up to foreign competition. The idea primarily stands for developing countries. However, the model of comparative advantage explains that both countries still gains from trade. Secondly, a question from developed countries is raising an issue that foreign competition is unfair and hurts other countries when it based on low wages. Krugman 2003 notes example that Ross Perot, a former presidential candidate in 2003, warned that free trade between the US and Mexico. Another provocative question was raising issues that Trade exploits a country and it worse off if its workers receive much lower wages than workers in other nations. Sweet shop was the most dramatic issue of international trade in the US newspapers through contrasting 2 million income of the chief executive officer of the clothing chain, while the worker who produces some of its merchandise get paid 0.56 per hour. What is about Indonesian basic salary which around 100 per month or 4 per day? Turning to income distribution, Heckscher-Ohlin Model indicates the relative prices of good converge toward equalization of factor prices. The basic relationship theory shows that a country with a lot of capital and not much land will tend to produce a high ratio of manufactures to food at any given prices, while a country with a lot of land and not much capital will do the reverse Krugman, 2003, p 51. Through the production possibilities theory, it indicates that trade benefits the factors that is specific to the export sector of each country but