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81. Downsizing Defense in Development: Unpacking DOD’s Development Assistance

Author:
Sarah Rose
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The US Department of Defense (DOD) is not a development agency, but it does manage millions of dollars of development assistance. In the early 2000s, DOD took on a significantly expanded development role, prompting a number of concerns and creating a lingering perception of intensive US military involvement in development activities. In fact, lessons learned from this era drove a reconceptualization of the Pentagon’s role in development. Today, the military controls only a tiny portion of US development funds, most of which go toward health (mainly PEPFAR) and disaster relief activities. This paper provides a brief landscape analysis of DOD’s recent development aid-funded efforts, breaking down its engagement into six key thematic areas. It concludes with five considerations related to DOD’s role in development assistance: (1) DOD has comparative advantages that make it an important actor in US development policy; (2) civilian-military coordination is hard but critical for development policy coherence; (3) adequate resourcing of civilian agencies is critical for effective civilian-military division of labor; (4) increasing the flexibility of civilian agencies’ staffing, programming, and funding could complement the military’s rapid response capabilities; and (5) incomplete transparency and limited focus on results reduces accountability around DOD’s aid investments.
Topic:
Defense Policy, Development, Military Strategy, Bureaucracy, and Civil-Military Relations
Political Geography:
United States and North America

82. Developing a More Inclusive US Trade Policy at Home and Abroad

Author:
Kimberly Ann Elliott
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
American policymakers have failed to adequately respond to concerns about globalization’s effects and the resulting backlash has taken an ugly turn in recent years. While globalization is only one of many factors contributing to economic dislocation, sluggish wage growth and inequality in the United States, foreigners, and developing countries in particular, are frequently the target of those who are frustrated at being left behind. Yet few realize that US trade policy effectively discriminates against poorer countries. In addition, provisions in trade agreements that tilt the playing field in favor of business interests over those of American consumers and workers also often undermine development priorities in partner countries. American policymakers should rethink the substance and process of trade policy and negotiations to spread the benefits more broadly, at home and abroad.
Topic:
Globalization, International Trade and Finance, Inequality, and Domestic Policy
Political Geography:
United States and North America

83. Beyond Connectivity: How California Libraries Can Leverage Bandwidth to Advance Community Goals

Author:
John Horrigan
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
Written by John Horrigan, this report unveils a set of opportunities and recommendations for strengthening local innovation and resetting community expectations, using public libraries and their gigabit-plus broadband capacity as a fulcrum. With a focus on California Public libraries, the report suggests how library broadband can be used to address statewide goals for universal pre-kindergarten, youth learning and engagement, and civic participation especially with regards to the 2020 Census and elections.
Topic:
Education, Infrastructure, Internet, Community, and Libraries
Political Geography:
United States, California, and North America

84. The Global Impact of Brexit Uncertainty

Author:
Tarek A. Hassan, Laurence van Lent, Stephan Hollander, and Ahmed Tahoun
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Using tools from computational linguistics, we construct new measures of the impact of Brexit on listed firms in the United States and around the world: the share of discussions in quarterly earnings conference calls on costs, benefits, and risks associated with the UK’s intention to leave the EU. Using this approach, we identify which firms expect to gain or lose from Brexit and which are most affected by Brexit uncertainty. We then estimate the effects of these different kinds of Brexit exposure on firm-level outcomes. We find that concerns about Brexit-related uncertainty extend far beyond British or even European firms. US and international firms most exposed to Brexit uncertainty have lost a substantial fraction of their market value and have reduced hiring and investment. In addition to Brexit uncertainty (the second moment), we find that international firms overwhelmingly expect negative direct effects of Brexit (the first moment), should it come to pass. Most prominently, firms expect difficulties resulting from regulatory divergence, reduced labor mobility, trade access, and the costs of adjusting their operations post-Brexit. Consistent with the predictions of canonical theory, this negative sentiment is recognized and priced in stock markets but has not yet had significant effects on firm actions.
Topic:
Economics, Political Economy, Regional Cooperation, Brexit, Global Political Economy, and Economic Policy
Political Geography:
Britain, United States, United Kingdom, Europe, and European Union

85. The Political Economy of Europe since 1945: A Kaleckian perspective

Author:
Joseph Halevi
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes the early stages of the formation of the Common Market. The period covered runs from the end of WW2 to 1959, which is the year in which the European Payments Union ceased to operate. The essay begins by highlighting the differences between the prewar political economy of Europe and the new dimensions and institutions brought in by the United States after 1945. It focuses on the marginalization of Britain and on the relaunching of French great power ambitions and how the latter determined, in a very problematical way, the European complexion of France. Because of France’s imperial aspirations, France, not West Germany, emerged as the politically crisis prone country of Europe acting as a factor of instability thereby jeopardizing the process of European integration, Among the large European nations, Germany and Italy appear, for opposite economic reasons, as the countries most focused on furthering integration. Germany expressed the strongest form of neomercantilism while Italy the weakest.
Topic:
Economics, Political Economy, Global Political Economy, World War II, and Common Market
Political Geography:
United States, Europe, Germany, and Global Focus

86. Synthetic MMT: Old Line Keynesianism with an Expansionary Twist

Author:
Lance Taylor
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Expansionary macroeconomic policy with a strong redistributive component is an attractive proposition, most recently launched on the basis of Modern Monetary Theory or MMT. The Theory is a synthesis of familiar ideas, newly relevant but scarcely path-breaking. Its basics – Chartalist or fiat money, functional finance, and models based on consistent national accounting – come straight from Maynard Keynes, Abba Lerner, and Wynne Godley. Functional finance is the heart of fiscalist Keynesianism built upon automatic stabilizers for the business cycle. MMT’s job guarantee proposal is one more stabilizer which could be a modest helpful supplement to the system which exists. National accounting comparisons of a possible MMT package with the 2008 crash and the Trump tax cut are presented with emphasis on autonomous shifts in demand. The package could have problems with debt sustainability and external balance. Inflation is unlikely if wage repression in the USA is not reversed. But strong wage increases are presumably a goal of MMT.
Topic:
Economics, Monetary Policy, Finance, Economic Theory, Macroeconomics, and Money
Political Geography:
United States

87. Big Tech Acquisitions and the Potential Competition Doctrine: The Case of Facebook

Author:
Catherine Ruetschli and Mark Glick
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The Big Tech companies, including Google, Facebook, Amazon, Microsoft and Apple, have individually and collectively engaged in an unprecedented number of acquisitions.When a dominant firm purchases a start-up that could be a future entrant and thereby increase competitive rivalry, it raises a potential competition issue. Unfortunately, the antitrust law of potential competition mergers is ill-equipped to address tech mergers. We contend that the Chicago School’s assumptions and policy prescriptions hobbled antitrust law and policy on potential competition mergers. We illustrate this problem with the example of Facebook. Facebook has engaged in 90 completed acquisitions in its short history (documented in the Appendix to this paper). Many antitrust commentators have focused on the Instagram and WhatsApp acquisitions as cases of mergers that have reduced potential competition. We show the impotence of the potential competition doctrine applied to these two acquisitions. We suggest that the remedy for Chicago School damage to the potential competition doctrine is a return to an empirically tractable structural approach to potential competition mergers.
Topic:
Economics, Science and Technology, Communications, Law, Digital Economy, Macroeconomics, Monopoly, and Antitrust Law
Political Geography:
United States

88. American Gothic: How Chicago Economics Distorts “Consumer Welfare” in Antitrust

Author:
Mark Glick
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.
Topic:
Economics, Law, Legal Theory, Economic Theory, Macroeconomics, Antitrust Law, and Microeconomics
Political Geography:
United States

89. Firm-Level Political Risk: Measurement and Effects

Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We validate our measure by showing it correctly identifies calls containing extensive conversations on risks that are political in nature, that it varies intuitively over time and across sectors, and that it correlates with the firm’s actions and stock market volatility in a manner that is highly indicative of political risk. Firms exposed to political risk retrench hiring and investment and actively lobby and donate to politicians. These results continue to hold after controlling for news about the mean (as opposed to the variance) of political shocks. Interestingly, the vast majority of the variation in our measure is at the firm level rather than at the aggregate or sector level, in the sense that it is neither captured by the interaction of sector and time fixed effects, nor by heterogeneous exposure of individual firms to aggregate political risk. The dispersion of this firm-level political risk increases significantly at times with high aggregate political risk. Decomposing our measure of political risk by topic, we find that firms that devote more time to discussing risks associated with a given political topic tend to increase lobbying on that topic, but not on other topics, in the following quarter.
Topic:
Economics, Economy, Business, and Risk
Political Geography:
United States

90. Expansionary Austerity and Reverse Causality: A Critique of the Conventional Approach

Author:
Christian Breuer
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
In this paper we methodologically review and criticize a broad literature of empirical work on the effects of fiscal policy (the ‘conventional approach’). Beyond previous critiques of this approach, we show that the cyclical adjustment strategy as used in this literature entails erroneous assumptions that necessarily produce flawed results in support of expansionary austerity. Specifically, the cyclically-adjusted primary balance (CAPB) strategy this literature employs fails to correct for cyclical effects in the expenditure- GDP-ratio, so that the estimates of the results of expansionary fiscal consolidation are affected by reverse causality, i.e. increasing GDP causally decreases expenditure-GDP- ratios, rather than vice versa. We provide suggestions on how to fix this incomplete cyclical adjustment problem with a new approach. After replicating two famous articles of the conventional literature and controlling for this bias, the expansionary effects of fiscal adjustments disappear or turn into their opposite
Topic:
Economics, Macroeconomics, and Fiscal Policy
Political Geography:
United States