Political Geography: / Topic: Economics

5201. US Trade Policy in 2005

Publication Date:: 02-2005
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Some time ago, Fred Bergsten and I were talking about the fact that, if trade liberalization is to move forward and retrogression is to be prevented, the focus of the policy community and the public on the benefits of trade-in the full sense, including imports-and on the issues around trade needs to increase. The adverse effects trade has on some people are very keenly felt and often lead to vociferous opposition, while the benefits of trade for a far greater number of people are diffuse and usually little if at all understood-for example, by consumers-and seldom generate political activity on behalf of trade.
Topic:: Economics, Human Welfare, and International Trade and Finance
Political Geography:: United States

5202. A Revived Bretton Woods System? Implications for Europe and the United States

Author:: Edwin M. Truman
Publication Date:: 02-2005
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: This note addresses three topics: (1) Do the recent musings by Dooley, Folkerts-Landau, and Garber (DFG), in particular their argument that the world is operating under a revived Bretton Woods system (BW2), provide a useful framework for thinking about international economic and financial developments and prospects? (2) What does the DFG framework imply for the euro area, and are those implications reasonable? (3) What does the DFG framework imply for the United States, and are those implications reasonable?
Topic:: Development and Economics
Political Geography:: United States and Europe

5203. This is Bangalore Calling: Hang Up or Speed Dial? What Technology-Enable International Trade in Services Means for the US Economy

Author:: Catherine L. Mann
Publication Date:: 01-2005
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Globalization, always a contentious issue, has become even more so with media reports of U.S. service-sector jobs being outsourced to emerging-market economies, such as call center operations to Ireland or programming jobs to India. Traditionally, these jobs have been considered “nontradable” and therefore safe from the competitive forces of international trade and investment. But increasingly, technological advances are making it easier to buy services from other companies, even those in developing countries, where savings in the cost of labor or the opportunity to use the 24- hour clock to speed product develop- ment can be irresistible.
Topic:: Economics, Globalization, International Trade and Finance, and Science and Technology
Political Geography:: United States and Ireland

5204. Breaking Up Is Hard To Do: Global Co-dependency, Collective Action, and the Challenges of Global Adjustment

Author:: Catherine L. Mann
Publication Date:: 01-2005
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: Global imbalances have continued, indeed deepened, far longer than both researchers and pundits would have thought. On the US side, the current account deficit at about $630 billion (2004q1-3, AR) and 5.5 percent of GDP (2004q3) falls outside the oft-quoted range of 4-5 percent after which, research on industrial countries suggests, economic forces tend to narrow the imbalance. There is some-what less research on the persistence of global imbalances from the standpoint of the rest of the world, in part because individually most of those imbalances are not so notable. Clearly though, collectively growth in the rest of the world has come to be co-dependent on US demand patterns.
Topic:: International Relations, Development, Economics, and Industrial Policy
Political Geography:: United States

5205. China and the World Economy Workshop. Conference Summary

Author:: Robert Kapp
Publication Date:: 12-2005
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: Peter Bottelier, the principal presenter of this topic, opened by noting that much discussion now surrounds the evolving “new line” embodied in China's economic plans for the next five years. The three agricultural questions, self-innovation, regional adjustment, opening up of a win-win “harmonious society,” and economizing on energy use: what do these and other much-discussed new terms really mean?
Topic:: Economics, Globalization, and International Trade and Finance
Political Geography:: China and Asia

5206. China as Producer: Chinese Industry After 25 Years of Reform

Author:: Thomas Rawski
Publication Date:: 12-2005
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: Beginning with the start of reform in the late 1970s, China's industry has recorded impressive growth of output, labor productivity, and exports as well as dramatic upgrading of the quality and variety of output. These gains have occurred in spite of difficulties arising from lethargic state enterprises, inadequate corporate governance, excessive official intervention, corruption, and weak financial institutions.
Topic:: Economics, Industrial Policy, and International Trade and Finance
Political Geography:: China and Asia

5207. China as Consumer

Author:: Kenneth Lieberthal
Publication Date:: 12-2005
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: This article seeks to examine two key issues that will be major drivers of consumption in China over the coming five years: urbanization and environmental amelioration. Whether the issues identified will be the largest factors over this time frame remains unclear, but each of these two areas warrants considerable attention as a very significant contributor to the future of consumer demand in China.
Topic:: Economics, Environment, and International Trade and Finance
Political Geography:: China and Asia

5208. China as Employer and Consumer: Economic Outlook for the 11th Five-Year Plan (2006-2010)

Author:: Arthur R. Kroeber
Publication Date:: 12-2005
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: China's impressive economic growth of the past quarter century (9.4 percent average annual real GDP growth between 1980 and 2004, by official figures) is not miraculous; on the contrary, it can largely be explained by conventional models of economic development.
Topic:: Economics, Human Welfare, and International Trade and Finance
Political Geography:: China and Asia

5209. Hu Jintao's Outbox

Author:: Joseph Fewsmith
Publication Date:: 12-2005
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: China has now sustained two and a half decades of high-speed growth. This growth has been even faster with regard to exports and China's role in international trade. Domestically, a capitalist tendency seems to be everywhere, while internationally the rise of China, whether peaceful or not, seems – at least to some – to threaten Western jobs, prosperity, and the international order. The focus of this paper, however, is not this question of whether or how China poses a threat to the West but rather an old (but new) question of how this “capitalist” conversion is compatible with the continued rule of a communist party. This is a question of considerable practical import, as people contemplate what the continued growth of the Chinese economy might mean for the political stability of that country, but it is also a question of considerable theoretical import: Leninist parties that sought to “include” external interests, it was argued, are on the way to collapse. It is only a matter of time. The time frame for China has lasted longer than theoreticians had supposed, though they might yet prove to be right – perhaps the Chinese Communist Party (CCP) has lasted longer than people imagined but it might still be on the road to collapse. This point of view would find supporters, both in the West and in China, but even if they prove right, it is important to inquire more deeply about what is going on in China, whether institutions are being created, and if so whether they might provide a foundation for a post-communist China or whether they suggest a more chaotic future.
Topic:: Economics and International Trade and Finance
Political Geography:: China and Asia

5210. The Inevitable Peaking of World Oil Production

Author:: Robert L. Hirsch
Publication Date:: 10-2005
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: The era of plentiful, low-cost petroleum is approaching an end. The good news is that commercially viable mitigation options are ready for implementation. The bad news is that unless mitigation is orchestrated on a timely basis, the economic damage to the world economy will be dire and long-lasting.
Topic:: Economics, Energy Policy, Environment, and Government

5211. Germany and the Future of the Transatlantic Economy

Author:: Jan Neutze and Philipa Tucker
Publication Date:: 08-2005
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: A senior delegation from the Atlantic Council of the United States, led by W. Bowman Cutter and Paula Stern, visited key government, parliamentary, and private sector stakeholders in Frankfurt, Berlin, and Brussels in spring 2005. The delegation presented the findings of the Atlantic Council report, "The Transatlantic Economy in 2020: A Partnership for the Future?" to numerous business, government, and think tank audiences. This report summarizes the delegation's discussions.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: United States, Europe, Germany, and Berlin

5212. Why Are German Employers Associations Declining? A Challenge to the Conventional Wisdom

Author:: Wolfgang Schroeder and Stephen J. Silvia
Publication Date:: 09-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: This paper challenges the conventional explanation for declining density of German employers associations. The dominant account asserts that German trade unions have taken advantage of increased globalization since the 1980s – which has made internationally active enterprises more vulnerable to production disruptions – to extract additional monopoly rents from multinational employers via aggressive collective bargaining. Small firms have responded to the increased union pressures by avoiding member ship employers associations, which has produced the density declines. Data, however, disconfirm the conventional explanation; compensation increases have actually become increasingly smaller over the decades. This paper presents an alternative explanation that is consistent with the data. We argue that it is the large product manufacturers rather than the trade unions that have greatly increased price pressures on parts suppliers, which has led to a disproportionate number of suppliers to quit employers associations. The paper also discusses these findings in light of the “varieties of capitalism” literature. It points out that this literature has depicted national models as too homogeneous. The decision of several German employers associations to offer different classes of membership represents an accentuation of variety within national varieties of capitalism.
Topic:: Civil Society, Economics, and Politics
Political Geography:: Europe

5213. The Politics of Budget Consolidation In Britain and Germany: The Impact of Blame-Avoidance Opportunities

Author:: Reimut Zohlnhöfer
Publication Date:: 07-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: According to parts of the literature, blame avoidance opportunities, i.e. the necessity and applicability of blame avoidance strategies, may differ among countries according to the respective institutional set-ups and between governing parties according to their programmatic orientation. In countries with many veto actors, a strategy of "Institutional Cooperation" among these actors is expected to diffuse blame sufficiently to render other blame avoidance strategies obsolete. In contrast, governments in Westminster democracies should resort to the more unilateral strategies of presentation, policy design and timing. At the same time, parties of the left are expected to have an easier time implementing spending cuts while right parties are less vulnerable when proposing tax increases. Evidence from the politics of budget consolidation in Britain and Germany does not corroborate these hypotheses. Instead, it seems that party competition conditions the effects institutions and the partisan complexion of governments have on the politics of blame avoidance.
Topic:: International Relations, Economics, and Politics
Political Geography:: Europe

5214. Endogenous OCA Theory: Using the Gravity Model to Test Mundell's Intuition

Author:: Hubert P. Janicki, Thierry Warin, and Phanindra Wunnava
Publication Date:: 06-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: This paper presents an empirical assessment of the endogenous optimum currency area theory. This study relies on the original intuition developed by Mundell in 1973. The gravity model is used to empirically assess the effectiveness of the convergence criteria by examining location specific advantages that guide multinational investment within the European Union. A fixed effects model based on a panel data of foreign direct investment (FDI) flows within the EU-15 shows that horizontal investment promotes the diffusion of the production process across the national border. Specifically, the examined Maastricht criteria suggest convergence in interest rate, government fiscal policy, and debt play a significant role in attracting multinational investment.
Topic:: Economics, International Political Economy, and International Trade and Finance
Political Geography:: Europe

5215. Fiscal Perspectives in Europe: Convergence and Debt's Burden

Author:: Thierry Warin
Publication Date:: 06-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: The paper addresses the question of the fiscal perspectives within the Economic and Monetary Union (EMU). By using a panel data analysis associated with an interpretation in terms of differences instead of levels, the results show a steady convergence of public deficits across the EMU, and that the EMU needs either to comply with the Lisbon agenda, or some kind of a growth strategy, or reduce the interest of the debt in order to regain some fiscal flexibility while abiding by the Stability and Growth Pact (SGP).
Topic:: International Relations, Debt, and Economics
Political Geography:: Europe

5216. Campaigning in Poetry, Governing in Prose

Author:: David Coates
Publication Date:: 04-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: New Labour's performance in office–as an orchestrator of economic and social change–is situated against, and evaluated by reference to, two sets of legacies: legacies inherited from the years of Conservative political dominance after 1979; and legacies brought to power by New Labour. The paper argues that the first se t of legacies was deep and enduring, and threw a long shadow forward. It argues that the second set of legacies were highly coherent and intellectually informed, but cumulatively involved a diminution in the capacity of the state. The result has been a two-term government that is sufficiently superficially successful to win a third term; but which has yet seriously to transform the legacies it inherited: to our misfortune, and ultimately–in electoral terms–also probably to its own. This paper is based on my study of New Labour's domestic policy–Prolonged Labour: The Slow Birth of New Labour Britain; I have also co-authored a study of New Labour's policy towards Iraq–Blair's War–which was published by Polity Press in 2004.
Topic:: Civil Society, Economics, and Politics
Political Geography:: Europe

5217. Still Two Models of Capitalism? Economic Adjustment in Spain

Author:: Sebastián Royo
Publication Date:: 04-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: The proponents of globalization contend that European countries are now converging on an Anglo-American model of capitalism. Contrary to this prediction, this paper will show that in Spain globalization and EMU have promoted rather than undermined coordination among economic actors. Unable to escape from economic interdependence the Spanish economic actors have developed coordinating capacities at the macro and micro levels to address and resolve tensions between economic interdependence and political sovereignty. In this paper I show that there is at least one more variety than the two–LME and CME–that Hall and Soskice cite and also that it is possible to develop coordination capacities in countries that lack a strong tradition of such capacities. In particular, this paper analyzes the resurgence of national-level social bargaining in Spain in the 1990s. This development was the result of the reorientation of the strategies of the social actors. In a new economic and political context, marked by a process of institutional learning, trade unions have supported social bargaining as a defensive strategy to retake the initiative and influence policy outcomes.
Topic:: Economics, Globalization, and Politics
Political Geography:: Europe

5218. The Politics of Institutional Learning and Creation: Bank Crises and Supervision in East Central Europe

Author:: Gerald A. McDermott
Publication Date:: 04-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: This article examines the political conditions shaping the creation of new institutional capabilities. It analyzes bank sector reforms in the 1990s in three leading postcommunist democracies–Hungary, Poland, and the Czech Republic. It shows how different political approaches to economic transformation can facilitate or hinder the ability of relevant public and private actors to experiment and learn their new roles. With its emphasis on insulating power and rapidly implementing self-enforcing economic incentives, the “depoliticization” approach creates few changes in bank behavior and, indeed, impedes investment in new capabilities at the bank and supervisory levels. The “deliberativ e restructuring” approach fostered innovative, cost-effective monitoring structures for recapitalization, a strong supervisory system, and a stable, expanding bank sector.
Topic:: International Relations, Economics, and Politics
Political Geography:: Europe, Eastern Europe, Poland, and Hungary

5219. Western Capital vs. the Russian State: Towards an Explanation of Recent Trends in Russia's Corporate Governance

Author:: Stanislav Markus
Publication Date:: 03-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: The literature on corporate governance in Russia stresses the abuse of shareholder rights in the face of various asset-diversion tactics by the management. Attributing this fiasco to a number of structural obstacles and the privatization legacy, the orthodox account fails to incorporate–let alone explain–the recent data demonstrating a qualitative improvement of corporate governance in crucial segments of the Russian economy. This paper disaggregates “corporate governance” into specific institutions and examines their quality at the firm level as well as by sector. The data supporting the analysis is drawn from recent studies by the OECD, UBS Warburg, CEFIR, and other organizations. The causal inference presented in this paper critically evaluates the impact of foreign capital on the improved corporate governance in Russia's blue-chip firms. The paper presents two alternative state-centered scenarios to explain the implementation of internationally accepted standards of corporate governance by Russia's big business.
Topic:: Economics, International Trade and Finance, and Politics
Political Geography:: Russia, Europe, and Asia

5220. Selling off the "Family Silver": The Politics of Privatization in the OECD 1990-2000

Author:: Reimut Zohlnhöfer and Herbert Obinger
Publication Date:: 03-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: The 1990s have witnessed unprecedented attempts at privatizing state owned enterprises in virtually all OECD democracies. This contribution analyzes the differences in the privatization proceeds raised by EU and OECD countries between 1990 and 2000. It turns out that privatizations are part of a process of economic liberalization in previously highly regulated economies, as well as a reaction to the fiscal policy challenges imposed by European integration and the globalization of financial markets. In addition, institutional pluralism and union militancy yield significant and negative effects on privatization proceeds. Partisan differences only emerge if economic problems are moderate, while intense economic, particularly fiscal, problems foreclose differing partisan strategies.
Topic:: Economics, Globalization, and Politics
Political Geography:: Europe

5221. The Spread of Neoliberalism: U.S. Economic Power and the Diffusion of Market-Oriented Tax Policy

Author:: Duane Swank
Publication Date:: 03-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: I offer an explanation for the widespread diffusion of neoliberal tax policies in the developed democracies. Specifically, I argue that the highly visible 1980s market-conforming tax reform in the United States, the late twentieth century's dominant political economy, creates significant incentives for adoption of neoliberal tax policies by decision makers in other polities. As such, I stress a dominant actor model of the diffusion of neoliberalism that is grounded in asymmetric competition for mobile assets and policy learning. However, while the incentives to follow U.S. tax policy are substantial, the relative weight assigned the costs and benefits of reform and, in turn, the pace and degree of neoliberal policy adoption by other nations is fundamentally contingent on features of domestic political and economic environments. I assess these arguments with empirical models of 1981-to-1998 tax rates on capital in sixteen nations. I find that changes in U.S. tax policy influence subsequent reforms in other polities; in the long-term, all nations move toward the U.S. neoliberal tax structure. Analysis also shows, however, that the responsiveness to US tax reforms is notably greater where linkages with U.S. markets are stronger, where domestic economic stress is deeper, and where uncoordinated market institutions are dominant. I conclude with a discussion of the implications of the present analysis for the volume's central questions: are dominant. I conclude with a discussion of the implications of the present analysis for the volume's central questions: of international policy interdependence and domestic political economic forces in shaping policy change?
Topic:: Economics and Politics
Political Geography:: United States and Europe

5222. Is Europe Becoming the Most Dynamic Knowledge Economy in the World?

Author:: Daniele Archibugi and Alberto Coco
Publication Date:: 01-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: The paper discusses the condition and perspective of the European Union in the knowledge economy and the feasibility of the goal given by the European Council at the Summits held in Lisbon (March 2000) and Barcelona (March 2002), that is, to increase European R expenditure up to 3 percent of GDP by 2010. The paper focuses on two aspects: comparative performance with its direct counterparts, in particular the US..; and intra-European distribution of resources and capabilities. A set of technological indicators is presented to show that Europe is still in a consistent delay when compared to Japan and the U.S., especially in R investment and in the generation of innovations. A small convergence occurs in the diffusion of Information and Communication Technologies (ICTs), the sector most directly linked to the concept of the "new economy." In the field of knowledge collaboration, Europe reveals opposing paths in the business and in the academic worlds. Within Europe, the level of investment in scientific and technological activities is so different across countries that it does not merge into a single continental innovation system.
Topic:: International Relations, Economics, and Science and Technology
Political Geography:: Europe and Lisbon

5223. The Challenges of EU Accession for Post-Communist Europe

Author:: David R. Cameron
Publication Date:: 02-2005
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: The accession of ten new member states in May 2004 and the prospective accession of several more in the near future will pose severe budgetary, administrative, and operational challenges for the European Union. But however great, the challenges of enlargement pale in comparison with the challenges of accession that will be faced by the new member states, especially those which until a decade ago were governed by Communist parties that presided over centrally-planned and predominantly-collectivized economies. This paper explores five of the most critical challenges that will face the new member states of post-Communist Europe: 1) administering the acquis; 2) deepening and extending the reform and transformation of the economy; 3) reducing the high levels of unemployment and large government, trade, and current account deficits; 4) financing accession in the face of the EUâ€™s budgetary constraints and financial provisions; and 5) coping with all of those challenges in the face of low levels of support for enlargement in many of the member states and high levels of ambivalence and skepticism about membership in most of the new member states. The chapter concludes by noting the low levels of trust in the national government and satisfaction with the way democracy works that exist in most of the new member states and suggests that those low levels of trust and satisfaction will make it difficult for the governments in the new member states to address these challenges while also maintaining sufficient public support to retain office.
Topic:: Economics and Government
Political Geography:: Europe

5224. Measuring Risk: Political Risk Insurance Premiums and Domestic Political Institutions

Author:: Nathan Jensen
Publication Date:: 09-2005
Content Type:: Working Paper
Institution:: Center for International Studies, University of Southern California
Abstract:: There is a resurgence in the literature in political science on how political risk affects multinational corporations operating in emerging markets. Most existing studies suffer from data problems where researchers can only offer indirect evidence of the relationship between political institutions and political risk. In this paper I utilize a new data resource to explore how domestic institutions affect political risks for multinationals. Utilizing price data from political risk insurance agencies I test how domestic political institutions affect the premiums multinationals pay for coverage against 1) expropriations and contract disputes and 2) government restrictions on capital transactions. I find that constraints on politicians lead to marginally lower expropriation and transfer risks. Democracy, on the other hand, greatly reduces expropriation risk but has no impact on transfer risk.
Topic:: Economics, Government, Political Economy, and Politics

5225. The Bargain of the Unstable: Trade Negotiations and Financial Crises in Mercosur 1995-2001

Author:: Pablo Heidrich
Publication Date:: 02-2005
Content Type:: Working Paper
Institution:: Center for International Studies, University of Southern California
Abstract:: Argentina and Brazil suffered grave financial crises during the 1990s. During that time, they were involved in trade negotiations with each other inside Mercosur. As the financial crises struck one or the other country, their negotiating positions varied from accommodating to aggressive, leading to peaks of confrontation from which Mercosur has not quite recovered yet. Furthermore, those crises provoked a large number of trade disputes as protectionism from both countries grew when the crises increasingly hurt their economies.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: Brazil, Argentina, and Latin America

5226. The Aspect of Culture in Promoting Social Inclusion in the European Union: Is the Open Method of Co-ordination (OMC) Working for Ethnic Minorities?

Author:: Tove H. Malloy
Publication Date:: 09-2005
Content Type:: Policy Brief
Institution:: European Centre for Minority Issues
Abstract:: In the context of making the European economic area competitive while reaching certain social and economic goals, the 2000 European Council at Lisbon initiated an ambitious implementation scheme on its Social Agenda introducing the Open Method of Co-ordination (OMC) as an instrument to streamline and optimize Community and Member States’ policies. The OMC method is a ‘soft governance’ approach aimed at generating real political commitment and different types of norms, procedural as well as substantive, through a highly institutionalized process of information sharing, deliberation, monitoring and learning.1 The method was first introduced in the area of employment and has been followed by an OMC on Social Inclusion (OMC/Incl.). Other focus areas are social protection/pensions and health care. The OMC on employment has recently undergone a first evaluation, and the Commission is preparing to subject the OMC/Incl. to its first evaluation.2 No OMC focuses specifically on minority inclusion but the OMC/Incl. has developed into one of the key areas of European Union (EU) policy implementation that addresses the socioeconomic exclusion of members of ethnic and Roma/Sinti minorities.
Topic:: Economics, Regional Cooperation, Minorities, European Union, and Social Services
Political Geography:: Europe

5227. Trends in Competitive Balance: Is there Evidence for Growing Imbalance in Professional Sport Leagues?

Author:: Arne Feddersen and Wolfgang Maennig
Publication Date:: 01-2005
Content Type:: Working Paper
Institution:: Chair for Economic Policy, University of Hamburg
Abstract:: The concept of competitive balance is a central aspect in the literature of sports economics. A popular argumentation of sport functionaries is that dominance of one or a few teams could lead to unequal incomes for the clubs, restrictions in the clubs’ ability to improve sporting performance and ultimately to a loss of attractiveness and loss of income for the league. Following this line of reasoning and alleging a negative trend in competitive sports functionaries often try to implement regulations in team sport leagues. The aim of this paper is to analyze for eight different leagues if there is such a trend existing. For an empirical test for trends in competitive balance of four European soccer leagues (ENG, ESP, GER, ITA) and four US Major Leagues (MLB, NBA, NFL, NHL), OLS regressions with a constant were carried out. For the entire observation period from 1969/70 to 2003/2004, of 48 trends ascertained, only 12 could be observed as being significantly positive (i.e. growing imbalance) with 19 significantly negative (i.e. growing balance). The remaining 17 trends were insignificantly different from zero.
Topic:: Economics, Sports, Soccer, Competitive Balance, and Sports Leagues
Political Geography:: Europe, Global Focus, and United States of America

5228. Slow Passthrough Around the World: A New Import for Developing Countries?

Author:: Jeffrey Frankel, David Parsley, and Shang-Jin Wei
Publication Date:: 02-2005
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: Developing countries traditionally experience passthrough of exchange rate changes that is greater and more rapid than high-income countries experience. This is true equally of the determination of prices of imported goods, prices of local competitors’ products, and the general CPI. But developing countries in the 1990s experienced a rapid downward trend in the degree of passthrough and speed of adjustment, more so than did high-income countries. As a consequence, slow and incomplete passthrough is no longer exclusively a luxury of industrial countries. Using a new data set -- prices of eight narrowly defined brand commodities, observed in 76 countries -- we find empirical support for some of the factors that have been hypothesized in the literature, but not for others. Significant determinants of the passthrough coefficient include per capita incomes, bilateral distance, tariffs, country size, wages, long-term inflation, and long-term exchange rate variability. Some of these factors changed during the 1990s. Part (and only part) of the downward trend in passthrough to imported goods prices, and in turn to competitors’ prices and the CPI, can be explained by changes in the monetary environment – including a fall in long-term inflation. Real wages work to reduce passthrough to competitors’ prices and the CPI, confirming the hypothesized role of distribution and retail costs in pricing to market. Rising distribution costs, due perhaps to the Balassa-Samuelson-Baumol effect, could contribute to the decline in the passthrough coefficient in some developing countries.
Topic:: Economics, Markets, Developing World, Tariffs, Exchange Rate Policy, and Inflation
Political Geography:: Global Focus

5229. Contractionary Currency Crashes In Developing Countries

Author:: Jeffrey Frankel
Publication Date:: 02-2005
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: To update a famous old statistic: a political leader in a developing country is twice as likely to lose office in the 6 months following a currency crash as otherwise. This difference, which is highly significant statistically, holds regardless whether the devaluation takes place in the context of an IMF program. Why are devaluations so costly? Many of the currency crises of the last ten years have been associated with output loss. Is this, as alleged, because of excessive reliance on raising the interest rate as a policy response? More likely it is because of contractionary effects of devaluation. There are various possible contractionary effects of devaluation, but it is appropriate that the balance sheet effect receives the most emphasis. Passthrough from exchange rate changes to import prices in developing countries is not the problem: this coefficient fell in the 1990s, as a look at some narrowly defined products shows. Rather, balance sheets are the problem. How can countries mitigate the fall in output resulting from the balance sheet effect in crises? In the shorter term, adjusting promptly after inflows cease is better than procrastinating by shifting to short-term dollar debt, which raises the costliness of the devaluation when it finally comes. In the longer term, greater openness to trade reduces vulnerability to both sudden stops and currency crashes.
Topic:: Debt, Economics, Developing World, Exchange Rate Policy, Currency, and Devaluation
Political Geography:: Global Focus

5230. Why is Mobility in India so Low? Social Insurance, Inequality, and Growth

Author:: Kaivan Munshi and Mark Rosenzweig
Publication Date:: 07-2005
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: This paper examines the hypothesis that the persistence of low spatial and marital mobility in rural India, despite increased growth rates and rising inequality in recent years, is due to the existence of sub-caste networks that provide mutual insurance to their members. Unique panel data providing information on caste loans and sub-caste identification are used to show that households that out-marry or migrate lose the services of these networks, which dampens mobility when alternative sources of insurance or finance of comparable quality are unavailable. At the aggregate level, the networks appear to have coped successfully with the rising inequality within sub-castes that accompanied the Green Revolution. Indeed, this increase in inequality lowered overall mobility, which was low to begin with, even further. The results suggest that caste networks will continue to smooth consumption in rural India for the foreseeable future, as they have for centuries.
Topic:: Economics, Inequality, Economic Growth, Mobility, and Insurance
Political Geography:: South Asia and India

5231. Taxing Business-to-Consumer Interstate Remote Retail Sales: Economics v. Jurisprudence in the Battle Over Tax Jurisdiction

Author:: Jeptha Nafziger
Publication Date:: 05-2005
Content Type:: Working Paper
Institution:: School of Public and International Affairs (SPIA), Princeton University
Abstract:: Retail sales and use taxes constitute a major component of state and local tax bases, providing critical funds for many public programs. The continued and increasing significance of nontaxed remote retail sales—interstate sales of goods by firms without sufficient presence in the destination jurisdiction—has put the long-term solvency of these tax bases and the public programs they fund in jeopardy. To a considerable extent, this problem is attributable to the oft-criticized “nexus” standard, a legal concept that limits a jurisdiction’s ability to tax remote transactions based on constitutional and stare decisis grounds. This paper offers a summary of the jurisprudence that has yielded the current nexus interpretation, an economic critique of its underlying principles, and several recommendations that could serve as policy alternatives to the status quo.
Topic:: Economics, Business, Tax Systems, Jurisdiction, Retail, Consumer Behavior, and Jurisprudence
Political Geography:: North America and United States of America

5232. What Makes a Difference in Achieving Higher Labor Productivity? The Case of Low-Income Countries in Latin America

Author:: Osvaldo Nina
Publication Date:: 12-2005
Content Type:: Working Paper
Institution:: Institute for Advanced Development Studies (INESAD)
Abstract:: This paper uses firm level surveys from Ecuador, Guatemala, Honduras and Nicaragua to estimate the determinants of labor productivity. This study started out with the hypothesis that the adverse external business conditions that firms in poor Latin American countries face, may be an important explication of the generally low levels of productivity. However, the empirical results, based on the survey of more than 1300 businesses, do not confirm this hypothesis. Compared to all the variables that are under the firms control, such as capital intensity, energy use, and worker skills, the external business environment (macroeconomic instability and labor regulations) has very little impact on productivity.
Topic:: Development, Economics, Labor Issues, Productivity, and Income
Political Geography:: Latin America, Nicaragua, Honduras, Guatemala, and Ecuador

5233. Financial Sector Reform in India: Is There a Grand Design?

Author:: Rajrishi Singhal
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: Center for the Advanced Study of India
Abstract:: The Planning Commission of India, in its Approach Paper for the Tenth Five-Year Plan (2002- 07), set its sights on two lofty targets: doubling per capita income over the next 10 years—compared to similar goals over 20 years as was previously the norm—and reducing the incidence of poverty by five percentage points.
Topic:: Development, Economics, and Government
Political Geography:: South Asia and India

5234. Thirteen Years of Power Sector Reform in India: Are We Still Groping in the Dark?

Author:: Kandula Subramaniam
Publication Date:: 05-2004
Content Type:: Working Paper
Institution:: Center for the Advanced Study of India
Abstract:: In 1991, before the New Power Policy was announced opening the Indian power supply industry to private investment, the country was experiencing power shortages. Sanghvi (1991) estimated that in countries like India, electricity shortages led to a loss of 1.5 to 2 percent of gross domestic product (GDP). Ten years later, India still experiences shortages of power in the form of load-shedding. Even grid breakdowns have become a regular feature. In 2001 alone, there were two major grid collapses, bringing several Indian states to a grinding halt for more than one day.
Topic:: Economics, International Trade and Finance, and Science and Technology
Political Geography:: South Asia and India

5235. CERI: Regional integration in Asia since China's entry into the WTO

Author:: Diana Hochraich
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: Centre d'Etudes et de Recherches Internationales
Abstract:: Since their economic development got under way, the ASEAN countries - which essentially manufacture labour-intensive products - have been marked by strong regional integration brought about by the segmentation of the production process engaged in by Japanese companies. In these countries, successive relocations resulted in de facto economic integration at a time when various political groupings intent on blocking the development of communism were also emerging. Since joining the WTO, China - the world's workshop - has become the hub for trade with the developed countries. In the face of such competition, the ASEAN countries will have to show their capacity to maintain their position in the value chain represented by the production of all of the Asian countries.
Topic:: Economics and Regional Cooperation
Political Geography:: China and Asia

5236. CERI: Eighteen months into Lula's presidency, how is Brazil faring?

Author:: François d'Arcy
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: Centre d'Etudes et de Recherches Internationales
Abstract:: This study, which examines the chances of success of the government of Luiz Ináci Lula da Silva, takes as its starting point the idea that the main obstacle resides in the structure of the Brazilian political system. Being unable to reform that system, President Lula has skilfully adapted to it, but not without having to forge certain unusual alliances. He has, nevertheless, honoured the campaign promises which brought him to power after three unsuccessful attempts in a row, maintaining anti-inflationary policies and strict budgetary discipline, and respecting commitments given concerning public debt and privatised companies. This macroeconomic policy – which follows on from that of Fernando Henrique Cardoso – dominated his government's first year in office, slowing the implementation of new policies addressing social issues and sustainable development. So far, the latter policies would appear to point more to continuity than to radical change, a fact which will, doubtless, contribute greatly to their success.
Topic:: Economics, Government, and Politics
Political Geography:: Brazil and South America

5237. The mysteries of Vietnamese "socialist democracy". Evolution of the people's assemblies and of the legal system since the launch of the Dôi moi

Author:: Matthieu Salomon
Publication Date:: 05-2004
Content Type:: Working Paper
Institution:: Centre d'Etudes et de Recherches Internationales
Abstract:: Since the 1980s – and, more symbolically, since the 6th Communist party Congress - Vietnam has been engaged in reform, which is referred to as "dôi moi", i.e. renewal. While their aim is, first and foremost, to change the rules governing economic activity, these reforms have, since the 1990s, also been associated with political, institutional and legal change. Influenced, on the one hand, by endogenous constraints arising out of the necessary adaptation of the politico-legal environment and of the evolution of the power-legitimation processes and, on the other hand, by exogenous constraints born of the desire for integration into the international community and economy, the discourse of the Vietnamese authorities and the country's fundamental political texts have both been modified. It seems undeniable that, despite its weightiness and areas of permanence, the Vietnamese politico-legal system is, de facto, slowly evolving and becoming "normalised". The intention here is not to suggest that Vietnam is undergoing a "democratic transition" bringing it closer to a western model of reference. The aim of the regime may be defined thus: "to consolidate the single-party system while satisfying the demands for modernisation". By means of an analysis of the system of people's assemblies elected by the population and of the legal - i.e. juridical and judicial - system, this study attempts to provide an insight into the regime's capacity for politico-legal innovation and, notably, into its capacity to structure new arenas for debate. It examines the complex evolutions which have affected the rules and players of this too-often-neglected aspect of a changing Vietnam.
Topic:: Development, Economics, and Politics
Political Geography:: Southeast Asia

5238. The Political Economy of Regionalism: Current Theorizing and Preliminary Observations on the G-3 FTA

Author:: Antonio Ortiz Mena López Negrete
Publication Date:: 12-2004
Content Type:: Working Paper
Institution:: Centro de Investigación y Docencia Económicas
Abstract:: This working paper provides and overview of current theorizing on the political economy of regional integration. Specifically, it assesses several theories that attempt to explain the causes behind the resurgence or regionalism in the late 1980's and early 1990's with special emphasis on Milner's demand-driven theory based on demands for regionalism by firms with internal increasing returns to scale. After reviewing the main propositions of the theories in light of the G-3 Free Trade Agreement, it finds that no single theory adequately accounts for the causes behind the establishment of the agreement, that Milner's model is better at specifying preferences than outcomes, and that greater attention should be paid to the institutional forms of regional integration agreements.
Topic:: Economics, Industrial Policy, Political Economy, and Regional Cooperation

5239. Policy Learning, Policy Diffusion and the Making of a New Order

Author:: Covadonga Meseguer
Publication Date:: 11-2004
Content Type:: Working Paper
Institution:: Centro de Investigación y Docencia Económicas
Abstract:: This chapter surveys the role of learning as mechanism of policy diffusion in the context of the creation of a new political order. I discuss policy learning against the background of recent research on the diffusion of deregulatory and regulatory policies, and attempt to distinguish learning from other mechanisms of diffusion. I then survey the challenges entailed in testing this mechanism and set out my particular approach: a rational version of learning. I also report the results of preliminary efforts to test learning as applied to the diffusion of regulatory policies. I conclude that learning cannot be rejected as a plausible mechanism of the diffusion of policies, although it shares its explanatory role with less rational mechanisms of diffusion, in particular policy emulation. Further research and analysis is needed to test learning in either its rational or its bounded version, and in doing so to delve into the politics of learning.
Topic:: Foreign Policy, Development, Economics, and Politics

5240. Las relaciones económicas internacionales de México hacia el siglo XXI: retos y oportunidades. Reporte.

Author:: Antonio Ortiz Mena L.N. and Ninfa Fuentes
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: Centro de Investigación y Docencia Económicas
Abstract:: On December 2002, the Division of International Studies (DEI) at the Centro de Investigación y Docencia Económicas (CIDE) organized the forum “The International Economic Relations of Mexico: Challenges and Opportunities” with the support of the Konrad Adenauer Foundation. The forum approached the international economic relationships of Mexico, from the regional and multilateral perspectives. The objective of the forum and of this document is to evaluate the relationships that Mexico maintains with each one of the regions and countries approached in the forum, highlighting the challenges and the opportunities that each one of them presents. We live an opportune moment to design a prospective and coherent vision of the international economic relationships of Mexico in the XXI Century among government's organs in order to avoid arriving to a point in which Mexico would have a reduced maneuver margin. The participants who took part in the forum and a list of acronyms are included at the beginning of the document. The conference agenda can be found as well. This document intends to reproduce the essence of the forum discussions and the participants' presentations. It is our intention to reflect in a clear and honest manner the participants' statements in this paper. Any lack of precision is not intentional and is exclusively our responsibility.
Topic:: International Relations, Development, and Economics
Political Geography:: Central America and Mexico

5241. Taxpayer's Rights and Obligations: Analysis of Implementation and Enforcement Mechanisms in Uganda

Author:: Emmanuel Kasimbazi
Publication Date:: 10-2004
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: This study uses Income Tax and Graduated Personal Tax to illustrate how taxpayers' rights and obligations are enforced. Existing literature on tax reform points to the fact that consideration of the rights and obligations of the taxpayers is central to the overall tax reform strategy. In fact, reform processes that do not effectively consider the rights of taxpayers will alienate and create discontent among the citizens. In the last few years, Uganda has taken keen steps to effectively reform its tax legal regime.
Topic:: Democratization, Economics, and Government
Political Geography:: Uganda and Africa

5242. The EU's Security Policy Towards the Mediterranean: An (Im)possible Combination of Export of European Political Values and Anti-terror Measures?

Author:: Ulla Holm
Publication Date:: 10-2004
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: The Southern part of the Mediterranean has been put high on the EU-security agenda after 9/11. The Working paper makes the argument that the EU-politics towards its Arab Mediterranean neighbours are staggering between a status quo oriented politics and a politics of export of democracy. The tension is seen as an expression of two conceptualizations of the Mediterranean and the uneasy combination of four contradicting concepts on the relationship between the Mediterranean and the EU. The first conceptualization is about the Mediterranean as a cultural cradle of great civilizations. The other one is about the Mediterranean as a conflict-ridden zone. These conceptualizations are interlinked in the discourses on how to export security to the South and which kind of security the EU has to promote. The inter-linkage between the two conceptualization of the Mediterranean is furthermore linked up to two oppositional representations of the EU: the EU as an exporter of democracy and the EU as being a model to copy but not an empire-builder. This results in the following dilemmas caused by the oppositional relationship between four concepts: Respect for cultural diversity and export of political shared values. Respect for Arab sovereignty and export of European political values. The opposition between the four concepts is sharpened by Islamic terrorism which underlines the uneasy 'marriage' of the four concepts.
Topic:: Economics and Sovereignty
Political Geography:: Europe and Arabia

5243. Migrant Transfers as a Development Tool: The Case of Morocco

Author:: Nina Nyberg Sørensen
Publication Date:: 10-2004
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: In 2003, the Global Development Finance Annual Report took formal notice of remittances as an important source of external development finance for the first time, listing Morocco as the 4th largest remittance recipient among developing countries. This paper examines the positive and negative results of remittances on Moroccan development, as well as of other migration-driven social changes. It offers a brief historical background to Moroccan migration and examines more closely Moroccan emigration to the EU from the early 1960s. Remittance practices are discussed, as is the issue of return migration. The paper concludes by discussing prospects for general development in the country and summarizing policy options in the field.
Topic:: Development, Economics, and Migration
Political Geography:: Europe and Morocco

5244. The Development Dimension of Migrant Transfers

Author:: Nina Nyberg Sørensen
Publication Date:: 10-2004
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: The current appreciation of remittances as a development tool is recent and several questions on how best to capture their development impact remain. This working paper addresses some of the fundamental questions pertaining to the role of remittances in the migrationdevelopment nexus. Apart from offering a conceptual tool for understanding of the importance of remittances for developing countries, the paper gives a global overview of various types of remittance flows, the dynamics of such flows and their possible developmental impact on developing countries, including those experiencing conflicts. The paper concludes by offering some ideas on how appropriate policy measures could contribute to making remittances into an effective development tool.
Topic:: Development, Economics, and Migration
Political Geography:: Europe

5245. Conflicting Motivations: The Private Sector and International Conflict

Author:: Luke A. Patey
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: Since the end of the Cold War, the world has been witness to a drastic increase in the number and magnitude of inter- and intra-state wars. These conflicts have predominately taken place within developing and underdeveloped countries and have led to substantial human, economic, and political costs at both local and international levels. The United Nations, along with international financial institutions and the global civil society, has recognized the need for curbing the violence and preventing further outbreaks. However, the political breadth and financial capacities of these organizations cannot ensure sufficient socio-economic recovery through peace-building operations alone. A more progressive approach is required. Responsible and committed engagement from private sector actors can provide a thrust towards reducing poverty in war-torn societies. Over the long term, the private sector in conjunction with international and non-governmental organizations can accelerate the process of postconflict reconstruction and encourage lasting peace through economic prosperity.
Topic:: Economics, Politics, Third World, and United Nations

5246. From Water 'Wars' to Water 'Riots' - Lessons from Transboundary Water Management

Author:: Jannik Boesen and Helle Monk Ravnborg
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: Over the last decade, water scarcity has increasingly been coupled with international security. Due to the nature of water – a fluid life-necessity and a key ingredient in economic development, driven by gravity across boundaries – it has been anticipated that water may trigger international conflicts – the so-called water wars – in the future.
Topic:: International Relations, Security, Economics, and Environment

5247. Concepts and Experiences with Demand Driven Advisory Services

Author:: Esben Friis-Hansen
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: The current institutional framework for agricultural services in East and Southern Africa was designed for a state-sponsored supply-driven approach. These institutions demand large field staff levels and are associated with high costs often financed by World Bank loans. These institutions are moreover ill-suited to respond to the demands from clients that are now emerging through development interventions and policies. Farmers are marginally involved with planning the content and means of service provision. Top-down approaches also fail to target agricultural services to women and vulnerable groups. Demand-driven advisory services have evolved over recent years and involve changing the role of extension agents from advisors to facilitators; increasing control by farmers through cost sharing; increasing the use of contracted services; and emphasizing knowledge provision rather then narrow technical advice.
Topic:: Agriculture and Economics
Political Geography:: Africa

5248. New Sources of Development Finance: Funding the Millenium Development Goals

Author:: Anthony B. Atkinson
Publication Date:: 09-2004
Content Type:: Policy Brief
Institution:: United Nations University
Abstract:: In order to achieve the Millennium Development Goals (MDGs), substantial additional external funding needs to be mobilized. Estimates differ, but a 'ballpark' figure is an annual increase of US$50 billion. This could be achieved by a doubling of official development assistance (ODA). Welcome steps have been made in that direction, but this takes time, and time is of the essence. For this reason alone, it is necessary to consider new sources.
Topic:: Development, Economics, International Cooperation, and United Nations
Political Geography:: United States

5249. Sustainability of External Development Financing to Developing Countries

Author:: Matthew Odedokun
Publication Date:: 03-2004
Content Type:: Policy Brief
Institution:: United Nations University
Abstract:: External development finance consists of those foreign sources of funds that promote or at least have the potential to promote development in the destination countries if delivered in the appropriate form. This rather broad definition qualifies all forms of external finance, and the quality and quantity of their inflows to developing countries are thus covered in the studies that form the background to this Policy Brief. These include official bilateral and multilateral, private commercial, and private noncommercial flows. A common characteristic is that all these types of flows are inadequate or becoming inadequate on the one hand and that their distribution is lopsided geographically and/or temporally, on the other.
Topic:: Development, Economics, International Cooperation, and United Nations

5250. Poverty, International Migration and Asylum

Author:: Christina Boswell and Jeff Crisp
Publication Date:: 02-2004
Content Type:: Policy Brief
Institution:: United Nations University
Abstract:: In recent years, the issues of international migration and asylum have risen to the top of the international agenda. The pressures and opportunities linked to the process of globalization have led to an increase in the number of people moving from one country and continent to another. At the same time, insecurity and armed conflict in many of the world's poorest and economically marginalized states have triggered new waves of displaced people.
Topic:: Economics, Migration, Poverty, and United Nations

5251. Race, Ethnicity, and Economic Well-Being

Author:: Kenneth Finegold and Laura Wherry
Publication Date:: 03-2004
Content Type:: Working Paper
Institution:: Urban Institute
Abstract:: Poverty has decreased among blacks, Hispanics, and whites in recent years. Yet only whites have experienced less hardship in the areas of food and housing. In contrast, blacks have seen an increase in housing hardship, while food hardship has increased among Hispanics.
Topic:: Demographics, Economics, and Poverty
Political Geography:: United States

5252. Obstacles Impeding the Regional Integration of the Javakheti Region of Georgia

Author:: Jonathan Wheatley
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: European Centre for Minority Issues
Abstract:: This working paper is a consolidated and condensed analysis of a longer field report originally carried out as part of ECMI's action-oriented project “Defusing interethnic tension and promoting regional integration – the Javakheti Region of the Republic of Georgia”. Both the original field report, and this resulting analysis aim to provide an insightful overview of current the social, economic and political situation in two rayons (districts) of Georgia; Akhalkalaki rayon and Ninostminda rayon; which together combine to form a geographical area better known as the Javakheti Region in southern Georgia. By identifying and providing information about the current problems impeding the regional integration of Javakheti, this working paper will act as a guide for defining priorities and ensuring more informed intervention in the area.
Topic:: Economics, Ethnic Conflict, and Politics
Political Geography:: Eastern Europe and Georgia

5253. Does Lootable Wealth Breed Disorder? A Political Economy of Extraction Framework

Author:: Richard Snyder
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: Kellogg Institute for International Studies
Abstract:: This article proposes a political economy of extraction framework that accounts for political order and state collapse as alternative outcomes in the face of lootable wealth. Different types of institutions of extraction can be built around lootable resources—with divergent effects on political stability. If rulers are able to forge institutions of extraction that give them control over the revenues generated by lootable resources, then these resources can contribute to the maintenance of political order by providing the income with which to govern. In contrast, the breakdown or absence of such institutions increases the risk of civil war by making it easier for rebels to get income. The framework is used to explain two puzzling cases that experienced sharply contrasting political trajectories in the face of lootable resources: Sierra Leone and Burma. A focus on institutions of extraction provides a stronger understanding of the wide range of political possibilities—from chaos, through dictatorship, to democracy—in resource-rich countries.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: Burma and Sierra Leone

5254. On the Role of Distance for Outward Foreign Direct Investment

Author:: Peter Egger
Publication Date:: 06-2004
Content Type:: Working Paper
Institution:: Kellogg Institute for International Studies
Abstract:: This paper focuses on the estimation of three distance-related effects on outward foreign direct investment (FDI). (i) Distance harms vertical multinationals, since they engage in trade. (ii) It makes non-trading multinationals better off than exporters. (iii) This positive effect on horizontal FDI is expected to rise with bilateral country size due to the home market effect. The use of panel data and related econometric methods is highly recommended to avoid parameter bias from endogenous, unobserved, time-invariant effects. A unified estimation approach to assess all three hypotheses then has to rely on instrumental variable techniques for generalized leastsquares methods. In the empirical analysis of 1989–1999 bilateral US outward FDI stocks at the industry level, it is shown that testing and accounting for autocorrelation is extremely important for parameter inference. In sum, the paper lends strong support to the theory of horizontally organized multinationals as outlined in Markusen and Venables (2000).
Topic:: Economics and International Trade and Finance
Political Geography:: United States

5255. Unemployment, Macroeconomic Policy and Labor Market Flexibility: Argentina and Mexico in the 1990s

Author:: Roberto Frenkel and Jaime Ros
Publication Date:: 02-2004
Content Type:: Working Paper
Institution:: Kellogg Institute for International Studies
Abstract:: This paper compares the divergent unemployment experiences in Argentina and Mexico in the 1990s, examining in detail the remarkable contrasts in the adjustment of the labor market in these two countries that occur despite equally striking similarities in the evolution of a number of macroeconomic variables and external economic shocks. The paper focuses on the role of macroeconomic policies and the type of industrial restructuring in these developments and considers to what extent the divergent unemployment experiences can be explained by differences in the institutional characteristics of the labor market.
Topic:: Economics and Industrial Policy
Political Geography:: Argentina, South America, North America, and Mexico

5256. Sweatshops and Third World Living Standards: Are the Jobs Worth the Sweat?

Author:: David Skarbek and Benjamin Powell
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: Independent Institute
Abstract:: Many studies have shown that multinational firms pay more than domestic firms in Third World countries. Economists critical of sweatshops have responded that multinational firms' wage data do not address whether sweatshop jobs are above average because many of these jobs are with domestic subcontractors. In this paper we compare apparel industry wages and the wages of individual firms accused of being sweatshops to measures of the standard of living in Third World economies. We find that most sweatshop jobs provide an above average standard of living for their workers.
Topic:: Economics, Human Welfare, Industrial Policy, and Third World

5257. Institutional Foundations of Economic Freedom: A time-series cross-section analysis

Author:: Xavier de Vanssay, Vincent Hildebrand, and Zane A. Spindler
Publication Date:: 05-2004
Content Type:: Working Paper
Institution:: Independent Institute
Abstract:: Using time-series cross-section analysis, we provide additional empirical validation for the principal-agent model developed by Adserà, et al. (2003). In our innovation, efficient economic policy is proxied by “economic freedom” from the Fraser Institute database and “political institutions” are proxied by variables from the Database of Political Institutions. Our results suggest that the more credible the threat of removal from office, the more government officials will pursue efficient economic policies.
Topic:: Development, Economics, Government, and Political Economy

5258. Firm Size, Technical Efficiency and Productivity Growth in Chinese Industry'

Author:: Dic Lo and Yuk-Shing Cheng
Publication Date:: 12-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: Since the mid-1990s, China's state leadership has adopted a policy of nurturing the competitiveness of large state-owned industrial enterprises. The implications of this policy have been a matter of debate in the literature. This paper seeks to provide some useful input into the debate. With a view of investigating into the potential of long-term development of large enterprises, we estimate the “sequential production technology” in computing the Malmquist productivity index for various size-groups of enterprises in Chinese industry. Our findings indicate that large enterprises did register the fastest productivity growth and improvement in technical efficiency in the 1994-97 period. It thus appears that large-scale, mainly state-owned Chinese enterprises have exhibited the potential of m a king noticeable improvements and the relevant state policy does have its justification.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: China

5259. Social origins of Ottoman industrialisation: Evidence from the Macedonian town of Naoussa

Author:: Costas Lapavitsas
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: Ottoman industrialisation in cotton spinning was led by the town of Naoussa in Macedonia. This paper shows that Naoussa capitalists grasped the opportunities created by trade liberalisation, accumulated capital in domestic manufacture of woollen cloth, and secured a regular supply of low-wage female labour and free hydraulic energy. It is further shown that they took advantage of local institutional and political mechanisms within the Christian community independent of the relatively remote Ottoman state. But there was no capitalist transformation of agriculture, even though Naoussa capitalists often owned large land estates. Lack of broader institutional and political influence and absence of capitalist transformation of agriculture hampered the transformation of Naoussa capitalists from a provincial social group into a broad-based capitalist class.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: Macedonia

5260. China's Nexus of Foreign Trade and Economic Growth: Making Sense of the Anomaly

Author:: Dic Lo
Publication Date:: 08-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: Using a range of specifications that are standard in the relevant literature, this paper finds that China's rapid and sustained economic growth in the reform era has tended to be negatively correlated with its export growth and positively correlated with its import growth. This finding runs counter to widely -held perceptions on China's nexus of foreign trade and economic growth, and thus presents a serious challenge for interpretation. On the basis of some further regression analyses, and drawing on a number of applied studies on the subject matter, the paper argues that the finding is plausible and of complex ramifications. The conclusion which this paper arrives at, therefore, is that the Chinese experience has tended to be a case of strategic integration into the world market, rather than conforming to the standard neoclassical thesis of trade regime neutrality.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: China

5261. The case for regional exchange rate arrangement in East Asia'

Author:: Takuji Kinkyo
Publication Date:: 08-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: The Asian crisis highlighted the difficulties for developing countries to actively manage exchange rates in an environment of high capital mobility. Now it became fashionable to argue that the exchange rate should be either allowed to float freely or irrevocably fixed. This paper examines the case for regional exchange rate arrangements as an instrument to enhance the manageability of exchange rates and discusses the options in East Asia. It critically assess the existing proposal of common basket peg system and suggests that East Asia should seek to create an Asian-version of regional monetary system modeled on the EMS.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: East Asia and Asia

5262. Disorderly adjustments to exchange rate misalignments: The experience of Korea'

Author:: Takuji Kinkyo
Publication Date:: 08-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: This paper analyzes Korea's exchange rate dynamics before and during the crisis of 1997-98 by estimating the long-run fundamental exchange rate and the associated error correction model. The analysis suggests that although Korea's exchange rate was substantially overvalued before the crisis, the subsequent exchange rate dynamics could not fully be accounted by the need to correct misalignments. It was found that there was a large deviation from the short-run fundamental value of exchange rates, indicating the presence of “overshooting of the overshooting equilibrium” during the crisis. The findings have important policy implications for crisis management in emerging market economies.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: Korea

5263. Transmission channels of capital flow shocks: why Korean crisis was so severe'

Author:: Takuji Kinkyo
Publication Date:: 08-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: The Asian crisis highlighted the vulnerability of emerging market economies faced by sudden capital flow reversals. An important question that has critical implications for crisis management is how negative shocks in capital inflows were transmitted to economic activities, transforming financial instability into fully-fledged crises. Using VARs, this paper analyzes the transmission mechanism of capital flow shocks during the Korean crisis of 1997-98. Although it is commonly believed that severe economic contractions were caused by credit crunch, the analysis suggests that the major constraint for production was a steep rise in prices of imported inputs due to sharp exchange rate depreciations.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: Asia and Korea

5264. Does South Africa Suffer from the Fear of Float' Syndrome?An Analysis of the Efficacy and Challenges of a Managed Floating Exchange Rate Regime with Financial Integration'

Author:: Olano Makhubela
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: The paper examines whether South Africa suffers from a 'fear of float' syndrome. The analysis also covers the efficacy and challenges of a managed floating exchange rate regime. I use time series data, volatility equations and ARCH models to test the volatility of South Africa's exchange rate, interest rate and foreign exchange reserves. Evidence shows that South Africa has volatile interest and exchange rates, but not foreign exchange reserves. Yet, South Africa does not seem to suffer from an extreme and chronic form of 'fear of floating'. South Africa requires financial integration to finance its current account deficits and to complement its low savings rate. Yet, evidence indicates that both capital account openness and foreign exchange control liberalization have no robust impact on growth. The authorities' intervention in the 2001 currency crisis did not help. Hence, I recommend that South Africa should use interest rates early to target both inflation and foreign exchange rates. Challenges remain in the form of relatively high interest rates, volatile capital flows, perceptions, destabilizing speculation, and loopholes in foreign exchange controls.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: South Africa

5265. Globalisation and Comparative Economics: Of Efficiency, Efficient Institutions, and Late Development'

Author:: Dic Lo
Publication Date:: 06-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: Does globalisation entail a demand for uniformity, or diversity, of the (political) economic institutions of nation-states? What is the theoretical underpinning of the demand? And what are the implications of the demand for economic development? The conventional literature known as comparative economic systems has been unable to answer these question, because there is an intrinsic tension between its methodology (the neoclassical framework of individualistic rational choices and their equilibrium) and the subject matter (the multiplicity of economic institutions and development experiences in the real world). The new comparative economics has consisted of a variety of attempts to cope with this tension: some aimed at preserving the neoclassical framework at a m o re fundamental level, while some others aim e d at transcending the framework to arrive at a new theory of economic system s and development. This paper argues that attempts that adhere to the neoclassical tradition is likely to lead to dead ends, while attempts that encompass collective as well as individualistic rationality represent m o re promising directions. Fuller developments of the literature, however, require incorporating objectified institutions and paradigmised technology in to its sphere of inquiry. It is submitted that there are important lessons to learn from classical political economy and their modern presentations, particularly Marxian theories of the social forces of production, in this regard.
Topic:: International Relations, Development, Economics, and International Political Economy

5266. Compensating Differentials and the Queue For Public Sector Jobs: Evidence from Egyptian Household Survey Data'

Author:: Mona Said
Publication Date:: 03-2004
Content Type:: Working Paper
Institution:: School of Oriental and African Studies - University of London
Abstract:: This Paper considers the determinants of male and female pay in the public and private sectors by estimating a joint model of sector allocation and wage determination using cross-sectional data from the Egyptian 1987 and 1997 labour force surveys. The results points to the profound impact of the graduate public sector employment guarantee on labour market segmentation in Egypt. In particular, the level of educational attainment became the most important factor in sorting workers between sectors. Comparison of the 1987 and 1997 results highlight that the strong impact of the public sector employment guarantee on the labour market in the 1980s was weakened in the 1990s for males but remains important for females. Moreover, risk-averse individuals (proxied by those who have greater financial responsibility in their households) have a greater probability of choosing public sector than private sector employment. These results are consistent with the effective operation of the guarantee for more highly educated workers and with time based queuing for guaranteed positions. A model of compensating wage differentials is then defined and estimated, in order to quantify the value of arguably the three most important non-pecuniary aspects of public sector employment: job security, fringe benefits (especially comprehensive retirement pensions) and lower effort and shorter hours which allow workers to supplement income through obtaining a second job. Estimates of the publicprivate differentials, correcting for differences in characteristics and selectivity, indicate a public sector disadvantage for males and a small advantage for females in 1987. Relative public sector wages improved for both males and females in 1997, and when adjustments for non-wage benefits are included, public sector premia are observed in all segments of the public sector for both males and females. It also emerged that the single most important adjustment factor leading to the change in the differential is the value of job stability, which drives up the differential in favour of the public sector, particularly in manufacturing. The results highlight the importance of job security as the major factor determining the persistence of queues for public sector jobs in Egypt.
Topic:: International Relations, Development, Economics, and International Political Economy
Political Geography:: Egypt

5267. Making States Work: From State Failure to State-Building

Author:: Michael Ignatieff, Ramesh Thakur, and Simon Chesterman
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: International Peace Institute
Abstract:: It is frequently assumed that the collapse of state structures, whether through defeat by an external power or as a result of internal chaos, leads to a vacuum of political power. This is rarely the case. The mechanisms through which political power are exercised may be less formalized or consistent, but basic questions of how best to ensure the physical and economic security of oneself and one's dependants do not simply disappear when the institutions of the state break down. Non-state actors in such situations may exercise varying degrees of political power over local populations, at times providing basic social services from education to medical care. Even where non-state actors exist as parasites on local populations, political life goes on.
Topic:: International Relations, Development, Economics, and Peace Studies

5268. War Economies in a Regional Context: Overcoming the Challenges of Transformation

Author:: Kaysie Studdard
Publication Date:: 03-2004
Content Type:: Working Paper
Institution:: International Peace Institute
Abstract:: This policy report distills key findings from research commissioned by the International Peace Academy's program on Economic Agendas in Civil Wars (EACW) on the regional dimensions of war economies and the challenges they pose for peacemaking and peacebuilding. Drawing from analytical research as well as case studies of Afghanistan in Central Asia, Sierra Leone in West Africa, and Bosnia and Herzegovina in Southeast Europe, a number of key issues concerning the political economy of regional war economies and lessons for more effective peacebuilding were identified: The notion that internal conflicts have economic "spill over" or "spill into" effects on neighboring states needs to be extended and deepened. Policymakers should work to develop a more comprehensive understanding of the interstate impacts of civil conflict that gives greater weight to systemic cross-border networks and less to potentially 'one-off' transborder phenomena.
Topic:: Economics, Peace Studies, Regional Cooperation, and War
Political Geography:: Afghanistan, Europe, Central Asia, Bosnia, Herzegovina, and West Africa

5269. Program on Economic Agendas in Civil Wars: Principal Research Findings and Policy Recommendations

Author:: Karen Ballentine
Publication Date:: 05-2004
Content Type:: Working Paper
Institution:: International Peace Institute
Abstract:: The Program on Economic Agendas in Civil Wars (EACW) was launched in 2000 in response to a convergence of political factors, academic interests, and policy concerns that pointed to the need for conflict prevention and resolution policies to be informed by a systematic understanding of the economic dimensions of contemporary civil wars. Preliminary studies undertaken by the International Peace Academy, the World Bank, and university researchers generated many of the broad propositions that guided the program's research and policy development design. These included assumptions that: Economic factors are consequential to warring elites' decisions to pursue war and peace; Economic greed and not socio-economic or political grievance is the chief driver of armed conflict; Countries with a relatively high dependence on natural resources are at higher risk of conflict; and Global economic flows (trade, aid, and investment) affect the incidence, duration, intensity, and character of armed conflict.
Topic:: Economics, International Organization, and Peace Studies

5270. Through Economy to Democracy and Security? An Integrated Approach to Stability in South East Europe - 7th Workshop of the Study Group "Regional Stability in South East Europe"

Author:: Frederic Labarre
Publication Date:: 01-2004
Content Type:: Working Paper
Institution:: Austrian National Defence Academy
Abstract:: In contrast to the Central European transition countries, the economies of South East Europe (SEE) have been facing complex and interrelated political and economic problems. The dissolution of Yugoslavia combined with market losses, war in Bosnia and Herzegovina and Croatia, sanctions finally culminating in the Kosovo conflict were the main causes of political and economic instability in the whole region. Taking into account these factors, output recovery has been much slower in SEE than in the Central European countries. Measured in purchasing power standards, Croatia is the best performer in the region, with its GDP at about 38% of the EU average. Next comes Bulgaria (32%), whereas the respective values for Serbia and Montenegro and Albania range between 15-17%. Looking at the economic performance in the 1990-2002 period, Croatia and Romania reached almost 94% of their pre-transitional level in 2002, followed by Bulgaria and Macedonia (about 88% each). Serbia and Montenegro, the worst-affected, reached only about half of what it was in 1990. The cumulative output decline there was one of the largest among all the Central and East European countries.
Topic:: NATO, Diplomacy, Economics, Political Economy, and Regional Cooperation
Political Geography:: Europe, Bosnia, Herzegovina, Kosovo, Yugoslavia, Bulgaria, Balkans, and Romania

5271. The challenge of United Nations reform

Author:: Christian Reus-Sumit, Marianne Hanson, Hilary Charlesworth, and William Maley
Publication Date:: 11-2004
Content Type:: Working Paper
Institution:: Australian National University Department of International Relations
Abstract:: The first half of the twentieth century saw multiple crises in the expanding international system, characterised most tragically and dramatically by two world wars, the Great Depression, and the Holocaust. In response, the international community engaged in history's most ambitious program of international institution building, a program that centred on the creation of the United Nations, the Bretton Woods institutions, and a plethora of functional regimes governing everything from arms control to the prohibition of genocide. Despite the impediments imposed by four decades of Cold War, these institutions have evolved into a complex global architecture of institutions which can claim partial yet significant credit for the decline in traditional interstate warfare, the containment of nuclear proliferation to a handful of states, management of the world economy, and the prosecution of an ever more comprehensive humanitarian agenda.
Topic:: Security, Development, Economics, and United Nations

5272. Rentier Shifts, Legitimacy, and the Social Sources of International Financial Hegemonie

Author:: Leonard Seabrooke
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: Australian National University Department of International Relations
Abstract:: This paper provides an analysis of the domestic legitimation of 'financial reform nexuses' during two periods of English and US international financial hegemony. Following Max Weber's work on the state and finance, I argue that positive state intervention is required to legitimise a 'financial reform nexus' (the interrelation of credit, property, and tax politics) for people on below median income. I hypothesise that sufficient legitimation of a financial reform nexus provides the means to generate and sustain international financial hegemony, including the capacity to tailor the structure of the international financial order to suit the hegemon's interests. Conversely, if the hegemon is unable to sustain the legitimation of its domestic financial reform nexus-a choice that correlates with negative state intervention that supports a 'rentier shift'-its capacity to maintain international financial hegemony wanes. I draw from examples of the legitimation of financial reform nexuses in England (1900-15) and the US (1985-2000), linking domestic legitimation to consequent changes in the structure of the international financial order. Through this analysis of the social sources of English and US international financial hegemonies, I differentiate the English 'international rentier economy' from the US 'international creditor economy'. Finally, I stress the importance of positive state intervention for the legitimation of the US financial reform nexus.
Topic:: Development, Economics, Government, and International Trade and Finance
Political Geography:: England

5273. Homes for an Inclusive City: A Comprehensive Housing Strategy for Washington, D. C.

Publication Date:: 06-2004
Content Type:: Working Paper
Institution:: The Brookings Institution
Abstract:: The growth and movement of jobs and population in the Washington, DC metropolitan area and the persistence of the booming housing market in the city have created both a crisis of affordability and an opportunity to strengthen and rebuild portions of the District of Columbia.
Topic:: Civil Society, Economics, Government, and Human Welfare
Political Geography:: Washington and Colombia

5274. The Role of Perceived Opportunity in Fertility Choice: Evidence from Latin America

Author:: Louise C. Keely and Margaret MacLeod
Publication Date:: 06-2004
Content Type:: Working Paper
Institution:: The Brookings Institution
Abstract:: We hypothesize that the perceived returns to human capital and to income uncertainty are important determinants of recent cross-sectional variation in Latin American fertility. An empirical study of cross-country individual level data supports the hypothesis. In particular, we find that a higher perceived return to human capital and higher income uncertainty both lead to higher fertility, all else equal. We interpret the evidence to suggest that increasing economic opportunity in Latin America should be accompanied by institutions that provide social protection in order to promote further decreases in fertility toward the replacement rate.
Topic:: Economics, Gender Issues, and Human Welfare
Political Geography:: South America, Latin America, Central America, and Caribbean

5275. Well Being and Unemployment in Russian in the 1990's: Can Society's Suffering Be Individuals' Solace?

Author:: Andrew; Gaddy Eggers
Publication Date:: 04-2004
Content Type:: Working Paper
Institution:: The Brookings Institution
Abstract:: This paper studies the effect of regional unemployment rates on subjective well-being in post-Soviet Russia. Research conducted in Europe and the United States has documented that higher unemployment rates lead to lower reported life-satisfaction. By contrast, our Russian study finds a small but significant effect in the other direction. We estimate that du ring the period of our study (1995-2001), each percentage point increase in the local unemployment rate was correlated with the average well-being of people in the region increasing by an amount equivalent to moving 2% of the population up one level in life satisfaction measured on a five-point scale. Our intuition is that the so-called comparison effect drives this result: when individuals observe their peers suffering in a troubled economy, they lower their standards of what is good enough. All else equal, they thus perceive themselves to be better off in worse times. In highlighting the dependence of subjective well-being scores on expectations and reference groups, we sound a note of caution against using happiness data from economies in crisis to draw macroeconomic policy conclusions.
Topic:: Economics and Human Welfare
Political Geography:: Russia, United States, Europe, Asia, and Soviet Union

5276. The Challenge of Achieving High Work Participation Rates in Welfare Programs

Author:: LaDonna Pavetti
Publication Date:: 10-2004
Content Type:: Policy Brief
Institution:: The Brookings Institution
Abstract:: Efforts to reform the welfare system over the last two decades have largely focused on reducing welfare dependency by getting welfare recipients to work. By the time the Temporary Assistance for Needy Families (TANF) program was created by the welfare reform law of 1996, there was widespread agreement in the states that welfare recipients should be required to look for work and to do so shortly after (or even before) they began receiving cash assistance. Once TANF was implemented, work became a central focus of local welfare offices. However, as shown by the recent debates on the reauthorization, consensus on work requirements remains elusive.
Topic:: Economics, Government, Human Welfare, and Poverty

5277. Financial Access for Immigrants: Learning from Diverse Perspectives

Author:: Audrey Singer and Anna Paulson
Publication Date:: 10-2004
Content Type:: Policy Brief
Institution:: The Brookings Institution
Abstract:: Policymakers and academics are now catching up to financial institutions in their desire to understand how and why immigrants use U.S. financial markets. “Financial Access for Immigrants: Learning from Diverse Perspectives,” a conference co-sponsored by the Brookings Metropolitan Policy Program formerly the Center on Urban and Metropolitan Policy) and the Federal Reserve Bank of Chicago, was held at the Chicago Fed on April 15-16, 2004. It included presentations from scholars and practitioners who discussed recent research on the financial practices of immigrants as well as the practical experiences of for-profit and nonprofit institutions working to provide financial services to the immigrant community.
Topic:: Economics, International Trade and Finance, and Migration
Political Geography:: United States and Chicago

5278. Law of the Sea Convention: Should the U.S. Join?

Author:: David B. Sandalow
Publication Date:: 08-2004
Content Type:: Policy Brief
Institution:: The Brookings Institution
Abstract:: The United States has vital interests in the oceans. U.S. national security depends on naval mobility. U.S. prosperity depends on underwater energy resources. Ocean fisheries help feed the United States and much of the world. On February 25, 2004, the Senate Foreign Relations Committee unanimously recommended that the United States accede to the Law of the Sea Convention, which sets forth a comprehensive framework of rules for governing the oceans. The recommendation followed two hearings in which the committee heard testimony supporting the Convention from the Bush administration, the armed services, ocean industries, and environmental groups, among others. Following the favorable report from Foreign Relations, other congressional committees held hearings at which several lawmakers raised concerns about the treaty. The United States should promptly join the Law of the Sea Convention. Doing so would help protect U.S. national security, advance U.S. economic interests, and protect the marine environment. Prompt action is needed to ensure that the United States is a party by November 2004, when the Convention is open to amendment for the first time.
Topic:: Economics and International Law
Political Geography:: United States

5279. Offshoring, Import Competition, and the Jobless Recovery

Author:: Charles L. Schultze
Publication Date:: 08-2004
Content Type:: Policy Brief
Institution:: The Brookings Institution
Abstract:: Until the end of 2003, the United States had been experiencing a “jobless” recovery, with employment stagnating at levels well below those in 2000. A widespread perception has arisen that a major culprit behind the dearth of jobs was the growing practice of U.S. firms to relocate part of their domestic operations to lower-wage countries abroad. “Offshoring” presumably caused a reduction in U.S. output and a corresponding loss of jobs.
Topic:: Economics, Government, and Human Welfare
Political Geography:: United States

5280. Improving the Saver's Credit

Author:: William G. Gale and Peter R. Orszag
Publication Date:: 07-2004
Content Type:: Policy Brief
Institution:: The Brookings Institution
Abstract:: For decades, the U.S. private pension system has provided preferential tax treatment to employer-provided pensions, 401(k) plans, and individual retirement accounts relative to other forms of saving. The effectiveness of this system of subsidies is controversial. Despite the accumulation of vast amounts of wealth in pension accounts, concerns persist about the ability of the pension system to raise private and national saving, and in particular to improve saving outcomes among those households most in danger of inadequately preparing for retirement.
Topic:: Economics, Government, and Human Welfare
Political Geography:: United States

5281. Development and Foreign Investments: Lessons Learned from Mexican Banking

Author:: Jacob Steinfeld
Publication Date:: 07-2004
Content Type:: Policy Brief
Institution:: Carnegie Endowment for International Peace
Abstract:: FOREIGN DIRECT INVESTMENT (FDI) HAS TRANSFORMED MEXICO'S BANKING SYSTEM during the past decade, making it the second largest in Latin America with $165 billion in commercial assets in 2003. In the past four years, Mexico received $25.3 billion of FDI into its financial sector. This composes nearly 40 percent of total FDI inflows into the country. As a result of FDI flowing into the country's financial sector, the Mexican banking system has the highest ratio of foreign ownership in Latin America.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: Latin America and Mexico

5282. Job Anxiety Is Real-And It's Global

Author:: Sandra Polaski
Publication Date:: 05-2004
Content Type:: Policy Brief
Institution:: Carnegie Endowment for International Peace
Abstract:: These are not normal times. Two changes in the past decade have produced a huge global oversupply of labor and intense competition for an expanding array of jobs. First, the Cold War's end threw millions of workers, who formerly produced only for the socialist bloc, onto the global labor market. And second, that market has become integrated by technological change that now permits outsourcing of service as well as manufacturing jobs. The current economic recovery will not solve the resulting global mismatch of supply and demand, and it cannot be addressed by the United States alone. Many current policies aggravate the problem. This paper proposes that the United States revise its policies and devote a concerted effort to get the major countries to work together to expand employment at that global level.
Topic:: Economics, Globalization, and Industrial Policy
Political Geography:: United States

5283. Small Enterprises and Economic Policy

Author:: Simon Johnson and Anders Åslund
Publication Date:: 03-2004
Content Type:: Policy Brief
Institution:: Carnegie Endowment for International Peace
Abstract:: Institutions such as strong property rights and the rule of law are important for both long-run economic performance and short-run volatility. Developing good institutions is generally viewed as a desirable goal, but there is no agreed road map for such changes.
Topic:: Economics
Political Geography:: Israel, Eastern Europe, East Asia, and Latin America

5284. The Dominican Republic: Resolving the Banking Crisis and Restoring Growth

Author:: Steve H. Hanke
Publication Date:: 07-2004
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: After a decade of rapid economic growth, the Dominican Republic entered a downward spiral in 2003. The economy shrank for the first time since 1990, the inflation rate quadrupled, the Dominican peso collapsed, government debt more than doubled, interest rates soared, and the central bank incurred large losses.
Topic:: Economics, International Trade and Finance, and Political Economy
Political Geography:: Latin America and Caribbean

5285. CATO Institute: Rethinking Electricity Restructuring

Author:: Peter Van Doren and Jerry Taylor
Publication Date:: 11-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Electric utility restructuring was initiated in the 1990s to remedy the problem of relatively high electricity costs in the Northeast and California. While politicians hoped that reform would allow low-cost electricity to flow to highcost states and that competition would reduce prices, economists wanted reform to eliminate regulatory incentives to overbuild generating capacity and spur the introduction of real-time prices for electricity.
Topic:: Economics, Energy Policy, Government, and Politics
Political Geography:: California

5286. CATO Institute: Implementing Welfare Reform: A State Report Card

Author:: Jenifer Zeigler
Publication Date:: 10-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: In 1996 the Personal Responsibility and Work Opportunity Reconciliation Act was signed into law, and the nation waited to see if welfare reform would truly “end welfare as we know it.” Block grant funding and administrative devolution gave the states a chance to move beyond pilot programs and prove that they could transition people off welfare more efficiently and effectively than the federal government. As a result, caseloads have dropped by more than half.
Topic:: Economics, Government, and Human Welfare
Political Geography:: United States

5287. CATO Institute: Fannie May, Freddie Mac, and Housing Finance: Why True Privatization is Good Public Policy

Author:: Lawrence J. White
Publication Date:: 10-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) are the two dominant entities in the secondary residential mortgage markets of the United States. They are an important and prominent part of a larger mosaic of extensive efforts by governments at all levels to encourage the production and consumption of housing.
Topic:: Economics, Government, and Industrial Policy
Political Geography:: United States

5288. CATO Institute: Health Care Regulation: A $169 Billion Hidden Tax

Author:: Christopher J. Conover
Publication Date:: 10-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Students of regulation have known for decades that the burden of regulation on the U.S. economy is sizable, with the latest figures suggesting this cost may approach $1 trillion in 2004. Surprisingly, given that the health industry is often viewed as among the most heavily regulated sectors of the U.S. economy, previous estimates generally have ignored the cost of regulating health care services.
Topic:: Economics, Government, and Human Welfare
Political Geography:: United States

5289. CATO Institute: Iraq's Odious Debts

Author:: Patricia Adams
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Most debts created by Saddam Hussein in the name of the Iraqi people would qualify as “odious” according to the international Doctrine of Odious Debts. This legal doctrine holds that debts not used in the public interest are not legally enforceable.
Topic:: Economics and International Trade and Finance
Political Geography:: United States, Iraq, and Middle East

5290. CATO Institute: A Lesson in Waste: Where Does All the Federal Education Money Go?

Author:: Neal McCluskey
Publication Date:: 07-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Since the 1965 passage of the Elementary and Secondary Education Act, which concentrated unprecedented authority over American education in the hands of the federal government, federal lawmakers have passed increasingly restrictive laws and drastically escalated education spending, which ballooned from around $25 billion in 1965 (adjusted for inflation) to more than $108 billion in 2002.
Topic:: Economics, Education, and Government
Political Geography:: United States and America

5291. CATO Institute: Deficits, Interest Rates, and Taxes: Myths and Realities

Author:: Alan Reynolds
Publication Date:: 06-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The federal government's swing from budget surpluses to budget deficits has raised concerns about possible negative economic effects. Some economists have argued that deficits will raise interest rates, reduce economic growth, increase trade deficits, and possibly create a financial crisis.
Topic:: Debt, Economics, and Government
Political Geography:: United States

5292. CATO Institute: Downsizing the Federal Government

Author:: Chris Edwards
Publication Date:: 06-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The federal government is headed toward a financial crisis as a result of chronic overspending, large deficits, and huge future cost increases in Social Security and Medicare. Social Security and Medicare would be big fiscal challenges even if the rest of the government were lean and efficient, but the budget is littered with wasteful and unnecessary programs.
Topic:: Conflict Resolution, Economics, and Government
Political Geography:: United States

5293. South Africa's War against Malaria: Lessons for the Developing World

Author:: Roger Bate and Richard Tren
Publication Date:: 03-2004
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Malaria imposes enormous human suffering and economic costs on many poor countries. For South Africa, which has a relatively minor malaria problem for a developing country, from 2000 to 2002 the economic cost ranged between US$15 million and US$41 million, excluding estimates of the human suffering and estimates of lost investment in malarial areas..
Topic:: Economics, Environment, and Human Welfare
Political Geography:: Africa and United States

5294. Transforming Competitiveness in European Transition Economies: The Role of Foreign Direct Investment

Author:: Jasminka Sohinger
Publication Date:: 05-2004
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: Foreign direct investment (FDI) has become one of the main drivers of globalization and integration of the European transition economies into the world economy, especially the European Union. Its growth enhancing capacity has played a significant role in transforming their competitiveness, both locally and on international markets, and its propensity to stimulate institution buliding is changing both economic and political landscapes in the region. The economic conditionality of FDI and the EU access-driven reforms are working hand in hand in helping the goals of transition and the convergence process. The achievement of both goals is seen as the best guarantor of peace and security in the region.
Topic:: Security, Economics, Emerging Markets, Globalization, International Trade and Finance, and Foreign Direct Investment
Political Geography:: Europe

5295. Copying the Nasdaq Stock Market in Europe: Supranational Politics and the Convergence-Divergence Debate

Author:: Elliot Posner
Publication Date:: 04-2004
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: Financial arrangements reflect political bargains. Like national labor regimes, the formal and informal rules and relationships governing the allocation of financial resources distinguish one type of capitalist society from another. How firms are financed shapes companies and industries and affects the risks citizens must bear, how they save for retirement, where they work, their job security and ability to buy homes, and the disparity between rich and poor. Leading theories provide increasingly inadequate explanations for changing institutional arrangements in western European finance. They emphasize convergence to global standards and the causal effects of either increased levels of mobile capital or the diffusion of ideas. Or else they describe change within a national trajectory and attribute it primarily to domestic politics, national historical institutions and path dependency. They exclude the possibility of independent regional-level causes. My empirical study of changing financial arrangements for smaller European companies between 1977 and 2003 reveals causes rooted firmly in European Union politics. Neither global forces nor national institutions were primarily responsible for drawing the stock exchanges of Europe into cross-border competition and prompting them to create new US-style markets. Instead, supranational political entrepreneurs, acting with relative autonomy, largely drove this pattern of institutional change. In pushing beyond the international-domestic dichotomy and emphasizing the independent effects of European-level politics, my argument contributes to a growing body of detailed empirical research on the national and global impact of the EU. It also provides more sustained analysis of the causes, mechanisms and effects of adopting US institutional forms outside American borders.
Topic:: Conflict Resolution, Economics, and Politics
Political Geography:: America and Europe

5296. Industrialization and Urbanization: Did the Steam Engine Contribute to the Growth of Cities in the United States?

Author:: Sukkoo Kim
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: Industrialization and urbanization are seen as twin processes of economic development. However, the exact nature of their causal relationship is still open to considerable debate. This paper uses firm-level data from the manuscripts of the decennial censuses between 1850 and 1880 to examine whether the adoption of the steam engine as the primary power source by manufacturers during industrialization contributed to urbanization. While the data indicate that steam-powered firms were more likely to locate in urban areas than water-powered firms, the adoption of the steam engine did not contribute substantially to urbanization.
Topic:: Development, Economics, and Industrial Policy
Political Geography:: United States and Europe

5297. A New Form of Governance? Comparing the Open Method of Coordination to Multilateral Surveillance by the IMF and the OECD

Author:: Armin Schäfer
Publication Date:: 09-2004
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: The Open Method of Coordination (OMC) has received much attention in the recent EU-literature. The predominant view claims that the OMC is not only a new but also an effective policy-making instrument. This paper raises doubts about both claims by offering a comparison of soft law policy coordination in three international organizations. More specifically, this paper compares the European Employment Strategy – which was the first use of the OMC – to the Broad Economic Policy Guidelines of the EU, the OECD Economic Surveys, and the IMF Article IV Consultations. Based on expert interviews, it seeks to demonstrate that these procedures are forms of multilateral surveillance that do not differ in kind. Such a comparative analysis of the OMC refutes claims to its novelty. Having compared the four procedures, a more general model of multilateral surveillance consisting of six elements is generated that facilitates further comparisons. This paper concludes that governments select voluntarist procedures mainly to secure their own competencies rather than to realize common goals. Effective problem-solving is therefore not necessarily the dominant objective of soft law.
Topic:: Economics, International Law, and International Organization
Political Geography:: Europe

5298. Political Conditionality of Economic Interactions in the Middle East; Turkey's Relations with Iran, Iraq, and Syria

Author:: Mustafa Aydin and Damla Aras
Publication Date:: 06-2004
Content Type:: Journal Article
Journal:: Uluslararasi Iliskiler
Institution:: Uluslararasi Iliskiler
Abstract:: The political logic (i.e., political perceptions of the ruling elite in a given country and nature of the political relations with other countries) determines economic activity, not the other way around, among the proto-capitalist states of the Middle East. As the political ties has primacy in the region in determining the course of economic relations, even market oriented democratic (or quasi-democratic) countries have to accept the prominence of political-strategic relations when dealing with such states. This paper will examine the interrelated fluctuation of trade and political tensions between Turkey and its immediate Middle Eastern neighbours - Iran, Iraq, and Syria. It will highlight the political determinants of the relationship between these countries; will discuss the role of the US as the independent variable; and will assess the possible effects of the emergence of Justice and Development Party government in Turkey on country's political and economic relations with its Middle Eastern neighbours.
Topic:: International Relations, Economics, and International Political Economy
Political Geography:: United States, Iraq, Europe, Iran, Turkey, Middle East, and Syria

5299. Chaos in Internationality, A Civilizational Evolution and an Islamic (F)actor: The Case of MÜSİAD in Turkey

Author:: Sennur Özdemir
Publication Date:: 09-2004
Content Type:: Journal Article
Institution:: Uluslararasi Iliskiler
Abstract:: A radical crisis in capitalist system has been determined in the first part of the study, in relation with the present chaotic international atmosphere, resulting in a civilisational turn (from the West to the East). The dominant role attributed to the (Islamic) East in this process will be argued in the second section. Lastly, this argument will be discussed around the MÜSİAD in Turkey, as an organisation (with an Islamic reputation) in recently declared 'model country' for the Islamic Middle East. The MÜSİAD has stamped on the agenda of 1990's in many respects with its multi-functional and multilateral positioning determined by the kinds of activities intersecting economic and socio-cultural (indirectly political as well) fields. This organisation is representative in reflecting Turkey's overall transformation in its multidimensionality (from a specific form of state capitalism to a specific form of market capitalism).
Topic:: Economics, Islam, and Religion
Political Geography:: Turkey and Middle East

5300. Immanuel Wallerstein: Reapproaching Social Sciences

Author:: Elçin Aktoprak
Publication Date:: 12-2004
Content Type:: Journal Article
Journal:: Uluslararasi Iliskiler
Institution:: Uluslararasi Iliskiler
Abstract:: Immanuel Wallerstein is one of the distinguished social scientists differentiating our general way of understanding and perceiving the world by developing the thesis that is based on world-system analysis. The aim of this article is limited to a short explanation of his approach. In this context, in the first chapter Wallerstein's world-system analysis and social sciences approach will be dealt with and in the second chapter modern world-system will be examined. Wallerstein considers modern world-system as a capitalist world-economy. Hence, Wallerstein's perception on capitalism and geoculture and his opinions on class, race, national and ethnic identity will be held in the second chapter.
Topic:: Civil Society, Economics, and Globalization

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