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5901. The Case Against a Dollar Policy

Author:
Samuel Brittan
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Milton Friedman’s classic “The Case for Flexible Exchange Rates” was published in 1953, but its inception dates back to 1950 when the author was a consultant to the U.S. Economic Cooperation Administration that was responsible for implementing the Marshall Plan. At that time, it was taken for granted that the Western nations were committed to a system of fixed exchange rates, except for periodic adjustments to new parities. Little did he know that in 1952 the British Treasury had proposed—in a very pessimistic vein and as a result of gloomy and wrongheaded forebodings—that sterling should move to a floating rate. The plan, known as “Robot,” was defeated in the British Cabinet. The country had to wait until 1972 to move to floating and another 20 years—after it was forced out of the European Exchange Rate Mechanism—to learn how to operate economic policy under such a system. Internationally the big shift to floating dates to the early 1970s, between President Nixon’s suspension of gold convertibility in 1971 and the collapse of the Smithsonian attempt to rebuild a fixed exchange rate system in 1973. The fixed rate system broke down because of the inherent tensions between the goals of free multilateral trade, national freedom to determine monetary policy, and fixed exchange rates. It is fortunate that a fixed exchange rate regime was the element that gave way in the end. The main force for change was as usual the pressure of events. Insofar as there was an intellectual influence it was the coming together of a coalition of “sound money” economists who wanted to be free to run stable domestic policies and “expansionists” who wanted to experiment with a more rapid increase in domestic nominal demand.
Topic:
Economics, Exchange Rate Policy, Currency, and Exchange Rates
Political Geography:
Global Focus

5902. The Unsustainability of the US Twin Deficits

Author:
Nouriel Roubini
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Global current account imbalances are increasing rather than decreasing. The U.S. current account deficit was about $665 billion in 2004 and rose to $791 billion (around 6.5 percent of GDP) in 2005, and it is likely to grow to more than $950 billion in 2006 and well above $1 trillion in 2007. Most other regions of the world—with the exception of Central Europe—are now running a current account surplus. Thus, with the exception of a few countries—Turkey, Australia, New Zealand, Iceland, Spain, Britain, and some Central European countries—most of the world is running a current account surplus and financing the U.S. current account deficits. Moreover, unlike some of these other countries running current account deficits, the United States is also running a large budget deficit that is growing— after a drop in 2005—at rates that are worrisome. Thus, the United States appears to be experiencing a twin fiscal and current account deficit whose medium- to long-term sustainability is doubtful. The stability of this global current account disequilibrium is widely debated. According to some (Dooley, Folkerts-Landau, and Garber 2004, 2005), we are in a new Bretton Woods 2 (BW2) regime where Asia and most of the emerging world is now actively pegging its currencies to the U.S. dollar and thus following a mercantilist policy of undervalued currencies that lead to export-led growth. The resulting current account surpluses lead to an accumulation of official foreign exchange reserves that imply a cheap financing of the U.S. current account deficit. According to the supporters of the BW2 view, this is a stable disequilibrium that could last for a decade or two. In fact, this BW2 regime and the growing global imbalances are unsustainable and bound to unravel in the next couple of years. The U.S. current account deficits—bound to rise above 7–8 percent of GDP in 2006–07—imply an accumulation of foreign liabilities that will lead the U.S. net foreign debt to grow from the 25 percent of GDP level of 2004 to over 50 percent by 2010. Thus, the issue is whether foreign investors—both private and public—will be willing to accumulate U.S. assets at the net rate of $800 billion to $1,000 billion a year for the foreseeable future. Those who believe in the sustainability of such trends point to the strength of the U.S. dollar in 2005 and to the low levels of U.S. long-term interest rates—the so-called bond market conundrum. They also argue that global imbalances are not due to the U.S. fiscal deficits but, rather, to other phenomena such as a global savings glut or foreigners’ desire to accumulate U.S. assets (the “capital account surplus” interpretation of the current account deficit in the Council of Economic Advisers 2006 Economic Report of the President). However, a careful analysis of the data refutes the complacency of financial markets and the revisionist interpretations of the U.S. external deficit.
Topic:
Economy, Fiscal Policy, Deficit, and Bonds
Political Geography:
Global Focus

5903. Will Emerging Markets Escape the Next Big Systemic Financial Crisis?

Author:
Kenneth Rogoff
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
For the past four centuries, emerging market debt crises have broken out like clockwork. In the early period, it was the European countries—the emerging markets of that era—that did the defaulting, with France reneging on its external debt eight times and Spain, the all-time record holder, 13 times (see Reinhart, Rogoff, and Savastano 2003). Over the last two centuries, it is today’s emerging markets, with countries like Brazil and Mexico having defaulted eight times, and Turkey six times. Venezuela leads them all with nine defaults. Defaults were relatively unknown in Asia until the 1990s, though in large part because most of these countries had been too poor until recently to become major borrowers on the world scene. Another factor, of course, is that they have achieved independence only this century. Today, the world seems very different, with credit risk premia on emerging market debt near record lows, and most countries in a position to borrow liberally on international capital markets. Indeed, the idea that emerging market countries cannot borrow in their own currency, which Eichenbaum and Hausman (2002) term “original sin,” seems like a distant memory, with many governments having issued large pools of internal market-based debt, with foreigners freely entering these markets. Even countries like Brazil, which has experienced two hyperinflations in the past 20 years, have succeeded in issuing domestic currency bonds sold directly to international investors. Now some people are even asking if European countries like Italy may soon face higher spreads than today’s emerging markets. Has the world been turned upside down? In this article, I will consider some rather sharply opposing perspectives on the admittedly complex current situation.
Topic:
Debt, Emerging Markets, and Financial Crisis
Political Geography:
Global Focus

5904. The U.S. Dollar and Prosperity: Accidents Waiting to Happen

Author:
Reuver Brenner
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Development in the rest of the world depends on the United States because America continues to be the engine of the world economy and the U.S. dollar is the main reserve currency. In this article, I examine the prospects of America remaining an economic superpower and the dollar maintaining its status as a reserve currency. I also show that unless the United States succeeds financial markets and development around the world will suffer. During the last decade, the U.S. dollar has experienced wide fluctuations. The dollar’s real effective exchange rate relative to the seven major currencies varied from about 80 in 1995 to 120 in 2001, and back to 90 in 2005 (BIS 2005: 91). The dollar was up roughly 30 percent relative to commodity prices between 1997 and 2001. Then, between 2002 and the end of 2004, the dollar fell by about 30 percent relative to gold and commodities. During the first 10 months of 2005, all hard currencies (except the Canadian and Australian dollar) were down by another 15 percent relative to gold. Nevertheless, the bond market still expects a stable dollar over the long haul, as reflected in long-term interest rates. The relative stability of the long-term interest rates offers comfort because the world depends on a predictable value of the dollar. The havoc its demise as reserve currency would provoke is hardly imaginable. The significant upward movement in the U.S. dollar during the late 1990s brought financial, political, and social havoc in countries that either pegged their currencies to the dollar or had currency boards, Argentina’s case being the most prominent. Later, the decline in the dollar between 2002 and 2004 has brought about much antagonism in trade relations around the world and cries for protectionism. Even with the dollar’s volatility around a downward trend since 2002, the euro did not displace the U.S. dollar as the world’s main reserve currency—and will not do so unless drastic events happen, which I do not foresee.1 One such drastic event would be an utter mismanagement of the U.S. dollar. Another would be the European Central Bank (ECB) announcing that it was moving toward targeting the price of gold to manage the euro. The ECB would then become a supranational monetary institution independent of all political pressures. Anchoring the euro to the price of gold would reflect changes in global demands for euro liquidity, functioning as a reserve currency. The reason I do not expect the euro to replace the U.S. dollar as the main reserve currency, unless either of these two events happens, is that the euro is the very first paper currency not backed either by a strong government or by gold. It is a unique experiment. For the euro to become a reserve currency, the eurozone would have to run persistent trade deficits, allowing surplus countries to build up their euro reserves. To achieve that outcome, however, the eurozone countries would have to radically reform their fiscal and regulatory policies, to encourage far more domestic entrepreneurship and consumption than they presently do. This scenario does not seem to be in the cards. Indeed, as Europe’s population gets older, meaningful reform becomes less likely, and I do not see any chance for a strong European government to emerge and tackle the situation. Aging baby boomers, who dominate Europe’s voters, prefer the status quo. In sum, the chances of the euro becoming a serious alternative to the U.S. dollar as a reserve currency are slim, or nonexistent. The Federal Reserve would have to seriously mishandle monetary affairs for this to happen.
Topic:
Currency, Economic Development, and Dollar
Political Geography:
Global Focus and United States of America

5905. Sound Monetary Policy, Credibility, and Economic Performance

Author:
Mickey Levy
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
History is a constant reminder that sustainable healthy economic development requires sound and credible monetary policy. This is true of all nations, industrial and developing. Frequently, economic policy conferences focus on issues that elicit tirades about how everything is going wrong and radical reform is required. But recent trends in the conduct of global monetary policies have been highly favorable, helping to generate dramatic improvement in international inflation and economic performance. My focus in this article is on the key foundations for sound and credible monetary policy, the plusses and minuses of when simple principles are followed or violated, and suggestions for maintaining recent favorable trends. The bottom line is that well-understood principles—such as zero inflation and the importance of maintaining inflation-fighting credibility, transparency, central bank independence, reliance on market-based mechanisms to address undesired imbalances—apply to both developing and industrialized nations, and must be pursued independently of fiscal and regulatory policies. If such independence is impossible—primarily because of the lack of independence between the monetary authorities and the treasury—other institutional arrangements are required to ensure monetary soundness and credibility. A generation ago, around 1980, the circumstances and perceptions about central banks and monetary policy were far different than now. Inflation was very high and economic and financial market performance was poor in industrialized and developing nations alike. Central banks lacked credibility and inflationary expectations were high and volatile. Budget deficits were high and rising, and projections of soaring government debt-to-GDP ratios dominated the fiscal debate. The projected unsustainable rises in debt-to-GDP and the associated “unpleasant monetarist arithmetic” that pointed to eventual debt monetization suggested that monetary policy ultimately may be hostage to irresponsible fiscal policy. On top of the undesirable macroeconomic trends of the day, this perception undercut the implied independence and credibility of the monetary authorities. The potential for improvement seemed remote. Other aspects of monetary policy were also distinctly different, and weighed heavily on central bank credibility. Many monetary authorities— including the U.S. Federal Reserve—either did not have sound objectives that included zero inflation, did not articulate them effectively, or were not credible. Central bank opacity of policies and actions was the rule, as it long had been, with market participants and the public purposely left in the dark. Some misunderstood the rational expectations school to imply that policy surprises, theoretically necessary in order to affect real activity, were somehow desirable. In fact, the key implication, as Milton Friedman, Robert Lucas, and others were early to recognize, is that fine-tuning in order to achieve multiple objectives is ultimately counterproductive. It has not been a smooth ride by any means—there have been supply shocks, several “crises,” including financial upheavals in Mexico and other Latin American nations, the Russian default and Asian tumult of 1997, Long-Term Capital Management in 1998, and the stock market bubble of 1999–2000—but the conduct of monetary policy globally has been significantly transformed for the better, and macroeconomic performance has improved accordingly. By and large, most leading central banks now pursue low inflation objectives and have gained significant credibility. Importantly, most know that this hard-won credibility cannot be taken for granted and must be maintained through adherence to sound principles.
Topic:
Markets, Monetary Policy, Economic Policy, and Credibility
Political Geography:
Global Focus

5906. Monetary Credibility, Inflation, and Economic Growth

Author:
Roger W. Ferguson Jr.
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
By now it must be universally agreed that low and stable inflation is a primary and essential goal for monetary policy, in large part because we believe it brings stability to financial systems and fosters sustainable economic growth over the longer run. In pursuit of this goal, central banks can report some success. According to the 2005 World Economic Outlook from the International Monetary Fund (IMF 2005), consumer price inflation in the advanced economies over the decade beginning in 1997 looks set to come in at an average annual rate of less than 2 percent, down from 3.5 percent for the previous 10 years. The IMF figures for the United States show a smaller but still substantial decline in headline inflation, from about 3.75 percent to 2.5 percent. The drop in inflation for the nonindustrial economies has been more striking, with average inflation falling from double to single digits.1 As someone who started work as a monetary policymaker in 1997, I am happy to acknowledge the accomplishments of many policymakers at the Federal Reserve and in other central banks around the world. Thanks to their success in fighting inflation, the central banking profession enjoys a very high standing. And as a related matter, we might say that monetary credibility, which I would define as the perception in the private sector that central banks will do what it takes to keep inflation under control, is also quite high. This credibility is hard won, however, and can be easily lost. The Federal Open Market Committee (FOMC) at its November 1, 2005, meeting increased the federal funds rate 25 basis points, to 4 percent, and observed: The cumulative rise in energy and other costs has the potential to add to inflation pressures; however, core inflation has been relatively low in recent months and longer-term inflation expectations remain contained. . . . With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability [FOMC 2005]. Unfortunately, however, the story over the past 20 years is not so uniformly positive for growth. Again according to IMF figures, growth among the nonindustrial economies appears to have increased to about 5.25 percent in the decade beginning in 1997, compared with growth of 3.75 percent in the previous 10 years. Growth in the United States has also moved slightly higher over the two periods, from 3 percent to 3.25 percent. However, growth in the other industrial economies has softened, to less than 2.5 percent in the recent decade from more than 3 percent in the previous one. This decline reflects slowing in some of the larger economies—Japan, Germany, Italy, and the Netherlands—as well as the effect of the Asian crisis in 1997 on newly industrialized Asian economies.2 To me, it is axiomatic that monetary credibility, by reducing the level and variability of inflation, lays the foundations for stronger and more sustained economic growth. In this article, I want to discuss anecdotal and academic evidence for the relationship between monetary policy credibility and economic growth and to do so in two segments: first, the link between monetary policy credibility and inflation performance and, second, the link
Topic:
Monetary Policy, Economic Growth, Inflation, IMF, and Credibility
Political Geography:
Global Focus

5907. Building Better Institutions

Author:
Rodrigo de Rato
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It is a pleasure to be here today at the Cato Institute. I know that Cato believes in competition. Perhaps it is this spirit of competition that led you to schedule today’s conference to coincide with the International Monetary Fund’s research conference and steal the IMF’s managing director and its current and past directors of research as participants. But while you have missed out on our research conference you will not miss out on our research: my talk today is based to a large extent on the findings of our latest World Economic Outlook, which conveniently has the theme “Building Institutions” [IMF 2005a]. My remarks address three questions. First, what have we learned about the importance of institutions in promoting economic development? Second, how we can accelerate the transition to better institutions? And, third, what reforms of international organizations, the IMF in particular, are needed to help this transition?
Topic:
Economics, International Organization, Reform, Economic Development, and Financial Institutions
Political Geography:
Global Focus

5908. International Engagement in Failed States

Author:
Louise Riis Andersen
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Failed states have made it to the top of the international agenda following 11 September 2001. This paper gives an overview of the debate on 'what to do'. Firstly, it suggests an explanation of where these so-called failed states are coming from: Why do some states self-destruct? Secondly, four different approaches to failed states are presented and discussed - with special emphasis on the dilemmas and predicaments they each hold. The paper concludes that the question of what to do with failed states requires a political answer. Not a technical one.
Topic:
International Relations, Security, Government, and Terrorism
Political Geography:
Global Focus

5909. Multilateralism, Sovereignty And Normative Change In World Politics

Author:
Amitav Acharya
Publication Date:
05-2005
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
This paper examines the role of multilateralism in fostering and managing normative change in world politics, with specific regard to the fundamental norms of state sovereignty. Post-war multilateralism helped to define, extent, embed and legitimize a set of sovereignty norms, including territorial integrity, equality of states and nonintervention. Today, multilateral institutions are under increasing pressure to move beyond some of the very same principles, especially nonintervention, as part of a transformative process in world politics. Without multilateralism, it is highly doubtful that the post-war international order would have been so tightly and universally built upon the norms of sovereignty. And without multilateralism, argues this paper, transition from this normative order now would be difficult and chaotic, as may be already happening as a result of the Bush administrations's challenge to the current multilateral system
Topic:
International Relations, Politics, Sovereignty, and Treaties and Agreements
Political Geography:
Global Focus

5910. Restoring American Leadership

Publication Date:
04-2005
Content Type:
Special Report
Institution:
Open Society Foundations
Abstract:
Cosponsored by the Open Society Foundations and the Security and Peace Institute (a joint program of the Center for American Progress and The Century Foundation), Restoring American Leadership: 13 Cooperative Steps to Advance Social Progress offers a starting point for restoring America's international alliances. The papers in the report, written by experts in 13 fields, recommend how President George W. Bush can make progress in areas where his personal commitment to action is needed and where global alliances can help strengthen the national security goals of the United States. Restoring American Leadership covers a wide range of topics, from international cooperation in the war on terror, to curbing proliferation of nuclear weapons, to advancing the rights of women across the globe. Each paper offers a specific set of recommendations for executive action by the president consistent with his stated values, as well as a brief overview of the administration's position on the issue to date.
Topic:
Foreign Policy, Diplomacy, International Cooperation, Leadership, and War on Terror
Political Geography:
United States and Global Focus

5911. Recommendations for Improving the United Nations Counter-Terrorism Committee’s Assessment and Assistance Coordination Function

Author:
Alistair Millar, Jason Ipe, George A. Lopez, Tona Boyd, Linda Gerber, and David Cortright
Publication Date:
09-2005
Content Type:
Special Report
Institution:
Fourth Freedom Forum
Abstract:
The effectiveness of the UN Counter-Terrorism Committee (CTC) depends on its ability to keep pace with transformations in the global security environment. When the CTC was established in the wake of the September 2001 terrorist attacks, the primary target was understood to be Al Qaeda and its international network of related terrorist groups. In order to secure its central role and relevance among multilateral counter-terrorism efforts, the CTC must find more creative ways to collect, assess, and disseminate information about current counter-terrorism capacities and to facilitate the provision of needed technical assistance by potential donors in a timely and sustainable manner.
Topic:
Security, United Nations, and Counter-terrorism
Political Geography:
Global Focus

5912. Bulgaria in NATO and the EU: Implications for the Regional Foreign and Security Policy of the Country

Author:
Plamen Pantev
Publication Date:
01-2005
Content Type:
Research Paper
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
The study includes three main interrelated issues, reflecting Bulgaria’s approaches and interests in preserving and developing a particular set of partnerships in South East Europe with the purpose of continuing the trend of the region’s modernisation in the fields of economy, infrastructure, technology, society and politics: first, the balancing between the special pragmatic relations of the United States with Bulgaria, and the EU integration of the country and the region; second, reaching a higher quality of NATO and EU memberships as a vehicle of pushing ahead the processes of regional emancipation, and, third, the specific regional consequences of the country’s membership in NATO and soon – in the EU
Topic:
International Affairs
Political Geography:
Global Focus

5913. The Democracy Makers: Human Rights and the Politics of Global Order

Author:
Nicolas Guilhot
Publication Date:
04-2005
Content Type:
Book
Institution:
Columbia University Press
Abstract:
Has the international movement for democracy and human rights gone from being a weapon against power to part of the arsenal of power itself? Nicolas Guilhot explores this question in his penetrating look at how the U.S. government, the World Bank, political scientists, NGOs, think tanks, and various international organizations have appropriated the movement for democracy and human rights to export neoliberal policies throughout the world. His work charts the various symbolic, ideological, and political meanings that have developed around human rights and democracy movements. Guilhot suggests that these shifting meanings reflect the transformation of a progressive, emancipatory movement into an industry dominated by “experts” ensconced in positions of power. Guilhot’s story begins in the 1950s when U.S. foreign policy experts promoted human rights and democracy as part of a “democratic international” to fight the spread of communism. Later, the unlikely convergence of anti-Stalinist leftists and the nascent neoconservative movement found a place in the Reagan administration. These “State Department Socialists,” as they were known, created policies and organizations that provided financial and technical expertise to democratic movements and also supported authoritarian, anti-communist regimes, particularly in Latin America. Guilhot traces the intellectual and social trajectories of key academics, policymakers, and institutions, including Seymour M. Lipset, Jeane Kirkpatrick, the “Chicago Boys,” influenced by Milton Friedman, the National Endowment for Democracy, and the Ford Foundation. He examines the ways in which various individuals, or “double agents,” were able to occupy pivotal positions at the junction of academe, national, and international institutions, and activist movements. He also pays particular attention to the role of the social sciences in transforming the old anti-communist crusades into respectable international organizations that promoted progressive and democratic ideals, but did not threaten the strategic and economic goals of Western governments and businesses. Guilhot’s purpose is not to disqualify democracy promotion as a conspiratorial activity. Rather he offers new perspectives on the roles of various transnational human rights institutions and the policies they promote. Ultimately, his work proposes a new model for understanding the international politics of legitimate democratic order and the relation between popular resistance to globalization and the “Washington Consensus.”
Topic:
International Relations, Globalization, Human Rights, and Democracy
Political Geography:
Global Focus
Publication Identifier:
9780231504195
Publication Identifier Type:
ISBN

5914. 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

5915. 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

5916. Science for Global Sustainability: Toward a New Paradigm

Author:
William C. Clark, Paul J. Crutzen, and Hans J. Schellnhuber
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This paper provides a context for the Dahlem Workshop on “Earth System Analysis for Sustainability.” The authors begin by characterizing the contemporary epoch of Earth history in which humanity has emerged as a major—and uniquely self-reflexive—geological force. They turn next to the extraordinary revolution in our understanding of the Earth system that is now underway, pointing out how it has built on and qualitatively extended the approaches that have served science and society so well since the first Copernican revolution. The authors then discuss the novel challenges posed by the urgent need to harness science and other forms of knowledge in promoting a worldwide sustainability transition that enhances human prosperity while protecting the Earth’s life-support systems and reducing hunger and poverty. Finally, the authors provide an overview of how the contributions to this Dahlem Workshop addressed the themes and challenges outlined in this introductory chapter.
Topic:
Development, Environment, Science and Technology, Institutions, Sustainability, Resilience, and Integrated Systems
Political Geography:
Global Focus

5917. Schools, Teachers, and Education Outcomes in Developing Countries

Author:
Paul Glewwe and Michael Kremer
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Eighty percent of the world's children live in developing countries. For economists working on education, the study of developing countries offers both policy questions of fundamental importance and a rich set of experiences to examine. This paper, prepared as a chapter for the Handbook on the Economics of Education, starts by providing background on primary and secondary education in developing countries, then outlines an analytical framework that will be used in interpreting the studies discussed. The authors then review selected empirical work: examining the factors influencing the quantity of education obtained; focusing on education quality by examining the determinants of skills obtained while in school; and examining distortions in education systems, the political economy of education, and school reform initiatives. Finally, the authors review methodological lessons and provide recommendations for future research on education in developing countries.
Topic:
Education, Developing World, Public Policy, and Teachers
Political Geography:
Global Focus

5918. What You Export Matters

Author:
Ricardo Hausmann, Jason Hwang, and Dani Rodrik
Publication Date:
12-2005
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
When local cost discovery generates knowledge spillovers, specialization patterns become partly indeterminate and the mix of goods that a country produces may have important implications for economic growth. We demonstrate this proposition formally and adduce some empirical support for it. We construct an index of the "income level of a country's exports," document its properties, and show that it predicts subsequent economic growth.
Topic:
Economic Growth, Exports, Productivity, and Specialization
Political Geography:
Global Focus

5919. 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

5920. Making Trade Work: Straight Talk on Jobs, Trade, and Adjustment

Author:
Research and Policy Committee of the Committee for Economic Development
Publication Date:
06-2005
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
This report examines the benefits and challenges of developing an effective adjustment policy for workers who lose their jobs because of outsourcing or any other adverse effects of trade. The statement, approved by CED's Research and Policy Committee states, "The most important next step is to recognize that adjustment policy is vital to achieving free trade - which, in turn, is vital to the nation's economic future." The statement concludes that America needs to develop the national will to devise and fund an adjustment policy that will get to "yes" on trade.
Topic:
International Trade and Finance, Labor Issues, and Unemployment
Political Geography:
Global Focus

5921. What Political Institutions Does Large-Scale Democracy Require?

Author:
Robert A. Dahl
Publication Date:
07-2005
Content Type:
Journal Article
Journal:
Political Science Quarterly
Institution:
Academy of Political Science
Abstract:
ROBERT A. DAHL examines the political institutions necessary for a democratic country. He argues that a large-scale democracy requires the following political institutions: elected officials; free, fair, and frequent elections; freedom of expression; alternative sources of information; associational autonomy; and inclusive citizenship.
Topic:
Elections, Democracy, Citizenship, Freedom of Expression, and Institutions
Political Geography:
Global Focus and United States of America

5922. To aid or not to aid: Foreign aid and producity in cross-country regressions

Author:
Pablo Selaya
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
The paper reexamines empirically the robustness of competing theories of foreign aid e§ectiveness. By shifting the focus from the e§ects of aid on income to to e§ects of aid on productivity, it is possible to put to test 3 existing theories of foreign aid e§ectiveness. The results provide support for the hypotheses that (i) aid has a positive e§ect in fostering growth of average productivity, (ii) aid doesnít operate with diminishing returns, and (iii) the magnitude of the total e§ect depends on climate-related circumstances. The results support the policy recommendation previously made in the literature to seriously reconsider the conditionality rule for foreign aid disbursements.
Topic:
Development, Foreign Aid, Productivity, and Income
Political Geography:
Global Focus

5923. An Action Agenda for Enhancing the United Nations Program on Counter-Terrorism

Author:
David Cortright, George A. Lopez, Alistair Millar, and Linda Gerber
Publication Date:
09-2004
Content Type:
Special Report
Institution:
Fourth Freedom Forum
Abstract:
The project examines how the CTC and the CTED can more effectively implement the mandates of Security Council Resolutions 1373, 1377, 1456, 1535, and other relevant measures. The project addresses the following specific research topics: financial asset controls; technical assistance to enhance member state implementation capacity; international, regional, and subregional coordination; linkages between counter-terrorism assistance and development aid; and the need to respect human rights while implementing counter-terrorism mandates.
Topic:
International Cooperation, United Nations, Counter-terrorism, and UN Security Council
Political Geography:
Global Focus

5924. Tough Policies, Incredible Policies

Author:
Alejandro Neut and Andrés Velasco
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We revisit the question of what determines the credibility of macroeconomic policies here, of promises to repay public debt. The literature has focused on governments. strategic decision to default (or erode the value of outstanding debt via inflation/devaluation). It has also focused on increasing policymakers. utility costs as a way to deter strategic misbehavior. By contrast, we build a model in which default or inflation can occur deliberately (for strategic reasons) or unavoidably (shocks leave no other option). In addition, when it does occur, default or inflation entail pecuniary costs, not just utility costs for the policymaker. In the model with these two features, much conventional wisdom on the determinants of credibility need no longer hold. Tough policies such a as appointing a conservative policymaker, indexing public debt or denominating public debt in foreign currency may reduce, not increase, the credibility of vows to repay debt in full. For some parameter values, these tough policies may also reduce welfare.
Topic:
Debt, Crisis Management, Macroeconomics, Currency, Credibility, and Commitment
Political Geography:
Global Focus

5925. Monetary Policy and the Currency Denomination of Debt: A Tale of Two Equilibria

Author:
Roberto Chang and Andrés Velasco
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Exchange rate policies depend on portfolio choices, and portfolio choices depend on anticipated exchange rate policies. This opens the door to multiple equilibria in policy regimes. We construct a model in which agents optimally choose to denominate their assets and liabilities either in domestic or in foreign currency. The monetary authority optimally chooses to float or to fix the currency, after portfolios have been chosen. We identify conditions under which both fixing and floating are equilibrium policies: if agents expect fixing and arrange their portfolios accordingly, the monetary authority validates that expectation; the same happens if agents initially expect floating. We also show that a flexible exchange rate Pareto-dominates a fixed one. It follows that social welfare would rise if the monetary authority could precommit to floating.
Topic:
Debt, Monetary Policy, Exchange Rate Policy, and Currency
Political Geography:
Global Focus

5926. Why is There No AIDS Vaccine?

Author:
Michael Kremer and Christopher M. Snyder
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We argue that differences in timing of drug and vaccine consumption will lead firms to be biased against developing vaccines. Vaccines are sold before consumers are infected, when they still have private information regarding their infection risk, whereas drugs are sold after consumers are infected, when those with positive valuation have no private information on infection risk. Calibrations suggest that, for sexually transmitted diseases, for which infection risk is highly heterogeneous across consumers, producer surplus from drugs may exceed that from vaccines by a factor of four. Consistent with the model, empirical tests suggest vaccines are particularly unlikely to be developed for sexually transmitted diseases. Biases against vaccines are exacerbated by the durability of vaccines and by the interaction between the timing of vaccine and drug consumption and the temporary protection of intellectual property rights. We extend the analysis to allow for government procurement and for income heterogeneity among consumers. Given that antiretroviral drugs are difficult to deliver in the poor countries where most people infected with HIV/AIDS live, biases against developing a vaccine raise enormous public health concerns.
Topic:
HIV/AIDS, Health, Public Health, and Vaccine
Political Geography:
Global Focus

5927. Sustainability Values, Attitudes, and Behaviors: A Review of Multi-national and Global Trends

Author:
Anthony A. Leiserowitz, Robert W. Kates, and Thomas M. Parris
Publication Date:
12-2004
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This review analyzes five efforts to define sustainability values, including the U.S. National Academy of Sciences, the Earth Charter, the UN Millennium Declaration, and the Global Scenario Group. It then summarizes empirical trends in sustainability values, attitudes, and behaviors, as measured by multi-national and global-scale surveys, related to human and economic development, the environment, and driving forces (population, affluence, technology, and entitlements). The review also summarizes empirical trends related to the values identified by the Millennium Declaration as essential to international relations (e.g., freedom and democracy, equality and shared responsibility), and broader contextual values (e.g., capitalism, globalization, institutional trust, and social change) that have sustainability implications. It then identifies several important attitude-behavior gaps and barriers. Finally this review draws several conclusions regarding future research needs and the value, attitude, and behavioral change needed to achieve sustainability.
Topic:
Environment, Poverty, Science and Technology, Population, Sustainable Development Goals, and Survey
Political Geography:
Global Focus

5928. Corporate Crime in a Globalized Economy: An Examination of the Corporate Legal Conundrum and Positive Prospects for Peace

Author:
Paul Richardson
Publication Date:
05-2004
Content Type:
Journal Article
Journal:
Journal of Public and International Affairs (JPIA)
Institution:
School of Public and International Affairs (SPIA), Princeton University
Abstract:
“This is it. They are going to arrest us all and execute us. All for Shell.” Ken Saro-Wiwa, a leader of the Nigerian Movement for the Survival of the Ogoni People (MOSAP), made this statement two weeks before his arrest in May 1994. Jailed for exposing the company’s role in directing and arming the Nigerian military, Saro-Wiwa’s efforts paved the way for similar campaigns throughout the world, in places as diverse as India, China, Colombia, Chad and Sudan. As the number of such cases has increased over the past decade, so too has the public’s scrutiny. What are the legal and ethical obligations of corporations operating in a conflict zone? How effective is existing international law in ensuring that companies are held accountable for extraterritorial human rights violations? Taking into account existing efforts to address corporate accountability on a global scale, this paper concludes that neither national legislation nor voluntary corporate codes of conduct provide an adequate means to ensure the protection of human rights. Instead, an international system must be created—one with sufficient oversight and monitoring powers to ensure that corporations adopt conflict-sensitive policies that contribute to peace and security
Topic:
Crime, Globalization, International Law, Economy, Peace, and Corporations
Political Geography:
Global Focus

5929. Complex Emergencies and Human Development: A Quantitative Analysis of Their Relationship

Author:
Rosilyne M. Borland
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
School of Public and International Affairs (SPIA), Princeton University
Abstract:
Increasingly, the world’s poorest and most marginalized are also those most affected by armed conflict. The complicated interactions among modern conflicts, poverty, hunger, and disease have led to the emergence of the notion of the “complex emergency.” The widespread occurrence of complex emergencies in the world’s poorest countries, where development efforts are the most needed, has grave consequences for human development. Through an application of quantitative methods, this paper examines the relationship between complex emergencies and development using the human development index developed by the United Nations Development Programme and the typology of complex emergencies developed by the United Nations University World Institute for Development Economics Research. The study demonstrates a relationship between levels of development and types of complex emergencies and suggests that an index which considers the multiple manifestations of complex emergencies would provide a better measurement than a single quantifier. These results point to the need to situate development efforts in the context of complex emergencies in order for them to meet the needs of the world’s most vulnerable populations.
Topic:
Development, United Nations, Armed Conflict, and Emergencies
Political Geography:
Global Focus

5930. CERI: For a theory of nationalism

Author:
Christophe Jaffrelot
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Centre d'Etudes et de Recherches Internationales (CERI)
Abstract:
Nation is state-oriented, whereas nationalism is an ideology which may simply promote one's own identity against others. Therefore, theories of nation-building do not explain nationalism. Other theories adopting a materialist approach do, like Gellner's model in which nationalism appears as resulting from socio-ethnic conflicts, but they ignore the inner mechanism of this ideology. Theories looking at nationalism as an export product from the West also miss this point too. In contrast, a convincing body of theories anchor nationalism in socio-cultural reform. The intelligentsia which undertakes it in order to resist the threat posed by some dominant Other – often from the West, that fascinates them-eventually develops a nationalist attitude, because it is not willing to imitate the West but strive to restore its culture by incorporating into it prestigious features of the West through the invention of a convenient Golden Age, the cornerstone of nationalism. This approach finds a parallel in the theories of ethnicity which do not apply the primordialist paradigm but focus on the making of group boundaries. Barth highlights the decisive role of the relationship to the Other and the little importance of cultural contents – compared to the maintenance of group boundaries – in the making of ethnic identities, in such a way that there are more affinities between his theory of ethnicity and theories of nationalism than between the latter and theories of the nation.However, one can construct an integrated model of nationalism by organising different theories in a sequence. While the ideology-based approach comes first, the creation of a nationalist movement implies the rise of socio-economic conflicts and the massification of nationalism, a process of nation-building.
Topic:
International Relations, Demographics, Development, and Nationalism
Political Geography:
Global Focus

5931. Sovereignty and the Politics of Identity in International Relations

Author:
Adrian Kuah
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
This paper examines the linkages between the norms and practices of sovereignty and the discourses on the formation of political identity and communities amidst tewnty-frist century socio-political and economic transformations. By undertaking a postmodern deconstruction of sovereignty, this paper recognizes sovereignty as a subjective, and hence fallible, social construct. It further contends that sovereignty as an Enlightenment project has become untenable with its promise of a universal solution to spatiotemporal problems. Against the backdrop of globalization, this paper problematizes sovereignty and argues that it is inextricably tied to the politics of identity. It also raises the idea of sovereignty as an analogue of the Englightenment model of the rational sovereign Man. Enshrined most preeminently in the nation-state, sovereignty represents simultaneously the locus and the limit of what is regarded as political identity. Furthermore, the norms and practices of sovereignty reflect changes in notions and the foci of identity. This paper attempts to locate explanations for the evolution of sovereignty at the level of identity formation, and points out that the politics of identity and the politics of sovereignty are a mutually constitutive, intersubjective discourse. Finally, this paper states that by persistently defining sovereignty in terms of indivisibility and exclusivity, sovereignty itself is becoming an obstacle to human emancipation.
Topic:
International Relations and Nationalism
Political Geography:
Global Focus

5932. Reputation and War: Explaining the Intractability of Territorial Conflict

Author:
Barbara F. Walter
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
Arnold A. Saltzman Institute of War and Peace Studies
Abstract:
Between 1940 and 1996, governments were seventy percent less likely to negotiate with rebels seeking independence or greater territorial autonomy than with rebels seeking any other goal. Current theories suggest that this is due to the economic, strategic, or psychological value of territory under dispute. I argue that a government's decision to negotiate has more to do with the signal the government wishes to send to future challengers than with any specific characteristics of the land in question. If the government believes it could face multiple separatist challenges in the future, it will invest in a reputation for toughness now rather than face additional challengers down the road. If the government knows it will face such a challenge only once, there is less reason to invest in a reputation and negotiation is likely to result. An analysis of all self-determination movements between 1940 and 2000 demonstrates that governments of multiethnic states are far less likely to negotiate than are governments that preside over more homogenous populations.
Topic:
Security, Peace Studies, and Politics
Political Geography:
Global Focus

5933. Micro-Economic Approaches to Evaluating the Burden of Malaria

Author:
Pia Malaney
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
The links between malaria and poverty are both obvious and subtle. While the correlation between the two is apparent, directions and mechanisms of causation are less so, and different methodological approaches to understanding the relationship provide widely divergent perspectives on the impact of the disease. Recent macroeconomic studies have suggested that in highly malarious countries the disease may be responsible for reducing economic growth by up to 1.3 percentage points a year. This methodology, however, functions independently of the chains of causation and cannot shed much light on underlying mechanisms. Micro-economic studies, which aggregate the cost per case to households, find a much smaller impact, generally less than one percent of per capita GDP. The traditional cost-of-illness methodology, which forms the basis of most of these studies, however, was designed to study illnesses that represent a far smaller disease burden. The pandemic nature of malaria presents economic costs that the traditional model is simply not able to capture. The paper explores the difference between the results of the different methodological approaches, examining some of the mechanisms through which malaria can affect long-term economic growth and development, and expands the cost-of-illness methodology to incorporate these effects.
Topic:
Economics, Health, Poverty, and Malaria
Political Geography:
Global Focus

5934. Promoting U.S. Economic Growth and Security Through Expanding World Trade: A Call for Bold American Leadership

Author:
Research and Policy Committee of the Committee for Economic Development
Publication Date:
06-2003
Content Type:
Special Report
Institution:
The Conference Board
Abstract:
This report presents a leadership vision of a strong and open global trading system, and urges the United States and its trading partners to adopt vital policy reforms, including delinking agricultural subsidies from prices and production while opening agricultural markets everywhere, and eliminating all tariffs and non-tariff barriers in both manufacturing and services.
Topic:
Security, International Trade and Finance, Leadership, Economy, and Economic Growth
Political Geography:
North America, Global Focus, and United States of America

5935. Reducing Global Poverty: The Role of Women in Development

Author:
Research and Policy Committee of the Committee for Economic Development
Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
In the developing world, women generally face greater difficulty than men in securing necessary resources and basic services—education, health, and nutritional services, physical and financial capital, and land—that would make them more productive and allow them to earn higher incomes. In this report, CED calls attention to the role women play in developing countries. This update expands on that recommendation and goes further to suggest specifically that U.S.-based businesses should support the equal status of women in all of their practices and programs in developing countries. They also should support U.S. ratification of the UN Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).
Topic:
Development, Poverty, United Nations, Women, and Economic Development
Political Geography:
Global Focus

5936. Reducing Global Poverty: Engaging the Global Enterprise

Author:
Research and Policy Committee of the Committee for Economic Development
Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
This report is the first update to the 2002 CED report A Shared Future: Reducing Global Poverty. In this report, CED recommends that U.S.-based enterprises strive to maintain the same high standards of corporate engagement in all countries in which they operate, making no distinction between operations in the United States and abroad, yet recognizing that specific actions need to take into account national customs and traditions.
Topic:
Poverty, Business, Economic Policy, and Economic Development
Political Geography:
Global Focus

5937. Politics and Passions: the Stakes of Democracy

Author:
Chantal Mouffe
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
Centre for the Study of Democracy, University of Westminster
Abstract:
For some time I have been concerned with what I see as our growing inability to envisage in political terms the problems facing our societies: that is, to see them as problems the solutions to which entail not just technical but political decisions. These decisions would be made between real alternatives, the existence of which implied the presence of conflicting but legitimate projects of how to organize our common life. We appear to be witnessing not the end of history but the end of politics. Is this not the message of recent trends in political theory and sociology, as well as of the practices of mainstream political parties? They all claim that the adversarial model of politics has become obsolete and that we have entered a new phase of reflexive modernity, one in which an inclusive consensus can be built around a 'radical centre'. All those who disagree with this consensus are dismissed as archaic or condemned as evil. Morality has been promoted to the position of a master narrative; as such, it replaces discredited political and social discourses as a framework for collective action. Morality is rapidly becoming the only legitimate vocabulary: we are now urged to think not in terms of right and left, but of right and wrong.
Topic:
Conflict Resolution, Government, Politics, and Religion
Political Geography:
Global Focus

5938. Does Conflict Beget Conflict? Explaining Recurrent Civil War

Author:
Barbara F. Walter
Publication Date:
06-2002
Content Type:
Working Paper
Institution:
Arnold A. Saltzman Institute of War and Peace Studies
Abstract:
This article seeks to explain why some countries experience recurring civil war while others do not. It argues that renewed war has less to do with the attributes of a previous war, as many people have argued, and more to do with the incentives individual citizens have to join rebel groups at any given point in time. Civil wars will have little chance to get off the ground unless individual farmers, shopkeepers, and workers choose to enlist in the rebel armies that are necessary to pursue a war, and enlistment is likely to be attractive when two conditions hold: the status quo for the average citizen is perceived to be worse than the possibility of death in combat, and there is no non-violent outlet for political change. An analysis of all civil wars ending between 1945 and 1996 suggests that improvements in basic living conditions and in the average person's access to political participation have a significant negative effect on the likelihood of renewed war. Countries that are able to increase the economic well-being of their citizenry, and create a more open political system are less likely to experience multiple civil wars regardless of what happened in a previous conflict.
Topic:
Security, Peace Studies, and Politics
Political Geography:
Global Focus

5939. Institutions, Geography, Regions, Countries and the Mobility Bias

Author:
Andrew Warner
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Recent research on the ultimate causes of the large differences in economic development across countries has framed the issue as a competition between geography and institutions. Some papers claim to have evidence that geography explains nothing after controlling for institutions. This paper argues and shows evidence that geography correlates with economic activity across regions within countries where institutions are far more constant than across countries. The paper also argues that mobility of factors can in theory completely mask the impact of geography if one looks only at output per-capita. Comparing cross-region with cross-country data and comparing regressions of output density with regressions of output per-capita, the paper finds evidence of this mobility bias. Finally the paper tries to integrate re-cent lines of research with an earlier line that looked at regional data as a laboratory to test for economies of scale. Overall the paper finds evidence for three important determinants of spatial income levels: geography, institutions and agglomeration economies associated with very large urban areas. One needs to consider all three to fully explain the pattern of economic activity across space.
Topic:
Institutions, Mobility, Economic Development, and Geography
Political Geography:
Global Focus

5940. Impact of Patents on Access to HIV/AIDS Drugs in Developing Countries

Author:
Joan-Ramon Borrell and Jayashree Watal
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This paper uses sales data on HIV/AIDS drugs in a sample of 34 low and middle income countries between 1995 and 1999 to assess empirically the impact of patents on unsubsidized access to a new drug therapy. There can be two possible effects of patents on access to new drugs in developing countries. On the one hand, patents may constrain access to new drugs through less competition and higher prices. On the other hand, patents may promote access to new therapy by encouraging innovators to launch new drugs in low and middle-income countries soon after introducing them in high-income countries. The net effect is theoretically ambiguous and, therefore, it is an empirical matter to evaluate. Our main finding is that patent rights do have a negative effect on unsubsidized access to HIV/AIDS drugs. Between 1995 and 1999, switching all HIV/AIDS drugs from a patent regime to a no patent regime would have actually increased access to therapy at least by 30%. However, we also find that the negative impact of patents on access differs strongly over time, and across countries with different income levels. Patents hurt access most in the early period from the date the drug is launched in the US, and in the countries of our sample with the relatively higher per capita income levels.
Topic:
HIV/AIDS, Health, Developing World, Drugs, and Patents
Political Geography:
Global Focus and United States of America

5941. Nutrition Knowledge Versus Schooling in the Demand for Child Micronutrient Status

Author:
Steven Block
Publication Date:
08-2002
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This study extends the literature on the demand for child height to consider the demand for child micronutrient status. Micronutrient malnutrition is a pervasive and debilitating problem in many developing countries. A central focus concerns the distinct roles of maternal schooling versus maternal nutrition knowledge as determinants of micronutrient status. Applying both parametric and non-parametric techniques to Indonesian household data, the study finds that critical determinants include: child gender and age, the number of children in the household, household expenditure levels, access to water, and maternal nutrition knowledge. Maternal schooling contributes to child micronutrient status primarily through its effect on nutrition knowledge (for which schooling is not the primary source), and possibly through its effect on household expenditures.
Topic:
Education, Health, Human Resources, and Nutrition
Political Geography:
Global Focus

5942. Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development

Author:
Dani Rodrik, Arvind Subramanian, and Francesco Trebbi
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We estimate the respective contributions of institutions, geography, and trade in determining income levels around the world, using recently developed instruments for institutions and trade. Our results indicate that the quality of institutions "trumps" everything else. Once institutions are controlled for, measures of geography have at best weak direct effects on incomes, although they have a strong indirect effect by influencing the quality of institutions. Similarly, once institutions are controlled for, trade is almost always insignificant, and often enters the income equation with the "wrong" (i.e., negative) sign, although trade too has a positive effect on institutional quality. We relate our results to recent literature, and where differences exist, trace their origins to choices on samples, specification, and instrumentation.
Topic:
Institutions, Trade, Economic Development, Integration, and Geography
Political Geography:
Global Focus

5943. CERI: Politics Behind The Mask: Studying Contemporary Carnivals in Political Perspective, Theoretical and Methodological Suggestions

Author:
Denis-Constant Martin
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
Centre d'Etudes et de Recherches Internationales (CERI)
Abstract:
Carnivals are a type of rite of renewal where mask and laughter spur the invention of highly symbolic modes of expression. They offer opportunities for the study of social representations and, since they are both recurring and changing, they constitute a ground where not only social change can be assessed, but where the meanings of social change can be best understood. The first part of this paper reviews and discusses theories of carnival, in particular those related to its relationship to power and social hierarchies. The second part proposes a few methodological suggestions for the study of carnival from a political perspective, emphasizing semiotic analysis and surveys using non-directive methods.
Topic:
Civil Society, Development, Government, and Politics
Political Geography:
Global Focus

5944. "Injustes" sanctions: les constructions internationales de la dénonciation des embargos et l'escalade de la vertu abolitionniste

Author:
Ariel Colonomos
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
Centre d'Etudes et de Recherches Internationales (CERI)
Abstract:
At a time when the use of sanctions has intensified considerably, criticism directed at embargos is gaining ground. In interpreting this significant rise in opposition, this article shows how and why mobilization against sanctions has developed, what sort of actors are involved and what forms it takes. This research brings to light the formation of networks and coalitions against both unilateral and multilateral measures. It underlines the role, status and scope of those whose business it is to fashion norms, by questioning the main analytical categories their strategies are usually based on. An expertise in embargo assessment, destined to levy judgment on a type of very specific violence, is developing in both national and transnational public spaces. This research, analyzing the emergence of this expertise, sheds light on the development of a conception of unjust sanctions and identifies the mechanisms of its construction on an international scale. This text in particular underlines the importance of traditions of just war, especially their reinterpretation by actors on the international scene and its moral norm-makers. Considering the development of these standards allows us to grasp one of the most decisive aspects of the use of force in the post-cold war world, as well as the establishment of certain international reforms.
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
Global Focus

5945. Grants Vs . Investment Subsidies

Author:
Ashok S. Rai and Tomas Sjöström
Publication Date:
12-2001
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
How should a government intervene to help the credit constrained poor? We study an economy where productivity and wealth are unobserved, and loans must be collateralized. We show that the e¢cient policy typically consists of o¤ering both a grant and an investment subsidy. Everybody will take the grant and only the relatively productive will take the subsidy. This policy reduces but does not eliminate investment distortions.
Topic:
Poverty, Investment, Collateral, Credit Constraints, Intervention, and Loan Subsidy
Political Geography:
Global Focus

5946. The global financial markets after September 11: What has changed?

Author:
Roger S. Leeds
Publication Date:
10-2001
Content Type:
Commentary and Analysis
Institution:
Argentine Council for International Relations (CARI)
Abstract:
We know now that the world has changed unimaginably and will never be quite the same, not for Americans. And not for the world, and it is going to require that institutions like CARI or the Council on Foreign Relations in New York take a new approach to how they look at the world and the types of programs they run.
Topic:
International Relations, Markets, 9/11, and Crisis Management
Political Geography:
Global Focus

5947. Making the Grade 2000: Second Annual Review of Fissile Material Control Efforts

Author:
Kevin O'Neill
Publication Date:
04-2000
Content Type:
Special Report
Institution:
Institute for Security and International Studies (ISIS)
Abstract:
A little over a year ago, ISIS initiated an annual review of fissile material controls covering a broad spectrum of initiatives. To do so, 19 separate initiatives were identified and assessed. Based on this assessment, grades were awarded on a scale of A, B, C, D, and F, where an “A” is excellent and an “F” is failing. Numerically, an “A” corresponds to a numerical grade of four, and an “F” to zero. The results of the first review were disappointing. Only 12 of the 19 initiatives received a passing grade of “C” or higher. The average grade of the initiatives was a “C”-showing an unfortunate level of mediocrity across the fissile material control agenda. In ISIS’s 2000 review, we found that the outlook is worse today than it was a year ago. Rather than make progress during the past 12 months, the overall fissile material control agenda fared poorly. The average grade of the identified initiatives fell from a “C” to a “C-minus.” This overall finding is borne out if one looks at the individual grades assigned to each of the 19 identified initiatives. ISIS judged that five initiatives remained essentially static, nine received lower grades, and five initiatives received higher grades.
Topic:
Arms Control and Proliferation, Nuclear Weapons, Fissile Material, and Nuclear Energy
Political Geography:
Global Focus

5948. Still Dead After All These Years: Interpreting the Failure of General Equilibrium Theory

Author:
Frank Ackerman
Publication Date:
11-1999
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
For years after the Spanish dictator actually died, the mock television newscast on “Saturday Night Live” was periodically interrupted with a “news flash” informing viewers that “General Franco is still dead!” This served both to satirize the breathlessly urgent style of television news reporting, and to suggest that after many decades of taking an absolute ruler for granted, the world needed more than one reminder that he was no longer alive and well. Much the same is true for general equilibrium theory. In the course of its long decades of rule over the discipline of economics, general equilibrium became established as the fundamental framework for theoretical discourse. Its influence continues to spread in policy applications, with the growing use of computable general equilibrium models. It has successfully colonized much of macroeconomics, with the insistence on the derivation of rigorous microfoundations for macro models and theories. General equilibrium theory is widely cited in a normative context, often in textbooks or semitechnical discussion, as providing the rigorous theoretical version of Adam Smith’s invisible hand and demonstrating the desirable properties of a competitive economy.
Topic:
Economics and General Equilibrium Theory
Political Geography:
Global Focus

5949. New Perspektives of International and German Development Policy

Author:
Dirk Messner
Publication Date:
12-1998
Content Type:
Special Report
Institution:
Institute for Development and Peace
Abstract:
Remarks on shaping globalization: Perspectives of development cooperation and elements of global governance (Dirk Messner); Old Wine in New Skins: Some critical comments on the UNDP Reports (Franz Nuscheler); The position of development policy: a functional definition (Adolf Kloke-Lesch).
Topic:
Development, Globalization, Governance, and United Nations Development Program (UNDP)
Political Geography:
Global Focus

5950. Is the Third Wave of Democratization Over? The Imperative of Consolidation

Author:
Larry Diamond
Publication Date:
03-1997
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
In Kellogg Institute Working Paper no. 236 I charted the progress of what Huntington has called the 'third wave' of global democratic expansion, from 1974 to the present, distinguishing among the various types of democracy that have resulted. If I am right in my analysis, democracy, and especially liberal democracy, will not expand in the coming years. It could recede into a reverse wave. It could just keep persisting, becoming less liberal and more artificial in the process. Or it could stabilize and sink firm roots in countries where it is now present-and even liberal-but not secure. If the historical pattern is to be defied and a third reverse wave avoided, the overriding imperative in the coming years is to consolidate those democracies that have come into being during the 'third wave.' In this paper I examine various conceptual approaches to consolidation and identify a number of challenges faced by new and insecure democracies. The paper concludes with a discussion of future prospects for democracy worldwide.
Topic:
Democratization, Globalization, Democracy, and Consolidation
Political Geography:
Global Focus