More pirates–this time in China

By Richard Norman

It’s been a bad week for Mickey Mouse. First in the Middle East:

A Hamas-run television station defied Israel and the Palestinian government on Friday by continuing to air a controversial children’s puppet show with a Mickey Mouse lookalike preaching resistance. Israel and Jewish groups have slammed the Al-Aqsa programme over calls made by the copycat mouse named Farfur and by a little girl for resistance against Israel and the United States, and for its overtly Islamist message. (Breitbart)

Then in China where a faux-Disney park has recently been in the news. Continue reading

Wolfowitz in 1995

By Richard Norman

As World Bank President Paul Wolfowitz waits to hear from the Bank’s Board of Directors about his future (he’s accused of giving a large pay-raise to his companion), I thought this video from 1995 might be interesting. Here Wolfowitz, talking about Bosnia, describes nation building as "a futile exercise" and, contra Brent Scrowcroft (the other guest), favours uncommitted intervention, efforts not to save the Bosnian Muslims, but just to help adjust their position in the conflict.
Continue reading

Free Markets Need Free People

Mexican border.JPGBy Nick Li

A recent report written for the US Council on Foreign Relations by UC San Diego economist Gordon Hanson challenges the conventional wisdom on illegal migration. Hanson’s previous work has also overturned some of the conventional wisdom, like the idea that Mexican migrants to the US are "negatively selected," i.e. they are the poorest and least educated Mexicans. In fact, Mexican migrants appear to be mildly positively selected, having above average skill and education – 32.6% of residents of Mexico have completed between 10 and 15 years of schooling, while the number for recent Mexican immigrants to the US is 64.8%.
Continue reading

Doha, Cotton and fluff

lamy.jpgBy Nick Li

I feel sorry for World Trade Organization Director-General Pascal Lamy. He has one of the hardest jobs in the world – forging a multilateral agreement between 150 member countries that requires explicit consensus on a wide range of issues that are politically charged in all countries, while trying to comply with the broader goal of `development’ set out in Doha, Quatar 2001.
Continue reading

The White Man’s Burden and the Miracle of Free Markets (Part Two)

easterly.jpgBy Nick Li
 
Perhaps the most myopic part of Easterly’s prescriptions for Africa and the developing world is his neglect of the subtleties of state and market interactions. One of the more interesting approaches I have seen recently is by a trio of economic historians – Nobel Laureate Douglass North, Barry Weingast and John Wallis – in their recent piece "A Conceptual Framework for Interpreting Recorded Human History." I quote from their abstract:
 
Neither economics nor political science can explain the process of modern social development. The fact
that developed societies always have developed economies and developed polities suggests that the connection between economics and politics must be a fundamental part of the development process.
Continue reading

The White Man’s Burden and the Miracle of Free Markets (Part 1)

By Nick Li
 
NYU Professor William Easterly, former World Bank Economist and author of "The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good" is at it again. He has an editorial in Saturday’s Wall Street Journal where he repeats his well-known positions – "African governments… have ranked low for decades on most international comparisons of corruption, state failure, red tape, lawlessness and dictatorship… the results of statist economics by bad states was a near-zero rise in GDP per capita for Ghana, and the same for the average African nation, over the last 50 years…there have been plenty more examples of poor countries which grew rapidly without much aid – China and India… meanwhile, aid amounted to 14% of total income year in and year out in the average African country since independence… Africa’s poverty trap is well covered in the media, since it features such economists as Angelina Jolie, Madonna, Bono, and Brad Pitt."
Continue reading

IMF Gets a New Chief Economist

simon-johnson2.jpgBy Nicholas Li

On February 28th Simon Johnson was named the new chief economist at the IMF. Professor Johnson is an economist at the MIT business school with previous work experience at the IMF. He takes over from Raghuram Rajan, an economist at the University of Chicago. As chief economists, their responsibilities include setting the IMF’s research agenda and also providing major input into policy.

The interesting thing about Johnson and his predecessor Rajan is that their research is concentrated in financial institutions and institutional economics more broadly. Johnson is perhaps best known for being the J in AJR (Acemoglu, Johnson, and Robinson), the famous trio of economists who wrote "The Colonial Origins of Comparative Development" the most cited article on growth and development economics in the last decade. That paper examines how malaria and other ecological conditions that influenced early settlement patterns (in particular the decision by white Europeans to settle or to set up "extractive" colonial regimes) influenced the quality of institutions (in particular the strength of property rights, the judiciary, and democracy) and subsequent growth patterns in the 20th century.
Continue reading

What’s going on in Argentina?

Bandera-argentina.jpgBy Nicholas Li

Argentina is no stranger to inflation. Foreign investors, labor unions, and international financial institutions like the IMF and World Bank have always kept a close eye on inflation and pressured the government to control it. Argentina’s ultimately disastrous decision to adopt a currency board and peg the peso to the dollar in 1991 was born out of a desire to bring inflation under control. In Latin America, Ecuador has dollarized for similar reasons. Argentina is much more like Ecuador than El Salvador, the other country that dollarized recently to promote closer economic ties with the United States and improve financial intermediation.
Continue reading

Are UN parking fines an objective measure of cultural norms of corruption?

duncanmeter.jpgBy Nicholas Li

The weakness of conventional measures of cross-country corruption, such as the World Bank index (available here ), is that they rely on subjective perceptions of corruption (business leaders and country experts are asked to rate countries on a numerical scale in terms of corruption) and they cannot isolate the impact of cultural norms and attitudes towards corruption from the legal enforcement environment.
Continue reading

The World Bank’s Anti-Corruption Programs

450px-World_bank.jpg
By Nicholas Li

Under the leadership of President Paul Wolfowitz, the World Bank has increased its lending and research focus on the issues of corruption and governance. While this focus had already begun prior to Wolfowitz’s appointment as President in 2005, he has made corruption and governance the primary focus of the Bank’s agenda, representing $4.5 billion dollars or 19% of the Bank’s new lending in 2006. As the new President put it :

Corruption drains resources and discourages investment. It benefits the privileged and deprives the poor. It threatens their hope for a better quality of life and a more promising future. Accountable and sound governance, on the other hand, nurtures the soil in which a robust civil society and an energetic private sector can flourish.

Continue reading