Friday, December 29, 2006

Cardboard Citizens Managing Director?

Well that’s a job advertised by the British government with an annual salary of 45,000 pounds according to the latest Non-Job Report from The Taxpayer’s Alliance;

"The Annual Non-Job Report 2006 was written to assess the cost to taxpayers of a growing public sector wage bill being further bloated by positions of no apparent value. Building on last year’s Annual Non-Job Report 2005 and our recent Public Sector Rich List, we undertook the task of calculating the total cost to taxpayers of all the jobs advertised in The Guardian newspaper’s Society supplement in 2006"

Related;
Spend-O-Meter

Favorite Economics Blogs of Year 2006

Heavy Weights
1. Café Hayek
2. Economist’s View
3. EconLog
4. New Economist
5. The Austrian Economists
6. Marginal Revolution

Underappreciated
1. Stumbling and Mumbling
2. The Filter
3. Bonobo Land
4. Agoraphilia
5. Organization and Markets
6. Trade Diversion

New Comers
1. Overcoming Bias
2. Free Exchange
3. Economic Investigations
4. Economontior

Used to be Very Good
1. PSD Blog (after Pablo left quality and frequency of updates has fallen)
2. Ben Muse
3. ArgMax

Ethnic
1. An Economist in Paradise
2. On Indonesia and Economy
3. Atanu Dey on India’s Development

Specialized
1. Risk Markets and Politics
2. Healthcare Economist

Best Development Issues Blog
Centre for Global Development blog and Poverty and Growth blog

Best Macroeconomics Blog
Brad Setser’s blog and Econbrowser

Those who should start blogging
Lawrence Summers
David Warsh
Jagdish Bhagwati
Stephen Roach

Best Blog for Econ 101
Greg Mankiw’s Blog and Aplia Econ Blog

Like to see
A good econometrics blog – other than Statistical Modelling

Happy New Year and a wonderful Eid


Early risers: Child laborers head to work at sunrise on the banks of the River Ganges in Allahabad, India. Their job is collecting recyclables from street trash and selling them.

More Pictures of the Year from SF Gate, BBC and TIME.

How to Justify Killing a Tyrant- using Shakespeare


Talk of the day- Shakespeare, Rhetoric and Politics: how to justify killing a tyrant;

“If you think that the idea of finding a justification for overthrowing a tyrant is only a contemporary concept, think again. Defining tyranny and working out justifications for killing tyrants were hotly topics towards the end of the 16th century. And those debates are reflected in Shakespeare's play, Julius Caesar. Quentin Skinner is the Regius Professor of Modern History at the University of Cambridge and he is in Australia for a conference on Shakespeare and Political thought at the ANU. The paper he is giving is called "Julius Caesar and the Justification of Tyrannicide".

Related;
How to appreciate Shakespeare

Toolkit on Randomized Trials

An interesting working paper-Using Ramdomization in Development Economics Research: A Toolkit by Esther Duflo, Rachel Glennerster, Michael Kremer;

"This paper is a practical guide (a toolkit) for researchers, students and practitioners wishing to introduce randomization as part of a research design in the field. It first covers the rationale for the use of randomization, as a solution to selection bias and a partial solution to publication biases. Second, it discusses various ways in which randomization can be practically introduced in a field settings. Third, it discusses designs issues such as sample size requirements, stratification, level of randomization and data collection methods. Fourth, it discusses how to analyze data from randomized evaluations when there are departures from the basic framework. It reviews in particular how to handle imperfect compliance and externalities. Finally, it discusses some of the issues involved in drawing general conclusions from randomized evaluations, including the necessary use of theory as a guide when designing evaluations and interpreting results."

Related;
Inverse Probability Weighted Estimation for General Missing Data Problems
Cluster Sample Methods in Applied Econometrics: An Extended Analysis

Evaluating Microfinance Program Innovation with Randomized Control Trials: An Example from Group Versus Individual Lending

Using randomized control designs in evaluating social sector programs in developing countries
Cash transfers, conditions, school enrollment, and child work : evidence from a randomized experiment in Ecuador

Thursday, December 28, 2006

This and That

Should women propose? - Tim Harford
On the influence and authority of conscience, and other considerations not found in any economics textbook -David Warsh

A Robot in Every Home- Bill Gates
Recalculating the Costs of Global Climate Change- Hal Varian

Milton Friedman: Objective scientist first, free-market promoter second- Mark Skousen
John Kenneth Galbraith understood capitalism as lived - not as theorized- Stiglitz
Friedman v Galbraith by Peter Boettke

Am I the Buddha? How To Tell If You're The Reincarnation Of Siddhartha.
Will the Dam Break in 2007?

A New Era for Islamic Science?
Muslim pilgrims say safety in God's hands at haj
Malaysian Activists to Study Polygamy
Muslims Against Holocaust Denial
Seeing Muhammad as Both a Prophet and a Politician

From price bubbles to flat sales: the story of champagne -John Kay
We're Watching You, Slacker- Tim Harford

A famously open mind.
Can’t Get No Satisfaction- In a culture where work can be a religion, burnout is its crisis of faith

Paul Krugman: A Failed Revolution
The Future of the Equity Premium- Delong
Universal 401(k) Accounts Would Bring the Poor Into the Ownership Society- Tyler Cowan
Weighing the costs of justice

A Research Report on iTunes Sales-Becomes Shot Heard 'Round the Net
Rational and Behavioral Reasons for Gift-Giving
Who's Counting: Which 'Experts' Make Better Political Predictions?
Why Do We Give Gifts?
In Minnesota, Case Study for Political Shake-Up

Latest Carnival of the Capitalist

'Wanted: Economics Stories' David Friedman

Quote of the Day

“I am convinced that at least half of what one learns at a college or university is learned from fellow students. They live together and they argue among
themselves with vigor and candor that are inappropriate in discussions with faculty members, even tolerant ones. If one could attract good students without a good faculty, one could run a fine university very economically.”

- George Stigler, Memoirs of an Unregulated Economist, p.26,

Tuesday, December 26, 2006

What World Bankers are reading!

The most popular articles from last two weeks at IMF-World Bank Joint Library;

Technology and innovation in developing East Asia: an interpretive survey by Hal Hill

Accounts and accountability: theoretical implications of the right-to-information movement in India / Rob Jenkins, Anne Marie Goetz

Productivity, innovation and R and D: micro evidence for Italy / Maria Laura Parisi, Fabio Schiantarelli and Alessandro Sembenelli

Symposium: trade policy in low income, small and remote economies

The institutions of monetary policy / Mervyn King

A stable international monetary system emerges: inflation targeting is Bretton Woods, reversed/ Andrew K. Rose

Smarter offshoring / Diana Farrell

Russian equities and corporate governance: special report / Ben Aris

The labor-market impact of high-skill immigration / George J. Borjas

Oil for what? Illicit Iraqi oil contracts and the U.N. Security Council / Paul Heaton

Neuroeconomics: how neuroscience can inform economics / Colin Camerer, George Loewenstein and Drazen Prelec

The role of public infrastructure and subsidies for firm location and international outsourcing / Hartmut Egger, Josef Falkinger

Reforms and growth in transition: re-examining the evidence / Elisabetta Falcetti, Tatiana Lysenko and Peter Sanfey

The politics and economics of offshore outsourcing / N. Gregory Mankiw, Phillip Swagel

Can Iraq overcome the oil curse? / Robert Looney

Fundamental equilibrium exchange rate for the Polish zloty / Micha± Rubaszek

The new EU member states and Austria: economic developments in the first year of accession / Peter Havlik ... [et al.]

Can payments for environmental services help reduce poverty? An exploration of the issues and the evidence to date from Latin America / Stefano Pagiola, Agustin Arcenas and Gunars Platais

Economic policy and prospects in Iraq / Christopher Foote ... [et al.]

Corruption in public service delivery: experience from South Asia's water and sanitation sector / Jennifer Davis

The Finesse in Indian Politics





The collection via 'A Dravidian Shade of Scarlet'

Talk of the Day- Why?



Interview with sociologist Charles Tilly, author of ‘Why? What happens when people give reasons…and why’

Here’s a review of the book by Malcolm Gladwell;

“In "Why?" (Princeton; $24.95), the Columbia University scholar Charles Tilly sets out to make sense of our reasons for giving reasons. In the tradition of the legendary sociologist Erving Goffman, Tilly seeks to decode the structure of everyday social interaction, and the result is a book that forces readers to reëxamine everything from the way they talk to their children to the way they argue about politics.

In Tilly's view, we rely on four general categories of reasons. The first is what he calls conventions—conventionally accepted explanations. Tilly would call "Don't be a " a convention. The second is stories, and what distinguishes a story ("I was playing with my truck, and then Geoffrey came in . . .") is a very specific account of cause and effect. Tilly cites the sociologist Francesca Polletta's interviews with people who were active in the civil-rights sit-ins of the nineteen-sixties. Polletta repeatedly heard stories that stressed the spontaneity of the protests, leaving out the role of civil-rights organizations, teachers, and churches. That's what stories do. As Tilly writes, they circumscribe time and space, limit the number of actors and actions, situate all causes "in the consciousness of the actors," and elevate the personal over the institutional.

Then there are codes, which are high-level conventions, formulas that invoke sometimes recondite procedural rules and categories. If a loan officer turns you down for a mortgage, the reason he gives has to do with your inability to conform to a prescribed standard of creditworthiness. Finally, there are technical accounts: stories informed by specialized knowledge and authority. An academic history of civil-rights sit-ins wouldn't leave out the role of institutions, and it probably wouldn't focus on a few actors and actions; it would aim at giving patient and expert attention to every sort of nuance and detail.

Tilly argues that we make two common errors when it comes to understanding reasons. The first is to assume that some kinds of reasons are always better than others—that there is a hierarchy of reasons, with conventions (the least sophisticated) at the bottom and technical accounts at the top. That's wrong, Tilly says: each type of reason has its own role.

Tilly's second point flows from the first, and it's that the reasons people give aren't a function of their character—that is, there aren't people who always favor technical accounts and people who always favor stories...”

Via orgtheory.net

Let’s Make Peace

A recent NYT op-ed of Thomas Cahill about early 13th-century friar Francis of Assisi who tried to make peace during the crusades;

Francis sailed across the Mediterranean to the Egyptian court of al-Malik al-Kamil, nephew of the great Saladin who had defeated the forces of the hapless Third Crusade. Francis was admitted to the august presence of the sultan himself and spoke to him of Christ, who was, after all, Francis’ only subject.

Trying to proselytize a Muslim was cause for on-the-spot decapitation, but Kamil was a wise and moderate man, who was deeply impressed by Francis’ courage and sincerity and invited him to stay for a week of serious conversation. Francis, in turn, was deeply impressed by the religious devotion of the Muslims, especially by their five daily calls to prayer; it is quite possible that the thrice-daily recitation of the Angelus that became current in Europe after this visit was precipitated by the impression made on Francis by the call of the muezzin (just as the quintessential Catholic devotion of the rosary derives from Muslim prayer beads).

It is a tragedy of history that Kamil and Francis were unable to talk longer, to coordinate their strengths and form an alliance. Had they been able to do so, the phrase “clash of civilizations” might be unknown to our world.

Francis went back to the Crusader camp on the Egyptian shore and desperately tried to convince Cardinal Pelagius Galvani, whom Pope Honorius III had put in charge of the Crusade, that he should make peace with the sultan, who, despite far greater force on his side, was all too ready to do so. But the cardinal had dreams of military glory and would not listen. His eventual failure, amid terrible loss of life, brought the age of the crusades to its inglorious end.

Related;
End of a Vision

Monday, December 25, 2006

What are the costs of reducing catastrophes to zero?

An interesting working paper 'On the Welfare Costs of Consumption Uncertainty' by Barro;

"Satisfactory calculations of the welfare cost of aggregate consumption uncertainty require a framework that replicates major features of asset prices and returns, such as the high equity premium and low risk-free rate. A Lucas-tree model with rare but large disasters is such a framework. In a baseline simulation, the welfare cost of disaster risk is large -- society would be willing to lower real GDP by about 20% each year to eliminate all disaster risk, including wars. In contrast, the welfare cost from usual economic fluctuations is much smaller, though still important -- corresponding to lowering GDP by around 1.5% each year."

Via The Economist’s blog

Q & A with Stiglitz on Iraq War


Rolling Stone has an interview with Stiglitz on the costs of Iraq War;

What's wrong with dropping a lot of money on the Iraq War? Didn't World War II pull America out of the Great Depression?
War is a lousy form of economic stimulus. The bang you get for the buck is very low. If we hadn't had to fight during the Depression, we would have become a much richer country by investing the money we spent on the war. Think of the Nepalese contractors doing work in Iraq. They spend their money in Iraq or Nepal -- not in America.

Because the war drove up oil prices, we are also giving more money to Saudi Arabia, Iran and Venezuela. It follows that we are not investing that money. And instead of spending the money we have left on things that will make us wealthier, we are spending it in ways that have just the opposite effect. I don't want to reduce this to cold, hard economics, but when you educate young people for twelve to eighteen years, you're investing a lot of money in them. If you then have them killed, maimed and debilitated, you destroy capital.

How did you arrive at the $2 trillion figure?
There were three parts to the calculations that I made with Linda Bilmes, a professor of public finance at Harvard. The first part is based on actual expenditures -- the impact on the federal budget. But the budget doesn't include a lot of expenditures we will be making in the future as a result of the war today, like paying for the health care and disability benefits of all the people who have been injured. These are lifetime expenditures, but they aren't included in the $600 million a year the Defense Department expects to spend on Iraq. They're just talking about the hardware of war.

The second part of our calculations estimates future expenditures to replace what we lose in the war. The budget includes spending for new ammunition, but not the wear and tear on weapons systems. Eventually the weapons must be replaced, but the administration doesn't count that as part of the projected cost of the war.

A third important category is a little more hidden. The defense budget has gone way up, beyond the money earmarked for Iraq. You have to ask why. It's not like the Cold War has broken out again. We infer that they are hiding a lot of the Iraq expenditures in the defense budget. We only attribute a small fraction of the increase to Iraq, but it would be hard to explain them any other way than the war...

Paul Wolfowitz actually claimed that the war would pay for itself with oil revenue.
You have to wonder: What reward should he receive for such acumen?
Bush made him president of the World Bank.


Related;
Paying for Iraq- Blood and treasure
Blood, oil, and ideology
Season of Change for Iraq Policy

Development Econ Talks

Some videos of talks on development issues from Asian Development Bank-

India: The Past and Its Future’ by Raghuram Rajan

Development Lessons for Asia from non-Asian Countries’ by Dani Rodrik

‘Planners vs. Searchers in Foreign Aid’ by William Easterly

Quote of the Day

Juan Cole reminds us a quote from Ben Franklin;


'And it being found inconvenient to assemble in the open air, subject to its inclemencies, the building of a house to meet in was no sooner propos'd, and persons appointed to receive contributions, but sufficient sums were soon receiv'd to procure the ground and erect the building, which was one hundred feet long and seventy broad, about the size of Westminster Hall; and the work was carried on with such spirit as to be finished in a much shorter time than could have been expected. Both house and ground were vested in trustees, expressly for the use of any preacher of any religious persuasion who might desire to say something to the people at Philadelphia; the design in building not being to accommodate any particular sect, but the inhabitants in general; so that even if the Mufti of Constantinople were to send a missionary to preach Mohammedanism to us, he would find a pulpit at his service.


Related;
Lone Muslim Congressman Speaks Out
The Koran-in-Congress Controversy Continues...
Goode Stands Tough on Fox
Goode Ol’ Boy’s Take on the Quran

Bollywood and Indian Government


Indian government is learning about the potential of Bollywood;
“But from 2001 onwards several steps were taken by the government to boost the business and the first move in this direction was taken when Reserve Bank of India's (RBI) allowed bank finances for films.

After suffering for decades in the hands of traditional financers, Indian film industry, especially Bollywood, witnessed a phenomenal change after the entry of banks.

'Through our vigorous efforts, we have been able to reduce the level of entertainment tax. We have simplified procedures and reduced the time required for granting permission to shoot foreign feature films in India,' Information and Broadcasting Minister Priya Ranjan Dasmunsi said in the Lok Sabha recently.

Entry of banks into film business lured corporate players like UTV, Percept Picture Company. Their entry ensured the quality of films, ample opportunities for wannabes and variety. For independent filmmakers, it turned out to be a blessing in disguise, because they could speak their mind through their craft.

Apart from that, entry of Non Traditional Financing Sources (NTFS) has boosted the business and profits started moving toward record levels.

According to Yes Bank Survey reports conducted till 2004, the number of films partially or fully financed from one or more NTFS has increased from six in 2001 to 46 in 2004.

Cumulatively, NTFS contribute Rs.2.56 billion in 2004 as compared to Rs.485 million in 2001. This constitutes more than 50 percent of total project outlay of top 50 Hindi films produced and released in 2004 and underlines the rapidly transforming funding sources for Hindi films.

Not only that, 20 out of 46 films financed from NTFS in 2004 were associated with the new directors which points towards the role being played by NTFS in nurturing and developing new talent in filmmaking.

And 61 percent of films financed from NTFS were funded by private equity from individuals and corporate houses. Apart from that, 93 percent films funded from one or more NTFS in 2004 involved equity financing.

The trend continued this year with UTV producing big hits like films 'Rang De Basanti', 'Krrish', 'Khosla Ka Ghosla' and Percept Picture Company churning out 'Dor', 'Corporate' and 'Malaamal Weekly'.”

Sunday, December 24, 2006

Insurance markets and economic growth


Working Paper of the Day- Does insurance market activity promote economic growth ? Country study for industrial and developing countries;

"Insurance market activity, both as a financial intermediary and a provider of risk transfer and indemnification, may contribute to economic growth by allowing different risks to be managed more efficiently and by mobilizing domestic savings. During the past decade, there has been faster growth in insurance market activity, particularly in emerging markets given the process of liberalization and financial integration, which raises questions about its impact on economic growth. The author tests whether there is a causal relationship between insurance market activity (life and nonlife insurance) and economic growth. Using the generalized method of moments for dynamic models of panel data for 56 countries and for the 1976-2004 period, he finds robust evidence of a causal relationship between insurance market activity and economic growth. Both life and nonlife insurance have a positive and significant causal effect on economic growth. High-income countries drive the results in the case of life insurance. On the other hand, both high-income and developing countries drive the results in the case of nonlife insurance.

'Paris Syndrome'

“This year alone, the Japanese embassy in Paris has had to repatriate four people with a doctor or nurse on board the plane to help them get over the shock.

They were suffering from "Paris syndrome".

It was a Japanese psychiatrist working in France, Professor Hiroaki Ota, who first identified the syndrome some 20 years ago.

On average, up to 12 Japanese tourists a year fall victim to it, mainly women in their 30s with high expectations of what may be their first trip abroad.”

- 'Paris Syndrome' strikes Japanese

Related;
Mastering French manners, the hard way (podcast)

Assorted Talks

The Siege Of Constantinople

The Virgin and the Grail
The legend of the Holy Grail is as old as medieval times when stories of its magical power and its Christian significance became popular. But what was the Grail? And how and where did the legend begin? And who was Perceval? Joe Goering is Professor of History at the University of Toronto, and his answers are much more interesting than those of The Da Vinci Code!

The Vibrator: A Social History
Another great untold history story....the social history of vibrators and why this explains the ban on sex toys in 12 U.S. states (mostly in the South)...and why the American Civil Liberties Union has waged into the issue in a district court in Alabama

A science of spirituality
Temple Music in the Time of Jesus
Brain Surgery - Live on the Wireless!
The Suez Crisis 1956
Watery Worlds: Cities Under Water
Accents
Seasonal Skepticism

How to Start a Fashion Line in Today's Market
Accounting & Bookkeeping Essentials
Break the Rules and Win More Business
Pricing your product or service: Break Even Analysis Primer

How Angels nearly disappeared from our Culture
Professor Peter Marshall discusses how the protestant reformation nearly removed Angels from our culture and how they managed to survive into the modern era.

Carbon Trading
Dr Andrew Sentance from the Centre for Globalisation and Regionalisation talks about carbon trading, how it works, how it affects us and the potential benefits

China and Indian- Economic Giants of the Future
China and India are the two burgeoning economic giants of the globalising economy. Dr Simon Collinson of Warwick Business School discusses their comparative positions and looks to the future for these to would-be superpowers

China's ambitions in Africa
Shipbreaking in India

Is America ripe for a Mormon president?
Homer goes to Hollywood

Saturday, December 23, 2006

Opportunity Costs of Foreign Exchange Reserves

A new working paper from the IMF- Financial Versus Monetary Mercantilism: Long-Run View of the Large International Reserves Hoarding;

“The sizable hoarding of international reserves by several East Asian countries has been frequently attributed to a modern version of monetary mercantilism -- hoarding international reserves in order to improve competitiveness. Taking a long-run perspective, we point out that manufacturing exporters in East Asia frequently used financial mercantilism -- subsidizing the cost of capital -- during decades of high growth. The switches to sizable hoarding of international reserves happened when growth floundered or deep crises erupted, exacerbating financial fragility as the legacy of past financial mercantilism. As financial fragility may lead to currency crises, the rise of non-performing loans provides impetus for the precautionary hoarding of international reserves, making it harder to disentangle the monetary mercantilism from precautionary response to the heritage of past financial mercantilism. Monetary mercantilism also raises the prospects of competitive hoarding -- exporters of competing manufacturing goods to third markets would adopt a similar hoarding policy, in order to mitigate their deteriorating competitiveness following the adoption of monetary mercantilism by a competitor. Competitive hoarding, owing to the negative externalities associated with it, can dissipate competitiveness gains and result in excess reserves. It may also encourage the formation of institutions like regional funds, in an attempt to curb these adverse externalities.”

Related;
Five predictions about India and China by Larry Summers
Almost a free lunch: Lawrence Summers at the World Bank
Summers on reserves, exchange rates, the international financial architecture

Who Owns the PRSP?

Moyeen Khan, Bangladeshi Minister who’s unhappy with the country’s poverty reduction strategy;
"Khan says for the poverty paper to be a document of the people there should have been formal debate on the floor of the parliament as well as grassroots village-based consultation in Bengali by those responsible for the plan. But the poverty paper was never brought to the floor of the national parliament – even though it has a picture of the national parliament on the front. “Could there have been a better deception than this?” asks Khan.

“Parliamentarians happen to be the representatives of the people, as a norm of the accepted democratic traditions of the world,” he says. “If the parliamentarians do not even have a chance to discuss this document, how on earth could I say that this document is owned by the people of this country?” he asks.“So without consultation at these two levels – the grassroots and the parliamentary – I don’t believe there has been any worthwhile consultation at all,” he says.

See a response by Praful Patel of the World Bank;
“The World Bank, along with the International Monetary Fund, requires a country to articulate its development and poverty-fighting priorities in a poverty reduction strategy paper, or PRSP, to set the context for appropriate international support.

From our side the logic is clear: a PRSP is an opportunity to redefine the aid relationship by empowering governments to set their own priorities, against which they will be held accountable. And the people of Bangladesh must decide, based on the document their government has placed before them, whether it is the right framework to deepen development…”


For Discussion; Is it about time that World Bank/IMF move away from the PRSP model of giving aid? There seems to something fundamentally wrong when the country’s PRSP cannot be found on any of the government’s websites but is on the donors' website.

Related;
Bangladesh - Poverty reduction strategy paper and joint IDA-IMF staff advisory note
Bangladesh Government links; Medium-Term Budget Framework, Implementation Monitoring and Evaluation Division
Bangladesh –links from World Bank
Virtual Bangladesh
Quarterly Economic Update, Bangladesh (ADB)
Doing Business in Bangladesh
Annual Review of Development Effectiveness (ARDE) 2006 from World Bank
PRSP Sourcebook
Bangladesh-Isn't democracy wonderful?
Blogs- Best Bangladesh Blogs, drishtripat group blog, The 3rd World View, (let us know if you know any economics blog for Bangladesh)

A Merry Christmas


Interesting article from KarenArmstrong, 'The Muslim prophet born in Bethlehem';

"For centuries Muslims cherished the figure of Jesus, who is honoured in the Qur'an as one of the greatest of the prophets and, in the formative years of Islam, became a constituent part of the emergent Muslim identity.

There are important lessons here for both Christians and Muslims - especially, perhaps, at Christmas. The Qur'an does not believe that Jesus is divine but it devotes more space to the story of his virginal conception and birth than does the New Testament, presenting it as richly symbolic of the birth of the Spirit in all human beings (Qur'an 19:17-29; 21:91). Like the great prophets, Mary receives this Spirit and bears Jesus, who will, in his turn, become an ayah, a revelation of peace, gentleness and compassion to the world.

The Qur'an is horrified by Christian claims that Jesus was the "son of God", and depicts Jesus ardently denying his divinity in an attempt to "cleanse" himself of these blasphemous projections. Time and again the Qur'an insists that, like Muhammad himself, Jesus was a perfectly ordinary human being and that the Christians have entirely misunderstood their own scriptures. But it concedes that the most learned and faithful Christians - especially monks and priests - did not believe that Jesus was divine; of all God's worshippers, they were closest to the Muslims (5:85-86)...

The Muslim devotion to Jesus is a remarkable example of the way in which one tradition can be enriched by another. It cannot be said that Christians returned the compliment. While the Muslims were amassing their Jesus-traditions, Christian scholars in Europe were denouncing Muhammad as a lecher and charlatan, viciously addicted to violence. But today both Muslims and Christians are guilty of this kind of bigotry and often seem eager to see only the worst in each other..."

India should abolish the Planning Commission

The only way to frontally address poverty is to raise the growth to double-digits and sustain them for a couple or three more decades
- T.N. Srinivasan

More advice to Indian government from Professor Srinivasan;

“The other thing is rethinking of economic management. After all, the Indian Constitution was passed in 1950 and India's Planning Commission was instituted, this is an extraconstitutional body by resolution of the Cabinet in 1950. Planning has gone everywhere else into the dust bin of history. Even China does not call its program anywhere Eleventh Five-Year Plan, but India still continues with this nonsense. So a rethinking of the whole system of economic management from fiscal federalism to what I have proposed, to abolish the Planning Commission, to be reconstituted as the Fund for Public Investment, because that is what it is. It is focusing on doing the public investment more efficiently, and financing it more effectively. That is what they should be doing. So that is necessary.”

India and China

Transcript of a book forum which I mentioned in a previous post is now available. Some excerpts and facts below;

- brief summary of what happened in the last 20 years as far as China is concerned. China added about $2 trillion to the global GDP, it added 120 million people in new employment, and pulled around 300 million people out of poverty. These numbers have the usual margin of error, but regardless of that, these are very large numbers. To just give you a context of what these numbers mean, it is like adding a country the size of Portugal every year to the world economy, creating as many new jobs each year as Australia's total labor force, and eradicating poverty from Ethiopia, Nigeria, Tanzania, and Zambia combined. So the question is, can this expansion be sustained? I am going to touch upon three issues regarding that. One, what is driving recent growth? Are there any weaknesses in this growth process? And if there are, what needs to be done?

- A quick comparison, China in PPP terms is the second-largest economy in the world, India is the fourth largest, and the share of world GDP and PPP, China, one-seventh, India, one-sixteenth, and so on. The per capita income in PPP terms in China is about twice as much as India.

- From a longer-term perspective, this is very interesting, looking at Angus Maddison's work who is a brave economic historian who calculates PPP/GDP from year 0 on for every country in the world, but let's focus on China and India. In the first wave of globalization in the late-19th Century, India benefited and China did not. The Chinese economy grew very slowly between 1870 and 1913, whereas India's economy grew rapidly during that period. If you run the clock forward, in 1950 when India began planning for development and in China the communists had taken over, India had an advantage of 25 percent GDP per capita over China. The entire area Mao area until Deng Xioping and later was spent essentially in catching up with India. So all the divergence between India and China is post China's opening and not before. And of course, now China is far ahead...

- a significant proportion of the workforce, in India in the case of nearly two-thirds, is stuck in low-productivity, primary activities.

- If you look at in terms of industrial share in GDP, and the manufacturing share in GDP, in India it is very low and growing very slowly.

- China and India according to recent surveys are among the most optimistic people surveyed by Pew.

- India's financial system is far stronger than China's, but there my concern is the public sector owns 75 percent of the assets of the banking system.

- Within China , investment is 42 percent of GDP, private consumption is below 40 percent.

- The Chinese economic system may be dynamic only in the sense of producing good growth, but it is not a system that has commonly held up as a system that has very robust, effective institutions.

- Professor Kenneth Arrow at Stanford and his co-authors, including Partha Dasgupta, have precisely asked that question, is China's growth sustainable if you do a proper accounting of the environmental costs? Their answer is, given the current high rates of investment, assuming that they are correctly calculated, probably is, but India is a dicey question.

Related;
The Chinese Economy: Progress and Challenges - Ben S. Bernanke
Clueless in China
China and the Multilateral Trading System
Paulson in Beijing: Can't get no satisfaction

Friday, December 22, 2006

World Bank beat IMF on Accountability



A new index Global Accountability Index is out. Created by UK NGO One World Trust, the index assesses accountability across three groups- inter-governmental organizations, non-governmental organizations, and transnational corporations;

The 2006 Global Accountability Index assesses thirty of the world's most powerful organisations from intergovernmental, corporate and non-governmental sectors. The Index analyses these organisations in the four dimensions of accountability as defined by the Global Accountability Framework: transparency, participation, evaluation, and complaint and response mechanisms.

The Index is the first initiative to measure and compare the accountability of transnational actors from intergovernmental, non-governmental and corporate sectors. In doing so, it extends basic principles of democracy to the global level. The organisations are assessed on how they integrate key accountability principles in existing capabilities - both organisational policies and the management systems that enable these policies to be operationalised.


Related;
Bank Noted for Accountability Policies
IMF responds to the report;
"The introductory text stating that the IMF's "key mission is to lend money to countries that experience severe financial difficulties" does not fully capture the IMF's other equally important activities, namely surveillance and the provision of technical assistance. Also, your second para implies that multilateral surveillance is a new activity, when in fact the IMF has been undertaking mulilateral surveillance for several years as evidenced by the regular semi-annual publications, the World Economic Outlook and the Global Financial Stability Report."

-Sabina Bhatia, IMF
ADB Accountability Mechanism

The right way and the wrong way to fight an insurgency

New Yorker has an interesting profile of David Kilcullen, an Australian anthropologist who is also a lieutenant colonel in his country’s Army and advising the US government on counter insurgency;

“An information strategy seems to be driving the agenda of every radical Islamist movement. Kilcullen noted that when insurgents ambush an American convoy in Iraq, “they’re not doing that because they want to reduce the number of Humvees we have in Iraq by one. They’re doing it because they want spectacular media footage of a burning Humvee.” Last year, a letter surfaced that is believed to have been sent from Ayman al-Zawahiri, bin Laden’s deputy, to the leader of Al Qaeda in Iraq, Abu Musab al-Zarqawi, nine months before Zarqawi’s death; the letter urged Zarqawi to make his videotaped beheadings and mass slaughter of Shiite civilians less gruesome. Kilcullen interpreted the letter as “basically saying to Zarqawi, ‘Justify your attacks on the basis of how they support our information strategy.’ ” As soon as the recent fighting in Lebanon between Hezbollah and Israeli troops ended, Hezbollah marked, with its party flags, houses that had been damaged. Kilcullen said, “That’s not a reconstruction operation—it’s an information operation. It’s influence. They’re going out there to send a couple of messages. To the Lebanese people they’re saying, ‘We’re going to take care of you.’ To all the aid agencies it’s like a dog pissing on trees: they’re saying, ‘We own this house—don’t you touch it.’ ” He went on, “When the aid agencies arrive a few days later, they have to negotiate with Hezbollah because there’s a Hezbollah flag on the house. Hezbollah says, ‘Yeah, you can sell a contract to us to fix up that house.’ It’s an information operation. They’re trying to generate influence.”

The result is an intimidated or motivated population, and a spike in fund-raising and recruiting. “When you go on YouTube and look at one of these attacks in Iraq, all you see is the video,” Kilcullen said. “If you go to some jihadist Web sites, you see the same video and then a button next to it that says, ‘Click here and donate.’ ” The Afghan or Iraqi or Lebanese insurgent, unlike his Vietnamese or Salvadoran predecessor, can plug into a global media network that will instantly amplify his message. After Kilcullen returned from Afghanistan last month, he stayed up late one Saturday night (“because I have no social life”) and calculated how many sources of information existed for a Vietnamese villager in 1966 and for an Afghan villager in 2006. He concluded that the former had ten, almost half under government control, such as Saigon radio and local officials; the latter has twenty-five (counting the Internet as only one), of which just five are controlled by the government. Most of the rest—including e-mail, satellite phone, and text messaging—are independent but more easily exploited by insurgents than by the Afghan government. And it is on the level of influencing perceptions that these wars will be won or lost. “The international information environment is critical to the success of America’s mission,” Kilcullen said.”


Related;
Cultural Operations Research Human Terrain
How to Fight an Insurgency
Social networks and counter-insurgency
Iraq and the 7 Habits of Highly Defective Presidents

Tsunami Aid Fact of the Day

- The Red Cross promised to build 50,000 permanent houses in Indonesia, Sri Lanka and the Maldives. So far only 8,000 have been completed

- The British Red Cross contracted to build over 2,000 houses and have so far completed 16 although another 300 are nearly ready

- The Chinese promised even more - $301m - and delivered - just $1m. In the Maldives, Kuwait allocated just under $10m but they have yet to spend a single cent and in Indonesia America promised over $400m and so far has delivered less than $70m.

- Billions of dollars given by individuals and governments have still not been spent while two thirds of those who lost their houses are still waiting for them to be rebuilt

-Only 30 to 35% of the people have been put back into permanent housing

- UN Department for Aid and Development database which tracks $6.7bn (£3.4bn) of money which has been pledged. Half of that - $3.3bn - has still not been spent

Via FP blog and BBC.

Chad Government - doing not so bad!

Chad has to be different, because we're staking our reputation on it.”
-World Bank official in 2002

Concluding Statement of the 2006 Article IV Consultation with Chad is out now and it seems Chad (atleast those running the country) is doing not so bad after reneging on the agreement to divert oil resources to poverty reduction in the country;

"Despite some progress in macroeconomic stabilization and reform under Fund-supported programs during the 1990s, Chad's indicators on business climate, governance, and socio-economic conditions still remain among the lowest in the world. Although the oil sector accounts for almost half of GDP, and has led to high growth rates during 2001-04, the bulk of the population still heavily depends on cotton, livestock, and small-scale agriculture.

In recent years, the resumption of armed conflict in the region has deteriorated the political and security situation. Real growth has slowed following the completion of the oil pipeline and a fall in oil production owing to technical problems. In 2006, real GDP is expected to grow by 1.3 percent, reflecting higher non-oil growth offsetting a somewhat larger fall in oil production than envisaged earlier. Real non-oil growth is expected to rise to about 6 percent by 2007, in part reflecting a higher level of government expenditure, and then to stabilize around 4.5 percent in subsequent years. Inflation increased to an annual average of 8 percent in 2005 owing to a drought in 2004, and, despite a better harvest, remained high in 2006 because of increasing meat prices. Mainly reflecting the appreciation of the euro against the U.S. dollar, the real effective exchange rate appreciated. After stagnating in 2003-04, broad money grew by 32 percent in 2005 owing to a rise in credit to the cotton sector, but monetary expansion slowed down to about 28 percent by late 2006. The financial health of the banking system appears broadly satisfactory, although vulnerable because of its overexposure to government deposits.

On the fiscal front, the start of oil revenue supported higher domestic spending during 2004-05, partly offsetting a sharp shortfall in budget donor support as reform momentum slowed and performance under the PRGF weakened. Despite the net rise in resources, domestic debt and arrears continued to accumulate, reflecting poor budget discipline and weak public finance management. Fiscal management was also complicated by the segmentation of the budget and cash management...

Directors considered the 2007 budget and the medium-term fiscal framework broadly supportive of macroeconomic stability, but noted that the fiscal outlook is subject to risks arising from the frontloading of public spending and the unsettled security environment. They encouraged the authorities to remain vigilant to ensure that spending does not exceed absorptive capacity, and to impose tight controls on new medium-term investment projects to ensure fiscal sustainability. Accordingly, a considerable part of the 2007 oil revenue will need to be saved for use in subsequent years.

Directors noted that Chad's membership in the Economic and Monetary Community of Central Africa and its fixed exchange rate regime have provided an important nominal anchor for macroeconomic policies. However, the oil windfall could lead to some real appreciation of the exchange rate..."

Related;
For some background on the Chad-Cameroon pipeline see the previous post and also Sebastian Mallaby’s The World’s Banker has a good overview of the project. It was a bold experiment on the part of the World Bank and may be it is too early to decide whether it was a success. Why isn't the World Bank experimenting such bold initiatives more? There are places with greater chances of success than in Chad.

See also the World Bank page on the oil pipeline;

Following the Government’s agreement with the Bank, on December 30, 1998 Chad’s Parliament approved a law setting out the Government’s poverty reduction objectives and arrangements for the use of oil revenues.

Under the law:

-10% of Chad’s direct oil revenues (dividends and royalties) are placed in trust for future generations, in a so-called Future Generations Fund
- Of the remainder, 80% of royalties and 85% of dividends are devoted to priority sectors such as education, health and social services, rural development, infrastructure and environmental and water resource management.
- 5% of royalties are earmarked for regional development in the oil-producing area, in addition to budget allocations the region already receives.
- Up to December 31, 2007, 15% of direct oil revenues can be spent on general expenditures; after that date, these revenues will be earmarked to priority sectors for poverty reduction.

Chad- a failed experiment in escaping resource curse?


It's not possible to speak of governance here…There is no governance.”- one foreign resident

“Prospectors first found oil in Chad in the 1960s. But the country was so unstable and so far from the big markets that no one bothered to exploit it until the World Bank agreed to help finance a pipeline through neighbouring Cameroon to the Atlantic Ocean in 1999 (see map). As a condition for its loan, the bank insisted that the government set aside almost all of its 12.5% share of revenue for development. To avoid corruption, the money is funnelled through an account that the bank can freeze.

The World Bank's participation, in turn, persuaded a foreign consortium to develop Chad's oilfields and build the pipeline. This year, the government should earn over $200m from royalties alone, compared with total annual revenue of about $130m before the oil flowed. But Mr Déby dismisses this as “crumbs”. Earlier this year, Chad's parliament passed a law to let him spend his petrodollars as he pleased, in breach of his agreement with the World Bank. It duly suspended disbursements, resuming them only when a new deal was reached, giving the government a shade more leeway over royalties in exchange for a promise to spend more on development from the overall budget.”
- Chad; Pump priming

Related;
External monitorng of the Chad-Cameroon pipeline project
Chad and Cameroon - Petroleum Development and Pipeline Project
Agropastoralism in Chad as a strategy for survival : an essay on the relationship between anthropology and statistics
Chad - Poverty assessment : constraints to rural development
Chad - Economic developments : constraints and potential (1974)

Information from ExxonMobil
Chad Oil Revenues: Watching How the Money is Spent
FOLLOW THE MONEY: A GUIDE TO MONITORING BUDGETS AND OIL AND GAS REVENUES
COVERING OIL: A REPORTER'S GUIDE TO ENERGY AND DEVELOPMENT
EITI-Chad

The Legacy of Dictators

“His cult of personality included authorship of the ``Rukhnama,'' a book of spiritual guidance that became required reading for children. Earlier this year, he said he had asked Allah to ensure that anyone who read the ``Rukhnama'' three times would go directly to heaven - and he appeared to have little doubt his request would be honored.”

Jonathan at The Head Heeb has insightful comments on Turkmenistan;

“I'm stepping way outside my region here, but it doesn't require a scholar to recognize that Turkmenistan is facing a dangerous power vacuum. Niyazov has no obvious successor. He has systematically prevented any other person from becoming entrenched enough to be a potential rival - this year alone, for instance, he purged all five regional governors and the turnover within the cabinet and senior civil service exceeded 100 percent - and his revolving-door purges have included the middle as well as upper levels of government. Even the constitution doesn't provide any guidance, because the chair of the people's assembly, who is supposed to succeed the president, was Niyazov himself. The early signs suggest that deputy prime minister Kurbanguly Berdymukhamedov has the inside track, but the dust from the power struggles might not settle for months.

A great deal will likely depend on how much advance warning the inner circle had of Niyazov's impending demise, and whether they had a real chance to discuss the succession. In many absolute dictatorships, it's unwise to mention succession out loud even when the supreme ruler is on his deathbed, meaning that any preparation has to be surreptitious and haphazard. Any new head of state will also have to live in the shadow of an ideology designed to glorify Niyazov personally, which can sometimes be lived with when (as in North Korea) the successor has a kinship bond with the predecessor, but more often not. And as if that isn't enough, the incoming government's first task will be to solve a crisis-level bread shortage that has its roots in the increasingly dysfunctional agricultural planning system. There's going to be change in Turkmenistan, but even there, it might be possible for things to get worse.”

Related;
The Dictator For Life Is Dead
International Crisis Group-Turkmenistan
Obituary: Saparmurat Niyazov
Turkmen president's name was omnipresent
Saparmurat Niyazov (wikipedia)

Assorted Talks

The Nativity Story of Christmas

History of Hell
So what is the purpose of hell and why is it found mainly in religions concerned with salvation? Why has hell proved so inspirational for artists through the ages, perhaps more so than heaven? And why do some ideas of hell require a Satan figure while others don't?

The Bamiyan Buddhas

The Lost Treasure of Solomon's Temple
Where is the lost treasure of the Temple of Jerusalem that Rome plundered in 70 AD? Is it in the Vatican stores, under the Temple Mount, or elsewhere? British archaeologist Sean Kingsley believes he knows where the treasure buried

The Divine Goddess
Take a journey with curator Chaya Chanrasekhar through an exhibition of splendid Indian sculptures and paintings of female deities throughout the centuries, at the Art Gallery of New South Wales. Whether erotic, fearsome or benign, whether Parvati, Kali, Lakshmi or `Mother India' herself, Bharat Mata, these images manifest the complexities of Hindu, Buddhist and Jain worship of the female principle

Heritage Conservation in India

The Red Marauder - a history of drought in Australia

HIV/AIDS in Africa: The Race Against Time

Hercules

The Chimeric Brain

Journeys to Recovery: Accepting the Reality of Unreality
People who hear voices or have delusions often don't believe they're sick with a psychotic illness. It's their harsh and frightening reality. Coming to terms with the need for treatment can be a mighty battle, for both themselves and their families. Lynne Malcolm speaks with two men who've found their own unexpected routes towards acceptance and recovery. And, psychologist Xavier Amador - a forensic expert in high profile cases such as the Unabomber and the 20th 9/11 highjacker - challenges the denial in unique ways.

Perspectives on Hajj

Renovating Muslim Australia

Science Fatwa – Part 1 and Part 2

Intelligent Design

Black America

Does philosophy work better than Prozac?
Australian immunologist Peter Doherty puts science up against philosophy. Can philosophy help the mind become more resilient to life's problems, just as the immune system can help fight illness? We explore the latest developments in understanding how the body resists disease, and the mind resists despair.

Fundamentalism and Terrorism

Burma

Kosovo- contest country

Carly Fiorina on Though Choices

Out-of-control kids
What can parents do when kids go wild? What can you do if kids skid off the rails and start speeding towards a life of crime?

The Business With Rembrandt

Shake-a-leg, talk the talk
Bruce Moore on the new edition of Australian Aboriginal Words in English, a lexicon of some 450 Aboriginal words that have entered Australian English since 1788

Job satisfaction and health
Many studies have shown a link between job satisfaction and health. Having a lot of stress at work can make us sick. Many people have unrealistic workloads which negatively influences their health and their relationship with family and friends.

Bad design causes diabetes
While junk food and obesity play a significant role is the development of diabetes, bad design is also now seen as an important player in the development of this disease. And, living in a major city dramatically increases your chance of getting diabetes. Why? Professor Martin Silink explains all on By Design

Socially Responsible Architecture
What responsibility does design have in identifying and solving social problems. What role do architects and designers have in helping a community overcome grief and loss, for example. By Design talks with three groups (Architecture For Humanity, Architects Without Frontiers, Habitat for Humanity) - about their approach to helping communities needing new buildings, and new lives

Boettke on Katrina and the Economics of Disaster

Thursday, December 21, 2006

How to adjust your GPA?

Q: OK here it is: I need an adjustment to my college GPA. Is this an absurd request?

Reply; Absurd no, difficult yes. Really depends on the college, security in place, the amount of databases required to truly update, log servers to compromise to remove evidence, type of access required to access the systems (internet? LAN? dialup? carrier pigeon?), and a dozen other things that come into play.

Via Attrition.org (http://attrition.org); a computer security Web site dedicated to the collection, dissemination and distribution of information about the industry for anyone interested in the subject. They maintain one of the largest catalogs of security advisories, text files, and humorous image galleries. They are also known for the largest mirror of Web site defacements and their crusade to expose industry frauds and inform the public about incorrect information in computer security articles.

Hat tip to Alex Tabarrok

Let’s Blame Climate Change and America!


“Ms. Akumu argues that, while pastoralists who live in arid regions will suffer, it is the Western countries who are to blame, especially the United States, which refuses to sign on to global protocols to reduce greenhouse gases. "Pastoralists are the losers - they are not responsible, but they feel the impact of climate change the most. The blame lies squarely at the doorstep of America."

Figures from the World Resources Institute in 2000 calculated that Africa's 812 million people produce only 0.8 metric tons of greenhouse emissions per person compared with 3.9 metric tons per person globally. Yet it is the African environment that sees the worst effects, and marginal communities, such as the pastoralists, who will suffer most.

Pastoralism does not fit well with modern nations of the kind Uganda aspires to be, and pastoralists have been marginalized by successive regimes from the days of British colonialism onward. The Karimojong live in an arid zone where settled agriculture does not work. They ignore borders as they move seasonally between pastures with their cows and use their guns to protect their herds and to launch cattle-rustling raids against neighboring groups.

They have little respect for state authority, and the government has little interaction with the Karimojong except during attempts to disarm the warriors. The Karamoja region has Uganda's lowest life expectancy, its highest infant and maternal mortality rates, no paved roads, and no industry - the Karimojong do not share in Uganda's economic progress. The country has a 4 percent growth rate.

Violent cattle raids are a traditional method of restocking herds among pastoral groups. However, the death count has spiraled since sticks and spears were replaced by AK-47s as the weapon of choice beginning in the late 1970s.

A well-established small-arms trade has sprung out of the regional insecurity, with guns flowing in from neighboring Sudan and Somalia. All this means Karamoja is well stocked with weapons and prices are falling: in the 1970s, a gun cost 60-150 cows, by 2004 it had fallen as low as two cows (roughly $100).”

- Climate change clash in Africa

X-Ray Baby

"A woman sent her one-month-old grandson through an X-ray machine at Los Angeles International Airport, security officials said on Wednesday.

The woman, who spoke little English and was traveling to Mexico, put the infant in a plastic bin used to hold loose carry-on items for security scanning at the busy airport on Saturday morning.

Security screeners saw the baby as it started to pass through, pulled the bin out, and immediately sought medical assistance for the child, Transportation Security Administration spokesman Nico Melendez said."

-Baby put into X-ray machine at Los Angeles airport

Public Pension Funds – Who Will Pay?

The trouble with one public pension fund in the US;

"For the Chicago Transit Authority’s pension fund, the problems are real now. A recent study showed that the plan, which covers nearly 20,000 people, could run out of money for retiree health care in early 2007 — and that the money to pay pensions could be gone by 2012.

“There were decisions taken years ago that seemed harmless at the time, but now they’re very problematic,” said John V. Kallianis, the plan’s executive director.

One was the decision in 1980 to start paying retiree health benefits without setting aside enough money to cover the cost. “Anyone who has embedded their obligation for their retiree health plan in their pension fund and doesn’t think it’s going to be a big drain on the assets of that pension fund is crazy,” said Lynn E. Turner, a former chief accountant for the Securities and Exchange Commission who is now managing director of research at Glass, Lewis & Company, a proxy advisory firm.
- Paying Health Care From Pensions Proves Costly

Other articles from the series Costly Promises;
Public Pension Plans Face Billions in Shortages
New York Gets Sobering Look at Its Pensions
City Foots Bill as State Upgrades Pensions
Cost of Pensions Adds to Factory Town’s Troubles

Podcasts;
Crisis of Abundance: Rethinking How We Pay for Health Care
Medicare Meets Mephistopheles

Does Corporate Governance Matter?

Working paper of the day- Does Corporate Governance Matter? A Crude Test Using Russian Data by Bernard Black;

“Does a firm’s corporate governance behavior affect its market value? In most empirical tests in developed countries, firm-specific corporate governance
actions have little or no effect on market value. These weak results could
reflect limited variation among firms in governance practices.

In contrast, the corporate governance practices of Russian firms vary widely, from quite good to awful. I test whether corporate governance behavior affects the market value of Russian firms using (1) fall 1999 corporate governance rankings developed by a Russian investment bank for sixteen Russian public companies and (2) the “value ratio” of actual market capitalization to potential Western market capitalization for these firms, determined independently at the same time by a second Russian investment bank. The correlation between ln (value ratio) and governance ranking is striking and is statistically strong despite the small sample size: Pearson r = 0.90 (p < .0001). A one-standard-deviation improvement in governance ranking predicts an 8-fold increase in firm value; a worst (51 ranking) to best (7 ranking) governance improvement predicts a 600-fold increase in firm value. My results are tentative, due to the small sample size. But they suggest that a firm’s corporate governance behavior can have a huge effect on its market value in a country where other constraints on corporate behavior are weak.”

Related;
National Council on Corporate Governance (Russia)
Blogs- Governance Focus, Corporate Governance News

One Dictator at a time


Turkmenistan’s authoritarian ruler, Saparmurat Niyazov, dropped dead from a heart attack;

“Mr Niyazov, like most dictators, looted the country’s wealth. A London-based human-rights organisation, Global Witness, accused him of siphoning off most of the country's estimated $2 billion a year in gas revenues and concealing them in offshore accounts. And he made sure that opposition was crushed. Any criticism or dissent was defined as treason and was punishable by long prison terms, confinement to psychiatric hospital or internal banishment, mostly to arid salt flats by the Caspian Sea. Private conversations everywhere were monitored by eavesdropping informers, as well as by bugs and phone-taps. E-mails were monitored. Surveillance, already tight, was ratcheted up after a failed coup attempt in 2002.”


Related;
The personality cult of Turkmenbashi
In pictures: Niyazov's cult
What if they gave an election...
World Audit- Turkmenistan
A week in the life of the dictator; from Open Society’s Turkmenistan Project;

“Last month's discovery of vast reserves in the Yolotan gas and oil fields, which President Saparmurat Niyazov has claimed contain an estimated 7 trillion cubic meters of natural gas, sparked increased efforts by foreign partners this week to lock in access to the fields. President Niyazov signed an order allowing the Turkish Çalik Energy Company to become the second company to take part in the development of the fields, following China's National Petroleum Company, which was slated to head exploration and development with $152 million in investment.

To stave off looming food shortages, Niyazov ordered security officers this week to prevent flour smuggling, banned wheat exports and ordered that import tariffs on flour be removed.

Niyazov sacked the minister of Motor Transport and Roads, Baymuhammet Kelov, for filing inflated reports about road construction progress and embezzlement of funds and supplies

The Kyrgyz Agrarian University, which began offering a course on Niyazov's book the Rukhnama this academic year, this week conferred upon Niyazov the title of honorary professor.”

The Economics of Broadcasting

John Kay’s columns are always worth reading;

“If it costs £50,000 to produce an hour of programming, you can recover that expenditure by raising a penny from 5m people or a pound from 50,000. The trouble is that even a penny per household is a lot to pay for an opportunity to describe the merits of your toothpaste. The peculiar economics of twentieth century television, dependent on toothpaste advertising or tax finance, could exploit only that first option. Commercial programme makers were obliged to make programmes that large numbers of people wanted to watch. State programme makers needed to compete for ratings to justify tax funding of their activities.

The outcome seemed to demonstrate that competition reduces quality and the output of private producers is worse than that of state producers. But experience of other markets is the opposite. Fords were better than Ladas, Fedex more reliable than US Mail and the complaint about private education or health is not that it is inferior but that it is elitist. The converse was true in broadcasting only because the economics of broadcasting was unique.

But the economics of broadcasting is no longer unique. You can receive data from satellites, along cables and telephone lines, on discs and USB keys. These advances mean you can charge for signals on screens as you can for any other product. Cyberspace is filled with multiple messages and we are no longer dependent on the munificence of either governments or toothpaste manufacturers...

But the future belongs to BSkyB chief executive James Murdoch, 30 in 2002, not incoming ITV executive chairman Michael Grade, 30 in 1973. In other markets, people pay for what they want and show great diversity in what they do want. The key insight is that £50,000 can be 5m pennies or 50,000 pounds. It now costs much the same to produce and disseminate a television series as to write, print and disseminate a book that takes the same time to read. Eventually, programme libraries will be as extensive and varied as book libraries.

However, old institutions and old ideas will continue to get in the way. In leaving the BBC for a commercial company, Michael Grade has dismounted the elephant in the room to climb on to the dead horse.”


Via Indonesia and economy

Did IMF bring down Suharto?


“Women in Islamic dress had staged pro-IMF demonstrations; they had been out there with placards reading, IMPLEMENT THE IMF PACKAGE! In the weeks after the Suharto's fall, the IMF mission chief would sometimes go to a coffee shop in the shopping centre adjoining his hotel. There'd be a hush as people recognized him, and then strangers would approach shyly and shower him with thanks.”


- The World’s Banker, Sebastian Mallaby, p.201 .

I’m not qualified to answer that question. Someone who used to work at a Think Tank in Indonesia during the Asian Crisis told me that it was the Indonesian technocrats working with IMF and other international counterparts who collaborated to force reform on the dictator. Let’s get a response from an Indonesian economist blogger.

Related;
The World Bank report you don't want to miss...

Wednesday, December 20, 2006

The Role of Parliaments in Curbing Corruption

A new publication from the World Bank, The Role of Parliaments in Curbing Corruption Edited by Rick Stapenhurst , Niall Johnston , Riccardo Pelizzo;

"In most countries, parliament has the constitutional mandate to both oversee government and to hold government to account; often, audit institutions, ombuds and anti-corruption agencies report to parliament, as a means of ensuring both their independence from government and reinforcing parliament's position at the apex of accountability institutions. At the same time, parliaments can also play a key role in promoting accountability, through constituency outreach, public hearings, and parliamentary commissions. This title will be of interest to parliamentarians and parliamentary staff, development practitioners, students of development and those interested in curbing corruption and improving governance in developing and developed countries alike."

Above title not available online. One of the best things the Bank could do is to share all of its publications online. I don't understand why the Bank need to make money on these type of 'knowledge products'.

IMF Happy with UK

United Kingdom—2006 Article IV Consultation Concluding Statement from the Fund is out. On public finances it says;

Continued fiscal restraint is also essential given the still sizable overall deficit. The strong macroeconomic outlook provides a favorable environment for it. Following the substantial fiscal adjustment in 2005/06, we expect a further modest narrowing of the overall deficit relative to GDP in 2006/07. After the sharp increase in spending during 2002/03-2005/06, the targeted slowing this year is welcome. However, the spending pattern thus far means strong discipline through the remainder of the year is needed. With the overall deficit close to 3 percent of GDP, the Pre-Budget Report contains plans for the further adjustment needed to halt, in the medium term, the rise in net debt as a share of GDP. We broadly agree with the Treasury that tax buoyancy alone should result in a modest increase in revenue relative to GDP. Also, we strongly support the government's plans to first stabilize and then lower spending as a share of GDP. This will require tough choices in the Comprehensive Spending Review, particularly as important infrastructure needs argue for maintaining capital spending as a share of GDP at its present level. With the implementation of these plans, we expect the overall deficit to decline gradually to 1½ percent of GDP by 2011/12, a level consistent with maintaining debt below 40 percent of GDP and only slightly higher than the forecast in the Pre-Budget Report. We welcome the proposed pension reform to address the long-term challenges of the pension system without jeopardizing fiscal sustainability.

The fiscal framework is supporting the improvement in public finances. The fiscal rules—the sustainable investment rule and the golden rule—have helped to constrain discretion and protect investment. Continuing commitment to the framework during the prospective period of strong growth will help ensure that good times are indeed used to reduce the underlying fiscal deficit. As experience grows, further improvements to strengthen the framework should be considered. An important pillar of the framework is the auditing by the National Audit Office of certain key assumptions underpinning the fiscal projections. Broadening the reach of this auditing process would further enhance confidence in the fiscal projections. And, once current balance is regained, consideration should be given to alternative formulations of the golden rule that preserve its constraint on discretion and fit likely future circumstances.

Fiscal policy needs to have sufficient cushions to permit a response to shocks. During the global downturn of 2000-03, a large fiscal expansion played an important role in moderating the slowdown in the United Kingdom. At present, the capacity for similar action is narrowing. First, we expect net debt to rise to around 39 percent of GDP before it stabilizes, leaving little room even for automatic stabilizers to operate fully in a downturn if debt is to remain below 40 percent of GDP. Second, the tax-to-GDP ratio has risen in recent years to about its level in the second half of the 1980s. Further tax increases would risk adversely affecting incentives to work and invest. Finally, favorable global financial conditions may be providing a temporary boost to the financial sector; in this case, some of the recent strength in revenue would not be permanent. Against this background, realizing the government's medium-term projection of an overall fiscal deficit below 1½ percent of GDP is essential to stabilize and then gradual reduce the ratio of net debt to GDP. This would ensure—even through difficult times—that debt remains below 40 percent of GDP, a limit that has served the economy well."

Related;
Pre-budget report- Gordon's manifesto
Bagehot- The man with the plans
Listen to Pre-Budget Report Speech
Fiscal policy in the UK;
The Government has also specified two key fiscal rules that accord with the principles. These are:
the golden rule: over the economic cycle, the Government will borrow only to invest and not to fund current spending; and
the sustainable investment rule: public sector net debt as a proportion of GDP will be held over the economic cycle at a stable and prudent level.