Saturday, March 31, 2007

Working Paper of the Day- A kleptocrat's survival guide

Working paper from World Bank- A kleptocrat's survival guide : autocratic longevity in the face of civil conflict;

Summary: Autocratic regimes are quite often short-lived kleptocracies formed and maintained through force and used to appropriate wealth from subjects. Some of these autocracies collapse after only a year or two of plundering while others manage to survive for 15 or 20 years. This paper asks why some autocratic regimes survive while others fail. A database of political regimes from 1960 to 2003 is introduced and accompanies the paper in an appendix. A model of political survival suggests that autocrats exchange constraints on their executive power for their continued survival. The relationship between payouts from successful rebellion and ease of rebellion determines how willing kleptocrats are to extend the political franchise and protect their power. Results show that extremely oppressive regimes and great expenditures on security are likely to accompany the most difficult environments for defense of the state. The model is used to identify the costs of pervasive political conflict and to decompose the "civil peace dividend" enjoyed by inclusive democracies that do not suffer from the malady of kleptocratic rule. Finally, the model suggests that slow democratization pushed by the autocratic elites to guarantee their survival, accompanied by stable development, may be the best path toward a democratic future for many fragile states.

On the graph; "Figure 1 depicts both the general trend that more developed countries are more democratic and the nuanced reality that economic development alone cannot account for either the successes or the failures of recent democratic transitions. Of course, these results do not speak to causality at all, simply the relationship between development and democracy. What can be concluded from Figure 1 and the statistics so far is that countries that are able to build lasting democracies and enjoy some prosperity seem to pool at a stable equilibrium among other successful performers including the OECD countries and a few eastern European transition economies as suggested by Przeworski, Alvarez, Cheibub and Limongi (2000)"

Some Book Reviews

Blink. Think. Blank. Bunk

How Doctors Think;

In recent years, Groopman writes, there has been a sharp reaction against the “catch as catch can” approach to teaching diagnosis that prevailed when he was in medical school, where trainees would watch senior doctors and somehow absorb their way of thinking. But he is critical of much of the thinking now in vogue. Today’s physicians are increasingly encouraged to behave as if they were computers, and to reason from flowcharts and algorithms. This is intended to produce better diagnoses and fewer errors; it is also embraced by insurance companies, who use it to decide which tests and treatments to approve. This approach can be useful for “run-of-the-mill diagnosis and treatment — distinguishing strep throat from viral pharyngitis, for example,” Groopman writes. But for difficult cases he finds it limiting and dehumanizing. He is similarly critical of generic profiles, classification schemes that draw statistical portraits of disease states. They encourage the doctor to focus on the disease, not the patient, and so may lead him to miss the particular manifestation in the particular sufferer.

Groopman also discusses physician heuristics — shortcuts to decision-making that he considers “the foundation of all mature medical thinking,” although they too “can lead to grave errors.” But Groopman points out that heuristics aren’t taught in medical school and are in fact discouraged, in favor of a much more leisurely and extended kind of thinking, typified by Socratic dialogue between students and professors. This means that young doctors enter the hospital knowing little about either the advantages or the disadvantages of heuristics. Take, for example, what psychologists call “availability,” the tendency to judge the likelihood of an event by how readily it comes to mind. Thus physicians may mistake symptoms of one disease for those of another disease they’ve seen more often. Or they may fall prey to “confirmation bias,” which leads them to rapidly assemble information into an accurate diagnosis — or misconstrue the evidence before them.

Cognitive errors are highlighted in Groopman’s account of a Vietnamese infant he calls Shira Stein, brought home by her adoptive mother to Boston. Before departure, the baby was coughing. On landing, she seemed dehydrated and refused to drink; a day later she was in the I.C.U. at Children’s Hospital with severe pneumonia. Her doctors, recognizing they might be up against an exotic infection from Vietnam, struggled to oxygenate her, but even on the respirator her condition deteriorated. Saved from death by extreme measures, she was found to be infected by five potentially lethal agents: pneumocystis, cytomegalovirus, Klebsiella, Candida and parainfluenzae. Such devastating multiple infections implied an immune deficiency. Doctors concluded that Shira had SCID, severe combined immunodeficiency disorder.

SCID is a rare, inherited condition. Because the gene is located on the X chromosome, it’s especially rare in girls, who must inherit the gene from both parents. And because Shira’s T-cells were only slightly low, she didn’t show the usual SCID pattern. Her case was defined as “atypical.”

Groopman’s account focuses on Shira’s extraordinary mother, who week after week stayed in the hospital, steadfast in her belief that her daughter would recover. “Shira is going to live,” Rachel tells him. “I can feel it inside of me.”

After more than a month in the I.C.U., Shira was successfully weaned from the respirator, and plans were begun for a bone marrow transplant to treat her immune deficiency. With the child improving, Rachel conducted her own research on SCID, becoming ever more convinced that her daughter did not have it. Instead, she suspected Shira had a nutritional deficiency.

Rachel stubbornly insisted that immune testing be repeated, and the pediatricians reluctantly indulged her. Shira’s T-cells were normal; she did not have SCID after all. The bone marrow transplant may well have killed her.

Groopman reviews the clinical conference where Shira’s case was discussed. Such conferences occur at every teaching hospital in the country, Groopman writes, but they generally lack “an in-depth examination of why the diagnosis was missed — specifically, what cognitive errors occurred and how they could have been remedied.” He observes that the doctors at Boston Children’s Hospital, one of the best pediatric hospitals in the world, had extensive experience with SCID and similar genetic abnormalities: “Familiarity breeds conclusions and sometimes a certain degree of contempt for alternatives.” Physicians may be reluctant to pursue unlikely diagnoses, particularly if they will be criticized by colleagues for ordering too many tests or for being show-offs.

Friedman as a Teacher

"I will not dwell here on what a remarkable colleague he was. I do, however, want to describe my first exposure to him as a teacher because he enormously changed my approach to economics and to life itself. After my first class with him a half-century ago, I recognized that I was fortunate to have an extraordinary economist as a teacher. During that class he asked a question, and I shot up my hand and was called on to provide an answer. I still remember what he said, “That is no answer, for you are only restating the question in other words.” I sat down humiliated, but I knew he was right. I decided on my way home after a very stimulating class that despite all the economics I had studied at Princeton, and the two economics articles I was in the process of publishing, I had to relearn economics from the ground up. I sat at Milton’s feet for the next six years—three as an assistant professor at the University of Chicago—learning economics from a fresh perspective. It was the most exciting intellectual period of my life."
-Gary Becker, The Economics of Liberty

See also the rest of the tributes.

Adjust rather than reduce part 2

Interesting article from NYT on global warming and its effects;

Two-thirds of the atmospheric buildup of carbon dioxide, a heat-trapping greenhouse gas that can persist in the air for centuries, has come in nearly equal proportions from the United States and Western European countries. Those and other wealthy nations are investing in windmill-powered plants that turn seawater to drinking water, in flood barriers and floatable homes, and in grains and soybeans genetically altered to flourish even in a drought.

In contrast, Africa accounts for less than 3 percent of the global emissions of carbon dioxide from fuel burning since 1900, yet its 840 million people face some of the biggest risks from drought and disrupted water supplies, according to new scientific assessments. As the oceans swell with water from melting ice sheets, it is the crowded river deltas in southern Asia and Egypt, along with small island nations, that are most at risk.

Like the sinking of the Titanic, catastrophes are not democratic,” said Henry I. Miller, a fellow with the Hoover Institution at Stanford University. “A much higher fraction of passengers from the cheaper decks were lost. We’ll see the same phenomenon with global warming.”

Those in harm’s way are beginning to speak out. “We have a message here to tell these countries, that you are causing aggression to us by causing global warming,” President Yoweri Museveni of Uganda said at the African Union summit in Addis Ababa, Ethiopia, in February. “Alaska will probably become good for agriculture, Siberia will probably become good for agriculture, but where does that leave Africa?” …

Mr. Miller, of the Hoover Institution, said the world should focus less on trying to rapidly cut greenhouse gases and more on helping regions at risk become more resilient...

Some officials from the United States, Britain and Japan say foreign-aid spending can be directed at easing the risks from climate change. The United States, for example, has promoted its three-year-old Millennium Challenge Corporation as a source of financing for projects in poor countries that will foster resilience. It has just begun to consider environmental benefits of projects, officials say.
Industrialized countries bound by the Kyoto Protocol, the climate pact rejected by the Bush administration, project that hundreds of millions of dollars will soon flow via that treaty into a climate adaptation fund.

But for now, the actual spending in adaptation projects in the world’s most vulnerable spots, totaling around $40 million a year, “borders on the derisory,” said Kevin Watkins, the director of the United Nations Human Development Report Office, which tracks factors affecting the quality of life around the world.

When in comes to global warming there seems to be too much finger pointing and for Musevenis of the world it is a useful tool for political rhetoric. The politicians of the developing world which are most likely to be hardest hit by global warming have hardly given a serious thought to the reality they are facing..."

When in comes to global warming there seems to be too much finger pointing and for Musevenis of the world it is a useful tool of political rhetoric. The politicians of the developing world which are most likely to be hardest hit by global warming have hardly given a serious thought to the reality they are facing.

How to Survive a Sea Level Uprising
Global warming resilience required

A Thing for Library

I've been playing around with the Library Thing- a cool way to organize your books.

Only a politician can justify a case for poor infrastructure

I wonder who's the economic adviser to the following Chief Minister from India;

Karnataka Chief Minister Dharam Singh today lashed out at the media for harping incessantly about the poor infrastructure in Bangalore. Singh said that the media should paint a more balanced picture and not stress only the negative aspects of the city.

"If you believe only what you read in the papers, you will think that people are only getting stuck in traffic jams every day. Why does nobody talk about the reasoning behind the our potholed roads?", asked the furious Chief Minister at a press conference today. When asked to explain, Singh said that thanks to the potholed roads and impoverished infrastructure of the capital city, many human lives had been saved. Referring to the recently released statistics that death from road accidents had gone down by 12% from 903 to 791, Singh gave credit to the poor roads and constant traffic jams in city. "You media people should put more value on human lives. Earlier, people used to get hit by speeding vehicles. Thanks to our roads, we have eliminated the possibility of reckless driving. Tell me, how can you hit an innocent pedestrian or another vehicle when you're driving on potholed roads at 20 Km/hour or if you're caught in a traffic jam on Airport Road?", said the CM.

Dharam Singh added that apart from the fewer accidents, inferior roads were also an important part of stimulating the state economy because they generated valuable jobs for the poor. He earnestly requested the middle class and upper-middle class citizens to spare a thought for the numerous labourers and construction workers who made their living from jobs generated by the road repair and maintenance contracts that are being issued every year. "It is easy for the people driving their expensive cars to complain about the state of the roads. I ask these people to put themselves in the shoes of the poor person who works on tarring roads. These people live a hand-to-mouth existence. If there are no roads to repair, how will they feed their families?", asked Singh.

via MadMan's Web

Quote of the day

"India's economic progress is largely responsible for the Indian films getting recognised abroad. When the economy is doing well, everything connected with the country, its food, culture, colour, art and films get noticed,"

- Indian film superstar Amitabh Bachchan

Friday, March 30, 2007

Costanza Doctrine

"If every instinct you have is wrong, then the opposite would have to be right."
- Jerry, to George, in "The Opposite"

"In recent times US grand strategy has been guided by a new kind of doctrine, named after not its author but its exemplar: the Costanza doctrine.

This doctrine, which had its heyday in 2002-2004 but remains influential, recalls the classic episode of the TV comedy Seinfeld, “The Opposite”, in which George Costanza temporarily improves his fortunes by rejecting all the principles according to which he has lived his life and doing the opposite of what his training indicates he should do. As Jerry tells him: “If every instinct you have is wrong, then the opposite would have to be right.”

Emboldened, he tries a counter-intuitive pick-up line on an attractive woman: “My name is George. I’m unemployed and I live with my parents.” At the end of their date, when she invites him up to her apartment, he demurs, cautioning that they do not know each other well enough. “Who are you, George Costanza?” the lady asks. Replies George: “I’m the opposite of every guy you’ve ever met.”

The Iraq policy pursued by the Bush administration satisfies the Costanza criterion: it is the opposite of every foreign policy the world has ever met.

The Costanza doctrine is most closely associated with President George W. Bush and his first-term confidants: the wild-eyed neo-cons and the dead-eyed ultra-cons. But there is a wider group, which includes most presidential candidates and many of Washington’s foreign policy elite, who are not fully paid-up subscribers to the doctrine but went along with it nonetheless. Allied governments in London, Madrid and Canberra also signed up.

In “The Opposite”, George breaches the most fundamental laws in his universe – for example, the age-old principle that “bald men with no jobs and no money, who live with their parents, don’t approach strange women”.

- America’s ‘Seinfeld’ strategy in Iraq

Ideas for Search Engines

I would like to be able to search for book covers- may be as a feature of Google Image search.

Quotes about Schumpeter

Schumpeter had launched a brilliant academic career just before World War I in Vienna. He is said to have made a vow to become the best economist, horseman, and lover in Vienna, and later to have remarked that he had never fully achieved that degree of mastery on a horse. After various vicissitudes, including a brief term as Minister of Finance during Austria’s hyperinflation, he came to Harvard in 1932. Schumpeter was learned and immensely clever, and as a minor foible, a poseur in abstract economic theory. I met him first in 1940 at the meetings of the American Economic Association in New Orleans. He greeted me cordially (characteristically he had read the little I had written) and he soon asked me: “ Are you not reminded, dear colleague, of general equilibrium theory in economics when you read modern mathematical physics?” I doubt that I had the courage to admit that I had sadly neglected mathematical physics, and I surely did not dare tell him that I doubted his own knowledge of that area.”

-George Stigler, Memoirs of an Unregulated Economist, pp.100-1,

"Schumpeter struggled mightily with the research and writing of Business Cycles. As he told his friend and fellow cycle theorist Wesley Clair Mitchell in 1937, "In order to carry out so detailed an investigation as would be necessary I would have to have a whole research staff working for me." To another friend, he wrote, "I am still a slave to my manuscript and for instance … worried last night till 2 a.m.., on such questions as whether potatoes were important enough in Germany in 1790 to count in the business cycle."

Even as he wrote the book, he pursued many other activities. As the undisputed star of the Economics Department, he entertained a stream of visiting scholars, led several faculty discussion groups, spent prodigal amounts of time counseling graduates and undergraduates, and taught a heavy load of courses. He also devoted considerable energy to a second big project—a book on money—but decided to defer (and ultimately to abandon) that effort. By the time he neared completion of Business Cycles, he was "in a state of perfect exhaustion," as he wrote in June 1937. Early in 1938, he reported to Harold Burbank, chairman of the Economics Department, "I am half dead and certainly entirely dazed from the long hours I must spend on rereading and touching up my manuscript.

Today, research efforts comparable to what Schumpeter was trying to do often employ teams of half a dozen statisticians, economists, and other social scientists. But in the 1920s and 1930s, this model of academic research was just getting started, and Schumpeter worked almost entirely on his own. As his student James Tobin recalled, "He didn't recruit students to help him; he didn't suggest topics arising in his own research to students for papers or dissertations; he didn't try out the ideas or findings of his draft chapters in seminars. That so enormous an achievement was the product of lonely research tells what a great scholar Schumpeter was.

- Thomas K. McCraw

Tyler Cowen recommends highly Thomas K. McCraw’s book,Prophet of Innovation: Joseph Schumpeter and Creative Destruction.

Foreign Exchange Reserves

China's reserves topped the $1 trillion mark last autumn.

Breastfeeding and HIV

"Exclusively breastfeeding until a baby is six-months old can significantly reduce the risk of mother-to-child HIV transmission, an African study says.

The South African researchers compared solely breastfed babies with those also given formula or solid foods.

They say breastfeeding carries a low transmission risk, but protects against potentially fatal conditions such as diarrhoea and pneumonia.

They say it is the best option for most women in the developing world.

In the developed world, the risk of mother-to-child HIV transmission has been cut from 25% to under 2% because of the use of antiretroviral therapies, exclusive formula feeding and good healthcare support."
-Breastfeeding alone cuts HIV risk

Circumcision Recommended in Global HIV Fight
Global health officials said Wednesday that countries with rampant AIDS epidemics should begin offering free or subsidized circumcisions in hopes of preventing millions of new infections and deaths.

The new recommendations, from the World Health Organization and the U.N. AIDS agency, came in response to growing evidence that removing a man's foreskin lowers his risk of contracting HIV by 60 percent. Circumcision campaigns could prevent 5.7 million new infections in Africa over the next 20 years, the agencies said.

World League Table of Adultery

A review of the book, Lust in Translation: The Rules of Infidelity from Tokyo to Tennessee by Pamela Druckerman;

"A former Wall Street Journal reporter, Ms Druckerman likes hard facts. So before getting into the tricky questions of guilt and complicity she tries to find an international adultery league table. That proves amazingly difficult. There are bogus surveys galore—she takes commendable swipes at Alfred Kinsey and Shere Hite—but very little based on proper, probability-weighted samples, and even fewer international comparisons.

Ms Druckerman finally unearths some unpublished data collected as part of AIDS research at the London School of Hygiene and Tropical Medicine. The most adulterous countries in the world are African. In Togo 37% of married or cohabiting men say they have had another sexual partner in the past 12 months. The most uxorious are probably Switzerland (3%) and Australia (2.5%).

In Japan she, like many outsiders, is baffled by the contrast between a gooey sentimentality about romance, and the sexlessness and distance of many Japanese marriages. It has its drawbacks, especially for women, but doesn't do much harm, she concludes. Her finely calibrated moral compass is matched by a reporter's knack for deft, understated description. She dryly recounts a visit to a sex club that is done up like a crowded subway train, where the customers pay for the privilege of being able to grope the female “commuters”.

Americans, she reckons, are a bit neurotic about adultery; in other countries it counts as a regrettable lapse, but not necessarily an unforgivable act of heinous betrayal. By contrast, in France, where she lives, people find it reprehensible that Americans actually discuss the point when dating turns monogamous; until then they casually juggle several suitors at once. The French are faithful during courtship; their marriages and liaisons last longer than Americans' do. Fidelity is rated as the top quality that Frenchwomen look for in a man; for men it comes second after “tenderness”. On the whole, though, they are tolerant of infidelity when it happens.

Her conclusion: people in rich countries value monogamy and tend not to stray often. In America, however, “adultery crises last longer, cost more, and seem to inflict more emotional torture.” Americans are so guilt-ridden, she writes, that they don't even enjoy what should be the pleasurable bit. Better, she reckons, to take a lesson from the French, who believe that monogamy is optimal, enjoy the lapses when they happen but try not to escalate them, and never, ever, confront a spouse for cheating."

Pervert Trains
For instance, one of the clubs, which caters to train gropers, simulates a 20-minute train ride in a carriage, complete with conductors’ announcements and ‘stops’ where women in short skirts (who are on the club’s payrolls) get on and off. For about 6,000 yen [about $50], ‘commuters’ can ride the train —and fondle as many of the pliant women as they please.

Bradford Plumer on the book

Podcasts Assorted

The History of Anaesthetics;
Charles Darwin described the horrors of surgery before anaesthetics like this: "I attended the operating theatre and saw two very bad operations... but I rushed away before they were completed. Nor did I ever attend again, for hardly any inducement would have been strong enough to make me do so; this being long before the blessed days of chloroform. The two cases fairly haunted me for many a long year." The suffering Darwin witnessed is almost unimaginable. In the 19th Century, a simple fracture often led to amputation carried out on a conscious patient, whose senses would be dulled only by brandy or perhaps some morphine. Many patients died of shock.

The properties of gases like nitrous oxide or “laughing gas” held out hope. The chemist Humphrey Davy in the 1790s described it as “highly pleasurable, thrilling”. He also noticed his toothache disappeared. But he failed to apply his observations and it wasn't until the 1840s that there was a major breakthrough in anaesthetics, when an enterprising dentist in Boston managed to anaesthetize a patient with ether. It became known as the “Yankee Dodge”. Ether had its drawbacks and the search for a suitable alternative continued until chloroform was tried in 1847, winning many admirers including Queen Victoria, the first English royal to use it.

So why did it take so long for inhaled gases to advance from providing merely recreational highs to providing an essential tool of humane surgery? What role did the development of the atomic bomb play in the development of anaesthetics? And how have society's changing attitudes to pain informed the debate?

Female orgasm
Professor Emerita Beverly Whipple from Rutgers University in New Jersey is co-author of the famous bestselling book The G Spot.

Satire Then and Now

Cardio-pulmonary resuscitation/Heart attack symptoms

Historical changes in sea level
How are ancient sea levels determined? It's with corals. They act as bathtub rings. Ancient reefs now exposed can be dated and placed in time. Sea level has been 100m higher than present, when there were no ice sheets, and about 120m lower than present during glacial periods. The whole mantle of the Earth adjusts as stresses change. The last time sea level was higher, it was 4-6 metres higher, and at that time, the arctic was 3-5 degrees hotter. 125,000 years ago, the reason was changes in the Earth's orbit. So if the same degree of warming was to occur this century, as predicted, a sea level rise of 4-6 metres would be expected. But this time, there'll be contributions from Antarctic melting as well.

The suspension of Pakistan's Chief Justice

A conversation with Don Stewart
Don Stewart (Retired Judge and Royal Commissioner, Author of "Recollections of an Unreasonable Man", published ABC Books)started his career as a police officer, went on to be a barrister, a judge, a royal commissioner and the founding chairman of the National Crime Authority. He has some amazing insights, some compelling stories and some surprising opinions

Coyle, Author, Says Economics Is Changing `Across the Board'

Ayaan Hirsi Ali

Two views on teaching: dumbing down or just relevant
Educationalist Dr Kevin Donnelly has been leading a spirited charge against what he sees as political correctness in the classroom. His new book Dumbing Down takes on progressive theories and educational fads. In this talk, recorded at the Sydney Institute, Dr Donnelly puts forward his key thesis. In reply, we hear from Carol Baxter, one of Australia's leading genealogical researchers, with the case for relevance

Philippe Legrain: Your Country Needs Immigrants

Annual Manning Clark Lecture: Restoring the Primacy of Reason in an Age of Fundamentalism

Nursing homes and their 'aesthetics'

Hamid Dabashi
Hamid Dabashi is the Hagop Kevorkian Professor of Iranian Studies and Comparative Literature at Columbia University in New York. He is the author of Authority in Islam, Theology of Discontent, and Close Up: Iranian Cinema, Past, Present, Future

The Donor's Perspective
Lisa Jordan, Deputy Director, Global and Civil Society Unit, Ford Foundation

The legacy of the slave trade
On the 200th anniversary of the abolition of the slave trade Cecily Jones discusses the legacy of the trade and why an apology is necessary

Global Organised Crime

Post Budget debate: Does public spending give us enough bang for our buck? (On UK Budget)

"We Call It Subprime for a Reason"
Concerns about the subprime mortgage market have been making the news lately. In the last NABE Outlook, subprime mortgage lending was identified by the NABE forecasters as posing the greatest risk to financial markets. At the same time, other headlines point to increases in both late payments and defaults. Take a closer look at this issue from the viewpoint of the mortgage banking industry with Douglas Duncan, chief economist of the Mortgage Bankers Association; from the standpoint of the credit ratings industry, with David Wyss, chief economist of Standard & Poor's; and from the standpoint of Fannie Mae, with chief economist David Berson.

The Libertarian Cultural Tradition, featuring Virginia Postrel
In Defense of Negative Liberty, featuring Tom G. Palmer
Are Libertarians in Intellectual Crisis?, featuring Tyler Cowen
On Radicals for Capitalism, featuring Brian Doherty

This Week from The Economist
George Bush and Congress; Germany's Muslims; Asia's economies; adultery around the world

Thursday, March 29, 2007

Wanted English Condom Testers

"The condom maker wants a panel of 5,000 people who are single, married, or in couples to report their experiences of using its condoms and lubricants.

Men and women of all ages, ethnic groups or sexual orientation have been asked to apply on its website.

Durex was inundated with 14,000 applicants on the first day it started a similar scheme in France."

-Condom testers required by Durex

A Cool Cover

Most of the contents of this week's The Economist is FREE.

Podcast about the survey on China and its region

Wednesday, March 28, 2007


As America falters, policymakers must look ahead by Summers (see also the rest of the comments)
How should economic policy respond to a potential fall-off in US demand? The great irony is that just as the worst investment decisions are made by those who do today what they wish they had done yesterday – buying assets that have already risen and selling those that have just lost their value – so also the worst economic policy decisions are made by policymakers who, instead of responding to current circumstances, seek to rectify past mistakes

How U.S. News Calculates "Employment at 9 Months"

Consistent common sense-Donald J. Boudreaux
"During the 1960s when Congress was mandating all sorts of automobile safety rules, such as prohibiting dashboards and car doors from having sharp metal edges, my colleague Gordon Tullock asked what is the goal of such regulation. "To save lives!" was, of course, the reply. "Fine," said Gordon. "But you're going about it all the wrong way. If you really want to save as many lives as possible on the highways, you should mandate that each steering-wheel column have a steel dagger jutting out with its point just inches from the driver's heart."

How Not to Bet on Global Warming

Growth story in volatile times

Nicole Richie vs. Carol Burnett from The Numbers Guy

Debating Hedge Funds ( The Economic Times of India)

Bombay as a Financial Centre

10 Austrian Vices and How to Avoid Them

Tsuyoku Naritai! (I Want To Become Stronger)

Removing the Blinders on International Trade

Picking the Perfect NCAA Bracket

Indian Currency Regime and Its Consequences

Social, Economic and Educational Conditions of Indian Muslims

The Marginal Cost and Marginal Benefit of Cancer Drugs

Private Property and Socialism: A Contradiction? BECKER

Beyond the Subprime Debacle- Robert J. Samuelson
Remember the bank panic of 1907? Probably not. But revisiting it is one way to clarify the differences between the old financial order and the new -- and the challenges posed to the new order by the subprime mortgage mess. Higher defaults on these loans to weaker borrowers raise a question: Is the new order better than the old? For the U.S. economy, the stakes are huge.

Consider the financial upheaval. Since the early 1800s, banks had dominated the system. People and businesses deposited their cash in banks; then the banks made loans. Now, much money bypasses banks. In 1975, banks and savings and loan associations -- close cousins -- issued 73 percent of all home mortgages. By 2006, their share of the $10 trillion mortgage market was 29 percent. Almost 60 percent had been "securitized": bundled into bonds and sold to investors (pensions, mutual funds, foreign investors).

Rejecting Nobel class papers

Interesting paper;

"I review and discuss instances in which 27 future Nobel Laureates encountered resistance on part of scientific community towards their discoveries and instances in which 36 future Nobel Laureates encountered resistance on part of scientific journal editors or referees to manuscripts that dealt with discoveries that on later date would assure them the Nobel Prize. Although in some occasions the rejection of Nobel class papers could be justified, here I show that the danger that scientific journals disregard or delay important discoveries is real and it can be disastrous"

Via EclectEcon

Ford Pinto Case

John Kay writes;

"Business activities such as chemicals, flying and pharmaceuticals are heavily regulated. Agencies such as CSB must balance the conflicting public interests in greater safety and cheaper products. Some do so explicitly: their economists try to calculate the monetary value of life, serious accidents and environmental damage. Perhaps companies should make the same assessment?

The Ford Motor Company once did. The company’s calculation was the “smoking gun” in what may be the most famous trial in the history of product liability. Richard Grimshaw, a 13-year-old passenger, suffered horrible disfigurement when a Ford Pinto caught fire after a rear-end collision. A Californian jury awarded $125m in punitive damages, but this was reduced on appeal.

Legend has Ford executives marketing a dangerous car after estimating that it would be cheaper to settle with grieving widows than to spend $10 per car protecting the fuel tank. The facts are somewhat different. The offending memo was prepared as part of a submission to the company’s safety regulator, the National Highway Transportation Safety Agency. The memo did not estimate the costs to Ford of protecting the fuel tank from the accident that injured Mr Grimshaw, but the cost to the US car industry of reducing the risk of fuel leakage if a car rolled over. The value of life in the calculation, at $200,000, is offensively low: much less than a US jury typically awards, and much less than the jury did in fact award to the family of the driver of the Pinto, who was killed in the accident. But the figure is based on a common methodology used by public agencies in such assessments and its source was the NHTSA itself. Ford’s calculation was precisely the one it believed the agency would make.

The Pinto was not a safe car. Small cars on US roads are vulnerable. The Pinto’s safety record was neither better nor worse than that of other small cars on American roads at the time.

Making decisions that balance human life against costs is unavoidable. Doctors and politicians, generals and road engineers must do so all the time. Everyone who buys a compact car makes such a trade-off. We wish it were not so. We prefer that the calculations are implicit rather than explicit. We prefer them to be made by public agencies than by private companies. And we deny that we make these judgments ourselves, although we do so every day.

Ford’s error in that memorandum was a more subtle one than the story of profit before human life – which may, nevertheless, have been the reality – allows. A private business had asserted the authority which only a political process can make legitimate. The safest course for a company making judgments about public safety – and it is not a very safe course either for the company or the public – is to rise slightly above the standards of its peers."

Regulation of Health, Safety, and Environmental Risks by W. Kip Viscusi
Smoke and Mirrors: Understanding the New Scheme for Cigarette Regulation
by W. Kip Viscusi
The Perception and Valuation of the Risks of Climate Change: A Rational and Behavioral Blend by W. Kip Viscusi
Risk-Risk Analysis

For overview of economics of the issue see Trade-Offs: An Introduction to Economic Reasoning and Social Issues by Harold Winter
(reviews at Newmark's Door and EclectEcon)

Reckless Homicide? Ford's Pinto Trial by Lee Patrick Strobel

The Myth of the Ford Pinto Case

Opportunity cost of Forex Reserves in India

"In the case of reserves: India holds roughly $200 billion of reserves, all of which are invested in low-yield first-world securities. From an `insurance' perspective, what India needs is roughly $50 billion. The opportunity cost of reduced returns works out to perhaps five percentage points. Applying 5 percentage points on $150 billion is an annual cost of $7.5 billion or roughly 1% of GDP."

- Ajay Shah

The welfare effects of a large depreciation

A working paper about Egypt from WB-The welfare effects of a large depreciation : the case of Egypt, 2000-05 by Art Kray;

Summary: The Egyptian pound depreciated sharply between 2000 and 2005, declining by 26 percent in nominal trade-weighted terms. The author investigates the effect of the large depreciation on household welfare operating through exchange rate-induced changes in consumer prices. He estimates exchange rate pass-through regressions using disaggregated monthly consumer price indices to isolate the impact of the exchange rate changes on consumer prices. Then he uses household-level data from the 2000 and 2005 Egyptian household surveys to quantify the welfare effects of these consumer price changes at the household level. The average welfare loss due to exchange rate-induced price increases was equivalent to 7.4 percent of initial expenditure. Stronger estimated exchange rate pass-through for food items imply that this effect disproportionately affected poorer households

Some caveats;

One should however keep in mind three major caveats about these results. The first is that I have looked only at the effects of the exchange rate working through consumer prices. The depreciation is also likely to have had heterogenous impacts on the earnings of households employed in different sectors, and these effects are not capture for lack of (a) detailed information in the household survey of the sector of employment of households, and (b) evidence on the effects of exchange rate changes on wages across sectors in Egypt.

A second limitation is that data limitations have also forced me to work at a fairly high level of aggregation. At this coarse level of aggregation, estimated substitution effects in response to price changes are small, and so I am likely to be overestimating the effects on household welfare. Consider for example the study of the Indonesian depreciation of 1997 by Friedman and Levinsohn (2002). They worked with a much more highly disaggregated set of expenditure items, and found that substitution effects were roughly half the size of the direct effects. If similar substitution behavior occurred for households in Egypt in response to the (much smaller) set of price changes, but was missed at the coarse level of aggregation at which I have worked, then the adverse welfare effects of the depreciation will be considerably overstated and could be much smaller.

Finally, as noted in the introduction, I have studied the welfare effects of depreciation-induced changes in consumer prices over a fairly short period with a fairly large depreciation, and this time horizon drives the finding of significant welfare losses. It is important to note that the depreciation in the trade-weighted nominal exchange rate between 2000 and 2005 was preceded by an even larger trade-weighted nominal appreciation in the previous five years between 1995 and 2000, and that over the entire period between 1995 and 2005, the trade-weighted nominal exchange rate appreciated by about 20 percent. If the pattern of exchange rate pass-through to disaggregated consumer prices was similar during this earlier period, then one can interpret the welfare losses sustained between 2000 and 2005 as just a partial reversal of the welfare gains experienced during the appreciation between 1995 and 2000.

Two Econ Talks

Amartya Sen- talks about the interplay of economic theory and political philosophy in his work on public choice, development, and freedom.

John Kenneth Galbraith looks back and reflects on the art of writing, U.S. policy toward the Third World during the Cold War, political leadership, and on his intellectual contributions.


Visualizing Global Development

An Online Atlas of MDGs fom the World Bank.

Google has acquired Hans Rosling's Trendalyzer software


India - “the next frontier” for American institutions

NYT writes about the increasing interest of American universities for the Indian higher education market;

Among Indians ages 18 to 24, only 7 percent enter a university, according to the National Knowledge Commission, which advises the prime minister’s office on higher education. To roughly double that percentage — effectively bringing it up to par with the rest of Asia — the commission recommends the creation of 1,500 colleges and universities over the next several years. India’s public universities are often woefully underfinanced and strike-prone.

Indians are already voting with their feet: the commission estimates that 160,000 Indians are studying abroad, spending an estimated $4 billion a year. Indians and Chinese make up the largest number of foreign students in the United States...

The Americanization of Indian education is following a variety of approaches. Champlain College, based in Burlington, Vt., runs a satellite campus in Mumbai that offers degrees in one of three career-oriented subjects that college administrators have found to be attractive to Indians: business, hospitality industry management and software engineering. A 2005 study commissioned by the government found at least 131 foreign educational institutions operating in India at the time, a vast majority offering vocational courses.

However, Champlain’s degrees are not recognized by the Indian government, something that is still typical here. One government official who looks after private education estimated that at least 100,000 students graduated from entirely unaccredited private institutions. The study found that students did not consider unaccredited college degrees to be a hindrance to getting jobs in the private sector.

California State University, Long Beach, has agreed to help start American-style, four-year degree programs at state-run Lucknow University in northern India. Its vice chancellor, R. P. Singh, said the California institution would help draft the curriculum and train faculty.

Cornell University, whose president is among the American university officials visiting India in recent months, is seeking to expand research collaborations, particularly in agriculture and public health.

Rice University envisions faculty and student exchanges, particularly in technology. “What’s in it for us is opportunities for our students, opportunities for our faculty in terms of research collaboration,” said David Leebron, the university president, who was in India in February. “At this stage we think we are best served by developing partnerships with Indian institutions.”

For its part, Carnegie Mellon offers its degree in partnership with a small private institution here, the Shri Shiv Shankar Nadar College of Engineering. Most of the course work is done at relatively inexpensive rates here in India, followed by six months in Pittsburgh, at the end of which students graduate with a Carnegie Mellon degree.

See also this post at FP blog

Congratulations to World's Tallest Man

Home is where the heart is for world's tallest man ;
"The world's tallest man, whose search for a bride covered the world, ended up marrying a woman from his home town nearly half his age and more than two feet shorter, Chinese media reported on Wednesday"

More Sex Equals Safer Sex?

I didn't know Landsburg's new book was out;

"An economic professor and author is making the rounds in Washington County and stopped by Marietta College for a talk about a surprising subject, sex.

Dr. Steven Landsburg is an economics professor of at the University of Rochester.

Tonight he spoke to dozens of Valley residents about his newest book, "More Sex is Safer Sex, and Other Surprises."

It was all part of the Milton Friedman Lecture Series.

Tomorrow, Landsburg will talk to the Economic Roundtable of the Ohio Valley about how to fix everything."

Some excerpts;
"Economics is largely about the surprising and sometimes tragic consequences of rational behavior. When there's an exciting moment at the ballpark, everybody stands up trying to see better, and therefore nobody succeeds. At parties with a lot of simultaneous conversations, everyone speaks loudly to be heard over everyone else, and everyone goes home with a sore throat. Still, it's rational to stand at the ballpark, and to yell at the party. We stand and we yell for the same reason we blow leaves -- from exquisite (and entirely rational) concern for our own interests and none for the harm that spills over onto our neighbors.

It's a general principle of economics that things tend to work out best when people have to live with the consequences of their own behavior, or, to put it another way, things tend to work out poorly when the consequences of our actions spill over onto other people. Simple and obvious as that general principle might sound, it has the power to undermine vast deposits of conventional wisdom. It suggests that the world has too few people, too few misers, and not enough casual sex, but just the right amounts of secondhand smoke and child labor. It implies that a thirst for gold is socially ruinous, but a taste for revenge can be a social godsend. It casts light on why the tall, the thin, and the beautiful earn higher wages. It suggests sweeping reforms of the legal system, the political system, the tax code, and the rule against jumping to the front of the water-fountain line. And it explains why automobile insurance in Philadelphia is so damn expensive."

I think the cover is really lousy.

‘Whoosh Boom Splat’ Podcast

A podcast interview with the author William Gurstelle (Backyard Ballistics: Build Potato Cannons, Paper Match Rockets, Cincinnati Fire Kites, Tennis Ball Mortars, and More Dynamite Devices) from Boing Boing.

William’s latest book is Whoosh Boom Splat: The Garage Warrior's Guide to Building Projectile Shooters.

William Gurstelle’s blog - Notes from the Technology Underground.

MAKE magazine podcasts

Minnesota Technology Magazine

Backyard Ballistics Teaching Resources

Some interesting posts from William's blog;
Home Brewed Isotopes – Basement Cyclotrons
Thoughts on DIY Geek Porn
Fruitcake Launching by Catapult
Nitric Acid Acts Upon Trousers
cooking for engineers
The Man Who Found Einstein's Brain
Whats New in the Field of Blowing Things Up
Exploding Chicken Recipe 1 - "Chicken CacciaTora Tora Tora
Making Flamethrowers
New Blog for lovers of Fire Art: Flame Effects Blog

The cultural limitations of cricket

Shashi Tharoor, Indian diplomat and author of forthcoming “The Elephant, the Tiger and the Cellphone: India, The Emerging 21st Century Power” laments about the unpopularity of cricket in America;

"No, it’s not a case of ethnic discrimination. Call it willful ignorance. Americans have about as much use for cricket as Lapps have for beachwear. The fact that elsewhere in the civilized world grown men dress up like poor relations of Gatsby and venture hopefully into the drizzle clutching their bats invariably mystifies my American friends. And the notion that anyone would watch a game that, in its highest form, could take five days and still end in a draw provokes widespread disbelief among results-oriented Americans.

In a concession to the pace of life in our increasingly Americanized world, one-day international cricket matches were born in the 1970s, and the World Cup features one-day games (which take about seven hours, rather than 30 as in the five-day “test matches”). But that hasn’t made it any more popular here. A billion people might be on tenterhooks around the world for the results of each match, but most American newspapers don’t even adequately report the scores.

Ever since the development of baseball, the ubiquitous and simplified version of the sport, Americans have been lost to the more demanding challenges — and pleasures — of cricket. Because baseball is to cricket as simple addition is to calculus — the basic moves may be similar, but the former is easier, quicker, more straightforward than the latter, and requires a much shorter attention span. And so baseball has captured the American imagination in a way that leaves no room for its adult cousin…

But now I’ve given up. As legions of missionaries have discovered before me, you can’t bring enlightenment to people who don’t realize they’re living in the dark. “You mean people actually pay to watch this?” exclaimed one American I tried to interest in the game. “It’s about as exciting as measuring global warming.”..

Indeed, cricket is no longer what Americans imagine it is, a decorous sport played by effete Englishmen uttering polite inanities (“marvelous glance to fine leg, old chap”) over cucumber sandwiches. World cricket now uses Hindi terms (the “doosra” trips off the tongues of Oxonian commentators) and 80 percent of the global game’s revenues come from India...

Cricket is better suited to a country like India, where a majority of the population still consults astrologers and believes in the capricious influence of the planets — so they can well appreciate a sport in which, even more than in baseball, an ill-timed cloudburst, a badly prepared pitch, a lost toss of the coin at the start of a match or the sun in the eyes of a fielder can transform the outcome of a game. Even the possibility that five tense, hotly contested, occasionally meandering days of cricketing could still end in a draw seems derived from ancient Indian philosophy, which accepts profoundly that in life the journey is as important as the destination. Not exactly the American Dream."

I wonder what would be Tyler Cowen's explanation on the issue.

Markets in Everything-Elephant Poo paper

"We can make about 25 large sheets of paper from a single piece (or turd) of elephant poo poo!!! That translates into about 10 standard sized journals including the front and back covers!"

Avialable from The Great Elephant Poo Poo Paper Company

Via Boing Boing

Fun with Maths

Number Gossip

Word Game

Advanced Dictionary Search

Interesting Web Links on Maths

In praise of mathematics


Free at Last; Part 1, Part 2 and Part 3 (Three part series from BBC on slavery abolition)

Bicentennial of the Abolition of the Slave Trade

On March 25th, 1807, George III gave his royal assent to the Act which abolished the slave trade. From then on it was illegal to carry slaves in British ships. Wendy Barnaby in London marks this 200th anniversary with an exploration of the history of the slave trade in Britain and conversations which assert that slavery has many modern forms

Alexis de Tocqueville - Prophet of democracy

Matheny of Macroeconomic Advisers Expects `Soft' GDP Growth

Crisis combination in the Middle East

Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement
Featuring the author, Brian Doherty

On Radicals for Capitalism, featuring Brian Doherty

In Defense of Negative Liberty, featuring Tom G. Palmer

McKinnon of Stanford Says Yuan Appreciation Could Hurt China

"For Britain to thrive, it needs many more migrants”- The Economist Debate

Frameworks For Success in Afghanistan: Do We Have What We Need?
Christopher Alexander, U.N. Deputy Special Representative of the Secretary General for Afghanistan; former Canadian Ambassador to Afghanistan

African Security and U.S. Interests: The Problem of `Ungoverned Spaces`
Theresa Whelan, U.S. Deputy Assistant Secretary of Defense for African Affairs

Health and Humanitarian Crises
Dr. Rick Brennan, Health Director, International Rescue Committee

Barbara Freese Says U.S. Coal Use `Higher Than It's Ever Been'

Hughes of Emory Says Safe Water Supply May Exceed 90 Percent

Kevin Kelly on the Future of the Web and Everything Else

Metal-containing molecules and DNA

Nixon and Mao: The Week that Changed the World

Tuesday, March 27, 2007

Uber Power

"America, though, is by far the biggest spender, allocating over eleven times as much as China to its defence budget, and more than the other nine biggest combined."

From The Economist

Yet, Rain KO'd Interceptors During Korea Missile Tests;
Torrential rains wiped out a quarter of the U.S.' intercontinental ballistic missile interceptor silos in Ft. Greely, Alaska last summer -- right when North Korea was preparing to carry out an advanced missile launch, according to documents obtained by the Project On Government Oversight.

Monday, March 26, 2007

Have Email Scams Migrated to Ivory Coast?

It’s amazing how far email scammers would go- calling you all the way from Africa trying to convince you of the genuiness of the offer. Recently, site meter of the blog has noticed search items like ‘company CEOs emails’ been hit from Sierra Leon and Ivory Coast.

So readers be informed, Even Smarties Get Swindled on the Net.

Here's the same scam from the one and only, Utility Delivery And Sleaning Company by a Miss Kudi Suleman.

*The picture shows one such scam document used by email scammers.

EFCC’s crackdown on Yahoo boys
Latest statistics released in March by Ultrascan Advanced Global Investigations, a Dutch private investigation firm that has been studying 419 scams worldwide for a decade, showed that companies and individuals in the United States were defrauded of about $720 million last year alone. Total losses from 37 nations to these scams are almost $3.2 billion.

The "Nigerian" Scam: Costly Compassion
The 419 Files

Fraud, Phishing and Financial Misdeeds
Nigeria - The 419 Coalition Website

Advance fee fraud
Fraud or Friendster?

The Internet Crime Complaint Center

Sunday, March 25, 2007

Quote of the Day

"Patriotism is supporting your country all the time, and your government when it deserves it"
-Mark Twain

Podcasts Assorted

Who's a Jew?
Reform Judaism began in the 19th Century, embracing social and scientific progress into its practice of Judaism. Today it is the dominant expression of Judaism in the West. But in Israel, where Rabbi Uri Regev heads the World Union for Progressive Judaism, it is disadvantaged legally and religiously. Rabbi Regev, and Rabbi Jacqueline Ninio of Temple Emanuel in Sydney, explain the beliefs and practice of Reform Judaism.

Bicentennial of the Abolition of the Slave Trade

The many worlds of David Lewis
The American philosopher David Lewis was an important and puzzling figure. Many philosophers believe that we can talk about different possible worlds (a world in which John Kerry won the last US presidential election, for example, or a world in which Tom and Nicole are still married) but Lewis held that there is a sense in which this multitude of other worlds can be said to exist. And he barracked for Essendon too

Unforgettable speeches: the Apology of Socrates

Serial Killers in American Culture

Catching affluenza
Is affluence a kind of virus? Does it produce twice as much mental illness in English speaking countries because we have a different approach to being well off? Oliver James is a psychologist and is connected to the Happiness Forum. His latest book, Affluenza is an indictment of modern materialism. But what's the alternative?

The Gospel according to Judas

George W. Bush: High Crimes and Misdemeanors?
Elizabeth Holtzman, Attorney, former U.S. Congresswoman (D-NY), former NYC comptroller

The Blind Brain: Part 1 of 2

The history and uses of Aspirin

Humor from Abraham Lincoln

"Abraham Lincoln told the following anecdote about George Washington, which he attributed to Colonel Ethan Allen, a hero of the American Revolution. During a post-war visit to England, Allen's hosts took great pleasure in ridiculing Americans, particularly George Washington. To irritate Allen they went so far as to hang a picture of Washington in the "Back House" (toilet). Allen announced this was highly appropriate, because "there is nothing that will make an Englishman shit so quick as the sight of General Washington."

Via Jennifer's History and Stuff

Phishing Markets

From Tech.view column from The Economist;

-A complete identity package, including a permanent resident card (or green card) and a social security card, goes for $150 and takes about 40 minutes to deliver.

-Identity theft is one of the fastest growing white-collar crimes in the world. A fresh identity is stolen every four seconds. Some 10m Americans have been victims. The average cost of restoring a stolen identity is reckoned to be $8,000, and victims spend typically 600 hours dealing with the nightmare—plus many years more restoring their good name and credit record.

-A new report from an internet security firm called Symantec says that more than one-half of all the “underground economy servers” used for selling confidential information and captured personal data are located in the United States. The trade in personal data suggests that internet criminals have more or less given up hacking into banking systems and trying to steal databases of customer accounts.

-In the underground marketplace, a credit card with its verification number can be bought for $6 a pop. For buyers in bulk, stolen identities—including bank account, credit card, date of birth and social security details—go wholesale for around $15 apiece, offering a ten-fold mark-up when retailed in MacArthur Park and elsewhere.

-Symantec says that in the second half of 2006 some 6m computers around the world were infected by “bots” (robotic pieces of malicious software), 29% up on the previous six months. Four out of five of them had been attacked by Trojan horses that sniffed out confidential information by logging keystrokes, recording internet sites visited, and reporting the findings to a third party. Other unsuspecting users were redirected to fake websites where they were fooled by phishing scams into parting with their identity details.

Why this sudden upsurge in identity theft? One factor, whether cause or effect, is a growing market in what the industry calls “zero-day exploits”. The majority of security testers agree that the ethical thing to do when they discover a flaw in a computer programme is to give the manufacturer sufficient warning for it to prepare a software patch before going public with the finding. But more and more vulnerabilities are being detected by shady hackers who auction their exploits off to the highest-bidding crooks.

Nasty little zero-day tricks that exploit flaws in popular software go for $20,000 to $30,000 each. A zero-day exploit for Microsoft’s new Windows Vista operating system will fetch anything up to $50,000. A Trojan horse designed for stealing online account information can be snapped up for as little as $5,000.

Symantec Reports Rise in Data Theft, Data Leakage, and Targeted Attacks Leading to Hackers’ Financial Gain
AntiPhising Working Group

History Lesson from the Daily Show

Did Abraham Lincoln include his rivals in the cabinet- John Bolton says no. John Stewart does some fact checking with Doris Kearns Goodwin, author of the book Team of Rivals: The Political Genius of Abraham Lincoln.

Watch the clip from Daily Show.

Goodwin discussing the book (podcast)
Interview with Goodwin (Google Video)
'Team of Rivals': Friends of Abe

How the Goodwin Story Developed

FMIS in Iraq

“The GoI has adopted a new transitional chart of accounts (CoA) and started using the automated Financial Management Information System (FMIS). The newly adopted CoA is not fully consistent with the Fund’s GFSM 2001, but we are committed to correct any shortcomings in this regard and identify which accounts in the CoA form part of the budget classification by end-June 2007 (structural performance criterion). An assessment of the FreeBalance software (which was supposed to be completed by end-December) is also behind schedule. The Ministry of Finance (MoF) has started using the FMIS from January 2007. The aggregated monthly reports generated by the FMIS will be reviewed and compared with the corresponding consolidated reports generated by the existing legacy system for the budget as a whole. We will also increase our efforts to make sure that all spending units, including small independent accounting units, submit their transaction data to the relevant ministry, which should submit consolidated data to the MoF. For spending units where this is not possible in the near future, the MoF will enter their trial balances in the FMIS.”
-Iraq Letter of Intent, IMF

If anybody has come across an independent evaluation of the FreeBalance software, let us hear about it.

Related Links;
Iraqi Central Bank
Links to other government agencies
Iraq's Financial Management Information System to be fully operational by June

Automating Financial Management Information Systems in Post-Conflict Environments: Lessons from Kosovo

Implementing Integrated Financial Management Information Systems: World Bank Experience ;
The World Bank has invested over $1 billion in integrated financial management systems (IFMIS) in developing and transition economies with mixed results

Debate about a verse

"Laleh Bakhtiar had already spent two years working on an English translation of the Koran when she came upon Chapter 4, Verse 34.

She nearly dropped the project right then.

The hotly debated verse states that a rebellious woman should first be admonished, then abandoned in bed, and ultimately “beaten” — the most common translation for the Arabic word “daraba” — unless her behavior improves.

“I decided it either has to have a different meaning, or I can’t keep translating,” said Ms. Bakhtiar, an Iranian-American who adopted her father’s Islamic faith as an adult and had not dwelled on the verse before. “I couldn’t believe that God would sanction harming another human being except in war.”…

“This verse became an issue of debate and controversy because of the ethics of the modern age, the universal notions of human rights,” said Khaled Abou El Fadl, an Egyptian-born law professor and Islamic scholar at the University of California, Los Angeles.

The leader of the North American branch of a mystical Islamic order, Sheik Muhammad Hisham Kabbani, said he had been questioned about the verse in places around the world where women were struggling for greater rights, but most of all by Westerners.
Women want to be free “from some of the extreme ideology of some Muslims,” the sheik said, after delivering a sermon on the verse recently in Oakland, Calif. ..

There are at least 20 English translations of the Koran. “Daraba” has been translated as beat, hit, strike, scourge, chastise, flog, make an example of, spank, pet, tap and even seduce…

Ms. Bakhtiar, who is 68 and has a doctorate in educational psychology, set out to translate the Koran because she found the existing version inaccessible for Westerners. Many Jewish and Christian names, for example, have been Arabized, so Moses and Jesus appear in the English version of the Koran as Musa and Issa.

When she reached the problematic verse, Ms. Bakhtiar spent the next three months on “daraba.” She does not speak Arabic, but she learned to read the holy texts in Arabic while studying and working as a translator in Iran in the 1970s and ’80s.

Her eureka moment came on roughly her 10th reading of the Arabic-English Lexicon by Edward William Lane, a 3,064-page volume from the 19th century, she said. Among the six pages of definitions for “daraba” was “to go away.”

“I said to myself, ‘Oh, God, that is what the prophet meant,’ ” said Ms. Bakhtiar, speaking in the offices of Kazi Publications in Chicago, a mail-order house for Islamic books that is publishing her translation. “When the prophet had difficulty with his wives, what did he do? He didn’t beat anybody, so why would any Muslim do what the prophet did not?”

She thinks the “beat” translation contradicts another verse, which states that if a woman wants a divorce, she should not be mistreated. Given the option of staying in the marriage and being beaten, or divorcing, women would obviously leave, she said…

“I am not apologetic about why the Koran says this,” said Seyyed Hossein Nasr, an Islamic scholar who teaches at George Washington University. The Bible, he noted, addresses stoning people to death…

The verse 4:34, with its three-step program, is often called a reform over the violent practices of seventh century Arabia, when the Koran was revealed. The verse was not a license for battery, scholars say, with other interpretations defining the heaviest instrument a man might employ as a twig commonly used as a toothbrush.
Sheik Ali Gomaa, the Islamic scholar who serves as Egypt’s grand mufti, said Koranic verses must be viewed through the prism of the era.

The advice “is always broad in order to be relevant to different cultures and in different times,” he said through a spokesman in an e-mail message. “In our modern context, hitting one’s wife is totally inappropriate as society deems it hateful and it will only serve to sow more discord.”..

“The whole idea is not to punish her,” said Ingrid Mattson, an expert in early Islamic history at the Hartford Seminary and the first woman to be president of the Islamic Society of North America. “It is like a fear of sexual impropriety, that the husband takes these steps to try to bring their relationship to where it is supposed to be. I think it is a physical gesture of displeasure.”

- New Translation Prompts Debate on Islamic Verse

I don’t understand why some body who doesn’t understand Arabic should be contemplating translating the Koran. I would recommend referring to Muhammad Asad’s translation.

To be Muslim and American: two books examine how
Anger at German Koran divorce ban
Muslim Marriage Contract in American Courts

The Paradoxes of Globalization

Interesting article from NYT- ‘Reverse Foreign Aid’;

"Economic theory holds that money should flow downhill. The North, as rich countries are informally known, should want to sink its capital into the South — the developing world, which some statisticians define as all countries but the 29 wealthiest. According to this model, money both does well and does good: investors get a higher return than they could get in their own mature economies, and poor countries get the capital they need to get richer. Increasing the transfer of capital from rich nations to poorer ones is often listed as one justification for economic globalization.

Historically, the global balance sheet has favored poor countries. But with the advent of globalized markets, capital began to move in the other direction, and the South now exports capital to the North, at a skyrocketing rate. According to the United Nations, in 2006 the net transfer of capital from poorer countries to rich ones was $784 billion, up from $229 billion in 2002. (In 1997, the balance was even.) Even the poorest countries, like those in sub-Saharan Africa, are now money exporters.

How did this great reversal take place? Why did globalization begin to redistribute wealth upward? The answer, in large part, has to do with global finance. All countries hold hard-currency reserves to cover their foreign debts or to use in case of a natural or a financial disaster. For the past 50 years, rich countries have steadily held reserves equivalent to about three months’ worth of their total imports. As money circulates more and more quickly in a globalized economy, however, many countries have felt the need to add to their reserves, mainly to head off investor panic, which can strike even well-managed economies. Since 1990, the world’s nonrich nations have increased their reserves, on average, from around three months’ worth of imports to more than eight months’ worth — or the equivalent of about 30 percent of their G.D.P. China and other countries maintain those reserves mainly in the form of supersecure U.S. Treasury bills; whenever they buy T-bills, they are in effect lending the United States money. This allows the U.S. to keep interest rates low and Washington to run up huge deficits with no apparent penalty.

But the cost to poorer countries is very high. The benefit of T-bills, of course, is that they are virtually risk-free and thus help assure investors and achieve stability. But the problem is that T-bills earn low returns. All the money spent on T-bills — a very substantial sum — could be earning far better returns invested elsewhere, or could be used to pay teachers and build highways at home, activities that bring returns of a different type. Dani Rodrik, an economist at Harvard’s Kennedy School of Government, estimates conservatively that maintaining reserves in excess of the three-month standard costs poor countries 1 percent of their economies annually — some $110 billion every year. Joseph Stiglitz, the Columbia University economist, says he thinks the real cost could be double that.

In his recent book, “Making Globalization Work,” Stiglitz proposes a solution. Adapting an old idea of John Maynard Keynes, he proposes a sort of insurance pool that would provide hard currency to countries going through times of crisis. Money actually changes hands only if a country needs the reserve, and the recipient must repay what it has used….

In many African countries, more than 40 percent of college-educated people emigrate to rich countries. Malawian nurses have moved to Britain and other English-speaking nations en masse, and now two-thirds of nursing posts in Malawi’s public health system are vacant. Zambia has lost three-quarters of its new physicians in recent years. Even in South Africa, 21 percent of graduating doctors migrate…

American energy use is being subsidized by tropical coastal nations, who appear to be global warming’s first victims. Some scientists argue that Bangladesh already has more powerful monsoon downpours and Honduras fiercer cyclones because of global warming — likely indicators of worse things ahead. The islands of the Maldives may someday be completely underwater. The costs these nations will pay do not appear on the global balance sheets. But they are the ultimate subsidy."

William Easterly: Africa's Poverty Trap
Jeffrey Sachs: Absent-Minded Killers
Boom and Bust
Toward a new development economics- Abhijit Vinayak Banerjee
Inequality Matters -Nancy Birdsall

Places you'd rather want to be in

- Faroe Islands (from NYT)

What Iraqi Government Promised IMF

Some excerpts from Iraq: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding;

The Government of Iraq (GoI) has been able to resist unwarranted spending pressures and the Central Bank of Iraq (CBI) has maintained stable monetary conditions. Inflation, however, has risen to an unacceptable level. Annual consumer price inflation peaked at a rate of almost 77 percent in August, fell back to around 52 percent in September-November, and increased again to almost 65 percent in December. The underlying rate of inflation (excluding fuel and transportation) has been stable, in the range of 30–35 percent.

Real GDP growth is estimated at about 3 percent in 2006. This is lower than the 10½ percent projected at the outset of the program, because oil production has not increased as expected. Oil exports have been hampered by technical problems, as well as security and other difficulties in undertaking the necessary investments. Real non-oil GDP growth also lagged expectations and, on the basis of available output indicators, is estimated at 7½ percent compared to 8 percent originally projected.

The 2007 budget is designed to accommodate the exchange rate appreciation, while preserving a solid investment program. Oil revenues are projected on the basis of increasing oil exports to 1.7 million barrels per day (mbpd) from 1.44 mbpd in 2006. The envisaged increase in the reconstruction (import) levy from 5 to 10 percent will be postponed until 2008.

The GoI intends to keep spending under control in 2007. The budget makes provision for the (amended) pension system, and allows for a large increase in the allocation for the social protection program, as well as for security. Other current expenditures, including on wages, will rise moderately while the daily hardship allowance for military personnel will be revised to limit the costs. We will freeze hiring in 2007 and resist unbudgeted bonuses. Budgetary support for imports of fuel products will be restricted to $300 million (for kerosene) and all other imports of fuel products by the Ministry of Oil (MoO) will be financed from the revenues of the MoO. There will remain an implicit subsidy on domestically produced fuel products (mainly regular gasoline and diesel).

To help curb inflation the CBI will continue its tight monetary policy stance and allow the exchange rate to appreciate gradually, assuming the inflationary situation warrants a continuation of this policy. The CBI also stands ready to further increase its policy interest rate, if needed and effective to bring inflation down.

We have raised the domestic prices of fuel products and will continue to gradually increase these prices in the period ahead (Table 3; indicative quantitative benchmarks). The government has exited the domestic market for premium gasoline. Regular gasoline (all of which is produced domestically) will be priced at ID 300 per liter by March 5, 2007, and at ID 350 per liter by end-June 2007. Government imports of premium gasoline will be blended with regular gasoline at a ratio not exceeding 50 percent. We will increase the price of blended gasoline to ID 400 per liter by March 5, 2007, and to ID 450 per liter by end-June. The price of diesel was increased to ID 300 per liter as of January 13, 2007, and will be further raised to ID 350 per liter by March 5, 2007. The price of LPG was increased to ID 2,000 per canister as of January 13, 2007, and will be set at ID 3,000 per canister by March 5, 2007. Kerosene will be priced at ID 150 per liter by March 5, 2007, and at ID 200 per liter by end-June 2007. We will review the price increases planned for end-June in light of the then prevailing security situation. To help the State Oil Marketing Organization (SOMO) import some of the petroleum products without having recourse to the proceeds generated from the sales of these products, the GoI has provided SOMO with a revolving credit, not to exceed a ceiling of ID 300 billion at any point in time (indicative target).

We will make every effort to have the amendments to the new pension law passed by the CoR as soon as possible. The main elements of the reform include a gradual reduction of replacement rates to fiscally sustainable levels, and zero indexation in 2007 to ensure affordability in the short-term. The reforms also involve the creation of an extrabudgetary fund, which will receive all pension contributions but would only pay out to new pensioners. The budget will continue to be responsible for paying existing pensioners, resulting in a direct budgetary cost of about ID 1.2 trillion in 2007, which will decline over time. We are committed to managing the extrabudgetary pension fund in a transparent manner, in line with international best practices, and seek technical assistance from the IMF and the World Bank in this area.

Iran Is Playing a Growing Role in Iraq Economy ;
Some Iraqi cities, including Basra, the southern oil center, buy or plan to buy electricity from Iran. The Iraqi government relies on Iranian companies to bring gasoline from Turkmenistan to alleviate a severe shortage. Iraqi officials are reviewing an application by Iran to open a branch of an Iranian bank in Baghdad, and Iran has offered to lend Iraq $1 billion....

The Iranian government gives Najaf $20 million a year to build and improve tourist facilities for pilgrims, said Asaad Abu Galal, the governor of Najaf. Mr. Abu Galal, a member of the Supreme Council for the Islamic Revolution in Iraq, an influential Iraqi political party founded in Iran, said Karbala got roughly $3 million a year. In addition, each Iranian pilgrim spends up to $1,000 on hotels, food and souvenirs

Footing the Iraq Bill