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...

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.

Learning from Athens

Interesting article on the Athenian democracy;

“The fifth-century B.C. historian Herodotus records the key meeting of the Athenian Assembly at which the Athenians decided to build a great fleet of warships:

The revenues from the mines at Laurion [a district in southern Attica] had brought great wealth into the Athenians’ treasury, and when each man was to receive ten drachmas for his share, Themistocles persuaded the Athenians to make no such division but to use the money to build two hundred ships for the war, that is, for the war with Aegina [a small but prominent nearby island polis].

Herodotus drops us into the midst of a debate in 483 B.C. over state resources. The discovery of the Laurion silver mines had brought a windfall to the community, and a proposal had been made to divide the revenue among the citizenry on a per-capita basis. Ten drachmas was a considerable sum for a working man, perhaps roughly equivalent to a month’s wages. Yet the Athenian citizens chose to forego individual payoffs in favor of Themistocles’ proposal for building and manning a fleet of warships that would make Athens the greatest naval power of the Greek world.”

Related;
Democracy and War- Provocative questions about this relationship between war and democracy are raised by the world's first democracy - classical Athens. Guests include John Keane, Founder and Director of the Centre for the Study of Democracy (Westminster University, London) and Josiah Ober Princeton University Department of Classics and the University Centre for Human Values; Constantine Mitsotakis Professsor at Stanford University. (podcast from ABC)

Tax and Fertility

Interesting working paper, The Earned Income Tax Credit and Fertility by Reagan Baughman and Stacy Dickert-Conlin. Below is the abstract;

“Government programs designed to provide income safety nets or to encourage work often restrict eligibility to families with children, in an attempt to keep the programs well targeted. One potentially unintended consequence of the design of these programs is that if they lower the costs associated with having children, economic theory suggests that they may encourage childbearing. This paper considers whether dramatically changing incentives in the Earned Income Tax Credit (EITC) affect fertility rates in the United States. We use birth certificate data spanning the period 1990 to 1999 to test whether expansions in the credit influenced birthrate among targeted families. While economic theory would predict that a positive fertility effect of the program for many eligible women, our baseline models show that expanding the credit produced only extremely small reductions in higher-order fertility among white women. We also find evidence that suggests changes in marriage patterns may be related to changing fertility rates. For example, higher levels of the EITC are associated with higher first birth rates among married women and lower first births among unmarried women. This may suggest that the EITC encouraged marriage among single women.”

Related;
To-Do List: Wrap Gifts. Have Baby
More on the Effects of Timed Births

"The two economists I mentioned in this week's column – Amitabh Chandra and Stacy Dickert-Conlin – have also looked at the health effects of scheduled births. On this research, they collaborated with Dr. David C. Goodman of Dartmouth Medical School and Laurence Baker, an economist at Stanford.

The researchers compared infant mortality for babies born during the week – when nearly all induced births and scheduled Caesarean sections take place – and on weekends. They took account of a wide variety of factors, including a mother's age, marital status, cigarette and alcohol use, as well whether she received prenatal care and whether she had a number of medical conditions, including diabetes and anemia. They also took into account whether the baby had been born with a congenital anomaly.

When all else was equal, babies born on a weekday died at a noticeably higher rate. The effect was most pronounced among babies weighing between 2 and 3 kilograms (or between 4.4 and 6.6 pounds).

(via Mankiw)

Middle East Fact of the Day

“According to a 2005 World Bank report, Finland, with a population of about 5 million, has more non-oil exports than the entire MENA region, with a population of more than 300 million people...

As Tarik Yousef has emphasized in a recent paper, unemployment rates in the region are already among the highest in the world, second only to those in sub-Saharan Africa. If allowed to grow, unemployment could pose a threat for social and political stability. To absorb the currently unemployed in addition to new entrants to the labor force, job creation must be even higher: close to 100 million new jobs by 2020. Again, Tarik Yousef noted that this is equivalent to creating as many jobs in the next 15 years or so as has been done over the past 5 decades. In a 2005 report on economic developments and prospects for the MENA region, the World Bank pointed out that job creation on this scale probably requires real GDP growth of 6 to 7 percent annually for a sustained period of time, double the average rate of about 3 percent per year achieved over the late 1990s.”

- Opening Remarks by Takatoshi Kato, Deputy Managing Director, International Monetary Fund, At the High-Level Seminar on: "Institution and Economic Growth in the Arab Countries"

Related;
Sustaining Gains in Poverty Reduction and Human Development in the Middle East and North Africa

Freereads from The Economist

Happiness and economics-Economics discovers its feelings
Pushtunwali-Honour among them
The art of conversation-Chattering classes
Cured meat-Feet in the trough
Russian airports-Kama Sutra and feral cats
Country music-Middle America's soul
Pentecostals-Christianity reborn
Jinn-Born of fire
Holy places-A child of Bethlehem
The Maldives-Waving or drowning?
Genghis Khan's legacy-Battle for Mongolia's soul
Sugar-Sick with excess of sweetness
Tabloid press-A right royal scandal
Shopping and philosophy-Post-modernism is the new black
The etiquette of bribery-How to grease a palm
Assisted conception-Buying babies, bit by bit
Meteorites-Fire from heaven

Venice and the East
Economics focus- Rate of decline
Astronomy- The Argus eyes of stargazing
Face value- Delhi dreams

SURVEY: THE BRAIN
Who do you think you are?
A discussion with Geoffrey Carr, Science Editor of The Economist

The electrical siege of Baghdad

"Last week even the official United States State Department figures, which many Iraqis contend lean toward the optimistic side, said there was an average of 6.6 hours of electricity per day in Baghdad and 8.9 hours nationwide...
Before the war, Baghdad had 16 to 24 hours of power and the rest of Iraq 4 to 8 hours, according to the Special Inspector General for Iraq Reconstruction, an independent United States federal office."
- Iraq Insurgents Starve Capital of Electricity

The Art of Demotivation

Talk of the Day; interview with Dr. EL Kristen; ‘Recent data says that people are increasingly unhappy with their jobs. The root of the problem says Dr EL Kirsten is the 'noble employee myth', the idea that if people are unhappy at work, there must be some problem with the organisation. But could it be that we all just expect too much from our work and the organisations we work with?’
It is the last segment in the podcast.

Dropping Dollar Debate

Go and read the latest Econoblog at WSJ; Dollars, Debt and the Trade Gap, Thoughts on the Dropping Dollar. The debaters are Manzie Chinn and Kash Mansori.

Large Current Account Deficits and Currency Boards

A new working paper from IMF on Bosnia and Herzegovina’s trade balance and discusses the trade-offs between monetary and fiscal policy needed to improve current account deficit; the country’s external position has deteriorated even with strong fiscal tightening. The country has a currency board enshrined in the constitution. The policy implications of the model are noted below;

“The estimated model raises a number of policy issues. First, the impact of a given flow of total credit to the private sector on the trade balance depends strongly on the composition of that credit. The flow of credit to enterprises has a markedly smaller negative impact on the trade balance than that of credit to households. Thus, to the extent that credit flows are led by credit to households, the adverse impact on the external deficit will be larger. This result implies that (if it can be devised) a policy measure targeted primarily at restraining credit to households would be more effective in achieving a desired correction in the external deficit.

The estimated model also indicates that the policy variable with the most immediate impact on the trade balance is fiscal expenditure, followed by credit flows and then fiscal revenue. This suggests that when an immediate correction to the trade balance is needed, the preferred policy option should be fiscal expenditure restraint.

Regarding the relative power of fiscal or credit policy to reduce the trade balance, empirical projections were made using the model, where plausible quarterly paths of the regressors were generated for 2006, and the impact on the trade balance assessed. Given the already heavy burden of taxation, the assessment of fiscal policy focused on a fiscal tightening generated solely through expenditure restraint, while, for credit tightening, the impact of changes in the overall flow of credit to the private sector was considered, keeping the breakdown between credit to households and enterprises the same as observed in 2005. These experiments indicate that a fiscal tightening through a 1 percent of GDP reduction in expenditure over a one-year horizon generates a 0.45 percent of GDP reduction in the trade deficit, whereas a reduction in the flow of credit of 1 percent of GDP over the same horizon generates a 0.44 percent of GDP reduction in the trade deficit. Thus, fiscal expenditure and credit tightening appear to be roughly equally effective in achieving reductions in the trade deficit over a one-year horizon.

However, the currency board and open capital account in Bosnia and Herzegovina imply that it is very difficult to target a particular credit growth rate. Generally, to restrain credit one could either tighten the required reserves regime or tighten prudential regulations. But with the domestic banking system dominated by subsidiaries of foreign banks with access to ample liquidity from their parents, these instruments are typically ineffective. This leaves fiscal policy as the only instrument that can be precisely calibrated to affect the trade balance.

Thus, in practice most of the efforts to restrain demand over the near term should focus on fiscal policy. Over the long term, however, deep structural reforms would be needed to bring the trade deficit down to sustainable levels.”

The country has a complicated federal system with a constitution largely dictated by the US which further makes things difficult for the authorities.

Related;
Bosnia and Herzegovina - Addressing fiscal challenges and enhancing growth prospects:a public expenditure and institutional review

Congratulations to Seychelles!

Seychelles has started participating in the International Monetary Fund's General Data Dissemination System;

Mr. Danny Faure, the Governor of the IMF for Seychelles, and also Minister for Finance, recognizes that improvement in the quality and timeliness of economic, financial, and social statistics is essential for economic and social policy, and also for monitoring and assessing the government's development programs. The Minister adds that: "As Seychelles undergoes rapid economic and structural changes, it is important that data-producing agencies develop and improve on their methodological, compilation, and dissemination practices with a view to making them consistent with international codes and standards. The IMF's GDDS provides a structured reference framework for the development of statistical systems and participating in it is proof of the commitment of the data-producing agencies to monitor progress and also implement short- and medium-term plans for strengthening the system of official statistics. This will ultimately lead to the production and dissemination of more reliable and timely statistics, which is important for policymaking and resource allocation decisions of the country."

The GDDS will be a valuable tool for international statistical comparision;

“The GDDS framework is built around four dimensions -- data characteristics, quality, access, and integrity -- and is intended to provide guidance for the overall development of macroeconomic, financial, and socio-demographic data…

The data dimension includes coverage, periodicity (i.e. the frequency of compilation), and timeliness (i.e. the speed of dissemination). The data dimension addresses the development, production, and dissemination of two interrelated classes of data: (1) comprehensive frameworks for each of the four economic and financial sectors (real, fiscal, financial, and external); and (2) indicators for each of these sectors, plus the socio-demographic data.

With regard to comprehensive frameworks, the objective of the GDDS is to encourage the production and dissemination of complete sets of data with widest coverage, based on international methodologies. Particular aggregates and balances are provided for illustration, but the emphasis is placed on complete data sets rather than on specific indicators.”

Related;
GDDS Participating Countries
Timetable of Statistical Releases (Seychelles Central Bank)
Seychelles Data Profile (World Bank)
Seychelles: Recent Economic Developments (Yr 2000 is the latest available from the Fund. Hopefully the REDs will also be available online soon)
Seychelles- A president in paradise
Doing Business Seychelles

This & That Assorted

Some links worth having a look;

What Should a Billionaire Give – and What Should You?
A Speculator’s Guide on What’s Happening in Putin’s Russia
What We Learn When We Learn Economics
Amaranth and the limits of mathematical modelling
Capitalists We Don't Trust- Sebastian Mallaby
Bad Apples and Good Bets -David Warsh

Malatesta Estimator
Baker and Summers
John Quiggin and Hal Varian on Stern Report
Primitive Accumulation
A Student Writes...
Levitt vs. Levitt & Dubner
Obscure Economic Indicator: The Guns-to-Caviar Index
Does Prison Harden Criminals ?
The S&P 500 at Your Fingertips
Galbraith's Contribution
Additional thoughts on Iraq
China in Revolt
Leisure Inequality
Musicians' demands for copyright extension are off key
Dilemmas of Formal Economic Theory
Does the future really belong to China?
Why aren't there more investment bankers?
The Top Ten Stories You Missed in 2006
To Be An American...
Thinking about the human mind

International Migrants Day

December 18th is the International Migrants Day. Best wishes to the 191 million migrants worldwide.
Via UN Pulse.

Related;
Migration data from World Bank, UN, IOM.
Migrants 'shape globalised world'
Trends in International Migration and in Migration Policies

Quote of the Day

"I would suggest that the rate at which countries grow is substantially determined by three things: their ability to integrate with the global economy through trade and investment; their capacity to maintain sustainable government finances and sound money; and their ability to put in place an institutional environment in which contracts can be enforced and property rights can be established. I would challenge anyone to identify a country that has done all three of these things and has not grown at a substantial rate." - Larry Summers (2003)

It was on top of the agenda of a conference organised jointly by the IMF and Arab Monetary Fund- Institutions and Economic Growth in the Arab Countries

For a critique see; Rethinking Growth Strategies by Dani Rodrik

Where are they now?

Map of the day; the location of US nuclear weapons - via Strategic Security Blog

Econ Talks from Australia

Governor of the Reserve Bank of Australia from 1996 to September 2006, Ian Macfarlane gave recently a series of lectures on how the developed world economies have struggled to maintain macroeconomic stability over the course of the 20th century. Here are links to the audio of the 6 part series (from Radio National);

Lecture 1: The Golden Age
Lecture 2: From Golden Age to Stagflation
Lecture 3: Reform and Deregulation
Lecture 4: The Recession of 1990 and its Legacy
Lecture 5: The Long Expansion
Lecture 6: Challenges for the Future

Final comments from the last lecture;

“But this still leaves the central bank with a very limited armoury with which to fight against a potentially dangerous asset price boom. The interest rate, which it does not have a clear mandate to use, and public persuasion, which is of limited effectiveness; how would it cope if it faced an asset price boom of the magnitude of those that occurred in the United States in the 1920s or Japan in the 1980s?

Not very well, I expect, and it would probably be held largely responsible for the distress that accompanied the bubble's eventual bursting.

It is still too early to judge whether the current approach to monetary policy will need to adjust to cope with evolving challenges. Looking back at the evolution of monetary and financial affairs over the past century, shows that all policy frameworks have had to be adjusted when they failed to cope with the emergence of a major problem. The succeeding framework was then pushed to its limits, resulting in a new economic problem. The lightly-regulated framework in the first two decades of the 20th century was discredited by the Depression, and replaced by a heavily regulated one accompanied by discretionary fiscal and monetary policy. This in turn was discredited by the great inflation of the 1970s and was replaced by another lightly-regulated one, with greater emphasis on medium term, anti-inflationary monetary policy. This has acquitted itself well over the past 15 years and is still working effectively; but over the next decade or two will probably face the type of challenge I have outlined.

I have tried in this final lecture, to take a very long-term view, although in truth, no-one is very good at picking the next major epic. We mainly react after the damage has been done. I'm influenced by the fact that as the great inflation of the 1970s was building up from the mid-1960s, no-one, including the central bank, had a mandate to prevent it. As we struggled to come to grips with it, governments took decisions that effectively gave the central bank a mandate and central banks worked out a framework that to date has been effective in dealing with it. No-one though, has a clear mandate at the moment to deal with the threat of major financial instability associated with an asset price boom and bust.

Yet I cannot help but feel that the threat from that source is greater than the threat from inflation, deflation, the balance of payments and the other familiar economic variables that we have confronted in the past.”

Beverly Hills of Moscow

A place where flats can cost several million dollars;

“Ostozhenka (pronounced ahs-TO-zhen-ka), once home to many artists and intellectuals, is now known in the parlance of real estate agents and their wealthy clients as the Golden Mile. In the last five years it has become a Kremlin-view Beverly Hills on the Moscow River. Its winding lanes are now home to modern multimillion-dollar penthouses, Ferraris, gourmet restaurants and bizarre crimes: last year a celebrity plastic surgeon was stabbed by roller skaters, and later died, in what appeared to be a roll-by contract killing...

Mr. Litoshik, 27, has a personal stake in its transformation: he lived, until recently, at Khilkov Pereulok 3, and is a leader of Leave Us Alone. As a journalist for the business newspaper Vedomosti, he is awed by what he says is a reported $33,000 per square meter price tag on apartments going up next door to his former home. “They’re not selling drugs, but they’re making much more money,” he said of developers who have converged on Ostozhenka.”

Google Patent Search

An interesting new feature from Google- Patent Search. I tried a couple of items;

Economics Teaching Device

Apparatus For Illustrating Economics

Method For Teaching Economics, Management And Accounting

Method Of Playing A Game Of Economics And Finance

Apparatus For Illustrating Economics By Physical Analogies

Undewear

Fireworks

Finger Puppet

Toothbrush

The picture shows an appratatus for teaching double entry bookkeeping

Related blogs; The Invent Blog, Patent Pending Blog, New Scientist Invention Blog

Two Working Papers from the World Bank

The economics of consanguineous marriages;

The institution of consanguineous marriage-a marriage contracted between close biological relatives-has been a basic building block of many societies in different parts of the world. This paper argues that the practice of consanguinity is closely related to the practice of dowry, and that both arise in response to an agency problem between the families of a bride and a groom. When marriage contracts are incomplete, dowries transfer control rights to the party with the highest incentives to invest in a marriage. When these transactions are costly however, consanguinity can be a more appropriate response since it directly reduces the agency cost. The paper's model predicts that dowry transfers are less likely to be observed in consanguineous unions. It also emphasizes the effect of credit constraints on the relative prevalence of dowry payment and consanguinity. An empirical analysis using data from Bangladesh delivers robust results consistent with the predictions of the model.

Are lives a substitute for livelihoods ? Terrorism, security, and U.S. bilateral imports;

What is the impact of terrorism on trade through higher security at the borders? The authors set up a theory which shows that the impact goes not only from terrorism to trade. Higher trade with a partner might, in turn, increase the probability of terrorism acts and make security measures more costly for total welfare. To identify the true impact of terrorism, their theory allows for a strategy to condition out the latter mechanism. The authors show in particular how past incidents perpetrated in third countries (anywhere in the world except the origin or targeted country) constitute good exogenous factors for current security measures at the borders. Their tests suggest that terrorist incidents have a small effect on U.S. imports on average, but a much higher effect for those origin countries at the top of the distribution of incidents. In addition, the level of the impact is up to three times higher when the acts result in a relatively high number of victims, the products are sensitive to shipping time, and the size of the partner is small. The authors further show how terrorism affects the number of business visas given by the United States, thereby affecting significantly U.S. imports in differentiated products. These results suggest that security to prevent terrorism does matter for trade

Emphasis mine.

How Democracy Affects Growth

An interesting working paper Romain Wacziarg- abstract below;

"This paper introduces a new methodology to examine the empirical relationship between democracy and economic growth. Democratic institutions are assumed to affect growth through a series of channels, in accordance with a procedural view of democracy. We specify and estimate a full system of equations determining growth and the channel variables. Results suggest that democracy fosters growth by improving the accumulation of human capital and, less robustly, by lowering income inequality. On the other hand, democracy hinders growth by reducing the rate of physical capital accumulation and, less robustly, by raising the ratio of government consumption to GDP. Once all of these indirect effects are accounted for, the overall effect of democracy on economic growth is moderately negative. We interpret our results as indicating that democratic institutions are responsive to the demands of the poor by expanding access to education and lowering income inequality, but do so at the expense of physical capital accumulation."

Learned about the author via Economist’s View- be sure to read Wacziarg’s comments on that blog;

“Wacziarg's most recent work relates genetic distance between populations to differences in economic outcomes, such as their income per capita, to better understand the process by which innovations diffuse from one culture to the next. He found that countries whose populations are the most remote genetically from the populations that developed major innovations over the past 200 years are the least well off. While geographical remoteness also plays a role, it is genetic distance that most strongly correlates with how rich or poor a nation will be. The research also suggests that the main way genetic distance hinders the diffusion of development is by creating cultural barriers. The greater the genetic distance, the greater the cultural barriers are to the flow of ideas and technologies.”

Related:
The Diffusion of Development
Is democracy good for the poor?
Democracy Has the Edge When It Comes to Advancing Growth

Did Darwin Support Genocide?

“While the 'Beagle' was anchored off Patagonia for much of 1833 he rode inland and came face to face with the Spanish policy towards indigenous peoples defending their lands against expropriation. General Manuel de Rosas, a cattle rancher who served as Governor of Buenos Aires, and later Dictator of Argentina (and who, later again, retired to Swaythling in Hampshire) was engaged on what Darwin recognised at the time as a mission 'to exterminate the Indians'.

Some 112 women and children and men were 'nearly all taken or killed, very few escaped. The soldiers pursue and sabre every man. Like wild animals however they fight to the last instant. The reason was to be made plain. 'This is a dark picture; but how much more shocking is the unquestionable fact that all the women who appear above 20 years old are massacred in cold blood. I ventured to hint that this appeared rather inhuman. He answered me, 'What can be done, they breed so'.'

It is the sadly familiar language of genocide. To the perpetrators, Darwin noticed, the killing was reasonable and even moral in the larger scheme of things. Civilisation decreed the sacrifice of barbarians who stood in its way. The shooters were the shock troops of progress, productivity and profit.

'If this warfare is successful, that is if all the Indians are butchered, a grand extent of country will be available for the production of cattle, and the valleys ... will be most productive of corn. The country will be in the hands of white Gaucho savages instead of copper-coloured Indians.'”

That’s from a talk by Dr Tony Barta, a historian from La Trobe University suggestisting that Charles Darwin himself seemed to have accepted that genocide was a necessity of the time. Listen to the talk.

Why Laughter is Infectious

Infectious laughter seems to have a neurological basis;

“The team of played pleasant sounds, such as laughter or cheering, and unpleasant sounds, such as screaming or retching, to volunteers. They then monitored their brains with functional magnetic resonance imaging (MRI). All the sounds triggered neural responses in the premotor cortex of the brain — an area known to prepare groups of facial muscles to respond accordingly. When a person in the study actually smiled or laughed, the neural activity moved to a primary motor cortical region.

The neural response in the premotor cortex was, on average, twice as big for pleasant sounds than for unpleasant sounds, the team reports. Since the pleasant sounds have a bigger impact on the bit of the brain that activates muscles to respond in kind, the findings suggests that pleasant sounds are more 'contagious' than unpleasant ones.”

Inside the Mind of the Art Criminals

NYT Magazine has an interesting profile of Noah Charney who’s completing a PhD in history of art theft;

“Charney is completing a doctorate at Cambridge University in a field he appears to have invented: the use of art history, combined with the more conventional tools of criminology, psychology and deductive logic, to help solve modern-day art thefts and to prevent future art crimes. The stolen-art trade is now an international industry valued as high as $6 billion per year, the third-largest black market behind drugs and arms trafficking. Yet the solution rate in art crime is reported to be a startlingly low 10 percent. Investigations are hampered by the cult of secrecy within the art world itself — museums sometimes don’t report thefts, fearing to reveal their vulnerability to future crimes and thereby hurt their chances of receiving new donations. “The art trade is the least transparent and least regulated commercial activity in the world,” says Julian Radcliffe, chairman of the Art Loss Register, a London-based company that maintains a leading database of stolen artworks...

More than anything, Charney is interested in understanding the motivation and mentality of art criminals, an area that has traditionally received little attention from the police. He has scrutinized the biographies of famous collectors like the financier J. P. Morgan, as well as legendary art thieves like the Victorian-era burglar Adam Worth, looking for ways that the details of their emotionally charged, obsessive psyches might help investigators understand the criminal mind — and, specifically, the art-criminal mind. He has also studied Hermann Göring, commander of the Luftwaffe, whose conception of Aryan supremacy, according to Charney, led him to loot even second-rate works by northern European painters rather than genuine masterpieces by “degenerate” artists like the French Impressionists. Both collectors and collector-thieves sometimes form a bond with an artwork that is as intense as a love affair. According to Charney, several owners of Ghirlandaio’s “Portrait of Giovanna Tornabuoni,” the famous profile portrait of Lorenzo Tornabuoni’s young wife who died soon after she sat for the painting, have said that she reminded them of their own deceased wives. And Stéphane Breitwieser, the French waiter arrested in 2002 for stealing some $1.5 billion in art from museums and galleries in seven European countries, declared that he was fascinated by the eyes and the beauty of the woman in the first painting he stole, who reminded him of his grandmother.”

Related; Scientists explore the frightening world of psychopaths

Iraq Study Group of Bloggers

Over at Glittering Eye a blogging colloquium has been announced titled “Directions on Iraq: a Blogging Colloquium”. Participants include James Hamilton and Rasheed Abou Al-Samh. I would like to see Juan Cole included in the list.

Related;
A Menu of Options on Iraq
A Matter of Pride -Why we can't buy off the next Osama bin Laden by Peter Bergen and Michael Lind
Iraq newlinks- Iraqslogger

Persistence of Inefficient States

An interesting paper by Daron Acemoglu, Davide Ticchi, Andrea Vindigni- abstract below;

“Inefficiencies in the bureaucratic organization of the state are often viewed as important factors in retarding economic development. Why certain societies choose or end up with such inefficient organizations has received very little attention, however. In this paper, we present a simple theory of the emergence and persistence of inefficient states. The society consists of rich and poor individuals. The rich are initially in power, but expect to transition to democracy, which will choose redistributive policies. Taxation requires the employment of bureaucrats. We show that, under certain circumstances, by choosing an inefficient state structure, the rich may be able to use patronage and capture democratic politics. This enables them to reduce the amount of redistribution and public good provision in democracy. Moreover, the inefficient state creates its own constituency and tends to persist over time. Intuitively, an inefficient state structure creates more rents for bureaucrats than would an efficient state structure. When the poor come to power in democracy, they will reform the structure of the state to make it more efficient so that higher taxes can be collected at lower cost and with lower rents for bureaucrats. Anticipating this, when the society starts out with an inefficient organization of the state, bureaucrats support the rich, who set lower taxes but also provide rents to bureaucrats. We show that in order to generate enough political support, the coalition of the rich and bureaucrats may not only choose an inefficient organization of the state, but they may further expand the size of bureaucracy so as to gain additional votes. The model shows that an equilibrium with an inefficient state is more likely to arise when there is greater inequality between the rich and the poor, when bureaucratic rents take intermediate values and when individuals are sufficiently forward-looking.”

Related; James Galbraith review of Acemoglu’s book Economic Origins of Dictatorship and Democracy (registration required);

“As an empirical study, this book illustrates perfectly the decline of discourse brought on by the fetishism of formulae and the neglect of rigor where it matters, in the pursuit of evidence to support, refute, or refine what is otherwise little more than a conjecture. And yet, Economic Origins of Dictatorship and Democracy will be heavily cited, lavishly praised, and assigned to advanced seminars in the better graduate schools. Too bad. For it isn’t about democracy. It’s about a cardboard caricature, the existence or absence of certain rituals, which by no means assure that the citizens rule the state. In sketching their caricature, Acemoglu and Robinson strip the democratic ideal of substantial and also of ethical content. By treating the democratic impulse as a pure exercise in money-grubbing, they feed the contempt for democracy already characteristic of elite circles–the rational member of Acemoglu and Robinson’s "elite" is, in other words, a fascist. Indeed, if Acemoglu and Robinson’s democracy is the only type on offer, there is little reason to support it–unless one belongs to a transfer-receiving group."

Have your PC become a Zombie?

Your computer could be a Zombie;

"One of the most active categories of malicious software threatening Internet users today is remote control software, according to a Microsoft Security Intelligence report published in October. Remote control software uses deceptive means to allow a hacker or cyber criminal to gain control of a large number of individual computers (“zombies”), and make them work together to form a “botnet”. The botnet can then be used to distribute spam and spyware, spread viruses, and attack networks."

Signs of infection;

1. A suddenly sluggish broadband connection
2.Excessive hard drive activity
3.An unresponsive mouse or keyboard
4.Email bounce notifications in your inbox from people you never tried to contact

Keep in mind that remote control software won’t disable your PC - because in order for a botnet to work, and a cyber criminal to profit, your PC needs to be active and connected to the Internet.

In the early days computer geeks created viruses to show off, as a prank or to gain notoriety. Today, cyber criminals have turned the potential of computer code to a malicious, money making machine. Unfortunately, this means that Internet users have to be ever wary of Internet schemes while the cat and mouse game of Internet threat versus Internet solution continues"

I, Ipod

“Take just one component of the iPod nano, the central microchip provided by the U.S. company PortalPlayer. The core technology of the chip is licensed from British firm ARM and is modified by PortalPlayer’s programmers in California, Washington State, and Hyderabad. PortalPlayer then works with microchip design companies in California that send the finished design to a “foundry” in Taiwan (China) that produces “wafers” (thin metal disks) imprinted with hundreds of thousands of chips. The capital costs of these foundries can be more than $2.5 million. These wafers are then cut up into individual disks and sent elsewhere in Taiwan (China) where each one is tested. The chips are then encased in plastic and readied for assembly by Silicon-Ware in Taiwan (China) and Amkor in the Republic of Korea. The finished microchip is then warehoused in Hong Kong (China) before being transported to mainland China where the iPod is assembled. Working conditions and wages in China are low relative to Western standards and levels. Many workers live in dormitories and work long hours.

It is suggested that overtime is compulsory. Nevertheless, wages are higher than the average of the region in which the assembly plants are located and allow for substantial transfers to rural areas and hence contribute to declining rural poverty. PortalPlayer was only established in 1999 but had revenues in excess of $225 million in 2005. PortalPlayer’s chief executive officer has argued that the outsourcing to countries such as India and Taiwan (China) of “non-critical aspects of your business” has been crucial to the development of the firm and its innovation: “it allows you to become nimbler and spend R&D dollars on core strengths.” Since 2003, soon after the iPod was launched, the share price of Apple, the company that produces and sells the iPod, has risen from just over $6 to over $60. Those who own shares in Apple have benefited from the globalization of the iPod.”

Sources: C. Joseph, “The iPod’s Incredible Journey,” Mail on Sunday, July 15, 2006; “Meet the iPods’s ‘Intel,’” Business Trends 32(4)(April), 2006. Cited in Global Economic Prospects 2007, Box 4.4 Global production and the iPod, p.118.

Assorted Talks

Indian Maths – So how were these advances passed on to the rest of the world? And why was the contribution of mathematicians from this area ignored by Europe for centuries?

Don Boudreaux on Law and Legislation

Science Fatwah? - Part 1: Charles Harper jnr and Richard Sloan
There are signs of a new anti-religion militancy on the part of scientists and atheists in the United States. In the first of a two part series, this week we speak to two of the protagonists at a recent science conference hosted by the Salk Institute in California

Metaphysics in Australia

What's wrong with slavery?

Apocalypse now

World Energy Outlook 2006: Mapping a New Energy Future
Fatih Birol, Chief Economist and Head of the Economic Analysis Division, International Energy Agency
See also ExxonMobil’s The Outlook for Energy, A view to 2030

Clean-Coal Technology and Policy Issues for the US (RadioEconomics)

A policy address by Turki Al-Faisal, Saudi Arabian Ambassador to the United States

India - an Emerging Giant
A Conference organized by Jadgish Bhagwati and Arvind Panagariya, professors of Indian Economy, Columbia University

The Stern Review on the Economics of Climate Change
Dimitri Zenghelis, UK government economic adviser to the Stern Review on Economic of Climate Change, commissioned by Chancellor Gordon Brown

Uncovering Iran- The Revolution and the Coup

Abbas El-Zein: memoirs of a 'Foreign Arab'

The Last Moghul
William Dalrymple is an award winning author, whose career spans travel writing as well as a series of books on Indian history that began with White Mughals...and continues with the book, "The Last Mughal: The Fall of a Dynasty, Delhi, 1857", in which he argues that 1857 has long been misunderstood by historians - Indian and British alike.

Shanta Devarajan and Michael Clemons on Development Funding

Tough Choices, by Carly Fiorina
After six years as CEO of computer firm Hewlett-Packard, Carly Fiorina was ousted by the company’s board of directors. In her memoir, Tough Choices, Fiorina has written a memoir of not only the events leading up to her firing, but also her career and rise in business.

WorldBank Seminar Series: Professor Eduardo Engel
Although they have become increasingly popular as tools for development, partnerships between government and private companies (public-private partnerships) have achieved only mixed results. In this seminar, sponsored by the World Bank’s Poverty Reduction and Economic Management (PREM) Network, the dilemma of the partnership approach was examined by Eduardo Engel, Professor of Economics at Yale University.

Some picks from Foreign Exchange with Fareed Zakaria- Interview with Saad Eddin Ibrahim from Egypt and the interview about the UN Human Development Report 2006- Beyond Scarcity: Power, Poverty and the Global Water Crisis

Living at Charles de Gaulle Airport since 1988

"Mehran Karimi Nasseri, also known as Sir, Alfred Mehran (yes, including the comma), is an Iranian refugee who has been living in the departure lounge of Terminal One in Charles de Gaulle Airport since August 8, 1988. After he was later imprisoned, tortured and expelled from his country, he applied for asylum in many European countries without luck."

via Tyler Cowen.

Demand and Supply of Governance

Some courageous Kenyans are doing something about the political corruption in the country;

Mzalendo is a volunteer run project whose mission is to “keep an eye on the Kenyan Parliament.” The project was started by two young like-minded Kenyans who were frustrated by the fact that it is difficult to hold Kenyan Members of Parliament (MPs) accountable for their performance largely because information about their work in Parliament is not easily accessible. In our opinion Parliament should be one of the most open institutions in government, yet beyond the coverage from local newspapers it is virtually impossible to keep track of what Kenyan Parliamentarians are doing. Of course one can peruse copies of the Hansard, but one has to go through an arduous process to get access to Hansard copies from the Government Printer’s Office and most people do not have the time to filter through the dense information that is contained in the Hansard hard copies.

One of the founders of the group noted;

The Kenyan parliament's website, was taken down two years ago "after protests by some MPs who were embarrassed about their CVs being published online", and it has not been replaced yet. People have to demand it - and that's what Ory and co. are trying do with Mzalendo: demand accountability from the MPs by monitoring what they do for their constituents.

We wish good luck to the founders of Mzalendo- and hope it will be taken up by other NGOs across the world to demand better accountability from elected officials. In most poor countries supply of governance will remain eternally scarce, may be the demand might create its own supply.

Related;
Kenya's Parliament Website: Too Embarassing for Public Consumption?
LegiStorm- a similar idea about the US Congress which is creating a storm (via Marginal Revolution)

How can Export Success be Bad for a Country

An interesting working paper on German export boom; The Pathological Export Boom and the Bazaar Effect - How to Solve the German Puzzle by Hans-Werner Sinn;

“Germany is the laggard of Europe, yet the country is world champion in merchandise exports. The paper tries to solve this theoretical and empirical puzzle by diagnosing a “pathological export boom” and a “bazaar effect”. Excessively high wages defended by unions and the welfare state against the forces of international low-wage competition destroy too big a fraction of the labour intensive sectors and drive too much capital and labour into the capital intensive export sectors, causing both unemployment and excessive value added in exports. Moreover, excessive wages induce too much outsourcing of upstream production activities which implies that export quantities grow too much in relation to value added contained in exports. Finally, excessive wages cause capital flight resulting in a too large current account surplus.”

The latest 'Selected Issues' on Germany from the IMF gives a summary of the paper;

“Sinn’s thesis is that rigidities cause a suboptimal allocation of resources and especially labor underutilization. Globalization represents a competitiveness shock but with wages and labor markets sluggish to respond, labor intensive exporting sectors (such as textiles) fail, releasing surplus labor into the market and causing unemployment to rise. (These failures also free up capital hitherto employed in these sectors.) At the same time, capital- and skill-intensive sectors (e.g. engineering) also replace labor with capital or outsource or offshore standardized production layers to abroad, further contributing to labor surplus.

The freed-up labor in either sector is not absorbed in the services sector because wage costs are too high and labor mobility tends to be too low. High domestic unemployment therefore causes downward pressure on wages and slow domestic consumption and other household demand (such as for residential construction). Capital from failing companies or new investment in capital intensive sectors largely moves abroad to be combined with less expensive labor there.The large current account surplus thus does not so much reflect exceeding export prowess, but rather domestic weakness and the export of capital. Because adjustment in the domestic labor market is drawn out, specialization in capital-intensive/exporting sectors overshoots, and investment and employment in domestic service oriented sectors undershoots. In this view, the large current account surplus is a sign of insufficient opportunity for profitable investment in the nontradable sector.”

See also the following op-ed by the author (hat tip to Mahalanobis);

“Astonishingly, many interpret Germany’s export boom and current-account surplus, which measures these capital exports, as an indicator of the strength of Germany as an investment location. But, according to the Bundesbank, net investment abroad (including financial investment) has already roughly matched domestic investment in recent years…”

Markets in Everything?

Organ tourism and poverty in Pakistan;

"Each year hundreds of kidneys are sold to patients who come from abroad, to so called 'organ tourists'.

Poverty stricken villagers feel it's their only option to earn some extra money. Many donors are left with scars and an uncertain future.

With large debts and a new wife and child, Tariq found an agent to sell his kidney.
The agent took a commission and left Tariq with just $150.

Tariq told Al Jazeera how the money changed his life: "For a little while things were okay. Firstly I paid my debts. And then I had to live on some of it myself. But I was unable to work for a year because of the operation."

The Inconvenient Truth

There will be no ice in the Arctic by 2040.

The research team points to several reasons for the abrupt loss of ice in a gradually warming world. Open water absorbs more sunlight than does ice, meaning that the growing regions of ice-free water will accelerate the warming trend. In addition, global climate change is expected to influence ocean circulations and drive warmer ocean currents into the Arctic.

"As the ice retreats, the ocean transports more heat to the Arctic and the open water absorbs more sunlight, further accelerating the rate of warming and leading to the loss of more ice," Holland explains. "This is a positive feedback loop with dramatic implications for the entire Arctic region."

Infrastructure and Corruption

Some policy implications about reducing corruption in infrastructure projects from a recent working paper by Charles Kenny;

“A lens that focuses on the development impact of corruption suggests that a single project-focused and in particular a procurement-focused approach may be inappropriate. O&M budgets in many developing countries are too low to sustain existing stocks of infrastructure –as reflected in poor indicators of quality. At the same time, donor projects are ‘cherry picked’ –the most attractive investment projects from the point of view of economic returns. These two facts help to reconcile high ERRs estimated for donor projects in Africa with very low overall returns to public investment and limited macroeconomic returns to aid. Low OM budgets and many poor project choices are both likely to be in some part connected to incentives created by poor governance and corruption. Taking a project approach to corruption would miss both of these impacts, which are frequently at the core of corruption’s overall development impact.

Furthermore, a procurement-centered approach is likely to miss a good deal of the corruption directly related to a project, including some of the most harmful forms. Theft of materials and bribes to cover up construction code violations both occur after the procurement process is complete, for example. The project may also generate downstream corruption in the form of petty bribes for connections, or tax and customs avoidance. As we have seen, these forms of corruption can make up the bulk of bribe payments and may also account for a considerable proportion of the economic harm caused.

Any comprehensive anti-corruption strategy in infrastructure should start at the level of the sector rather than the project or the procurement, then. The usual focus on the scale of improper payments and theft centers attention on particular anti-corruption strategies in projects --methods to benchmark construction prices to detect overbidding, for example. We should additionally focus on tools to reduce the most damaging consequences of corruption, because if these consequences are avoided, we will know that the impact of corruption in infrastructure on overall development will be comparatively small.”

I’ll put some detailed comments on the paper later.

It’s heartening to see the author of the paper, Charles Kenny, an economist at the World Bank writes a blog about happiness and purpose in life.

Updated some related links;
Charles Kenny pushes the corruption debate forwards
World Bank Corruption Strategy: An Impolitic View (ex World Banker)

China and India: Learning from Each Other

A book forum discussing the following two books from the Fund is now online;

India Goes Global: Its Expanding Role in the World Economy
China and India-Learning From Each Other: Reforms and Policies for Sustained Growth

Related;
Dancing with Giants: China, India, and the Global Economy
Partially awakened giants : uneven growth in China and India
Africa's silk road : China and India's new economic frontier

Why the name Marshall Jevons?

The author(s) of this blog selected the name as a parody of the real Marshall Jevons. The three small detective stories by William Breit and Kenneth G. Elzinga are one of the reasons for generating our interest in economics. The three detective books plus Russell Roberts books Invisible Heart: An Economic Romance and The Choice: A Fable of Free Trade and Protectionism are excellent books for teaching economics for the layperson.

'Real' and 'Fake' Marshall Jevons?

Over at Marginal Revolution, there have been some speculation going about the author(s) of this blog. Let me assure our readers that the author(s) of this blog are NOT the Marshall Jevons of William Breit and Kenneth G. Elzinga. According to Wikipedia their Marshall Jevons have a fictitious biography;

Marshall Jevons is the President of UtilMax, Inc., an international consulting firm headquartered in New York City. A former Rhodes Scholar, he holds advanced degrees in economics, biochemistry, and oceanography. Mr. Jevons is an Olympic medal holder in kayaking whose hobbies now include rocketry and the futures market in cocoa beans. He is a native of Virginia but prefers to call 'home' the Queen Elizabeth 2. This is Marshall Jevons' first novel.

Once again, the author(s) of this blog have not worked for UtilMax, Inc. and do not have any relationship with Marshall Jevons of William Breit and Kenneth G. Elzinga. I apologize to the two professors for the misunderstanding.

Also of interest the following heated exchange at the original MR post;

Marshall Jevons is Ken Elzinga. He makes all his students buy a really crappy detective book he wrote under that pseudonym. He is a decent lecturer for an intro class, but his methods of evaluation were horrible. He makes the exam multiple choice, and then within each of the 5 choices are 5 subtly different combinations. It is like a chinese box and does a very poor job of distinguishing students. Finally since everything is on a curve, people who understand the material just as well as the next person do significantly better or worse on their final grade. His exams were a Bayesian Heresy, and frankly, given what I have read of Greg Mankiw's blog, Elzinga could not hold a candle to him, yet he is one of the best regarded professors at UVA.

Secondly, he ended up recruiting a good friend's sister into his Christian Fundamentalist cult which greatly set her back in life and I will never forgive him for that.

And a reply by Paul W;

No, the blog is not by either professor of the Marshall Jevons pseudonym. I am 100% sure (from a very reliable witness) that they are now looking into possible copyright infringement.

To "Pace": It sounds like someone is angry that they earned a poor grade on the Econ 201 final. I thought that Elzinga was a excellent professor. In any case, most multiple choice exams are similar to the "Chinese box" which you describe; being able to discern the differences (albeit often subtle differences) between the possible answers is part of distinguishing which students truly understand the subject, and which do not. Though the final was a large part of the grade, the other tests did not involve multiple choice, offering plenty of room to improve your grade outside the final.

As for the subject of your good friend's sister - being "set back in life" is a relatively subjective statement. I would be willing to wager that she is now happier, and that the Christian church which she joined is far from a "cult." I believe that there is more to existence than possessions and life on earth, and I will pray for you.

For Discussion (for law bloggers); So who's the 'real' Marshall Jevons?- President of the UtilMax?

Nigeria Fact of the Day

"So lucrative is public office here that even in a backwater like Ekiti, a state of only 2 million people in a nation of 130 million, the state house and the spoils that come with it are apparently worth killing for. Of Nigeria’s 36 governors, 31 are under federal investigation, mostly on suspicion of corruption, and 5 have already been impeached, including Mr. Fayose in October. He is now in hiding.

“This is democracy at work in Nigeria,” Mr. Fayemi muttered as he drove between campaign stops in Ekiti in early November. “Murder and money, violence and fraud."...

In 2000, suffused with the euphoria of new freedoms, 84 percent of Nigerians said they were satisfied with the state of their new democracy, according to the Afrobarometer public opinion survey. But six years later, the same survey found that just 25 percent of Nigerians felt that way...

Ekiti’s most recent governor, Mr. Fayose, is a case in point. In October, he was impeached after an investigation found that he and his associates had pocketed millions from the state treasury. In one instance, he is alleged to have spent close to $7 million, mostly in contracts to political allies, supposedly for a poultry farming project, but the money simply disappeared and the project has yet to produce a single egg...

“Money,” Mr. Fayemi said. “It is the language of Nigerian politics. As much as you want to get away from that, you also have to be mindful of those short-term things you must do.”

Source; Money and Violence Hobble Democracy in Nigeria, NYT

Related;
Corruption Calculator for Nigeria
A discussion on Culture and Economic Development

Development Quote of the Day

I think this passionate consultant from the Caribbean makes a lot of sense;

“The problem is that we mistake that importance of technical ability, and vastly underestimate the important of entrepreneurial ability. Our schools are organized to produce technicians in all fields, and from age 16 a student must narrow down their course of formal study (for life in most cases) to four subject areas and General Paper.

The truth is that educating another lawyer, doctor or accountant is unlikely to contribute much to our GDP. Narrow technical abilities are admirable, but nowhere near as vital to countries in which the large mass of people cannot afford to use them.

What most developing countries need are not more professionals with masters degrees in contract law, but more entrepreneurs who are willing to hire ever increasing numbers of ordinary people.

In the Caribbean, we have developed First World values that have no basis. In other words, we cannot afford to produce more and more sophisticated cardiologists, when the people who need them are selling icy-mints and steering-wheel covers on the corner.

What would it be like if we as a society were to value entrepreneurs, and determined to make their way easy?”

Via Africa Unchained.

Related;
The Nature and Role of Entrepreneurship in Markets: Implications for Policy by Israel M. Kirzner, and Frederic Sautet
Entrepreneurship And Invention: Toward Their Microeconomic Value Theory by William Baumol
Is Entrepreneurship a Factor of Production?
A Nobel for Entrepreneurship?
The Grameen Myth
Phelps on Entrpreneurship
Good business tips could come from Mauritius
Entrepreneurship Research Portel

Freakonomics Overrated?

Diane Coyle thinks Freakonomics is overrated;

Freakonomics, by Steven D Levitt and Stephen J Dubner (Penguin). Economics as freak show. Depressingly, this seems to be the only way to gain a wider audience for the empress of the social sciences, other than multinational bashing.

The World is Flat by Thomas Friedman (Farrar, Straus and Giroux). Less breathless and more thoughtful about globalization than the earlier "The Lexus and The Olive Tree." But not as good as its author thinks and tending towards the banal.

Via Alex Tabarrok. He points out to her book titled, Sex, Drugs and Economics.

I think Diane’s new book The Soulful Science: What Economists Really Do and Why It Matters might be a good one.

Here’s a interview of her at RadioEconomics (podcast).

The reason why Freakonomics is not overrated; watch this Steven Levitt's talk. Tyler Cowen highly recommeds the book by Sudhir Alladi Venkatesh, the person who studied the drug gang that Levitt mentioned about.

Assorted Interesting Maths

Links to some interesting statistics related columns and blog posts;

How Many Kids Have Autism?
Several skeptical Numbers Guy readers have suggested I look into an alarming claim: that one in 166 U.S. children has autism.

A focus on the exceptions that prove the rule by Benoit Mandelbrot and Nassim Taleb
The Difference Between Significant and Not Significant is Not Statistically Significant
The difference between significant and non-significant is not itself statistically significant
The trouble with percentages
Marginal and Average
The Good and Bad
Who's Counting: The Monty Hall Problem- Game Shows, a Variant Puzzle and a General Question

Computer scientists fear voting fraud
"Loss aversion" isn't always
Swivel: Web 2.0 and Data
Making fine distinctions in understanding hereditability of attitudes
"Everyone is fundamentally alike"
Galton was a hero to most
The long tail and the fat head
1200-year-old problem 'easy'
Schoolchildren from Caversham have become the first to learn a brand new theory that dividing by zero is possible using a new number - 'nullity'.

Some recent discussion on Ask ET;
Adjusting for Inflation
PowerPoint and Military Intelligence
Grand truths about human behavior
Beautiful Evidence: chronicles
Lists: theory and practice
Medical information exchange: The patient, doctor, computer triangle
Corrupt Techniques in Evidence Presentations
Midterm congressional elections: ET deja vu and thoughts about 2006

Tragicomic Mathematics
A Beautiful Theory by Tim Harford
The Mathematics of Senate Reform
Visual mathematics
Recalculating the Costs of Global Climate Change
How Much is a Nickel Worth?

Mathematics and Statistics: Critical Skills for Australia's Future ( a recent report)