University Professor Jagdish Bhagwati is known for his advocacy of freer trade and economic globalization. His 2004 book, In Defense of Globalization, has been re-released, complete with a new afterword detailing the evolution of the arguments originally presented for and against economic globalization. On Friday, professor Bhagwati gave the following interview:
Spectator: On Monday, Oct. 22, there will be a panel titled “Is American Anxiety over Globalization Mistaken?” where the new edition of your book In Defense of Globalization will be launched. Can you give me a little sound bite on what this event will be like?
Jagdish Bhagwati: I think currently in America there is a lot of anxiety in the working classes. I think part of the problem has been that lots has been blamed on trade in particular. Our idea is to talk about the anxiety and decide if it has something or nothing to do with globalization.
Spec: I read that you are working on illegal immigration reform in the U.S. What can you tell me about that? What do you think the U.S. policy on immigration should be?
JB: I had predicted in op-ed articles on the 1986 Immigration Reform and Control Act that it would fail in removing illegals from our midst, as its supporters wanted to do. None of it worked, predictably. The way forward is to deep-six the current approach, inherited from the 1986 IRCA act, which pretends that somehow we can eliminate the illegals from our midst.
Spec: Why do you suppose globalization gets such a negative branding by the media? Is it that nagging fear again? What are the most commonly-held misconceptions about globalization?
JB: That is true mostly in the U.S. media which is always looking for hype. At least three times in the last 20 years, the U.S. media have announced the death of consensus among economists on free trade. But the free-trade consensus is alive and well.
Spec: What do you think about professor [Jeffrey] Sachs’ argument for a dramatic increase in foreign aid? Do you side with [NYU economics professor William] Easterly in the debate?
JB: My reaction is: plague on both your houses! Professor Rosenstein-Rodan, who advised John F. Kennedy on foreign aid, taught me about “absorptive capacity”—that we should ensure that aid is absorbed productively. This is not just a moral requirement—few would want aid to be given just as a duty but with disregard to its consequences. In the 1960s and 1970s, I participated on the huge discontent on the left about how aid was either a malign-intent way of keeping neocolonial control of the decolonized lands, or that it unwittingly led to dependence in various ways: by reducing domestic savings, by hurting domestic agriculture through supply of foreign aid, and argued that, on balance, aid had been useful in countries like India. I doubt professor Sachs ever pays attention to such sophisticated objections, always dismissing those who raise them as if they were wicked conservatives with horns and no brains. But Easterly is equally wrong in arguing that aid hardly works.
Spec: In chapter three of your book, you discuss the coastal shrimp farming in India ruining the mangroves. How can globalization and environmental stewardship be fostered to go hand-in-hand?
JB: My view is primarily that, traditionally, we didn’t value the environment and that is the real problem. We don’t have enough policies in place, and trade could make us put policies in place. One of my environmentalist friends said, “International trade is bad, the flowers coming from Mali are being sold in London, and the transportation ruins the environment.” Somebody in England did a study showing that if you grew them in Denmark in their greenhouses, the carbon dioxide emissions would be greater, causing more damage for not growing them in Africa. The argument from that is not to attach conclusions for specific activities, and it is also the argument for carbon tax, because someone doing carbon dioxide emissions will pay for it. It will reduce emissions because they will be shouldering the cost.
The National Confectioners Association estimates that 2005 Halloween sales were $2.1 billion, easily making Halloween the biggest candy season. This year, sales will certainly be higher.
What percentage of those sales end up providing candy that individuals don't really like? If my own careful scientific study of Halloween bags is any guide, perhaps about 75 percent.
It's not the dead that concern me about Halloween. And it is not the impact of all that sugar on the weight of our kids. No, it's the dead-weight loss, or pointless lost utility of the entire enterprise. That likely has a dollar value that exceeds $1.5 billion annually. American citizens squander more than a billion and a half dollars a year on an economically inefficient holiday.
So let's do something to reform Halloween. The first step would be for Halloween donors to give kids money instead of candy. Kids could then go to the supermarket the next day and binge on the candies they really like. That solution would get an A-plus in economics.
TutorVista also stands out for its well-known venture backers, its scale and its ambition. The two-year-old company has raised more than $15 million from investors including Sequoia, Lightspeed Venture Partners and Silicon Valley Bank.
TutorVista employs 760 people, including 600 tutors in India, a teaching staff it plans to double by year-end. Its 52-person technical staff has spent countless hours building the software system to schedule, monitor and connect potentially tens of thousands of tutors with students oceans away.
“Our vision is to be part of the monthly budget of one million families,” Mr. Ganesh said.
It is a long-term goal. To date, TutorVista has signed up 10,000 subscribers in the United States, and its British service, rolled out in September, has 1,000.
Further gains will depend on winning over more customers like the Tham family in California. Since he was in elementary school, Kenneth has had stints of conventional tutoring, often in classroom settings with up to 10 other students. At times, this cost the family up to $500 a month. Last year, Ernest Tham, a truck driver, noticed a reference to TutorVista on a Web site and suggested his son give it a try.
“Kenneth was apprehensive at first, and I wasn’t sure how it would work,” Mr. Tham said. “But, shocking to say, it’s gone very well.”
Kenneth said he initially found it “very unusual, not seeing another person. You get used to it, though. It’s not a problem.” He schedules one or two sessions nearly every day, mainly for English and chemistry. With a digital pen and palette, he writes sentences and grammar exercises, for example, and his work appears on his computer screen and on the screen of his tutor. They discuss the lessons using Internet-telephone headsets.
“You can also get help with homework problems,” Kenneth said, “but they’re not supposed to do all your homework for you.”
In a year with the TutorVista service, Kenneth has improved both his grades and standardized test scores, his father said.
Ramya Tadikonda has tutored Kenneth Tham, among many others, from her home in Chennai, India. To achieve its ambitions, TutorVista must recruit, train and retain thousands of tutors like her.
In his new book, Is The Welfare State Justified?, philosopher Daniel Shapiro insightfully combines moral and political philosophy with contemporary social science to argue that proponents of the welfare state — egalitarians, communitarians, and liberals alike — have misunderstood the implications of their own principles, which in fact support more market-based or libertarian institutional conclusions than most people realize. Please join us for a discussion of this important and controversial new book on the missing moral foundations of the welfare state.
Paul Krugman’s essay “Who Was Milton Friedman?” seriously mischaracterizes Friedman’s economics and his legacy. In this paper we provide a rejoinder to Krugman on these issues. In the course of setting the record straight, we provide a self-contained guide to Milton Friedman’s impact on modern monetary economics and on today’s central banks. We also refute the conclusions that Krugman draws about monetary policy from the experiences of the United States in the 1930s and of Japan in the 1990s.
But the struggle for the protection of rights and civil liberties in the West is not a finished chapter in our history. The constitutions of Western democracies and the rights they enshrine do not protect themselves. The preservation of these liberties requires a vigilant, critical, and courageous citizenry that can be neither complacent in times of security nor compromising in times of fear and insecurity – citizens who understand that the violation of the basic rights of one is a violation of the rights of all. Loyalty to country and constitution demands that we speak up against injustice, uphold our ideals, and hold our leaders accountable.
For years, I worked tirelessly in academic and public circles to dismantle the barriers erected by those who see Islam and the West as mutually exclusive, to build bridges of mutual understanding and respect. Since 2001, I have also intensified my work to remind my fellow Western citizens of the fragility of our societies and the precariousness of our civil liberties as we are thrust into this so-called war on terrorism. Since the end of 2004, I have done this primarily in Europe through my academic work, debates, and public lectures and by working closely with European politicians, governmental agencies, and civic institutions. But I have been prevented from doing this work on American soil.
In the summer of 2004, I was poised to start a dual professorship at Notre Dame University and eager for a more concentrated academic and public engagement than was previously allowed by my numerous but brief visits to the United States.
But that was not to happen. My visa was canceled at the last minute at the behest of the Department of Homeland Security, supposedly under a provision of the Patriot Act. This revocation not only cost me my academic post, it deprived me and Americans of a much needed mutually enriching dialogue and debate. It also fueled fantastical allegations of terrorism support and of shadowy associations that tarnished my reputation and cast a cloud of suspicion over my character and work.
On this remote edge of the Indian Ocean, an experimental model for implementing Muslim environmental ethics and education is yielding results. Local and international nongovernmental organizations, which pioneered the project, will publish a guidebook later this year in English and Swahili to be distributed throughout the Swahili-speaking coast of East Africa and eventually in Muslim communities around the world.
Many of the fisherman here are now members of the Misali Island Conservation Association (MICA), which helps to protect the resources of this important islet off the west coast of Pemba.
"Misali is a benchmark for the faith community," says Fazlun Khalid, the founding director of the Britain-based Islamic Foundation for Ecology and Environmental Sciences (IFEES), one of the NGOs involved with the project. "It shows that Islamic leaders can empower and organize their constituents on conservation issues much faster than governments can."
Mr. Khalid was first invited to Zanzibar in 1998 by Rob Wild of CARE, who was frustrated that traditional conservation messages were not reaching the fishermen. Khalid had been eager to pilot a methodology using Islamic teachings to communicate conservation, and Misali became the first experiment of that methodology.
Khalid, together with CARE, met with religious leaders and fishermen to discuss how the teachings of the Koran related to the environment and the use of natural resources. Later, they worked with MICA to train religious leaders to incorporate conservation messages into their Friday prayer sermons.
"We researched lost teachings and put them together in a modern form," says Khalid. "The Koran gives ethical principles on guardianship and relationships with other beings, which can form the ethical foundation for conservation. And there are other sayings and practices of the prophet [Muhammad] that relate to sustainable use of resources."
One Koranic verse selected for its ecological significance was Sura 6:141: "...it is He [Allah] who produces gardens, both cultivated and wild.... Eat of their fruits when they bear fruit and pay their dues on the day of their harvest, and do not be profligate. He does not love the profligate."
Misali Island, a teardrop-shaped atoll that makes up part of the Zanzibar archipelago, is part of a lush marine ecosystem where more than 300 species of fish breed and swim through a maze of 42 types of coral.
Fishing and tourism, together with small-scale cultivation of fruit and spices like clove, form the backbone of Tanzania's coastal economy. More than 12,000 Pemba residents in 36 villages count on fish from Misali's waters and little else for survival....
Though no study to assess the project has been done in recent years, a baseline study by CARE in 2000 showed that only 34 percent of fishermen thought that Islam related to their use of the sea and its resources. In 2003, another study showed the number had risen to 66 percent. It also found that the lessons learned through the project had actually spread beyond the villages directly concerned.
Yet despite the program's successes, challenges remain.
According to Mbarouk, some less pious community members have not taken the message to heart and still use dragnets and poles to poke at the coral.
Much has been written about the widening gap in earnings and low-income rates between recent immigrants to Canada and their Canadian-born counterparts. However, the challenges associated with the integration of immigrants often extend beyond the first generation.
This study, published today in the October 2007 edition of Perspectives on Labour and Income, focuses on second-generation Canadians aged 17 to 29—young men and women born in Canada to two immigrant parents between 1967 and 1982.
Using data from the Survey of Labour and Income Dynamics, the study compares, over a six-year period (either 1996 to 2001 or 1999 to 2004), the earnings of these second-generation Canadians who have a strong labour force attachment to those of their peers with Canadian-born parents. It also compares the two groups' family characteristics, educational attainment and geographical distribution, and the extent to which these factors may lead to differences in earnings.
Taking education levels into account, the study found that young women with two immigrant parents had significantly higher hourly and annual earnings than young women with Canadian-born parents during the entire six-year period.
Among young men, on the other hand, there was little evidence of such a second-generation earnings advantage. In fact, everything else being equal, some visible minority men with two immigrant parents appeared to have a significant disadvantage in earnings compared to their peers with Canadian-born parents.
In the case of women, roughly half of their advantage in hourly earnings was due to geographic distribution. Three-quarters of young Canadians with two immigrant parents were concentrated in Ontario and British Columbia, and more than three-quarters lived in large urban centres. In contrast, half of their counterparts with Canadian-born parents lived in less economically prosperous regions, such as Atlantic Canada, Quebec, Manitoba and Saskatchewan. About 60% lived in smaller cities, small towns and rural areas.
A large part of the annual earnings advantage among young women with two immigrant parents was also because they were less likely to have been married or had children.
By the end of the six-year period when they had reached the ages of 22 to 34, less than half of women with two immigrant parents had been married. Only a third had given birth to, adopted, or raised children. In contrast, over 60% of those with Canadian-born parents had been married, and close to half had had children.
The situation was quite different for young second-generation men. The study found little evidence of an advantage in hourly or annual earnings relative to their third- and higher-generation male counterparts.
To investigate differences in hourly and annual earnings among the different groups, a sub-sample of non-students with paid employment in year 1 was selected from the original sample of 17- to 29-year-olds. This sub-sample had high labour force attachment, with an average of around five years of paid employment over the six-year period and little variability between groups. (Multilevel growth models - Table)
Multilevel models are ideal for investigating continuous outcomes (like earnings) whose values change systematically over time.
Why multilevel? At the first level are individual growth trajectories—in the simplest case of linear growth, each person's trajectory can be described with an intercept (starting point) and a slope (linear rate of change). At the second level are average trajectories, with individual and group deviations from the average. This allows differences in intercept and slope to be examined....
The AIDS virus invaded the United States in about 1969 from Haiti, carried most likely by a single infected immigrant who set the stage for it to sweep the world in a tragic epidemic, scientists said on Monday.
Michael Worobey, a University of Arizona evolutionary biologist, said the 1969 U.S. entry date is earlier than some experts had believed.
The timeline laid out in the study led by Worobey indicates that HIV infections were occurring in the United States for roughly 12 years before AIDS was first recognized by scientists as a disease in 1981. Many people had died by that point.
"It is somehow chilling to know it was probably circulating for so long under our noses," Worobey said in a telephone interview.
Over the past two years I have worked with a psychologist, two human rights researchers, and several NGOs on studies of war affected youth in northern Uganda, the findings of which challenge conventional wisdom and policy. In a recent book chapter, we use survey data from hundreds of former child soldiers to show that, at least in Uganda, adolescent recruitment is a product, not of barbarism, but of rational calculation by the rebel group. Young adolescents were disproportionately targeted for three reasons: because they were overrepresented in the population; because they were more effective guerrillas than younger children; and (perhaps most importantly) because they were more easily indoctrinated and disoriented than young adults. Children who were orphaned at the time of abduction were also much more likely to stay with the rebel group once abducted, suggesting a fourth determinant of child soldiering: the quality of the life to which one can return.
He is wildly controversial, though. As one of the foremost scholars of game theory—or “rational choice,” as its political-science practitioners prefer to call it—Bueno de Mesquita is at the center of a raging hullabaloo that has taken over some of the most prestigious halls of learning in this country. Exclusive, highly complex mathematically, and messianic in its certainty of universal truths, rational-choice theory is not only changing the way political science is taught, but the way it’s defined.
To verify the accuracy of his model, the CIA set up a kind of forecasting face-off that pit predictions from his model against those of Langley’s more traditional in-house intelligence analysts and area specialists. “We tested Bueno de Mesquita’s model on scores of issues that were conducted in real time—that is, the forecasts were made before the events actually happened,” says Stanley Feder, a former high-level CIA analyst. “We found the model to be accurate 90 percent of the time,” he wrote. Another study evaluating Bueno de Mesquita’s real-time forecasts of 21 policy decisions in the European community concluded that “the probability that the predicted outcome was what indeed occurred was an astounding 97 percent.” What’s more, Bueno de Mesquita’s forecasts were much more detailed than those of the more traditional analysts. “The real issue is the specificity of the accuracy,” says Feder. “We found that DI (Directorate of National Intelligence) analyses, even when they were right, were vague compared to the model’s forecasts. To use an archery metaphor, if you hit the target, that’s great. But if you hit the bull’s eye—that’s amazing...
How does Bueno de Mesquita do this? With mathematics. “You start with a set of assumptions, as you do with anything, but you do it in a formal, mathematical way,” he says. “You break them down as equations and work from there to see what follows logically from those assumptions.” The assumptions he’s talking about concern each actor’s motives. You configure those motives into equations that are, essentially, statements of logic based on a predictive theory of how people with those motives will behave. From there, you start building your mathematical model. You determine whether the predictive theory holds true by plugging in data, which are numbers derived from scales of preferences that you ascribe to each actor based on the various choices they face.
The Prisoner’s Dilemma, a basic in game theory, explains it well: Two burglars are apprehended near the scene of a crime and are interrogated separately by the police. The police know these two goons did it, but they don’t know how, so they offer each one a deal. If they both confess and cooperate, they’ll both get a minor sentence of five years. If neither man confesses, they’ll both only get one year (for having been caught with some of the stolen loot on them). But, and here’s where it gets interesting, if one confesses and the other doesn’t, the one who confesses walks out scot-free while the other will do 10 years. What will they do? Will they trust each other and do what’s obviously in their best interest, which is not confess? Based on game theory’s assumptions about human nature, the math derived from this dilemma tells you squarely that the two goons will turn each other in...
There’s also the book he’s written with Condoleezza Rice and two other authors, The Strategy of Campaigning, which comes out in the fall. Given the Bush administration’s heavy ideological bent—which would seem to represent everything a rationalist like Bueno de Mesquita opposes—how does he justify putting his name on the same dust jacket as Rice’s Bueno de Mesquita repositions himself in his chair. “The central question in this book is a question that Condi raised before she came to Washington,” he says. (So is her name there just to sell books? “We are making a concerted effort not to play up the fact that the Secretary of State is a co-author,” he later adds.)
Meanwhile, he has just launched and is the director of NYU’s Alexander Hamilton Center. “The mission for the center is the application of logic and evidence to solving fundamental policy problems. Not to a bipartisan solution, but to a nonpartisan solution.” In his continuing work for the CIA and the Defense Department, one of his most recent assignments has been North Korea and its nuclear program. His analysis starts from the premise that what Kim Jong Il cares most about is his political survival. As Bueno de Mesquita sees it, the principal reason for his nuclear program is to deter the United States from taking him out, by raising the costs of doing so. “The solution, then, lies in a mechanism that guarantees us that he not use these weapons and guarantees him that we not interfere with his political survival,” he says.
Joining our Global Development team are Aleem Walji, John Lyman, Salimah Samji, and Swati Mylavarapu. An anthropologist and urban planner by training, Aleem comes to Google.org having served most recently as CEO of the Aga Khan Foundation in Syria. His specific interests lie in rural economic development, employment creation through financial services and entrepreneurship, and forming partnerships with private sector and civil society institutions. John is a graduate of UC Berkeley's Masters in Public Policy program. He previously worked on economic and development issues as the Center for American Progress and the Clinton Global Initiative. Born in Kenya, Salimah joins our team from the World Bank, where she served as specialist in social/rural development and monitoring and evaluation in India. She holds a Masters in Public Administration in International Development (MPAID) from Harvard's Kennedy School of Government. Swati is one of two Rhodes scholars to join our team. While at Oxford, Swati studied ethnic conflict and political competition in East Africa. She completed her undergraduate work at Harvard in International Development. Lant Pritchett continues to serve as an advisor to the Global Development team from his post teaching economic development at Harvard's Kennedy School of Government.
Adverse Selection in Online "Trust" Authorities, an empirical look at the best-known certification authority, TRUSTe. I cross-reference TRUSTe's ratings with the findings of SiteAdvisor -- where robots check web site downloads for spyware, and submit single-use addresses into email forms to check for spam, among other automated and manual tests. Of course SiteAdvisor data isn't perfect either, but if SiteAdvisor says a site is bad news, while TRUSTe gives it a seal, most users are likely to side with SiteAdvisor.
key finding: Sites certified by TRUSTe are more than twice as likely to be untrustworthy as a random sampling of popular sites. The relative hazards of TRUSTe-certified sites hold even when analysis controls for site attributes and for site complexity.
One of the Pompeian places that is sure to feature somewhere in this book is The Brothel. Now that the famous House of the Vettii is closed to the public, it is this that is the tour guides’ hot spot, nicely restored with Danish money a few years ago. On the ground floor, it consists of five little rooms, each with a fitted stone bed – plus a single loo, though no running water.
What makes it 100% certain that it is a brothel rather than (say) a cheap lodging house is the decoration (a lot of more or less unimaginative bits of painted erotica above the doors to the ‘cells’).
As indicators for policy guidelines, Küng's and Roy's analyses make sense—but within crucial limits. There remains a strong body of evidence that the terrorist atrocity of July 2005 in London, and subsequent unsuccessful attempts, were inspired, at least partly, by radical preachers working out of British mosques. Saudi Arabia, the world's largest oil producer and exporter of the fundamentalist Sunni ideology known as Wahhabism, may be actively opposed to jihadism in its present forms. But as Roy previously explained in Globalized Islam, the oil-rich kingdom and neighboring Gulf states have helped to extend Wahhabi or Salafist (fundamentalist) influence "through an intensive outpouring of fatwas and short conferences or lectures, spread through the internet, television stations...or via cheap booklets." These products, he argued, arean important part of the curriculum of worldwide Muslim institutions that are subsidized by Gulf money. Through informal networks of disciples and former students, [Wahhabi preachers] reach a lay audience far larger than the madrasas [seminaries] in which they teach.[1]
A recent survey of jihadists in Europe concluded that "activists invest considerable time and energy in self-study of Wahhabi Islam and subsequently the jihadi strain of Salafism."[2]
There are countervailing tendencies, for example in the appeal of Sufi ideas and religious disciplines (to which Wahhabis are adamantly opposed) in some literary and artistic circles, and in related mystical traditions imported from Indo-Pakistan. But so long as there remains a generation of European Muslims who feel alienated from their parents' traditions yet rejected by the wider society, the style of religiosity supported from Arabia will remain a powerful "ultramontane" force.
Summary: For years, South Korea presented the puzzling phenomenon of steeply rising sex ratios at birth despite rapid development, including in women's education and formal employment. This paper shows that son preference decreased in response to development, but its manifestation continued until the mid-1990s due to improved sex-selection technology. The paper analyzes unusually rich survey data, and finds that the impact of development worked largely through triggering normative changes across the whole society - rather than just through changes in individuals as their socio-economic circumstances changed. The findings show that nearly three-quarters of the decline in son preference between 1991 and 2003 is attributable to normative change, and the rest to increases in the proportions of urban and educated people. South Korea is now the first Asian country to reverse the trend in rising sex ratios at birth. The paper discusses the cultural underpinnings of son preference in pre-industrial Korea, and how these were unraveled by industrialization and urbanization, while being buttressed by public policies upholding the patriarchal family system. Finally, the authors hypothesize that child sex ratios in China and India will decline well before they reach South Korean levels of development, since they have vigorous programs to accelerate normative change to reduce son preference.
Having made a decision, say, for chicken or Greece, what people often do to alleviate this dissonance, is update their attitudes to match the choice they made – the beef would have been too rare, Spain would have been too hot. Remarkably, psychologists at Yale University have now shown that young children and monkeys engage in these sorts of thought processes too.
Forty 4-year-olds used a scale of smiley faces to indicate how much they liked a range of animal stickers. For each child, the researchers identified three stickers which that child liked equally – let’s call these A, B, C. Each child then faced two choices – first to choose which of A or B they would like to take home. Afterwards, they then had to choose between sticker C and whichever sticker (A or B) they hadn’t selected before.
In the latter case, if the children liked the stickers equally, then on average they should have opted for sticker C over either A or B 50 per cent of the time, but in fact sticker C was selected in 63 per cent of such choices. The reason, the researchers say, is because, to reduce cognitive dissonance, the children had downplayed the appeal of whichever sticker (A or B) they had chosen not to pick earlier, thus tipping the balance in favour of C.
Moreover, the same pattern was found in an almost identical experiment with six capuchin monkeys who chose between different coloured, equally appealing M&M sweets. After a given colour was rejected, its future appeal suffered as the monkeys appeared to update their attitudes to match their earlier choices.
Is government intervention interfering with adult responsibility and the free market? Or is the long term lack of visible nutrition information irresponsible and unethical on the part of chain restaurants that typically serve unhealthy fare?
Each book targets a different audience. Often there are advertisers lurking in the background. The primer I have enjoyed most, the one I would recommend to a friend who wanted to learn how economists think about the world right now, is one that passed almost completely unnoticed into the stream, perhaps because it is so slight. But then, that is the point of Economics: A Very Short Introduction, by Partha Dasgupta, the Frank Ramsey Professor of Economics at Cambridge University. He boils down everything that's ordinarily included in a thousand-page introductory text, and more, to 160 graceful but undersized pages. (The book is one of an interminable list of Very Short Introductions -- to everything from Anarchy, Anglicanism and Animal Rights to Schizophrenia, the World Trade Organization and, coming soon, Chaos -- from Oxford University Press.)
Dasgupta, 65, is one of those figures, well-known to insiders but virtually invisible to those outside the field, until they pop up some year as an October surprise. (Queen Elizabeth knighted him in 2002 "for services to economics.") He has done deep work on issues the length and breadth of economics -- he taught game theory to Joseph Stiglitz and learned the economic history of science from Paul David. But the contribution for which he is best known is a skein of work with Geoffrey Heal, then also of Cambridge University, on the economics of natural resources, begun in 1972, in the context of the then-best-selling The Limits to Growth, and finished with a prescient 1979 monograph, Economics Theory and Exhaustible Resources. That led Dasgupta to an engagement with the United Nations, and a long collaboration with Karl-Gšran Mþler, another environmental economics pioneer. Both are still at it; in 2001 Dasgupta published Human Well-Being and the Natural Environment, and expanded it in 2004. But also in 1972, he read John Rawls' A Theory of Justice, and that led to a second leg of work on social choice, on mechanism design and, ultimately, on the nature of wealth and destitution.
Thus Dasgupta is supremely well qualified to write an overview of economics for the layman. Originally, he says, he had it in mind to lay out what he understood to be the research frontier. "But even though the analytical and empirical core of economics had growth from strength to strength over the decades," he writes, "I haven't been at ease with the selection of topics that textbooks offer for discussion (rural life in poor regions -- that is the economic life of some 2.5 billion people -- doesn't get mentioned at all, nor with the subjects that are emphasized in leading economic journals (Nature rarely appears there as an active player)." The result is a serious textbook treatment shaped around the lives of two ten-year-old "literary grandchildren," Becky in a small Midwestern suburb where her father works for a firm specializing in property law, Desta in a village in southwestern Ethiopia, where her father farms half a hectare of land.
The problem addressed in this paper is a classic one: the optimal redistribution of income. A Utilitarian social planner would like to transfer resources from high-ability individuals to low-ability individuals, but he is constrained by the fact that he cannot directly observe ability. In conventional analysis, the planner observes only income, which depends on ability and effort, and is deterred from the fully egalitarian outcome because taxing income discourages effort. If the planner’s problem is made more realistic by allowing him to observe other variables correlated with ability, such as height, he should use those other variables in addition to income for setting optimal policy. Our calculations show that a Utilitarian social planner should levy a sizeable tax on height. A tall person making $50,000 should pay about $4,500 more in taxes than a short person making the same income.
Height is, of course, only one of many possible personal characteristics that are correlated with a person’s opportunities to produce income. In this paper, we have avoided these other variables, such as race and gender, because they are intertwined with a long history of discrimination. In light of this history, any discussion of using these variables in tax policy would raise various political and philosophical issues that go beyond the scope of this paper. But if a height tax is deemed acceptable, tax analysts should entertain the possibility of using other such “tags” as well.
Many readers, however, will not so quickly embrace the idea of levying higher taxes on tall taxpayers. Indeed, when first hearing the proposal, most people recoil from it or are amused by it. And that reaction is precisely what makes the policy so intriguing. A tax on height follows inexorably from a well-established empirical regularity and the standard approach to the optimal design of tax policy. If the conclusion is rejected, the assumptions must be reconsidered.
Our results, therefore, leave readers with a menu of conclusions. You must either advocate a tax on height, or you must reject, or at least significantly amend, the conventional Utilitarian approach to optimal taxation. The choice is yours, but the choice cannot be avoided.
Business Environment Snapshots present measurable indicators across a wide range of business environment issues and over time. This new web-enabled tool compiles many data, indicators, and project information on the business environment for each country in an easily accessible, consistent and usable format.
How is it possible to achieve the miracle of raising taxes on men by less than the reduction on women while also holding tax revenue constant? The answer is well known to any graduate student in public finance. The supply of labour of women is more responsive to their after-tax wage, so a reduction in taxes increases the labour participation of women substantially. Men’s labour supply is more rigid, so an increase in taxes does not reduce their labour supply by much, if at all. Ergo, for a given tax cut on women, with a smaller tax increase on men, one maintains the same total revenue with fewer tax distortions. This is simply an application of the general principle of public finance that goods with a more elastic supply should be taxed less. Our computations, available in our working paper, Gender Based Taxation*, suggest that the difference in tax rates across gender that would be implied by our proposal – based upon different labour responses to wages – could be quite large, especially in countries where the labour participation of women is not as high, such as the Nordic countries.
Since we are talking about people and not goods, one needs to worry about whether such a policy undermines other social goals. In fact it does not, and this is why social activists should favour it as well. Increasing the labour participation of women is an explicit goal of the European Union’s Lisbon agenda. It sets a very ambitious target for female employment, especially in southern Europe, where women tend to stay at home more. Reducing the cost of working for women (ie their taxes) is the simplest and most direct way of achieving that goal. Concern over the discrimination against women in the labour force underlies many policies of “quotas” for women or affirmative action. A lower tax on women would lower their pre-tax wage and increase their after-tax wage, making it relatively cheaper for an employer to hire women. Discrimination would then become more costly. As for pollution, it is easier and more effective to tax the undesirable activity (ie make it costly) rather than prevent it by regulation or other forms of government activism.
Often those who care about women’s work emphasise the policy of supporting it with publicly funded childcare facilities. A higher take-home salary for women created by our proposal would allow them to buy more childcare at market prices and, since childcare facilities employ mostly women, they would also benefit on their costs. Moreover childcare subsidies target only women who have children; the problems of gender discrimination and low female labour force participation are more general. Not all countries will want to subsidise fertility directly.
The recent comeback of private contracting suggests that central governments have become weaker again, at least relative to the tasks they are undertaking. Alexander Tabarrok, my colleague (and sometimes co-author) at George Mason University, where he is also a professor of economics, traced the history of private contractors in a study, “The Rise, Fall, and Rise Again of Privateers” (The Independent Review, spring 2007, www.independent.org/publications/tir/article.asp?issueID=49&articleID=631). He showed that public navies and armies began to displace private contractors in the 19th century, as governments became more powerful and better funded.
Today, America no longer has a draft, its military bureaucracy can be inflexible and the public wishes to be insulated from the direct impact of war. Contractors are a symptom of government weakness, but are not the problem itself. The first Persian Gulf War, which enjoyed greater international support, was not reliant on contractors to nearly the same degree.
Among many Iraqis, Blackwater and other companies have a reputation for getting the job done without much caring about Iraqis who get in the way. But part of the problem may stem from economic incentives. If Blackwater is assigned to protect a top American official, who is later assassinated, Blackwater may lose future business. A private contractor doesn’t have a financial incentive to protect Iraqi citizens, who are not paying customers. Ultimately, this reflects the priorities of the United States military itself. American casualties are carefully recorded and memorialized, but there is no count of Iraqi civilian deaths.
It is harder to recognize when private contractors are being underemployed. During the Rwandan civil war in the 1990s, the United Nations debated using two private contractors, Executive Outcomes or Sandline International, to intervene. The U.N. rejected the notion and instead turned to a poorly trained Zairean police contingent. We’ll never know how private contractors would have fared, but the Zaireans were ineffective; some 800,000 Rwandans were murdered.
The US has responded in an ad hoc way by carrying on a “strategic dialogue” with China – by far the largest economy with an exchange rate linked to the dollar – backed by congressional threats to address exchange rate issues using the tools of trade policy and references to communiqués from the Group of Seven leading industrial nations. In reality the dialogue is anything but strategic. Like so much of American international policy in recent years, it seems to confuse the firm statement of legitimate desire with the serious conduct of diplomacy.
Think of the questions Chinese policymakers must ask themselves. What is the highest US priority – global financial stability or market access for well-connected US firms? Can the US take yes for an answer or is it a certainty that a new president will insist in 18 months on a new set of economic diplomacy accomplishments with China? In which areas, if any, is the US prepared to adjust its policies in response to global interests? Given that the Chinese authorities have presided over nearly double digit annual growth for a generation, do US officials who make assertions about what is in China’s interest have the experience and knowledge of China that should cause their views to be taken seriously? Why is China being singled out? How could China – even if it wished to – act in ways that the US prefers without appearing to yield to international pressure?
An Englishman, William Willett, drew attention to the inefficient use of daylight a century ago and proposed an ingenious solution. Now that governments controlled the time, they could make people turn their clocks forward or back. Willett’s campaign was quickly and unexpectedly successful. Summer, or daylight saving, time was adopted on both sides in the first world war.
The economic arguments were based on the implications of unnecessarily shortened daylight for industries such as farming and construction. Those arguments survived wartime exigencies. Today most places more than 30º latitude (Atlanta is 34º, New York and Madrid 41º, and London and Berlin 52º) shift clocks forward in summer.
Enforced time-shifting is an intrusive yet effective piece of economic and social engineering. Next week, even people free to rise when they choose, such as retirees and newspaper columnists, will get up later and go to bed later. Who would believe they could be induced to do this by government decree?
A new report from Congress’s Joint Economic Committee predicts that there will be two million foreclosures on subprime mortgages by the end of next year. That’s two million American families facing the humiliation and financial pain of losing their homes.
At the same time, investors who bought assets backed by subprime loans are continuing to suffer severe losses. Everything suggests that there will be many more stories like that of Merrill Lynch, which has just announced an $8.4 billion write-down because of bad loans — $3 billion more than it had announced just a few weeks earlier.
Second, much if not most of the subprime lending that is now going so catastrophically bad took place after it was clear to many of us that there was a serious housing bubble, and after people like Mr. Gramlich had issued public warnings about the subprime situation. As late as 2003, subprime loans accounted for only 8.5 percent of the value of mortgages issued in this country. In 2005 and 2006, the peak years of the housing bubble, subprime was 20 percent of the total — and the delinquency rates on recent subprime loans are much higher than those on older loans.
MUCH as George W. Bush’s presidency was ineluctably shaped by Sept. 11, 2001, so the outbreak of the French Revolution was symbolized by the events of one fateful day, July 14, 1789. And though 18th-century France may seem impossibly distant to contemporary Americans, future historians examining Mr. Bush’s presidency within the longer sweep of political and intellectual history may find the French Revolution useful in understanding his curious brand of 21st- century conservatism.
Soon after the storming of the Bastille, pro-Revolutionary elements came together to form an association that would become known as the Jacobin Club, an umbrella group of politicians, journalists and citizens dedicated to advancing the principles of the Revolution.
The Jacobins shared a defining ideological feature. They divided the world between pro- and anti-Revolutionaries — the defenders of liberty versus its enemies. The French Revolution, as they understood it, was the great event that would determine whether liberty was to prevail on the planet or whether the world would fall back into tyranny and despotism.
When it comes to risky bedroom behavior, what matters most may be where you live.
The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. Deny them that ability, and you might well deny them the prospect of continuing industrial growth, even reverse the growth that has been achieved. And since export-oriented growth, for all its injustice, has been a huge boon for the workers in those nations, anything that curtails that growth is very much against their interests. A policy of good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no favor to its alleged beneficiaries.
You may say that the wretched of the earth should not be forced to serve as hewers of wood, drawers of water, and sewers of sneakers for the affluent. But what is the alternative? Should they be helped with foreign aid? Maybe--although the historical record of regions like southern Italy suggests that such aid has a tendency to promote perpetual dependence. Anyway, there isn't the slightest prospect of significant aid materializing. Should their own governments provide more social justice? Of course--but they won't, or at least not because we tell them to. And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard--that is, the fact that you don't like the idea of workers being paid a pittance to supply rich Westerners with fashion items.
Since the 1990s, the concept of good governance has taken center stage in development thinking and practice. While it has been increasingly viewed as a key ingredient for development, the decade also witnessed a renewed focus on poverty reduction as the major goal of development. This paper reviews the concepts of good governance and pro-poor growth, and develops a conceptual framework that specifies the linkages between different aspects of the two.
The paper uses the framework developed to review a range of quantitative cross-country studies that include measures of governance as independent variables and focuses on the dependent variable in at least two of the three dimensions of pro-poor growth: poverty, inequality, and growth.
The overall finding of the paper is that governance indicators that capture a sound decision-making environment for investment and policy implementation, such as political stability and rule of law, are associated with growth but provide mixed results in regard to poverty reduction. The paper also discovers that governance indicators that refer to transparent political systems, such as civil liberties and political freedom, tend to be conducive for poverty reduction, but the evidence is rather mixed, and the relationship of these variables with growth remains unclear.
Short of revamping the infrastructure of international financial institutions, a low hanging fruit that the IMF should consider is salary compensation for senior civil servants in developing countries. Relying on the good will and civic mindedness of grossly underpaid civil servants is simply not sustainable. If the IMF and its donor siblings are serious about their lofty goals of promoting macroeconomic stability and economic growth, they need to adequately support the only team that can pull off a home run: the governments they work with. Otherwise, even an all star IMF team may just as well sit on the bench.
The names of Nasir al-Din al-Tusi and Ibn al-Nafis may be less familiar to many people than those of Isaac Newton or Albert Einstein. But these and other Islamic scholars of the 12th and 13th centuries belong in the pantheon of thinkers whose work has shaped the direction of modern science.
Like that of China, the history of Islamic science and innovation is one of a period of great flourishing followed by a steep and protracted decline. Today, research and development spending across the 57 member states of the Organisation of the Islamic Conference averages just 0.38 per cent of gross domestic product, compared with a global average of 2.36 per cent.
This is not simply a sign of relative poverty: oil-producing states such as Saudi Arabia and Kuwait are among the lowest investors in research as a percentage of GDP. In 2005, the 17 countries of the Arab world together produced 13,444 scientific publications, fewer than the 15,455 achieved by Harvard University alone. A 2002 survey of science in the region could identify only three subjects in which it excelled: desalination technologies, camel reproduction and falconry research. This has led some commentators to suggest that there is something about Islam that is inimical to innovation. However, the picture is starting to change.
Across the Islamic world, the past 12 months have been punctuated by eye-catching announcements. In May 2007, the United Arab Emirates launched a $10bn foundation to create research centres in Arab universities. In Nigeria, the government has poured $5bn into a petroleum technology development fund to support research and education. In Qatar, a 2,500-acre education city has been constructed outside Doha and is home to international campuses of five of the world's top universities. Earlier, in August 2006, King Abdullah of Saudi Arabia laid the foundation stone for a $2.6bn university devoted to science and technology in Taif. In December last year, Egypt's President Hosni Mubarak launched a "decade of science of technology".
At a multilateral level, there is also a focus on science and innovation. In 2005, the Organisation of the Islamic Conference announced a 10-year action programme, which identifies targets for educational reform and proposes that by 2015, member states should aim to spend 1.2 per cent of GDP on R&D. Particular impetus is coming from oil-rich nations, which see innovation as the key to their long-term prosperity.
Chapters
1. Of Terrorism and Climate Change
2. A Tale of Two Protocols
3. Catastrophe
4. Irreversibility
5. Money
6. The Future
Abstract: The main objective of this report is to present the Government of Chile with policy options related to the institutional distribution of roles and responsibilities for effective quality assurance in education. Following the introduction, the report is structured as follows. Chapter II presents background information on the evolution of Chile's education system since 1980. This information, together with an analysis of the current situation of the education sector, describes the motivation for the study and demonstrates the urgent need to shift the focus in education policy to quality assurance. Chapter III describes the conceptual framework developed for the analysis of how successful systems carry out education quality assurance. The framework developed identifies education participants, including: students; teachers; principals and school administrators; schools; local governments (districts, municipalities); regional governments (states, provinces); and the national government. Chapter IV applies the framework to the nine education systems selected as comparisons and presents a summary of the quality assurance functions and institutions in each selected education system. Chapter V describes the four alternative instructional visions for quality assurance in education developed as a result of the international review. Finally, Chapter VI presents policy options for the distribution of roles and responsibilities for education quality assurance across individuals and/or institutions, which vary depending on the instructional vision followed
Abstract: In India, land continues to be of enormous economic, social, and symbolic relevance. The main purpose of this report is to review new empirical evidence on land administration and land policy, as well as the possible interaction between the two, to derive policy conclusions. The empirical basis for the discussion of land administration is provided by a review of land records, survey and settlement, and land registration in 14 states. Chapter two describes the origin, nature, and main functions of current institutions and the ensuing problems for secure tenure and easy transferability of land. Chapter three identifies elements of a best practice approach to improving textual data (records and registration) and, based on a review of state experience, identifies the associated benefits. Chapter four reviews the extent to which lessons from improving textual records could help to give a boost to improvement of the spatial database for land administration. Chapter five concludes the discussion on land administration by assessing the scope for title registration to help improve tenure security in India and by identifying that need to be discussed. Chapter 6 highlights that land reform has helped increase accumulation of physical and human capital but that the impact is declining over time. Chapter 7 explores the functioning of land lease markets, and the extent to which restrictions on land leasing reduce the scope for productivity and equity enhancing transfers through such markets which could be particularly beneficial for women. Chapter 8 reviews the operation of land sales markets and suggests alternative approaches for preventing land loss by tribal people and chapter 9 concludes with a series of policy recommendations.
