In present-day political and policy discussions in Washington, widespread concern is shared over the large and growing U.S.-China trade deficit. In the Senate, this concern was manifested in the proposed Currency Exchange Rate Oversight Reform Act of 2007, which was introduced in June 2007, and calls for designations and escalations to punish countries deemed to be guilty of exchange rate manipulation. Many other proposals to adjust, control or limit various elements of the U.S.-China trade relationship also exist, underscoring the belief that the U.S. economy suffers in some way from this trade relationship. More specifically, at the very base of these concerns lies the view that the large trade deficit has reduced U.S. welfare by increasing unemployment and reducing wages. Yet is this an accurate representation of the affect of current trade patterns with China on the U.S. economy? In order to determine the answer, in this paper we examine some of the economic issues associated with the large overall U.S. trade deficit (which, in 2006, was three and a half times larger than the bilateral U.S.-China trade deficit), and some of policy options in reducing U.S.-China economic tensions by posing and answering four critical questions.
在华盛顿当前的政治和政策讨论中，人们普遍担心巨大且不断增长的美中贸易逆差。在参议院，这种担忧在2007年6月提出的《2007年货币汇率监督改革法案》(Currency Exchange Rate Oversight Reform Act of 2007)中得到了体现，该法案呼吁对那些被认为操纵汇率的国家进行点名和升级惩罚。还有许多其他建议调整、控制或限制美中贸易关系的各个方面，强调美国经济在某种程度上受到这种贸易关系的影响。更具体地说，这些担忧的根本在于这样一种观点，即巨额贸易逆差通过增加失业率和降低工资而降低了美国的福利。然而，这是否准确反映了当前中美贸易模式对美国经济的影响?为了确定答案，在本文中，我们研究了与美国巨额贸易逆差(2006年，美国贸易逆差是美中双边贸易逆差的3.5倍)相关的一些经济问题，以及通过提出和回答四个关键问题来减少美中经济紧张关系的一些政策选择。
{"title":"Facing Protectionism Generated by Trade Disputes: China's Post-WTO Blues","authors":"W. Woo, G. Xiao","doi":"10.2139/ssrn.1082905","DOIUrl":"https://doi.org/10.2139/ssrn.1082905","url":null,"abstract":"In present-day political and policy discussions in Washington, widespread concern is shared over the large and growing U.S.-China trade deficit. In the Senate, this concern was manifested in the proposed Currency Exchange Rate Oversight Reform Act of 2007, which was introduced in June 2007, and calls for designations and escalations to punish countries deemed to be guilty of exchange rate manipulation. Many other proposals to adjust, control or limit various elements of the U.S.-China trade relationship also exist, underscoring the belief that the U.S. economy suffers in some way from this trade relationship. More specifically, at the very base of these concerns lies the view that the large trade deficit has reduced U.S. welfare by increasing unemployment and reducing wages. Yet is this an accurate representation of the affect of current trade patterns with China on the U.S. economy? In order to determine the answer, in this paper we examine some of the economic issues associated with the large overall U.S. trade deficit (which, in 2006, was three and a half times larger than the bilateral U.S.-China trade deficit), and some of policy options in reducing U.S.-China economic tensions by posing and answering four critical questions.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121563251","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Orthodox economic analysis cannot identify how to provide affordable housing on a sustainable basis because it: (i) Considers the nature of property rights as a given rather than as a policy variable; (ii) Neglects taking into account variations in the values of assets and liabilities; (iii) Neglects or omits how government investment in urban infrastructure creates private profits for land owners; (iv) Does not identify Surplus Profits; (v) Fails to recognize how surplus profits and windfall gains can cross subsidize housing and commercial investors to democratise the wealth of cites. Duplex property rights are described that separate the value of buildings from the values created in their land by neighbouring infrastructure investment. This allows uplift in land values created by infrastructure expenditure to be used to make all neighbourhood sites self-financing to halve the cost of urban housing and eliminate the cost of land for commercial developments. The resulting increase in economic efficiency improves equity by providing eight ways to distribute wealth to citizens without government taxes or welfare. The paper recommends that approval for public infrastructure expenditure and/or development be made conditional upon adopting duplex ownership of urban realty.
{"title":"Affordable Housing Policy: Not Identifiable with Orthodox Economic Analysis","authors":"S. Turnbull","doi":"10.2139/ssrn.1027864","DOIUrl":"https://doi.org/10.2139/ssrn.1027864","url":null,"abstract":"Orthodox economic analysis cannot identify how to provide affordable housing on a sustainable basis because it: (i) Considers the nature of property rights as a given rather than as a policy variable; (ii) Neglects taking into account variations in the values of assets and liabilities; (iii) Neglects or omits how government investment in urban infrastructure creates private profits for land owners; (iv) Does not identify Surplus Profits; (v) Fails to recognize how surplus profits and windfall gains can cross subsidize housing and commercial investors to democratise the wealth of cites. Duplex property rights are described that separate the value of buildings from the values created in their land by neighbouring infrastructure investment. This allows uplift in land values created by infrastructure expenditure to be used to make all neighbourhood sites self-financing to halve the cost of urban housing and eliminate the cost of land for commercial developments. The resulting increase in economic efficiency improves equity by providing eight ways to distribute wealth to citizens without government taxes or welfare. The paper recommends that approval for public infrastructure expenditure and/or development be made conditional upon adopting duplex ownership of urban realty.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117352386","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We review theoretical explanations for in-kind transfers in light of the limited empirical evidence. After reviewing the traditional paternalistic arguments, we consider explanations based on imperfect information and self-targeting. We then discuss the large literature on in-kind programs as a way of improving the efficiency of the tax system and a range of other possible explanations, including the "Samaritan's Dilemma," pecuniary effects, credit constraints, asymmetric information amongst agents, and political economy considerations. Our reading of the evidence suggests that paternalism and interdependent preferences are leading overall explanations for the existence of in-kind transfer programs but that some of the other arguments may apply to specific cases. Political economy considerations must also be part of the story.
{"title":"Transfers in Cash and in Kind: Theory Meets the Data","authors":"Janet Currie, F. Gahvari","doi":"10.1257/JEL.46.2.333","DOIUrl":"https://doi.org/10.1257/JEL.46.2.333","url":null,"abstract":"We review theoretical explanations for in-kind transfers in light of the limited empirical evidence. After reviewing the traditional paternalistic arguments, we consider explanations based on imperfect information and self-targeting. We then discuss the large literature on in-kind programs as a way of improving the efficiency of the tax system and a range of other possible explanations, including the \"Samaritan's Dilemma,\" pecuniary effects, credit constraints, asymmetric information amongst agents, and political economy considerations. Our reading of the evidence suggests that paternalism and interdependent preferences are leading overall explanations for the existence of in-kind transfer programs but that some of the other arguments may apply to specific cases. Political economy considerations must also be part of the story.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124802422","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we identify four Gordian Knots of the global economy in the 21st century, that is 1) limits to growth: scarce energy and natural disasters, 2) aging of the developed world and the 21st century as the age of migration, 3) the rise of China and the failure of democracy, and 4) rising significance of global financial markets and emergence of new global players. We describe what policies are adopted at international and European level to deal with these Gordian knots and assess, when it can be done, what are the strengths and flaws of these polices. Finally we suggest "outside-the-box" Alexandrian solutions to some of these problems. We argue that while the natural resources constitute limits to growth in the medium run, the humanity ability to develop disruptive innovations will challenge those limits in the long run. We therefore call on the Club of Rome to broaden its discussion as what appeared as the main Gordian knot of the 21st century some 30 years ago should now be seen in a broader context. Europe has immense challenges and opportunities lying ahead. It is high time that the Club of Rome warns politicians which so diligently take Europe towards the dead end called global marginalization. Lack of strategic vision, national patriotism, protectionism, inability to see developing countries as legitimate global players. All these strategic weaknesses will strike back and will lead to weak Europe, unable to play an important global role in the 21st century. It is not to late avoid this gloomy scenario.
{"title":"Gordian Knots of the 21st Century","authors":"Paweł Opala, Krzysztof Rybiński","doi":"10.2139/ssrn.1024826","DOIUrl":"https://doi.org/10.2139/ssrn.1024826","url":null,"abstract":"In this paper we identify four Gordian Knots of the global economy in the 21st century, that is 1) limits to growth: scarce energy and natural disasters, 2) aging of the developed world and the 21st century as the age of migration, 3) the rise of China and the failure of democracy, and 4) rising significance of global financial markets and emergence of new global players. We describe what policies are adopted at international and European level to deal with these Gordian knots and assess, when it can be done, what are the strengths and flaws of these polices. Finally we suggest \"outside-the-box\" Alexandrian solutions to some of these problems. We argue that while the natural resources constitute limits to growth in the medium run, the humanity ability to develop disruptive innovations will challenge those limits in the long run. We therefore call on the Club of Rome to broaden its discussion as what appeared as the main Gordian knot of the 21st century some 30 years ago should now be seen in a broader context. Europe has immense challenges and opportunities lying ahead. It is high time that the Club of Rome warns politicians which so diligently take Europe towards the dead end called global marginalization. Lack of strategic vision, national patriotism, protectionism, inability to see developing countries as legitimate global players. All these strategic weaknesses will strike back and will lead to weak Europe, unable to play an important global role in the 21st century. It is not to late avoid this gloomy scenario.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126610294","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
When democracy is new, it is often fragile and not fully consolidated. We investigate how the danger of a collapse of democracy may affect fiscal policy in new democracies in comparison to countries where democracy is older and often more established. We argue that the attitude of the citizenry towards democracy is important in preventing democratic collapse, and expenditures may therefore be used to convince them that "democracy works". We present a model focusing on the inference problem that citizens solve in forming their beliefs about the efficacy of democracy. Our approach differs from much of the literature that concentrates on policy directed towards anti-democratic elites, but our model can encompass that view and allows comparison of different apporoaches. We argue that the implications of the model are broadly consistent with the empirical patterns generally observed, including the existence of political budget cycles in new democracies not observed in established democracies.
{"title":"Why is Economic Policy Different in New Democracies? Affecting Attitudes About Democracy","authors":"Adi Brender, Allan Drazen","doi":"10.3386/W13457","DOIUrl":"https://doi.org/10.3386/W13457","url":null,"abstract":"When democracy is new, it is often fragile and not fully consolidated. We investigate how the danger of a collapse of democracy may affect fiscal policy in new democracies in comparison to countries where democracy is older and often more established. We argue that the attitude of the citizenry towards democracy is important in preventing democratic collapse, and expenditures may therefore be used to convince them that \"democracy works\". We present a model focusing on the inference problem that citizens solve in forming their beliefs about the efficacy of democracy. Our approach differs from much of the literature that concentrates on policy directed towards anti-democratic elites, but our model can encompass that view and allows comparison of different apporoaches. We argue that the implications of the model are broadly consistent with the empirical patterns generally observed, including the existence of political budget cycles in new democracies not observed in established democracies.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"128 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114313363","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-09-14DOI: 10.1111/j.1467-8608.2007.00507.x
D. Campbell, R. Slack
This paper examines the strategic use of corporate philanthropy in the 1990s by UK building societies faced with an intensification of societal pressure to change legal form from mutual to corporate status. While the economic case for mutuality has been made elsewhere, this paper examines the observation that community relationships were thought by management to be capable of assisting in the strategic positioning of mutual societies with regard to their legal form. By increasing charitable giving to respond to the level of societal scrutiny and discussion on the issue of mutuality, this paper argues that charitable giving, as one proxy for community involvement, was used as a strategic tool to deflect calls for demutualisation, thereby preserving the existing mutual status of building societies.
{"title":"The Strategic Use of Corporate Philanthropy: Building Societies and Demutualisation Defences","authors":"D. Campbell, R. Slack","doi":"10.1111/j.1467-8608.2007.00507.x","DOIUrl":"https://doi.org/10.1111/j.1467-8608.2007.00507.x","url":null,"abstract":"This paper examines the strategic use of corporate philanthropy in the 1990s by UK building societies faced with an intensification of societal pressure to change legal form from mutual to corporate status. While the economic case for mutuality has been made elsewhere, this paper examines the observation that community relationships were thought by management to be capable of assisting in the strategic positioning of mutual societies with regard to their legal form. By increasing charitable giving to respond to the level of societal scrutiny and discussion on the issue of mutuality, this paper argues that charitable giving, as one proxy for community involvement, was used as a strategic tool to deflect calls for demutualisation, thereby preserving the existing mutual status of building societies.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"114 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"119872195","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Currently, the age structure of the Moroccan population is characterized by the predominance of youth aged 15-24. The share of youth in the population grew from about 17 percent in 1971 to a little over 21 percent in 2004. This "youth bulge" is regarded as one of the main causes of unemployment because the number of jobseekers is increasing much faster than the number of jobs that the economy can create. While this argument may seem legitimate in light of the current economic context, a youth bulge should naturally be considered a "demographic gift." By building the human capital of young workers and providing them with opportunities to use their skills, Morocco can increase incomes per capita, bolster savings and improve social welfare. But unfortunately, today's youth face severe economic and social exclusion hampering their transitions to adulthood. Youth exclusion is determined by many factors including illiteracy and unemployment. But moreover, exclusion is not just a condition but rather a process which marginalizes certain individuals. This process varies with context (e.g. urban versus rural) and is constantly evolving. In this paper we will outline how youth cohort and their expectations and focus on the economic dimensions of youth exclusion. In understanding the consequences of economic exclusion, however, we also extend our analysis to look at various social and political dimensions.
{"title":"Youth Exclusion in Morocco: Context, Consequences, and Policies","authors":"Brahim Boudarbat, A. Ajbilou","doi":"10.2139/ssrn.1087430","DOIUrl":"https://doi.org/10.2139/ssrn.1087430","url":null,"abstract":"Currently, the age structure of the Moroccan population is characterized by the predominance of youth aged 15-24. The share of youth in the population grew from about 17 percent in 1971 to a little over 21 percent in 2004. This \"youth bulge\" is regarded as one of the main causes of unemployment because the number of jobseekers is increasing much faster than the number of jobs that the economy can create. While this argument may seem legitimate in light of the current economic context, a youth bulge should naturally be considered a \"demographic gift.\" By building the human capital of young workers and providing them with opportunities to use their skills, Morocco can increase incomes per capita, bolster savings and improve social welfare. But unfortunately, today's youth face severe economic and social exclusion hampering their transitions to adulthood. Youth exclusion is determined by many factors including illiteracy and unemployment. But moreover, exclusion is not just a condition but rather a process which marginalizes certain individuals. This process varies with context (e.g. urban versus rural) and is constantly evolving. In this paper we will outline how youth cohort and their expectations and focus on the economic dimensions of youth exclusion. In understanding the consequences of economic exclusion, however, we also extend our analysis to look at various social and political dimensions.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"77 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131989773","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2007-09-01DOI: 10.5089/9781451867824.001.A001
Etienne B. Yehoue
I study the link between ethnic diversity, democracy, and corruption. In a static model, I show that contrary to conventional wisdom, corruption might emerge as a negative externality of democracy. This occurs through ethnicity, which appears as a rent-extracting technology in a democratic society. Extending the model into a dynamic framework, I find that this technology of extraction operates only at the early stage of democracy. Its impact tends to phase out as democracy matures. In other words, the model predicts that democracy exhibits a threshold effect on corruption.
{"title":"Ethnic Diversity, Democracy, and Corruption","authors":"Etienne B. Yehoue","doi":"10.5089/9781451867824.001.A001","DOIUrl":"https://doi.org/10.5089/9781451867824.001.A001","url":null,"abstract":"I study the link between ethnic diversity, democracy, and corruption. In a static model, I show that contrary to conventional wisdom, corruption might emerge as a negative externality of democracy. This occurs through ethnicity, which appears as a rent-extracting technology in a democratic society. Extending the model into a dynamic framework, I find that this technology of extraction operates only at the early stage of democracy. Its impact tends to phase out as democracy matures. In other words, the model predicts that democracy exhibits a threshold effect on corruption.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126185161","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the interaction between social and economic incentives in determining the level of corruption. Using social rewards as incentives for civil servants may help to reduce corruption. In our model, a decrease in corruption produces an externality that reduces the cost of hiring civil servants. In particular, it makes wage schemes which avert corruption (efficiency wages) cheaper. We show that the existence of this externality reduces the “optimal” level of corruption in a society, the greater the power of social status, the lower the level of corruption.
{"title":"Social Status and Corruption","authors":"Sebastian Galiani, F. Weinschelbaum","doi":"10.2139/ssrn.1011418","DOIUrl":"https://doi.org/10.2139/ssrn.1011418","url":null,"abstract":"We study the interaction between social and economic incentives in determining the level of corruption. Using social rewards as incentives for civil servants may help to reduce corruption. In our model, a decrease in corruption produces an externality that reduces the cost of hiring civil servants. In particular, it makes wage schemes which avert corruption (efficiency wages) cheaper. We show that the existence of this externality reduces the “optimal” level of corruption in a society, the greater the power of social status, the lower the level of corruption.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"334 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123057980","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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