Thursday, May 22, 2008
I'm huge in Ontario.... huge, I say
The Agenda with Steve Paikin is TV Ontario's equivalent of Charlie Rose...at least, that's what they tell me.
Anyway, I participated in their show on "The International Order" earlier this week:
The search for a new international order at a time of profound global change: Is the global system established in the wake of WWII still working? Do organizations such as the UN, the World Bank and the IMF need to be reformed ... or replaced?You can access the video by clicking here. Other participants include Janice Gross Stein, Richard Rosecrance, Alan Alexandroff, Patricia Goff, and David Rothkopf.
As an added treat, if you watch the whole thing, you'll catch the conversation about me and my eye-rolling.
Friday, May 2, 2008
What I said at the London conference
Is summarized in https://blogs.princeton.edu/globalforum/2008/05/panel-6-the-global-economy.htmlthis blog post.
And I might have been the most upbeat person on the panel!
Friday, April 25, 2008
This is funny? Really?
Look, I like ripping into Thomas Friedman as much as the next blogger -- but I can't agree with Matt Yglesias that the following video is "funny":This is the kind of thing that accomplishes the following:
A) It makes some people who dislike Friedman very happy;Matt also suggests checking out his book Heads in the Sand as "a more intellectually rigorous Friedman takedown." That's great, but damning with faint praise. I'm pretty sure my seven-year old could muster a more intellectually rigorous takedown as well.
Admittedly, I think he's an exceptionally smart seven year old, but still....
I don't think I'm particularly sensitive, but I find the notion of physically humiliating somebody who's trying to explain their ideas in a civic forum to be absolutely horrifying.For a more virtuous -- and more amusing -- example of pie-throwing, click here.
Friday, February 29, 2008
Sovereign wealth fund = greater transparency?
A common lament about sovereign wealth funds is their lack of transparency -- no one knows their investment strategy. The chart below -- cribbed from a Standard Chartered report summarized by the FT's Martin Wolf -- makes this visually clear:
It's generally assumed that a chief source of this opacity is that the governments chruning out SWFs are largely authoritarian and this impervious to domestic scrutiny.
I tend to agree with this assessment. But I did find this Wall Street Journal op-ed by Heidi Crebo-Rediker and Douglas Rediker to be counterintuitively interesting on this point -- transparency on SWFs would have domestic effects within these countries as well:
When even the most secretive sovereign wealth fund makes an investment, it must comply with the disclosure obligations of the countries in which it is investing. So, when the newly formed China Investment Corporation bought into Blackstone last summer, it was compelled to disclose the terms of the deal and other material information as part of Blackstone's regulatory filings in the U.S. That turned out to have some very real consequences back home.Read the whole thing.
Wednesday, February 6, 2008
Your cool statistic for the day
The number of mobile phone users will overtake the number of nonusers this year for the first time, according to the U.N. telecoms agency.I would be more impressed, however, if this piece of information appeared anywhere on the International Telecommunications Union main web page.
Thursday, December 6, 2007
So much for China's Olympian vulnerability
The Christian Science Monitor's Peter Ford reports that in advance of the Games, China's government is devising new ways to handcuff indigenous NGOs:
Last Thursday morning, five law-enforcement agents marched into Zhai Minglei's Shanghai apartment, seized his computer hard disk and copies of the small magazine he used to publish, and ordered him to report for questioning the next day.It should be noted that this reaction to the color revolutions is not unique to China -- it mirrors what governments in Russia, Iran, and Central Asia have done as well.
Wednesday, December 5, 2007
So will Bali accomplish anything?
When it comes to enegy and the environment, anything David Victor writes is worth reading.
The effort, though noble, is largely irrelevant to the urgent task of cutting greenhouse-gas emissions. The countries that care the most about successful U.N. talks are a small and shrinking part of the problem. Those that matter most—notably China, which in 2007 became the world's largest emitter of warming gases—have exempted themselves from any regulation of their effluent. The Bali agenda offers no route around this impasse and will probably make it harder to solve in the future.
Sunday, July 22, 2007
The public aims at the wrong bogeymen
What you see above you is the result of a Financial Times/Harris poll among various OECD countries about globalization (note, by the way, that the FT wierdly flip-flops the categories halfway through the graph). The associated story sums it up as follows:
The depth of anti-globalisation feeling in the FT/Harris poll, which surveyed more than 1,000 people online in each of the six countries, will dismay policy-makers and corporate executives. Their view that opening economies to freer trade is beneficial to poor and rich countries alike is not shared by the citizens of rich countries, regardless of how liberal their economic traditions.Indeed, as the poll shows, there's either majority or plurality enthusiasm for "setting pay caps for the heads of companies." The breadth of support surprises Mark Thoma.
For a pro-globalization type like me, there's not a lot that's funny about this kind of public sentiment. There is something ironic, however, about the extent to which publics believe that this kind of measure will reduce income inequality. On this point, I click over to Marginal Revolution and find the following:
We consider how much of the top end of the income distribution can be attributed to four sectors -- top executives of non-financial firms (Main Street); financial service sector employees from investment banks, hedge funds, private equity funds, and mutual funds (Wall Street); corporate lawyers; and professional athletes and celebrities. Non-financial public company CEOs and top executives do not represent more than 6.5% of any of the top AGI brackets (the top 0.1%, 0.01%, 0.001%, and 0.0001%)....Oh, and there's no apparent correlation between higher pay and the openness of a sector to international trade.
To be fair, I suspect publics would support capping the income of Wall Street groups if they were asked. CEOs might simply be a proxy for "evil capitalist pg-dogs." That said, CEOs do tend to be the first target whenever this kind of sentiment is translated into political action.
I can't dispute the rising resentment about rising inequality -- but that doesn't mean that the resentment has acquired the correct target (I don't think there is a clear target, but that's a topic for another day). There is support, clearly, for some really stupid policies.
Monday, July 16, 2007
Coping with the global economy
In response to my last post on the rise of economic populism among Democrats (admittedly, one of a long series), Kevin Drum poses the following questions to yours truly:
Answers to these questions after the jump....
1) The trouble with populism is (mostly) not about the remaining 10% of barriers to trade (though see below), it's about efforts to f$%& up the 90% of barriers that have been dismantled. The Baucus-Grassley-Schumer-Graham bill, for example, isn't about halting new trade openings -- it's about finding new ways to clamp down on existing openness.I now officially triple dog-dare the Democrats to embrace any or all of these proposals.
Thursday, July 5, 2007
For China Inc., it's going to get worse before it gets better
China said on Wednesday that nearly a fifth of the food and consumer products that it checked in a nationwide survey this year were found to be substandard or tainted, underscoring the risk faced by its own consumers even as the country’s exports come under greater scrutiny overseas.This is going to be a huge, long-term headache for Beijing. Brand images are not easy to change, and China has been beset by a perfect storm of health and safety scares over the past six weeks. Furthermore, as Barboza points out, improving the brand is not merely a function of the central government "getting it" (and cases like this one suggest that they do not "get it" across the board):
Experts say aggressive and opportunistic entrepreneurs continue to take advantage of the country’s chronically weak enforcement of regulations, choosing to blend fake ingredients into products; to sign contracts agreeing to sell one product only to later switch the raw materials for something cheaper; and to doctor, adulterate or even color foods to make them look fresher or more appetizing, when in fact they might be old and stale.strong enforcement of regulations will require a widespread change in both the government and business cultures, and addressing head-on issues of corruption.
In other words, this problem won't be going away anytime soon.
Tuesday, June 26, 2007
China Inc. is developing a bad brand image
The growth of health and safety concerns about Chinese imports is not fading away into the night.
A fatal auto accident in Pennsylvania has stirred concerns about another potentially hazardous Chinese product in wide use in the U.S.: tires.As a country develops and moves up the consumer supply chain, they generally acquire a reputation for making high-quality goods (think Japan and South Korea). What's interesting is that China seems to be moving in the opposite direction.
I have no doubt that U.S. industry associations will hype consumer health and safety fears to serve their own interests. This doesn't mean they're wrong, however.
Monday, June 18, 2007
The rise of trans-Pacific regulatory conflict
In the past two days there have been two stories in the press suggesting that the U.S. will be butting heads with China and India over a variety of regulations.
On Sunday, the Washington Post's Marc Kaufman writes that the growth of pharmaceutical imports is triggering health and safety concerns:
India and China, countries where the Food and Drug Administration rarely conducts quality-control inspections, have become major suppliers of low-cost drugs and drug ingredients to American consumers. Analysts say their products are becoming pervasive in the generic and over-the-counter marketplace.Meanwhile, in USA Today, Jayne O'Donnell reports about another brewing regulatory problem -- lead levels in childrens' jewelry:
The Chinese government opposes a proposed U.S. standard limiting the amount of lead allowed in bracelets, necklaces and other jewelry sold for children.If you read both articles, these two cases are not identical. There appears to be a strong justification for ratcheting up the lead regulations, while problems with pharmaceutical imports remain more hypothetical than real.
Going forward, it will be interesting to see whether affected domestic industries will be lobbying for regulatory barriers rather than more overt forms of protectionism. The thing about regulatory barriers is that they are not always protectionist in motivation. And that's precisely what makes them more attractive for import-competitive sectors.
UPDATE: Thanks to Nicholas Weaver for sending me this New York Times story by Walt Bogdanich on Chinese resistance to regulatory investigations. Definitely worth a read.
Friday, June 15, 2007
Cato Unbound, part deux
The Cato Unbound debate about All Politics Is Global continues with response essays:
1) Ann Florini, "Globalization Is Transformative."My response to the critiques can be found here.
I want to believe the Zagats -- I really do
Nina and Tim Zagat have an op-ed in today's New York Tmes about why Chinese food in the United States is substandard. I should sympathize with their argument:
Twenty years ago, American perceptions of Asian food could be summed up in one word: “Chinese.” Since then, we have developed appetites for Korean, Japanese, Thai and Vietnamese fare. Yet while the quality of the restaurants that serve these cuisines, particularly Japanese, has soared in America, Chinese restaurants have stalled. For American diners, the Chinese restaurant experience is the same tired routine — unimaginative dishes served amid dated, pseudo-imperial décor — that we’ve known for years....Hmm.... reducing barriers to exchange, increasing globalization of cuisine... I should be on this proposal like white on rice.
Except that the Zagats' policy solution does not explain their policy conundrum. Immigration barriers should have a roughly equal effect on all Pacific Rim cuisines, not just China's. Why would it be the case that Chinese cuisine in the U.S. is particularly disadvantaged by vsa restrictions?
1) Because China has a larger internal market, there is more innovation and competition at home, leading to more frequent innovations. Without a reliable transmission mechanism (i.e., migrating chefs), Chinese cuisine in China will improve at a faster rate than in the U.S.A.I'm willing to endorse more culinary trade as a matter of principle, but I'd still like a good explanation for this conundrum.
Take it away, Tyler Cowen!
Monday, June 11, 2007
Drezner gets interesting results from Vladimir Putin
Hey, remember that Foreign Affairs essay I wrote called "The New New World Order?" If you don't, that's OK -- but it appears that Vladimir Putin has been reading it. From the Financial Times' Neil Buckley and Catherine Belton:
Russian president Vladimir Putin called on Sunday for a radical overhaul of the world’s financial and trade institutions to reflect the growing economic power of emerging market countries – including Russia.What's interesting about this speech is that Putin is correct in describing the state of the world, but not necessarily correct in his belief that "a new architecture of international economic relations" is going to serve Russia's interests.
Consider that Russia is already a member of one powerful club -- the G-8. Any realistic reform of global economic governance is going to give China and India more power than Russia relative to the status quo, because Russia still has the great power trappings it inherited from the Cold War. Indeed, unless we're talking about energy or nuclear weapons, Russia would be a less powerful actor after any reform effort.
Putin probably does not believe this, given sustained interest in the Russian economy and the comfort of high oil prices. Russia, however, should be very wary of what it wishes for -- it might just get it.
This new international order is just dominated by big national institutions -- SAFE and the PBoC, the Bank of Russia, the Saudi Arabian Monetary Agency, the Abu Dhabi Investment Authority and the like -- not big international institutions. The international financial institutions of the old international economic order -- the IMF for example -- are still around. But they don't have as much influence as they once did.
Wednesday, June 6, 2007
The topic of this month's Cato Unbound is.....
Why, hey, what do you know, the topic of June's Cato Unbound will be All Politics Is Global: Explaining International Regulatory Regimes!!!
My lead essay, "The Persistent Power of the State in the Global Economy," is now up. Response essays will be written by Jeremy Rabkin, Ann Florini, and Kal Raustiala.
Go check it out.
Saturday, April 21, 2007
On global warming, life will not be fair
China will overtake the United States as the world’s biggest emitter of heat-trapping carbon dioxide (CO2) either this year or next, the International Energy Agency said on Wednesday.Read the whole thing.
One could argue -- as China will -- that the U.S. produces far more pollutants per person -- not to mention the fact that the OECD countries are responsible for much of pre-existing pollution in the atmosphere.
However, if this IPCC report is correct, then global warming will have disproportionate effects on the poorer countries of the world. From a bargaining perspective, it will be interesting to see whether this effect will put greater pressure on China than the United States.
Saturday, March 31, 2007
Baptists, bootleggers, and porn
CNET's Dawn Kawamoto reports that the .xxx registry will not be happening anytime soon:
The Internet Corporation for Assigned Names and Numbers has rejected a controversial proposal to create a new .xxx domain suffix for adult Web sites.In the New York Times, Thomas Crampton explains the interesting coalition of interest groups that opposed the .xxx registry:
ICM had argued that creation of the domain would enhance safety for young users by clearly defining .xxx sites as a no-go zone.Political scientists talk about "baptist-bootlegger coalitions" to explain occasions when groups on opposite sides of an issue support the same policy for very different reasons (baptists: naive expression of preferences; Bootleggers: rent-seeking).
In this case, however, the baptists refused to side with the powerful bootlegger.
Monday, March 26, 2007
Is the U.S. more cosmopolitan.... or just bigger and more powerful?
On his Financial Times blog, Gideon Rachman suggests that Americans are more cosmopolitan than Brits:
We are all familiar with the clichés about American insularity: the number of Congressmen who don’t have a passport, the number of Americans who have never left the US – and so on.Much as I like the back-slapping of America, a few obvious points of caution are warranted. The most obvious is this one: the United States has roughly five times the population of Great Britain. It shouldn't be that surprising, therefore, if a book sells better five times here or a foreign policy event attracts a much larger crowd.
Second, cosmopolitan implies more than just a keen sense of foreign policy interest -- there are cultural dimensions as well. The U.S. might stack up well in that department as well, but it's not a part of Rachman's post.
Now, that said, assuming that Rachman's point is still correct, is this because "America is still enjoying its imperial moment." Well, right now I would use neither the word "imperial" nor "enjoying."
That said, what the U.S. does have in place is a foreign policy infrastructure that's second to none at this point. Beyond the official organs of the federal government, there are a host of quasi-governmental organizations, think tanks, NGOs, foundations, and yes, God forbid, universities with a vested interest in thinking about the world and America's place in it. Sixty years of superpower status will have that effect.
The interesting question to ponder is how long it will be before another country -- or supranational institution -- matches American investments in this area. There is a lag between the acquisition of power and the development of domestic and international institutions to convert that power into authority.
Monday, March 19, 2007
How is China's media reporting on Zimbabwe?
There's been a spot of trouble in Zimbabwe's autocracy as of late. I wonder how media outlets in non-democratic regimes are covering this trouble?
From the People's Daily Online:
The Zimbabwe government will not sit back and watch the opposition perpetrating "terrorist attacks" on innocent citizens while authorities are also geared to stamp out domestic violence, which accounted for 60 percent of Zimbabwe's murder cases, President Robert Mugabe has said.I can only hope that the honorable people's government in Zimbabwe crushes the treacherous curs of the MDC to promote peace, order and social justice for all [Snap out of it!!--ed. C'mon, I don't get to use "treacherous curs" in daily parlance all that often.]
Tuesday, March 13, 2007
Gideon Rachman, security risk
Over at his FT blog, Rachman points out that excessive regulation for admitting both foreigners and foreign capital is posing some problems for the United States:
[T]he survey for the Discover America partnership – a group of big businesses that seeks to promote tourism – also suggested that 39 per cent of regular travellers rate the US “worst” for immigration and entry procedures; the Middle East came second on 16 per cent. Discover America complains of a “climate of fear” and a “travel crisis”. It cites a “near 20 per cent drop in the United States share of overseas travellers since 2000” and claims that this has cost 200,000 jobs and $93bn in revenue.You'll have to read his whole post to understand the title of this post.
Tuesday, March 6, 2007
"Feh" to globalization
That's the conclusion of Pankaj Ghemawat in this Foreign Policy essay. He makes a convincing case:
In truth, the world is not nearly as connected as these writers would have us believe. Despite talk of a new, wired world where information, ideas, money, and people can move around the planet faster than ever before, just a fraction of what we consider globalization actually exists. The portrait that emerges from a hard look at the way companies, people, and states interact is a world that’s only beginning to realize the potential of true global integration. And what these trend’s backers won’t tell you is that globalization’s future is more fragile than you know....Read the whole thing. This paragraph helps explain to me why my editor at Princeton made me remove the world "globalization" from the title of All Politics Is Global:
According to the U.S. Library of Congress’s catalog, in the 1990s, about 500 books were published on globalization. Between 2000 and 2004, there were more than 4,000. In fact, between the mid-1990s and 2003, the rate of increase in globalization-related titles more than doubled every 18 months.
Sunday, February 18, 2007
A post in which I agree with the European Commission
Tobias Buck reports in the Financial Times that the European Commission has decided it wants the rest of the world to look more like Brusels:
Brussels wants the rest of the world to adopt the European Union’s regulations, the European Commission will say this week.The EU deciding to throw around its market weight? This sounds very, very familiar.
Friday, February 2, 2007
Is economic protectionism on the rise in China?
That's the topic of Ariana Eunjung Cha's story in today's Washington Post. It starts out with an odd example, however:
"I know you don't know that you don't know.""Gee," I thought, "That's an odd example. There's no government action there -- it's a marketing campaign."
To Cha and her editors' credit, they do make this very point at the end of the story:
Richard Ji of Morgan Stanley Hong Kong said some companies have used China's new rules as an excuse for their own marketing or strategic shortcomings. He said that in the cases of Google and eBay, the companies' challenges have had more to do with failure to tailor the content of their Web sites to Chinese tastes and needs.Read the whole thing. In between this vignette, there's some decent evidence that China is officially wigging out about certain forms of FDI.
UPDATE: Thanks to Mitchell Young for pointing to the Baidu commercial on YouTube:The ad is a good example of the difference between economic nationalism and economic protectionism. The ad is clearly nationalist, and designed to foster a "Buy China" mindset, in part through rational arguments that Baidu is better than Google, and in part through cultural tropes designed to make the Western character in the ad look uncool. However, it's not an example of protectionism -- it's not calling for government intervention or relief, it's just trying to beat Google.
Tuesday, January 30, 2007
Davos vs. Herzliya
Gideon Rachman attended two conferences last week, and writes about the resulting conceptual whiplash:
I went to two international conferences last week. The Herzliya security conference took place on the Israeli coast and the World Economic Forum was held in the Swiss mountains. It felt as if they were taking place on different planets....Read the whole thing. And then, for fun, check out Rachman's description of his "brainstorm" nightmare at Davos on his blog.
Monday, January 29, 2007
The euro disconnect
There's something a bit odd about the contrast between a) economists debating the prospect of the euro supplanting the dollar as the world's reserve currency, and b) the fact that Europeans don't like the euro all that much. The Financial Times' Ralph Atkins explains:
An overwhelming majority of citizens in the big eurozone countries believe the euro has damaged their national economies, highlighting the popular scepticism that still surrounds Europe’s eight-year-old monetary union.UPDATE: Henry Farrell provides an explanation for the oddity.
Thursday, January 25, 2007
Nationalism, globalization, China and Starbucks
Favorite quote that will cause rioting in London:
[What] about a Starbucks inside Buckingham Palace[?]. For all I know there may be one, years since I was there, but certainly there should be one. It wouldn't make much money inside the private quarters, I doubt the Queen does many skinny lattes, but in the Royal Gallery, which is the visitable part of the palace, a Starbucks would be an excellent fit.
Sunday, January 21, 2007
Davos screws me over yet again
I have an essay in today's Los Angeles Times about the World Economic Forum -- otherwise known as the Davos forum. In the essay,I ask whether Davos is really significant, or whether it has jumped the shark:
Since Swiss business professor Klaus Schwab launched the forum in 1971, it has become the ne plus ultra of elite meetings, eclipsing such challengers as Renaissance Weekend, the British-American Project and the Trilateral Commission.Read the whole thing, but you should know that I submitted a different byline than the one they used.
The byline reads -- online at least -- as "Daniel W. Drezner is associate professor of international politics at Tufts University's Fletcher School and the author of "All Politics Is Global." He maintains a blog at danieldrezner.com/blog/."
Which is great, but the byline I submitted to them was, "Daniel W. Drezner is associate professor of international politics at Tufts University's Fletcher School and the author of "All Politics Is Global." He has never been invited to Davos, but is not bitter about that fact in the slightest."
I think I'd be less upset if I didn't fear that the deleted sentence was the best line in the piece.
Want to read more about Davos? You can check out the David Rothkopf's diary from last year's conference here. A precis of the polling results discussed in the piece can be found in this story. And here's a link to the official web site.
Finally, given that I was gently mocking it in the piece, I feel I owe a link to the one scholarly piece I found on Davos: Jean-Christophe Graz, "How Powerful are Transnational Elite Clubs? The Social Myth of the World Economic Forum." New Political Economy, Vol. 8, No. 3, November 2003. If you can get past the sections when Graz gets trapped in his own jargon, he makes an interesting argument about the inherent limits of these kind of fora.
Tuesday, December 12, 2006
An Obama question that will make many people squirm and fidget
Skimming through the Obama-thon coverage from New Hampshire, this quote from a Newsweek story about Hillary vs. Obama by Jonathan Alter caught my eye:
"After seven years of the 'we kick a--, go it alone' foreign-policy response to 9/11, the American voter will be ready to try a leader who projects better on the world stage," says Jeh Johnson, a corporate attorney and former general counsel of the Air Force under Clinton. "Barack's multicultural heritage will represent that change."Johnson's quote is fascinating, because while I have no doubt that there would be parts of the globe where Obama's heritage would be a plus, I'm not entirely certain that the effect is as global as Johnson claims. Racism is hardly a phenomenon that's unique to the United States, and without naming names there are some countries out there that are not too keen on dark-skinned people. Even in regions of the globe where reason and light ostensibly prevail, there are football fans who dissent from this view.
Here's an uncomfortable question to readers -- are there any regions, countries, or classes of the globe where Obama's African heritage might not be considered in a favorable light?
Just to be clear -- these kind of responses do not constitute a knock on Obama. But Johnson's quote got me thinking, and it's worth pondering all of the effects of Obama's
Wednesday, December 6, 2006
The gift that keeps on giving for protectionism
Ah, the Democratically-controlled Congress -- is there any step towards economic liberalization that they won't block?
Don Phillips, "U.S. Withdraws Plan on Foreign Investment in Airlines, Disrupting Open-Skies Treaty," New York Times, December 6, 2006:
The Bush administration withdrew a plan on Tuesday to give European airlines more freedom to invest in American airlines and to participate in management decisions, bowing to opposition expected to deepen in a Democratic-controlled Congress.I was curious about he substantive reasons why unions were opposing this particular agreement, seeing as the sweatshop argument did not seem credible.
You see some of the union arguments by clicking here and here. As near as I can determine, the primary reason for opposition is based on simple protectionism akin to the Dubai Ports World episode-- they simply do not want to see foreign ownership and control of U.S. carriers.
As for the benefits of an Open Skies arrangement? One union head argued that since the benefits are likely to be realized in the medium to long-term, there's no real cost to scuttling the arrangement.
Gonna be a long two years.....
The grounded open-skies deal was only half the prize sought by both sides. Ending most market-access restrictions would have triggered a second round of talks aimed at creating an Open Aviation Area (OAA), with more alignment of safety, security and competition policy and, perhaps, investment and ownership rules....ANOTHER UPDATE: The Los Angeles Times' Paul Thornton has more on the killing of this deal (hat tip: Virginia Postrel). He also addresses the national security concern -- as I suspected, it's about as well-placed as the Dubai Ports World fiasco:
A "homeland security risk"? All the DOT's proposal would have allowed is non-citizens to hold executive positions in airlines that oversee purely economic decisions (think fares, routes and aircraft purchases). The proposal explicitly -- I repeat, explicitly -- walled off non-citizen managers from having any say in an airline's security. In fact, the DOT proposal would have left the 25% foreign ownership cap completely intact; it even had the blessing of the Department of Defense....
Wednesday, November 15, 2006
I, for one, welcome our protectionist overlords
The most important--and unfortunately the least debated--issue in politics today is our society's steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America's top tier has grown infinitely richer and more removed over the past 25 years. It is not unfair to say that they are literally living in a different country. Few among them send their children to public schools; fewer still send their loved ones to fight our wars. They own most of our stocks, making the stock market an unreliable indicator of the economic health of working people. The top 1% now takes in an astounding 16% of national income, up from 8% in 1980. The tax codes protect them, just as they protect corporate America, through a vast system of loopholes....The op-ed consists mostly of a critique of the existing situation -- not a lot of suggested solutions. For that, we have to go to his campaign web site, where we find:
This country is splitting into three pieces. As a result of the internationalization of the economy, the people at the top have never had it so good. The middle class is continuing to get squeezed by stagnant wages and rising cost of living. And we are in danger of creating a permanent underclass. We must reexamine our tax and trade policies and reinstitute notions of fairness, and also enforce our existing trade laws so that free trade becomes fair trade."Fair trade" is a vague term, but given Webb's rhetoric, it's safe to say that he kind of policies that Webb favors will:
a) Have little effect on the income of the richest Americans -- though their capital gains will fall dramatically;Combine that with reduced overall growth, and, well, it's gonna be a scary Senate for international economic policy.
[L]et's suppose for a moment that a free-market economist were hired by the Dems to offer policy advice. If the boss's goal is to reduce income inequality, what is the best way to do that?
Saturday, November 11, 2006
Sign # 347 that the Doha round is deader than a doornail
The Democratic victories have generated a lot of pessimism in the business press about there being any chance for a revival of world trade talks. I'm certainly not optimistic about a revival in trade talks.
That said, let me offer two counters to this -- one positive and one negative.
The negative is that there wasn't exactly a lot of momentum on trade liberalization before the election. The most symblolic evidence of this fact come from this Reuters story from November 2nd:
Comatose world trade talks showed a possible sign of brain activity on Thursday as World Trade Organization Director General Pascal Lamy arrived in Washington to meet with U.S. officials.Sounds like a cautiously positive story, until you get to the marathon part. I saw Lamy speak when he was on Boston, and it was clear that he had trained rigorously for the marathon. This is great for Lamy, but it raises the obvioius point -- no WTO Director is going to have the time to train for a real marathon if there's progress to be made on a trade round.
[So what should Lamy have done with his time?--ed. Oh, the impasse is not his fault -- the WTO director has practically no power. His ability to train for the marathon is a symptom of the stalemate among the key countries -- not a cause.]
Second, even if Doha goes down, and even if enthusiasm for free trade slows in the Congress, progress towards liberalization can still be made. Consider that in the past week, Vietnam was admitted into the WTO, and the US approved Russia's entry into the organization as well. There are a few other economies on the outside looking in -- Ukraine and Kazakhstan, not to mention a third of the Middle East-- and if the US can facilitate their entry, then the WTO can live up to its name.
Wednesday, October 25, 2006
Diamond interdependence in the Middle East
In the interest of posting some good news about the Middle East, I found this AP story about the diamond trade between Israel and Dubai to be pretty interesting:
As Israelis and Arabs emerge from the war in Lebanon, a booming diamond exchange in Dubai, United Arab Emirates (UAE,) 1,300 miles away, is hard proof that some Arab-Israeli ties have survived despite the region's tensions.The bolded section suggests that trade can trump enduring rivalries -- but it also suggests that trade won't cause enduring rivalries to go away, either.
[I thought this was a good news post!!--ed. Sorry,I failed to stay the course.]
Wednesday, October 11, 2006
So how's the Kyoto Protocol working out?
I'm shocked, shocked at this Associated Press report that some industrialized nations might not be living up to their Kyoto Protocol obligations:
With few exceptions, the world’s big industrialized nations are struggling to meet the greenhouse gas reductions they committed to in the embattled Kyoto pact on climate change. Europe is veering off course, Japan is still far from its target and Canada has given up.Hat tip: Jonathan Adler at the Volokh Conspiracy.
The report does observe that the EU as a whole could achieve its target -- provided that they "make full use of carbon credits for investing in clean technology projects in developing countries." However, another AP report by Charles Hanley points out the pitfalls of trading scheme as implemented:
As the world grows warmer, poorer nations are helping the rich by reining in heat-trapping gases in a multibillion-dollar "carbon trade" that is outrunning its U.N. overseers and founding principles, and spawning conflicts of interest and possible abuse....UPDATE: Ah, it appears that the EU has devised a new way to ensure countries honor their commitments to halt global warming. Sounds like some commissioners must have been talking to Joe Stiglitz.
Friday, October 6, 2006
Let's stop the hyperventilating about Hugo Chavez
Far from being a pariah, Venezuela is increasingly in step with the world. Thanks to deep wells of anti-Americanism and Chávez's dogged diplomacy among the developing world, he's managed to build a large, loose coalition of states aligned not just against the United States, but against the liberal world order that is the real bedrock of American hegemony. Chávez's goal is not to destroy the American economy--cutting off our supply of oil from Venezuela would do more harm to Caracas than to us--so much as to replace the structures by which we hold sway over the world economic community. And while it makes headlines to talk about Chávez's military (and paramilitary) aspirations, his real successes--and his real threats--exist in the economic, rather than the military, realm....Look, I can doom-and-gloom the demise of freer trade with the best of them, but in the thinking about existential threats to the world trading system, Hugo Chavez does not come to mind.
The key facts about Chavez's policy initiatives are as follows: 1) Sure, Chavez has signed a lot of trade deals -- but most of them are of the pissant variety. $200 million? Big whoop.
2) Sure, Chavez wants to diversify his imports and exports away from the United States -- but he's not going to succeed.
3) Sure, Chavez wants Mercosur to do his bidding -- but he can't, since Brazil is the key veto player in that trading bloc. Lula might not be America's biggest fan, but he's not really anti-American either.
Hugo Chavez is an irritant, but it's silly to paint him as the big bad wolf of the global political economy.
Wednesday, October 4, 2006
The quickest way to dynamite the WTO out of existence
The Center for Global Development's Lawrence MacDonald blogs about Joe Stiglitz's new idea to
Nobel laureate Joseph Stiglitz urged at a CGD event that U.S. trade partners ask the WTO for authority to impose countervailing duties on exports of U.S. steel and other energy-intensive products that benefit unfairly from Washington’s refusal to join the Kyoto Protocol limiting carbon and other greenhouse gasses....For a full transcript of Stiglitz's talk, click here. For an article-length treatment by Stiglitz, click here.
Stiglitz's proposal probably would improve the global warming situation -- but not the way he thinks. Assuming the WTO Appellate Body was willing to destroy itself, here is the chain of events that would improve the environment:
1) The WTO rules against the U.S.A.;I'm thinking that there are better ways to solve the global warming problem.
This, by the way, is one of the basic problem I find with the parts of Making Globalization Work that I've read. There is a decent diagnosis of some of the ills caused by globalization -- but for a man who spent the past decade and a half in policymaking circles, he seems oddly oblivious to the massive political externalities many of his proposals would create.
UPDATE: My colleague Joel Trachtman explains why Stiglitz's plan is a legal non-starter.
ANOTHER UPDATE: Greg Mankiw critiques another of Stiglitz's policy prescriptions.
Sunday, September 17, 2006
Will there be a TAFTA?
This week the Economist has an excellent survey by Pam Woodall of the global economy, and the increasingly powerful effects that the developing world are exerting on prices, wages, and interest rates:
Last year the combined output of emerging economies reached an important milestone: it accounted for more than half of total world GDP (measured at purchasing-power parity). This means that the rich countries no longer dominate the global economy. The developing countries also have a far greater influence on the performance of the rich economies than is generally realised. Emerging economies are driving global growth and having a big impact on developed countries' inflation, interest rates, wages and profits. As these newcomers become more integrated into the global economy and their incomes catch up with the rich countries, they will provide the biggest boost to the world economy since the industrial revolution....Be sure to check out the podcast interview with Woodall, conducted by the dulcet tones of one Megan McArdle. Woodall thinks what's happening now will be "bigger than the industrial revolution."
One obvious implication to draw from the survey is that the relative (though not absolute) economic power of the US and EU will decline over time.
How will Washington and Brussels respond? The Financial Times' Bertrand Benoit offers one intriguing answer:
Spurred by concern about China’s growing economic might, Germany is considering a plan for a free-trade zone between Europe and the US.When I was in Berlin this summer I met with a few Bundestag and industry officials who were quite keen on the idea. The fact that Merkel is considering this suggests that the idea has gotten more traction in recent months.
There are many reasons to believe that TAFTA will never get off the ground. What Europe thinks should go into a free trade agreement is a bit more modest than what the U.S. thinks should go into one. I simply can't see agriculture included into any TAFTA. I can't imagine that France would ever let it go forward. Anti-Americanism on the continent could be enough to scotch it.
And yet, the idea is very intriguing. Even if it takes ten years to negotiate, the combined weight of a TAFTA in terms of both market size and rule-setting behavior would be formidable.
Friday, September 15, 2006
Let's get some odds of the Pope being burned in effigy
The BBC reports that some Muslims are none too keen on what the Pope said yesterday... or rather, who the Pope quoted yesterday:
A statement from the Vatican has failed to quell criticism of Pope Benedict XVI from Muslim leaders, after he made a speech about the concept of holy war.Click here for the controversial excerpts from the speech. And here's a link to the full text of the speech, as posted by the Vatican.
Question to readers -- will this be the sequel to the Muhammed cartoon controversy, something not quite as serious, or something even more serious?
UPDATE: OK, less than 24 hours for the burning of the Pope in effigy. If the Feiler Faster Thesis ever gets applied to world politics, I expect to see effigy-burning take place within an hour of whatever triggers the controversy.
Meanwhile, Juan Cole has little sympathy for the Pope, "The Pope was wrong on the facts. He should apologize to the Muslims and get better advisers on Christian-Muslim relations."
Friday, September 8, 2006
The New York Times blows the lid off of pissant think tank contributions
I've been known to question the value-added of think tanks from time to time, so I looked with interest at Michael Barbaro and Stephanie Strom's New York Times story on how Wal-Mart is potentially buying ideological support through it's support of consevative think tanks:
As Wal-Mart Stores struggles to rebut criticism from unions and Democratic leaders, the company has discovered a reliable ally: prominent conservative research groups like the American Enterprise Institute, the Heritage Foundation and the Manhattan Institute.[Uh-oh, another potential payola scandal in the think tank community. We're talking millions here, right?--ed.] As it turns out, not so much, no:
At least five research and advocacy groups that have received Walton Family Foundation donations are vocal advocates of the company.In plain English, the Walton Foundation gave AEI an average of $33,000 a year, PRI $35,000 a year, and a whopping $3,667 a year to Heritage.
Besides the fact that the story reveals no link between the donations and think tank outputs, besides the fact that these groups would be ideologically predisposed to support Wal-Mart anyway (just as EPI would support the union position), it's worth stressing that in the think tank world, these are nothing amounts. These sums of money buy a B.A.-level RA and some cocktail shrimp at a reception. After reading the article, I'm not amazed that Wal-Mart is giving money to these think tanks -- I'm amazed they'e giving so little.
This leads to a fundamental question -- what on earth motivated the New York Times to put this article on the front page of its Business section? Properly headlined, an article that blares, "Little Money Flowing Between Wal-Mart and Washington Think Tanks" wouldn't even have run, much less on the front page. Instead, we get,"Wal-Mart Finds an Ally in Conservatives."
In Congress, there's a threshhold below which legislators are not required to report gifts because they are so minor. The sums we're talking about here are below the threshhold to motivate a NYT story.
UPDATE: For the record, I have received no money or gifts from Wal-Mart at any time.
And frankly, I'm a little hurt.
ANOTHER UPDATE: Over at Volokh, David Bernstein also has some fun with the article.
YET ANOTHER UPDATE: Here's an example of a Heritage analyst -- the very same one who's cited as pro-Wal-Mart in the story -- adopting an anti-Wal-Mart position. Thanks to Heritage's Khristine Brookes for the pointer. [You remembered to ask her for cash, right?--ed. D'oh!!]
Tuesday, September 5, 2006
The Australian's Matthew Warren reveals that the Intergovernmental Panel on Climate Change is about to revise its global warming projections in a way that will be inconvenient for Al Gore:
The world's top climate scientists have cut their worst-case forecast for global warming over the next 100 years.Read the whole thing.
Global warming is still a real phenomenon, and it will bring costs associated with it -- but any day when the worst-case scenario looks more than 50% better than it did yesterday is a very good day.
UPDATE: OK, having read Tim Lambert and Gavin Schmidt, I'm withdrawing my endorsement of the Warren article. He appears to have "confused climate sensitivity (how much warming will eventually occur if we double CO2) with projected 21st century warming," according to Lambert. Which means the reduction of the worst-case scenario outcome is nonexistent.
Apologies to one and all.
Saturday, August 26, 2006
Bernanke on globalization
Federal Reserve Chairman Ben Bernanke gave an interesting speech entitled, "Global Economic Integration: What's New and What's Not?" that's worth a gander. Here's his answer to what's new:
Each observer will have his or her own perspective, but, to me, four differences between the current wave of global economic integration and past episodes seem most important. First, the scale and pace of the current episode is unprecedented. For example, in recent years, global merchandise exports have been above 20 percent of world gross domestic product, compared with about 8 percent in 1913 and less than 15 percent as recently as 1990; and international financial flows have expanded even more quickly. But these data understate the magnitude of the change that we are now experiencing. The emergence of China, India, and the former communist-bloc countries implies that the greater part of the earth's population is now engaged, at least potentially, in the global economy. There are no historical antecedents for this development. Columbus's voyage to the New World ultimately led to enormous economic change, of course, but the full integration of the New and the Old Worlds took centuries. In contrast, the economic opening of China, which began in earnest less than three decades ago, is proceeding rapidly and, if anything, seems to be accelerating.To me, the most astonishing difference is number two.
Thursday, August 24, 2006
Mary Jordan has a front-pager in the Washington Post detailing how social movements use text messaging to surmount attempts to contain dissent:
Cellphones and text messaging are changing the way political mobilizations are conducted around the world. From Manila to Riyadh, Saudi Arabia, andKathmandu, Nepal, protests once publicized on coffeehouse bulletin boards are now organized entirely through text-messaging networks that can reach vast numbers of people in a matter of minutes.The best part of the story documents a real-time Filipino protest designed to overwhelm the police's ability to disperse it:
At 1:30 p.m. on a recent day, Palatino and three students lingered near the doughnut case in the 7-Eleven on a congested corner of Morayta Street. They stood in the air-conditioned cool, cellphones in hand, waiting for a text....Note to self: add to paper on IT's effect on state-society relations.
Those dirty Polynesian rats
I'm a big fan of Jared Diamond's Guns, Germs and Steel, and still need to read his sequel, Collapse. However, Terry L. Hunt has an essay in the latest issue of The American Scientist that calls into question Diamond's central case study in Collapse -- the decline and fall of the Rapa Nui on Easter Island:
In the prevailing account of the island's past, the native inhabitants—who refer to themselves as the Rapanui and to the island as Rapa Nui—once had a large and thriving society, but they doomed themselves by degrading their environment. According to this version of events, a small group of Polynesian settlers arrived around 800 to 900 A.D., and the island's population grew slowly at first. Around 1200 A.D., their growing numbers and an obsession with building moai led to increased pressure on the environment. By the end of the 17th century, the Rapanui had deforested the island, triggering war, famine and cultural collapse.
Sunday, August 20, 2006
The muted power of transnational capital
If the International Whaling Commission is my favorite international governmental organization, then my favorite international non-governmental organization would have to be the TransAtlantic Business Dialogue. Why? Because despite the impressive membership roster, this group does not appear to accomplish all that much. On issues like data privacy or genetically modified foods, the TABD has repeatedly issued stern proclamations with no effect on the outcome.
Which is why I am unmoved by this Financial Times story by Stephanie Kirchgaessner
Citigroup chairman Charles Prince has urged President George W. Bush to reinvigorate multilateral trade discussions and “identify a way forward” on the Doha round of trade talks.After such a proclamation, any good Marxist would predict that Doha would be reborn. And, as usual, they will likely be wrong.
UPDATE: Henry Farrell disagrees:
I think Dan is wrong here. The main reason that the TABD isn’t very influential in the grand scheme of things is that it doesn’t need to be. Business leaders on both sides of the Atlantic have plenty of access to policy makers without any need to go through the formalities of the TABD....Henry's point that multinationals have access to policymakers beyond the TABD is well-taken. That said, I do think the failure of transnational capital to pry open the transatlantic market poses a greater challenge to structural Marxists than Henry asserts. To be sure, there are political economy arguments that explain the collapse of Doha and other transatlantic trade frictions as placating agribusiness and other forms of national capital. But these kind of political economy arguments do not mesh well with this part of the Communist Manifesto:
The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.
Tuesday, August 8, 2006
Pirates of the Malacca Strait: Lloyd's Curse
One of the low-level globalization stories that occasionally bubbles to the surface is the apparent difficulty of combating piracy in the sea lanes.
One of the world’s busiest and most hazardous shipping routes was yesterday declared to be winning its fight against piracy when Lloyd’s, the shipping insurer, dropped its war risk designation for the Malacca Strait.
Tuesday, July 25, 2006
Us greedy, chocolate-eating, Wal-Mart-shopping, family-protecting academics
In the Chronicle of Higher Education, Mathew H. Gendle engages in one of the more useless acts of self-flagellation about globalization I've seen in quite a while:
Like many liberal-arts institutions, the university where I teach [Elon] places a heavy emphasis on the freshman year, and all new students are required to take a class called "The Global Experience," taught by faculty members drawn from departments across the campus. One of the central objectives of the course is to break students out of their bubble by forcing them to think about the interconnectedness of our world.Oh for Pete's sake.....
If Gendle really wants his students at Elon to learn, he might want to inform them of the following:
1) Eric V. Edmonds and Nina Pavcnik, "Child Labor in the Global Economy," Journal of Economic Perspectives 19 (Winter 2005): 199–220,. Their punchline:If Gendle wants to make his Elon students really ponder their consumer behavior, here's a question worth asking -- what is the welfare effect of not purchasing goods and services made in the least developed countries?Fortunately, abhorrent images of children chained in factories or forced into prostitution stand out for their relative rarity. Most working children are at home, helping their family by assisting in the family business or farm and with domestic work....In all likelihood, the clothes you wear are not manufactured with child labor -- but if you choose to refrain from buying clothes made in countries like Bangladesh, you actually increase the likelihood of exploitative child labor.
I'm in an area that focuses on social justice and responsibility along environmental, gender, political, and economic lines. Know what I'm doing this afternoon? Going to the WalMart to buy a product I haven't been able to find anywhere else. After I finish my tropical fruit and non-organic, non-fair trade coffee and take a 20-minute shower, of course.
Monday, July 24, 2006
World trade talks have collapsed. The Financial Times' Alan Beattie and Frances Williams explain:
A last-ditch meeting in Geneva of the six core “Doha round” negotiators – India, Brazil, the US, EU Japan and Australia – broke up amid recriminations over irreconcilable differences about farm liberalisation. The US continued to argue for big cuts in farm import tariffs to open up markets for its farmers, a demand fiercely rejected by the European Union, Japan and India, who said America had first to go further in offering to cut agricultural subsidies.The Economist explains why this is a tragedy (excerpted by Megan McArdle):
Last year, the World Bank estimated that global gains from trade liberalisation would equal roughly $287 billion, of which $86 billion would accrue to developing nations, lifting at least 66m people out of poverty. Activist groups including Greenpeace and Oxfam were quick to condemn both Washington and Brussels for intransigence over agricultural subsidies, saying that rich-world self interest is leaving the poor to suffer.[Why the question marks in the title?--ed.] Because trade rounds have been declared dead before and were revived. Doha looked dead after Cancun and was brought back to life by Bob Zoellick. On the other hand, the hard deadline here is the expiration of President Bush's Trade Promotion Authority in June of next year. Beattie and Williams are sober about the chances for a resurrection of Doha:
Historical experience provides a little hope but not firm ground for optimism. The previous “Uruguay round” of trade talks was in essence suspended in 1990 after similar disagreements between countries. Arthur Dunkel, then director-general of the WTO’s predecessor organisation, continued to take soundings among member countries and produced his own “Dunkel draft” suggestion for a final deal a year later, leading eventually to a final agreement in 1994.Developing.... I hope.
UPDATE: Simon Lester has a good roundup of who is blaming who for the collapse of the talks.
Monday, July 10, 2006
This seems like good news
There's not a lot of good news out there today, so let's engage in a little counter-programming before we get to it.
A British drug company is seeking permission to conduct the first human trials of an experimental vaccine against the avian flu virus.
Friday, June 9, 2006
Drezner gets results from Richard Lugar!!
Senator Richard Lugar has an op-ed in the International Herald-Tribune that sounds a theme familiar to readers of danieldrezner.com -- high energy prices hurt the developing world a hell of a lot more than the developed world:
As we in the West contend with spiraling world crude prices, we must remember that they can be devastating to developing countries, blunting the effectiveness of foreign aid and the push for democracy. This is more than a humanitarian issue - it is also a global security concern that demands our urgent attention.
Tuesday, June 6, 2006
Davos has so jumped the shark
Rob Long has a very amusing piece at ForeignPolicy.com on how celebrities can maximize their star poweer to pursue foreign policy agendas:
Welcome to the fascinating world of foreign policy! It’s wonderful that Hollywood has taken such an interest in world affairs—the hotel lobbies and corridors of Davos have never been so glittering, and hotspots in Africa and the Middle East are sprinkled with stardust. Boffo kudos, as we say in the business.Apparently, going to the Davos Economic Forum is a no-no:
Honestly, Davos is a no-win situation for you. You won’t be the most famous person there; that honor will inevitably go to Bill Clinton. You won’t be the richest; that honor will go to Bill Gates. You won’t really get the respect or the attention that you deserve. It’s sort of like going to the Oscars when you’re not nominated. No matter how famous you are, people will wonder what, exactly, you’re doing there. You’ll be photographed in a swank hotel lobby with a lot of short men in dark suits. Someone will try to hire you to appear in a commercial in Bahrain. The scientists and techies will ignore you. The Economist will print something snarky about you. Davos is a terrible costar.Read the whole thing.
[Do you have any more advice?--ed. Oh, yes... lots of very valuable advice... but I'm saving myself for a particular Academy award-nominated actress.]
Thursday, June 1, 2006
Hugo Chavez wants to impoverish the developing world
Venezuelan President Hugo Chavez wants OPEC to join his anti-American bandwagon. The Financial Times' Carola Hoyos reports that he hasn't been all that successful:
Ministers of the Organisation of the Petroleum Exporting Countries, the oil cartel, on Thursday united against Venezuela to reject its call to cut the group’s production.Read the whole thing, because there's some interesting bits of info about the possible expansion of OPEC's membership.
For now, however, let's focus on Chavez's bolded statement, because it's pretty much the opposite of the truth. If one posits that the cartel's reason for existence is to keep the price of oil at artificially high levels, then OPEC does little for the third world except to impoverish countries in Asia, Africa, Latin America and the Middle East that are not members of OPEC.
How is Africa fairing with past year's rise in oil prices? Let's check with the African Development Bank:
According to the African Development Bank (ADB), current oil prices will certainly translate into a higher average inflation of 2.6 percentage point for oil-importing African countries in 2006. High oil prices will exert a heavy toll on the finances of many oil-importing African countries. Increasing oil prices spell real economic danger for these countries as many companies faced with higher energy bills may attempt to cut down on cost and one way of achieving this is to lay off some workers. In the event of such a situation, governments of affected countries will see their tax bases eroded. Lay-offs in one sector of the economy could have huge and devastating effects on the entire economy and many African countries already caught up in the throes of an economic crisis, may have to deal with more complex economic and political situations.Hmmm.... what about Asia? Well, the Asian Development Bank is not as sanguine as Mr. Chavez:
The region of developing Asia and the Pacific is potentially vulnerable to high oil prices. It is a large net importer of oil (in this section oil is taken to include petroleum energy products excluding natural gas) and much of its rapidly expanding energy needs are met by oil. Developing Asia produces about 11% of the world's crude oil, but consumes more than 20% of it, and this gap is widening. Economies in developing Asia are nearly as oil intensive in energy consumption and much less energy efficient than most industrial countries. For each unit of gross domestic product (GDP), measured at market exchange rates, developing Asia consumes nearly five times as much energy as Japan and nearly three times as much as the United States (US).Click here to see a more in-depth analysis by the ADB of the effect of higher oil prices on the region.
In fact, let's just excerpt this 2004 International Energy Agency report to see the effect of high oil prices on the non-OPC members of the developing world as a whole:
The adverse economic impact of higher oil prices on oil-importing developing countries is generally even more severe than for OECD countries. This is because their economies are more dependent on imported oil and more energy-intensive, and because energy is used less efficiently. On average, oil-importing developing countries use more than twice as much oil to produce a unit of economic output as do OECD countries. Developing countries are also less able to weather the financial turmoil wrought by higher oil-import costs. India spent $15 billion, equivalent to 3% of its GDP, on oil imports in 2003. This is 16% higher than its 2001 oil-import bill. It is estimated that the loss of GDP averages 0.8% in Asia and 1.6% in very poor highly indebted countries in the year following a $10 oil-price increase. The loss of GDP in the Sub-Saharan African countries would be more than 3%.[Surely Chavez is correct about the Middle East, right?--ed. Er, no. According to this UN Development Program table, the Arab states have actually seen their energy efficiecy per unit of output decline by close to 50% in the past 25 years. Countries like Egypt and Jordan would get hammered as well.]
Hugo Chavez has zero interest in helping the countries of the developing world. And it's a good thing for the developing world that the rest of OPEC chooses to ignore him.
Monday, May 15, 2006
Clash of the regulatory titans
In the Financial Times, George Parker and Tobias Buck make an argument about EU regulation that sounds very, very familiar:
Seen from some European capitals, the accession of Bulgaria and Romania in 2007 or 2008 is a worrying sign of overstretch, fuelling fears that the EU is becoming too cumbersome and too diverse to have real clout in the globalised world.Hat tip to Sungjoon Cho at the criminally underrated International Economic Law and Policy blog.
Saturday, May 13, 2006
More good news about avian flu
The New York Times' Donald McNeil Jr reports on an encouraging trend in the place where avian flu started:
Even as it crops up in the far corners of Europe and Africa, the virulent bird flu that raised fears of a human pandemic has been largely snuffed out in the parts of Southeast Asia where it claimed its first and most numerous victims.If we are very, very lucky, the fear of an avian flu pandemic will be akin to fears about the imact of the Y2K bug -- serious and real, but successfully contained through the necessary policy responses.
Sunday, April 23, 2006
An interesting weekend for global economic governance
The Financial Times has a few stories on the ups and downs of global economic negotiations. Negotiations about trade barriers appear to be going in one direction, while negotiations about global imbalances seem to be going forward.
Pascal Lamy, director-general of the World Trade Organisation, will on Monday ask WTO members to work for a crucial deal on farm and industrial goods by early summer, after key trading powers acknowledged their self-imposed April 30 deadline was out of reach.On the other hand, the spring meeting of the IMF and World Bank seems to have produced a small breakthrough, according to Chris Giles and Krishna Guha:
Leading countries secured a breakthrough in the governance of the global economy at the weekend, transforming the role of the International Monetary Fund and putting it at the centre of a more co-operative effort to resolve trade imbalances.Click on this companion story by Giles and Guha, which seems devoted to explaining why the deal is so great.
I need to look into the nature of the agreement a bit longer, but to indicate the daunting nature of what's involved here, consider this paragraph from the IMF communiqué:
Following the discussion at the Global Imbalances Conference held at the IMF on April 21, the Committee confirms that the agreed policy strategy to address imbalances remains valid. Key elements include raising national saving in the United States—with measures to reduce the budget deficit and spur private saving; implementing structural reforms to sustain growth potential and boost domestic demand in the euro area and several other countries; further structural reforms, including fiscal consolidation, in Japan; allowing greater exchange rate flexibility in a number of surplus countries in emerging Asia; and promoting efficient absorption of higher oil revenues in oil-exporting countries with strong macroeconomic policies. Given economic interlinkages, all countries and regions will have a role to play by increasing the flexibility of their economies and adapting to changing global demand patterns.Accomplishing this kind of integrated policy outcome will require
Thursday, April 6, 2006
When is "a major health problem" good news?
When it's not as bad as a national catastrophe. Tyler Cowen links to a Washington Post story by Craig Timberg on how AIDS infection rates in most of Africa have been wildly overestimated:
Researchers said nearly two decades ago that this tiny country was part of an AIDS Belt stretching across the midsection of Africa, a place so infected with a new, incurable disease that, in the hardest-hit places, one in three working-age adults were already doomed to die of it.It should be stressed that HIV/AIDS infection rates on Southern Africa are alarmingly high.
That said, this is still unambiguously good news.
Tuesday, April 4, 2006
Bill Thomas reads Doha its obituary
In a speech last month, WTO Director-General Pascal Lamy said that the Doha round was approaching a "moment of truth"
Christopher Swann and Edward Alden report in the Financial Times about what House Ways and Means Chair Bill Thomas told the truth to an audience at AEI about the future of U.S. trade policy:
Bill Thomas, President George W. Bush’s most important congressional ally on trade liberalisation, is urging the administration to focus its energy on concluding bilateral trade deals, warning on Monday that the Doha multilateral round of talks was heading for failure because of conflicts between the US and the European Union.That's the uderstatement of the day.
Thursday, March 30, 2006
While there's a debate over immigration....
I've beeen jamming on a paper I need to finish within the week, which means I haven't been able to cover the whole immigration debate as thoroughly as Mickey Kaus.
[So what's your position?--ed. I think guest worker programs make little economic or political sense. I'd rather vastly expand the legal flows of immigrants who want U.S. citizenship, while simultaneously investing more in border security schemes -- though I'm pessimistic about the latter working terrbly well.]
That said, I can link to this interesting Financial Times story by Richard Lapper on the extent to which Latin America relies on worker remittances as a source of capital inflows:
Migrant workers from Latin America and the Caribbean sent home $53.6bn to their families last year, an increase of 17 per cent on 2004.Here's a link to the actual IADB report.
Thursday, March 23, 2006
It's not easy to catch avian flu
Scientific American's David Biello reports on a important finding: why, so far, the H5N1 avian flu virus has not passed from human to human yet:
A virus's ability to spread is the key to its ability to create a pandemic. New research shows that this bird flu currently lacks the protein key to unlock certain cells in the human upper respiratory tract, preventing it from spreading via a sneeze or a cough.Here's the link to the article abstract in Nature.
Tuesday, March 14, 2006
Getting lectured to by the Chinese
John Thornhill reports in the Financial Times that China doesn't like the way people are bitching about globalization:
Long Yongtu, the diplomat who negotiated China’s entry into the World Trade Organisation, has urged western governments to stop politicising trade and start telling their voters the truth about globalisation.To which I say -- it would be a hell of a lot easier not to politicize trade with China if the government didn't a) intervene on a continuous basis to keep the yuan undervalued; and b) try to create companies that are global competitors but happened to be state-owned.
[You're saying that these things are a big deal?--ed. I'm much less troubled than most of my readers on China's state interventions -- it's their inefficient policies, not ours. However, to ask Western governments to keep politics and economics separate when the Chinese state can't seem to do the same thing is a bit rich.]
Saturday, March 11, 2006
A new twist on Fight Club
The first rule of watching Fight Club -- try not to think about the plot holes in Fight Club.
Naturally, I violated this rule the first and only time I watched it. The thing that kept running through my head was, "Gee, all of the people who supposedly hold these degrading jobs seem to be Anglos. I'm pretty sure in the real world a large fraction of these jobs would be taken by immigrants."
I raise this because of the front page of the Chicago Tribune this morning:
In a show of strength that surprised even organizers, tens of thousand of immigrants poured into the Loop Friday, bringing their calls for immigration reform to the heart of the city's economic and political power.This was the part that reinded me of Fight Club:
As they transformed the Loop with their presence, immigrants made a powerful statement elsewhere by their absence.With Congress already set to enhance its ability to block foreign direct investment, I, for one, look forward to a reasoned, rational debate on immigration policy.
Wednesday, February 22, 2006
David Ignatius makes me so mad!!!
David Ignatius' column in today's Washington Post echoes some recent speculation about why globalization hasn't led to the kind of moderate, secular modernization predicted by the likes of Tom Friedman and other Davos men:
So why does the world feel so chaotic? Why is there a growing sense that, as Francis Fukuyama put it in a provocative essay in last Sunday's New York Times Magazine, "More democracy will mean more alienation, radicalization and -- yes, unfortunately -- terrorism"?....Wait a minute -- I thought blogs were dead. How can they be passe and a conduit for rage? Huh? HUH??!!
What the f@#$ does Ignatius know about blogs???!!! He's just a card-carrying member of the ELITE MAINSTREAM MEDIA!! ATTICA!!! ATTICA!!!!!
OK, got that out of my system.
I see the point that Ignatius and Fukuyama are trying to make -- that democratization creates real short-term problems by allowing radicals to take over governments. However, as I've said repeatedly, unless radical or revolutionary groups succeed at making the trains run on time, these groups (and blogs) become discredited and illegitimate over time. More generally:
[I]lliberal democracies are [not] necessarily better for world politics than slowly reforming authoritarian states are. But they are not necessarily worse, either. It's more a question of timing -- illiberal states that become democratic are more likely to have problems sooner rather than later, while authoritarian states that are slowly democratizing are likely to have problems later rather than sooner.Fukuyama and Ignatius are correct to raise the short-term problems that come with globalization and democratization -- but they're wrong not to stress the long-term advantages that come along as well.
Tuesday, February 7, 2006
Open cartoon thread
Readers may have noticed that I haven't posted on the whole cartoon business. To be honest, I didn't think it was that big a deal. Clearly, some Muslims disagree.
A lot of blogs have posted deep, deep thoughts about the state of Islam and the perceptions of Muslims in the world. I'm afraid I can't muster anything beyond two quick, cryptic observations: a) there's a difference between a democracy and a liberal democracy, and it's clear that the Muslims exercised by this cartoon do not distinguish between the two at all, and b) this is neither the first or the last time we're going to see protests of this nature.
UPDATE: This Andrew Sullivan post seems pretty powerful to me.
Friday, January 13, 2006
The unasked question about Mexican expatriates
Lurking among the many fears of anti-immigration advocates -- and Sam Huntington -- is the fear that the large influx of Mexican immigrants into this country will have divided loyalties -- or worse, develop no sense of American identity. Another fear is that this is a conscious policy of the Mexican government in order to wield influence in the United States.
This brings me to a story by Oscar Avila and Hugh Dellios in the Chicago Tribune about Mexican government efforts to get expats to vote in Mexican elections. Apparently it's not going so well:
At a registration drive in Pilsen, radio host Javier Salas tried to energize his countrymen about their historic opportunity to vote in Chicago for their homeland's next president. "Let's hear it!" he shouted into his microphone Thursday. "Viva Mexico!"The story blames cumbersome bureaucratic procedures for the low turnout, but I have to wonder -- how much of this is due to the fact that Mexicans coming to the United States don't really care about Mexican politics any more?
Wednesday, January 11, 2006
The good news about avian flu
There have been a series of avian flu cases reported in Turkey over the past week, and oddly enough there's been some good news from this development.
World Health Organisation (WHO) officials said that the 14 cases of avian flu recently discovered in Turkey were contracted through contact with infected animals and that there is absolutely no evidence that human-to-human transmission is occurring.Link via Glenn Reynolds, who has more here about US preparedness. I remain convinced that calling for the US to engage in crash preparedness can lead to more harm than good.
Second, Elizabeth Rosenthal of the International Herald-Tribune reports on a very interesting development among some of the avian flu diagnoses -- they're not getting sick:
Two young brothers, aged 4 and 5, are being closely watched at the gleaming new Kecioren Hospital here, a police car at the entrance guarding a potential scientific treasure. Though both boys have tested positive for the H5N1 virus after contact with sick birds, neither has any symptoms of the frequently deadly disease.Here's a link to the medical study abstract cited in the article. Their conclusion is a touch more neutral: "Our epidemiological data are consistent with transmission of mild, highly pathogenic avian influenza to humans and suggest that transmission could be more common than anticipated, though close contact seems required. Further microbiological studies are needed to validate these findings."
Thursday, December 22, 2005
Why panics, pandemics, and policy don't mix
Concerns about a looming avian flu pandemic have prompted a lot of commentary and blog chatter over the past few months (including from yours truly) about whether governments are adequately pepared to combat an outbreak of avian influenza. However, panicked calls for governments to "do something" without contemplating the costs and risks that come with each strategy generally leads to bad policy.
Consider, for example, that many developed-country governments have been scrambling to load up on the drug Tamiflu as a way to treat the H5N1 variant of the bird flu. In the Financial Times, however, Andrew Jack explains why this might be a problem:
Fresh doubts were cast on the efficacy of Tamiflu as a treatment for bird flu on Wednesday night when one of the world’s most prestigious medical journals published new reports of resistance to the drug and deaths in patients in Vietnam.Here's a link to the actual NEJM paper for all of the M.D.s in the house. Dr. Anne Moscona has a commentary on the paper in the NEJM that's worth reading for non-doctors as well. One disturbing implication:
It is therefore worrisome that personal stockpiling of oseltamivir [Tamiflu] is likely to lead to the use of insufficient doses or inadequate courses of therapy. Shortages during a pandemic would inspire sharing of personal supplies, resulting in inadequate treatment. Such undertreatment is of particular concern in children — the main source for the dissemination of influenza within the community, since they usually have higher viral loads than adults and excrete infectious virus for longer periods. The habit of stopping treatment prematurely when symptoms resolve (a well-established tendency with antibiotic therapy) could also lead to suboptimal treatment of influenza and promote the development of drug resistance....
Saturday, December 17, 2005
Is there a deal or not?
After a long night, the Associated Press is prematurely reporting that a trade deal has been reached:
Negotiators at the World Trade Organization have agreed on a sweeping trade deal dismantling barriers to trade in agriculture, manufacturing and services, India's trade minister said Sunday....CNN reports that there's just one sticking point remaining:
Just one issue remained unresolved as World Trade Organization negotiators worked to reach a series of agreements to end agricultural, manufacturing and service trade barriers, according to a WTO official Sunday.This sounds great... except I just talked to an EU official who's making the rounds in the press room and apparently that sticking point ain't going anywhere for a while. The sticking point remains ending agricultural export subsidies, and that the EU did put forward 2013 as the end date. The problem was that at the last minute Brazil pushed for an earlier date -- and it all fell apart.
My hunch is that Humpty Dumpty has a decent chance of being put together again -- I think the EU is trying to tell the Brazilians and others it's either 2013 or no deal, and I suspect the Brazilians will take what they can get. One possible explanation for Nath's statement is that the Indians are trying to publicly signal to the Brazilians to accept the deal on the table. That said, the EU folks are exceedingly grumpy right now, so I wouldn't place a great deal of faith in that hunch.
The hard deck for the Ministerial will be 5 AM Hong Kong time on Monday (4 PM Sunday EDT). That's when the Convention Center here has to prep for its next booking.
A side note: one of the amusing features of being in the press room is seeing the pack mentalityof journalism in action. If a sufficient number of journalists are congregating around person A, then that group starts acting like a powerful magnet attracting the individual iron fillings of other journalists. Sometimes this makes a great deal of sense -- as when the EU tspokesman contradicts the India statement. Sometimes it makes no sense -- as when a great throng materialized to get their hands on... a schedule of the Ministerial's closing ceremonies. No one gives a flying fig about that.
WTO negotiators reached a breakthrough on the most contentious issue of their six-day talks, agreeing that wealthy countries would eliminate farm export subsidies by 2013, according to a final draft of the accord. The deal paves the way for a broader agreement to cut trade barriers across various sectors.
So this is what it's like to be in a lockdown
Despite the fact that the WTO negotiations are, at best, making marginal progress, the Korean Peasants Association appears bound and determined to wreak havoc in Wan Chai (the neighborhood where the Ministerial is being held).
The result is that Hong Kong's Secretary for Security made an announcement for the public to leave Wan Chai. Which is great, except for those of us staying in hotels in Wan Chai.
The result is that I've spent this evening looking at policemen sheathed in protest gear -- gas masks, body-length Plexiglass shielding, truncheons, etc. -- while drinking and dining at the hotel buffet along with a healthy number of WTO delegates. It's more than a bit surreal.
The truly bizarre thing is that, having ventured out earlier in the evening, I'm quite certain that the number of curious onlookers outnumbers the actual protestors, the press contingent outnumbers the protestors, and the police most definitely outnumber the protestors. The Korean protestors are certainly causing inconveniences beyond their numbers, but this is a much smaller contingent of activists than were present at either Seattle in 1999 or Cancun in 2003. And any press report suggesting otherwise is full of it.
Do check out Simon's World for a link-rich post on the Ministerial.
Thursday, December 15, 2005
It's déjŕ vu in Hong Kong... or is it?
A former U.S. trade negotiator during the Uruguay round sent me an e-mail that contained the following:
I haven't keep current, thank goodness, on ag trade policy issues for more than 10 years. However, I suspect the lay of the land hasn't changed much: - Agricultural trade, as usual, is the biggest block to freer trade for agricultural products... but also non-agricultural products since the agricultural stalemate is holding up progress in non-agricultural talks:Given the current stalemate in talks -- and Peter Mandelson's intransigence on the EU taking the next step on ag subsidies -- it would seem that everything old is new again. However, there are two new wrinkles to current negotiations as opposed to prior rounds.- The EU is the biggest block to freer trade in ag products.
First, small countries have figured out that they can use the need for consensus to threaten walkouts if they don't get something. For example, The Independent's Philip Thornton reports that the west African country of Benin is now a major player:
The mood soured [at the WTO meetings] further when Benin indicated it was prepared to walk out of the talks over the failure of the US to meets its demand to end cotton subsidies.Second, the "advanced" developing countries are getting just as good at being hypocrites on trade issues as the developed world. Consider these excerpts from Victor Mallet's FT story on Indian commerce minister Kamal Nath:
Kamal Nath, India’s commerce minister, said there would be no deal at the WTO talks in Hong Kong unless developed nations stop demanding concessions from poor countries in exchange for reducing agricultural and other protectionism that should not be there in the first place.This sounds great -- but let's reconsider what Arvind Panagariyapointed out in Foreign Affairs about levels of protection in the developing and developed world.
Take sugar, for example: Sugar is highly protected in virtually all major developed and developing countries. It is subject to the following MFN rates, for example: 72 percent in South Africa, 60 percent in India and Japan, 56 percent in high-income developing Asia, 43 percent in the United States, 23 percent in Central America and the EU (and 74 percent in other European countries), 18 percent in China, and 17 percent in Argentina and Brazil. Thus, reforming tariffs on sugar will require virtually all WTO members to liberalize. The EU and the United States are major offenders, but others -- including developing countries -- are not without blame....When Nath blames EU intransigence on agriculture for the talks not going anywhere, he's half right -- because at this point India deserves just as much of the blame.
Thursday, December 8, 2005
Our comparative advantage in risk
Paul Blustein frets in the Washington Post that many developing countries are heading for another financial bubble:
International money managers are pouring funds at a record pace into the emerging markets of Latin America, Asia, Eastern Europe and Africa. Cash is gushing into mutual funds that specialize in emerging markets, and billions of dollars more are flowing into such countries from giant insurance companies and pension funds.Lachman's article is mostly about Latin America -- but this paragraph captures his jitters pretty well:
What is also surprising is how little attention Latin American investors seem to be paying to the gathering storm clouds over the global economy. How long do they think that global economic growth can be sustained at its recent pace with international oil prices likely to remain at their currently heady levels? Or how long do they think that international commodity prices will remain well bid in a world in which the Chinese economy slows under the weight of its deep macro-economic imbalances and in which Europe stagnates at a time of internal dissension and policy paralysis?There appears to be an enormous irony in the pattern of global investment flows right now. As Alan Greenspan recently noted, there has been a decline in the home bias of investment:
The decline in home bias is reflected in savers increasingly reaching across national borders to invest in foreign assets. The rise in U.S. productivity growth attracted much of those savings toward investments in the United States. The greater rates of productivity growth in the United States, compared with still-subdued rates abroad, have apparently engendered corresponding differences in risk-adjusted expected rates of return and hence in the demand for U.S.-based assets....The irony is that this home bias is affecting U.S. investors as well -- the Blustein article demonstrates that even as massive sums of savings from the developing world are making their way to the safe haven of the United States, institutional investors in this country are channeling more funds to the developng world.
Does this make any sense? Most people would instinctively say no, and Blustein's implication in his article is that this crazy. My hunch is that it makes a fair amount of sense, because U.S. capital markets and financial institutions possess both a comparative and absolute advantage in coping with risk. This allows them to place large bets in developing country equity markets and earn a higher rate of return than those investing in the U.S.
Then again, I don't have large sums of money invested in the Turkish stock market. Large, wealthy investors are heartily encouraged to post comments on how sanguine they feel about global equity markets.
Tuesday, November 22, 2005
The difficulty of doing good on HIV/AIDS
Despite decreases in the rate of infection in certain countries, the overall number of people living with HIV has continued to increase in all regions of the world except the Caribbean. There were an additional five million new infections in 2005. The number of people living with HIV globally has reached its highest level with an estimated 40.3 million people, up from an estimated 37.5 million in 2003. More than three million people died of AIDS-related illnesses in 2005; of these, more than 500000 were children.David Greising has a front-pager in the Chicago Tribune about the efforts of Abbott Laboratories to help Tanzania cope with the AIDS epidemic. The story highlights the fact that this is not simply about access to cheap medicines:
For five years now, Abbott has worked with Tanzania's government to alleviate the impact of AIDS. The experience has taught the company that the biggest obstacles are less obvious, and less readily overcome, than getting drugs to the villages.
Thursday, November 17, 2005
India decides to welcome FDI
Jo Johnson reports in the Financial Times that the Indian government is about to make some major changes in its rules about foreign direct investment:
India's Communist-backed government will on Thursday afternoon consider a sweeping liberalisation of foreign direct investment rules that would kick start a long-stalled programme of economic reforms.UPDATE: Tim Harford has an update suggesting that FDI liberalization on't be preceding as planned.
Friday, November 4, 2005
The immigration wave hits New Orleans
Yesterday Michael Martinez wrote a front-pager for the Chicago Tribune about the influx of Latinos into New Orleans looking for post-Katrina reconstruction work. Today, Leslie Eaton has a similar story in the New York Times.
Some highlights from Eaton's piece:
This is interesting stuff, but for my money, the Martinez piece in the Tribune is of greater interest because of two points not mentioned by Eaton. I've highlighted them below:
This story raises all sorts of uncomfortable questions about immigration, race, and the economy.
For me, the big question remains -- if New Orleans was such a stagnant economy that those displaced to Houston don't want to return, just how much money should be committed to reconstruction efforts?
Over at The Plank, Jason Zengerle castigates the Times and other national outlets for not reporting on Nagin's remarks. Props to Martinez and the Tribune for catching it.
Sunday, October 30, 2005
The trouble with European Muslims....
One of the central tenets of the global war on terror and the National Security Strategy is that the primary source of ant-American terror comes from the Arab Middle East. Some, like Peter Bergen, challenge this assumption, arguing that the bigger threat comes disaffected Muslims living in Western societies.
Bill Powell has a long, disturbing essay in Time for Europe that makes Bergen's point for him. The nut paragraphs:
The most disturbing aspect of Powell's story is that the turn to radicalism appears to be inculcated among second-generation Muslims:
Tuesday, October 25, 2005
Do brain drains retard economic development?
Celia Dugger has an annoying New York Times story entitled, "Study Finds Flight of Educated Workers Affects Poor Nations." Here's how it opens:
A few thoughts:
Here's a link to the actual World Bank report. Go check it out.
Sunday, October 23, 2005
The EU needs to turn the key
Alan Beattie and Victor Mallet report in the Financial Times that the EU's previous trade commissioner -- and current Director-General of the World Trade Organization -- is trying to pressure the current trade commissoner to get the EU's act together on the Doha round:
The situation is clearly causing Peter Mandelson to get hot under the collar.
Why exactly is the EU acting so obdurate on this issue? Well, it's mostly the French, and according to Thomas Fuller of the International Herald Tribune, it's the power of terroir (link via Virginia Postrel)
Tuesday, October 18, 2005
Can you feel the Hong Kong buzz?
Last week WTO Director-General Pascal Lamy said that, "the engines [of WTO negotiations] are buzzing" -- mostly because of a U.S. proposal to reform its domestic price supports for agricultural goods.
Lamy has an ambitious timetable in the run-up to the December Hong Kong Ministerial conference:
Well.... the problem is that the U.S. isn't the only country that needs to make concessions.
There's the European Union, for example. Deutsche Welle is not optimistic:
And then there's the rest of the world -- particularly the developing countries. In the Financial Times, Alan Beattie is not optimistic:
Lamy is correct -- his timetable for negotiations is not impossible.
But with this constellation of interests, it's pretty damned improbable.
Sunday, October 16, 2005
Is any country prepared for the avian flu?
As the Bush administration continues to develop its pandemic plan, I'm beginning to wonder if any country is really prepared for a pandemic. The Financial Times reports that the EU isn't prepared for an avian flu pandemic. What's interesting is why:
There are going to be some nasty intra-EU squabbles if a pandemic breaks out anytime soon (which, it should be stressed, is far from certain. Experts are predicting an outbreak by 2020. So, with luck, this will turn out to be like the Y2K problem rather than the 1918 influenza outbreak).
UPDATE: Tyler Cowen makes the case for not violating Roche's patent on Tamiflu.
Thursday, October 6, 2005
"I can't think of anything bigger that's happened in virology for many years."
That's the assessment of one expert in Gina Kolata's New York Times front-pager on new research about the 1918 influenza virus:
A companion piece by Gardiner Harris suggests that Democrats have officially freaked out about the avian flu problem:
Even though I've been Bush-bashing as of late, it's worth pointing out that Democrats are late to this party. Kolata says in her story that, "Bush administration officials have been talking about pandemic flu preparedness for years, and they say they will soon release a pandemic flu plan, in the works for more than a year." Harris says that, "The Senate majority leader, Bill Frist of Tennessee, said he had been delivering speeches about improving the nation's preparedness for a flu pandemic since December."
Of course, let's see how the plans pan out.
Monday, October 3, 2005
Things that keep me up at night
The Independent's Jeremy Laurance reports that the World Health Organization is trying to calm people down about avian flu:
Well, I feel much better now.
Even more calming is this Time.com report from Christine Gorman:
Wednesday, September 28, 2005
The end of the immigration spike
Bernstein's story is a riff on the Pew Hispanic Center's latest report, "Rise, Peak and Decline: Trends in U.S. Immigration 1992 – 2004." The executive summary also observes that:
Indeed, the report makes it clear that the shift in immigration flows to new states is a permanent and not temporary shift.
Beyond allaying fears of Mexifornia, the study has two take home points.
First, immigration flows follow the economy:
This finding probably won't surprise many economists, but it is politically significant -- because it counters the belief that immigration is some unyielding, unstoppable force.
That said, the second, more disturbing take-home point is that the composition of immigration flows is changing -- and not for the better:
This kind of study may give greater impetus to a grand bargain on immigration reform -- in which legal immigration flows are expanded at the same time there is a crackdown on illegal immigration. [I thought the grand bargain involved a guest worker program--ed. Yeah, but my grand bargain would ditch that part -- guest worker programs don't have a great track record, and the dispersal of immigrants to non-border states would probably reduce its allure anyway.]
Go check out the whole report.
Tuesday, August 9, 2005
Is there a grand compromise on immigration?
Tamar Jacoby thinks the answer is yes. She explains why in the Weekly Standard:
There might be a consensus at the elite level, but I'm very skeptical that this consensus extends down to the populace. Click here for why I'm skeptical.
The interesting question is if Jacoby is correct, whether public hostility would derail any proposed reform.
Sunday, August 7, 2005
Good news on the whole pandemic thing
I've expressed concern in recent months about the possibility of a pandemic of avian flu emerging from the birds of East Asia. So it's only fair to point out when there is good news on this front. Lawrence K. Altman provides some on the front page of the New York Times:
The law of comparative advantage is not dead
That's the message Jagdish Bhawgati delivered in a Wall Street Journal op-ed on Friday, responding to Thomas "The World is Flat" Friedman.
The best rebuttal to Bhagwati's argument, by the way, is not Thomas Friedman, but labor economist Richard Freeman. So go check both of them out.
Wednesday, August 3, 2005
Following up on the avian flu
A follow-up post to June's discussion of the threat of an avian flu pandemic. There's some good news and some bad news.
The good news is that, according to the Financial Times' Clive Cookson, containing the spread of a pandemic is quite feasible:
The bad news is that the computer simulations were based on "an outbreak in rural Thailand of flu caused by the H5N1 avian strain." I'm not sure how they would cope with where the strain has actually migrated. Douglas M. Birch explains in the Baltimore Sun:
Saturday, July 23, 2005
Private equity groups go to Europe
Peter Gumbel has a fascinating story in Time on the growth of U.S. based private equity firms engaging in leveraged buyouts of European firms.
Read the whole thing. The restructurings are causing a bit of a ruckus. That fact that these groups are headquarted in the U.S. probably doesn't help matters right now. More importantly, European unions allege that the private equity groups come with mass layoffs. I have no doubt that's true in some cases, though the funny thing is that if you read the entire article, you will fail to find a single example of a U.S. firm actually recommending mass layoffs.
Saturday, July 16, 2005
Talk about your fun accession negotiations!
In The Lexus and the Olive Tree, Thomas Friedman argued that globalization forced states into the Golden Straitjacket, choosing between "free market vanilla and North Korea." This is one of those classic Friedmanisms that is simultaneously overexaggerated and yet tugs at some gut sense that there's a truth embedded in somewhere in that statement.
Anyway, I bring this up because apparently North Korea has called and apparently wants vanilla. Anna Fifield explains for the Financial Times:
I really do not know how much credence to put into this report. But if there's any truth to it, I'd love to be a fly on the wall when the accession negotiations start.
Wednesday, July 13, 2005
Progress for the Doha round?
Richard McGregor reports in the Financial Times about a potential breakthrough in the agricultural negotiations for the Doha round of world trade talks.
Sounds great, until you get to the nitty-gritty of the proposal:
The scary thing is that what's proposed represents liberalization of a sort -- agriculture is so heavily protected and subsidized that it will take decades for complete liberalization.... if it ever happens.
Supachai is more pessimistic about the overall progress of the Doha round. Click here for his statement from last week. Key paragraphs:
Tuesday, July 12, 2005
Are times changing in France?
Christian Noyer, governor of the Bank of France, recently gave an interview to the Financial Times in which he said some very un-French things:
Read more of the interview here -- in which he gives faint praise to new French PM Dominique de Villepin while dismissing Villepin's suggestion for closer political consultations with the European Central Bank.
Friday, June 17, 2005
How whirlpool does globalization
Louis Uchitelle has a nice case study of how one U.S. multinational deals with global sourcing questions in the New York Times:
Read the whole thing. One interesting result is that despite the fact that globalization supposedly flattens the world, geography (in the form of shipping costs) and history (in the form of past investments) still matter a great deal.
Sunday, June 12, 2005
Who wins from GM's misfortunes
The announcement by General Motors that it planned to 25,000 or more assembly-line jobs over the next few years would seem to advance the hypothesis that the United States suffers from expanding international trade.
Gregg Easterbrook does a nice job of pointing out why that's not true in the New York Times today:
[Yeah, but life is still bad for workers in the auto indistry, right?--ed.] Well, that depends on where you live. Easterbrook points out some other employment trends in the automobile sector beyond General Motors:
AIAM's press release about that report also mentions, "When the number of jobs created by the new American automakers is combined with related new vehicle dealership employment, this sector of the industry has generated 1.8 million jobs in the U.S. economy."
Wednesday, June 8, 2005
The OECD's recipe for economic growth
Psst... hey, buddy -- want to make some more money?
Chris Giles writes in the Financial Times on the Organization for Economic Cooperation and Development's latest working paper:
You can access the OECD's summary here, and the full report here. By barriers, the authors are referring to tariffs, limits on foreign direct investment, and product market regulation. The bulk of the gains come from regulatory reforms.
How big are the benefits? This is from the report's cover letter:
UPDATE: Robert Tagorda at Outside the Beltway has some more thoughts on the OECD report.
Meanwhile, Gary Hufbauer and Paul Grieco's op-ed in the Washington Post yesterday makes a similar point about the past benefits of economic openness:
[But the costs... what about the costs!!--ed. Ah, yes, they measure that too:
Tuesday, May 24, 2005
Arabs at home and abroad
In Foreign Policy, Moises Naim makes an interesting point about Arab Americans:
For Naim, this success presents an interesting puzzle:
Read the whole thing. And thanks to Colin Grabow for the link.
UPDATE: Hmmm.... Naim may have spoken too soon. Many thanks all of the commenters -- especially Andrés Vernon -- for pointing out the differences in the attributes of Arabs emigrating to the U.S. versus Arabs emigrating to Europe. Vernon provided a link to this Arab American Institute web page on Arab demographic. Two graphs worth reprinting:
BREAKDOWN OF ARAB AMERICANS BY COUNTRY OF ORIGIN
BREAKDOWN OF ARAB AMERICANS BY RELIGION
The second graph is particularly telling. I seriously doubt that only 24% of Europe's Arab influx is Muslim -- which means that the Arab immigrant stream into Europe is demonstrably different than those Arabs who empigrate to America. For more on the European side of the equation, see Claude Salhani analysis for UPI from last December.
And thanks to all the commenters for picking up the flaw in Naim's data.
LAST UPDATE: See Reihan Salam for more on this.
Sunday, April 17, 2005
So did the Bush administration get serious about the dollar?
Well, the meeting of the G-7 finance ministers happened. Did the U.S. and the G-7 ratchet up the pressure on China, as was previously suggested?
This appears to depend on who you ask. In the Washington Post, Paul Blustein says "no":
In this case, both the FT and WaPo are correct. It's clear that the latest G-7 statement doesn't differ much from previous ones, and I have no doubt Japan acted as the brake on any change in the language. However, U.S. Treasury Secretary John Snow also delivered a statement after the communique that was reasonably clear in its intent:
Of course, the U.S. can insist that China is ready all it wants -- whether Beijing will hop to is another question. Until and unless Japan changes its tune, it would appear that China doesn't face a huge incentive to change the status quo.
On the other hand, this Bloomberg report by Tim Kelly suggests that Japan recognizes the political lay of the land:
Tuesday, April 12, 2005
Globalization and human welfare
Martin Wolf has a concise summary of globalization's variable effects on the human condition for the past few decades in his Whitman Lecture to the Institute for International Economics last week:
About the only thing I would add is that with regard to economic development, one could say, "________ has not worked well for Africa and much of Latin America" and you'd likely be correct no matter what filled in the blank. And I don't mean that scornfully, but rather tragically.
Thursday, April 7, 2005
The World Bank fires a warning shot across the dollar's bow
Andrew Balls reports in the Financial Times that the World Bank ain't too comfortable with the developing countries' accumulation of dollar-denominated assets:
The World Bank press release contains more direct warnings shots than those quoted in the FT:
Click here for the Bank's full report, Global Development Finance 2005: Mobilizing Finance and Managing Vulnerability.
Brad Setser has further thoughts on this topic as well:
The Bretton Woods 2 system of Asian reserve financing of the US continues, no doubt. But I also think it is fair to say that many -- both in Asia and in the World Bank -- are beginning to reassess the cost/ benefit ratio of this system.
Wednesday, January 12, 2005
The political economy of disaster aid and debt relief
The Economist has a good backgrounder on the delicate politics of proffering aid and debt moratoriums as a means of assisting countries experiencing natural disasters. It opens as follows:
Read the whole thing.
UPDATE: CNN provides another complication when disaster relief is deployed:
Wednesday, December 1, 2004
Whatever shall global civil society do?
It's dangerous to ascribe a common set of preferences to the heterogeneous collection of NGOs, social movements, activist networks, charities, churches, and even some individual philanthropists that comprise "global civil society." But most people who study these entities would acknowledge a rough consensus among these groups that a) genetically-modified organisms (GMOs) should be regulated to within an inch of their existence; and b) land mines are evil and should be banned.
So I wonder which side of the fence these groups will fall on when they read about this tidbit blogged by Warren Ginn:
Link via Virginia Postrel.
Aresa's web site has this to say on how these GM products would accelerate land mine removal:
Monday, October 4, 2004
So how did that G-7 dinner go?
Remember that G-7 dinner that Chinese Finance Ministry officials were asked to attend? It took place over the weekend. Chris Giles and Andrew Balls report on the outcome in the Financial Times. First, the dinner:
More interesting was the assessment at the end of the article on why there might not be any change in global macroeconomic imbalances anytime soon -- although they may be unstatainable in the long run, the status quo ante brings short-run economic benefits and minimal political costs for the U.S., China, and the European Union:
This post from a few weeks ago is also worth checking out -- both on the global imbalances and China's exchange rate policies.
UPDATE: The Economist has more on the G-7 meeting. Money paragraph:
Thursday, September 23, 2004
China and the G-7
Paul Blustein reports in the Washington Post about a very important invitation:
I suspect it will be quite some time -- if ever -- before China becomes a full-blown G-7 member. Having participated in the G-7 process while at Treasury, it involves an intense and ongoing consultation among officials up and down the chain of command. This kind of close working relationship doesn't always produce consensus, but there is a shared trust in the value of the consultation process. When the states in question are on the same page -- or at least pretty close to each other -- it's a powerful coordination tool.
The trillion-dollar questions are whether a) Chinese preferences are even close to the advanced industrialized states on global economic matters; b) Whether the G7 finance ministries are willing to trust their Chinese counterparts. You'd think I would have firm answers to those questions -- but I don't.
Still, the outcome of this meeting will be very interesting to observe.
Saturday, September 11, 2004
The foreign direct investment of Hooters
I can already visualize the impending Naomi Klein column, heaving with brand outrage -- of course, Klein has had her own problems as of late.
Thursday, July 29, 2004
A step forward on agriculture?
Richard Waddington has a Reuters story suggesting that the Doha round of trade talks has overcome the agriculture obstacle:
It's worth noting that 15 years ago, when the Uruguay round was being negtiated, the "core members" of the world trade body were called the "Quad" -- the U.S., European Union, Japan, and Canada. The fact that India and Brazil need to be consulted at this level is a testament to how the balance of power has shifted within the WTO.
Thursday, July 22, 2004
How do Americans and Europeans feel about trade?
That's the question asked by the German Marshall Fund of the United States, which helped commission a four-country public opinion survey on the subject entitled Reconciling Trade and Poverty Reduction.
The fund concludes that "support for free trade remains robust." After reading the report, I'm more pessimistic. This is from the accompanying press release:
The report goes onto suggest ways to pitch free trade policies in politically friendly ways. Consider this proposed phrasing:
That's just a God-awful way to sell free trade, because it admits a falsity. Smart people like Stephen Roach are dredging up the race-to-the-bottom argument to explain the current job market, but it's just wrong. The statement that "workers in developing countries living under abominable conditions" with more globalization is particularly egregious.
On the other hand, this message works for me:
This phrasing has the twin virtues of greater acccuracy and greater optimism.
One final interesting finding:
Go check it out.
Wednesday, July 21, 2004
Your environmental quote of the day
In my mailbox today I found David Victor's Climate Change: Debating America's Policy Options, which was sponsored by the Council on Foreign Relations. David is a disgustingly prolific and competent writer with a cv longer than my arm, so it's worth paying attention to what he writes.
The book maps out three possible policy options for the coping with climate change. Flipping through, I came across this assessment of the myriad predictions about the extent of global warming by the year 2100 (p. 11):
For a very long pdf version of the report, click here.
Tuesday, July 13, 2004
The state of the globalization literature
Peter Dougherty, the senior economics editor for Princeton University Press, tries to summarize and categorize the globalization literature in an interesting Chronicle of Higher Education essay (subscription may be required).* As this is a topic with which your trusty blogger has more than a passing interest, I checked it out. Some of the good parts:
From a purely self-interested perspective, this is the part I found most gratifying:
*[Possible conflict of interest alert: I have an advance contract for my globalization book with Princeton University Press. However, I've never met or interacted with Dougherty.]
Friday, July 2, 2004
Voice of America reports on recent research on a generic three-in-one drug to fight AIDS:
Meanwhile, the same issue of Lancet has an epidemiological study of HIV trends in sub-Saharan Africa that also offers a modest dollop of good news:
Friday, June 18, 2004
What sustains the barriers to globalization in the Middle East?
Marcus Noland and Howard Pack have written a must-read policy brief for the Institute for International Economics on why the Middle East appears to be suffering from relative economic stagnation. They lay out the challenge in stark terms:
The authors dismiss the simple argument that Islam retards receptivity to capitalism. Rather, Noland and Pack's key finding is that "public attitudes toward foreigners and globalization" more generally is the greatest barrier to foreign investment. Their operationalization of this kind of attitude is most intriguing:
From this finding, the authors return somewhat gloomily to the role of Islam and conclude:
Read the whole brief.
Tuesday, May 4, 2004
The Asian brown cloud
The Chicago Tribune's front-pager yesterday was a James P. Miller story about the effect of Chinese air pollution -- the "Asian brown cloud" -- on U.S. weather. Some of the tidbits:
It's not clear if there are any policy implications from this -- but I hadn't seen the phenomenon reported previously.
Wednesday, September 25, 2002
Great Washington Post story on the current mood of pro-globalization thinkers. The money grafs: