Archive for the ‘Political Economy’ Category

targeting the poor does not work

Tuesday, September 4th, 2018

Targeting the poor provides opportunity for corruption in delivery of benefits, even when the beneficiaries are older persons. Here is an example from Nueva Ecija, a province in the Central Luzon region of the Philippines. (more…)

the rise of American authoritarianism

Wednesday, July 25th, 2018

More than two years ago Amanda Taub, a journalist and former human rights lawyer, published an amazing article that I somehow missed. Drawing on the work of several political scientists, Ms Taub explains why Donald Trump was elected, and why we can expect US voters to elect authoritarian figures similar him in the future. In other words, Trump is not a passing phenomenon. (more…)

immigration policies of Republican presidents

Monday, June 25th, 2018

FT columnist Edward Luce, in an op-ed last week, highlighted the rise of anti-Americanism in the world. “US pollsters”, he wrote, “routinely find that more of the world trusts China to uphold global stability than America”. What caught my attention, though, was Luce’s point that Trump’s treatment of immigrants is so different from that of his Republican predecessors:

Both Reagan and Bush junior were keen to create new citizens. Reagan gave amnesty to 3m [3 million] illegal immigrants. Mr Bush said if Mexicans could make it across the border, “hell we want ‘em”. Mr Trump called African countries “shitholes” and uses words such as “animals”, “infest” and “criminals” when talking of Central America.

Edward Luce, “The rise of a new generation of anti-Americans“, Financial Times, 22 June 2018 (gated paywall).

Adam Smith for our troubled times

Saturday, June 23rd, 2018

An old joke is that a classical book is one that everyone cites, but no-one reads. By this measure, each of the two books that Adam Smith wrote are classics. If his followers today took time to read then, they would disagree with much of what he wrote. (more…)

Italy’s economic woes

Wednesday, June 20th, 2018

Martin Wolf’s Wednesday column provides an excellent explanation this week of why Italy is in trouble. Italy should never have joined the euro. In theory, countries can avoid devaluation by increasing productivity and lowering wages. In practice, this is politically difficult. In the case of Italy, it is impossible. If Italy had kept the lira, it could easily devalue its currency and regain competitiveness with other countries of the euro zone (primarily Germany). (more…)

New Zealand’s universal pension is in danger

Saturday, June 16th, 2018

New Zealand has a universal pension scheme that is the envy of the world. It is simple, affordable, and eliminates poverty in old age. When a qualified resident reaches the state pension age, he or she receives a basic, flat pension, regardless of income, wealth or employment history. This benefit, called ‘Superannuation’, is financed from general government revenue. Earmarked taxes are not levied to support it, but benefits are taxable as regular income, so net benefits are lower for pensioners who have income from work or from savings. (more…)

the source of US power

Monday, May 28th, 2018

FT columnist Wolfgang Münchau explains that acceptance of the US dollar as a global currency gives the country extraordinary power. The United States alone can impose and enforce extraterritorial sanctions. This privilege is not available to other countries because no currency exists to replace the US dollar. (more…)

China’s view of the world

Tuesday, May 1st, 2018

FT columnist Martin Wolf recently participated in an international conference convened by the Tsinghua University Academic Center for Chinese Economic Practice and Thinking. He describes it as “franker than any I have participated in during the 25 years I have been visiting China”, and lists seven propositions that the Chinese elite expressed to their foreign guests:

1. China needs strong central rule.
2. Western models are discredited.
3. China does not want to run the world.
4. China is under attack by the US.
5. US goals in the trade talks are incomprehensible.
6. China will survive these attacks.
7. This will be a testing year.

Martin simply describes these seven propositions, without criticism. I assume that he agrees with them, but perhaps he will express disagreement in a future column. Or, perhaps not. In the meantime, I pass along to you his description of proposition number two, which I found most interesting, and most disturbing for western states: (more…)

measuring economic value

Sunday, April 29th, 2018

Economists are frequently criticized for failing to include in their measures of output goods and services that have no price. A common example is household services done by parents – or children – without pay. Even worse, cleaning up bads – such as an oil spill – is counted as an increase in national output (GDP). FT columnist Martin Wolf reviews a new book by Italian-American economist Mariana Mazzucato that covers all this and more. (more…)

the new barter economy

Saturday, April 21st, 2018

FT columnist Gillian Tett explains, very well and concisely, that the ‘free’ services that internet companies provide in exchange for our personal data is the age-old system of barter. This system is difficult for economists to understand, because prices, measured in money, are absent. (more…)