Category Archive: Sources

  1. Where The Birds Never Sing

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    RAILROADS

    On February 3, a freight train operated by Norfolk Southern derailed in East Palestine, Ohio. The major accident was later declared “100 percent preventable.” 

    Falling safety standards in the industry can be traced back to the Staggers Act of 1980, which spurred deregulation. Examining the aftermath of this shift, a 2022 article by JOHN S. STRONG finds that “activist investors”—including one who was briefly involved with Norfolk Southern—initiated board takeovers that transformed the operations of several freight rail companies. 

    From the article:

    “Many of the activist campaigns during the 2000–2022 period were spurred by the development of a new approach to rail operations, known as Precision Scheduled Railroading (PSR). PSR focuses not on train movements, but car movements. Rather than waiting for a train to be built, cars are picked up from shippers and added to trains regardless of train length. Two major effects of PSR are to reduce the number of required hump yards, and to shift from unit trains to manifest mixed services on regularly scheduled trains. The nature of PSR operations results in potential problems. The closing of hump yards and reduction in trackage means the industry has less capacity to respond quickly to surges in demand. Labor reductions have resulted in shortages of train and network crews. Shippers previously served with larger unit trains have experienced occasional service disruptions. Longer, heavier manifest trains have raised concerns about safety.”

    +  “Deregulation meant discrimination…in the sense that transport ceased to be a product sold to all customers at a standard price.” Marc Levinson on big and small shippers. Link. 

    +  “If the safety of railroad freight transportation is measured solely by train accidents, and if the maximum amount of freight traffic is assumed to have been shifted by deregulation, as many as 236 extra freight transportation deaths per year can be blamed on deregulation.” A 1989 chapter by Kennith D. Boyer. Link. 

    +  James M. Macdonald and Linda Cavalluzzo on deregulation and organized labor. Link. And Steffen Habermalz and Kirsten Monaco track how wages fell after the Staggers Act. Link. 

    NEW RESEARCHERS

    Local fiscal capacity

    SASCHA DRAY is an economist at the World Bank in the Macroeconomics, Trade, and Investment Global Practice. In a recent paper, he explores the importance of tax revenue for the growth of local governments.

    From the abstract: 

    “Using newly collected financial data of more than 300 U.S. cities over 1899-2000, I leverage source-specific variation in revenue through a shift-share research design. I report three main results. First, additional tax revenue causes greater spending on services than same-sized non-tax revenue, despite partial earmarking of non-tax revenue for this purpose. Second, tax revenue generates persistence in revenue. An initial increase in tax revenue has a 81% persistence on total revenue 10 years later, while similar non-tax revenue increase has dissipated after 3 years. This persistence can be explained by fiscal capacity improvements through higher effective tax rates, better enforcement and increased spending on revenue collection. Third, reliance on taxes has long-run effects on municipal finances and growth.”

    +  “Kindleberger sat close enough to the center of power to want to, and occasionally be able to, influence US foreign economic policy. He nonetheless remained an outsider methodologically and at a distance from the actual policy reins.” New on PW, Herman Mark Schwartz on Perry Mehrling’s Money and Empire. Link.

    +  “A divide emerges between how the ECB hindered or facilitated fiscal responses to these two international crises, despite the Federal Reserve’s willingness in both periods to prevent liquidity crises from worsening.” Also new on PW, Nina Eichacker compares ECB policy in 2008 and 2020. Link. 

    +  “Pakistan’s nest of international lenders looks as intransigent as its brazenly elite-captured domestic economy.” New on the Polycrisis, Tim Sahay and Kate Mackenzie analyze debt and power in Pakistan. Link.

    +  “In this paper, we lay out a theory of supply chains where financial conditions play a pivotal role in the determination of the length of supply chains.” By Se-Jik Kim and Hyun Song Shin. Link. 

    +  “While climate change poses a risk to Nigeria’s development prospects, it also provides opportunities for Nigeria to rethink the design and implementation of its national development programs.” By Belinda Archibong and Philip Osafo-Kwaako. Link. 

    +  Amanina Abdur Rahman and Achim Schmillen on Malaysian growth and within-sector labor productivity. Link.

    +  “The ‘softening’ of the German power bloc towards fiscal capacity building and redistributive mechanisms in the EMU is likely to prove durable.” Etienne Schneider on recent shifts Germany’s European policy approach. Link. 

    +  A new report from the Center on Global Energy Policy, authored by Ian Hamilton, on decarbonizing the global building sector. Link. And see Jeremy Wallace’s recent Polycrisis essay on China’s construction sector and the global climate agenda. Link. 

    +  “The bargaining position of mercenaries depended upon whether their numbers were greater or less than the demand for them. When they were in short supply, or particularly needed, they could, and did, insist on more attractive terms from their employers, even, as with the Ten Thousand, in the middle of a campaign. Suspecting that Cyrus’ expedition ‘would involve more difficulty and danger’ than he had disclosed to them, ‘they asked for more pay, and Cyrus promised to give to all half as much again as they had before’. Later, angry at learning that Cyrus planned to march against the Great King himself, they successfully negotiated a settlement whereby each soldier would receive a bonus of five minae of silver (about four months’ pay) and full pay until his return to Ionia.” By Harvey F. Miller. Link. 

  2. Palingenesis

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    LABOR FLEXIBILITY

    Chile has long been known in the region for relatively steady growth paired with high levels of income inequality. The country’s economic trajectory has been linked to its “labor flexibilization” policies implemented under Pinochet, which have not changed substantially since the transition to democracy in 1990.

    In a 2018 chapter, PAUL W. POSNER calls into question the justification for these policies, arguing that the country’s highly flexible labor market has failed to increase formal sector employment.

    From the chapter:

    “Labor reforms adopted during the Augusto Pinochet dictatorship and largely maintained since the democratic transition are consistent with the flexible labor policies advocated by IFIs such as the IMF, World Bank, and Inter-American Development Bank. Labor flexibility in Chile has perpetuated, if not exacerbated, the very conditions its proponents have argued it would ameliorate. Chile’s continued adherence to a flexibilized labor market should be understood not in terms of its capacity to reduce inequality or generate employment. Rather, it should be understood as the product of several interrelated factors: (1) the business sector’s ability to protect its interests through the leverage it accrued with policymakers over the course of the dictatorship; (2) the center-left Concertación’s conscious limitation of threats to the business sector’s interests in order to maintain political and economic stability; and (3) the weakness of organized labor, resulting from the perpetuation of the Pinochet-era labor regime and its own failure to adapt to Chile’s profoundly altered labor conditions.”

    +  “Our main conclusion is that Chile’s labor market reactions to structural shocks are among the most flexible economies.” By Elías Albagi, Pablo García, and Jorge E. Restrepo. Link. And a 2007 paper by Víctor O. Lima and Ricardo D. Paredes examine three labor market regimes in Chile from 1967 to 2002. Link.

    +  “The code facilitated shifting workers from one position to another within a firm and, more importantly, allowed employers to fire workers at will, individually or en masse, for no reason other than ‘business necessities.'” By John Lear and Joseph Collins. Link. And a 1994 BLS paper defines the characteristics of  “labor market flexibility.” Link. 

    +  Ángela Vergara on the rejected draft constitution’s proposals for labor reform. Link. And see her PW essay on the vote of Chilean mine workers. Link. 

    NEW RESEARCHERS

    EMILIE SARTRE is a Postdoctoral Research Associate at Brown University, affiliated with the Brown Center for Philosophy, Politics, and Economics. In a recent paper, she studies how public fiscal mismanagement leads to the rise of populism.

    From the abstract: 

    “This paper studies how populist candidacies were fueled by a case of public financial mismanagement that became salient during the Great Recession. Using an instrumental variable strategy, we exploit the leak of a list of French municipalities that contracted “toxic” loans before the crisis. During the subsequent municipal elections, we show that i) the right-wing populist party is the only political orientation experiencing an increase in vote share, while mainstream incumbents’ political orientations are electorally punished, ii) both right-wing and left-wing populist candidacies are more likely in municipalities affected by the scandal, leading to arise in electoral competition, iii) the entry of populist candidates remains persistent over time. Importantly, the findings are not driven by economic deprivation, austerity measures, or pure demand for a political turnover. They suggest that the disclosure of public financial mismanagement contributes by itself to the rise of populism during financial crises via the strategic entry of populist parties.”

    + + +

    +   “Today, the European effort to assert economic sovereignty is in service of a sanctions alliance with the US.” New on PW, Esfandyar Batmanghelidj on how sanctions are reshaping EU-US relations. Link. 

    +   “How would securitizing the World Bank’s portfolio work, and how does this tactic relate to the larger derisking turn in development finance?” New on the Polycrisis, Advait Arun analyzes securitization as a strategy for climate finance. Link.

    +   “Russia’s war on Ukraine concretely reveals what it means for countries to lose their food sovereignty.” A new issue of Siyada magazine on the Ukraine invasion and food supply in North African countries. Link. 

    +   Hugh Miller, Simon Dikau, Romain Svartzman, and Stéphane Dees on the shortage of three raw materials—copper, lithium, and nickel— needed for the low-carbon transition. Link.

    +   “The IRS and Treasury effectively cannot be challenged in court for an action or decision that favors taxpayers, causing the government to lose money.” Brian D. Galle and Stephen E. Shay on administrative law and taxes. Link. 

    +   Anne-Sophie Corbeau and Ann-Kathrin Merz on Germany’s gas price break. Link. 

    +   A 2005 article from Betül Sengezer and Ercan Koç on land use planning and earthquake mitigation in Turkey, from Disaster‘s larger collection around earthquakes in the country. Link to the article, link to the collection. 

    +    “A recent survey found that 63% of the population or around 130 million people are now ‘multi-dimensionally’ poor.” An interview with Alex Batubo on Nigeria’s upcoming presidential elections. Link. 

    +   “It may be argued that the prohibition of usury impeded the development of capitalism in at least two ways: first, by keeping the interest rate high and, second, by undermining the enforcement of contracts. As far as the Medici are concerned, unsound financing was perhaps a major factor in their downfall. It seems plausible that they placed themselves in the same position as that of a modern corporation which is trading on the equity and relies mostly on the issuing of bonds as a means of financing expansion. When business conditions became unfavorable and profits fell, the Medici should have reduced the return which they offered to depositors. Perhaps it was impossible to do so without losing prestige or without causing withdrawals of much needed cash at a critical moment. In any case the Medici were reluctant to cut interest charges, except as a last resort. When they finally decided to take this fateful step, it gave wide publicity to the extent of their losses and undermined their prestige both at home and abroad.” By Raymond de Roover. Link. 

  3. That Day, On The River

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    RETIREMENT

    Protests against a measure to raise the retirement age in France and news of China’s population decline have prompted discussion around aging populations and implications for social policy. 

    In a classic 2004 study, ROBIN BLACKBURN studies how an aging demographic affects systems of pension provision around the globe. 

    From the book:

    “The term ageing society should be taken literally. The median age of the world’s population was 23.6 years in 1950; it rose to 26.4 in 2000 and is expected to reach 36.8 by 2050 in the UN’s 2002 medium projection. The ageing effect is proceeding most rapidly in Europe where 29.2 was the median age in 1950, rising to 35.4 in 2000 and where it is expected to reach 47.7 by 2050. If the over 65s are to comprise between a fifth and a quarter of the population, then they are going to need a big chunk of GDP. Overall those over pension age currently receive an income that is 70 to 75 percent of average income. This is income from all sources: the state pension, private pensions, earnings and other savings. To maintain the relative income of those past retirement age it is generally necessary for these sources to supply between 15 and 22 percent of GDP, depending on the dimensions of ageing in that society. In nearly all advanced countries today there is a likelihood, with current programmes, of an income shortfall amounting to between 3 and 6 percent of GDP showing up between 2030 and 2050.”

    +  “In 30 OECD nations, the labor force participation of older men and women has grown significantly since 1993.” Teresa Ghilarducci on the distribution of retirement and older working time in OECD countries Link. 

    +  “I examine three of the world’s demographically oldest democracies and ask whether or not an older electorate leads political parties to increasingly seek the support of older voters through their political party messages and to avoid policy measures that might harm older workers.” Jennifer Dabbs Sciubba on Germany, Italy, and Japan. Link. 

    +  “Approximately 70% of the total 60+ population receives no pension at all.” Charan Singh, Kanchan Bharati, and Ayanendu Sanyal call for a universal pension scheme in India. Link. And Michael Kpsessa and Daniel Béland on the ILO’s influence on pension schemes in sub-Saharan Africa. Link. 

    NEW RESEARCHERS

    Electricity capital

    LUCY BAKER is a Senior Research Fellow in Science Policy Research at the University of Sussex Business School. In a recent paper, she studies the off-grid solar electricity market in in sub-Saharan Africa. 

    From the text: 

    “Standalone solar home systems using pay as you go (PAYGO) mobile money have been proposed as a key solution to meeting the target of universal access to energy under Sustainable Development Goal 7. I investigate how through PAYGO, off-grid solar electricity in sub-Saharan Africa is being transformed into a cash flow, a financial asset and a conduit for consumer debt. In so doing I analyse evolving relationships between some of the key actors and institutions involved in this process, including mobile banking platforms such as MPesa, ‘next generation utilities’ such as M-KOPA and BBOXX, and powerful mobile network operators such as Safaricom and MTN. Theoretically I conceptualise energy access as a new frontier of ‘electricity capital,’ a developing field from political economy and energy geography, which is concerned with the way in which technological developments in the electricity sector are reconfiguring relationships between different institutions of the state, industry, finance, and users.”

    + + +

    +   “China produces more than half the world’s steel and cement, and those two sectors alone account for about 14 percent of global CO2 emissions.” New on the Polycrisis, Jeremy Wallace on China’s troubled real estate sector and climate. Link.

    +   “Contractionary fiscal shocks larger than 1.5 percent of GDP are associated, on average, with a negative effect of more than 3 percent on GDP, even after fifteen years.” New on PW, Guilherme Klein Martins on the long-run impacts of austerity. Link. 

    +   “Europe may be more intentional than the US in its energy transition policies, but it is also backward-looking.” This week’s Polycrisis newsletter, by Kate Mackenzie and Tim Sahay, on the EU and the Inflation Reduction Act. Link. 

    +   Read highlights from last year’s second seminar of the Brasilian Sovereign Funds Forum, a partnership led by JFI and Fluminense Federal University. Link.  

    +   In Next City, JFI Vice President Halah Ahmad, Steve Nuñez, and Hope Wollensack argue that the future of guaranteed income is at the community level. Link. 

    +   Three on Adani: Aswath Damodaran on the stock meltdown, John Hyatton on how the fallout affects other investment funds, and Nikhil Agarwal and Ritesh Presswalla on impacts to the Life Insurance Corporation of India. Link, link, and link.

    +   “The Algerian financial system conceals two time bombs: an insane mass of subsidies which weigh a good quarter of the GDP and a constantly expanding budget deficit of almost the same dimensions.” By Jean-Pierre Sereni. Link.

    +   Paul Lasley and David Ostendorf on the American Farm Crisis of the 1980s. Link. 

    +   The Economist notes that “the US government is spending lavishly to revive green manufacturing.” Link. And see a talk with Ted Fertik and the Polycrisis’s Tim Sahay on climate and the Inflation Reduction Act. Link. 

    +   “Although some considerable distance lies between the emergent household specialization and the fullblown Aztec tortilla seller, the development of one into another can be explained by the opportunities afforded by the Aztec urban economy. The breadth of the tortilla seller’s inventory clearly is not aimed at poor households and minimal subsistence but at a wealthier status and luxury conscious clientele. Similar specialists entered households and organized the preparation of fancy maize foods for celebrations. In the broader economy, the volume of goods flowing into Aztec urban centers meant numerous visitors— merchants, load-bearers, itinerant craftspeople, and others distant from their own households—also created a demand for tortilla sellers. Other Aztec institutions fostered large-scale maize preparation. The large households and palaces of the elites were well suited to this practice. Similarly, the work of specialists attached to elite-sponsored craft workshops might have been subsidized with tortillas and other food.” By Martin Biskowski. Link. 

  4. To Monet, Giverny

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    COLOMBIAN OIL

    At the World Economic Forum in Davos, Colombia’s new Minister of Mines and Energy, Irene Vélez Torres, announced that the country’s government would not approve any new oil and gas exploration projects. 

    In a 2021 chapter, DERMOT O’CONNOR and JUAN PABLO  BOHÓRQUEZ MONTOYA examine the privatization of Colombia’s energy sector in the 1990s. 

    From the chapter:

    “In 2003, after more than fifty years of operations as a state-owned oil producer and refiner albeit one that relied heavily on partnerships with British, American, and Canadian firms for exploration, transportation, and marketing—Ecopetrol was restructured and re-established as a publicly traded corporation (although the state initially held 100 per cent of its shares). This was done in order to rationalize operations and enhance competitiveness internationally. After restructuring, Ecopetrol doubled production from 399,000 barrels of crude oil per day in 2007 to 755,400 barrels per day in 2014. Following price depressions in the oil sector in recent years, Ecopetrol has focused on sustaining operations, exploring for new deposits, and seeking international investors. In the petroleum industry, foreign direct investment in Colombia went from US$135 million in 1994 to US$5.4 billion in 2012. In the mining sector (including coal), foreign direct investment in 1994 was US$638 million, but it went up to US$3.01 billion by 2009. 

    The implications for Colombian citizens living within resource extraction zones have been profound and violent: large-scale land grabs and megaprojects have entailed the forced displacement of millions of rural people. In addition to violence and human rights violations, displaced persons have lost more than seven million hectares of property.”

    Link to the text.

    +  “These positive trends for Colombia’s oil sector have occurred during periods of intensifying civil war violence in Colombia.” David Maher on political violence and Foreign Direct Investment in Colombia’s petroleum industry. Link. And a 2017 article by Bruce M. Bagley and Jonathan D. Rosen examines energy security and environmental sustainability. Link. 

    +  “The Colombian government provided at least 5,610 billion pesos (around USD 1.7 billion) in subsidies to fossil fuel production and consumption in 2019, with around 60% of these directed to petroleum.” A 2022 report by Angela Picciariello, Adriana Quevedo, and Ipek Gençsü. Link. 

    +  Stefano Tijerina looks at oil extraction in Colombia from 1918 to 1938, focusing on the Canadian subsidiary Tropical Oil. Link. 

    NEW RESEARCHERS

    Race and the US Housing Market

    BRIAN HIGGINS is a PhD candidate in economics at Stanford University. In a recent paper, he studies long-term trends in racial segmentation in the US housing market.

    From the paper: 

    “This paper quantifies the welfare consequences of racial segmentation in the housing market from 1960 to 2019. Using microdata on housing choices—what house to rent, what house to buy, and whether to buy or rent—I document large differences between Black and White households. I estimate a dynamic equilibrium model of the housing market, allowing for market segmentation by race, and use the model to map the differences in housing choices into differences in economic welfare. The main finding of the paper is that Black households pay higher quality-adjusted rents and prices, especially at higher qualities, which cause them to sort into lower quality homes. Relative to an integrated market, where Black and White households face the same rents and prices, the average Black household in 1960 is five percent worse off in terms of lifetime consumption equivalent welfare. The average White household is slightly better off (one half of a percent). Between 1960 and 2019, the welfare gaps have narrowed by four–fifths.”

    Link to the text, link to Higgins’s website.  

    + + +

    +   “In the opaque, patrimonial, and bureaucratic Georgian state, the dollar was used as a primary means of payment—serving the interests of rent-seeking political, economic, and financial elites.” New on PW, Ia Eradze on dollarization in Georgia. Link. 

    +   “Electrification, automation, and digitalization are together likely to increase efficiency and reduce costs of road freight. This is in many ways a positive development but could have unintended consequences.” A new report from the Stockholm Environment Institute on the transformation in road freight. Link. 

    +   Jayati Ghosh, Naomi Hossain, Ahilan Kadirgamar, Farooq Tariq, and Chamila Thushari discuss debt restructuring processes in Bangladesh, Pakistan, and Sri Lanka. Link. 

    +   Eliot Chen appraises the future prospects of Chinese chipmaking giant Hua Hong Semiconductor. Link.

    +   “By impeding the government from extending special financing arrangements to other firms in the area, sanctions precluded the adoption of policy decisions that could have stabilized production at pre-sanctions levels.” A look at US sanctions on Venezuelan oil, by Francisco Rodrí­guez. Link. 

    +   A new report from the Fiscal Policy Report suggests that housing costs, rather than taxes, are driving migration out of New York City. Link.

    +   Daniel K. Fetter, Lee M. Lockwood, and Paul Mohnen on the long-run intergenerational effects of social security. Link. 

    +   “In this article, I explore the conflicting beliefs of two groups of fashion professionals during the interwar years: one group held that fashion design should be protected, while the other maintained that everyone should have access to fashion designs and be allowed to copy them. In France, the creation of a system protective of fashion designs was founded on the principle that fashion was a branch of high art, whereas, in the U.S., fashion was perceived in functional terms, and thus its designs were not protected. Under French law, fashion creators were held in the same high regard reserved for artists, while American law assigned them a lower status.” By Véronique Pouillard. Link. 

  5. Camelid in the City

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    PENSION REFORM

    Last week, over a million people in France marched in protest of President Macron’s planned pension reforms. The reforms would raise the retirement age and require workers to contribute a minimum of 43 years in social security payments in order to qualify for a full state pension. 

    In a 2013 chapter, JEAN-PAUL RÉVAUGER charts the long history of French pension reform, showing how successive administrations scaled back benefits by citing budgetary constraints and demographic trends.

    From the chapter:

    “The Fillon plan tried to embark on an exercise in social engineering by encouraging people to postpone retirement. Workers who, at age 60, left before they had accomplished 40 working years because they had started working after the age of 20 would see their pension reduced by 5 per cent per year, and those who exceeded 40 years would obtain an extra 3 per cent. In fact, the impact of this was extremely limited, since unemployment remained high. 

    However, in official discourse, the notion of individual choice came to replace that of ‘intergenerational solidarity.’ The principle of solidarity was the cornerstone of the system created after the war: the contributions of working people would not be saved or invested, but used in order to pay for the pensions of older workers. The ideological climate of the twenty-first century was under the influence of the Atlantic neoliberal winds. The idea that individuals should choose for themselves whether they decided to postpone their retirement age, with the promise of a higher pension, or retire as soon as they could, with a more modest one, was given wide credence. In practice, the notion of choice is certainly a contemporary notion in keeping with dominant individualism, but the degree of real choice enjoyed by people was very limited. Not being in employment after the age of 55 is not necessarily the outcome of a choice. The relative demise of ‘intergenerational solidarity’ was to a certain extent due to the extremely precarious situation new entrants in the market found themselves in.”

    Link to the text.

    +  “More generally, beyond the question of life expectancy, the old idea according to which the retirement system is only there to perpetuate into advanced old age the inequalities of working life does seem to me today to be outdated.” A 2019 article by Thomas Piketty. Link. 

    +  “Since 1993, the strategy has remained the same: first, the reform hits the pensions of private sector employees, that are less unionized than are public employees; then, after some years, new legislation is proposed to align the treatment of the public employees with the others.” Matthieu Montalban on the political economy of France’s pension reforms. Link. 

    +  Sarah Le Duigou, Bérangère Legendre, and Mareva Sabatier examine the effects of the 2003 French pension reforms on older workers. Link. And Carole Bonnet, Sophie Buffeteau, and Pascal Godefroy look at pension reforms and gender inequality. Link. 

    NEW RESEARCHER

    Private Prisons & Recidivism

    GRACE PHILLIPS is a PhD candidate in economics at Cornell University. In a recent paper, she links private prisons to increased recidivism rates.

    From the paper: 

    “I find that private prison openings have increased recidivism among states that open private prisons in the last 19 years. This effect grows over time. Six to nine years after a private prison opens, 1-year recidivism rates are 8.6 percentage points larger than if a state had not opened a private prison. Interestingly, the increased recidivism is not driven by a change in crime; it appears that the rise in prison admissions are increasingly the result of parole or probation violations. These results suggest that private prisons systematically change state prison systems, making individuals less able to meet their parole or probation requirements. As more people ‘churn’ through the criminal justice system and recidivate more frequently, the long-run cost to states increases.”

    Link to the text, link to Phillips’s website.  

    + + +

    +   “Far from painting a picture of worker empowerment, the data shows that ‘The Great Resignation,’ both in China and the US, has particularly affected women working in lower-salaried jobs.” New on PW, Aida Hozić and Xiao Sun investigate the gender and class dynamics of “The Great Resignation.” Link. 

    +   “In NATO’s new climate framework, the energy transition has been co-opted into an imperial project.” New on the Polycrisis, Mona Ali on the militarization of the climate agenda. Link. 

    +   Gishan Dissanaike, Ranadeva Jayasekera, and Geoff Meeks unpack the relationship between General Electrics and the US airline industry. Link. 

    +   A new report from the Climate and Community Project shows how the US can achieve zero-emissions transportation while limiting the amount of lithium mining. Link.

    +   “The post-disaster market might select for wealthier buyers as they have a greater ability to both absorb the price increase and any ensuing insurance cost increases.” Joshua Graff Zivin, Yanjun Liao, and Yann Panassié on hurricanes and gentrification in Florida. Link. 

    +  “Can Serbia survive EU’s economic ultimatum?” By Branko Milanovic. Link.

    +   A report from the New Economics Foundation argues that the UK government needs to spend 50 billion pounds more that it does at present per year to adequately fund the country’s care system. Link. 

    +   Amy Janzwood, Kate J. Neville, and Sarah J. Martin on the assetization of Canada’s oil pipelines. Link. 

    +   “Adhikari’s translation of The Communist Manifesto must be seen in the context of the long history of the making of a Marathi literary sphere in colonial western India. When Adhikari and his colleagues in the Meerut jail translated the Manifesto, they had to navigate the structures of language and a social structure in which caste was an important feature to make the Jahirnama comprehensible to other intellectuals, trade union leaders and workers. It was in this process that the strategy of obscuring caste subjectivities and creating a new identity of class found its greatest success and also its ultimate failure. The paradoxical outcome of the vernacularisation of the Manifesto can be gauged by considering the Jahirnama’s strategies of denoting categories of people in the city of Mumbai such as kamgaar, Mavali and dalit. These categories may have seemed natural to the publisher and their readers but they had no fixed referents and their meanings were contested at the time Adhikari was translating the Manifesto and continue to be contested today.” By Juned Shaikh. Link. 

  6. Z’s Table

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    INDIAN INEQUALITY

    Oxfam India’s latest report revealed that 84 percent of the country suffered a decline in wealth in 2022, even as the number of billionaires grew from 102 to 142. The report notes reduced state investment in public education and healthcare, along with an increased reliance on indirect rather than corporate taxes to raise revenue. 

    In their 2013 book, JEAN DRÈZE and AMARTYA SEN analyze the aftermath of the liberalization of India’s economy in the early-1990s, arguing that even as the country recorded major growth, it had fallen behind in living standards. 

    From the book:

    “Contrary to the increasingly used rhetoric which suggests that India is well on its way to becoming an economic ‘superpower’, this is far from the real picture, even in terms of per capita income. In fact, despite rapid economic expansion in recent years, India remains one of the poorest countries among those outside sub-Saharan Africa. According to the World Bank, only 15 countries outside sub-Saharan Africa had a ‘gross national income per capita’ lower than India’s in 2011: Afghanistan, Bangladesh, Burma, Cambodia, Haiti, Kyrgyzstan, Laos, Moldova, Nepal, Pakistan, Papua New Guinea, Tajikistan, Uzbekistan, Vietnam and Yemen. India does indeed have a large gap in world living standards to overcome, as was discussed in the last chapter. What is disturbing, given the past, is not India’s comparatively low position in terms of income per head among the countries in the world outside sub- Saharan Africa, but how badly India does in terms of non-income features of living standards even within this group of poorest non-African countries.”

    Link to the text.

    +  “Liberalization and high growth in India drove inequality upwards after the 1980s, due to the pattern of private investment, the less interventionist state and a rather flexible labour market.” A 2018 article by Gerry Rodgers. Link. And Sripad Motiram and Karthikeya Naraparaju study why economic growth in India has not been inclusive. Link. 

    +  “The inability or unwillingness to to collect taxes from large corporations and rich individuals has several adverse consequences.” C.P. Chandrasekhar and Jayati Ghosh on India’s corporate tax laws. Link. 

    +  “The picture that emerges is one of comprehensive and persistent disadvantage for the scheduled caste and scheduled tribe groups in contemporary India.” Vamsi Vakulabharanam and Ajit Zacharias on wealth inequality and caste divisions. Link.

    NEW RESEARCHER

    Latrine Construction & Water Quality

    KAZUKI MOTOHASHI is a PhD candidate in the Economics and Public Policy at Tufts University. In a recent paper, he examines the negative externalities of latrine construction on water quality and health in India.

    From the abstract: 

    “Developing countries have increased sanitation investment to reduce diarrheal diseases. However, the direct health benefits of latrine construction can be offset by water pollution and negative health effects due to poor treatment of fecal sludge. I estimate these negative externalities of a sanitation policy in India that subsidized the construction of over 100 million latrines. Exploiting geographical variation in soil characteristics and the differential increase in latrine coverage across districts, I find that the policy increases river pollution by 72%. While it reduces diarrheal mortality overall, this positive health effect is two-thirds smaller in areas with lower capacities for treatment of fecal sludge where water pollution externalities are consequently larger.”

    Link to the text, link to Motohashi’s website.  

    + + +

    +   “Central banks cannot have it both ways: they cannot equally fight both inflationary and recessionary forces if they are to preserve institutional expectations.” New on PW, Manuela Moschella on the Fed, the ECB, and the limits of reputation. Link. 

    +   “The first Bush administration continued to link export controls to non-proliferation and proceeded to strengthen trade ties with the PRC, prioritizing American high-tech firms in the wake of the Tiananmen massacre.” Also new on PW, Ella Coon reviews Daniels and Krige’s Knowledge Regulation and National Security in Postwar America. Link. 

    +   The International Energy Agency’s new report on the global manufacturing of clean energy technologies. Link. 

    +   Matthew A. Kraft, Megan Lane Conklin, and Grace T. Falken examine the labor supply decisions of of substitute teachers in Chicago public schools. Link.

    +   “The decade-long, House Republican-driven budget cuts have created dysfunction at the IRS, where relatively few millionaires are now audited.” By Chuck Marr. Link. 

    +   Four ways the Biden Administration can ensure offshore wind development benefits tribes and indigenous people. Link.

    +  “We show that the case law on the legality of bond purchases by Eurosystem central banks is partly based on the economic theory of monetarism.” From our friends at Dezernat Zukunft. Link to the paper, and link to a thread by co-author Philipp Orphal. 

    +   “The Federal Reserve is consistent in its view that low interest rates (and by extension, economic expansion and lower unemployment) is contingent on the radical post-1970s ‘decline in workers bargaining power.’ ” PW contributing editor Tim Barker shares a 1996 memo from Janet Yellen. Link. 

    +   “Local authorities, both as landowners and planning authorities, have the opportunity to sidestep the private property trap.” Kate Swade on rural regeneration in the UK. Link. 

    +   “This article examines banditry, embezzlement, and other insider crimes along Egyptian railway lines during a period when British officials exerted centralized control over the Egyptian railway and financial austerity had a negative impact on the rail sector. By exploring the motives and tactics of railway crimes, I posit that criminals, by making claims on and use of the technology outside the purview of state regulations, expressed their heterogeneous desires to redistribute social wealth, repurpose the technological promise of modern railways, and confound intentions of colonial governance.” By Xiaoyue Li. Link. 

  7. Landscape with a Boat

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    GHANA TRADES UNION CONGRESS

    This week, Ghana’s government reached an agreement to raise public sector salaries by 30 percent in response to rapidly rising inflation, now at 54 percent. In addition to demanding wage increases, the Ghana Trades Union Congress (GTUC)—the nation’s largest labor organization—has rejected certain austerity measures proposed by the government, which is seeking a $3 billion IMF loan.

    In a 2017 article, NAABORKO SACKEYFIO-LENOCH examines the GTUC after independence, focusing on the union’s international labor alliances from 1957 to 1971. 

    From the article:


    “At the beginning of 1957, Ghanaian trade unions, like many African trade unions, embraced a global perspective on worker issues even within the context of the nationalist struggles. Within less than two years, however, that viewpoint had been replaced by an inward-looking perspective that focused on developing an African labor movement on African terms and separate from the international labor movement. Because the Nkrumah government and the GTUC advocated the Pan-African trade union model, they had not explored the issue of how such a union would be financed and instead had focused on issues related to international affiliation. The Pan-African and nationalist framework intersected with the question of financing imperatives such that national and continental efforts superseded GTUC’s endeavors to work with European or American groups at this pivotal moment.

    In spite of ongoing ideological divisions among African trade unions related to the issue of international affiliation, union leaders continued to seek and international organizations continued to provide development assistance. Trade unions across the continent invariably were identified with one or the other of the competing Cold War blocs. Despite some African countries’ refusal to affiliate with international entities, the underlying competition between the ICFTU and the International Federation of Christian Trade Unions, which represented the West, and the WFTU, representing the Eastern bloc, meant that all three groups continued to provide financial support that enabled delegations, study groups, and technical advisers to travel to and from Africa. African labor unions’ need for external assistance to develop their programs contributed to this contested landscape.”

    Link to the text.

    +  “Trade union discord ‘produced perhaps the angriest of all divisions on the Pan-African front.'” A 1986 article by Tiyambe Zeleza. Link. And Opoku Agyeman examines the All-African Trade Union Federation. Link. 

    +  “Ghana stands out as an inflation-targeting country where inflation has been persistently some way above the target.” Michael Bleaney, Atsuyoshi Morozumi, and Zakari Mumuni on Ghana’s monetary policy since 2007. Link. And from 1991, Jon Kraus on the GTUC’s opposition to IMF and World Bank-supported structural adjustment policies. Link. 

    +  “The unionization of drivers reflected the culmination of nearly three decades of African attempts to claim control of motor transportation from the colonial authorities.” Jennifer Hart on drivers’ unions in colonial Ghana. Link.

    NEW RESEARCHERS

    “Blacklisting” in the Soviet Union

    VITALIIA YAREMKO is a PhD candidate in the economics department at the University of California, Berkeley. In a recent paper, she examines the long-term consequences of “blacklisting,” a Soviet policy enforced in Ukraine during the 1932-33 famine.

    From the abstract: 

    “Under blacklisting, all village residents could be banned from trade and provision of crucial goods, prohibited from moving, and imposed harsh in-kind fines. Formally, the policy was meant to punish the communities underperforming in terms of state food procurement (similar to in-kind taxation) because local procurement shortfalls supposedly were a consequence of intentional, profit-seeking behavior. Using a weather-based instrument for the locality’s blacklisting status, I document that blacklisting significantly reduced the present-day nightlight intensity (a proxy measure for economic development). Additional evidence points to entrepreneurship and trust as channels for this effect. My results support the notion that policies that suppress economic freedoms and disrupt social structure can have persistent negative effects on economic performance.”

    Link to the text, link to Yaremko’s website.  

    + + +

    +   We’re thrilled to announce a publishing collaboration with the University of Chicago Press: Phenomenal World Books, a new book series on political economy and the social sciences. The series’s editorial board is Mehrsa Baradaran, Melinda Cooper, Daniela Gabor, Destin Jenkins, Ndongo Samba Sylla, and Adam Tooze. Read the full announcement here.  

    +   “Germany has lower emissions in part because the US imports them.” New from The Polycrisis, Daniel Driscoll on dollar hegemony and the green transition. Link. 

    +   “A key finding in our paper is the fundamental importance of fossil-fuel dependence. Trying to overcome this dependence underscores the challenges for monetary stability.” Also new in The Polycrisis, Kate Mackenzie interviews Isabella Weber on inflation and the energy sector. Link. 

    +   A new podcast hosted by Matt Klein and Michael Pettis, co-authors of Trade Wars Are Class Wars, examines the global financial system. Link. And see Adam Tooze’s PW interview with Klein and Pettis. Link.

    +   Samuel Dodini, Michael F. Lovenheim, Kjell G. Salvanes, and Alexander Willén on overestimates of monopsony power in the labor market. Link.

    +   “Solar geoengineering—that is, shooting aerosol particles into the stratosphere to block some of the incoming sunlight and thereby cool the Earth—sits in the back of the consciousness of climate politics.” By Andreas Malm. Link. 

    +   Labor Market Strength Is No Justification for a Recession. By Justin Bloesch and Mike Konczal. Link.

    +   An interactive database from Common Wealth shows which companies—including ExxonMobil and Royal Dutch Shell—own oil and gas licenses in the North Sea. Link. 

    +   “What we hope to find out in the coming months is the pace of labor income growth that is sufficient for bringing inflation down to more desirable rates.” Employ America’s new project estimates the labor market and inflation outcomes the Fed should aim for. Link. 

    +   “Service was associated, first, with small to medium sized farms. On these ‘family’ farms, farmers faced the acute problem of balancing family needs and family labor over the developmental cycle of the family. Servants were hired to fill the economic role of missing adolescent children (as they were also hired to replace dead husbands and wives). Smaller farmers found it simple to integrate their small hired labor force into their families. Farm service was associated, next, with the keeping of livestock. Animals required constant care, and servants hired for the year and resident on the farm were ideally suited to these tasks. Discontinuous and seasonal tasks, on the other hand, were those to which laborers hired for the day, week, or task were better suited. The presence of commons and wastes, and of rural by-employment, enhanced the demand for servants by depressing the supply of full-time adult laborers.” By Ann S. Kussmaul. Link. 

  8. More Light Research

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    STRIKE BAN

    In response to escalating industrial unrest, UK Prime Minister Rishi Sunak’s newly proposed anti-strike legislation threatens to impose “minimum service levels” in key public sectors. The laws constitute the latest in a longrunning history of state intervention in workplace disputes.

    In his 2007 book, CHRIS HOWELL examines British industrial relations policy from its earliest iterations in the 1890s. Challenging narratives of the non-interventionist British state, he argues that the UK government played a crucial role in the construction of regulatory mechanisms in three distinct periods.

    From the book:

    “The first system of industrial relations, which emerged in response to the decline of the staple industries that had powered Britain’s economic growth for much of the nineteenth century, was organized around industry bargaining between trade unions and employer associations. The institutions that made up this system limited competition, both between employers and workers, and between different employers in the same industry, creating a floor of terms and conditions of work and elaborating grievance procedures. These institutions began to collapse in the 1950s, when the British economy shifted to industries that more closely approximated Fordist forms of growth. The absence of institutions for managing economic change inside firms generated higher levels of industrial conflict, much of it uncontrolled by trade unions. The second system was thus organized around the creation of collective workplace institutions to permit the negotiation of economic change.

    The third system replaced collective regulation with individualized institutions that maximized the flexibility of employers in organizing work and managing their workforces. In the 1980s, the British state once again played a central role in the articulation and spread of this new set of industrial relations institutions. A slew of industrial relations legislation—six major acts of Parliament alone between 1980 and 1993—limited the capacity of trade unions to resist change and gave employers a free hand in restructuring their industrial relations, and action in the public sector served to demonstrate acceptable forms of industrial relations to private-sector employers.” 

    Link to the text.

    +  “Between 1865 and 1896, workers in both England and the United States began to demand state protection of the right to strike. Before this could be secured, the common law doctrine of criminal conspiracy had to be repealed.” Victoria Hattam’s 1992 article compares state structure and class formation in the US and UK. Link.

    +  A European Trade Union Institute report by Wiebke Warneck surveys strike legislation across 30 different states: “The right or freedom to take collective action is, in most countries, guaranteed in the constitution, exceptions being Austria, Belgium, Luxembourg, Malta, the Netherlands, Ireland and the UK.” Link.

    +  “The policy was remarkable not only for more extensive balloting and notice requirements that aim substantially to reduce industrial action, but also a shift to a more obviously economic justificatory orientation.” Tonia Novitz weighs the implications of the 2016 Trade Union Act. Link.

    NEW RESEARCHERS

    Ownership Structure and Development

    Assistant Professor in Business and Society at Queen Mary University ISADORA CRUXÊN studies market governance and sustainable development in the Global South. Her PhD dissertation examines the implications of varying ownership models for institutional development in Brazil’s water and sanitation sectors.

    From the abstract: 

    “I interrogate how variation in forms of business ownership and politics not only shape public-private collaboration for service delivery over time but also contribute to re-configuring the institutions that govern service provision markets in global South contexts. My work yields three central insights. First, it illuminates how shifts in business ownership away from family-owned construction business groups towards ownership by financial investors produced a “centralizing” organizational and institutional pull in the governance of private urban water and sanitation services. Second, it shows that private investors in Brazil’s water and sanitation sector were able to counter strong opposition and successfully lobby for a centralizing regulatory reform by constructing business power over time. Finally, by comparing long-term outcomes of different models of public-private collaboration, it shows that states can still shape service delivery priorities through the work of politically-appointed managers and state allies, what I call “political modulation.” This finding suggests politics can play a positive role in promoting more equitable service outcomes.”

    Link to the text, link to Cruxên’s website.  

    + + +

    +   “When the Apple iPhone launched in 2007, Nokia’s handset market collapsed, exports fell by half, Finland’s current account swung into deficit, and a decade plus of economic stagnation began.” New on Phenomenal World: Herman Mark Schwartz on Finland, Nokia, firm strategy, stagnation in small, rich economies, and Schumpertian growth waves. Link. (For more HM Schwartz, see his interview on this week’s RGK podcast with Robert Manduca and Nic Johnson. Link.)

    +   “I’m very skeptical that a few new plants here and there are going to reshape national politics.” Also new on the site, Justin Vassalo interviews historian Richard Bensel about the founding of the Republican Party, American developmentalism, and the Biden agenda. Link.

    +   “The Persistence of Original Sin.” A new paper by Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza assesses the enduring denomination of external debt in foreign currency in emerging market countries. Link.

    +   “Climate integration results from the combination and hybridisation of internal dynamics and external pressures.” A new paper by Jérôme Deyris studies development of climate consensus at the ECB. Link.

    +   “The new appetite for the visible hand of the state promises to expand developmental space for low- and middle-income countries. But developmental interventions also have a distinct new meaning, centered on fostering partnerships with private capital via de-risking.” Daniela Gabor and Ndongo Samba Sylla on green hydrogen projects and developmental sovereignty on the African continent. Link.

    +   “Going from the lowest dignity job to the highest dignity job is equivalent to a 20% increase in wages.” Arindrajit Dube, Suresh Naidu, and Adam Reich study jobs, quits, amenities, and dignity at Walmart. Link.

    +   “I use rice prices in three cities to analyze the efficiency of the marketing system and the institutional framework of Javanese agriculture, 1823–1853. I show that imperfections in rural capital markets caused the extreme fluctuations in rice prices and that the segmentation of the capital market modifies the McCloskey and Nash interpretation of the relationship between seasonal fluctuations of grain (or rice) prices and interest rates. I argue that these fluctuations proxy peasants’ stress. Finally, I hypothesize that institutional and market failures explain the “noneconomic” behavior of Javanese peasants in Boeke’s theory of dualistic economic development.” By Jan Luiten Van Zanden. Link.

  9. Harbor New York

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    A YEAR IN REVIEW

    Over the past year, Phenomenal World has inspired discussion across spheres of political economy, publishing on topics including the politics of debt and climate, the aftermath of the Russian invasion of Ukraine, inflation and its policy responses, and pivotal elections across continents. 

    If you’ve enjoyed reading this year, we ask that you share this letter with colleagues and friends, and encourage others to subscribe to PW Sources. We will be off until 2023. Until then, here is a roundup of some of our favorite essays, discussions, and newsletters from 2022. 

    Thank you for reading, and best wishes for the holiday season. 

    PHENOMENAL WORLD

    +  “The droughts have revealed a key paradox: hydropower was initially considered as a key renewable energy source for climate mitigation, but its own availability has been curtailed by already-present climatic changes.” New this week on PW, Imaduddin Ahmed on the troubled future of World Bank-funded hydropower in Zambia. Link. 

    +  This fall, Phenomenal World launched The Polycrisis, a new project on the political economy of climate led by Tim Sahay and Kate Mackenzie. The series kicked off with an event on “The Geopolitics of Stuff,” investigating supply chains, commodities, and climate. The project’s second event, “Money and the Climate Crisis,” discussed the main takeaways of COP27 and featured Mona Ali, Rishikesh Ram Bhandary, Anna Gelpern, Avinash Persaud, Brad Setser, and Adam Tooze. In the discussion, Gelpern comments: “‘Drowning in debt’ is a metaphor, drowning in water is not. It is critical to remember that debt is a social institution, a social construct, an accounting concept. The genuine lack of resources—be it for climate adaptation, loss and damage, hunger, war—is not a metaphor.” Link. 

    +  Amidst discussions around rising global inflation, we presented a series on the politics of the price level, co-edited by Andrew Yamakawa Elrod. The series has included contributions from Greg Brew on oil prices, Isabella Weber on wartime price controls, and an introductory essay by Yamakawa Elrod. From the introduction: “Until wages policies are coordinated with both the macroeconomic throttle and control of other incomes, the growth of a new labor movement will be vetoed by the public preference for recession over inflation…In the experience of the United States, only victory in war has supplied that vision.” Link. 

    +  Following the Russian invasion of Ukraine, Mona Ali questioned if the imposition of western sanctions on Russia precipitated the rise of a new monetary order: “Economic lawfare is part of this freshly weaponized landscape. Consider the global dollar system itself as a money-military matrix backed by legal armature. Its major capitals are New York and London.” Link. 

    +  In July, Melinda Cooper examined the relationship between monetary policy and inequality, reviewing Karen Petrou’s Engine of Inequality: “The Fed’s conviction that low-wage workers must be punished for over-exuberant demand is grotesque. But it is internally coherent.” Link. 

    +  Implicated in the green transition is the sourcing of critical minerals from around the globe. In his essay, Jewellord T. Nem Singh considers the extractive relations underpinning the EU’s critical raw materials strategy: “Reluctant to embrace mineral production in their own territories, European governments have leveraged the language of comparative advantage to place the responsibility of mineral production on the shoulders of poor, resource-rich countries.” Link. 

    PW SOURCES

    +  In March, public sector bank employees in India engaged in a nationwide strike against privatization proposals supported by the Modi administration. We spotlighted a 2005 article by Robin Burgess and Rohini Pande evaluating the expansion of the nation’s public banking sector: “Nationalization in 1969 brought the 14 largest commercial banks under the direct control of the Indian Central Bank. Following this, the Central Bank launched an ambitious branch expansion program, which sought both to expand the rural bank branch network and equalize individual access to banks across Indian states. Between 1961 and 2000, the number of branches opened in rural unbanked locations in our sample states increased from 105 to 29,109.” Link to the newsletter, link to the paper. 

    +  Amidst turbulent commodity markets, this spring saw the London Metal Exchange suspend nickel trading after a 250% price hike. Jack Seddon writes: “Since its inception in 1877, the LME has distinguished itself from futures markets in the United States through its physical-trade-orientated rather than finance-orientated membership and structure. Traditional members understood themselves to be ‘metals men,’ whose personal fortunes, and those of the market collective, depended on the success of the international metals trade. Yet, the growth in financial contracts traded on the exchange relative to underlying physical production has advanced in the three decades since banks and financial groups joined the market.” Link to the newsletter, link to Seddon’s article. 

    +  In August, the death of Mikhail Gorbachev prompted worldwide reflections on the leader’s legacy and the fall of the Soviet Union. We shared an excerpt from David Woodruff’s book on Russian statebuilding and its money markets after 1991: “Seven years after the fateful August that spelled the end of the Soviet Union, the project of refounding the state on a new money-driven market economy was very far from accomplished. Initially, barter retreated rapidly. The ruble had achieved universal purchasing power in Russia within months after price liberalization. But its power to command resources never became exclusive. New forms of barter began to spread in the first half of 1994, even as inflation dropped with tighter fiscal and monetary policy.” Link to the newsletter, link to the book. 

    +  In October, Exxon announced two new oil discoveries in Guyana, which, in addition to discoveries from earlier this year, have the potential to transform the nation into a major global oil producer. Arif Bulkan and Alissa Trotz examine the geopolitics of oil in the country: “Oil has placed Guyana firmly on the geopolitical map, given the size of the proven reserves and its long-running border dispute—which includes the offshore oil production sites—with Venezuela. That Guyana has become important for energy geopolitics was clearly signaled by the September 2020 arrival of US Secretary of State Mike Pompeo. The message was clear: Guyana is now expected to be a compliant junior partner not only in multinational-led extractivism, but also in regional geopolitical projects.” Link to the letter, link to the text. 

  10. The Fallen One

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    MERCOSUR

    This week’s Mercosur summit exposed rifts between the trade bloc’s four members—Argentina, Brazil, Uruguay, and Paraguay—with Uruguay stating the intention to form trade partnerships outside the bloc, and Argentina pushing for a renegotiation of the 2019 EU-Mercosur agreement.

    Established in 1991, the common market has faced various challenges in its efforts to promote integration while balancing the economic interests of member states. Reflecting on first decade of Mercosur in a 2001 paper, NICOLA PHILLIPS argues that bloc represents a “new regionalism.” From the article:

    “Subregionalism in the Mercosur has come to rest on a principle of policy coordination which implies, in the long-term, the articulation of a new form of market governance. This form of market governance rests in the first instance on a significant regionalisation of governance mechanisms. While this process does not imply the wholesale elimination of more ‘national’ forms of economic governance, progressively the trend is towards convergence upon a set of regionally coordinated policy norms and objectives and the location of market governance mechanisms at the subregional level. 

    Trends since the Brazilian devaluation have coalesced into a vision of the Mercosur as a platform for ‘autonomous economic development’ which is imbued with a range of strategic and developmental objectives. While the regional project remains conceptualised as a ‘market-making’ strategy, its nature and direction corresponds increasingly to a significantly more ‘heterodox’ project in which the Mercosur provides a space for the implementation of active developmental policies and in addition acquires strategic utility. As such, regionalism in the Mercosur of late appears to approximate closely Hettne’s notion of ‘developmental regionalism’ which is associated not with autarkic development strategies but rather with a selective and cautious approach to free trade and globalisation, and evolves in response to the needs among developing countries for—in varying degrees—the creation of economic size and political weight in external negotiations; the creation of a ‘viable economy’ in that ‘self-sufficiency’ is only feasible at the regional level; and the promotion of development, peace and security.” 

    Link to the text.

    +  “Regional integration then moved from open regionalism—with trade opening one of the pillars of the South American neoliberal integration project—to multidimensional regionalism based on economic and social development.” Tatiana Berringer on the evolution of Mercosur under PT governments in Brazil. Link.

    +  “Whereas, during the 1950s and 1960s, the prescription for regional integration tended to promote an inward-looking economic model, the emphasis today is on export-led growth.” From 1994, Luigi Manzetti on the establishment of Mercosur. Link. And Hector Alimonda and Bill Steiger on the role of domestic labor unions in early Mercosur negotiations. Link. 

    +  “The models estimate that the agreement will cause additional deforestation in Brazil ranging from 56-173,000 hectacres to accommodate increases in cropland area.” On the EU-Mercosur agreement. Link. And Detlef Nolte expands on the agreement’s tensions around climate diplomacy. Link. 

    NEW RESEARCHERS

    Chinese Financing & Electricity

    KEYI TANG is a PhD candidate at the Johns Hopkins School of Advanced International Studies. In a 2020 paper, she and co-author Yingjiao Shen examine the distributional effects of a Chinese-financed dam in Ghana. 

    From the abstract: 

    “China has become an increasingly important financier of energy infrastructure development in the Global South, especially hydropower projects. Using data from Johns Hopkins SAIS CARI China-Africa Loan Database and the Demographic and Health Survey (DHS) Program Database, we estimate the impacts of the China-financed Bui Dam in Ghana. We use two difference-in-differences models to identify change of the likelihood to have access to electricity, and to own several electric appliances among over 29,000 local households receiving electricity transmitted from Bui Dam. We found that after the Bui Dam’s completion, the likelihood for households living in the treatment regions having access to electricity increased by about 4 percent. However, our models also show that urban households witness a much higher increase in their ownership of various electric appliances, suggesting that the Bui Dam’s improvement of electrification may be predominant in the urban and rich households.”

    Link to the text, link to Tang’s website.  

    + + +

    +   “COP as a collective has finally realized that unless you reform the global financial architecture, you’re really not going to move the needle on climate and development.” New on the site, the transcript from The Polycrisis’s second event on climate ambition and global debt politics after COP27. Featuring Mona Ali, Anna Gelpern, Avinash Persaud, Rishikesh Ram Bhandary, Brad Setser, and Adam Tooze. Link. 

    +   “Castillo represents a dogmatic response to the Peruvian questions of nation, state, and civil society. In Peruvian history, political dogmatism has resorted to military dictatorships, languages of revolution, God, and the market.” From 2021, by Javier Puente. Link. 

    +   Christian Henderson and Rafeef Ziadah on the UAE’s role as a hub for agri-food trade in the Gulf region. Link. 

    +   “The International Energy Agency has raised its global forecast for renewables growth in what it calls its ‘largest ever upward revision’ for the sector.” By Josh Gabbatiss. Link. 

    +   Renee Tapp and Richard Peiser’s antitrust framework for analyzing the US rental housing market. Link. 

    +   Yaechan Lee and William Grimes examine the role of the South Korean National Pension Service in managing financial crises. Link. 

    +   “Iroquois maize farmers in the 17th and 18th centuries produced three to five times more grain per acre than wheat farmers in Europe. The higher productivity of Iroquois agriculture can be attributed to two factors. First, the absence of plows in the western hemisphere allowed Iroquois farmers to maintain high levels of soil organic matter, critical for grain yields. Second, maize has a higher yield potential than wheat because of its C4 photosynthetic pathway and lower protein content. However, tillage alone accounted for a significant portion of the yield advantage of the Iroquois farmers. When the Iroquois were removed from their territories at the end of the 18th century, US farmers occupied and plowed these lands. Within fifty years, maize yields in five counties of western New York dropped to less than thirty bushels per acre.” By Jane Mt. Pleasant. Link.