Research on the determinants of inequality has implicated globalization in the increased income inequality observed in many advanced capitalist countries since the 1970s. Meanwhile, a different form of international embeddedness—regional integration—has largely escaped attention. Regional integration, conceptualized as the construction of international economy and polity within negotiated regions, should matter for inequality. This paper offers theoretical arguments that distinguish globalization from regional integration, connects regional integration to inequality through multiple theoretical mechanisms, develops hypotheses on the relationship between regional integration and inequality, and reports fresh empirical evidence on the net effect of regional integration on inequality in Western Europe. Three classes of models are used in the analysis: (1) time-series models where region-year is the unit of analysis, (2) panel models where country-year is the unit of analysis, and (3) analysis of variance to identify how the between- and within-country components of income inequality have changed over time. The evidence suggests that regional integration remaps inequality in Europe. Regionalization is associated with both a decrease in between-country inequality, and an increase in within-country inequality. The analysis of variance shows that the net effect is negative, and that within-country inequality now comprises a larger proportion of total income inequality.
This paper is prepared for the conference on "Inequality Beyond Globalization: Economic Changes and the Dynamics of Inequality," sponsored by the World Society Foundation and the Research Committee on Economy and Society of the International Sociological Association (RC-02), and convened in Neuchatel, Switzerland, June 2008. Please direct comments to Jason Beckfield.Download PDF
Unlike China, India doesn't have a clear vision for its role in the world.For three decades, India has craved a nuclear energy deal that would bring prestige and advanced technology. Yet when the coalition government declared this week that it would move ahead with one, it triggered a crisis and a no-confidence motion in Parliament, which it had to scramble to survive.Watching this drama unfold, the international community may be forgiven for feeling a little baffled. After all, the landmark Indo-US nuclear deal is immensely advantageous for India. It allows India to buy nuclear technology from the US in exchange for abiding by International Atomic Energy Agency safeguards. It would give India's growing economy much-needed energy without endangering its strategic capabilities or influencing its sovereignty in foreign policy.To understand the political anguish and hand-wringing in India over a nuclear deal with the US, one needs to understand a very simple fact. Unlike China, its rival rising power, India lacks a grand strategy or concept of its role in the world. India thinks it should be a great power but has no clear vision of its path. In contrast, China thinks it is a great power and expends a great deal of time and energy outlining its "peaceful rise" to itself and the world.China's rise on the world stage is constantly discussed by Chinese academics, journalists, policy experts, political leaders, and the elite. This discourse emphasizes that despite China's growing power and the need for resources and markets, it will not pursue militarization and hegemony as Germany and Japan did before and during World War II.Rather, it intends to rise peacefully and harmoniously. Simultaneously, this idea draws on the concept of tianxia ("all under heaven") which, simply put, promotes order over chaos and has been key to understanding governance in China for the past 2,000 years. With defined ideas of the world and their role in the world, China acts like a confident great power and pursues its international goals with single-minded zeal.The last time India had a defined concept of its international role, Jawaharlal Nehru was the prime minister. Nehru made some notable foreign policy mistakes, particularly his disastrous Forward Policy that resulted in the 1962 war and bitter defeat at the hands of China.But there is no doubt the man was a visionary. Designed by Nehru, the Non-aligned Movement (NAM) was a domestic and international triumph for India. It was poor, struggling to develop economically and militarily, but there was a sense of purpose and national pride that it had, at least, cornered the moral market in international relations and assumed the leadership of the developing nations.Post Nehru and post cold war, India failed to adapt or abandon NAM, even when it had little significance. Nor, unlike China after Mao, did any Indian leader articulate an alternate ideology of the world and India's role in it.It is, therefore, not surprising that such bitter ideological divisions now exist in India. What is the way forward for India as a would-be great power? Does signing a nuclear deal with the US make its old antagonist its new BFF? Does it mean that even paying lip service to the long-obsolete idea of NAM is no longer possible? Or does great power mean, as the communists suggest, proudly rejecting the nuclear deal and thereby showing the international community who's boss?Even as the nuclear deal steams ahead, unless India articulates a vision for itself and gains the confidence of a great power, such splits will continue to plague its international relationships and negotiations.Manjari Chatterjee Miller is a post-doctoral fellow at the Woodrow Wilson School at Princeton University and an affiliate of the Weatherhead Center for International Affairs at Harvard University. She is working on a book about Indian and Chinese foreign policy.
Does landholding inequality block democratization? This classic
question in the study of political regimes concerned Alexis de Tocqueville,
Max Weber, and Alexander Gerschenkron. It is also a question
that has recently attracted the attention of leading “new structural”
political economists interested in the sources of regime change. Echoing
Gerschenkron’s evocatively titled Bread and Democracy in Germany, these scholars have returned to the question of how preindustrial patterns
of inequality—namely, landholding inequality—might exert an
enduring and underappreciated effect on the chances for democratic
transitions.3 The new literature utilizes the most advanced tools of political
economy to examine historical and contemporary cases of democratization,
generating competing accounts of how the preexisting
distribution and mobility of economic resources affect regime change.
This book explains how postwar Japan managed to achieve a highly egalitarian form of capitalism despite meager social spending. Estévez-Abe develops an institutional, rational-choice model to solve this puzzle. She shows how Japan’s electoral system generated incentives that led political actors to protect, if only for their own self-interested reasons, various groups that lost out in market competition. She explains how Japan’s postwar welfare state relied upon various alternatives to orthodox social spending programs. The initial postwar success of Japan’s political economy has given way to periods of crisis and reform. This book follows this story up to the present day. Estévez-Abe shows how the current electoral system renders obsolete the old form of social protection. She argues that institutionally Japan now resembles Britain and predicts that Japan’s welfare system will also come to resemble Britain’s. Japan thus faces a more market-oriented society and less equality.
The goals and concerns surrounding the debate over government policies related to the greater use and production of biofuels were addressed in an executive session convened by the John F. Kennedy School of Government at Harvard University and the Venice International University on May 19-20, 2008. The session attracted more than 25 of the world's leading experts from the fields of policy, science, and business to San servolo Island for an intensive two day session (see Appendix A for a list of the participants). The discussions were off-the-record, with each participant present in his or her own capacity, rather than representing an organization. The session was one in a series on Grand Challenges of the Sustainability Transition organized by the Sustainability Science Program at Harvard University with the generous support of the Italian Ministry for Environment, Land, and Sea. This particular session was held as part of the Ministry's ongoing work with the Global Bioenergy Program established at the G8 Gleneagles Summit in 2005. This summary report of the session is our synthesis of the main points and arguments that emerged from the discussions. It does not represent a consensus document, since no effort was made at the Session to arrive at a a single consensus view. Rather, we report here on what we heard to be the major themes discussed at the session. Any errors or misrepresentations remain solely our responsibility.
Also CID Working Paper No. 174 and BCSIA Working Paper, July 2008.Download PDF
Over the past two decades, no two economies have averaged more rapid economic growth than China and Vietnam.
But while China's income inequality has risen rapidly over that same time frame, Vietnam's has only grown
moderately. Structural and socio-cultural determinants fail to account for these divergent pathways. Existing political
variables are also unhelpful. China and Vietnam are coded in exactly the same way, even in the path-breaking work
on authoritarian regimes. In this paper, we take a deeper look at political institutions in the two countries,
demonstrating that profound differences between the polities directly impact distributional choices. In particular, we
find that Vietnamese elite institutions require construction of broader coalitions of policymakers, place more
constraints on executive decision making, and have more competitive selection processes. As a result, there are
stronger political motivations for Vietnamese leaders to provide equalizing transfers that limit inequality growth.
Also Harvard Business School Working Paper No. 08-099.Download PDF
The poor and disadvantaged are widely seen as having weak organizations and low rates of participation in community
associations, impeding their political representation and economic advancement. Many policy initiatives aim to build civic
participation among the disadvantaged by funding local community associations. Taking advantage of random assignment
in a program supporting women’s community associations in Kenya, we find little evidence that outside funding expanded
organizational strength, but substantial evidence that funding changed group membership and leadership, weakening the
role of the disadvantaged. The program led younger, more educated, and better-off women to enter the groups.New entrants,
men, and more educated women assumed leadership positions. The departure of older women, the most socially marginalized
demographic group, increased substantially. The results are generalized through a formal model showing how democratic
decision making by existing members of community associations can generate long-run outcomes in which the poor and
disadvantaged either do not belong to any associations or belong to weak organizations.
The recent presidential election in Kenya has declined into a bloodbath with the deaths of more than 300 people, jeopardizing the nation and the stability and democracy in East Africa as a whole. Both the government and the opposition must authorize and support an independently directed recount of votes and begin a process of national reconciliation.The election, the most competitive in the country's history, began peacefully on Dec. 27. The Commonwealth Observer Group commended the Election Commission of Kenya for its professionalism. Early returns on Dec. 29 gave opposition leader Raila Odinga a lead of nearly a million votes. Vote counting was stopped by the election commission that day with 189 of 210 constituencies reporting. On Dec. 30, the election commission announced that in a mysterious overnight switch incumbent Mwai Kibaki had won by 231,728 votes.European Union observers have condemned the delay in releasing the final presidential result. In addition they have noted that there were irregularities in ballot numbers, and that the presidential election results are not credible. Further, at least four election commissioners have since come forth and asked for a full investigation into vote tampering. There is credible evidence that the elections were rigged.The current electoral violence in Kenya has historical roots. Kibaki was elected on a multiparty, multiethnic democratic ticket in 2002 promising to “sweep away” corruption and one-party rule. He presided over a renewal of the once moribund economy: Kenya grew 6.1 percent in 2006. Under Kibaki, the press became freer, and civil society flourished. Bill Clinton praised Kibaki for introducing free primary education throughout the country.Yet, Kibaki reneged early in his administration on a memorandum of understanding with the Liberal Democratic Party regarding governmental power sharing. Although the Kenyan economy grew at a rapid pace, so did economic inequality, resulting in a concentration of wealth in a small oligarchical elite, while most Kenyans earn less than $1 a day.Senior members of Kibaki's government resigned under a cloud of corruption and his anticorruption czar went into exile in fear for his life. In a sharp turnaround from his 2002 entry as a democratic reformer, Kibaki has behaved like an autocrat in the days after the election, muzzling live broadcasts by the private media, banning opposition protests, and allowing the police to fire live ammunition upon unarmed civilians.For the sake of the nation and the region, Kenya must move forward to a peaceful democratic transition. Kibaki should immediately unmuzzle the press, and allow the opposition to assemble peacefully in public. Church leaders, civil society, and international observers must urge the police to stop firing on innocent civilians. As urged by Nobel Peace Prize laureate Wangari Maathai, an independent recount of contested ballots is required. The African Union, the United Nations, and the Commonwealth Group should rapidly assist in convening an independent body of Kenyans from all backgrounds to conduct the recount.African figures with unassailable democratic credentials, such as Desmond Tutu of South Africa and John Kufuor of Ghana should work with all Kenyan political parties to form an interim unity government that can rule in a transition period. Crucially, Odinga, Kalonzo Musyoka, and other Kenyan leaders must help lower temperatures by tempering inflammatory rhetoric, participating in good faith in negotiations, and urging those who claim to be supporters of Odinga's Orange Democratic Movement to halt politically motivated violence. Finally, credible new elections for the position of president must be scheduled in the next six months.The violence we are seeing in Kenya is not ethnic or tribal; it is political and has deep roots in social and economic inequities that have deepened continuously since independence. For hundreds of years, 42 ethnic and linguistic groups have lived peacefully together in Kenya, with high rates of intermarriage, trade, and in-migration. This violence obscures deep social inequities in economic distribution that cross ethnic lines among all groups.For 40 years, Kenya has been as a haven for refugees and a broker for peace settlements, avoiding the type of wrenching violence that has torn neighbors Sudan, Rwanda, and Somalia apart while earning a reputation as the most democratic nation in the region. Without immediate efforts toward national reconciliation, and a recount of disputed ballots, Kenya risks descent into autocracy and civil war.Warigia Bowman is graduate student associate at the Weatherhead Center and a doctoral candidate at the John F. Kennedy School of Government, Harvard University.
U.S. presidential candidates aren't doing the Jewish state any favors by offering unconditional support.Once again, as the presidential campaign season gets underway, the leading candidates are going to enormous lengths to demonstrate their devotion to the state of Israel and their steadfast commitment to its "special relationship" with the United States.Each of the main contenders emphatically favors giving Israel extraordinary material and diplomatic support—continuing the more than $3 billion in foreign aid each year to a country whose per capita income is now 29th in the world. They also believe that this aid should be given unconditionally. None of them criticizes Israel's conduct, even when its actions threaten U.S. interests, are at odds with American values or even when they are harmful to Israel itself. In short, the candidates believe that the U.S. should support Israel no matter what it does.
Such pandering is hardly surprising, because contenders for high office routinely court special interest groups, and Israel's staunchest supporters—the Israel lobby, as we have termed it—expect it. Politicians do not want to offend Jewish Americans or "Christian Zionists," two groups that are deeply engaged in the political process. Candidates fear, with some justification, that even well-intentioned criticism of Israel's policies may lead these groups to turn against them and back their opponents instead.If this happened, trouble would arise on many fronts. Israel's friends in the media would take aim at the candidate, and campaign contributions from pro-Israel individuals and political action committees would go elsewhere. Moreover, most Jewish voters live in states with many electoral votes, which increases their weight in close elections (remember Florida in 2000?), and a candidate seen as insufficiently committed to Israel would lose some of their support. And no Republican would want to alienate the pro-Israel subset of the Christian evangelical movement, which is a significant part of the GOP base.Indeed, even suggesting that the U.S. adopt a more impartial stance toward the Israeli-Palestinian conflict can get a candidate into serious trouble. When Howard Dean proposed during the 2004 campaign that the United States take a more "evenhanded" role in the peace process, he was severely criticized by prominent Democrats, and a rival for the nomination, Sen. Joe Lieberman, accused him of "selling Israel down the river" and said Dean's comments were "irresponsible."Word quickly spread in the American Jewish community that Dean was hostile to Israel, even though his campaign co-chair was a former president of the American Israel Public Affairs Committee and Dean had been strongly pro-Israel throughout his career. The candidates in the 2008 election surely want to avoid Dean's fate, so they are all trying to prove that they are Israel's best friend.These candidates, however, are no friends of Israel. They are facilitating its pursuit of self-destructive policies that no true friend would favor.The key issue here is the future of Gaza and the West Bank, which Israel conquered in 1967 and still controls. Israel faces a stark choice regarding these territories, which are home to roughly 3.8 million Palestinians. It can opt for a two-state solution, turning over almost all of the West Bank and Gaza to the Palestinians and allowing them to create a viable state on those lands in return for a comprehensive peace agreement designed to allow Israel to live securely within its pre-1967 borders (with some minor modifications). Or it can retain control of the territories it occupies or surrounds, building more settlements and bypass roads and confining the Palestinians to a handful of impoverished enclaves in Gaza and the West Bank. Israel would control the borders around those enclaves and the air above them, thus severely restricting the Palestinians' freedom of movement.But if Israel chooses this second option, it will lead to an apartheid state. Prime Minister Ehud Olmert said as much when he recently proclaimed that if "the two-state solution collapses," Israel will "face a South African-style struggle." He went so far as to argue that "as soon as that happens, the state of Israel is finished." Similarly, Israel's deputy prime minister, Haim Ramon, said earlier this month that "the occupation is a threat to the existence of the state of Israel." Other Israelis, as well as Jimmy Carter and Anglican Archbishop Desmond Tutu, have warned that continuing the occupation will turn Israel into an apartheid state. Nevertheless, Israel continues to expand its settlements on the West Bank while the plight of the Palestinians worsens.Given this grim situation, one would expect the presidential candidates, who claim to care deeply about Israel, to be sounding the alarm and energetically championing a two-state solution. One would expect them to have encouraged President Bush to put significant pressure on both the Israelis and the Palestinians at the recent Annapolis conference and to keep the pressure on when he visits the region this week. As Secretary of State Condoleezza Rice recently observed, settling this conflict is also in America's interest, not to mention the Palestinians'.One would certainly expect Hillary Clinton to be leading the charge here. After all, she wisely and bravely called for establishing a Palestinian state "that is on the same footing as other states" in 1998, when it was still politically incorrect to use the words "Palestinian state" openly. Moreover, her husband not only championed a two-state solution as president but he laid out the famous "Clinton parameters" in December 2000, which outline the only realistic deal for ending the conflict.But what is Clinton saying now that she is a candidate? She said hardly anything about pushing the peace process forward at Annapolis, and remained silent when Rice criticized Israel's subsequent announcement that it planned to build more than 300 new housing units in East Jerusalem. More important, both she and GOP aspirant Rudy Giuliani recently proclaimed that Jerusalem must remain undivided, a position that is at odds with the Clinton parameters and virtually guarantees that there will be no Palestinian state.Sen. Clinton's behavior is hardly unusual among the candidates for president. Barack Obama, who expressed some sympathy for the Palestinians before he set his sights on the White House, now has little to say about their plight, and he too said little about what should have been done at Annapolis to facilitate peace. The other major contenders are ardent in their declarations of support for Israel, and none of them apparently sees a two-state solution as so urgent that they should press both sides to reach an agreement. As Zbigniew Brzezinski, a former U.S. national security advisor and now a senior advisor to Obama, noted, "The presidential candidates don't see any payoff in addressing the Israel-Palestinian issue." But they do see a significant political payoff in backing Israel to the hilt, even when it is pursuing a policy —colonizing the West Bank—that is morally and strategically bankrupt.
In short, the presidential candidates are no friends of Israel. They are like most U.S. politicians, who reflexively mouth pro-Israel platitudes while continuing to endorse and subsidize policies that are in fact harmful to the Jewish state. A genuine friend would tell Israel that it was acting foolishly, and would do whatever he or she could to get Israel to change its misguided behavior. And that will require challenging the special interest groups whose hard-line views have been obstacles to peace for many years.As former Israeli Foreign Minister Shlomo Ben-Ami argued in 2006, the American presidents who have made the greatest contribution to peace—Carter and George H.W. Bush—succeeded because they were "ready to confront Israel head-on and overlook the sensibilities of her friends in America." If the Democratic and Republican contenders were true friends of Israel, they would be warning it about the danger of becoming an apartheid state, just as Carter did.Moreover, they would be calling for an end to the occupation and the creation of a viable Palestinian state. And they would be calling for the United States to act as an honest broker between Israel and the Palestinians so that Washington could pressure both sides to accept a solution based on the Clinton parameters. Implementing a final-status agreement will be difficult and take a number of years, but it is imperative that the two sides formally agree on the solution and then implement it in ways that protect each side.But Israel's false friends cannot say any of these things, or even discuss the issue honestly. Why? Because they fear that speaking the truth would incur the wrath of the hard-liners who dominate the main organizations in the Israel lobby. So Israel will end up controlling Gaza and the West Bank for the foreseeable future, turning itself into an apartheid state in the process. And all of this will be done with the backing of its so-called friends, including the current presidential candidates. With friends like them, who needs enemies?
According to standard economic models, a risk-averse consumer who faces uncertainty about
length-of-life should place a high value on life annuities that provide guaranteed income for life.
Yet numerous studies show that few consumers voluntarily annuitize their retirement savings. As
public and private pension systems around the world continue the ongoing shift from traditional
defined benefit plans, which typically pay benefits for life, to defined contribution structures
which rarely require annuitization, retirees find themselves increasingly exposed to longevity
risk—the risk of being unable to sustain their consumption should they live longer than average.
Presented at the American Economic Association, January 5, 2008.Download PDF
This landmark study in the field of comparative politics is being celebrated for its return to print as the newest addition to the "Longman Classics in Political Sciencer" series. Politics in Plural Societies presents a model of political competition in multi-ethnic societies and explains why plural societies, and the struggle for power within them, often erupt with inter-ethnic hostility. Distinguished scholars Alvin Rabushka and Kenneth Shepsle collaborate again in this reissuing of their classic work to demonstrate in a new epilogue the persistence of the arguments and evidence first offered in the book. They apply this thesis to the multi-ethnic politics of countries that are of great interest today: Iraq, Lebanon, Sudan, Yugoslavia, and more.
A basic feature of many field experiments is that investigators are only able to randomize
clusters of individuals—such as households, communities, firms, medical practices, schools,
or classrooms—even when the individual is the unit of interest. To recoup some of the
resulting efficiency loss, many studies pair similar clusters and randomize treatment within
pairs. Other studies (including almost all published political science field experiments) avoid
pairing, in part because some prominent methodological articles claim to have identified serious
problems with this "matched-pair cluster-randomized" design. We prove that all such
claims about problems with this design are unfounded. We then show that the estimator
for matched-pair designs favored in the literature is appropriate only in situations where
matching is not needed. To address this problem without modeling assumptions, we generalize
Neyman’s (1923) approach and propose a simple new estimator with much improved
statistical properties. We also introduce methods to cope with individual-level noncompliance,
which most existing approaches assume away. We show that from the perspective of,
among other things, bias, efficiency, power, or robustness, and in large samples or small,
pairing should be used in cluster-randomized experiments whenever feasible; failing to do so is equivalent to discarding a considerable fraction of one’s data. We develop these techniques
in the context of a randomized evaluation we are conducting of the Mexican Universal Health
In its response to letters protesting the recent hiring of hard-line neoconservative William Kristol as a weekly Op-Ed columnist, the New York Times described the decision as the result of a "long and thoughtful process" by a paper committed to "vibrant political discourse." Editorial page editor Andrew Rosenthal said critics of the move were being "intolerant" and complained about a "weird fear of opposing views."Hiring Kristol did not bring an "opposing view" to the Times' Op-Ed page, of course, because columnist David Brooks already represents the same worldview that Kristol does. Nor does the Times' roster of liberal pundits provide a full complement of "opposing views." Most liberal commentators share the neocons' belief that it is America's right and responsibility to exercise "global leadership," even when that role involves the aggressive use of American military power and constant interference in other countries' affairs. The Times' Thomas Friedman was an energetic supporter of the Iraq war until it went south, and Nicholas Kristof is a passionate advocate of U.S. intervention in Darfur. Columnists like Maureen Dowd and Frank Rich have been sharply critical of the neoconservatives' worst follies, but both proceed from the familiar liberal internationalism that has characterized the American foreign policy establishment for many years.Even now, neoconservatives do not lack other mainstream outlets for their ideas. Charles Krauthammer, Robert Kagan, Fred Hiatt and Jonah Goldberg appear regularly on the editorial pages of the Washington Post or Los Angeles Times, and prominent neocons routinely publish in the Wall Street Journal, the Washington Times and the New York Sun. Not to be outdone, the supposedly liberal Boston Globe publishes neocon Jeff Jacoby twice a week. The neoconservative outlook is ubiquitous in journals of opinion like the New Republic, Commentary or Kristol's own Weekly Standard and is regularly heard on major radio and TV talk shows. Even National Public Radio and Comedy Central give neoconservatives a platform with surprising frequency.What's missing in America's mainstream media is the voice of realism. As the label implies, realists think foreign policy should be based on the world as it really is, rather than what we might like it to be. Realists see international politics as an inherently competitive realm where states constantly compete for advantage and where security is often precarious. But realists understand that being overly alarmist and aggressive can get states into just as much trouble as being excessively trusting or complacent. So realists keep a keen eye on the balance of power, but they oppose squandering blood or treasure on needless military buildups, ideological crusades, or foolish foreign wars. Realists cherish America's commitment to democracy and individual liberty, but they know that ideals alone are no basis for conducting foreign policy. They also understand that endless overseas adventures will inevitably provoke a hostile backlash abroad and eventually force us to compromise our freedoms here at home.Such views are hardly heretical, but there is not a single major columnist, TV commentator or radio pundit who consistently presents a realist perspective on world politics and American foreign policy. In America today, the mainstream media is a realism-free zone.The exclusion of realism is surprising for three reasons. First, realists enjoyed distinguished positions in the American foreign policy community in the past and remain a respected group today. Prominent statesmen whose views generally reflected a realist approach include the late George Kennan, Henry Kissinger, Zbigniew Brzezinski, Colin Powell, Richard Haass and Brent Scowcroft, as well as politicians like outgoing Sen. Chuck Hagel and current Secretary of Defense Robert Gates. To give a realist regular space on a major Op-Ed page is hardly like hiring a Maoist, a Scientologist or a die-hard World Federalist.Second, realists are an important constituency in the academic world. Realism is still the dominant paradigm in the academic study of international politics, and the writings of realist scholars like E.H. Carr, Hans J. Morgenthau and Kenneth Waltz have cast a long and lasting shadow over the academic landscape. One would think editors and publishers would be eager to hire someone whose views reflected that distinguished intellectual tradition.Third, realism's track record as a guide to foreign policy is quite impressive, especially when compared to the neocons' catalog of blunders. Morgenthau, Waltz and Kennan were among the first to recognize that the Vietnam War was a foolish diversion of American power, and Waltz was one of the few foreign policy experts who understood the Soviet Union was a Potemkin colossus with feet of clay. When assorted hawks were sounding frantic alarms about Soviet dominance in the late 1970s, Waltz was writing that the real issue was whether the Soviets could hope to keep up with the far wealthier and more powerful United States. The 1980s proved they couldn't, and that Waltz and his fellow realists had been essentially correct.Realism has done rather well since. Liberals and neoconservatives greeted the end of the Cold War by proclaiming the "end of history" and imagining a long era of peaceful American hegemony, but realists foresaw that the end of the Cold War would unleash new forms of security competition and produce new tensions within existing alliances. And when both hawks and doves foresaw a difficult and bloody battle in the 1990-91 Gulf War, realist scholars like Barry Posen of MIT and John Mearsheimer of the University of Chicago wrote articles that correctly predicted America's easy victory.Most important, realists were among the most visible opponents to America's more recent misadventure in Iraq. In September 2002, for example, 33 international security scholars paid for an ad in the New York Times declaring "War With Iraq Is Not in the U.S. National Interest." About half of the signatories were prominent realists, and several others wrote articles before the war explaining why it was unnecessary and unwise. By contrast, it was the neocons who conceived and promoted the Iraq war, while many prominent liberals endorsed it. Surely Americans deserve to hear from a perspective that has been an accurate guide to recent events, instead of relying on pundits who have been consistently wrong.A realist would provide readers with insights that have been largely absent from mainstream discussion for a decade or more. Realism emphasizes that states defend their interests vigorously and that successful diplomacy requires give-and-take; that advancing our own interests often requires us to do business with regimes whose values we find objectionable; that nationalism is a powerful force and most societies resist when outsiders try to tell them how to run their own affairs; that global institutions can be useful tools of statecraft but require great power support to work effectively; and that even well-intentioned democracies sometimes do foolish and cruel things. Most important of all, a realist would emphasize that military force is a blunt and costly instrument whose ultimate effects are unpredictable, and that it should be employed only when vital interests are at stake.In short, a realist would be a valuable antidote to the self-righteous hubris that pervades contemporary U.S. commentary on foreign affairs, an attitude that has encouraged many of the policies that have undermined America's image around the globe. A realist would also cast a skeptical eye on virtually all of the current presidential candidates, whose views on foreign policy do not stray far from the current neoconservative/liberal consensus. Realists aren't infallible and some readers will undoubtedly object to their views, but that's hardly the issue. The point is that Americans would be better informed if they regularly heard what realists had to say, and media institutions that are genuinely interested in presenting a diverse array of views should be signing up a few of them.
Exchange rates powerfully affect cross-border economic transactions. Trade,
investment, finance, tourism, migration, and more are all profoundly influenced
by international monetary policies. Many developing-country governments
have searched for alternatives to the uncertainty that can prevail on
international currency markets. Policy entrepreneurs have rushed to peddle
currency nostrums, urging a turn toward dollarization, managed floating,
nominal anchors, target bands, or other options.There are both theoretical and empirical reasons to expect globalization to
heighten the importance of the exchange rate. Theoretically, open-economy
macroeconomic principles imply that capital mobility profoundly affects
exchange rate policy choices. As Robert Mundell showed more than forty
years ago, the government of a financially integrated economy faces a choice
between monetary policy autonomy and a fixed exchange rate (Mundell 1963).
If the government opts for a fixed rate, capital mobility makes impossible a
monetary stance different from that of the anchor currency; alternatively, if
the government opts to sustain an independent monetary policy, it must allow
the currency to move. These constraints mean that the economics and politics
of monetary and exchange rate policy are likely to be very different in an
economy that is financially open than in an economy that is not. By the same
token, inasmuch as international economic integration involves increased
exposure to international financial and commercial flows, it heightens the
concerns of those involved in or exposed to international trade and finance. In
a relatively closed economy, few economic actors care about currency movements.
But as economies become “globalized” more firms, investors, and
workers find their fortunes linked to the exchange rate, and to its impact on
trade and financial flows. This concentrates attention on the exchange rate.
Domestic economic institutions change through processes of conflict
and bargaining+ Why do the strongest groups in such conflicts ever change their minds
about the acceptability of institutional arrangements they once opposed? Drawing
on the cases of Ireland in 1986–87 and Italy in 1989–93, this article demonstrates
how the process of common knowledge creation between employers and unions
changed the course of negotiations over national wage bargaining institutions+ Common
knowledge creation happens when existing institutions are in crisis+ The institutional
experimentation that follows such crises, characterized by deep uncertainty,
places a premium on persuasive argument+ The ideas most likely to serve as the basis
for newly common knowledge will have analytical and distributive appeal to both
unions and employers, and they must be ratified in public agreements, which I call
common knowledge events. Common knowledge events establish new social facts,
which can change the payoffs associated with different institutional outcomes. This
can lead even powerful actors to accept institutions they had previously opposed.
The theoretical case for industrial policy is a strong one. The market failures that industrial policies target—in markets for credit, labor, products, and knowledge—have long been at the core of what development economists study. The conventional case against industrial policy rests on practical difficulties with its implementation. Even though the issues could in principle be settled by empirical evidence, the evidence to date remains uninformative. Moreover, the conceptual difficulties involved in statistical inference in this area are so great that it is hard to see how statistical evidence could ever yield a convincing verdict. A review of industrial policy in three nonAsian settings—El Salvador, Uruguay, and South Africa—highlights the extensive amount of industrial policy that is already being carried out and frames the need for industrial policy in the specific circumstances of individual countries. The traditional informational and bureaucratic constraints on the exercise of industrial policy are not givens; they can be molded and rendered less binding through appropriate institutional design. Three key design attributes that industrial policy must possess are embeddedness, carrots-and-sticks, and accountability.
Also published as a Commission on Growth and Development Working Paper No. 3, Washington, DC, 2008.Download PDF
On November 1, 2006, Peruvian president Alan García announced he would be proposing
a new law that would include the death penalty as one sanction for terrorism in the Penal Code.
As he argued, “We are not going to allow Shining Path to return and paint their slogans on the
walls of our universities. Once this law is approved, anyone who commits the serious crime of
terrorism will find themselves facing a firing squad. A war forewarned does not kill people.”
As one might imagine, García’s comments sparked intense debate in Peru, a country in
which a series of democratically elected governments waged a twenty-year war against
terrorism. President García himself presided over one of those previous administrations from
1985-1990, and he would subsequently be named as one of the political leaders alleged to have
abdicated democratic authority in an effort to finish terrorism by whatever means necessary.
In its 2003 Final Report, the Peruvian Truth and Reconciliation Commission determined
that the country’s twenty-year war on terror resulted in the greatest loss of human life and
resources in all of Peru’s history as a republic. However, listening to President García three
years after the TRC completed its work, I did not hear Nunca Más; rather, his words provoked a
disturbing sense of déjà vu.
Forthcoming in Beyond the Toolkit: Rethinking the Paradigm of Transitional Justice. Rosalind Shaw, Lars Waldorf and Pierre Hazan, eds. Stanford University Press, Studies in Human Rights, 2009.Download PDF
Poor countries become rich not by following in suit of their predecessors but rather by overcoming their own highly specific constraints.
While economic globalization can be a boon for countries that are trying to dig themselves out of poverty, success usually requires following policies that are tailored to local economic and political realities rather than obeying the dictates of the international globalization establishment. One Economics, Many Recipes shows how successful countries craft their own unique growth strategies and what other countries can learn from them.
Interactive problem solving is a form of unofficial diplomacy, centering on problem-solving workshops and related activities with political elites in conflicting societies. Its dual purpose is producing changes in individual participants that are transferred to the policy process. The most relevant criterion for evaluating the effectiveness of interactive problem solving is its contribution to changes in the political cultures of the parties that would make them more receptive to negotiation. The article describes the difficulties in evaluating such changes in political culture, because of the inapplicability of the standard experimental model of evaluation and the ethical and methodological obstacles to the use of procedures that may interfere with the practice of conflict resolution. It then presents two models of evaluation research, based on gradual accumulation of evidence in support of the assumptions of interactive problem solving: the "links-in-the-chain" model, testing by appropriate means each of the steps in the logic of the approach; and the experimental model, using a variety of settings for empirical tests of the assumptions of the approach.
Economists have long been interested in the idea that there is a direct circular relation
between poverty and low productivity, and not just one that is mediated by market failures,
usually in asset markets. The nutrition-based e¢ ciency wage model (Partha Dasgupta and
Debraj Ray, 1987) is the canonical example of models where this happens: However it
has been variously suggested (see for example T. N. Srinivasan, 1994) that the link from
nutrition to productivity and especially the link from productivity to nutrition is too weak
to be any more than a small part of the story. Partha Dasgupta himself acknowledges this
when he writes "nutrition-productivity construct provides a metaphor... for an economic
environment harboring poverty traps."
Presented at the American Economic Association, January 4, 2008.Download PDF