Research Library

2002
Simmons, Beth A. 2002. “To Settle or Empanel? An Empirical Analysis of Litigation and Settlement at the WTO”.Abstract

This paper seeks to understand the factors that cause disputes at the World Trade Organization to move from the negotiation stage to the panel stage. We hypothesize that transfer payments between states are costly to arrange and that the lowest–cost transfers are those that relate directly to the issue in dispute. This implies that when the subject matter of the dispute has an all–or–nothing character and leaves little room for compromise (for example, health and safety regulations), the parties? ability to reach an agreement through the use of transfers is restricted. In contrast, if the subject matter of dispute permits greater flexibility (for example, tariff rates), the parties can more easily structure appropriate transfer payments through adjustments to the disputed variable. We conduct an empirical test of this hypothesis, finding support for it among democratic states.

Reich, Michael R. 2002. “Ethical Analysis in Public Health”.Abstract

Public–health regularly encounters serious ethical dilemmas, such as rationing scarce resources, influencing individuals to change their behaviour, and limiting freedom to diminish disease transmission. Yet unlike medical ethics, there is no agreed–upon framework for analysing these difficulties. We offer such a framework. It distinguishes three philosophical views, often invoked in public–health discourse: positions based on outcomes (utilitarianism), positions focused on rights and opportunities (liberalism), and views that emphasise character and virtue (communitarianism). We explore critical variations within each approach, and identify practical problems that arise in addressing the ethical dimensions of health policy. We conclude by examining challenges posed by the feminist argument of ethics–of–care and by postmodern views about the nature of ethics. Health professionals need enhanced skills in applied philosophy to improve the coherence, transparency, and quality of public deliberations over ethical issues inherent in health policy.

Nye, Joseph S., Jr.. 2002. “Lessons from Afghanistan”. Publisher's VersionAbstract

The battle in east Afghanistan is winding down, and President Bush has offered to train other governments for the second stage in the war on terrorism. Though the American military officials assure us that much remains to be done in Afghanistan, the lessons of the campaign are already being drawn. And, before they become engraved in conventional wisdom, we should distinguish the accurate lessons from the misleading ones.

Most important, in an age of globalization, the United States cannot ignore problems in distant regions. During the Cold War, we thought Afghanistan important enough to support its struggle against the Soviet invasion. During the 1990s, to the extent that we noticed the deteriorating conditions, we felt it was not our affair. Yet we learned on Sept. 11 that events in poor countries half way around the world can do us great harm. Our military success in Afghanistan has shown clearly to any state ready to support terrorism that this is no longer a safe option.

Terrorism is to this century what piracy was to an earlier era when some governments gave pirates and privateers safe harbor to earn revenues or harass their enemies. In this era, some states have harbored terrorists in order to attack their enemies or because they were too weak to control powerful fanatical groups.

For too long our country simply looked the other way on the mistaken assumption that such alliances would have little world consequence. The United States and its allies must consistently condemn state support for terrorism and use the stick of the Afghanistan campaign to demonstrate the consequences that can befall these states.

The success to date in Afghanistan also shows that force can be used effectively and with discrimination even in difficult settings. Although there were civilian casualties, the combination of US Special Forces on the ground and precision air power proved to be a powerful one.

On the other hand, we would be mistaken if we concluded that the Afghanistan formula can fit all sizes and situations. The Northern Alliance provided important proxy forces already on the scene, and without them, air power would not have been sufficient.

Indeed, some military critics believe that the United States failure to insert more of its own ground forces led to the failure to capture Al Qaeda fighters in the battle of the Tora Bora caves. We also have to realize that the last act in Afghanistan is far from over, and more outside forces will be needed to keep the peace if our success is not to erode.

Perhaps the most dangerous lesson learned is by those in the administration and outside commentators who believe that Afghanistan shows that unilateralism works.

It is true that the United States accomplished the military tasks with little help from allies except Pakistan, Uzbekistan, and Britain. But the lesson is misleading because it implies that there is a purely military solution to the war on terrorism.

According to the CIA, while the fighting in Afghanistan toppled the Taliban government, it killed or captured less than a quarter to a third of the Al Qaeda network.

The military success in Afghanistan dealt with the tip of the iceberg of terrorist threats. Al Qaeda retains cells in some 50 countries, few susceptible to military solutions. We are not about to bomb Rome, Hamburg, or Jakarta.

And Al Qaeda is not the only transnational terrorist organization. Suppressing terrorism will take years of patient international civilian cooperation involving intelligence sharing, police work, tracing financial flows, customs and immigration. Rather than proving the unilateralists' point, the partial success in Afghanistan illustrates the continuing need for international cooperation.

Sept. 11 was a terrible symptom of deeper changes occurring in the world. Technology has been diffusing power away from governments and empowering individuals and groups. With the use of desktop computers and the Internet, terrorist networks can now exchange high-tech secrets and coordinate complex campaigns across continents that only governments could conduct 20 years ago.

Privatization has been increasing, and terrorism is the privatization of war. Nor is terrorism the only issue. Many other important problems that can cause great harm&madash;such as international financial instability, global climate change, or the spread of diseases—are inherently multilateral.

The ultimate lesson of Afghanistan is that the United States is so large that these crucial problems cannot be solved without us, but we are not large enough to solve them alone.

Kelman, Herbert C. 2002. “Needed: A Manifesto for Mideast Peace”. Publisher's VersionAbstract

Israel and the Palestinian territories are on the brink of an all-out war with disastrous consequences for these two traumatized nations.

The Israeli government and the Palestinian street are controlled by elements that see such a war as an opportunity to achieve their maximalist goals. Under the circumstances, there is a compelling need for vigorous intervention by outside powers—the Arab League, the European Union, the United Nations, and, perhaps most important, the United States—to pull the parties away from the brink and back to the negotiating table.

Outside intervention, however, cannot by itself restore the working trust required for negotiating an agreement conducive to the stable peace and mutually enhancing relationship between the two nations on which their survival in the small land they share ultimately depends. To succeed, the outside intervention must be accompanied by creative, courageous acts of leadership emanating from the two societies themselves.

The most likely candidates to perform such leadership roles are the two surviving members of the triad that received the Nobel Peace Prize in 1994: Palestinian Authority President Yasser Arafat and Israel's Foreign Minister Shimon Peres. Both men have suffered losses in power and prestige. Both have been criticized for their roles in legitimizing the extremes of violence in their respective communities.

And yet they are probably the only leaders with the authority and the domestic and international standing to take the initiative proposed here.

The scenario I envisage calls for a meeting or a series of meetings between the two men (and a small number of close advisers) in Arafat's headquarters in Ramallah. Refusal by Prime Minister Ariel Sharon to authorize such an initiative would provide the appropriate moment for Peres to resign from the government: He would be resigning in pursuit of an initiative with the potential for achieving a dramatic breakthrough.

The meetings between the two leaders would aim to produce a joint manifesto with the following components: First, a call for an end to the violence and for the resumption of negotiations designed to achieve a just solution to the conflict, addressing the fundamental needs of both parties.

Second, a commitment to the final outcome of the negotiations: an agreement that would end the conflict on the basis of a historic compromise in the form of a two-state solution.

Third, a delineation of the broad outlines of the historic compromise, including: establishment of a viable, independent, and sovereign Palestinian state consisting of the West Bank and Gaza, with contiguous territory within each of these two units and safe passage between them; acceptance of the legitimacy of Israel as a Jewish-majority state with the proviso that it assure full democratic rights for its Arab minority; designation of Jerusalem, including the Old City and the holy sites, as a shared city, containing the capitals of both states; and development of a comprehensive, multifaceted solution to the problem of Palestinian refugees, including resettlement and compensation, which would satisfy Palestinians' sense of justice and Israelis' concern about the stability of their state.

Fourth, a specification of the issues that remain to be negotiated within the framework of the historic compromise, such as border adjustments and territorial exchange, arrangements for governance and security of a shared Jerusalem, and procedures for addressing both the symbolic and the practical aspects of a solution for the refugee problem. Finally, an unambiguous and honest account of the costs that a historic compromise would entail for both peoples, stressing, in particular, the need to recognize that Israeli dreams of settling Judea, Samaria, and Gaza, and Palestinian dreams of returning in large numbers to the homes they lost in 1948 cannot be realized.

A manifesto along these lines would demonstrate to the Israeli and Palestinian publics that there are courageous leaders who are prepared to commit themselves to a historic compromise and honestly spell out its implications. It would help revive the belief in each community that there is a credible negotiating partner on the other side and that there is a mutually acceptable formula for a final agreement.

The manifesto would gain symbolic strength if Arafat and Peres dedicated it to the memory of their fellow Nobelist, Yitzhak Rabin, who paid with his life for the pursuit of a historic compromise and whose assassination was a major contributing factor to deterioration of the peace process.

Simmons, Beth A. 2002. “International Organizations and Institutions”.Abstract

International institutions have become an increasingly common phenomenon of international life. The proliferation of international organizations (IOs) (Shanks et al., 1996), the growth in treaty arrangements among states (Goldstein et al., 2000) and the deepening of regional integration efforts in Europe all represent formal expressions of the extent to which international politics has become more institutionalized.

The scholarship on international institutions has burgeoned in response. Moreover, in the past decade, theories devoted to understanding why institutions exist, how they have functioned and what effects they have on world politics have become increasingly refined and the methods employed in empirical work more sophisticated. The purpose of this chapter is to draw together this divergent literature, to offer observations on the development of its various theoretical strands and to examine progress on the empirical front. We predict that a broad range of theoretical traditions – realist, rational functionalist, constructivist – will exist alongside one another for many years to come, and offer some suggestions on research strategies that might contribute to a better empirical base from which to judge more abstract claims.

In Handbook of International Relations (1st edition) edited by Walter Carlsnaes, Thomas Risse, Beth A. Simmons. Sage Publications Ltd., March 13, 2002.
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Tambiah, Stanley J. 2002. Edmund Leach: An Anthropological Life. Cambridge University Press. Publisher's VersionAbstract

Edmund Leach is widely regarded as the outstanding figure in Cambridge archaeology in the second half of the twentieth century, and as one of the leading social anthropologists of his generation. Stanley Tambiah's intellectual biography covers his professional career and reviews his writings. The work is organized chronologically—providing an introductory assessment as well as a closing portrait. Two brief chapters discuss Leach's early years, but the bulk of the book deals with his anthropological projects.

Grzymala-Busse, Anna, and Pauline Jones Luong. 2002. “The Ignored Transition: Post-Communist State Development”.Abstract

This study reconceptualizes theories of the state in light of post–communist developments. After the collapse of communist regimes across Eastern Europe and the former Soviet Union, scholars overlooked a central aspect of the transition: the need to reconstruct public authority, or state–building. Likewise, theorists of the state have largely ignored the post–communist challenge to existing theories of state capacity and development. Post–communist state development is characterized by the need to reconstruct public authority, or state–building. Two aspects of this process determine subsequent state trajectories: a) the representativeness of elite competition (that is, whether elites compete by representing constituencies, or in self-contained elite conflicts), and b) the mechanisms of elite competition (that is, whether it is channeled via formal institutions, or informal networks and ties.)

514_02_02_final.pdf

WCFIA Working Paper 02–02, March 2002.

Frankel, Jeffrey. 2002. “You're Getting Warmer: The Most Feasible Path for Addressing Global Climate Change Does Run Through Kyoto”.Abstract

When I first arrived at the White House in September 1996, I had no idea that one of the issues on which I would spend the most time during my period as a Member of President Clinton?s Council of Economic Advisers was global climate change. But Under Secretary of State Tim Wirth had the month before announced a major change in policy: that the United States would in multilateral negotiations now support "legally binding" quantitative targets for the emission of greenhouse gases. This left 15 months for the US Administration to decide what kind of specifics it wanted, at the Third Conference of Parties of the UN Framework Convention on Climate Change (UNFCCC), scheduled for November 1997 in Kyoto. Because other countries take their cue from the superpower (whether it is to support or oppose US positions), this countdown engendered a certain amount of suspense: What specifically would the U.S. propose at the Kyoto Conference, most notably regarding how the numerical targets should be determined? Outsiders demanded to know –with particular tenacity in the case of the U.S. Congress, who feared the worst. I was a member of a large inter–agency group that worked intensively on what was to become the Kyoto Protocol.

I never thought that the agreement had a large chance of being ratified by the U.S. Senate, or of coming into force in a serious way. There were too many unbridgeable political chasms, as I will explain. Furthermore I understand the reasons why almost all economists, at least in the United States, disapprove of the Kyoto Protocol. Nevertheless, I am prepared to defend the Clinton version of the treaty, and I believe it was a step in the right direction.

I will begin by noting that the weight of scientific opinion seems indeed to have concluded that the Earth is getting warmer, that increasing concentrations of carbon dioxide and other greenhouse gases are the major cause, and that anthropogenic emissions are in turn responsible. I am not a scientist. But the latest IPCC report concludes "The globally averaged surface temperature is projected to increase by 1.4 to 5.8 degrees Celsius" over the period 1990 to 2100, and "global mean sea level is projected to rise by 0.09 to 0.88 metres." The evidence has become clearer over the last ten or twenty years. President George Bush, the Second, made a big mistake when he initially allied himself with the minority of disbelievers. It was a political mistake if nothing else. Even granting that the incoming administration in 2001 did not want to pursue Kyoto, it was foolish and unnecessary for the White House to dismiss the climate change problem.

This paper will take as given that the problem of global climate change is genuine, and is sufficiently important to be worth addressing by steps that are more than cosmetic. Because the externality is purely global – a ton of carbon emitted into the air, no matter where in the world, has the same global warming potential – the approach must be multilateral. Individual countries will not get far on their own, due to the free rider problem. Specifically, multilateral negotiations have since the Rio Summit of 1992 proceeded under the UNFCCC.

The paper will summarize major decisions that the Clinton Administration had to make, and why it made them as it did. What were the quantitative limits on emissions to be? How would greenhouse gases other than carbon dioxide be treated? Would trading across time or across countries be permitted? And so on. In my time in the government, I was surprised to discover that policy makers often must make such technical–sounding decisions with relatively little help from the body of technical knowledge and opinion outside the government. It is not just that academic research is too abstract to be of much direct help with the minutia of specific policy decisions. The pronouncements of think tanks and op–ed writers also ignore practical complexities, because they seek to make big points for general audiences. We were largely on our own.

Robinson, James A. 2002. “The Political Economy of the Kuznets Curve”.Abstract

The paper provides a political economy theory of the Kuznets curve. When development leads to increasing inequality, this can induce political instability and force democratization on political elites. Democratization leads to institutional changes which encourage redistribution and reduce inequality. Nevertheless, development does not necessarily induce a Kuznets curve, and it is shown that development may be associated with two types of nondemocratic paths: an "autocratic disaster," with high inequality and low output, and an "East Asian Miracle," with low inequality and high output. These arise either because inequality does not increase with development, or because the degree of political mobilization is low.

Reich, Michael R. 2002. “Reshaping the State from Above, from Within, from Below: Implications for Public Health”.Abstract

The modern state is being reshaped by multiple forces acting simultaneously. From above, the state is actively constrained by agreements promoted by international agencies and by the power of multinational corporations. From within, the state is being reshaped by increasing trends toward marketization and by problems of corruption. From below, the state's role is being diminished by the expansion of decentralization and by the rising influence of non–governmental organizations. This article explores these three sets of processes — from above, from within, and from below — and suggests some implications for public health. Public health professionals require an understanding of the changing nature of the state, because of the consequences for thinking about the metaphors, solutions, and strategies for public health.

Noll, Roger, and Mary Shirley. 2002. “Privatization, Institutions and Performance: Telecommunications in Africa”.Abstract

Nearly all of Sub–Saharan Africa is extremely poor. While a few countries in Asia, Latin America and Oceania are comparably poor, no other region has as many poor people and undeveloped countries. Not surprisingly, in no part of the world is the penetration of telecommunications technology so low. Thus, Africa would not seem to be an area where substantial improvements in telephone service would be likely until more fundamental economic problems are solved. Yet, beginning in 1995, a few African countries began to reform the telecommunications industry, leading to seemingly miraculous results. The purpose of this paper is to explore how and why these changes took place.

The paper documents the path of reform, its political sources, and its consequences for six African countries: Cote D?Ivoire, Ghana, Malawi, Senegal, Tanzania and Uganda. These countries are diverse in institutional structure, political stability, cultural heritage, and the nature and success of their reform, although all have improved, especially in radio telephony.

This essay is based on detailed case studies undertaken by a team of economists that were assembled by the World Bank, and is intended to fill a gap between analytic narratives of a specific case and regression analyses that seek to explain performance or reform (few seek to explain both simultaneously) across a large sample of countries based on relatively crude measures of the institutional environment. Our approach, also an analytic narrative, is complementary to the others in that it allows cross–country comparisons while emphasizing the nuances of the political and institutional factors surrounding reform.

656_nollshirley.pdf
Angrist, Joshua D, Eric Bettinger, Erik Bloom, Elizabeth King, and Michael Kremer. 2002. “Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment”.Abstract

Colombia's PACES program provided over 125,000 pupils from poor neighborhoods with vouchers that covered approximately half the cost of private secondary school. Vouchers were renewable annually based on satisfactory performance. Since many vouchers were allocated by lottery, we use differences in outcomes between lottery winners and losers to assess program effects. Three years into the program, lottery winners were 15 percentage points more likely to have attended private school, had completed .1 more years of schooling, and were about 10 percentage points more likely to have finished 8th grade, primarily because they were less likely to repeat grades. The program did not significantly affect dropout rates. Lottery winners scored .2 standard deviations higher on standardized tests. There is some evidence that winners worked less than losers and were less likely to marry or cohabit as teenagers. On average, lottery winners increased their educational expenditure by about 70% of the value of the voucher. Since winners also worked less, they devoted more total resources to education. Compared to an equivalent expansion of the public education system, the voucher program increased annual government educational expenditure by about $24 per winner. But the costs to the government and to participants were probably much less than the increase in winners' earnings due to greater educational attainment.

624_vouchers_4.8.02clean.pdf
MacFarquhar, Roderick. 2002. “China in Political Transition.” Keynote Speech for EAI's 5th Anniversary Celebration. Singapore.Abstract

I feel honored to have been asked by my old friend Wang Gungwu to give a keynote speech in such distinguished company at this anniversary conference. Gungwu is one of the great scholars of the contemporary China field. I remember a remark made by my old Harvard teacher Yang Liansheng at a China Quarterly conference on history which I ran in 1964. (My goodness that was a long time ago!) Yang told Gungwu that his Chinese colleagues greatly admired his ability to use with equal facility the tools of both Western and Chinese historiography.

The subject I have chosen is "China in Political Transition," and I shall focus on succession politics. As everyone here today knows, China is at this very moment in the run–up to a most important political transition, succession at the very top of the Communist Party. How that succession process evolves will tell us a lot about the degree of institutionalisation that has taken place in the Chinese political system since the Cultural Revolution. It will also provide some insight into whether the new generation of leaders will be able to cooperate or whether they will continue to consider politics as a zero sum game.

572_singapore.pdf

Working Paper 100. East Asian Institute, 2002.

Hidalgo, Diego. 2002. “El Futuro de la Política Exterior de Estados Unidos”. Publisher's VersionAbstract

Reconociendo las dificultades para analizar una situación mundial cada vez más compleja, Mijaíl Gorbachov y yo tratamos de identificar hace apenas un año los principales problemas con los que parecía enfrentarse la humanidad en los albores del siglo XXI. Dejando aparte los medioambientales y el avance del sida y otras enfermedades infecciosas, dos problemas destacaban entre todos: la pobreza y desigualdad crecientes y el hecho de que la tercera ola democrática se hubiera detenido. Los acontecimientos desde el 11 de septiembre de 2001 han añadido tres problemas más, relacionados con los anteriores.

El primero, evidente, es que han aumentado las sensaciones de inseguridad e incertidumbre. Muchas de las certezas que un ciudadano de cualquier país del mundo tenía entonces se han convertido en incógnitas que nos preocupan, angustian o aterran, y que nos hace temer con fundamento que el mundo en el que vivirán nuestros hijos y nietos será mucho más difícil y, desde luego, peor que el nuestro.

El segundo, que añadió el presidente Clinton a mi lista, es "el círculo vicioso que existe en la mayoría de países musulmanes en Oriente Próximo y el Magreb": la escasa educación que reciben las mujeres lleva a tasas elevadas de natalidad, y éstas, a que un porcentaje demasiado elevado de la población sea de niños con escasas posibilidades de integrarse dignamente en la sociedad al llegar a la edad adulta. La mitad femenina de estos niños apenas recibe educación, mientras que la masculina la recibe sólo de organizaciones islámicas que imparten una versión intransigente del Corán. Clinton recordaba que un niño paquistaní de diez años, guapo y de voz dulce, que sabía el Corán de memoria, declaraba que su mayor felicidad cuando fuera mayor sería morir matando a todos los americanos que pudiera. El presidente Clinton opina que este problema, unido a los de la pobreza y crisis democrática, es el principal responsable de la emergencia del terrorismo y la inseguridad.

Hay un tercer problema, que añado a los anteriores, y que podría simplificarse como el de un unilateralismo creciente de Estados Unidos. La lista de temas importantes con grandes diferencias de posición entre su Gobierno y el resto del mundo (como Oriente Próximo, América Latina, la Corte Penal Internacional, el Convenio de Kioto, el sistema antimisiles, el proteccionismo a su sector siderúrgico, su casi nula ayuda externa, etc.) crece aceleradamente; pero estas discrepancias, lejos de incitar a Estados Unidos a reexaminar sus posturas, van acompañadas por una arrogancia cada vez mayor. Creo que los estadounidenses tienen dificultades para ver que la falta de un contrapeso a su poder hegemónico, que no tiene precedentes históricos, y el escaso interés de sus electores por todo lo que ocurre más allá de sus fronteras les está llevando a una política exterior que en lugar de ganar corazones y voluntades en el mundo los está alienando.

Hace dos semanas, el Weatherhead Center for International Affairs, de la Universidad de Harvard, organizó en Talloires, junto al lago de Annecy, una conferencia titulada El futuro de la política exterior de los Estados Unidos. La política del WCFIA de impedir la atribución de las opiniones a los participantes, acertada para estimular su libertad y espontaneidad, me obliga a no hacer citas. Sin embargo, puedo asegurar que la conferencia reunió a unos treinta de los mejores especialistas en relaciones internacionales procedentes de unos veinte países, entre ellos a varios profesores norteamericanos, algunos de ellos demócratas y otros próximos a la Administración de Bush. Creo poder afirmar que casi todos los europeos y asiáticos, y espero que algunos americanos, salimos de Talloires extraordinariamente preocupados por las exposiciones que hicieron personas próximas a la mentalidad del Gobierno de Estados Unidos.

La discusión en la conferencia estuvo dominada por dos análisis, actitudes y predicciones contrapuestas: a) una autoproclamada imperialista, que considera legítimo el intervencionismo de Estados Unidos en cualquier situación de amenaza; b) otra (offshore balancer) aislacionista, que postula que Estados Unidos no debe intervenir, sino enfrentar una contra otra a potencias regionales para que se controlen o eliminen entre sí (ejemplos, Irán contra Irak, India contra Pakistán, China contra Rusia o contra Japón). Ambas posturas son unilateralistas; están basadas en la aplastante superioridad militar de Estados Unidos y ninguna considera necesario ningún tipo de coalición o consenso internacional, ni la participación de un organismo multilateral como las Naciones Unidas, ni siquiera la aquiescencia previa de la Unión Europea y de otros antiguos aliados de Estados Unidos, a quienes se considera irrelevantes.

La postura imperialista ha acogido con entusiasmo los discursos del presidente Bush, que, tras la reacción moderada inmediatamente después del 11 de septiembre, han crecido en belicosidad a lo largo de 2002; al del Eje del Mal del Estado de la Unión ha sucedido el reciente de West Point, en el que Bush considera un error esperar a que las amenazas militares o terroristas se materialicen y considera legítimo el derecho a iniciar ataques y guerras preventivas. La doctrina de la necesidad de efectivos militares se puede resumir en un "4+2+1". El 4 representa el número de lugares en los que Estados Unidos debe ser capaz de ejercer su poder disuasivo. El 2 representa el número de guerras simultáneas (por ejemplo, Irak y Corea del Norte), y el 1, la capacidad de Estados Unidos de forzar un cambio de régimen, lo cual presupone la necesidad de ocupar ese país por un ejército terrestre. Naturalmente, esta postura defiende incrementos presupuestarios importantes en un momento en el que el superávit se ha convertido en serio déficit y en una coyuntura económica desfavorable.

La postura aislacionista tiene tres premisas basadas en la vieja doctrina de Monroe, que ha regido la política exterior de Estados Unidos durante más de siglo y medio. Estados Unidos debe a) establecer su hegemonía regional en las Américas, b) vigilar para que ninguna potencia domine de igual manera en Europa o en Asia y c) tratar con esas potencias rivales sólo si otras demuestran ser incapaces de controlarlas. Por ejemplo, es esencial que ninguna potencia local (Irán o Irak) predomine en el golfo Pérsico amenazando el acceso al petróleo de la zona. "A los americanos no les gusta perder vidas". EE UU debe intervenir sólo en caso de extrema necesidad: la amenaza directa de una potencia rival.

Mis reflexiones durante esta discusión entre dos posturas "alucinantes", que dirían mis hijos, pero "realistas" y reales, me llevaron a varias observaciones y conclusiones. Primero, tras el 11-S cabían dos preguntas: 1) ¿quién nos ha hecho esto?, y 2) ¿por qué? Plantear sólo la primera conduce a la paranoia, y sólo la segunda lleva a las verdaderas causas—es decir, a los problemas enumerados al principio de este artículo—y supone un paso hacia las soluciones. Mi temor es que muchos analistas se han quedado en la primera pregunta. No analizar las causas que llevan a personas a morir matando por una causa y creer que el problema se puede solucionar por métodos militares es ignorar las lecciones de la historia.

Segundo, fue muy revelador que en una conferencia sobre política exterior se hablara exclusivamente de intereses, temas militares y de seguridad, y en ningún momento de valores, solidaridad, ayuda, apertura de mercados, diplomacia y paz.

Tercero, América Latina y África no fueron tema de discusión. Igual que noviembre de 1989, fecha de la caída del muro de Berlín, supuso la marginalización definitiva para África, el 11 de septiembre lo ha supuesto para América Latina.

Por último, los europeos y asiáticos y algunos de los americanos alejados del poder proclamamos nuestra preocupación. Casi todos opinamos que un Estados Unidos aislacionista es más peligroso que uno intervencionista. En todo caso, el predominio de intereses sobre valores, de temas militares sobre económicos y diplomáticos, de Rumsfeld sobre Powell, de la guerra sobre la paz, indica un divorcio creciente entre Europa y EE.UU. La hora del diálogo entre ambos ha sonado y es, sin embargo, más difícil que nunca.

Diego Hidalgo is a former CFIA Fellow, 1994-1995. He was a Division Chief for Africa at the World Bank (1968-1977), President of FRIDA (1978-1983) and Alianza Editorial in Spain (1983-89) as well as cofounder of EL PAIS.
Ramseyer, Mark J, and Yoshiro Miwa. 2002. “The Legislative Dynamic: Evidence from the Deregulation of Financial Services in Japan”.Abstract
In many ways, the current financial distress in Japan traces itself to the limited range of non-bank financial intermediaries available. That limited availability is itself a creature of regulation. By examining the recent deregulation of commercial paper issues by financial intermediaries, we explore the dynamics of the regulatory process that originally contributed to—if not caused—the current distress. We also use this case study to explore the dynamics of the Japanese legislative and regulatory process more generally. We characterize deregulation as a bargain between banks and the newer non-bank intermediaries: the banks acquiesced to commercial paper issues by non-banks, while the non-banks agreed to the regulatory jurisdiction of the Ministry of Finance. The non-banks obtained a cost-effective way to raise additional funds; the banks brought their new competitors within their regulatorily enforced cartel. At a specific level, the dynamics illustrate the classic Stiglerian theory of regulation; at a more general level, they illustrate the trans-national economic logic to the Japanese legislative and regulatory process.
Also John M. Olin Center for Law, Economics, and Business, Working Paper no. 373.
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Johnston, Alastair Iain. 2002. “The Sources of Conflict in the Sino-US Arms Control Relationship”.Abstract
This article examines one facet—arms control—of a larger puzzle in US-China relations over the last decade, namely why are we seeing an increasing degree of politico-military friction in Sino-US relations as China becomes more, not less, integrated into global institutions? On the one hand China’s arms control performance on most issues improved over the 1990s, with participation rates increasing in various institutions, agreements and regimes, and with accession to a small number of commitments that could actually constrain China’s relative power to some degree. On the other, despite these trends Sino-US differences over arms control have remain acute and a source of friction in the relationship. What is going on? This article begins with a description of the changes in Chinese arms control behavior over the last decade or so and offers a range of possible explanations for these. It then examines the areas of disagreement and friction in the US-China relationship on arms control. In particular it focuses on the apparent differences in the preferences of US and Chinese decision-makers on arms control policy. Finally it offers a list of three major explanations for these differences.
Paper originally prepared for Fairbank Center for East Asian Research, Chinese Academy of Social Sciences Institute of American Studies Project on Issues in Sino-US Relations.
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Alfaro, Laura. 2002. “On the Political Economy of Temporary Stabilization Programs”.Abstract

This paper provides a political economy explanation for temporary exchange–rate–based stabilization programs by focusing on the distributional effects of real exchange–rate appreciation. I propose an economy in which agents are endowed with either tradable or nontradable goods. Under a cash–in–advance assumption, a temporary reduction in the devaluation rate induces a consumption boom accompanied by real appreciation, which hurts the owners of tradable goods. The owners of nontradables have to weigh two opposing effects: an increase in the present value of nontradable goods wealth and a negative intertemporal substitution effect. For reasonable parameter values, owners of nontradables are better off.

Johnston, Alastair Iain. 2002. “Sources of Conflict in the Sino-US Arms Control Relationship”.Abstract

This article examines one facet – arms control — of a larger puzzle in US–China relations over the last decade, namely why are we seeing an increasing degree of politico–military friction in Sino–US relations as China becomes more, not less, integrated into global institutions? On the one hand China?s arms control performance on most issues improved over the 1990s, with participation rates increasing in various institutions, agreements and regimes, and with accession to a small number of commitments that could actually constrain China?s relative power to some degree. On the other, despite these trends Sino–US differences over arms control have remain acute and a source of friction in the relationship. What is going on? This article begins with a description of the changes in Chinese arms control behavior over the last decade or so and offers a range of possible explanations for these. It then examines the areas of disagreement and friction in the US–China relationship on arms control. In particular it focuses on the apparent differences in the preferences of US and Chinese decision–makers on arms control policy. Finally it offers a list of three major explanations for these differences.

Paarlberg, Robert L. 2002. “The Contested Governance of GM Foods: Implications for U.S.-EU Trade and the Developing World”.Abstract

Genetically modified (GM) foods are widely produced in the United States and in two other Western Hemisphere countries (Argentina and Canada) but almost nowhere else. In most other wealthy industrial countries, including Europe and Japan, it is legal for farmers to plant these crops, but they voluntarily refrain from doing so because consumers are averse to eating GM. In most developing countries it is not yet legal for farmers to grow GM foods, on biological safety grounds. Yet biosafety is not the real issue. Poor countries are now trying to stay "GM–free" so as to retain the option of exporting food to Europe and Japan.

New regulations in the EU on the labeling and traceability of imported GM foods and feeds will only increase the potential cost to exporters of planting GM seeds. The United States has considered challenging EU regulations as illegal under the WTO, and a serious trade conflict now looms. The EU, not the United States, is better positioned to prevail in this conflict. In international food markets, safety and labeling standards tend to be set by big importers rather than big exporters.

558_paarlbergwp02-04.pdf

WCFIA Working Paper 02–04, July 2002.

Desai, Mihir A. 2002. “Expectations and Expatriations: Tracing the Causes and Consequences of Corporate Inversions”.Abstract

This paper investigates the determinants of corporate expatriations. American corporations that seek to avoid U.S. taxes on their foreign incomes can do so by becoming foreign corporations, typically by "inverting" the corporate structure, so that the foreign subsidiary becomes the parent company and U.S. parent company becomes a subsidiary. Three types of evidence are considered in order to understand this rapidly growing practice. First, an analysis of the market reacton to Stanley Works's expatriation decision implies that market participants expect its foreign inversion to be accompanied by a reduction in tax liabilities on U.S. source income, since savings associated with the taxation of foreign income alone cannot account for the changed valuations. Second, statistical evidence indicates that the large firms, those with extensive foreign assets, and those with considerable debt are the most likely to expatriate – suggesting that U.S. taxation of foreign income, including the interest expense allocation rules, significantly affect inversions. Third, share prices rise by an average of 1.7 percent in response to expatriation announcements. Ten percent higher leverage ratios are associated with 0.7 percent market reactions to expatriations, reflecting the benefit of avoiding the U.S. rules concerning interest expense allocation. Shares of inverting companies typically stand only at 88 percent of their average values of the previous year, and every ten percent of prior share price appreciation is associated with 1.1 percent greater market reaction to an inversion announcement. Taken together, these patterns suggest that managers maximize shareholder wealth rather than share prices, avoiding expatriations unless future tax savings – including reduced costs of repatriation taxes and expense allocation, and the benefits of enhanced worldwide tax planning opportunities – more than compensate for current capital gains tax liabilities.

576_expectationsandexpatriations.pdf