Globalization is the process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Extreme views of this process stress the destruction of local cultures and the homogenization of life styles, caused by the spread of American and Japanese popular culture. This article reviews arguments for and against the cultural imperialism hypothesis, and concludes that globalization is in the eyes of the beholder. An anthropological approach to these issues hinges upon the distinction between form and content (or outward appearance versus internal meaning). Does the appearance of a McDonald's restaurant necessarily imply that local consumers are being Americanized? Many commentators, notably journalists and politicians, confuse form with content and do not look closely at the ways ordinary people incorporate global influences into their everyday lives. This article examines several cultural systems that are said to foster globalization: fast food, film, television, style, pop music, and the internet.
Five years ago, with James Woolsey, former director of the Central Intelligence Agency, I headed a government study that found a lack of preparedness to face catastrophic terrorism. Our warnings and those of similar groups went largely unheeded. On Sept. 11, complacency was wiped away, but the fragmented bureaucratic structure and procedures of our government remain a barrier to action, despite President Bush's decision to name Gov. Tom Ridge of Pennsylvania to head a new Office of Homeland Defense.By using the rhetoric of war to frame our response to the terror attacks, President Bush has marshaled the public's patriotism and persuaded Congress to provide financing. But the danger in the rhetoric is that the new office may be structured like a military organization.There are many types of terrorism and many kinds of terrorist weapons. Even if we succeed in eliminating Osama bin Laden, we have to remember that Timothy McVeigh was home-grown. And as we succeed in battening down the cockpits to prevent civilian aircraft being used again as giant cruise missiles, terrorists will be exploring other vulnerabilities in our open society and investigating even more devastating weapons.Fortunately, nuclear and biological weapons are not as easy to make as popular fiction suggests, but there have been reports that Mr. bin Laden and others have tried to purchase stolen nuclear weapons from the former Soviet inventory. We also know that a few years ago the Japanese Aum Shinrikyo cult killed people with both chemical and biological agents.Suppressing terrorism is very different from a military campaign. It requires continuous, patient, undramatic civilian work and close cooperation with other countries. And it requires coordination within our government.The C.I.A. and F.B.I. must improve their ability to work together on detection and must reconcile their different authorities and programs in intelligence and law enforcement. The F.B.I., the Immigration and Naturalization Service, the Customs Service, the Defense Department and other agencies must improve their cooperation. Because of poor coordination, two suspects were able to enter this country even after their names had been placed on a watch list, and the jet fighters that scrambled after the Federal Aviation Administration notification of the hijackings arrived too late.The Federal Emergency Management Agency has to work with local governments on domestic responses. New federally funded research and development programs are needed to address each phase of a crisis, as well as to accelerate new technologies and devise special training and testing exercises.It would be a mistake if the Office of Homeland Defense merely added another layer of bureaucracy. Instead, Governor Ridge should head a committee of deputy secretaries from the agencies with control over budgets and programs involved with terrorism defense. He should create a small staff that works closely with the Office of Management and Budget to monitor plans to be carried out by existing agencies.His office should be supported by new research corporations created to deal with terrorism, as the RAND corporation was created in the cold war to deal with the nuclear threat. These groups should not be bound by the rigidities and inadequate salaries of the federal bureaucracy. Their independence should allow them to plan an antiterror system that can find gaps and overlaps in government agencies' antiterror efforts and examine weaknesses in private systems like computer networks.Planners should conduct regular exercises with teams simulating terrorists and defenders, trying to outsmart each other. Had we done this for our airport security system, we might have realized that it was designed to detect guns and bombs but not to stop suicide pilots armed with knives and box cutters.As recently as last spring, a commission on national security headed by former Senators Gary Hart and Warren Rudman also warned of our lack of preparedness. Sadly, the commissioners were right. Now we must organize ourselves effectively to combat terrorism.
On the 10th anniversary of 9/11, Joseph S. Nye, Jr. recorded a video for the New York Times commenting on this Op-ed piece that he wrote for the newspaper.
EL PARTEAGUAS MUNDIAL DE FINES DE LOS OCHENTA y comienzos de los noventa no dejó de afectar a Cuba. El derrumbe de los regímenes comunistas europeos y, en particular, de la Unión Soviética puso fin también a una larga etapa de la historia de Cuba comenzada en 1960. En su sistema político, económico y social, Cuba había sido distinta del resto de América durante las últimas tres décadas de la Guerra Fría en Europa. Con la desaparición de su principal aliado internacional, el gobierno de Cuba, acorralado, se vio obligado a iniciar un viraje en la conducción de su política nacional e internacional. Ese viraje, sin embargo, fue un golpe de timón de un buque anclado, cuyo piloto reorienta el barco sin alterar su equilibrio a pesar de un fuerte oleaje.
American Political Science Review, 95, 649-662There are many well–developed theories that explain why governments redistribute income, but very few can explain why this often is done in a socially inefficient form. In the theory we develop, compared to efficient methods, inefficient redistribution makes it more attractive to stay in or enter a group that receives subsidies. When political institutions cannot credibly commit to future policy, and when the political influence of a group depends on its size, inefficient redistribution is a tool to sustain political power. Our model may account for the choice of inefficient redistributive policies in agriculture, trade, and the labor market. It also implies that when factors of production are less specific to a sector, inefficient redistribution may be more prevalent.
Among countries colonized by European powers during the past 500 years, those that were relatively rich in 1500 are now relatively poor. We document this reversal using data on urbanizations patterns and population density, which we argue, proxy for economic prosperity. This reversal weighs against a view that links economic development to geographic factors. Instead, we argue that the reversal reflects changes in the institutions resulting from European colonialism. The European interventions appears to have created an "institutional reversal" among these societies, meaning that Europeans were more likely to introduce institutions encouraging investment in regions that were previously poor. This institutional reversal accounts for the reversal in relative incomes. We provide further support for this view by documenting that the reversal in relative incomes took place during the late eighteenth and early nineteenth centuries, and resulted from societies with good institutions taking advantage of the opportunity to industrialize. This paper documents a reversal in relative incomes among the former European colonies. For example, the Mughals in India and the Aztecs and Incas in the Americas were among the richest civilizations in 1500, while the civilizations in North America, New Zealand, and Australia were less developed. Today the United States, Canada, New Zealand, and Australia re an order of magnitude richer than the countries not occupying the territories of the Mughal, Aztec, and Inca Empires.
We develop a theory of political transitions inspired by the experiences of Western Europe and Latin America. Nondemocratic societies are controlled by a rich elite. The initially disenfranchised poor can contest power by threatening revolution, especially when the opportunity cost is low, for example during recessions. The threat of revolution may force the elite to democratize. Democracy may not consolidate because it is redistributive, and so gives the elite an incentive to mount a coup. Highly unequal societies are less likely to consolidate democracy, and may end up oscillating between regimes and suffer substantial fiscal volatility.
The literature on the role of religious institutions in ethnic conflict does not answer the question of whether these institutions support violence or the status quo. From a resource mobilization perspective, religious institutions generally have the organizational resources to facilitate opposition to the status quo. However, it is also clear that most religions at different times have supported both violence and the status quo. An analysis of 105 ethno–religious minorities using data from the Minorities at Risk project shows that religious institutions tend to inhibit peaceful opposition unless there is a sufficient level of perceived threat to the religious institutions or the religion itself, in which case religious institutions tend to facilitate political opposi–tion among ethno–religious minorities. However, the decision to violently oppose a regime is based mostly on secular factors including the desire for some form of autonomy or independence and political discrimination against the ethno–religious minority.Studies in Conflict and Terrorism, Vol. 22, Iss. 2 (1999): 119-139.
As the international community reflects on the forms and magnitude of the assistance that can be rendered to Pakistan, it is worth pondering how a country that has been one of the world's largest recipients of foreign financial aid—nearly $58 billion from 1960-98, the third-highest of any country—still finds itself in such a beleaguered and impoverished state. In particular, the international community has to grapple with the reality that the very institution whose help is critical in efforts to break the power of terrorists groups in South Asia, the Pakistani military, is also deeply responsible for creating and nurturing these groups. The role of the Pakistani army is central not only to the well being of Pakistan's citizens, and to the region. It is also critical to stopping the global spread of terrorism.Pakistan's current economic, political and social fragility is primarily the result of the country's history as a beneficiary of geostrategic rents—from the U.S. during the 1950s and `60s, and again in the '80s; from the Middle East, especially in the '70s and '80s; and from China in the '90s. These substantial rents have shaped the country's political economy and its institutions. And they have underpinned the continued preeminence of the Pakistani military even as militaries in most other developing countries have gone back to the barracks.The consequences have been devastating. Internally, Pakistan's institutions have atrophied, which has in turn provided the justification for the military to maintain its monopoly on power. Gen. Pervez Musharraf has promised to return the country to full democracy with provincial and federal elections in October 2002. And yet there is ample evidence to suggest that the proposed power devolution, carried out via constitutional reforms, will actually marginalize secular political parties and the civilian bureaucracy, thereby allowing the army an even wider role in the country's political future.Moreover, the military's hegemonic role has had a negative effect on the nation's economy. The military has claimed a disproportionate fraction of the country's modest resources while expenditures on health, education and business development programs have suffered. Even today, military expenditures are twice that of the latter, in a country that has one of the weakest indicators of human development.Another consequence stems from the chronic quest for legitimacy that authoritarian regimes need to retain power. Pakistan's military has used two instruments to shore up its domestic support. First, beginning with President Muhammad Zia ul-Haq in the early '80s, the military cultivated the Islamic religious establishment using religious parties to outflank their mainstream counterparts. This Faustian bargain resulted in the rapid growth of Islamic schools, the madraasas, with financial support from Saudi Arabia, which was eager to enlarge the influence of Wahabist Islam and the Islamicization of the Pakistani military and society. The weakening of secular political parties further justified the military establishment's grip on political power.The second instrument of the military government's legitimacy comes from the perennial tension with India. The need to "protect the integrity of Pakistan" against the alleged wily machinations of India has always been a handy tool to whip up nationalist sentiment and justify the military's hold on power. The May 1999 Kargil invasion, engineered by Gen. Musharraf even as the country's own civilian government was engaged in a dialogue with its Indian counterpart, ensured that dialogue was still-born and the military's hegemony unchallenged.But even if the Pakistani security establishment's bleeding of India in Kashmir can be justified by India's actions, it is Afghanistan, much more than India, that has suffered egregiously from the Pakistani military's actions. Driven by its obsession with India, the Pakistani military sought to create a client state in Afghanistan in its quest for "strategic depth," and thereby build a staging area from which to infiltrate Kashmir.From funding, logistics and indirect military support, the Pakistani military intervened in Afghanistan's affairs to a degree that even the superpowers rarely managed during the Cold War. Although the ultimate rationale of the Pakistani security establishment's involvement in Afghanistan has been India, the net result was to further hasten the destruction of the country begun by the Soviets.A third instrument of control has been the military's contention that it is a protector of Muslims throughout South Asia. This claim is made by an institution that was responsible for one of the world's worst slaughters of Muslims in the last century—at least half a million people in what was then East Pakistan, now Bangladesh, in 1971.Western, and in particular American policy makers and media, have long been apologists for the Pakistani army. Nevertheless, though the strategic calculations of the Cold War have given way to the tactical imperatives of the current Afghan campaign, this alone cannot justify blind support for the military, nor glossing over the long-term consequences of that support for Pakistan and the region, and the West itself.There can be no doubt that given Pakistan's importance on the global stage and its current weaknesses, the country both needs and deserves considerable and sustained international financial assistance. But in doing so, there should be a clear target for the aid: a country and its people. The international community must ensure that, unlike the foreign assistance offered to Pakistan in the 1980s, new resources don't simply help to further strengthen the very institution that has been at the root of the country's—and increasingly the region's—problems.Proposals to cut Pakistan's debt servicing and reschedule the debt are basically steps in the right direction. However, unless the resulting savings are channeled toward sharply increasing social expenditures on human capital development and poverty-oriented programs, they will serve little more than to further entrench the military regime. It is not surprising that during his recent visit to Washington, Gen. Musharraf was more interested in securing the release of a package of F-16 fighter jets from the Bush administration than in obtaining aid for his country's devastated education system.External assistance should therefore be contingent on curbing military expenditures (which continue to be one of the highest in the world) as well as funding for the madraasas that serve as jihadi prep schools (although it should be emphasized that many madraasas are simply parochial schools and not training grounds for zealots). However, these initiatives will also require the cooperation of "moderate" Arab countries, especially Saudi Arabia and the United Arab Emirates, whose citizens are an important source of funds not only in Pakistan, but also in other parts of South and Southeast Asia.The manner in which the international community helps Pakistan will have broader implications as it grapples to assist other weak, undemocratic states. Unfortunately, for much of the past half-century, foreign aid has too often served as the palatable cover for what were essentially bribes to friendly regimes to secure their cooperation than as resources whose intent was the long term political and economic development of a country and its people. In the process, hundreds of billions of dollars have been spent with little to show for it; regimes that have caused untold misery to their people in a variety of contexts have been entrenched; donor institutions have been seriously discredited. This is a lesson American policy makers should heed in helping Pakistan to secure a promising future for its 140 million people.
Before the Nazis killed him for his work in the Resistance, the great French historian Marc Bloch wrote a famous short book, Strange Defeat, in which he puzzled over Germany's six-week conquest of his nation in the spring of 1940. In Strange Victory, the distinguished diplomatic historian Ernest R. May argues that Germany's success is even more of a puzzle than Bloch could have imagined, for we now know that its armed forces were measurably inferior to those of France and its allies, even in tanks, and its top military leaders all considered an attack on France to be a long-odds gamble.Strange Victory, a riveting study not only of those crucial six weeks but of the years and days leading up to the German invasion, makes it clear how Hitler, though a lazy, ill-informed psychopath, outguessed his own experts as to how French and British leaders would respond to German actions. May's dramatic narrative, laced with vivid character sketches, draws on little-used German, French, and British archives to show how German intelligence officers found the keys to plan a successful surprise attack on the Western front, and, on the Allied side, how French and British officers failed to see or understand the plain signs of Germany's intentions, even though they had well-placed spies in Berlin. His interpretative history suggests new ways to think about the decisions taken on both sides, and new ways to see how this history relates to issues of our own time.Strange Victory makes it clear that French and British leaders (Winston Churchill not excepted) clung to their expectations of a nearly bloodless victory over Germany, even through the first devastating days of the German offensive. This part of the story is especially important, for it has some of the qualities of a parable: Nazi Germany was taking advantage of governmental habits of mind and custom in 1940s France that have parallels today—among them, confidence in technology, a high aversion to incurring casualties, and decision-making processes that did not favor rapid response. In the future, Professor May suggests, nations may suffer strange defeats of their own if they do not learn from their predecessors' mistakes.
In Bernhard Ebbinghaus and Philip Manow eds., Comparing Welfare Capitalism: Social Policy and Political Economy in Europe, Japan and the USA (London/New York: Routledge, 2001)To the extent that the literature on the varieties of capitalism has taken notice of welfare state arrangements, it has done so by focusing upon the impact of such arrangements on employment relations (Esping–Andersen 1990; Estevez–Abe et al. 1999; Manow 1997a,b; Mares 1997; Huber and Stephens 1997; Wood 1997). In the literature, however, employment relations constitute just one of the features that define a specific model of capitalism (Aoki and Dore 1994; Berger and Dore 1996; Crouch and Streeck 1997; Hall 1986; Hal and Soskice, forthcoming; Boyer 1989; Hollingsworth and Boyer 1997; Kitschelt et al. 1999). The nature of financial markets and the relations between firms and suppliers of capital are every bit as important. The ability of corporations to form long–term commitments, such as lifetime employment, depends on the availability of patient, far–sighted capital. The longer the time horizon of capital suppliers, the greater the autonomy of corporate managers. The time horizon of capital is, in short, one of the most significant determinants of variation between different types of capitalism.
According to WHO, while 50 percent of global health research and development (R&D) in 1992 was undertaken by private industry, less than 5 percent of that was spent on diseases specific to less developed countries (LDCs).1,2 Despite this, private industry has produced major drug discoveries and developments for serious LDC disease threats, including malaria, TB, hepatitis B, river blindness, meningitis, leprosy, sleeping sickness and trachoma. Moreover, the development of globally–applicable drugs and vaccines has led to important advances in public health in developing countries. At the same time, the simple fact is that every company in the biopharmaceutical industry has a limited number of research and development programmes in their portfolio. These projects are regularly reviewed against each other using a variety of analytical tools. Fundamentally the process tends to favour those projects with a higher probability of success and which, if successful, would serve markets with a larger value. As a result, there is underinvestment in and comparative neglect of some diseases concentrated in LDCs, such as tuberculosis and malaria, despite their high global disease burden. It is therefore generally agreed that new mechanisms and incentives are needed to encourage industrial R&D in such diseases. In this paper, we summarize some recent thinking about ways to stimulate industrial R&D for neglected infectious diseases, and we argue that enlarging the value of the market for drugs and vaccines for these diseases is a critical step toward stimulating R&D.
CAMBRIDGE, Mass. -- The America of six decades ago now seems achingly familiar. The attack on Pearl Harbor, like the attacks of Sept. 11, evoked feelings of pride and citizenship - as well as anxiety and helplessness - in every American. In the days and weeks following Dec. 7, 1941, Americans sought meaning and comfort in their communities, just as we do now. And we can find inspiration in the very institutions and practices they created 60 years ago.A durable community cannot be built on mere images of disaster, however vivid or memorable. It arises from countless individual acts of concern and solidarity. Television images of ash-covered firefighters cannot create community bonds any more than radio reports of burning battleships could.What created the civic community in the United States in the aftermath of Pearl Harbor? The victory gardens in nearly everyone's backyard, the Boy Scouts at filling stations collecting floor mats for scrap rubber, the affordable war bonds, the practice of giving rides to hitchhiking soldiers and war workers - all these taught "the greatest generation" an enduring lesson in civic involvement.Their involvement was as varied as it was deep. The Civilian Defense Corps grew to 12 million Americans in mid-1943, from 1.2 million in 1942. In Chicago, 16,000 block captains in the corps took an oath of allegiance in a mass ceremony; they practiced first aid, supervised blackouts and planned gas decontamination. Nationwide, Red Cross volunteers swelled to 7.5 million in 1945, from 1.1 million in 1940. By 1943, volunteers at 4,300 civilian-defense volunteer offices were fixing school lunches, providing day care and organizing scrap drives.
All these endeavors represented cooperation between the federal government and civic society. Sometimes the government merely offered encouragement and approval, as it did with the victory gardens. Often it played an active role, or even the prime role. The United States financed the war effort in part through small-denomination war bonds sold to the general public, not because it was economically efficient - Treasury Secretary Henry Morgenthau conceded it wasn't - but because of the importance of weaving the actions of millions of Americans together in pursuit of larger national goals.America's young people, especially, were taught practical civic lessons. Over a two-year period, the historian Richard Lingeman writes in his book "Don't You Know There's a War On?" eighth graders in Gary, Ind., were especially busy. They sold an average of $40,000 worth of war stamps a month. They campaigned against buying black-market goods. They took auxiliary fire- and police-training courses. They held tin-can drives. And this was just in one medium-sized Midwestern city.Such sacrifice was reinforced by popular culture from radio shows to comic strips. All Americans felt they had to do their share, thereby enhancing each American's sense that her commitment and contribution mattered. As one said later in an oral history of the home front: "You just felt that the stranger sitting next to you in a restaurant, or someplace, felt the same way you did about the basic issues."Society is different now, of course, as is the war we are fighting. Americans have become more transient, and involvement in civic institutions is in decline. The war itself involves far fewer Americans in battle; it creates few material hardships; the enemy is largely invisible. Nonetheless, we can take action to ensure that this resurgence of community involvement continues.Since Sept. 11, we Americans have surprised ourselves in our solidarity. Roughly a quarter of all Americans, and more than a third of all New Yorkers, report giving blood in the aftermath of the attacks. Financial donations for the victims and their rescuers have reached almost $1 billion. Attendance at places of worship has increased.
Still, underneath all this mutual concern lies an unsettling question: Will this new mood last?I believe it can. Even 60 years ago, civic involvement took hold and flourished only with government support. It was not all spontaneous. This is both instructive and reassuring; instructive because it shows that the most selfless civic duties cannot be performed without government help, reassuring because it shows us a path toward a more civil society today.President Bush's recent call to America's children and teenagers to wash cars or rake yards to earn money to benefit the children of Afghanistan was well-intentioned. But government can do more. It should urge America's religious congregations to plan interfaith services over Thanksgiving weekend. It should also expand national service programs like AmeriCorps. And just as those Boy Scouts at filling stations learned firsthand the value of civic life, this new period of crisis can make real to us and our children the value of deeper community connections.
This book brings together a diverse group of experts on international monetary policy to examine the basic conceptual issues of currency unions and other monetary regimes, including flexible and fixed exchange rates, and assess the available empirical evidence on the performance of these alternative monetary systems. They also draw some policy conclusions on the desirability of currency unions for countries in various circumstances.Currency Unions reviews the traditional case for flexible exchange rates and countercyclical?that is, expansionary during recessions and contractionary in booms monetary policy and shows how flexible exchange rate regimes can better insulate the economy from such real disturbances as terms-of-trade shocks. The book also looks at the pitfalls of flexible exchange rates and why fixed rates, particularly full dollarization might be a more sensible choice for some emerging-market countries. The contributors also detail the factors that determine the optimal sizes of currency unions, explain how a currency union greatly expands the volume of international trade among its members, and examine the recent implementation of dollarization in Ecuador.
This paper outlines our initial thoughts on treating identity as a variable. It is part of a longer-term project
to develop conceptualizations of identity and, more importantly, to develop technologies for observing
identity and identity change that will have wide application in the social sciences. Heretofore the usual
techniques for analyzing identity have consisted of non-replicable discourse analysis or lengthy individual
interviews, at one extreme, or the use of large-N surveys at the other. Yet, much social science research
relies on historical and contemporaneous texts. Specifically we hope to develop computer-aided
quantitative and qualitative methods for analyzing a large number of textual sources in order to determine
the content, intensity, and contestation of individual and collective identities at any particular point in time
and space. These methods will allow researchers to use identity in a more rigorous and replicable way as an
independent (and dependent) variable in a wide variety of research projects. They will also allow more
rigorous testing among identity-based hypotheses—such as those drawing on social identity theory, role
theory, or cognitive theories—along with other variables in explaining behavior. Researchers may also be
able to develop early warning indicators that might be used to track growing intensity of out-group
differentiation, a development which makes subjected groups more susceptible to identity-based
mobilization for conflict. Perhaps most important, scholars will, using these methods, be able to observe
more systematically the contestation and construction of identity over time.
Paper prepared for presentation at APSA, August 30–September 2, 2001, San Francisco. Download PDF
Social science theories of contentious politics have been based almost exclusively on evidence drawn from the European and American experience, and classic texts in the field make no mention of either the Chinese Communist revolution or the Cultural Revolution—surely two of the most momentous social movements of the twentieth century. China's record of popular upheaval, moreover, stretches back well beyond this century, indeed all the way back to the third century B.C. This is a direct effect of the Confucian "mandate of heaven" which bestowed instant legitimacy on successful rebel leaders. This book, by bringing together studies of protest that span the Imperial, Republican, and Communist eras, introduces Chinese patterns and provides a forum to consider ways in which contentious politics in China might serve to reinforce, refine or reshape theories derived from Western cases.
This paper — a revision of an earlier draft that was entitled "When Do Special Interests Run Rampant? Disentangling the Role of Elections, Incomplete Information and Checks and Balances in Banking Crises" — develops and tests a model of the effect of political checks and balances on the incentives of elected veto players to cater to special interests. A larger number of veto players reduces political incentives to make deals with special interests, but the effect is declining in the rents available from such deals. Evidence from country responses to banking crises supports these conclusions: governments make smaller fiscal transfers to the financial sector and are less likely to exercise forbearance in dealing with insolvent financial institutions the larger the number of political veto players, conditional on the value of rents at stake. This simple explanation for special interest influence is robust to controls for more subtle institutional effects that are prominent in the literature, including the competitiveness of elections, regime type (presidential versus parliamentary) and electoral rules (majoritarian versus proportional).
It is widely accepted, not least in the agreement establishing the World Trade Organization (WTO), that the purpose of the world trade regime is to raise living standards all around the world — rather than to maximize trade per se. Increasingly, however, the WTO and multilateral lending agencies have come to view these two goals — promoting development and maximizing trade — as synonymous, to the point where the latter easily substitutes for the former. The net result is a confounding of ends and means. Trade has become the lens through which development is perceived, rather than the other way around. Imagine a trading regime in which trade rules are determined so as to maximize development potential, particularly that of the poorest nations in the world. Instead of asking, "How do we maximize trade and market access?" negotiators would ask, "How do we enable countries to grow out of poverty?" Would such a regime look different than the one that exists currently? The answer depends on how one interprets recent economic history and the role that trade openness plays in the course of economic development. The prevailing view in G7 capitals and multilateral lending agencies is that economic growth is dependent upon integration into the global economy. Successful integration in turn requires both enhanced market access in the advanced industrial countries and a range of institutional reforms at home (ranging from legal and administrative reform to safety nets) to render economic openness viable and growth – promoting. This can be ca lled the "enlightened standard view" – enlightened because of its recognition that there is more to integration than simply lowering tariff and non–tariff barriers to trade, and standard because it represents the conventional wisdom.In this conception, the WTO ’s focus on expanding market access and deepening integration through the harmonization of a wide range of "trade–related" practices is precisely what development requires. This paper presents an alternative account of economic development, one which questions the centrality of trade and trade policy and emphasizes instead the critical role of domestic institutional innovations. It argues that economic growth is rarely sparked by imported blueprints and opening up the economy is hardly ever critical at the outset. Initial reforms instead tend to combine unconventional institutional innovations with some elements from the orthodox recipe. They are country–specific, based on local knowledge and experimentation. They are targeted to domestic investors and tailored to domestic institutional realities.
A straightforward extension of the standard Stigler–Peltzman model of regulation, coupled with the Taagepera–Shugart analysis of electoral–system effects, suggests: (a) that the greater the seat–vote elasticities of majoritarian electoral systems will tilt policy in favor of consumers, while proportional systems should strengthen producers; and (b)that the pro–consumer bias of majoritarian systems should be manifested in systematically lower prices. Empirical tests, controlling for structural determinants of national price levels established in the earlier "law of one price" literature, establish majoritarian electoral systems as a significant and robust predictor, lowering national price levels in the mean OECD country by between ten and seventeen percent.
The process of European monetary integration varied widely among countries and over time. This paper argues that an important explanation for the evolution of European exchange rate arrangements was the sectoral impact of their expected effects on European trade and investment. In this perspective, the principal benefit of European MI was its expected easing of cross–border trade and investment within the EU, while its principal cost was the loss of national governments' ability to use currency policy to improve the competitive position of their producers. Empirical results indeed indicate that a stronger and more stable currency was associated with variables used as proxies for private economic interests — the importance of manufactured exports to the DM zone, and improvements in net exports. This suggests a powerful impact of private–interest factors in determining national currency policies.