Research Library

2002
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.
Download PDF
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.
Download PDF
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
Domínguez, Jorge I, and Steven Levitsky. 2002. “U.S. Must Help Argentina Recover”. Publisher's VersionAbstract

The Bush administration, like its two predecessors, has expressed strong support for democracy in the Americas. It is now time to put its money where its mouth is.

Argentina's story in the 1990s was, in many respects, exactly what the United States would like to see happen throughout the hemisphere. The country has been a democracy since 1983, its longest span of constitutional government since the 1920s.

It has undergone a major foreign policy shift. Argentina resolved territorial disputes that once brought it to the edge of war with its neighbors, dismantled programs that could have led to the development of nuclear weapons, downsized its armed forces and became one of the most reliable U.S. allies in Latin America.

Poster Child

Argentina also became a poster child for market-oriented economic reform in the 1990s. The 1991 Convertibility Law, which pegged the Argentine peso to the dollar at a one-to-one rate, ended a devastating period of hyperinflation and helped to reintegrate Argentina into the global economy. The first Bush administration was a key ally in this process, supporting Argentina politically and financially.

Yet today Argentina is bankrupt, and its hard-won democracy is in danger. Mass riots and looting left at least two dozen people dead and forced President Fernando de la Rúa to resign in December. After more riots last weekend, Adolfo Rodríguez Saá also resigned a week after being appointed interim president.

A nearly four-year-long recession has pushed the unemployment rate to almost 20 percent and, according to one study, more than three million people into poverty in the last year alone. Argentina now stands on the brink of a huge debt default and a political meltdown.

The causes of the current crisis are disputed, but most observers agree that the same convertibility scheme that had ended the hyperinflationary crisis a decade ago left Argentine governments without instruments to respond to the recession that hit the country in the wake of the 1997 Asian financial crisis. Unable to increase the money supply or devalue the currency, governments were left only with fiscal policy instruments.

The de la Rúa government was also shackled by its $132 billion debt burden. Rather than boosting the economy through a fiscal or monetary stimulus, as governments normally do, Argentine governments did the opposite in their increasingly desperate effort to sustain international financial credibility: They cut spending in the face of recession and refused to dismantle the currency peg that once ended hyperinflation.

The recession deepened, unemployment soared, poverty widened and tax revenues plummeted.

No Easy Way Out

There is no easy way out of this crisis. Indeed, any interim government will have to undertake one or both of the two Ds that its predecessor desperately sought to avoid: default and devaluation. Both options will entail massive economic and political costs.

This is where the Bush administration can help. Argentina's successful economic adjustment requires approximately $50 billion in international support for its evolving international-debt and exchange-rate policies, consistent with its economic realities and its international financial obligations.

That large sum can be assembled only with the direct, active and immediate support of the Bush administration, working with the International Monetary Fund and other governments and public and private financial institutions. One reason to assemble the large sum is to deter a worse panic.

Why should the U.S. government help soften Argentina's difficult landing? During the 1990s, Republican and Democratic administrations actively pursued the twin goals of democracy and economic integration in the Americas. Those goals are now imperiled. Argentina's further collapse would directly or indirectly damage other South American economies, provoking cumulative financial panics. And the breakdown of one of the region's largest democracies would undermine two decades of gains across the hemisphere.

Only two decades ago, dictatorship, not democracy, dominated much of Latin America. Argentina suffered six military coups between 1930 and 1976.

Since 1983, Argentines have put political violence and instability behind them. Presidents are now regularly and freely elected, and power has passed peacefully several times from government to opposition. Civil liberties are now widely respected, and the country possesses a vibrant free press and civil society.

Losing Hope

The current crisis threatens to undo these democratic gains. After four years of recession, Argentines are beginning to lose hope. Trust in government has eroded. Many citizens no longer believe their elected leaders are able to address their most pressing problems.

The de la Rúa 2-year-old government suffered such a dramatic loss of support because it was increasingly perceived to be sacrificing its citizens' well-being to meet the demands of financial markets. In his wake, Rodríguez Saá's grace period lasted only a week.

The danger today is that frustration has spread to include the entire political elite, and perhaps even Argentina's political institutions—patterns similar to those that gave rise to Alberto Fujimori in Peru and Hugo Chávez in Venezuela. If that occurs, the prospects for democracy will dim considerably.

It has not come to that yet. Neither de la Rúa's or Rodríguez Saá's resignation was a military coup, and no Argentine Hugo Chávez has yet emerged. No one doubts that the election to choose de la Rúa's successor will be free and fair. But if Argentina is to steer clear of a Venezuela-like fate, its new government must deliver economic solutions to Argentines. To do so, it will require external assistance.

A successful model of such U.S.-backed support was tested in Mexico. The U.S. government's decision to organize a financial assistance package to help Mexico address the 1994-95 financial panic was bold and politically risky. But it clearly worked. A worse panic was deterred, economic growth was soon restored and Mexico made an impressive transition to democracy.

Argentina deserves similar help. Few, if any, Latin American countries combined democracy and market reforms as successfully as Argentina did in the 1990s.

Argentine democracy has proven remarkably resilient, weathering hyperinflation and radical economic reform. But if something is not done soon to give Argentines a realistic expectation that their politicians and democratic institutions can provide solutions to their problems, someone else will try to convince them that those politicians and those institutions are themselves the problem.

If that happens, U.S. interests will suffer badly in Argentina and elsewhere in the Americas.

Kydd, Andrew H. 2002. “Which Side Are You On?: Bias, Credibility and Mediation”.Abstract

Mediators are often thought to be more effective if they are unbiased, or have no preferences over the issue in dispute. This paper presents a game theoretic model of mediation drawing on the theory of "cheap talk" which highlights a contrary logic. Conflict arises in bargaining games because of uncertainty about the resolve of the parties. A mediator can reduce the likelihood of conflict by providing information on this score. For a mediator to be effective, however, the parties must believe that the mediator is telling the truth, especially if the mediator counsels one side not to make a large demand because their opponent has high resolve and will fight. An unbiased mediator who is simply interested in minimizing the probability of war will have a strong incentive to make such statements even if they are not true, hence the parties will not find the mediator credible. Only a mediator who is effectively "on your side" will be believed if they counsel restraint. Parties will accept mediators who are biased against them if there are social norms which imply that rejecting mediation is a sign of weakness and something to hide, rather than of strength. There is a social benefit to promulgating such norms, because of the loss involved in letting conflicts go unmediated.

468_janmed.pdf
Domínguez, Jorge I. 2002. Mexico, Central, and South America: New Perspectives (In Four Volumes). Garland Publishing Inc. Publisher's VersionAbstract

With the fall of the Soviet Union and the acceleration of global economic, political, and social pressures, Mexico, Central, and South America have undergone vast transformations. This collection details these changes and updates the scholarship on a region once defined by the cold war and now struggling to define itself within the era of economic globalization and democratization. Rapid changes in the area have produced new and contentious scholarship, the best of which is contained in this new five-volume set. Collected by one of the premiere authorities on the region, each volume contains a valuable introduction and considers a key discipline of study.

Maybury-Lewis, David. 2002. The Politics of Ethnicity: Indigenous Peoples in Latin American States. Harvard University Press. Publisher's VersionAbstract

The indigenous people of the hemisphere have resisted a five-hundred-year assault, fighting to maintain their cultural identities. During this time, authorities in the Americas have insisted that the toleration of indigenous societies and cultures would undermine their respective states. In recent years, however, the nations of the Americas have started to reverse themselves. They are altering their constitutions and proclaiming themselves multiethnic. Why is this happening now? The Politics of Ethnicity: Indigenous Peoples in Latin American States, edited by David Maybury-Lewis, helps us understand the reasons and history behind these times of transition.

The book provides a valuable overview of current problems facing indigenous peoples in their relation with national states in Latin America, from the highlands of Mexico to the jungles of Brazil. The traditional, sometimes centuries old, relations between states and indigenous peoples are now changing and being rediscussed. The collection, authored by U.S. and Latin American anthropologists using interdisciplinary approaches, enables the reader to understand these recent developments in a comparative framework. An ambitious and quite thorough collection, it is brought together skillfully by one of the discipline's greatest thinkers.

Riker, James V, and Kathryn Sikkink. 2002. Restructuring World Politics: The Power of Transnational Social Movements, Networks and Norms. University of Minnesota Press. Publisher's VersionAbstract

A comprehensive look at the global movements that are transforming international relations.

From the earliest campaign against Augusto Pinochet's repressive practices to the recent massive demonstrations against the World Trade Organization, transnational collective action involving nongovernmental organizations has been restructuring politics and changing the world. Ranging from Santiago to Seattle and covering more than twenty-five years of transnational advocacy, the essays in Restructuring World Politics offer a clear, richly nuanced picture of this process and its far-reaching implications in an increasingly globalized political economy. The book brings together scholars, activists, and policy makers to show how such advocacy addresses-and reshapes-key issues in the areas of labor, human rights, gender justice, democratization, and sustainable development throughout the world.

A primary goal of transnational advocacy is to create, strengthen, implement, and monitor international norms. How transnational networks go about doing this, why and when they succeed, and what problems and complications they face are the main themes of this book. Looking at a wide range of cases where nongovernmental actors attempt to change norms and the practices of states, international organizations, and firms in the private sector—from debt restructuring to protecting human rights, from anti-dam projects in India to the pro-democracy movement in Indonesia—the authors compellingly depict international nongovernmental organizations and transnational social movements as considerable, emerging powers in international politics, initiating, facilitating, and directing the transformation of global norms and practices.

Bellin, Eva. 2002. Stalled Democracy: Capital, Labor, and the Paradox of State-Sponsored Development. Cornell University Press. Publisher's VersionAbstract

In this ambitious book Eva Bellin examines the dynamics of democratization in late-developing countries where the process has stalled. Bellin focuses on the pivotal role of social forces and particularly the reluctance of capital and labor to champion democratic transition, contrary to the expectations of political economists versed in earlier transitions. Bellin argues that the special conditions of late development, most notably the political paradoxes created by state sponsorship, fatally limit class commitment to democracy. In many developing countries, she contends, those who are empowered by capitalist industrialization become the allies of authoritarianism rather than the agents of democratic reform.

Bellin generates her propositions from close study of a singular case of stalled democracy: Tunisia. Capital and labor's complicity in authoritarian relapse in that country poses a puzzle. The author's explanation of that case is made more general through comparison with the cases of other countries, including Mexico, Indonesia, South Korea, Turkey, and Egypt. Stalled Democracy also explores the transformative capacity of state-sponsored industrialization. By drawing on a range of real-world examples, Bellin illustrates the ability of developing countries to reconfigure state-society relations, redistribute power more evenly in society, and erode the peremptory power of the authoritarian state, even where democracy is stalled.

Eva Bellin is an associate professor at Hunter College and was a faculty associate of the Weatherhead Center for International Affairs.

Cooper, Richard N, and Richard Layard. 2002. What the Future Holds: Insights from Social Science. The MIT Press. Publisher's VersionAbstract

Predicting the future is notoriously difficult. But systematic analysis leads to clearer understanding and wiser decisions. Thinking about the future also makes social scientists focus their research into the past and present more fruitfully, with more attention to key predictors of change.

This book considers how we might think intelligently about the future. Taking different methodological approaches, well-known specialists forecast likely future developments and trends in human life. The questions they address include: How many humans will there be? Will there be enough energy? How will climate change affect our lives? What patterns of work will exist? How will government work at the local, national, and world level? Will inflation remain under control? Why have past forecasts been so bad? The book concludes with a discussion of the intellectual and historical context of futurology and a look at the accuracy of predictions that were made for the year 2000.

Estévez-Abe, Margarita. 2002. “Negotiating Welfare Reforms: Actors and Institutions in Japan”.Abstract

In Sven Steinmo and Bo Rothstein eds. Institutionalism and Welfare Reforms (Palgrave 2002)

During the 1990s, Japan simultaneously expanded and cut benefits in different programs. In doing so, the Japanese case casts doubts upon facile assumption that the welfare state goes through separate phases of expansion and retrenchment. What seems to be happening in Japan is an overall reshuffling of costs and benefits within the welfare state.

Welfare reforms are difficult, because, as Esping–Andersen (1996) and Pierson (1994) have pointed out, welfare states produce groups with stakes in the status quo. Some institutions, however, make it easier to reform the welfare state (cf. Bonoli 2000: Bonoli and Palier 2000; Pierson ed. 2001). Visser and Hemerijick (1997), for instance, show how the Dutch transformed their welfare state by drawing upon a corporatist social partnership. I look at the noncorporatist country, Japan, to examine why some reforms were possible and some not.

Helpman, Elhanan. 2002. “Integration Versus Outsourcing in Industry Equilibrium”.Abstract

We develop an equilibrium model of industrial structure in which the organization of firms is endogenous. Differentiated consumer products can be produced either by vertically integrated firms or by pairs of specialized companies. Production of each variety of consumer good requires a unique, specialized component. Vertically integrated firms can manufacture the components the need in the quantity and type that maximizes profits, but they face a relatively high cost of governance. Specialized firms can produce at lower cost, but input suppliers face a potential hold–up problem. We study the equilibrium mode of organization when inputs are fully or partially specialized. We consider how the degree of competition in the market and other parameters affect the equilibrium choices, and how the equilibrium compares with the efficient allocation.

Foner, Nancy. 2002. “Comparative Perspectives on Immigrants in New York -- Across Time and Space”.Abstract

This paper is a comparison across time of the two great waves of immigration to New York City in the last hundred years: the first wave, between 1880 and 1920, brought hundreds of thousands of eastern Europeans and southern Italians to the city; the recent influx of Asians, Latin Americans, and Caribbeans began in the 1960s and is still going strong. In the first wave, the African American community was insignificant, and the total black population did not even reach a hundred thousand. By time of the second wave, the city had been on the receiving end of a massive flow of African Americans from the South that began around World War I and continued until the 1960s.