Research Library

Leaning, Jennifer. 2000. Human Security: A Framework for Assessment in Conflict and Transition.Abstract
Human security is a concept that dates back to the Enlightenment. Various strains of meaning, spanning a focus on individual rights and a preoccupation with territorial integrity of states, have accompanied its use in many settings. In the last 25 years, the term has increasingly been applied to political, social, and economic inputs required to create security for individuals and communities. Most recently there has been growing interest in assessing the usefulness of this concept in the design of policies to provide relief and stabilization in areas emerging from war and conflict. In that transitional context this paper argues for a new definition of human security based on identifying those factors that protect and promote human well being through time. This argument builds on the capabilities analysis of Sen and Dreze, incorporates the vulnerability model described by Webb, and employs the psychosocial needs framework of Amoo. Noting that the provision of basic material supports is essential but not sufficient, the definition of human security advanced here insists on the additional importance, for individuals and communities, of fulfilling three basic psychosocial dimensions: a sense of home and safety; constructive family and social supports; and acceptance of the past and a positive grasp of the future. These three psychosocial dimensions (referred to in shorthand as home, community, and time) are evaluated in a number of settings, primarily in Africa. Suggestions are provided, based upon this concept, for humanitarian efforts in refugee and immediate post–conflict settings. The paper further argues that ways of measuring human security along these three dimensions are more easily approached through the use of negative indices, or threats to human security. The negative indices proposed here are social dislocation (for home), dynamic inequality (for community relationships), and high discount rate (for positive sense of the future). It is noted that further methodological effort is needed to refine the metrics to be used in these indices. Whether this concept and its proposed indices could prove useful in identifying trends in human security (or threats to human security) in the immediate post (or pre) conflict setting will require further empirical work, through retrospective case studies and prospective observation and analysis.
Austen-Smith, David. 2000. Redistributing Income under Proportional Representation, in .Abstract
Although majoritarian decision rules are the norm in legislatures, relatively few democracies use simple majority rule at the electoral stage, adopting instead some form of multiparty proportional representation. Moreover, aggregate data suggest that average income tax rates are higher, and distributions of posttax income flatter, in countries with proportional representation than in those with majority rule. While there are other differences between these countries, this paper explores how variations in the political system per se influence equilibrium redistributive tax rates and income distributions. A three–party proportional representation model is developed in which taxes are determined through legislative bargaining among successful electoral parties, and the economic decision for individuals is occupational choice. Political–economic equilibria for this model and for a two–party,winner–take–all, majoritarian system are derived and compared.
From the Journal of Political Economy 108, (December 2000): 1235-1269.Download PDF
Alesina, Alberto. 2000. Who Trusts Others?.Abstract
Both individual experiences and community characteristics influence how much people trust each other. Using individual–level data drawn from US localities we find that the strongest factors associated with low trust are: i) a recent history of traumatic experiences; ii) belonging to a group that historically felt discriminated against, such as minorities (blacks in particular)and, to a lesser extent, women; iii) being economically unsuccessful in terms of income and education; iv) living in a racially mixed community and/or in one with a high degree of income disparity. Religious beliefs and ethnic origins do not significantly affect trust. The role of racial cleavages leading to low trust is confirmed when we explicitly account for individual preferences on inter–racial relationships: within the same community, individuals who express stronger feelings against racial integration trust relatively less the more racially heterogeneous the community is.
Hausmann, Ricardo. 2000. The Redesign of the International Financial Architecture from a Latin American Perspective: Who Pays the Bills?.Abstract
This article discusses this "political economy" side of redesigning the international financial architecture. It draws heavily from our previous work (Fernández–Arias and Hausmann 2000a, 2000b). The next section reviews the problems of international financial markets. We subsequently assess their importance in light of the evidence and discuss for whom they are crucial. The last section reviews the solutions that are being proposed and discusses the distribution of their costs and benefits. Concluding remarks follow.
Friedman, Benjamin M. 2000. Monetary Policy.Abstract
Monetary policy is one of the two principal means (the other being fiscal policy) by which government authorities in a market economy regularly influence the pace and direction of overall economic activity, importantly including not only the level of aggregate output and employment but also the general rate at which prices rise or fall. The ability of central banks to carry out monetary policy stems from their monopoly position as suppliers of their own liabilities, which banks in turn need (either as legally required reserves or as balances for settling interbank claims) in order to create the money and credit used in everyday economic transactions. Important developments both in research and in the actual conduct of monetary policy in recent decades have revolved around the choice of a short–term interest rate versus a reserve quantity as the central bank's direct operating instrument, whether to use some measure of money as an intermediate target, whether to constrain the central bank to follow some fairly simple policy rule, what degree of political independence a central bank should have, and whether to target inflation. Some key areas of ongoing research in this area, as of the beginning of the 21st century, are whether the behavioral process by which monetary policy affects nonfinancial economic activity centers more on money or on credit, quantitative measurement of whatever is the mechanism at work, the –off between price inflation and real aspects of economic activity like output and employment, and just why it is that the public in most industrialized countries is as averse to inflation as is apparently the case.
Friedman, Benjamin M. 2000. The Role of Interest Rates in Federal Reserve Policymaking.Abstract
Most central banks, including the U.S. Federal Reserve System, implement their monetary policy by setting interest rates. This paper reviews the major changes that have taken place along the way from the Federal Reserve's interest rate–based policy structure of the 1960s to the interest rate–based structure in place today, and then goes on to consider three open questions that this way of conducting monetary policy presents: (1) whether there is a nominal anchor' problem, and if so whether explicit inflation targeting would solve it, (2) whether there is a role in this policymaking process for interest rates other than whatever particular rate the Federal Reserve chooses to set, or equivalently for equity prices, and (3) to what extent the electronic revolution now under way in banking threatens the efficacy of an interest rate–based monetary policy. The paper concludes by considering the implications of the rules–versus–discretion debate for the role of interest rates in monetary policymaking.
Falkenrath, Richard A. 2000. The Problems of Preparedness: Challenges Facing the U.S. Domestic Preparedness Program (BCSIA Discussion Paper 2000-28, John F.Abstract
The purpose of this paper is to sketch the general contours and rationale of the U.S. domestic preparedness program, and to identify the most significant problems of domestic preparedness.4 The first section discusses the program?s origins and evolution. While the basic motivation of the domestic preparedness program has been the perception of a rising threat, the specifics of the program have been determined not by any guiding strategic concept but by discrete, uncoordinated legislative appropriations and administrative initiatives. The second section elaborates on the basic rationale behind the domestic preparedness program, explaining how these highly specific domestic policy innovations relate to the national security objective of reducing the threat of WMD terrorism to America. The third section describes the major policy and management challenges facing the program.
Alesina, Alberto. 2000. Dollarization.Abstract
We seek in our analysis to understand the forces that favor and oppose currency unions, that is, we extend the classic analysis of optimum currency areas from Mundell (1961). One consideration, not touched on in Mundell?s economic analysis, is that individual currencies are sometimes valued simply out of national pride. One would have expected these nationalistic concerns to be more intense for language than for money, yet most countries willingly use the language of another country, typically the one of a former colonial ruler. Given this acceptance of transplanted language, it is surprising how often people reject currency unions–which sometimes involve the use of another country's currency– simply on the grounds that important countries are supposed to have their own money.
Kremer, Michael. 2000. A Better Way to Spur Medical Research and Development.Abstract
Today, the United States government spurs research mainly through direct funding and the granting of patents. Both methods are vitally important, but each causes serious problems–and each has proved inadequate in spurring the research needed to develop effective vaccines against HIV, tuberculosis and malaria.
Alesina, Alberto. 2000. War, Peace and the Size of Countries.Abstract
This paper studies the relationship between international conflict and the size distribution of countries in a model in which both peaceful bargaining and non–peaceful confrontations are possible. We show how the size distribution of countries depends on the likelihood, benefits and costs of conflict and war. We also study the role of international law and show how better defined international "property rights" may lead to country breakup and more numerous local conflicts.
Sutherland, Peter. 2000. Is Free Trade Fair? Has It Gone Too Gar?.Abstract
This paper is about trade liberalization, not globalization. It considers whether the significant steps that have been taken in this direction since the formation of the General Agreement on Tariffs and Trade (GATT) in 1948, have resulted not only in the freer movement of goods and services across borders, but also in a fairer, more open international trading system.
Rogoff, Kenneth S. 2000. Do We Really Need a New International Monetary Compact?.Abstract
In recent years, many countries have instituted monetary reforms aimed at improving anti–inflation credibility. Is it a problem, however, that international welfare spillover effects seldom receive much consideration in the design of monetary reforms? Surprisingly, the answer may be no. Under plausible conditions, as domestic rules improve and international financial markets become more complete, the Nash and cooperative monetary rule setting games converge. We base our analysis on a utility–theoretic sticky–wage (new open economy macroeconomics) model; the question we pose simply could not have been adequately formulated using earlier models of monetary cooperation.
Rodrik, Dani. 2000. Growth and Poverty Reduction: What Are the Real Questions?.Abstract
Should governments pursue economic growth first and foremost, or should they focus on poverty reduction? The recent debate on these questions has generated more heat than light, because it has become embroiled in a wider, political debate on globalization and the role of World Bank/IMF conditionality. As an empirical matter, it is clear that growth and poverty reduction go largely hand in hand. The real questions in this debate should be: What are the policies that yield these rewards, and would a poverty focus facilitate their adoption?
Marin, Guillermo. 2000. La Tercera Revolucion de la Diplomacia.Abstract
La primera revolución de la diplomacia fue la de su nacimiento como institución. En realidad, el arte u oficio de las relaciones internacionales existe desde que se produjeron los primeros contactos entre pueblos diferentes, durante la más remota Antigüedad. Se sabe que, ya en el siglo XIV a.C., había algún tipo de relación formal entre egipcios y habitantes de la Mesopotamia. Pero fue el contacto estrecho entre las ciudades–estado de la Grecia clásica lo que dio origen a la diplomacia institucionalizada. Heraldos y un cierto código de conducta le otorgaron carta de naturaleza. Las relaciones diplomáticas de esta primera época tenían carácter puntual. A partir de entonces, paulatinamente, el poder político se fue centralizando y la comunicación entre las distintas entidades que lo albergaban se fue intensificando.
Hausmann, Ricardo. 2000. What's Wrong with International Financial Markets?.Abstract
This paper discusses different views about what is wrong with the world, or as an economist would say, the principal distortions that are present. The intent is to clarify the logic behind the proposals for reforming the international financial architecture and provide a means of assessing them. (The actual assessment is performed in the companion paper "Getting it Right: What to Reform in International Financial Markets," Fernández–Arias and Hausmann, 2000.)
Hausmann, Ricardo. 2000. Getting it Right: What to Reform in International Financial Markets.Abstract
This paper provides an overview and assessment of reform initiatives, both those currently on the table and those that are not but we think should be. The intent is to clarify the logic behind these proposals and assess them from a Latin American perspective. Our discussion is based on the extent to which reform initiatives alleviate the problems we identified in the companion paper "What?s Wrong with International Financial Markets," (Fernández–Arias and Hausmann, 1999). The overall conclusion is that the current approach to reforming the international financial architecture is not appropriate for the task and a paradigm shift is required.
Frankel, Jeffrey. 2000. Estimating the Effect of Currency Unions on Trade and Output.Abstract
Gravity–based cross–sectional evidence indicates that currency unions stimulate trade; cross–sectional evidence indicates that trade stimulates output. This paper estimates the effect that currency union has, via trade, on output per capita. We use economic and geographic data for over 200 countries to quantify the implications of currency unions for trade and output, pursuing a two–state approach. Our estimates at the first stage suggest that belonging to a currency union more than triples trade with the other members of the zone. Moreover, there is no evidence of trade–diversion. Our estimates at the second stage suggest that every one percent increase in trade (relative to GDP) raises income per capita by roughly 1/3 of a percent over twenty years. We combine the two estimates to quantify the effect of currency union on output. Our results support the hypothesis that the beneficial effects of currency unions on economic performance come through the promotion of trade, rather than through a commitment to non–inflationary monetary policy, or other macroeconomic influences.
Frankel, Jeffrey. 2000. Globalization of the Economy.Abstract
Globalization of trade and finance has gone a long way over the last –century. But it is less impressive than most non–economists think, judged either by the standard of 100 years ago or by the hypothetical standard of perfect international integration. The paper documents the extent of globalization, and some reasons for the barriers that remains. It then briefly considers the implications for economic growth and the implications for goals not measured by GDP equality and the environment. The conclusion is that globalization is not the primary obstacle to efforts to address such concerns.
Alesina, Alberto. 2000. Political Jurisdictions in Heterogeneous Communities.Abstract
We investigate how the number and size of local political jurisdictions in an area is determined. Our model focuses on the tradeoff between the benefits of economies of scale and the costs of a heterogeneous population. We consider heterogeneity in income, race, ethnicity, and religion, and we test the model using American school districts, school attendance areas, municipalities, and special districts. Using both cross–sectional and panel analysis, we find evidence of a significant tradeoff between economies of scale and racial heterogeneity. We find weaker tradeoffs between economies of scale and income or ethnic heterogeneity. That is, it appears that people are willing to sacrifice the most, in terms of economies of scale, in order to avoid racial heterogeneity in their jurisdiction.
Waldinger, Roger. 2000. The Sociology of Immigration and Host Societies: Second Thoughts and Reconsiderations, in .Abstract
The contemporary study of immigration has come a long a way — or at least so it seems to someone whose interests in the subject were first sparked in that prehistoric era we call the late 1970s. Others already knew better, but at the time it wasn't clear to me that there was a field to master, nor a subject that would live for long. Immigration had long since disappeared from the scholarly radar screen, and though it was quietly undergoing a renaissance, its rebirth was hard for this, admittedly obtuse, graduate student to discern. The older literature appeared truly antique. Yes, there was a relevant body of scholarship dating from the 1960s, but this seemed dated, and in any case, reeked of a melioristic liberalism so hopelessly passe that one couldn't take it seriously. It was also easy to succumb to the political correctness of the time: the authors of Beyond the Melting Pot were then at the height of their neo–conservative phase, making theirs the type of book one read only after having wrapped it in a brown, paper cover.