Category: Economics (page 2 of 2)

No Escape from Uncle Sam

This is a guest post by Patrick Emmenegger, Professor of Comparative Political Economy and Public Policy at the University of St. Gallen, as part of the Duck of Minerva’s Symposium on Structural Power and the Study of Business. This post draws on ideas developed at greater length in Emmenegger’s article found here. Links to other posts in the symposium can be found here.

The United States of America is the most powerful country in the world but when it comes to interactions with international banks, it looks surprisingly feeble – at least according to conventional wisdom. Two types of international banks seem beyond the reach of U.S. law enforcement authorities. On the one hand, some banks are primarily located in other countries and thus protected by these countries’ legal sovereignty. Absent international cooperation, these banks – although influencing international capital flows in important ways – seem beyond the reach of national law enforcement. On the other hand, the largest international banks are typically located on U.S. soil but considered to be “too big to fail.” Since their collapse could endanger the viability of the global financial system, these banks are off-limits for criminal prosecution, because history shows that criminal prosecution of such banks leads to their collapse.

Continue reading

Structural Power and Contemporary Politics

This is a guest post by Pepper D. Culpepper, Professor of Political Science at the European University Institute, as part of the Duck of Minerva’s Symposium on Structural Power and the Study of Business. This post draws on ideas developed at greater length in Culpepper’s article found here. Links to other posts in the symposium can be found here.

Crises shake up the real world. Sometimes, they even shake up the world of political science. The recent global financial crisis and the ongoing bank and sovereign debt crisis associated with it in the Eurozone have led many scholars to reach back into the toolbox of structural power to help understand some puzzling developments. The symposium that is appearing this week brings together contributions from several scholars who have found this toolbox useful.

Continue reading

Programming Note: Symposium on Structural Power and the Study of Business

This week the Duck will host a symposium on a recent special issue of Business and Politics on Structural Power and the Study of Business, which was guest-edited by Pepper Culpepper and published in October. De Gruyter has generously agreed to temporarily ungate the issue to correspond with this symposium; the articles may be found here.

Each day of the week will contain a post in the morning and the afternoon, written by the authors of the articles in the issue, with a concluding post discussing the project by Randall German. We hope you will join us in the comments as we go along. This note will be updated with links to each post as they appear, so as to serve as an archive of sorts. The full schedule is below the jump.

 

Continue reading

The Agency of Multilateral Organizations

This is a guest post from Tana Johnson, an Assistant Professor at Duke University’s Sanford School of Public Policy. I had the pleasure of editing a reviews exchange on her important new book, Organizational Progeny. The exchange just came out in the latest issue of International Politics Reviews and features reviews from me (Josh), Tanisha Fazal, and Alexandru Grigorescu, as well as a response from Johnson herself. Ungated access here.  

I’ve recently returned from Geneva, home to scores of international intergovernmental organizations (IGOs). It’s an intriguing place: unlike New York, which is overrun by international politics for a just a few weeks each autumn,  in Geneva international politics play out on every corner, on every day. The city is a hub for international policymaking in health, trade, human rightslabor, and countless other issue areas. So, can the IGOs that operate there, and elsewhere, act independently of their members? Or are they simply robots, mechanically doing what states want? Continue reading

“There was something missing from scholars’ models of political and economic life: ideas”

The Chronicle of Higher Education has a longish write-up on Pinar Dogan and Dani Rodrik’s efforts to exonerate Dogan’s father after he had been caught up in then Turkish Prime Minister Recep Tayyip Erdogan’s efforts to push Turkey’s generals out of the political arena. At the heart of this effort was the publication in 2010 of documents detailing an alleged plot—Operation Sledgehammer—by Turkish military leaders in 2003 to overthrow the government by undertaking a massive campaign of state terrorism. Dogan’s father was a general in 2003 and was, according to the documents, the leader of the coup that did not happen. Rodrik and Dogan undertook to demonstrate her father’s innocence and, in the process, pretty conclusively showed that the documents detailing Operation Sledgehammer were fake.

So far, just an interesting example of an economist venturing over into politics. Continue reading

Getting Your APSA Preconference On: The Politics of Markets

I just got out of a half-day APSA pre-conference short course on the politics of markets, firms, and interest groups organized by the sociologist Edward Walker and political scientist Patty Strach. Having attended Thad Dunning’s short course on natural experiments in the past, I think there is a lot to be said for alternative formats to the traditional panel of papers and discussants. This morning, 9 panelists each reflected on a common set of questions with two discussants, Ed and David Vogel, weighing in on our remarks.

Fellow panelists including a number of folks who study American politics and business interest groups (Alex Hertel-Fernandez, Benjamin Schneer, Leah Stokes), but we also had a healthy contingent of people who study the comparative politics of states and markets (Graham WilsonTasha Fairfield, Alison Post). Others are exploring the private politics of corporate social responsibility (Tim Werner). While most of us were political scientists, some had appointments in business schools (Tim Werner, Tricia Olsen). The organizers did a good job mixing people at different levels of seniority and disciplinary focus and methodological practices, though I might have been the only straight-up IR person of the bunch.

For what it is worth, I thought I’d share my remarks on transnational social movements and markets, which reflects my sense of the state of the literature and  important questions that should be asked going forward. These remarks are informed by my experience writing my previous book, AIDS Drugs for All,  with Ethan Kapstein on AIDS treatment advocacy and market transformations. Since that book came out in 2013, we’ve been been refining and distilling further our work on social movements and markets in a piece that is wending its way through the review process. Continue reading

Three Ways to Think about the IMF’s Insistence on Debt Relief for Greece

According to the NY Times, the IMF has refused to participate in any new bailout program for Greece unless Hellas is receiving debt relief. Specifically, says the IMF, this relief must come in one of three ways to be determined by Greece and the Troika: reducing the amount of principal debt to be repaid (“writedowns”), extending the term of the loans (the IMF suggest no payments for 30 years), or interest rate subsidies that would allow Greece to repay its loans at rates substantially below their market value. In practice part of the debt (around€100bn) was already discharged in 2012 via debt swaps that amounted to writedowns. And some of the third and a bit of the second were already being done under the old bailout regime, and both would have been part of the new agreement reached last weekend as well.

But those are less than half-measures in the face of an onrushing avalanche.  Continue reading

You Are Doing It Wrong

The former Greek finance minister Yanis Varoufakis (also a former colleague) has compared Greece’s situation to “fiscal waterboarding” at the hands of its creditors. Thomas Piketty has accused Germany of forgetting its own post-World War II experience with debt relief. When I read some of the appeals to Germany and the European Union on Greece’s debt situation,  I thought as an act of strategic framing that Greece/Syriza (and to a lesser extent those of its supporters like Piketty) might be going about it wrong.

As I wrote about in my first book Moral Movements and Foreign Policy, in the late 1990s, the Jubilee 2000 campaign galvanized a global movement to write-off the debts of the world’s poorest countries. That movement succeeded in persuading key creditors, including Germany, as well as the World Bank and IMF to embrace (or at least grudgingly implement) debt relief.

Now, the stakes in the current situation are very different. Then, Germany was only owed about $6 billion by developing countries, and unlike Greece with the common currency, Germany’s own economic situation was scarcely implicated in the economies of the developing world. That said, there are some parallels here that I think are potentially relevant, the traditional reluctance by the German finance ministry and elites, particularly among Christian Democrats, to write-off debt being among them.  Continue reading

Why Piketty Is Wrong about Debt Forgiveness

[UPDATE: This provides more detail and context than I do. Read it instead of, or at least in addition to, my post.]

Thomas Piketty has decided that because Germany was the beneficiary of debt relief in 1953 that they should extend the same privilege to Greece today:

When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: What a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.

Before explaining why this is both normatively and positively misguided I would like to clear some brush by mentioning two things. First, everyone (including me!) agrees that Greece’s debt must be written down. In fact, a gradual disposal of Greece’s debt has been a part of bailout program since 2010 and more of it will be discharged in the future. Greece has not paid back a single cent on net. In the meantime the debt is being financed through rollovers whose interest is mostly being paid by the rest of Europe while Greece has received fiscal transfers equivalent to more than 100% of GDP. So it is not an accurate characterization of the situation to say that the Greek economy is being squeezed in order to pay back debt; it is being squeezed because its level of spending was not matched by its level of productivity. And in some ways it still is not, although it is now quite close.

Second, while it would be very nice to have an international bankruptcy mechanism that would allow us to discharge debt and reorganize national economies in an orderly fashion, governments are unlikely to cede sovereignty over this issue for understandable reasons. So ad hoc bargaining is what we’re stuck with for the foreseeable future.

Continue reading

Greece: a Shakespearean Tragedy

greek-bailout

In the Greek bailout episode the Greek government has been behaving much like the self-pitying Antonio from “The Merchant of Venice,” while the EU has been posing as a rather heavy-handed Shylock. Despite being aware of the damaging consequences of a Greek default and potential exit from the Eurozone, the EU seems intent of having its pound of flesh. By subjecting Greece to additional austerity provisions, it may be risking the revival of the Euro financial crisis—this time with serious geostrategic implications.

For five years the Greek people have been dealing with a series of austerity measures that have crippled their economic prospects. The Greek economy has contracted a jaw-dropping 25% during this period, forcing Greece into a deep recession that now borders on depression, with a 26% unemployment rate and a debt level of 180% of GDP. The resulting loss of jobs and livelihoods has been staggering; tens of thousands of Greeks are barely getting by.

But on the eve of its default this week the Greek government capitulated and at the 11th hour informed the EU it would accept additional austerity after all, only to be told by the EU that its offer had expired. Adding insult to injury, a senior EU official stated “The previous program has expired. So now we need to start new negotiations as regards a new program.” Tragically, Greece may no longer be in the Eurozone by then. Continue reading

You Never Give Me Your Money/ You Only Give Me Your Funny Paper

I would like to cut through a lot of the rhetoric and discuss where we are with the Greece crisis and where we are likely to be quite soon. I will conclude with some thoughts as to why this has been an enormous failure on the part of Syriza and the intellectual left that has supported it, and it will come with a very high cost. TL;DR: Wishful thinking is no substitute for real analysis. The European North made its position on indefinite financing of the South (and East) clear before the euro came into being. In fact, that was a condition for the euro to come into being. It has not changed. The deal was fundamentally the same in 1997 as it is today and will be tomorrow.

Here’s where we are:

Continue reading

What’s at Stake in TPP?

President Obama’s difficulty in convincing Congress to grant him authority to negotiate the Trans-Pacific Partnership without legislative amendment is a serious setback for his foreign policy agenda. Most commentary on the subject has focused on the trade deal’s likely economic impact — which are not negligible, most importantly for Asian partners like Vietnam, but likely won’t impact the US in discernable ways. Others discuss its geopolitical significance in breathless, but vague, tones. Take this recent NY Times article:

“If this collapses, Pacific Rim countries will be aghast,” said Shunpei Takemori, a professor at Keio University in Japan, the largest economy in the would-be trade zone after the United States. “China is pushing, and if the U.S. just stands aside, it would be a tragedy.” …

“If you don’t do this deal, what are your levers of power?” Singapore’s foreign minister, K. Shanmugam, asked in Washington on Monday. “The choice is a very stark one: Do you want to be part of the region, or do you want to be out of the region?”

Continue reading

The Threat of the BDS Movement

Hello there! I’m very excited to be blogging here at Duck of Minerva for the next several months, and I’d like to thank all the full-time Ducks for the opportunity! For my first post, I thought I’d address something I’ve been thinking about ever since a student asked about it in my US Foreign Policy class this past semester. She asked about the BDS movement and whether I thought it had any chance of influencing Israel’s behavior towards the Occupied Territories and the Palestinians. Not having thought much about the issue before, I gave a typically hemming-and-hawing answer, but the more I think about it the more I think that the Boycott, Sanctions, and Divest Movement is, perhaps, the most significant threat faced by Israel today. (As an aside, this is not at all an area of expertise of mine, so what follows is more musing than academic treatise. I’ll post more serious  stuff in my area of academic expertise soon.)

Seriously, you ask? Yes, seriously. Seriously, you ask again? More significant than the rockets of Hamas and Hezbollah? More significant than Iranian nuclear proliferation? More significant than the civil war in Syria and the potential collapse of the Assad regime? Yes. Let me explain.

Continue reading

Newer posts

© 2017 Duck of Minerva

Theme by Anders NorenUp ↑