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In Geography and the Wealth of Nations, Sherif Khalifa argues that geography influences the factors that determine economic performance, such as the quality of institutions, the adopted cultural values, the systems of governance, the likelihood of conflict, the historical experiences, and the integration into the global economy.

The twilight of an era --. - The last straw --. - Adrift on the Nile --. - Fate answers the call --. - Days of reckoning --. - The turning point --. - Unlock the deadlock --. - A not so immaculate conception --. - The end of the honeymoon --. - The final countdown --. - A new breed --. - A rendezvous with destiny --. - A window of opportunity --. - The breaking point --. - The portal of perception --. - A gaze into the abyss --. - Past the point of no return --. - Beyond semantics --. - A conspiracy or the lack thereof --. - To mind one's business --. - Glory away from the battlefield --. - The levers of dependence --. - A look in the crystal ball --. - A requiem to a dream

This paper argues that the effect of income inequality on economic growth depends on the level of democracy in a country and whether people believe that redistribution is an essential component of the democratic process. The paper uses the World Values Survey to focus on countries where the majority believe that taxing the rich and subsidizing the poor an essential component of democracy, and on countries where the majority believe that the rich do not buy elections in their country. Using the threshold estimation technique introduced by Hansen (1999), the analysis suggests the presence of a statistically significant threshold income inequality level, below which democracy does not have a statistically significant effect on growth, and above which an increase in the dose of democratization has a statistically significant negative effect on economic growth. The interpretation is that in countries where income inequality is high, and the majority believe that taxing the rich and subsidizing the poor is an essential component of democracy, a higher level of democratic governance allows people to support redistribution policies which can deter investment and economic growth.

AbstractThis paper investigates the impact of imposing conditionality covenants on the performance of the signatories to a sovereign credit contract. A two period model is developed in which creditors provide a loan to a sovereign conditional upon the implementation of investments. Commitment to these covenants overcome the debt repudiation problem, as it increases the likelihood of repayment, if the implemented conditionalities contribute to an increase in the sovereign's productive capacity. A three period model is also developed to entertain the possibility that the sovereign engage in credit activities in subsequent periods, where in the final period the debtor has obligations towards junior and senior creditors. This allows for dynamic inconsistency, as the sovereign may be tempted to increase its debt in the second period, thus increasing the probability of repudiation in the third period. Imposing conditionality covenants by senior creditors that increase the portion they can appropriate in case of repudiation, relative to junior creditors, reduces the supply of credit by junior creditors in the second period and thus overcomes the debt dilution problem. Copyright © 2009 John Wiley & Sons, Ltd.